Nearshore Americas
RPA pitfalls

The Pitfalls of RPA Adoption and the Perils of Jumping in Too Quickly

With BPO’s widespread adoption of automation, artificial intelligence (AI), and robotic process automation (RPA), the industry is locked into a highly transformational phase, providing the ideal platform for these technologies to flourish.

Like with other transformative technologies, the potential is high, but it’s all too easy for the marketing hype to get ahead of reality. This often leads to unrealistic business results being pushed; unfortunately, reality often falls short of their promises.

Ed Hansen
Ed Hansen, Partner at Morgan Lewis

“If you listen to some of the hype around RPA, you’d be forgiven for thinking your company is already going out of business without it,” said Ed Hansen, Partner at Morgan Lewis. “The reality is that even though RPA, like outsourcing, can often free up resources to perform higher value work, management often doesn’t understand the significant investment required to train people in these higher value skills. Furthermore, while it’s true that there are people doing jobs that can be automated, companies aren’t always taking into account that it can be challenging to push employees to learn new skills.”

The challenge then is understanding how RPA truly impacts the company, and what needs to be considered from a human capital perspective, before jumping into something in a way that could be damaging in the long-term.

An Industry Spinning on its Axle

For decades, we have been seeing and hearing the same story repeat itself whenever something new and interesting enters the fray. We saw it with Cloud a few years ago, and even saw it with outsourcing in the early days.

The thing is, the problem hasn’t changed – enterprises are attracted by the benefits of RPA, but fail to realize that it’s a means to an end, NOT an endgame solution.

When Cloud first became the next “must-have” shiny object, it was commonly – and incorrectly – believed that anyone who wasn’t in the Cloud was going out of business, and we are seeing the buzz around RPA causing the same thing to happen, according to Hansen.

“I can remember going to conferences and people telling me that they that they had to put everything in the Cloud, like yesterday, and I would say “why do you think that?” he said. “In one case, I had a CIO of a very small company proudly tell me that he’d already put everything in the Cloud and just wanted me to check the contracts for ‘legal language’. The sad thing was that the contracts that he signed actually stipulated that he was signing over all his data to the provider by using their infrastructure. Eventually we stopped seeing those kinds of terms, because the market wouldn’t tolerate them. Cloud eventually found its footing, but some people just didn’t think about it before they jumped.”

So how do we, as an industry, break this cycle?

How to Jump on the RPA Bandwagon and Survive

When approaching RPA in the context of an enterprise deal, or in the context of a BPO bringing RPA into the deal, the basic fundamentals of the deal still hold.

If a company buys the robots directly from the RPA provider and implements it, that’s no different from any other software license. Of course, the people who are advocating the solution will have to understand that they are bearing all of the execution risk of implementation. But let’s assume that they understand this and are willing to assume that risk.

In the BPO context, there can be some cause for relief, because the BPO provider often assumes the risk of the implementation through increased efficiencies and lower prices. But the company still has to realize that these implementations can involve some pretty significant business process re-engineering. It should be obvious that this presents a contingency that could put the business case in real danger.

“The marketing hype even affects people who are highly experienced in deal work. Even seasoned procurement professionals sometimes get wrapped up in their approach to RPA,” said Hansen, referring to his experience at several related conferences. “People who have been buying technology all their lives sometimes ask how to handle updates and enhancements with RPA, when they already know the answers from experience working with other software. The lesson there, of course, is not to get so wrapped up in how different something is supposed to be that you lose sight of what that thing really is.”

One of the reasons for this mad rush is that RPA has been pushed as a business strategy, not as a tool. Companies are dipping their toes into it under the assumption that they have to be doing something, often without really thinking it through.

“I think what we’ll find over time is that the real benefit driver of robotics in the business setting will not be the FTE savings, but its ability to collect large amounts of data, what happens with that data, and being in a better position to be able to mine it and apply business intelligence,” said Hansen. “RPA is here to stay, it is working, and if done right it can be a very powerful tool, but people should be working to avoid repeating past mistakes.”

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Wind Your Watch; Take a Breath

Ultimately, this kind of knee-jerk reaction to an industry shift has become all too common over the years – even when outsourcing was relatively new, companies jumped on the bandwagon. So today, it’s all about bucking the trend and getting people to step back and think strategically about the tools at their disposal.

“As a pilot, I learned that the first thing you should do during an emergency is “wind your watch”, which basically means taking a moment to collect your thoughts and figuring out what to do,” he said.

Without a well-thought-out plan and the knowledge of what is being implemented, as Hansen puts it, “it’s like building a house on a bad foundation: you end up spending all your time fixing cracks in the walls.”

Matt Kendall

During his 2+ years as Chief Editor at Nearshore Americas, Matt Kendall operated at the heart of both the Nearshore BPO and IT services industries, reporting on the most impactful stories and trends in the sector.

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