Asia’s Business Process Outsourcing (BPO) industry is big business. Globally, the industry was valued at USD$88.9 billion in 2017 and is set to grow to USD$262.2 billion by 2022, of which the Asia Pacific region will account for 8.5%, a major share of the growth. In the Philippines, the largest BPO center in Southeast Asia, the industry employs 1.2 million people and accounts for six percent of the gross domestic product, yet Malaysia and Vietnam are also growing fast, albeit from a low base (Vietnam has grown 20% in the past decade).
Given the importance the industry plays in some Asian countries, and the number of people it directly employs, it is understandable that the region’s leaders fret over the onset of technologies that could potentially replace many BPO functions. These technologies chiefly include Artificial Intelligence (AI), which incorporate automation technology and could affect the industry in two ways. Firstly, by automating many of the time-consuming, repetitive tasks, AI could make the provision of BPO services cheaper, and thus potentially make it viable to ‘re-onshore’ BPO functions back to higher-cost countries such as the USA and Europe. Asia’s lower cost competitive edge would thus be undercut.
Secondly, such are the advances in AI that many worry they could be completely replaced by a robot. AI-powered translators have become so sophisticated that they are able to talk and sound like a human and make instantaneous translations to a high degree of accuracy. This is of particular concern in the Philippines, where high levels of English proficiency is one of the reasons for its BPO superiority. Chatbots are also becoming more capable as conversational AI picks up.
Yet this concern is misguided. History tells us that new technologies while providing short-term, localized disruption will result in much more growth – and jobs – in the long-run. Even today, though, we can see how technology such as AI is future-proofing Asia’s BPO industry rather than threatening it.
For example, customer habits have changed thanks to the onset of the smartphone and social media among other things. 15 years ago, the primary means by which a customer would interact with a brand is either in person or by phone. As such, the call center was created with rows upon rows of employees fielding telephone calls from customers. Today, things could not be more different, with customers engaging with brands through phone, social media, text, e-mail, instant messaging and more.
Yet the BPO industry has been slow to adapt to this, and many BPO employees are simply unable to extract all the relevant customer data in one place. AI allows this to happen and can pull customer social media engagements, e-mails, texts, and customer history instantaneously. Furthermore, AI is able to automate many time-consuming tasks, leaving more time for employees to interact with customers.
Ultimately, this means a better, faster, more efficient level of customer service. Firms will be able to evaluate and act on customer sentiments quicker, and engagements through chat, e-mail and text will further improve and become 100%-accurate, resulting in better, faster customer service and overall experience. This will create a new competitive edge for the industry as there will still be a need for human-to-human interaction, only this time the employee will be armed with better data and tools to provide an even better level of service. Lastly, we may even see more demand for new skills, such as data scientists, designers and digital marketing experts.
Change is never easy, and the BPO industry in Asia has had it pretty good over the past few decades and understandably want this to continue. However, AI and its continued evolution will happen regardless, and the sooner BPO firms and governments embrace technologies such as AI, the more secure its future will be.