Impact of Automation on BPO industry

Strategic intelligence has become the new competitive advantage for businesses – and Artificial Intelligence (AI) is making it possible for them. Business models guided by AI has become the norm.

The traditional delivery models are being turned upside down with customers demanding better quality and more personalized services. As a result, ‘business’ and ‘digital’ aspects are merging as the functions are shifted to cloud or on internet.

Businesses have the challenge of delivering highly personalized content, products and services that are also scalable.

For an industry catering to business needs of companies around the globe, the BPO industry, the disposition of business leaders toward AI calls for creating a new normal.

Let’s see what automation has in hold for BPO industry. Before we get on to that, here is a quick brief on what new age clients expect.

Changing expectations of business leaders

Businesses are eager to bank upon new technologies to hedge the future of their enterprises and pile revenues. They expect new technologies to cut the hidden waste in traditional process while making them better and help them scale.

These desires are reflected on the outsourcing units in the BPO industry who will naturally be expected to materialize these requirements (if the processes are outsourced to them). In a survey conducted with executives who attended Intelligent Automation week in Chicago (2017), two interesting observations were made:

  • More than 50% of the attendees confirmed their plans to use AI to either partially or fully automate 21 to 40 percent of their business processes.
  • The biggest challenge in the large-scale adoption of AI in business processes came out to be the lack of standardized processes before implementation.

Tendency of businesses toward automating their processes has only ramped up in last few years.

Rise of Robotic Process Automation (RPA)

‘Reimagination’ and ‘Reinvention’ of services around RPA and automation technologies is forecasted to be valued at $8 billion, by 2022 (Nelson Hall, May 2018 Report).

Many contend, as Robotic Process Automation (RPA) takes the place of traditional processes, the need for BPO unit may suffer. While the contention has merits because:

  • Use of RPA by clients may reduce the need for outsourcing the non-core processes to BPO industry for cost-advantage;
  • Inclusion of RPA in business processes will also lend time-efficiency to businesses on their own, without requiring the aid of BPO organizations;
  • In communication especially, use of RPA can half the charges of communication, while automating the interactions;
  • RPA will particularly benefit businesses in increasing compliance and reducing non-compliance to nil.

Does this mean, RPA would be an end to BPO?

As business automate their processes, would they no longer require services of BPO?

Not really!

Implications – Will automation pull the plug for BPO Industry?

Automation will scale businesses further. As they scale, the need for BPO units with proven expertise in AI technologies and automation will be heavily sought.

RPA and AI wouldn’t pull the plug on BPO professionals. Though it will make BPOs less labor-centric, introduction of robotic automation and AI will amplify the need for human touch. The reasons being:

  • When a bot communicates with a consumer, it may fail to address some peculiar problems that are not programmed.
  • When a human makes an error, the probability of her not repeating it again is high in other transactions. However, when a bot makes an error, it will most likely be looped and the error would be repeated several times.
  • While the number of humans involved in the process will be reduced, they will still be required. RPA and automation systems will be the helping hands for humans. They will free humans to take value-added decisions to better drive and fully-integrate automation in the system.
Agile BPO firms with a better grasp on the future will be fastest to capitalize on the new opportunities brought about by emerging businesses’ needs for RPA and automation.


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