Evolution of RPA & How It'll Change Business Trajectory in 2024
Moreover, RPA has now become the fastest-growing segment of the global enterprise software market, with 85% of large and very large enterprises expected to deploy some form of RPA.
The main question we aim to answer in this article is how RPA got here. To explain that, we will delve into how RPA:
- Has evolved to arguably be more profitable than outsourced labor,
- Has cognitively evolved to carry out a wider range of tasks,
- Has become suitable for COVID-induced remote working conditions,
- Can shed light on process inefficiencies.
1. RPA now makes more economical sense than outsourcing
Per Statista, from the turn of the century to 2014, the global market of outsourced services kept climbing (see Figure 1).
The main driver behind outsourcing is finding someone in a faraway land that can do the same job a local hire does but at a lower wage. But because of the following factors, the “low wage” no longer seems that low, or even that appealing, for that matter.
1.a. Most labor arbitrage has already peaked
According to a survey in 2016, 75% of organizations said to have realized their cost-savings targets. This implies a shift in priority: cost savings could no longer be CEOs’ top concern. Factors such as innovation, R&D, and environmental sustainability are now arguably more important.
1.b. Outsourcing still requires coordination with expensive labor from the developed world
Coordination between labor from the developed and the developing world is needed to ensure operational accuracy and continuity.
And in order to increase operational competitiveness, outsourced labor needs to be retrained every couple of years to keep up with the latest developments.
The opportunity cost of mismanaged coordination, and the incurring costs of retraining and complementary hires from the developed world, can quickly add up to erase the initial cost savings brought about by low wages.
1.c. To err is human
Even with the brightest outsourced labor force at your disposal, there still exists the risk of human error in manual processes.
Errors may go unnoticed until they become major issues, especially with outsourced operations where it is challenging to maintain ongoing control due to linguistic, temporal, cultural, and geographic constraints.
1.d Outsourced labor is not as cheap as before
The developing world is getting more expensive. India, which remains the hottest outsourcing market, will have a 9.7% numerical rise in wages by the end of 2022. On the other hand, the YoY (year on year) exchange rate between the Indian Rupee and the dollar has largely stayed the same.
So in real terms, and ceteris paribus, hiring the same worker from India can cost companies approximately 10% more than it did last year.
2. RPA has cognitively evolved
The earliest version of RPA, during the early ‘90s, relied on screen-scraping to record a user’s interactions with the OS and replicate them. One limitation of the bot was that it could not recognize different programming languages to read and replicate.
The introduction of code-based RPA brought flexibility to the tool – the developers could tailor it to their needs, thereby able to find solutions to emerging obstacles. The issue was programming knowledge being paramount to this premise.
The rise of no-code/low-code RPAs has mitigated that challenge. With the accumulation of drag-and-drop interface, the RPA marketplace, and screen recording, the citizen developer today can build a bot in minutes.
Lastly, with the rise of unattended automation bots, RPA has become less of a hassle to maintain and monitor. These bots can function as programmed with minimal human intervention and only require human input if they come across an unfamiliar scenario, or as previously scripted.
3. RPA encourages remote work
Managers claim to be conducting more of their business remotely now than before the COVID-19 (62%). RPA could have been an enabler for this phenomenon.
Thanks to cloud computing, RPA tools, and automation software applications leveraging RPA bots, are accessible and configurable on the cloud.
This minimizes, if not entirely eliminates, the need for users, whose duty is overseeing the bot, to be physically present at the office. As long as they have wifi and a laptop, they can monitor the bots from wherever, through visible dashboards.
So another reason why RPA has become a popular tool among business leaders has been its ability to enable businesses to navigate, and mitigate COVID-induced adjustments.
4. RPA & process mining shed light on inefficiencies
RPA’s efficiency and high ROI could entice business leaders to try and see what other processes could benefit from automation.
This means leveraging process intelligence tools can allow you to better understand your as-is processes, and provide you with insights about areas where inefficiencies had previously gone unnoticed.
As 70-80% of manual tasks are estimated to be automatable by RPA, the potential for leveraging intelligence automation (IA) exists for businesses that are bogged down by manual and error-prone processes.
For more on RPA
If you are interested in learning more about the RPA technology, read:
- RPA Pricing: Comparison of Leading Vendors’ Fees
- 4 Ways RPA Will Transform Marketing
- Top 5 RPA Myths And The Reality Behind Them
To gain more in-depth knowledge on RPA, download our RPA whitepaper:
And if you think your business would benefit from leveraging an RPA solution, head over to our RPA software hub where you will find data-driven lists of vendors.
We will help you in the process of choosing the best vendors for your specific needs:
Cem has been the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per similarWeb) including 60% of Fortune 500 every month.
Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.
Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised businesses on their enterprise software, automation, cloud, AI / ML and other technology related decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.
He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.
Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.
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