Outsourcing 2018: How will Artificial Intelligence Affect Call Centers

by | Aug 9, 2018 | BPO | 0 comments

What is Artificial Intelligence?

Artificial Intelligence sounds like it’s something from a sci-fi movie, but it’s a very real thing in the 21 st century and it will affect many jobs all over the world. It will have a massive impact on outsourcing companies which provide jobs for millions of people in numerous countries.

This includes the many people who work in outsourced call centers. Not sure what artificial intelligence is? Well, to put it simply, it’s a computer system that can speak, behave, think, and act in the same way as a human being.

It is rapidly expanding to many aspects of society even though numerous researchers and scientists believe that it’s a danger to mankind. There have already been a significant number of jobs lost to artificial intelligence, particularly in the US and in China, and it’s highly likely that many people will think that it is a threat to their livelihood.

However, will artificial intelligence really take over the majority of outsourced jobs? We are here to find out how in particular it will affect outsourced call centers. There are many of these situated all over the world, in particular India, China, and the Philippines.

History of Artificial Intelligence

It may surprise you to learn that the history of artificial intelligence actually began centuries ago with people telling each other myths and stories of artificial beings with a superior intelligence.

However, it probably won’t surprise you to hear that these tales spread like wildfire. After all, this is the way that legends are made. The classical philosophers described human thinking as the mechanical manipulation of symbols.

This involves the manipulation of characters rather than numbers. However, it was only in 1943 that the foundations for artificial intelligence were really laid down with the creation of the programmable digital computer.

In 1956, at a workshop held at Dartmouth College, the field of artificial intelligence research was set in motion. Those who attended the workshop became leaders of the research during the next few decades. They predicted that a machine which would be as intelligent as a human being would be created within a generation.

Unfortunately, they were wrong and in 1973 the US and the UK withdrew funding after giving billions of dollars to fund the research. Seven years later, the Japanese government persuaded other governments to fund the initiative, but by the late 1980s funds were withdrawn again.

It wasn’t until the mid-2000s when Geoffrey Hinton, a British cognitive psychologist and computer scientist, invented fast-learning algorithms based on the Boltzmann machine. The artificial neural network has become known as the Restricted Boltzmann machine. It first became popular in the fields of natural language processing and speech recognition.

The Attitude of Companies to Artificial Intelligence

You will find that some companies are keen to switch over to artificial intelligence completely, thinking that it will work even with sensitive interactions with customers. Others are completely against it, believing that the maintenance and resource costs are going to outweigh staff costs.

However, there is a middle ground and this is one which could suit call centers. It involves using both human beings and virtual assistants.

Why are Call Centers Outsourced?

Outsourcing came about in the 1990s and the main aim of companies taking this road was to save money. Most outsourcing takes place in Third World countries where the cost of living is much less than in places such as Europe and North America.

These people are generally very well educated, but they need less money to live on. Even though they are paid lower wages than most of its in-house staff, this is not a form of exploitation as these wages enable them to live a decent life, with all the modern conveniences they desire.

Call centers have been one of the top choices in the outsourcing field and we have to ask ourselves how they will be affected by artificial intelligence.

Will Artificial Intelligence Save Companies Even More Money?

Companies which run outsourced call centers have already started to think that they can save on labor costs even further if they use artificial intelligence instead of human beings. In fact, some are already using it successfully in conjunction with outsourced labor.

However, companies need to also consider that with artificial intelligence, they will have ongoing costs for data engineers, speech scientists, and artificial intelligence experts. These people will, most likely, charge a higher fee than a call center worker will.

In the end, you’re taking money out of one purse to put it into another, but is this really a means to an end? Will using virtual assistants still be cheaper than using human beings?

Some businesses believe that if they use artificial intelligence instead of people they will have more time and money to invest in local talent for the more important tasks.

This could be true if they decide to cut their outsourced workforce dramatically, but will the job be done as efficiently by virtual assistants? It’s all a matter of trial and error for each individual company, but this can cost money.

For example, if you invest a bulk of company resources in artificial intelligence and it turns out that it doesn’t work well for your company, you will have lost money and will then have to go through the process of recruiting staff again.

Did you know that Facebook had to shut down its artificial intelligence project because the robots created their own language and started conversing in it? Now doesn’t that sound like something straight out of a sci-fi movie.

Are the Days of Large Outsourced Call Centers Numbered?

The answer to this is possibly yes. This is not to say that they will go fully automated, but we are already seeing a reduction in the number of staff in call centers. In all probability, outsourced call centers will become much smaller.

Who hasn’t picked up their phone to call their bank and got an automated voice asking them to press a different number for the service they want? Nine times out of ten, they don’t need to speak to a call center representative, but if they can’t be helped by the virtual assistant, they finally have the opportunity to speak to an actual human being.

In the same way it’s now become quite common for people to receive spam calls from businesses. The voice at the end of the line mimics human speech, can understand the answers, and adapts to the conversation so well that it often fools people. Sometimes the only way to know if it’s a spam call or not is to ask a gibberish question which a virtual assistant wouldn’t be able to answer.

