For years, business case for the offshore captive IT center model — whereby companies set up their own wholly owned IT service centers abroad — has centered on the benefits of labor arbitrage to generate cost savings. However, as the return on salary differentials has dwindled and the pressure on captive centers to create additional value, companies are looking to other sources of lower costs and increased efficiencies.
The current rise of robotic process automation (RPA) presents an opportunity for IT organizations to wring more benefits from their offshore delivery centers. The rapidly advancing technology that is used to automate rules-based and repetitive tasks with limited or no human involvement is growing in popularity among the captive center set, says Sarah Burnett, vice president of research with outsourcing research firm and consultancy Everest Group. RPA offers a number of benefits: incremental cost savings over traditional offshore delivery; improved service delivery in the form of process quality, speed, governance, security and continuity; relatively shorter investment recovery periods; and a general ease of implementation.