When we talk with clients and prospective clients, it is often around how to improve data accuracy and lower costs through automation using classification, data location and recognition/extraction. For these professionals, the ability to lower costs is always a consideration. They know that more automation means improved margins and potentially improved turn-arounds.

Business Process Outsourcers (BPOs) providing document processing services, either as a primary offering or to support a larger business process, often refer to offshore labor as a primary avenue for document preparation and data entry. And why not? With high-speed networks and distributed computing, it is fairly simple to establish an offshore presence to perform this highly laborious and costly process for much cheaper than performing it locally. And often, it is the only strategy for performing document processing because of its relative simplicity as opposed to researching and implementing costly and complex automation.

What is not often considered is the strategic importance of automation to shelter the business from fluctuations in labor availability, increases in labor costs, civil unrest, natural disasters, and regulatory uncertainty. This last one has to be top-of-mind in the shadow of potential changes to trade agreements and the potential of new tariffs applied to any product or service with a foreign component.

Simply put, if an organization uses offshore labor as its “cheap option” fallback strategy for any client project or service offering, there are serious risks to profitability and even disruption of service from incidents that the company cannot control. The world saw what happened to the massively distributed manufacturing of electronics, cars and other hard goods following the 2011 Tsunami in Japan that practically had manufacturing at a standstill. Unfortunately, this same set of unknowns can occur with people-centered services such as document processing.

There are too many unknowns to be overly-reliant on offshore labor.

Rather than think about document automation as only a cost-reduction strategy, it’s time to consider it as a strategic risk reduction strategy as well.

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Also, you might consider watching the recent AIIM Webinar, “Taking Advantage of Web-based APIs to Add New Value and Enrich Customer Experience.”