Underperforming BPO under threat from software automation

Business process outsourcing (BPO) fails to achieve business goals but automation software promises to free up resources

Business process outsourcing (BPO) arrangements are failing to achieve business goals but automation software promises to free up resources to enable BPO to deliver above and beyond what is expected.

Research from analyst organisation Horses for Sources (HfS) has revealed that BPO could do more. The research revealed that even 10% of BPO initiatives are not effective at cutting costs, despite this being the mainstay of the sector.

The 2013 State of the Outsourcing Industry survey, conducted by HfS with KPMG, revealed that BPO not effective when it comes to gaining access to analytical (28%); gaining access to new technology (29%); and providing innovation (38%).

Automation software can reduce the need for full time equivalents (FTEs) in offshore locations to carry out roles and enable businesses to invest in high value services.

HfS said it believed the role of automation software in outsourcing bigger than it thought a year ago, when it published its last report on the subject. 

“A year ago, we had very specific ideas about when robotic automation would be relevant and when it would not," said the report.

"Generally, that meant the greatest relevance was in low-end, rules-based tasks. We have discovered since then that robotic automation has the potential for much wider application, and we may need to fundamentally change our thinking about rules-based processes, what roles can be automated.”

Mobile operator O2 deployed software to automate business processes, which reduced the cost of back office operations and cut its reliance on offshore recruitment to cope with spikes in workload.

The software from Blue Prism enabled O2 to change business processes and free up the IT department to focus on major IT projects. O2 expects to save millions of pounds and get a return on investment in the first year, with year two and three delivering pure savings.

IT industry body Intellect is raising awareness of the benefits that automation software can bring to UK business.

Intellect said automation software is underused in the UK, which is currently in its early adopter phase. The industry body said businesses are missing out on what it describes as "white-collar automation".

Blue-collar automation is already established with robots carrying out a sizable proportion of manufacturing processes. But white-collar automation – software carrying out businesses processes for back offices – has a substantial potential market.



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