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Outsourcing: Challenged By Tradition, Sustained By Automation

Outsourcing clients want improved efficiencies, productivity gains, and cost savings, thereby generating interest on new technology models in the industry

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Economic changes worldwide and innovations in the outsourcing market are reshaping the competitive landscape of the business process management (BPM) industry. Outsourcing clients want improved efficiencies, productivity gains, and cost savings, thereby generating interest on new technology models in the industry.

Organisations are therefore embracing innovation across business functions through analytics, automation, digital transformation, virtualization, mass personalization, etc. While it does have visible benefits in outsourcing, the future of automation in BPM hinges on several factors, upskilling talent being the most obvious!

Businesses are harping on the wave of disruptive automation technologies that offer value in outsourcing and enable timely delivery and efficient results. With contact centers experiencing an influx of customer information, deployment of analytics is giving companies a competitive edge. A market survey by a global agency says 58% of top-performing companies, where marketing contributes more than half of the sales pipeline, have adopted marketing automation.

Efficiency: Automation performs outsourcing tasks with less variability than humans, providing more consistency in results. Intelligent process automation lifts the burden on workers by doing more with less, and by producing more efficient results.

Productivity: Contact centers handle more volume with less agents because virtual agents work with several clients at the same time. Automating tasks allows knowledge workers to be redeployed to high-value work. This frees human labor, which can then move to meaningful functions.

Cost savings: Automation results in greater savings opportunities for BPM stakeholders. For example, network and voice costs are declining by 66% due to the convergence of voice, video and data solutions built on highly standardized and virtualized capabilities.

Reduced work: As automation moves up the IT process value chain and into business processes, it eliminates significant amount of work through problem avoidance and self-healing, and with it, it relieves a significant part of the headcount needed to deliver large-scale outsourcing tasks.

Systems integration: There is significant opportunity afforded by automation of different functions across departments and systems. BPM companies that automate interconnected processes take up considerably less time and are less error prone compared with those subsisting on manual entries.

Compliance: Automation ensures compliance in some common areas of fault as it follows standardized procedures without lapse in productivity. Information remains secure as it is automatically moved from system to system, while encryption and security policies ensures better handling.

Scalability: Automation is an effective means of scaling throughput, at a fixed and known level of service and quality, without the overhead of recruiting and training new staff to perform the same tasks.

The widespread adoption of automation, however, is also hampered due to high installation costs, data incompatibility, error flow across different channels, etc.

But the advantages outweigh the demerits. It is in the nature of technology that any impediments in its introduction and propagation are outpaced by its benefits.
Overall Impact of Automation and Future Road Map

The impact of automation on customer engagement services has been significant:

"    Revenue cannibalization through headcount reduction in input/agent-driven model.
"    Reduction in mundane tasks, allowing staff to move to higher-value services like analytics.
"    Reduced cost of development and incremental investments in software and IT infrastructure.
"    Reduction in agents, leading to consolidation of delivery centers.
"    Increased agent demand to support complex customer needs.

A banking study says the probability of automation is 40% for technical occupations and 75% for sales and customer services. This is worrisome as a large proportion of customer support and service roles are outsourced. But this opinion could be argued differently. New jobs will be created in outsourcing through automation. For example, corporate chatbot and customer-service automation will be updated and maintained, which demands human intervention.
Outsourcing services are therefore looking to replace labor-intensive, repeatable BPM processes with innovations. The "culture of innovation" in the industry, along with the ability to take risks, a strong leadership willing to take hard decisions, and the foresight to appoint the right people, are central to its business. The BPM sector is seized of this challenge, and opportunity. It's moving fast, and only the right decisions and investments - in automation, digital technologies, and analytics - will help outsourcing clients and service providers stand up to competition.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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Automation outsourcing opinion

Deepak Wadhawan

The author is Location Leader-North, Concentrix, India

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