Maksim Kabakou - Fotolia

Get started Bring yourself up to speed with our introductory content.

Software robots: Enterprises ask for RPA technology on new services contracts

Robotic process automation is making its way into new outsourcing contracts and playing a role in reinvigorating existing deals, according to industry executives.

Services providers in the outsourcing space might want to step up their investigation of robotic process automation: Customers are beginning to ask for the technology on new bids and contracts already in place.

That's the word from industry executives tracking developments in robotic process automation (RPA), a nascent technology that uses software robots to handle time-consuming -- and cost-generating -- manual IT tasks. RPA technology is making an early impact on business process outsourcing (BPO) and IT outsourcing, fields that have traditionally relied on offshore outsourcing as the way to cut costs.

And while the technology is still young, enterprises are taking it seriously.

Pat Geary, chief marketing officer, Blue PrismPat Geary

"From what we have seen, on every new bid the customer is asking for an RPA component or asking for significant automation to be included in the bid," said Pat Geary, chief marketing officer at Blue Prism Group a software company based in the United Kingdom that focuses on RPA.

Existing outsourcing contacts, meanwhile, may include innovation clauses that invite service providers to "come back to customers midway through a contract and deliver some more savings or more innovation on top of what was expected," he said.

In such a scenario, RPA technology can help contractors reinvigorate their existing offerings, Geary added.

A midlife kicker

Neil Kinson, chief of staff, Redwood SoftwareNeil Kinson

Neil Kinson, chief of staff at Redwood Software, an RPA vendor with U.S. headquarters in Morrisville, N.C., said he has also seen RPA emerge as a midlife booster on contracts. Among the service provider companies showing the most interest in adopting RPA are those partway through three- to five-year contracts, he said.

"Unless they can demonstrate some innovation, they are unlikely to retain the business moving forward," Kinson said.

But Kinson noted that not every service provider is on board with RPA, adding that the technology disrupts the traditional outsourcing business model. Outsourcing firms, he said, have typically depended on salary arbitrage and geographic location of resources to offer their clients lower cost. He said outsourcers provide some quality improvement but have mostly been telling customers "we can do your mess for less."

"So, I think there is an inherent block to innovation that comes from that kind of business model and contracting approach," he said.

Ian Barkin, co-founder and head of strategyIan Barkin

Ian Barkin, co-founder and head of strategy at Symphony Ventures, a professional services firm specializing in RPA, questioned the usefulness of innovation clauses in BPO contracts. He said those clauses "have always been poorly defined and poorly executed. They are not coherent enough to stipulate how to leverage RPA in a meaningful way."

Barkin said he sees room for what he calls R-BPO, or robotic business process outsourcing, in which pure-play RPA firms help enterprises leverage the technology. He said those firms provide an automate-first mentality "that's free of the binds of traditional firms, structure and contracts."

Enlisting software robots

As it happens, a range of service providers are now enlisting software robots. Geary cited Accenture and IBM as examples. Accenture, for instance, is building out an intelligent automation platform, which the company said taps artificial intelligence and RPA.

From what we have seen, on every new bid the customer is asking for an RPA component or asking for significant automation to be included in the bid.
Pat Gearychief marketing officer, Blue Prism Group

And there's activity among early-stage, pure-play RPA ventures, as well.

"A whole host of small organizations are coming to market straight away with robots and ... new offerings," Geary noted.

One example is Thoughtonomy Ltd., a 3-year-old company that provides RPA as a service, targeting such use cases as IT and infrastructure support, data migration and customer support. Thoughtonomy collaborates with Blue Prism and its robotics technology.

Terry Walby, CEO, ThoughtonomyTerry Walby

Terry Walby, CEO at Thoughtonomy, based in London, said RPA technology has tended to focus on high-volume back-office applications. His company's approach, however, is to pursue customers with higher value, lower volume operations. The objective, he said, is to "use RPA principles to deliver a broader set of applications."

In the field of IT support, for example, Thoughtonomy's RPA technology, which it calls Virtual Workforce, can handle systems administration tasks around complex legacy platforms such as the IBM AS/400, Walby explained. Software robots can take over activities that would otherwise require human expertise that could, in the case of legacy technology, prove difficult to find or expensive to hire.

Symphony Ventures, meanwhile, is also a young company. The consulting, implementation and managed services firm, which has U.S. offices in Boston and San Francisco, was founded in 2014. Barkin said he has seen widespread interest in software robots among enterprises.

"More and more, enterprises across industries and geographies are looking to implement and integrate RPA," Barkin said.

Earlier this year, a Symphony Ventures report found that more than 60% of the buyers and users of RPA software surveyed said they needed advice on how to implement RPA, integrate the technology with existing systems and adapt their organizations to manage RPA.

"We're seeing interest in using the technology in HR departments with vetting, onboarding, talent acquisition and pay integration systems; in finance and accounting with accounts payable, accounts receivable and reconciliations; in logistics with shipping status and returns," he said.

Next Steps

Read about the impact software robots are having on claims processing

Learn more about RPA's value proposition

Find out how business process management will back RPA

This was last published in August 2016

Dig Deeper on New emerging technologies in the IT channel

PRO+

Content

Find more PRO+ content and other member only offers, here.

Join the conversation

1 comment

Send me notifications when other members comment.

By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

Please create a username to comment.

When will RPA and software robots play a role in your IT services company? This year? Within five years? Never?
Cancel

-ADS BY GOOGLE

MicroscopeUK

SearchCloudProvider

SearchSecurity

SearchStorage

SearchNetworking

SearchCloudComputing

SearchConsumerization

SearchDataManagement

SearchBusinessAnalytics

Close