The Race for Lucrative Robotic-enabled BPO Work is On: RPA Providers Muscle In on BPO Market

Will ITO/BPO Service Providers Present Tough Competition for RPA Providers? Automation is emerging as the current big opportunity in process improvement, and showing huge potential in its ability to capture the outsourcing market. RPA – or Robotic Process Automation – is being offered to clients as virtual Robots, tools, or a set of scripts, which deliver head count reduction and zero errors, and convert repetitive, low skill jobs into automated processes. But does that mean RPA product companies have an opportunity to capture this market easily, or will outsource service providers present tough competition for them? For the sake of this discussion, let’s take the example of an IT support environment. RPA organizations providing solutions in the ITSM environment claim to automate more than 90% of jobs or activities done by humans at Help Desk Level 1 support; and around 60% of jobs or activities at Level 2 & above. However, it is generally agreed that 100% automation or replacement of Humans is still not possible with automated processes or robots. In order to resolve critical problems, a combination of both automated tools as well humans is needed. The success of RPA solutions providers depends heavily on the IT Service Provider. This means that RPA provider companies have three "Go To Market" options. Partnership or Alliance Model: Tie up or partner with IT Service Providers (IT-SPs) and get their RPA solutions bundled into outsourcing deals. Direct To Client: Approach clients directly to offer their RPA solution, implement it into their environment and integrate it with IT-SPs who are providing high skilled or niche support to client. SaaS or Managed Services Model: Provide end-to-end service offerings to clients directly, for example through an RPA-based Helpdesk support, email, network support, backup management solution, etc. That said, I foresee some challenges in these options. Challenges with Option 1 IT service providers developing inhouse RPA tools/solutions Top IT service providers have more than two decades of experience and have gone through multiple cycles of innovation in their industry. IT Service Providers (ITO/BPO) who are currently already offering these services to clients are aware of the impact of disruptive technology like RPA, and have already started developing their own automation tools. They also have an edge over RPA product companies: As domain experts in the support industry they will be able to include features and capabilities in their RPA solutions that cover clients’ challenges and requirements. They will already have plans to bundle RPA into their outsourcing solutions, thus offering cost benefits to existing or new clients. IT-SPs like TCS, Infosys, Wipro, IBM, Accenture, CTS, etc., are already working aggressively in this area to develop solutions inhouse. If they decide to use their own inhouse developed tools, they would be able to save huge licensing costs and forward the benefits to clients. In addition, BPO teams would provide support for the tools and future customizations specific to a client’s infrastructure. It is therefore down to individual IT-SP/BPO providers as to whether to use their own inhouse developed tools, or partner with RPA providers whose solutions are available in the market. Challenges with Option 2 Adding to the complexity of highly complex, multi-vendor ecosystem What are the benefits for a client company in outsourcing some aspect of work that is a candidate for automation to an RPA product company for implementation & ongoing support, with another part of the work (high- & niche-skilled) to an IT-SP? Customers are already struggling with managing multiple vendors and getting value out of their existing contracts. Rather than creating more complexity, customers may prefer to continue to work with an experienced service provider and leveraging their potential automation solutions as these become available. Success criteria of an RPA solution Headcount/Cost reduction and process improvement are some of the success criteria that apply to RPA solutions. To achieve greater benefits, the level of automation configured in the solution plays a major role. The level of automation that can be achieved depends on parameters like: Client’s current support environment (applications & hardware infrastructure) Process, workflow & ways of working Quality of configuration Flexibility of change management enabled IT-SP’s will have the upper hand here due to the domain knowledge they have acquired over the years in managing similar environments, their knowledge of client support processes, and their access to subject matter experts. This means they are able to optimally design & configure the tool to achieve better benefits. Challenges with Option 3 Managed Services Model I do not see much value in RPA product companies going down the route of a Managed Services Model to provide end-to-end services like Helpdesk & Infrastructure support solutions by bundling with RPA solutions. They will have a tough time in convincing clients to outsource end-to-end support due to lack of credentials associated with their logo. Specifically, they will have to develop Level 2 and above support capabilities to offer these services, whereby activities that cannot be automated are serviced by high-skilled resources. Clients seeking head count reductions in large volume or transaction-based process work might prefer the route of a service provider, rather than including another layer of automation service provider within the governance structure. Summary The success of RPA developers will depend heavily on the ITO/BPO service providers as these have the direct connection with clients, and have the advantage of possessing domain knowledge as well as vast implementations experience. Please add your comments below or join the discussion around this article on LinkedIn.

The Race for Lucrative Robotic-enabled BPO Work is On: RPA Providers Muscle In on BPO Market

Upcoming Events

HR Shared Services & Outsourcing Week

Agentic & Applied AI for the Enterprise

Finance Transformation Virtual Summit

Human-in-the-Loop: AI for Connected Record-to-Report

Smarter AP, Reduced Risk: How Medius uses AI to detect fraud and strengthen supplier engagement

The Power of Thinking Differently: Why Process Mapping Falls Short in the Age of Agentic AI

Follow Us

Latest Webinars

Germany’s 1 January 2027 E-Invoicing Deadline: Timely Guidance for Time-Crunched Leaders

How AI-Native Accounts Payable Is Changing the Finance Function

Why Shared Services and GBS Transformation Stalls and How to Overcome Change Fatigue

Recommended

Egypt: The Next Country North American Shared Services Should Consider IT and Bu...

How Do Sourcing Objectives and Criteria Determine the Sourcing Approach ?

The Outsourcing “Conundrum”: Securing the Benefits You Expect

EP17 The critical link between digital transformation and GBS (Global Business S...

BPO = Business Process Outcomes [not Business Process Outsourcing]

5 Ways Your Business Process Management System Could Be Failing Your Back Office

"Parts Is Parts" - The Key to Differentiating Yourself

Tech Demo: Accelerating Invoicing to Overcome Workload, Speed and Regulatory Cha...

What Will Save BPOs?

Shifting to SaaS may not eliminate the “Technical Debt”

Offshore Engineering R&D Centers Will Continue to Flourish in Current Crisis

Play Nice, Outsourcing Providers. There will be life after COVID-19

FIND CONTENT BY TYPE

SSON COMMUNITY

ADVERTISE WITH US

JOIN THE SSON COMMUNITY

The Race for Lucrative Robotic-enabled BPO Work is On: RPA Providers Muscle In on BPO Market

Upcoming Events

Follow Us

Subscribe to our Free Newsletter

Latest Webinars

Recommended

FIND CONTENT BY TYPE

SSON COMMUNITY

ADVERTISE WITH US

JOIN THE SSON COMMUNITY