Will software robots give offshore workers the boot?

The Merriam Webster dictionary defines a robot as "a real or imaginary machine that is controlled by a computer and is often made to look like a human or animal." So when Alastair Bathgate stopped by Computerworld's offices the other day to talk about how software robots are the Next Big Thing I pressed him for a definition.

Bathgate is the founder and CEO of Blue Prism, a UK-based "agility software" company that automates business processes currently handled manually by low-wage offshore workers. Some processes, such as a VISA chargeback or activating a mobile phone SIM card, require following a complex and cumbersome set of process steps that, when written down, can fill 60 pages or more. Historically, businesses have driven down the cost of that work by delegating it to offshore labor. Today, however, there's no place left for businesses to go to cut labor costs further. So, says Bathgate, the next step in driving down costs and increasing productivity will be to replace those workers with nonhumans. Software bots are the new workforce, and they can do this kind of laborious work faster, more accurately and more consistently than a human ever could, he claims.

Hold on a minute. Businesses have been automating business processes for a long time. So what's different here?

A couple of things. But let's start with that definition first.

Software robotics is simply automation or automation with human-like skill, Bathgate says. Gartner, which named Blue Prism one of its cool vendors last year, describes the vendor's niche as "rule-based data entry automation." It can't make judgments, and it only handles structured, rule-based processes that can be moved offline for execution on the back end. It won't, for example, interact with the customer who needs a SIM card activated. But the customer service rep can enter the customer's information -- name, account, telephone number, SIM card information and so on -- and push that back to a software robot for processing. The bot runs on a virtual machine in the data center. "What takes a human 25 minutes a software bot can do in seconds," he says.

The difference between this type of business process automation and what you might develop in SAP is that while Blue Prism runs in the data center, domain experts handle the configuration of the bots. "This is done in the user domain, not in the IT domain." The robotic part of it, and what makes it different than an SAP customization, Bathgate says, is that Blue Prism sits outside of the IT app infrastructure and interfaces with it in the same way that users would. "In the end the business process experts do the work. That's the main difference."

The product is also designed to be highly scalable -- up to hundreds of thousands of bots can be running simultaneously -- and easy for non programmers to use, with a flow chart interface and object oriented design, he adds. While the product has been around since 2008, the latest release finally has attained the scalability and security that business process outsourcers require, Bathgate says.

Of course, giving the product a sexy name like "software robotics," has also helped Blue Prism gain traction with businesses such as Telefonica and The Co-operative Bank in the UK. After all, who wants to buy a plain old "rule-based data entry software automation tool?"

Customers pay for the number of bot runtimes used, and each typically can eliminate two full-time employee shifts at one third of the cost. That's assuming a fully loaded cost of labor of about $20,000 annually, Bathgate says. And with the cost of offshore labor rising, Blue Prism sees a growing opportunity.

While that's not good news for offshore workers, it does represent a resumption of the kind of capital investment in labor saving machine automation technologies that has improved productivity in the industrialized world for decades. With offshore labor so cheap, businesses didn't need to make the investment. Now, with the era of cheap labor coming to a close, companies must earn productivity gains through capital investments in business process optimization and automation, rather than simply moving low-skilled, repetitive jobs that could have been automated to the developing world.

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