Business process outsourcing (BPO) is one of the fastest-growing industries in the Philippines, boasting a yearly revenue growth of about 9%, and is a major source of employment opportunities for millions of Filipino professionals. However, artificial intelligence (AI) threatens to take over repetitive jobs that are currently done by humans.
While it’s understandable that people are concerned about this, possibly undercutting the industry’s growth, there is also the possibility that AI may positively transform the BPO sector into an even more robust employment opportunity.
What is AI?
AI refers to the simulation of human intelligence by machines and software, specifically computers. It involves the application of computer science to create advanced and intelligent machines that mimic some human actions and reactions to different prompts.
AI performs various activities such as speech recognition, problem-solving, expert system (simulating human behavior and judgment), and machine vision. These applications are designed to perform processes such as machine learning, self-correction, and reasoning.
There are two categories in AI. Firstly, weak AI or narrow AI is trained to do only a specific task. For example, virtual personal assistants like Siri and Alexa give pre-programmed responses to an inquiry or instruction set by the user. Strong AI or artificial general intelligence, on the other hand, refers to the AI system designed with the cognitive abilities of humans. If they receive an unfamiliar input, strong AI can search the web to solve the issue without human intervention.
How Does AI affect BPO?
Artificial intelligence, robotics, and machine learning have rapidly gained a footing in business processes. AI revolutionized data entry in a way that significantly reduced errors. The result is a highly consistent, responsive and secure handling of data.
Unfortunately, there have been cuts in BPO employment due to the automation of repetitive outsourced services that required simple skills such as manual data entry. Fortune reports that automation may replace 40% of jobs on a global scale, possibly impacting low-income workers.
As the world transitions to automation, several white-collar and blue-collar workers are expected to be affected. However, there’s a reason to believe that advanced AI technology may take as much as 10 years to negatively impact employees and businesses, according to Leechiu Property Consultants CEO David Leechiu.
In the Philippines, 49% of the labor force needs to upskill to face the effects of automation, according to Asian Institute of Management Professor Christopher Monterola in a study he showcased during the Entrepreneur’s Summit in Cebu earlier this year. The same report revealed that as much as 800,000 BPO employees are in danger of losing their jobs as companies take on automation technology in the next three to five years.
However, there is an upside to AI that BPO companies could also consider. This technology could also bring more value to the bottom line as it is expected to streamline customer-side activities such as support and marketing, and as well as supply chain management, in the next five years.
Streamlining Processes
According to research firm Nelson Hall, AI and automation reimagine the outsourcing sector by expanding their services. The result is faster, more responsive and secure business processes with a significantly reduced margin of error. The firm believes that robotic process automation (RPA) and AI-integrated businesses could contribute around $8 billion to the industry’s potential growth by 2022.
RPA is transforming back-office tasks in the BPO sector and promotes the automation of repetitive processes by introducing a virtual workforce. It is an emerging technology that streamlines operations and dramatically reduces costs.
RPA applies technology to business logic, wherein a software captures and interprets a transaction, manipulates data, and delivers the corresponding response. For instance, quick-reply SMS, automated emails and bot deployment in an ERP system aptly paints the picture of RPA.
The adoption of RPA in BPO is seen to boost revenue growth by offering accuracy, scalability, cost-effectiveness, data security, and flexibility in operations. By automating low-value tasks, employees can focus on high-value work like decision-making and management.
What’s Next for AI in the BPO Industry?
Like any change, AI automation in the BPO sector has advantages and disadvantages, making companies slow on the uptake for now.
If you remember the emergence of automated teller machines, there was fear of mass replacing bank tellers for such devices. However, it did the opposite and generated more income for the financial sector, resulting in additional branches, more jobs, making banking one of the world’s most stable industries globally.
The basis for fearing BPO automation is valid, especially when industry experts believe that loss of employment is one of the risks. The answer to this issue is upskilling the workforce, which many consultants now urge that BPOs implement.
Highly skilled employees will be needed to create algorithms, design models and interpret results delivered by RPAs. To do this, professionals need to improve their knowledge, as well as analytical-thinking and problem-solving skills. There are still many tasks an AI application cannot handle, such as critical thinking, which is an inherently human trait.
Automation in Future Outsourcing
BPO growth despite the rise of artificial intelligence is still expected for years to come. AI technology is on an upward trend, and it could a very beneficial tool for BPO businesses to deliver quality service to customers.
To learn more about RPA and its application in outsourcing, Yempo can help you. Our experts can give you more insight into the pros and cons of applying this emerging technology to your business. Send us a message today.
Thank you for visiting our blog! We hope you found our content informative and engaging. Stay connected with us for more insightful blogs, updates, and tips on outsourcing IT & outsourcing Finance in the Philippines, or shoot us an email at sales@yempo-solutions.com. We are happy to answer your questions!
Learn more
Find & cost IT & Finance talent you need.
Explore your aims with our CEO, Michelle Fiegehen
Download our Step-by-step IT & Development Outsourcing Guide