Article: How the Philippines is adopting AI in the business process outsourcing industry

Technology

How the Philippines is adopting AI in the business process outsourcing industry

Industry leaders believe adopting AI in the BPO sector will enable agents to focus on more complex transactions. But are they equipped to train agents for these new realities?
How the Philippines is adopting AI in the business process outsourcing industry

Leading business process outsourcing (BPO) companies in the Philippines have reaffirmed their support of artificial intelligence, believing that AI integration would result in better opportunities for all stakeholders.

Local BPO firms have been one of the biggest sources of finances for the Philippines. In 2023, the sector registered an annual revenue of US$29.5 billion, according to global research firm Everest Group. This is equivalent to 83% of all revenue generated by the country’s Information Technology and Business Process Management (IT-BPM) industry.

With the industry poised for more growth in the coming years, business leaders expect IT-BPM companies can even reach a target annual revenue of US$59 billion by 2028.

To achieve this, organisations like the Contact Centre Association of the Philippines (CCAP) believe BPO firms need to adopt AI technologies to help improve their productivity.

Boosting productivity through generative AI

The CCAP, a non-profit organisation consisting of more than a hundred local BPO firms, has been a strong supporter of AI integration in the Philippines. The group recently reiterated its stance that generative AI can benefit not only contact centres but other IT-BPM companies as well.

“We firmly assert that AI will continue to help make our industry more resilient and generate more revenue, contradicting fears of some concerned parties,” CCAP President Mickey Ocampo said.

“People may not be fully aware, but AI has already been widely used through the chatbots we encounter online and even through the mobile features and applications we use daily. That usefulness can further strengthen our industry.”

According to Ocampo, AI technologies allow contact centre agents to concentrate on more important tasks such as completing complex transactions. This would result in better productivity, as well as a much more positive experience for both workers and customers.

Read More: Inside the Philippines' multi-billion-dollar creative economy

Leveraging machine learning for BPO processes

Piton-Global, a BPO services provider with operations in the Philippines, has also expressed support for AI adoption. CEO Ralf Ellspermann said companies can take advantage of technologies such as automation and data analytics to augment the capabilities of their employees.

For Ellspermann, BPO firms can use machine learning algorithms to automate many of their repetitive tasks to free up human workers to do higher-value operations. They can also leverage AI to produce insights and accurate data analyses.

“Natural language processing algorithms can extract information from unstructured data sources, such as social media and customer reviews, to offer valuable insights and enhance customer service,” Ellspermann said.

“Moreover, AI-powered virtual assistants can assist in scheduling appointments, triaging customer inquiries, and providing information, freeing up human staff to tackle more complex tasks.”

Another area where artificial intelligence can be leveraged is in predictive analytics. BPO firms can use AI to accurately predict customer needs and trends, giving business leaders the opportunity to make well-informed decisions. These insights also allow companies to improve their recruitment and training strategies.

Positioning the Philippines as a leader in BPO AI adoption

As part of its goal of growing the BPO industry further through AI, the IT and Business Process Association of the Philippines (IBPAP) announced that it was teaming up with the Everest Group to produce a more comprehensive roadmap leading up to 2028.

According to the initial Roadmap 2028, the industry is targeting an annual revenue of US$59 billion by 2028. IT-BPM companies are also looking to add 1.1 million jobs for Filipinos over the next six years.

The IBPAP hopes to leverage AI technologies, particularly generative AI, to help its members achieve these ambitious targets.

“As the Philippine IT-BPM industry rides the GenAI (generative AI) wave, the nation is uniquely positioned to seize opportunities,” IBPAP President and CEO Jack Madrid said.

“With support from the government, industry visionaries, and academia, IBPAP ensures the industry and workforce are not just prepared for the future – they are shaping it”.

For the IBPAP, generative AI presents both a challenge and opportunity for IT-BPM companies. However, the group believes the technology holds the key to boosting productivity and improving business value.

As more BPO companies adopt AI technologies, workers will need to be equipped with the right skill set to handle the new demands of the job. The IBPAP said it recognises the urgency for an upskilling revolution and is spearheading workers’ training on GenAI.

Read More: Boosting jobs and skills in the Philippines

Securing jobs for BPO workers

There is a growing concern among Philippine lawmakers about the job security of Filipino BPO employees, especially as more companies incorporate AI into their processes.

Earlier this year, the Philippine Senate released a statement regarding Senator Risa Hontiveros’ call to the Department of Trade and Industry (DTI) to protect BPO workers from the rise of AI-powered contact centres.

The Senate cited a report by global research firm Gartner that contact centres can save up to US$80 billion by 2026 if they were to replace human workers with AI.

As big tech companies like Microsoft begin to unveil AI tools for contact centres, the Philippines will have to deal with the potential impact of these changes to the BPO sector.

One of the new technologies introduced is Microsoft’s Dynamics 365 Contact Centre, which scans and analyses tools and systems, as well as understand human speech. The AI has the ability to provide tailor-made experiences for Microsoft customers.

There are three major features at the forefront of Microsoft’s AI-powered contact centre:

Conversation summary: Copilot automatically documents customer interaction, removing the need for contact centre agents to write notes.

Translation: The AI translates languages in real time, removing the need for foreign language proficiency for workers.

Response suggestion: The AI can suggest appropriate replies for customers, making it easier for the company to respond to emails and calls.

The development of newer and better AI technologies is leading many to question the role of human workers in the BPO sector. India, the Philippines’ closest rival in global business outsourcing, is already paying close attention to the growth in popularity of AI-powered contact centres.

In her message to DTI Secretary Alfredo Pascual, Senator Hontiveros questioned whether Filipinos are at risk of losing their jobs to AI programs. The lawmaker also highlighted the potential for the Philippines to lose billions of dollars in revenue if the trend continues.

“Is the BPO industry in trouble too?” Hontiveros said.

“Does Secretary Pascual, being at the helm of the DTI, have a plan for when more companies invest in AI instead of workers? It will have a huge impact on our BPO industry and economy. That is why our agencies must prepare for this possibility.”

Senator Hontiveros said BPO companies should provide continuing education opportunities for their workers.

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Topics: Technology, Business, #Artificial Intelligence, #TechHRSG, #DigitalTransformation, #Future of Work

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