Automation vs outsourcing: which is best for your organisation?

Automation vs outsourcing. Should you automate your back-office tasks, or outsource them to a third-party agency?

Both options involve trimming down the processes your (internal) team need to complete each day. Both options seek to remove the strain of routine, repetitive administrative tasks on your organisation.

But both options deliver wildly different results. So, automation vs outsourcing: which is best for your organisation?

Option one: outsource

Outsourcing means delegating work that used to be internal to a third party. While it doesn’t have to, outsourcing often means having these workflows and processes completed by people in a different country. (Due to lower costs of work and living.)

So, a human still does the work, but not someone within your organisation.

Outsourcing offers three main benefits:

  1. Access to a bigger talent pool
  2. Lower HR costs — it can cost less to pay a third party to handle processes than an internal team
  3. Freed up productivity time for your internal team

The issues with outsourcing

When weighing up automation vs outsourcing, it’s important to understand the host of downsides to outsourcing too.

For a start, in the case of offshore outsourcing, hurdles such as time differences, cultural differences, and possibly language differences can cause friction. This makes it harder to communicate well and manage or change your outsourced processes.

Regardless of where you outsource to, there is also the issue of security to contend with. Your processes may involve sensitive data. In such cases, outsourcing requires time and effort spent on creating and enacting data protection policies to stay in line with regulations. 

Outsourcing also raises (potential) ethical questions. For a start, outsourcing jobs can hit internal employee morale. Team members may feel anxious or worried if they think their job might get outsourced to a third party. You also have little-to-no say over the working conditions of those now completing your processes.

And then you have issues of control.

You’re not in charge of your own processes; you’ve lost visibility.

It’s generally not a good idea to lose touch with the processes that keep your operations running smoothly.

Plus, though outsourcing can reduce personnel costs in some cases, this may not always apply. Agencies can prove expensive – particularly if they’re working a substantial number of hours on your behalf. And paying humans is always more expensive than paying for software.

Option two: automation

This leads us to the flipside of the automation vs outsourcing coin: process automation software. Automation software enables a ‘bot’ or machine to handle processes for you.

Automation is also known as business process automation (BPA) and/or robotic process automation (RPA) depending on the method of automation in question.

The benefits of automation are similar to the benefits of outsourcing. Namely, lower costs and freed up productivity for internal teams. This is because you aren’t paying for a human to complete the extra work, but that work is still taken off the plate of your team members.

However, using automation offers a host of extra benefits.

The extras

So, what gives process automation software the edge in the automation vs outsourcing question?

  • You maintain greater control over your processes

Processes are automated to happen the way you want, and you can monitor them to ensure they’re working correctly.

  • Flexibility and scalability

With automation, you can add, change, and remove the processes you automate as you see fit. Without, that is, dealing with strained communications and possible extra costs.

Plus, there’s no limitation on how many processes you automate. For the cost of the software, you can automate as many processes, workflows, and parts of workflows as you want. So, as your business — and list of processes to automate — grows, your automation costs don’t have to.

  • Consistency

Part of the beauty of automation is that the rules you set out will be followed every time. There’s no cutting corners, no forgetting, and no risk of human error. Once a trigger for a process happens, the automation completes the process in a uniform, consistent way.

  • Security

Unlike with outsourcing, automating your processes means that it all stays in-house. This can mean that processes involving sensitive data can be included in your automation efforts. Data can be processed behind your firewalls, and with your cyber protection measures in place.

Issues with automation?

Of course, just as outsourcing has downsides, automation software has limitations.

For example, some workflows aren’t suitable for total automation. If the process or workflow is overly complex or flawed and in need of fixing, then the automation software won’t work. Automation cannot think in the way a human can. So, while it’s perfect for high-frequency, repetitive processes, work requiring intelligence is better left to humans. (Whether in-house or outsourced.)

The other thing to remember is that automation software needs to be set up, monitored, and maintained. Someone needs to write the rules or train the bots. Someone needs to make sure the automation continues to run smoothly. And someone needs to keep the software up to date.

Automation vs outsourcing

While there are a few exceptions, most of your processes are better handled by automation than completed through outsourcing.

Automation keeps the work internal, in your control, and to your standards. All while delivering the reduced costs and improved productivity that outsourcing would. It’s scalable, secure, and consistent. And that’s what’s best for any organisation.

Useful links

In-house automation vs outsourced automation: the pros and cons

Is automation ethical?

A guide to achieving continuous process improvement