The Birth of "Bot-Shoring"

It's not relocation – it's automation

Rakesh Sangani

Smart-Sourcing is Still Key

Speaking with a UK multinational bank this week, it was clear that the traditional models of shared services and outsourcing are now competing with a new delivery approach. Looking at how the organisation's back-office functions could deliver more, we introduced the concept of bot-shoring. In lots of ways, the model is similar to off-shoring except that processes are assessed and considered for automation rather than relocation. Repetitive manual rules based work is removed, saving cost and freeing up time for valuable resources to focus on more value-adding activities.

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Historically, the business had identified this type of manual, rule-based activity as a candidate for migration to its shared service centre in India. This was successful in achieving certain cost advantages (on a wage arbitrage model); it provided timing advantages (for example, the India team would process the transactions prior to the UK team starting their work day); and the governance and infrastructure were set up in India to make the additional migrations relatively easy to achieve.

"In lots of ways, the model is similar to off-shoring except that processes are assessed and considered for automation rather than relocation"

Implemented correctly, Robotic Process Automation (RPA) offers even more benefits than a traditional offshoring model. There are the significant cost and time savings that you might expect, of course. A robot typically operates at around one-third of the cost of an equivalent off-shore resource. Bots are not only faster than a human counterpart, but they can also operate at any time, 24/7. In addition, using bots can greatly improve accuracy and remove the risk of communication errors.

There is no escaping the fact that RPA technology is opening new possibilities. Looking at the industry, I have no doubt that there will be a growing wave of activity as organisations reconsider their delivery models and look to bot-shoring. Bot-shoring and offshoring models will become complimentary partners, however, rather than distinct alternatives. Depending on the nature of activities, not all processes can be automated end-to-end. Bot-shoring will eliminate tasks using technology where possible; the human interactions that remain will be relocated.

"Bot-shoring will eliminate tasks using technology where possible; the human interactions that remain will be relocated"

Traditionally the choice was “lift and shift” or “transform and shift” when considering whether to offshore a process to another location. That choice must now include "lift and automate" or "shift and automate" in the strategy, and the use of bot-shoring must be considered either with the offshoring, or as an alternative.

For any new delivery model to be successful, a number of key elements need to be in place in order to step into the relatively new-world of bot-shoring:

1. Vision and strategy

The strategy for bot-shoring must be clear, along with a strong case for change that delivers return on investment. Why should bots be introduced at an organisational level? What do you want to achieve and how does this fit with your current position and future direction?

2. Vendor selection

The software you will use for the automation is a key decision. You will need to decide whether to focus on one RPA provider or a combination. Each vendor should be leveraged to play to their strengths and complement your overall strategy.

3. Operating model

The model for how the bot infrastructure will be set up will depend on the structure of your organisation. There are important considerations for technical environments and ongoing support, as well as human resources. You will need to consider whether to do this in house, as a hybrid or fully outsourced, and consider not just the development aspect of the bots but also what happens in post-production environment.

4. Governance & Standards

New structures will need to govern implementation to ensure that investment and implementation decisions are made appropriately. The operating standards will need to be set out including documentation such as process flows, design documents, technical architecture, checklists support structure and the infrastructure model. A gated model for decision making should be set up to ensure clarity and completeness.

5. Change Management

Frequently underinvested in, managing the impact of the change is absolutely critical for a smooth and successful implementation. The need to communicate with, train and support existing colleagues is augmented by the fears that (rightly or wrongly) surround robotics and what it will mean for the human workforce.