RPA and the Politics of Outsourcing

The rapid growth in implementation of Robotic Process Automation (RPA), coupled with emerging advances in more advanced forms of Artificial Intelligence (AI), are redefining sourcing models and service delivery strategies. Smart tools are also fueling concerns of massive unemployment, with some reports predicting that up to a third of all jobs will be replaced by robots within a decade.

While concerns regarding employment impact are certainly valid, RPA can also serve as an alternative to traditional outsourcing, one that can actually preserve jobs in certain industries and geographies. First off, by diminishing the competitive advantage of low-cost labor, RPA undermines a fundamental pillar of the business rationale of offshoring. Put differently, low-wage workers, no matter how skilled, can’t compete with robots, who can work from anywhere. The result is that businesses are increasingly less likely to base sourcing location decisions on the availability of skills – and may be increasingly more inclined to consider an insourcing option.

Consider too growing political opposition to outsourcing in many developed countries; specifically, to the notion of “jobs being shipped overseas.” This sentiment is particularly acute in economically depressed regions. An RPA business case that explicitly calls for retraining and redeployment of displaced human resources could deliver business benefits that include improved complianc data analysis reduced cycle times and significant cost savings by increasing the capacity of existing staff. The RPA solution, moreover, could be more politically palatable than traditional outsourcing.

About the author

Jeff has more than 20 years of experience helping clients solve diverse business issues and create transformative Business Process Outsourcing (BPO) solutions.