Does Robotic Process Automation (RPA) live up to the hype? Bots vs. Outsourcing Offshore for SMBs.

There’s an explosion of information online on how Robotic Process Automation (RPA) is going to change the world. At Sherpa Works, we simply believe RPA is going to solve business problems for SMBs like never before.

After owning and running an Outsourcing Offshore business and a Robotic Process Automation (RPA) services business, I’m in a unique position to share with you a “warts and all” explanation of how RPA Bots stack up against Outsourcing Offshore and vice versa.

My outsourcing journey to the Philippines started in 2008, with a multinational organisation that set-up an offshore capability in Manila, to support the business globally. After building a Filipino team I knew first-hand how capable and hard working it was, but at the same time, how much misinformation was in the market, regarding what an offshore team could and couldn’t do. This became the genesis of an idea to start-up an outsourcing business, serving the SMB market. As they say the rest is history, over a 6-year period my former business partner and I built a business of over 150 Filipino staff servicing Australian, UK and US SMBs. My former company proudly won an AFR Fast Award three years in a row.

What was unique to outsourcing to SME and Mid-market companies was the engagement model, which involves building a remote team using the support staff and facilities of your outsourcing partner, but allowing you to maintain control over your team, whereby you still task your team and are ultimately responsible for your team’s success. This model has been hugely successful. In fact, today there are only select SMB organisations that have not established a team in the Philippines already or at the very least taken a close look at this mature business strategy.

After exiting my outsourcing business nearly four years ago I took a close look at Robotic Process Automation (RPA), however, the technology was then more geared to enterprise or large corporations. However, in late 2019 (only a few months ago), the two leading RPA vendors, UiPath and Automation Anywhere, put a cloud-based version of their offering into the market, which is much more digestible for SMB customers.

The customers we now help build and support bots for range from the smallest, a 120-person recruitment company, to largest, a 2,000-person retail organisation. Regardless of the nature of the organisation or front and back office processes, each organisation is trying to do more with less, and become fitter and leaner in readiness for a challenging year ahead and beyond.

Advantages of Bots vs. Outsourcing Offshore for SMBs.

  • Bots don’t take sick or annual leave. Bots can run 24 x 7, 365 days of the year.
  • Bots don’t resign and require retraining.
  • Bots allow you to reduce the cost of doing business for processes which are too complex to be sent offshore.
  • Bots complete the work much faster, which means better turnaround times, better customer and internal stakeholder experience.
  • Bots behave very well and don’t make mistakes. You can eliminate the cost of having to fix mistakes, both in terms of the duplication of work and poor customer experience.
  • Bots are a low-risk way of reducing the cost of doing business, when compared to outsourcing offshore.
  • Sending work offshore can be an emotional issue, but automating workflow is much more digestible.
  • Even if a workflow requires human assessment or critical thinking skills, you can still automate repetitive workflow components with an Attended Bot.

Advantages of Outsourcing Offshore vs. Bots

  • Bots can’t provide empathy, critical thinking or creative skills.
  • If you are required to make an assessment of work that relies on years of experience and unique skills, then a Bot can’t do that.
  • If you plan on changing a business process in the next 6-12 months’ then it’s best not to use Bots, because you’re going to have to rebuild the bot, which adds to the cost of the automation, often making the exercise not worthwhile.
  • The cost of adding AI and ML to RPA can make Bots too expensive for SMBs.

For the most part organisations start their outsourcing or bot journey trying to reduce the cost of doing business. Naturally, there are many benefits for both strategies beyond cost reduction, but let’s take a look at the numbers. Before sharing the numbers, I need to preface these with there are two key types of UiPath Robots: Attended and Unattended Bots. Attended bots are those bots that require worker intervention to complete the business process, requiring assessment or direction. Whereas Unattended Robots are those that work all day without any kind of direction of employees. Also, some bots are more complex that others to build, for example, with countless business applications and steps required to complete the process. However, the below numbers, illustrates a process which would only take a couple of days to build and implement, which is a simple build and implementation process.

The minimum Sherpa Works investment for an Attended bot project is $16,000 (ex GST) AUD whereas for an unattended bot solution it is $30,000 (ex GST) AUD. Please note, the investment required to bring to life your automation aspirations may vary greatly subject to the complexity of the build and implementation and the solution required. Now we understand some base line numbers for a simple process to automated with RPA Bots let’s compare the cost difference between the Bots vs. Outsourcing Offshore.

Simple Attended Bot Project vs. Outsourcing Offshore

Simple Unattended Bot Solution vs. Outsourcing Offshore

** For ease of illustration we have not included the cost to manage the said offshore resource

You can see an attended bot is marginally more cost-effective than running a remote employee. So despite offshoring work, you can still further make productivity improvements by having your offshore employees team up with bots, to produce their best work. However, an unattended robot, because of its ability to work around the clock, it can be significantly more cost effective than an offshore employee. Please note, an unattended robot is only suitable if the bot doesn’t require any support or interaction from your offshore employee.

Regardless of whether or not you have a mature outsourcing strategy, to help you better understand the potential of Robotic Process Automation (RPA) in your business, we can help you shape your RPA strategy and business case with our Discovery Process. Our Discovery Process helps you review your business processes to determine if they are fit for automation, helping you prioritise and structure your investment and showing you the payback you can expect. This allows you to make a more informed assessment of the potential of RPA.

There you have it! A no hype, simple and relevant way to look at RPA for SMBs. So, whilst RPA may not change the world, RPA is going to change the way SMBs operate their business processes and manage their cost of doing business.

David Barlow is the Co-Founder and Commercial Director, of Sherpa Works, Australia’s leading RPA services company proudly serving the SMB and Mid-market. David is particularly passionate about helping clients experience outrageous success with their Bot workforce.