Outsourcing Industry in Philippine Braces for the Rise of Machines

November 14, 20174:19 pm732 views

As the country with the most call centres in the world, Philippine outsourcing industry is worried that rampant growth of artificial intelligence (AI) will take up to US$23 billion in the sector. It is projected that AI-powered translators could weaken the biggest advantage the Philippines has: the wide use of English. Meanwhile, the other AI applications could take over process-driven jobs.

The country, business process outsourcing (BPO) industry is an economic lifeline for the Southeast Asia nation for about 100 million people. This sector absorbs about 1.15 million people, and along with the remittances from overseas workers, the industry remains one of two top earners of foreign exchange.

With their strong command in English, the Philippines dethroned India in 2011 as the largest number of voice-based BPO services in the world. Chief delivery officer at Sutherland Global Services, Rajneesh Tiwary said that amidst the rise of AI, the Philippines’ excellent command of spoken English will not really be protective for the next five or ten years from now.

Meanwhile, Eric Simonson, managing partner of research at Everest Group, a management consulting and research firm said that there needs to be some concerns over the issue of how technology might be able to replace some of what could be happen in voice, Reuters reports.

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With its ability to comb through large amounts of raw data that can predict outcomes and recognise patterns, AI is predicted to take over 40,000 to 50,000 low-skilled or process-driven BPO jobs in the next five years, said Rey Untal, president and chief executive officer of the IT & Business Process Association of the Philippines (IBPAP).

In Philippine, contact centres make up four-fifths of total BPO industry, which accounts 12.6 percent of global market for BPO. While the United States remain the biggest customers for the service, demand for BPO services from neighboring Europe, Australia, and New Zealand is also growing. The country’s share of global outsourcing pie is estimated to reach about US$250 billion by 2022 and forecasted to reach 15 percent by that year.

However, to achieve that position, Southeast Asia nation needs to prove to the world that it has more than just a pool of English-speaking talent. Additionally, BPO executives said that the country has to take on high-value outsourcing jobs in research and analytics, as well as turning the headwinds from AI into an opportunity. The key to stay relevant and ahead of the competition is to ensure that workers are trained in significant areas such as data analytics, machine learning, and data mining.

Luis Pined, president of IBM Philippines said, “You will see in the next few years more automation coming in the way we do things in IT and BPO industry, robotic processing, the use of chat bots. If we are ahead of the game, we will be at an advantage where people will give us more work, because we are cheaper and productive.”

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