The world of work has changed! In the past 3 years we have seen a global pandemic with record sick leave taken, productivity drops, talent shortages, and inflation spikes increasing wages. Now in 2023, there is talk that a recession looms. Q1 is a key time to consider your staffing infrastructure for the next 3-5 years. How will your company weather the coming storms? Are you planning a return to in-office culture, hire offshore support teams, or perhaps automation? Let’s look at these options and consider BPO vs RPA.
BPO – Business Process Outsourcing
In the climate of soaring inflation in the first world, many global or even midsize companies are looking for offshore staffing to supplement their workforce. Outsourcing comes with its own savings and challenges.
Benefits of Traditional BPO
There are many advantages to hiring an outsourced team. First and foremost is cost. It can be very cost-effective to do business in countries where the dollar is strong and currency conversion works in your favor. These additional team members could be brought on to handle new business volume or as a lift and shift strategy, where a whole department may be moved overseas.
The US has the most percentage of outsourced jobs in the world, with almost 68% of companies delegating their services. The UK, meanwhile, has around 48% of companies offshoring business functions with talent shortage as the main factor.– Outsource Accelerator
What can be overlooked in the gloss of a drastic cost-cutting plan are some of the hidden challenges and costs. When considering moving a department offshore, it is necessary to consider the 3-5 year impact of this move, not just this year’s bottom line.
Challenges of BPO – the costs that are often not factored in
Outsourced teams come with their own challenges. Management of these teams needs to be different. Attitudes toward productivity, usage of sick time, the volume of vacation/public holiday days, and how to maintain morale vary widely from country to country. If your US or European offices are managing outsourced teams there are often significant time disparities, and you can end up paying extra for management in off hours.
International payroll is another area of cost that is easily overlooked. This is an area where there is not one simple solution. For larger organizations Gartner suggests a hybrid payroll model, in their Market Guide for Multicountry Payroll Solutions. Their recommended solution includes BPO for your BPO Team. This problem is solvable, but it is an expense worth considering. Whether you have this vital business function professionally managed, or have your internal team troubleshoot foreign payroll and tax requirements.
Cybersecurity should also be considered. Infrastructure capacity, governmental overreach, and encryption tools are all considerations when doing business in developing world economies. This was among the first cautions in the Gartner Magic Quadrant for Customer Service BPO 2022.
When evaluating global sourcing of services, potential clients should review a country’s maturity with its infrastructure and other government and economic areas to determine if the vendor’s suggested support location meets their business requirements.– Gartner
Managed BPO Solutions
Of course, you can outsource much of the management of your outsourced team to Managed BPO companies. Despite the additional cost, it still may be cheaper than the management efforts that would need to be made by your onshore staff. The greater challenge here becomes transparency.
- How efficiently are these teams working?
- Do employees receive the training needed to maintain the standards you have set for your organization?
- Are compliance standards actually being adhered to?
- Will employees report operational problems or are they swept under the rug?
- Is your BPO employing RPA technology already, and how much access do you have to the data they are collecting?
Impact to the customer using customer service BPO
Beyond operational costs, businesses should consider the impact on the customer or the product. Customer service or customer complaints one of the most outsourced areas of businesses. These interactions are often your first line of defense for customer retention. Offshore solutions can run into significant customer dissatisfaction issues.
There can be huge upsides to finding effective ways to service existing and potential customer questions. Capitalizing on these missed opportunities can turn this cost center into a profit center, with automated or hybrid solutions. Read more about that below.
Are you interested in exploring RPA solitons for your Business Process Outsourcing?
RPA – Exploring outsourcing to the Digital-Shore
Many have heard about Robotic Process Automation or have built a few small automations to assist in company workflows. WonderBotz is inviting the world of business to think about RPA robots as digital workers. Ones who do not take days off, get sick, or require biweekly payroll processing. Rather than small stop gaps we are creating end-to-end automations that execute complete workflows in the same way a human worker might.
Like BPO, RPA has its own advantages and challenges that we will explore as we continue to discuss BPO vs RPA.
