Robotic Process Automation (RPA) Trends
Category Intelligence on Robotic Process Automation (RPA) covers the following
- Information relating to market, supply, cost, and pricing analysis
- Hard to find data on cost and TCO models, supplier details, and performance benchmarks
- Macroeconomic and regional trends impacting cost, supply, and other market dynamics
- Category-specific negotiation and sourcing advice
Industry Outlook & Drivers
Regional Market Outlook on Robotic Process Automation (RPA)
The worldwide RPA market was valued at $630 million in 2018. The market is forecasted to grow at a CAGR of about 40 percent between 2017 and 2023, and it is estimated to reach $3.39 billion in 2023
- Presently, North America contributes close to 50 percent of the global RPA market and are estimated to contribute significantly during 2018–2023.
- Europe's contribution to the global RPA market is driven by the increase in innovative service quality requirements from end-consumers.
- APAC's contribution to the global RPA market is forecasted to increase during 2018–2023, due to increase in IT service providers in these regions, especially China, India, Japan, etc.
Global RPA: Drivers and Constraints
Reduced labor costs
- RPA replaces manually intensive tasks with machines reducing the need for resources
- The annual cost of a RPA robot will range from $5,000 to $10,000, which is approximately one-third of an FTE
Increase in employee productivity with minimal process change
- RPA elevates employees into higher functioning roles that make use of their expertise rather than invest a significant time in mundane workflow-based tasks
Rise of innovative RPA applications
- With companies constantly looking for more ways to apply automation (i.e., cognitive computing, NLP, ML, etc.) in their operations and the continuous technological advancements, this demand would create opportunities for greater number of tasks to be performed entirely by the automated workforce
Lack of technical ambiguity
- Though RPA takes a minimal implementation time, the workforce must satisfy technical and operating requirements for sound implementation, as it involves risk factors across multiple impact points
- E.g., Defining process rules, modifying IT architecture, data compliance and management, etc.
Managing stakeholder expectations
- RPA implementation also includes managing expectations of both individual employees whose jobs are impacted by RPA and their managers
Porter's Five Forces Analysis
- The RPA market is highly fragmented. Hence, the supplier power is low
- RPA has a high supplier base, ranging from global to regional vendors, who can cater to specific business needs
- Due to this, competitive pricing and stiff competition exist across all tiers of players
Barriers to New Entrants
- The RPA market has low barriers to entry, due to low capital investment and abundance of technical workforce
- The market is driven by demand for value-added solutions that can deliver value-added services, such as consulting, training, support, etc.
Intensity of Rivalry
- Intense competitive rivalry exists, as the vendors are competing to establish product, service differentiation, and competitive advantage in the marketplace by providing a variety of services
Threat of Substitutes
- Threat of substitution is low, as RPA itself is an alternative for human workforce
- A competitive supplier landscape will be an advantage to the buyer, since they can choose the best-fit service provider from a diversified supplier base
- Hence, the bargaining power of a buyer is high, as they are provided with choice of selecting a supplier with best-in-class rates and service portfolio (i.e., market leaders to start-ups)