Why traditional outsourcing is becoming obsolete as AI continues to evolve

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Why would an organization continue to outsource digital services if it could use artificial intelligence instead? It’s a great question to ask, particularly right here, right now. Everyone seems to be talking about AI these days.

AI is a branch of computer science that deals with the simulation of intelligent behavior in computers. It also refers to the capability of a machine to imitate human behavior.

At a steady rate, AI-enabled machines are taking on more and more tasks for us. In our homes, smart robot vacuums are making a clean sweep of our floors; on our roads, intelligent cars are guiding us to stay in our lanes.

How do companies benefit?

Meanwhile, in organizations, AI is allowing us to automate routine operations, freeing employees to take on more critical and creative tasks. It is also minimizing and even eliminating human error. AI-enabled machines don’t lose concentration — in fact, they’re fast, consistent, and accurate, hour after hour, day after day, and even night after night.

AI is also enabling companies to make better decisions. Good data analysis is needed for good decision-making, yet it can be challenging for even the cleverest humans to analyze huge amounts of data in a short period of time. However, this is a task that smart devices do brilliantly. They can crunch vast swathes of data, identify trends and trace patterns, predict future outcomes, and prompt the right actions. And with machine-learning capabilities, they constantly improve themselves.

Another significant benefit of AI for organizations is enhanced productivity. AI cuts the time that employees spend on certain tasks so they can achieve more in less time.

Is outsourcing outdone?

What does this mean for companies that offer outsourced digital services? Is AI likely to replace them entirely? Will AI eliminate the need to contract the operations and responsibilities of specific processes to a third-party service provider?

For perspective, it’s helpful to look back at the origins of the outsourcing industry itself. Outsourcing first flourished because it could substantially reduce costs and client organizations saw the potential for savings.

But as process automation increases, there’s a very real threat that outsourcing companies will gradually lose this original cost advantage: Robots can do it cheaper.

Did outsourcing just get better?

Maybe this marks the end of traditional outsourcing? Or does it, in fact, herald a new era for better, higher-functioning outsourcing? Third-party digital service providers have much to gain from these emerging opportunities. 

As in all industries, AI is helping outsourcing companies to automate simple and mundane tasks. It’s giving them deeper insights and helps them make great decisions. And it’s increasing productivity and efficiency while also reducing costs. Most significantly, third-party digital services providers are now using AI to augment the workforce, allowing employees to focus on higher-value tasks.

For example, as AI chatbots are learning to provide excellent customer service, they need only the occasional human input to answer complicated questions and deal with exceptions. Far from representing a threat to the global Business Process Outsourcing sector, this is an opportunity. In fact, Statista anticipates a combined annual revenue growth rate of 6.48% in the global BPO market between now and 2027.

Clearly, AI is accelerating a transition from low value-added, volume-driven digital services to more sought-after, complex, and creative higher-level digital services such as Knowledge Process Outsourcing and Information Technology Outsourcing.

In parallel with this, AI is allowing third-party providers to offer incubator spaces for AI startups with all the human resources, facilities, and fast internet access that developers so desperately want and need.

Digital services outsourcing just got better, and AI is responsible. It’s a game changer for clients and third-party providers, and a great example of this is the global digital services sector in Jamaica which promises upscale outsourcing, or “upsourcing,” for growth, high-quality services, and higher-value services. Relationships that were once transactional are rapidly becoming transformational, with everyone (and every AI thing) on the same team with sights set on a winning strategy.

Learn more about the global digital services sector in Jamaica.

This post was created by Jampro with Insider Studios. 


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