By Nishant Kashyap, Senior Manager, Business Transformation
These are exciting times for the CX industry. There are countless innovations emerging in the market including three high-profile game-changers: robotic process automation (RPA), artificial intelligence (AI), and blockchain. RPA has been maturing for some time now, while blockchain is just at the initial phase of its lifecycle, fast catching up. Whenever a new technology emerges, it is difficult to predict the success of it, so let’s simply compare the paths of these technologies at different stages in their lifecycle.
RPA functions as a machine mimicking human interaction with the user interface (UI) to automate repetitive manual processes. While pinpointing an exact origin of RPA is a difficult pursuit, arguably the disruptive scalability of this technology evolved in the past five years. As per HfS Research, the market grew by about 65% from $271 million in 2016 to $443 million in 2017. The technology and its adoption is maturing, and disrupting multiple industries like finance, healthcare, manufacturing, and retail.
Business Process Outsourcers (BPOs)s have successfully implemented the technology to automate such repetitive, manual process steps to achieve cost savings, revenue generation, and delightful customer experience on behalf of clients. RPA is being employed to drive considerable ROI..
Journey from RPA to AI
Now that automation of repetitive process steps is already maturing, AI is increasingly implemented to automate processes that involve subjective decision-making. AI makes this journey even more interesting, since the potential for this technology knows no limits, and it can entirely disrupt the labor-capital dynamics across industries. AI goes one-step further than RPA by making the machines cognitive and thus capable of executing subjective processes requiring decision-making. AI combined with RPA has become a very effective tool for exponential efficiency gains.
Fast on the heels of RPA and AI is blockchain—the next accelerator, and soon to be disruptor. Blockchain is a distributed ledger technology, by which each transaction is secured cryptographically and shared across all the systems on the network, rather than being stored on a single server. Think of it like distributing eggs in different baskets. Thus, there is no single point of failure on the network, and each transaction is added to the network only after there is a consensus on the network about the validity of the transaction. These features make the system secure, immutable, transparent, and easily auditable.
Unlike RPA, blockchain is currently a very nascent technology. As per HfS Research, the technology is at 90-9-1 stage, meaning that 90% of the companies are in the exploratory phase with the technology; 9% have done a proof of concept (PoC); and less than 1% have implemented the solution for one or more of their lines of business. But while it’s early days, the potential for this innovation’s growth across industries is unimaginable. As per IDC, the spending is projected to grow 10 times between 2017 to 2021, from $900 million to $9.7 billion. Like RPA, blockchain has also made its debut in financial services and is rapidly starting to interest industries like manufacturing, retail, and healthcare.
Since blockchain is a platform for data sharing, it will be at the back end of all the UIs, and RPA will have to interact with it at the front end to multiply the efficiency gains. If designed to interact amicably, these technologies can complement each other, however, several applications of blockchain may make RPA redundant—for example, smart contracts. Thus, blockchain is both an opportunity as well as threat for RPA.
Smart Contract: Where AI Meets Blockchain
A very special application of blockchain is the ability to write smart contracts. As the name suggests, smart contracts make contracts smarter and decrease dependence on third parties for their enforcement. In smart contracts, contracts will be drafted as computer codes which get triggered by an event. This will make enforcement of a contract faster, less expensive, and more accurate, while also reducing the instances of litigation. As a smart contract will involve coding many subjective interpretations, it is where blockchain meets AI as a very effective tool for automating contract execution.
Prequel to Blockchain
For blockchain to be a possibility, the first thing that has to happen is development of an ecosystem of participants with a trust in this technology. The concept is very much dependent on a consortium of participants being on the network. It is not a technology that can be developed in a silo within a single organization, rather most of the industry will have to be convinced about it simultaneously and this is where the biggest challenge lies.
Secondly, a regulatory structure has to develop around it, like any other technology. Some regulatory requirements might be related to data security, legality of transactions, etc. A strong regulatory approach will also help to convince more potential participants about the technology.
It will be interesting to see where the focus will shift in the next five years. Most of the gains from RPA were reaped by the companies that were operationally ready for this disruption. The same will be the case with blockchain. Companies that are the first-movers and are ready to embrace the change will have a huge advantage over the others. Tomorrow’s BPOs will need to convert the threats into opportunities. But they will play a niche role by providing the requisite expertise, as they have helped optimize RPA for today’s businesses.