Is there a place for both artificial intelligence and humans in an outsourced call center? At the moment, the answer is probably yes. The company just needs to decide where to position each of them.

It may be best to spend money on human contact in pre-sales where a good salesman would be able to persuade a customer to buy, while a virtual assistant wouldn’t have this gift. On the other hand, post-sales customer interaction is a net cost and most companies would want to keep these costs to a minimum.

To survive in the business world, it may be cheaper to use artificial intelligence in this case rather than pay workers.

How Can Artificial Intelligence Support Humans in a Call Center?

Although many workers may be replaced by artificial intelligence, there is little chance of it taking over completely, at least for the time being. Even people sometimes have a hard time interacting with other humans. It would be irrational to expect that a machine could handle everything and leave the customer 100% satisfied.

Perhaps in 20 years or so, artificial intelligence will be able to take over in a call center, but here in 2018 this is not the case. Virtual assistants still play a background role, allowing the more difficult tasks to be dealt with by humans.

An extremely useful thing that a virtual assistant can already do is to judge when a customer or agent’s tone is abnormal and then direct the conversation to a supervisor. Virtual assistants are able to monitor voice pitch, scripting, and keywords, and can intercept negative interactions.

They are able to judge when a customer is angry or if an agent is floundering. They are also able to help with poor agent performance which can be associated with low levels of enthusiasm and confidence.

This can then be brought to the attention of the supervisor who can arrange extra training sessions for the agent. If the training works out, it will lead to customer satisfaction; if it doesn’t, the agent may have to be let go.

I’d like to give you another good example of how artificial intelligence works in conjunction with human beings. Say a customer wants a couple of things sorted out, the first being that he wants to change details of payments to a health care provider.

He texts customer service, which immediately texts back saying that they will call him. The virtual assistant calls, verifies all the details, and then asks the customer if he wants anything else. He says he would like a discount on his annual payment.

The virtual assistant is unable to authorize this, so passes the call to a customer service agent who is then able to facilitate this type of request.

Artificial intelligence can also predict what customers want, which results in a significant competitive advantage. It can monitor customer satisfaction levels across voice, SMS, social, and chat. This is important because if the customer is dissatisfied he or she might decide to go to another company, resulting in a loss of revenue for you.

Virtual assistants can also listen to calls and are programmed to learn. There is already software available that reviews call recordings to analyze sentiments, for example, if the customer loses his or her temper.

By analyzing thousands of calls, the virtual assistant is able to learn what vocabulary and vocal qualities indicate that the customer is becoming dissatisfied and how they should react.

This however, won’t help the jobs of the human agents in the long run. There is always the possibility that the virtual assistants will eventually be able to have natural flowing conversations with the customers.


Research from Gartner has said that by this year, 2018, 40% of outsourced services will be using artificial intelligence. If this pans out by the end of the year, the outsourcing market will suffer.

Businesses may decide to work from their offices instead and keep everything close to home. If that happens there will be a lot of people out of work in countries supplying outsourced labor.

The same report from Gartner states that over $10 billion dollars’ worth of these systems have already been purchased from over 2,500 companies which provide this technology, while more than 35 major service providers are investing in ‘virtual labor’.

Gartner also predicts that by 2020, customers will spend 85% of their time with a company without any human contact. If this is the case, there seems little point in outsourcing.

If companies are going to pay the same for machines anywhere in the world, then why not have them in business headquarters and just hire a few members of staff locally?

Will there be Mass Unemployment?

Artificial intelligence won’t take over all the jobs in the world. Technology has been opening new markets as old ones have become obsolete. Take for example the rise of the motor car.

Between the years of 1900 and 1920, horses, which people used for transport, were replaced by cars. What happened to the industries surrounding the use of the horse, for example horse feed, shoes, and stables? They obviously disappeared, but were replaced by jobs surrounding the car.

People became bus, taxi, and delivery drivers. They trained as car mechanics or they resurfaced roads. The possibilities were endless. However, will this help call center workers? Yes, if the business is kept in the outsourced country.

There will be jobs relating to the maintenance of the systems, but there might not be enough jobs and if the business decides to close down its outsourced call centers, people will be out of work and their future will be uncertain.


There is a possibility that in fifteen years or so, we will be able to have natural conversations with virtual assistants and human agents will become obsolete.

However, in 2018 the role of virtual assistants in a call center will be less visible. They will be crucial to the call center, but humans will still be there for the more difficult tasks and when common sense is needed.

In the long run however, it does look as if large outsourced call centers will be a thing of the past. Such major strides are being made in artificial intelligence that it’s going to take over jobs sooner than later.

Companies are always looking for ways to cut costs and if artificial intelligence makes sense than hiring hundreds of outsourced call center agents as well as majority of business managers directing them are going to plumpet as a result.

Companies are probably going to opt for call centers at their headquarters with the bare minimum of staff working alongside artificial intelligence. This does not look good for the future of outsourced call centers in India, China, and the Philippines.

Will there be anything to replace these jobs? Will the people have to join the unemployment line or be forced to look for work abroad? Only time will tell.



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