ReShoring Through RPA
There is no one way to use robotic process automation (RPA). Very soon, RPA will be a part of the many services offered through business process outsource (BPO) providers. For organizations that would rather take care of things in-house, RPA works in that environment as well. A growing trend, however, shows businesses ending their BPO relationships and “reshoring” the work. What’s behind this trend and how does RPA come into play?
The primary reason to reshore business processes is simple: cost. Businesses and manufacturers initially found cheaper labor overseas, and the competitive market forced a lot of companies to turn to outsourcing as a solution. Now costs for outsourced labor are rising and maintaining the labor arbitrage model is becoming a strain. For manufacturing, bringing labor back to the home country also means cutting down on shipping costs and moving products faster. Even before RPA arrived to challenge the traditional labor arbitrage “lift-and-shift” approach to outsourcing business processes, companies have been reshoring. A recent study showed that 80 out of 200 companies in the U.S. and U.K. surveyed reported reshoring in the past 3 years. This doesn’t mean that all BPO relationships are at risk – more complicated process may be more cost-effective when outsourced – but automation is clearly having a big impact already.
Companies who reshore business processes are finding other benefits as well. Bringing work back to the organization gives more control to the decision-makers (no matter how good your BPO relationship was). There is more cohesion among departments and hopefully less administrative hassle when making small changes.
The biggest factor in the decision to reshore process labor is the growing adoption of RPA. Software robots are more cost-effective than FTEs: they work faster, don’t need to stop for breaks, don’t make errors, and don’t need health insurance or benefits. This can understandably make some people nervous, fearing a future where robots take our jobs. However, many analysts predict an increase in domestic job creation with RPA. The systems which run and deploy the robots will need to be managed, maintained, and supervised which will create a need for new roles and teams. And the work that RPA is best suited for – repetitive, dull, menial tasks – is the work that employees dread anyway. A company can invest its employees’ time in more meaningful work to innovate and grow business instead of tasks to keep the machine running.