The Pros and Cons of Automation in the BPO Industry

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Written by Allie Delos Santos


The business process outsourcing (BPO) industry is seeing a significant shift thanks to the rise of automation technologies. The industry is experiencing a growing trend toward using automation and artificial intelligence (AI) to handle outsourced processes. Clients of BPO companies might wonder how this development affects their outsourced functions.

This article explores how automation in the BPO industry affects outsourced work. It also discusses the advantages and disadvantages of this technology.

Automation in BPO Defined

Automation in BPO

What exactly is BPO? This business strategy involves contracting areas of operations to a third-party service provider. BPO tasks are divided between the front office and the back office.

Robotic process automation (RPA) uses software robots to perform rule-based functions across business areas. The use cases of RPA include expense management, data entry, and more. According to Automation Anywhere, a typical rule-based process can be automated by 70% to 80%.

RPA BPO refers to outsourcing vendors that use automation to reduce human errors, run operations faster, and improve workflow efficiency. BPO companies handle most business functions that are rule-based, repetitive back-end tasks that make excellent candidates for RPA. Here are examples of the best automation strategies in the BPO industry.

  • Call center automation. This type of automation allows agents to concentrate on customers while bots handle the data legwork and seek approvals. AI in call centers can give right-size information and step-by-step assistance to remote agents, enabling them to control access to confidential systems and minimize fraud rates and errors.
  • RPA for back-office functions. RPA allows BPO providers to perform back-office functions—whether human resources (HR), payment processing, accounting, information technology (IT) services, quality assurance, or regulatory compliance—for clients with maximum accuracy and round-the-clock availability.
  • Front-office augmentation. Automating manual processes across the front office, such as customer interactions, sales, and marketing, improves customer experience by enhancing accuracy, efficiency, and speed of service delivery.
  • Intelligent automation. Intelligent automation combines RPA and AI technologies, enhancing digital transformation and empowering rapid end-to-end business process automation.

The benefits of RPA for service providers are similar to the perks businesses get from using it. Discover the advantages of automation for the BPO industry and its clients in the next section.

Advantages of Automation in the BPO Industry

Advantages of Automation in the BPO Industry - Infographic

Here are the advantages of automation in the BPO industry and its effect on outsourcing clients:

Available in Different Shapes and Forms

Many automation tools, such as chatbots, are available to help BPO companies provide excellent customer service and support to end users. For example, a self-service page on the client company’s website is the primary digital channel customers use to engage with brands, accounting for 30%–60% of self-service, according to a report from McKinsey.

End customers can access similar self-service options to find solutions for simple issues instead of asking agents common inquiries. Bots can also help provide customers with actionable self-help articles, detect the intent of their messages, and handle complex requests using machine learning (ML) and natural language processing (NLP).

Improved Efficiency and Consistency

RPA bots are often more consistent and efficient than human staff. They can repeatedly perform the same task without exhaustion, distraction, or loss of focus. Consistency is vital, especially when reducing churn and improving client retention.

BPO clients then benefit from more accurate and efficient service. When outsourcing providers win clients, they can reward the client’s trust with consistent performance for their contracted function.

Better Scalability

Workflows built around RPA help service providers accept new clients without worrying about having insufficient workers to meet the increased demand.

Scalable RPA bots can do the same task simultaneously for the same clients. For example, a BPO company specializing in web scraping for e-commerce brands can have a vast client base, provided that they have the necessary infrastructure and that bots are accurately programmed.

Lower Costs

Automation technology lets outsourcing vendors use bots to perform work that human staff would otherwise need to do. According to Gartner, automation can save 25,000 hours in a finance department. BPO companies can reduce costs when bots take on more tasks, and they can hire a smaller staff.

This benefit is more important considering that wages in offshore locations are growing; hence, outsourced work is less affordable for the BPO provider and the client using the service.

Real-time Monitoring

Most outsourcing providers use cloud-based, AI-enabled programs for their processes, which offer clients a visible dashboard for real-time monitoring. It gives decision-makers in the client company 24/7 availability on pain points, execution, and whether additional actions are needed to fulfill a process.

Another benefit of RPA BPO for client companies is that it eliminates issues caused by time differences. It also takes away the need to be in the same time zone. 

Disadvantages of Automation in the BPO Industry

Disadvantages of Automation in the BPO Industry

Here are the disadvantages of automation in the BPO industry and its negative influence on outsourcing clients:

  • Poorly implemented automation might be frustrating for customers. End users might find themselves in a conversational loop from misguided bots and punish the business by leaving a bad review. After all, 60% of web users see poor customer service as a red flag for purchasing online.
  • RPA struggles with complex problems. Automation works best with rule-based, standardized requests. However, many cases require agent intervention. Moreover, according to PWC, 75% of customers prefer talking to a human even if automation technologies improve. Only 3% prefer automated customer service.
  • Automation is hard to configure. Installing AI-powered chatbots has risks since it is not a one-time purchase and requires a whole support system for maintenance and updates. The early stages of the implementation are done in a managed testing environment to avoid irritating end customers. Plus, the transition also requires adjustment.

The Bottom Line

Before automation in the BPO industry, outsourcing providers were valued for their economy and speed. Even though there were times when accuracy was at risk, human monitoring kept it safe.

Automation offers outsourcing vendors the capacity to maintain competitiveness and profitability in an ever-changing business climate. Thanks to the added advantage of automation, BPO companies enhance their ability to provide more value for their clients’ dollars.

Leverage an RPO BPO now to reduce operating costs, increase cost savings, and stay ahead of the competition. Let’s connect to discuss how a BPO partnership will benefit your business.

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Author's picture - Allie Delos Santos

About The Author

Allie Delos Santos is an experienced content writer who graduated cum laude with a degree in mass communications. She specializes in writing blog posts and feature articles. Her passion is making drab blog articles sparkle.

Allie is an avid reader—with a strong interest in magical realism and contemporary fiction. When she is not working, she enjoys yoga and cooking.

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