In the past few decades, the BPO sector in India has thrived tremendously because of its ability to handle complex back-office processes for global clients at lower labour costs compared to developed countries. However, with the onslaught of LLMs and chatbots, what does the future hold for them? What is the possibility of generative AI taking their jobs away?
The first line of jobs touted to take the ‘AI hit’ has always been customer service. With nearly 4 million Indians employed in this sector, the impact on jobs could be significant due to generative AI, however, industry experts AIM interacted with hold a different perspective.
Generative AI will only improve productivity
Generative AI will help BPOs automate certain aspects of their work processes, allowing employees to focus on more complex and value-added tasks. “It can help streamline repetitive tasks, enhance decision-making, and improve customer service among other things. Hence, generative AI-driven automation will not lead to job losses in the BPO sector. On the contrary, it has the potential to empower employees and enhance their productivity and efficiency in their daily tasks,” Tapan Barman, co-founder and chief executive at Mihup.ai, told AIM.
Similarly, Sanjeev Menon, co-founder and head of product & tech at E42.ai says generative AI is helping enterprises scale without increasing their head count. “For example, a financial services company that started their journey with us had just about 22 people in their customer support. Even though the number of people in the team remains the same, their customers have increased 20 times,” he told AIM. Companies that do not leverage these technologies are at the risk of being left behind. “People and companies using AI will replace those not doing so and this is going to have more of an impact than the actual job losses,” Menon added.
Srikumar Ramanathan, chief solutions officer at Mphasis told AIM that the biggest impact of generative AI is going to be on productivity and not on jobs. Generative AI will help agents with repetitive and mundane tasks and shift their focus towards other important aspects of their jobs.
Moreover, even though generative AI in BPO sparks job loss concerns, it aims to augment human agents, not replace them, according to Gaurav Singh, founder, and chief executive at Verloop. By automating repetitive tasks and optimising processes, companies can allocate resources more efficiently, reduce manual errors, and achieve higher productivity levels. “This not only improves cost-effectiveness but also enables human agents to focus on more complex and value-added activities that require critical thinking, problem-solving, and creativity,” he told AIM.
Technology at the core
Even though the BPO sector in India thrived because of its ability to provide a workforce at a relatively cheaper cost, BPO firms have also relied heavily on technology. Ramanathan said, “We have a couple of units within Mphasis, like for example, the Next Labs, which is an R&D lab exploring emerging technologies,” he said.
In fact, BPO firms in India have also been leveraging AI/ML technologies for quite some time. “At Mphasis, around 2017-18 is when the pivot happened, it shifted our focus to the two Cs– cognitive and cloud,” Ramanathan said.
Similarly, in 2017, Bengaluru-based BPO firm 24/7.inc rebranded to 24/7.ai, indicating the company’s heavy focus on the technology. Similar to these companies, other players in the industry have also been significantly investing in AI. “BPO/BPMs in India have truly embraced the potential of AI and its transformative impact on their operations,” Singh said.
For example, conversational AI has emerged as a leading application of AI within the BPO/BPM sector. “A leading BPO company has integrated conversational AI into its customer support system. It is trained to handle common inquiries, such as order status and product information. With its advanced NLP capabilities, it understands customer queries accurately and provides instant responses,” Singh said.
Adding newer capabilities
Generative AI will also add new capabilities such as real-time translation of languages. “AI in BPO enables real-time translation, allowing processing of diverse languages. For instance, we’re piloting a German chat system that enables non-German speakers to track, reply, and chat, expanding markets without language barriers or the need to learn new languages,” Ramanathan said.
Besides, generative AI will also change the very nature of call centre jobs. Menon believes it will create newer jobs. “The jobs that existed in a BPO a decade ago do not exist today, they get transformed and newer jobs come into the picture,” he said. Singh also concurs with Menon. “Generative AI-driven automation may bring about changes in job roles within the BPO sector, the impact is likely to be short-term. Reskilling and upskilling initiatives will play a crucial role in ensuring that BPO professionals can adapt to the evolving demands of the industry,” he said.
