Offshoring with shared services centers (SSCs) and robotics process automation (RPA) are two topics that individually hold their own weight, controversially speaking, but both have recently found themselves being combined during heated debates. Even so, while the discussion about moving operations or business processes to a cheaper country and eliminating jobs via automation generates plenty of noise across organizations, the fact is that roughly 40% of firms around the world have already implemented an offshore or shared services strategy, and 25% of SSCs have embraced some form of RPA, so it can’t be all bad, right?
The main drivers for offshoring and RPA are to reduce and control costs, free up internal resources, and improve business or customer focus, so it’s clear that companies adopting this approach have been successful in delivering significant savings, larger pools of talent, and process standardization.
Which is Better, RPA or Offshoring? Or does it matter?
A lot has been said about RPA as a vehicle for replacing offshoring, but this discussion relies on the argument of RPA potentially increasing savings. In fact, A.T. Kearney ranks RPA as one of the main new trends affecting the landscape in its 2016 Global Services Location report.
On the other hand, supporters of BPO and offshore argue that massive centralization enables process expertise and allows for economies of scale. At the end of the day, both schools of thought are right, and, from their perspective, they can each create positive ROI for individual business cases in the first year of operation.
The one element that both perspectives are missing independently is the incremental value of merging both strategies into a single, long-term, more powerful strategy. I am convinced that a single RPA-offshore strategy is the best option, but the next dilemma is a chicken and egg situation: what is the most logical sequence? Should I first centralize/offshore and then RPA/streamline transactional processes? Or should I optimize all my transactions via RPA to then lift and shit a new, re-engineered process?
I don’t think there’s a perfect answer to that, but rather a set of guiding principles and methodologies that can lead to the optimal path for success.
Implementing an RPA-SSC Strategy
In most cases, the ideal strategy will vary based on company, country, and business process. Many companies have already implemented either a shared services strategy or an RPA program. The vital strategy in this case is to quickly integrate existing projects and add missing elements.
If nothing has yet been implemented, the logical sequence is based upon on business growth strategy: where is the business growth and bulk of sales expected to originate from? If growth will come from international revenue, a solid shared services/offshore strategy is the best choice. On the other hand, if most of the growth will come from domestic revenue, investing in local talent to drive a new RPA project should be the logical choice.
In my experience, the most critical success factor for SSCs and RPA is to realize that any location and technology you select to run your project needs to be scalable, replicable, and reusable so your projects don’t become one-of-a-kind, ad-hoc patches. The goal is to find new ways to focus your most talented workforce in more value-added, customer satisfaction based roles and responsibilities. Therefore, for both RPA and SSC strategies, you can add greater customer value by promoting the company’s most qualified professionals to the next best job within the enterprise. This should be one of the man goals on a company’s radar at all times.
Marry the two, reap the benefits
My view is that any individual SSC or RPA strategy brings a great deal of value. However, the combination of both strategies enables exponential benefits. A cohesive/coordinated shared services/RPA strategy will maximize expense reduction, process improvement, and time to value.
There is no doubt that the journey will involve many hurdles along the way, such as the fact that RPA will need IT involvement and initial investment may be slightly higher, but, once the challenges have been overcome, overall ROI will certainly improve.
Moreover, RPA and offshoring may become a perfect couple since they can cover for each other’s gaps. RPA can bring faster and more accurate transactional processes whereas SSCs will bring healthy economies of scale and more qualified talent. This perfect combination will create a niche value to customers and stakeholders in ways that have never been seen before.