Chatbots Coming Virus Crisis Accelerates Call Center Automation In The Philippines
Apr 13, 2020

The current coronavirus crisis is a double edged sword for the call center and business process outsourcing (BPO) industry in the Philippines, with experts saying the business might as well benefit from the coronavirus crisis in the short term, but will not be exempt from a wider-ranging disruption in the medium to long term.

In any case, analyst recommend that the industry, which generates around $25 billion a year in revenues – which translates into close to ten per cent of the Philippine GDP – and employs some 1,3 million people mainly in its hubs in Metro Manila and Cebu City, should be prepared for disruption.

In the short term, the economic carnage the coronavirus caused around the world could lead to an increase in outsourcing activities for back office tasks by global companies in the quest for cost savings.

With regards to workforce expenses, the Philippines would provide from 70 to up to 90 per cent in salary savings as compared to the US, Derek Gallimore, CEO of Outsource Accelerator, a Manila-based special advisory firm focusing on BPO outsourcing, told ABS CBN News.

He said that apart from larger corporations, more and more medium and small enterprises in English-speaking countries badly affected by the pandemic would “likely” look into outsourcing opportunities in the Philippines which would bring the industry a much-needed boost in times of a severe crisis.

Basic call center services are the first to be replaced by automation

However, experts say that those upticks might be short-lived since the entire BPO industry – like many others – was in disruption due to technological advances, and the coronavirus crisis is just accelerating it.

It will begin with basic call center services where tasks are likely soon to be replaced with purely automated solutions such as chatbots, software-based “conversational agents” using a process known as natural language processing combined with artificial intelligence which could be first used for low-value repetitive tasks that are vulnerable to automation in order to save costs by accelerating the workflow and save expenses for human staff.

This could be a big blow for the Philippine BPO industry since currently up to 60 per cent of customer contact operations at Filipino call centers are such tasks, Shivaji Das, managing director Asia-Pacific and Partner at consultancy Frost & Sullivan, told Nikkei Asian Review.

AI and robotics to take over more complex tasks

The next challenge will be the advance of robot process automation and new artificial intelligence technology for more complex tasks such as processes involving data entry and movement, checking, validation and aggregation which would also reduce human errors.

Other BPO tasks than will likely be taken over by robotic solutions at a higher performance grade and accelerated workflow are, for instance, basic coding, file and data manipulation, formatting, multi-format message creation, user interface manipulation, web data extraction, text mining and pattern matching, uploading and exporting, downloading and importing of data and a number of other data management tasks, as well as customer care automation, e-commerce merchandising automation, currency and exchange rate processing and client reconciliations. There will also be cases where automated decision making will be deployed in certain mid to back office functions.

Change in BPO business model needed

Overall, the BPO industry will have to face the fact that as innovation advances, it will be targeted for processes involving minimum or no human involvement at all. This means that the BPO industry in the long term will have to change its business model and switch to services that cannot (yet) be automated, as there are certainly some tasks that still need the human element.

Such services would include, for example, complex coding, creative design or interpersonal marketing and anything business-related that reflects higher-value skills and deeper domain knowledge. However, it will also lead to a reduction to a smaller, but higher-skilled and specialised workforce in the BPO industry, which, in turn, provides another challenge for the education sector in the Philippines.