In the digital economy, there’s a disruptive trend going on in the way work gets done. In the past, organizations offshored high-volume back-office production and IT operations to take advantage of cheap foreign labor. Today, not so much. Labor costs have trended up, and software-powered digital labor is now cheaper, faster, and more productive than old school labor arbitrage ever was. Meantime, the total contract value for outsourced and managed services has declined from 138 billion in 2007 to just 62.7 billion in 2017. And the 25 to 40% cost saving of RPA totally beats the 5 to 10% cost saving of traditional outsourcing business models.
The most successful companies are pivoting from people to software for high-volume highly manual processes. And this pivot is happening fast. So, why is the pivot to digital labor so important? Because traditional approaches to labor cost savings and compliance are becoming less and less relevant each day. For example, in the banking and financial services industry, compliance costs will more than double by 2022. But here’s the good news. If you are in a highly-regulated industry, the speed, accuracy, and analytics of RPA will drive down compliance costs and mitigate risk.
The beauty of RPA is that it fully tracks and documents each step in an ITO business process. There’s no compliance utopia for companies in highly regulated industries like banking, healthcare, and insurance. But the workflow telemetry and audit trails provided by RPA make it easier than ever to comply with industry and audit regulations.
On top of that, software robots work 24/7, 365. They don’t call in sick or take vacations. And they minimize processing errors. On the flip side, RPA boosts employee productivity. As software robots increasingly handle rule-based, repetitive, and dangerous work, it frees up employees to do more value-added activities that drive customer loyalty and long-term customer value. You can always find skeptics to downplay RPA as a passing trend. But RPA is fast becoming a critical success factor for organizations that want to compete and win in the digital economy.
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