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US based company Ipsoft and British founded company Blue Prism Ltd use software robots and humanoids, making it unnecessary to offshore software and back office projects. They are able to automate more than half the projects they undertake and solve technical issues at a speed faster than any human engineer. IPsoft has less than 2000 staff and Blue Prism just 25.

"While an onshore FTE (full time equivalent) costing 80,000 can be replaced by an offshore FTE for $30K, a robot developed with the Blue Prism tool kit can perform the same function for $15K or less, without the drawbacks of managing and training offshore labour," James R. Slaby, research director at HfS Research.

Software robots or algorithms have benefits including the ability to automate the entire workflow, provide faster solutions and do so at a cheaper cost (as they can also be based in offshore locations such as India). As extensive technological skills are not needed, non engineering graduates can be employed to manage these processes.

"Automation is a cure for the current state of the IT outsourcing industry …The economics are simple, minimal human intervention with services delivered at unparalleled quality, and there are no annual wage increases, too."  Jeya Kumar, chief executive of IPsoft's Asia-Pacific operations.

However, the $25 billion a year market for computer desktop and server management is at risk. It is predicted that one in every four IT projects will be automated within the next three years. Experts say companies such as Blue Prism can disrupt traditional models of IT services.

"Now that robots have arrived, low-cost outsourcers may soon be forced into an unpleasant choice: cannibalize your own business, or let an innovative new entrant do it for you," Slaby of HfS Research.

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