India has been a global leader in outsourcing and BPO services for over 20 years. The call centre outsourcing sector is a large part of this market. In India, the IT, ITeS, BPO and KPO segments make up almost 10% of India’s GDP, with approximately 3.1 million individuals working in these sectors. However, call centres in India make up a much smaller part of the industry, with about 1.1 million workers. Although this is a significant number, it still places India behind the Philippines in voice-based outsourcing services.
For organisations competing in a global marketplace, call centre outsourcing was one of the earliest and most popular outsourcing services. For the most part, India was able to meet much of this demand due to its large pool of labour to draw from. There are shifts happening in the call centre outsourcing industry, however. Much of this change is being driven by introducing and adopting new technology such as Artificial Intelligence (AI) and machine learning. These technologies will dramatically impact call centres in India and elsewhere. Some of these effects will be beneficial, and others will present challenges.
AI has been around for decades in various forms, but it has recently experienced accelerated advances in applications and adoption. It is now increasingly being used in many different industries. This technology can be used in call centres and is also being utilised in other businesses such as manufacturing, service companies, retail, BFSI, healthcare, and logistics and transportation. With so many sectors of the global economy utilising AI for a variety of processes, the demand to build out the infrastructure for AI-related services by call centres in India will inevitably continue to grow. With the country’s massive pool of highly skilled labour, India can surely meet much of this demand.
“The flip side of the coin is that increased reliance on this technology will lead to many job losses for call centres in India. For example, AI is being used for automated chatbots that can answer customers’ questions without human intervention. This has made simple customer service interactions easy enough that the call centre agent need not be involved at all,” says Ellspermann. It is also being used for transcription of various types, effectively eliminating the need for human interpretation. In addition, machine learning is being used to improve the quality of customer interactions by analysing past interactions and providing agents with real-time recommendations. All these applications of AI are resulting in a reduced need for human intervention in call centres and will eventually lead to job losses in India.
“Call centres inevitably are related to voice-based services, and in this regard, call centres in India will likely face competitive challenges from the Philippines as AI continues to be widely adopted. The Philippines has been the global leader in voice-based contact centre outsourcing since 2010. In fact, the country’s dominance in this sector is so significant that India’s top outsourcing providers long ago began setting up operations in the Philippines to take advantage of some of its key advantages. This includes a population that is highly proficient in American-English, and which enjoys a close cultural affinity with the US, as a result of being a US protectorate for 50 years,” explains Ellspermann. These factors have made the Philippines very attractive to US buyers of call centre services.
Additionally, Philippines-based call centres have been early adopters of AI technology, as they understand its benefits from working with some of the leading customer-centric companies in the world. “Despite these competitive challenges, India still has a massive population and highly skilled workforce, which gives it a strong foundation to build upon. With large investments in call centres in India and strong support for the industry, it is likely that India will remain a leader in this field as it continues to evolve,” he adds.