The end of an outsourcing contract term raises some fundamental questions for a client organization – am I getting a fair market price? Is my provider doing all they can to leverage innovative technologies? Should I test the waters for alternatives? Should I take services back in-house?
The emergence and rapid adoption of Robotic Process Automation adds layers of complexity to these traditional considerations. In terms of assessing an incumbent provider’s RPA credentials, clients must recognize that many tier one providers – while talking the talk of RPA capabilities – are dragging on actual implementations, especially if doing so risks cannibalizing existing revenue streams. Smaller up-and-coming firms, meanwhile, are aggressively seeking market share and looking to displace entrenched players. In this environment, the option of changing the existing mix of providers takes on an added dimension.
One good way to gauge an existing provider’s commitment to innovation is to consider whether they proactively bring RPA solutions into the mix of your account, or whether they do so only when asked. An assessment of existing pricing against market standards – and whether existing pricing is aligned with RPA-influenced market standards – is another good barometer of a provider’s RPA-readiness.
A decision to re-compete services of course raises a whole new set of questions – the most basic being, which set of outsourcing providers to engage? RPA implementations require significant changes to the RFX process and to contract negotiations. Specifically, pricing and delivery models are being redefined as the business model evolves from FTEs to outcomes and from total deal size to optimized margins. In the emerging world, clients need to understand what to ask for in order to receive optimized responses.
Clients should also consider the short- and long-term implications of their provider’s RPA go-to-market strategy. Some are developing expertise in implementing off-the-shelf software from vendors such as Automation Anywhere, Blue Prism or IPsoft, while other providers are developing their own, proprietary solutions. Each approach has its respective strengths, weaknesses and risks, and clients should understand them in the context of their specific requirements.
Another option is a do-it-yourself approach to RPA, whereby customers repatriate services from their outsourcing provider and automate them using tools purchased directly from an RPA software vendor. While insourcing and leveraging RPA offers the potential benefit of building a tailored solution, the investment needed to develop in-house RPA expertise will likely be significant.
As the end of a contract term approaches, clients seeking to leverage benefits from RPA or other emerging technologies need to ask if their provider is a leader, willing and able to implement effective solutions – or a laggard, paying lip service to RPA concepts while foot-dragging on implementation. In today’s rapidly evolving marketplace, new capabilities are continually emerging and clients who fail to assess alternative options and simply sign on for more of the same from their incumbent risk falling behind.