Benefits of RPA – Digital Outsourcing
Hiring digital workers can be even more cost-effective than offshore or near-shore human counterparts. Gartner Magic Quadrant for Customer Service BPO 2022 holds the same opinion.
Rates of digital adoption continue to accelerate, opening the door for a “no-shore” digital approach to outsourcing — digital containment is the new offshore.– Gartner
By opting for Digital Business Process Outsourcing companies avoid the challenges created by hiring human staff in a global workforce. Payroll and international tax laws do not apply. Sick leave, recruiting time, employee retention incentives, wage inflation, and cost of living increases are all standard HR concerns simply do not apply to robots.
When Hiring on the digital shore “salaries” are paid in the annual platform and licensing costs. Think of recruitment and training costs that would apply to a human workforce as the implantation and testing phase of your automation journey. Your Digital BPO employees will still have some small management and oversight costs. Your human workers who are now free from their repetitive tasks, have only to review the outcomes that the robots have created. Hiring and firing digital workers, scaling up or down, is easy with flexible service agreements.
Once AI-empowered robots are “hired” and trained up, they work with exceptional efficiency, around the clock, every day.
Your digital workforce will operate within your company’s physical network or on a secure cloud-based platform. This eliminates many of the cybersecurity and network limitation issues that may be experienced working with teams in developing nations.
Challenges of RPA
No business solution is without challenges. All Digital Transformation efforts require a level of technical understanding and infrastructure to implement. Think of this as designing the “workspace” for your digital workers. It will need to be an on-site server or a cloud-based automation platform. Which way you choose will depend on, your existing hardware, the level of sensitivity of your information, and how much flexibility you need to scale up or down performance.
One challenge that is the same in BPO vs RPA is process intelligence. To train digital or human workers you must understand, standardize and train workers in your business processes. This element is easy to miss and causes wild inefficiencies both offshore and in the digital shore. However, with RPA this problem comes to the surface much more quickly. Trying to automate broken processes produces broken botz. Choosing the right process discovery and process improvement tool is a key step in starting your RPA Journey.
Check out the WonderBotz Back-Office Bundle to jumpstart your automation success.
Impact to the Customer with RPA – Digital BPO
Taking your customer service department completely digital may yield the highest customer satisfaction yet! The traditional belief is we need a person to speak to. But starting with a well implemented digital solution is growing in popularity among younger customers.
63% of millennials prefer using a live chat system over traditional channels like email or phone. According to Comm100, millennials—or those born between 1980 and 2000—prefer to use live chat due to its speed and convenience– FitSmallBusiness.com
Well done chatbots collect the data from customers that agents need to process customer requests quickly. Thinking beyond the immediate use, there is enough customer data that can be collected in these interactions to turn your automated customer service from a cost center into a profit center.
- Learn what features of your product or service are generating the questions.
- Discover what feature fixes, or updates customers would like to see.
- Determine which elements of your marketing are not clear and are causing customers to turn to support before making a buying decision.
- Log customer needs to retarget them with other services in the future.
The list of potential uses for this data goes on. But in order to collect and analyze this data you need to own and calibrate the data stream.
Conclusions of BPO vs RPA
Here at WonderBotz, we agree with Gartner that the digital shore is the new direction for outsourcing. Your business will always need human workers to make decisions, provide oversight, and complete customer interactions. Both BPO and RPA are seeking ways to offload repetitive tasks from your high-value core staff. On top of being more accurate, cost-effective, and efficient, RPA prevents any human from having to do the repetitive tasks that nobody wants to do.
Here at WonderBotz, we see a world a little bit differently. We see a world where humans and robots interact seamlessly to produce better business outcomes.
- Where intelligent digital workers support and empower your human team to focus their time on high-value tasks.
- Where basic business functions with a high level of accuracy is required are delivered correctly every time, on time.
- Where the right data is collected to make smart business decisions that move your company forward.
- Where you can even consider a robot your colleague.
Rather than BPO vs RPA we are suggesting RPA as BPO, designing digital workers (or hiring ours!) rather than hiring human workers in a low-cost market.
If you are ready to create this type of workplace in your organization let us help.