How 'Chatbots' Could Soon Put BPOs Out Of Business?

By LIKHAVEER | INNLIVE

Everybody from Microsoft CEO Satya Nadella, Google CEO Sundar Pichai to Facebook cofounder Mark Zuckerberg have touted chatbots as the next big thing in the world of technology. 

But back home, popularity of chatbots could lend a significant blow to the Indian Business Process Outsourcing (BPO) industry. Chatbots, are making their debut on Facebook, Google and Skype and function as robotic customer service representatives for a host of companies such as taxi, ecommerce, news, weather etc, and are increasingly being deployed globally and in India. 

Given that they can take over traditional customer service functions, chatbots could spell significant loss of revenues for BPO firms along with leading to erosion of low-end jobs. While there are no exact estimates, experts peg low-end jobs to be anywhere between 5-6% of the overall revenues of the BPO industry which stood at $28 billion. 

BPO industry veterans such as Raman Roy of Quatrro, Susir Kumar of Intelenet acknowledge the threat and say that they are preparing to make up for the loss by migrating to high end jobs. 

"The repetitive tasks started going away more than a decade ago, it has already happened and will continue to happen, while we are adapting, more and more of these low-end tasks will go away, you can see the signs," said Roy, regarded as one of the founders of the Indian BPO industry. Roy, however, said that as new concepts such as driverless cars and Internet of Things emerge, more of the complicated tasks at the backend will come to India. "Where else will you find the brains to do it," he said. 

A few years ago, a majority of the voice business of the Indian BPO industry moved to countries such as Philippines due to availability of cheaper and better talent. The industry captains recouped after the initial blow by moving to highend tasks such as data analytics. 

Kumar, executive chairman of Intelenet Global Services, said that Robots will take away more and more of the "mundane human" tasks. "The billing will never be wrong, the line will never drop. But, as technology evolve, transactions will become more complicated and need for human intervention will arise for different kind of jobs," he added. 

An industry executive said that while the concept is still in its infancy, rough assumptions would suggest that the scope for automation would be 5-6% of the total $28 billion industry out of which domestic BPO is between $2-3 billion. "It would hit the commoditised basic tasks the first and the hardest," said the official. 

Phil Fersht of HFS research said that he predicts about 20% of legacy low-value IT services and BPO jobs to be phased out over the next 5 years.