Chatbot: A Threat or a Friend to the BPO Industry?

AI, once a sci-fi concept, is now a reality, powering chatbots on websites. BPO firms leverage AI by employing chatbots for client operations. Is chatbot a threat or friend to the BPO industry? Find answers as we explore its impact on service outsourcing providers.
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Artificial intelligence (AI) used to only exist in science fiction, but it has now become a reality. Visit any website today, and AI-powered chatbots are ready to assist you.

The business process outsourcing (BPO) industry is proof of AI’s usefulness. Some BPO firms now employ chatbots to handle their client’s operations, including customer service.

Here are the questions: Is chatbot technology a threat to the BPO industry? Or is it a friend to service outsourcing providers? Read on to discover the answers.

The Rise of Chatbots in the BPO Industry

Chatbots have become increasingly popular in the BPO industry. But first, let us understand what a chatbot is and what BPO is:

  • A chatbot is a computer program capable of interacting with customers like a living person. It uses AI technology to simulate communication through text messages, chat platforms, or phone services. It can understand customer inquiries, provide relevant responses, and engage in meaningful conversations.
  • BPO involves subcontracting business processes, typically non-core functions, to third-party providers. Typically, a business hires a service provider to handle its tasks instead of entrusting them to in-house staff. Organizations outsource to access expertise and technology, optimize operations, and reduce costs.

Leveraging chatbots is best for BPO service providers catering to various clients. Here are a few ways BPO firms use AI technology in their processes:

  • Customer service: handling basic customer inquiries
  • Sales or leads: providing service information and product recommendations
  • Order processing: taking customer orders and processing requests
  • Appointment scheduling: assisting clients in setting their appointments
  • Social media management: responding to customer inquiries, comments, and direct messages
  • Surveys: collecting customer feedback by asking questions, recording responses, and analyzing data

But are chatbots a threat or a friend to the BPO industry? Find out in the next section.

Chatbot: The Threat Perspective

Let us take a look at how chatbots can pose threats to the BPO industry.

1. Potential Job Displacement

Is chatbot technology a threat to the BPO industry? Many individuals and professionals worry that AI will eventually replace BPO agents. According to the World Economic Forum, AI could eliminate about 85 million jobs by 2025. However, it could also create 97 million new ones. Here is how AI can cause job displacement:

  • Automation of routine and repetitive tasks. Chatbots handle non-core functions through automation, causing retrenchment in the BPO workplace.
  • Reduction of the human workforce. Chatbots can replace BPO agents who assist customers via websites, live chat, and phone calls. AI can take over repetitive customer service tasks from humans.

2. Current Chatbot Limitations

The existing constraints associated with deploying chatbots in diverse BPO processes without human involvement can potentially adversely affect your business. Consequently, some individuals may argue that chatbots pose a threat to the BPO industry. These limitations of AI technology are as follows:

  • Lack of emotional quotient (EQ). Despite the capabilities of machine learning (ML) that enable chatbots to think, they lack emotional intelligence. Unfortunately, active listening, empathy, and comprehension play pivotal roles in BPO customer service.
  • Inability to handle complex questions. Chatbots are still in the process of evolving and are not equipped to handle intricate questions and issues. The necessity for BPO agents remains significant when dealing with complex cases.

3. Considerable Trust Issues and Customer Dissatisfaction

Given the constraints of chatbots, consumers often perceive them as a potential threat and may not place complete trust in their capabilities. In the worst-case scenario, these chatbots can mishandle inquiries and requests, resulting in customer dissatisfaction within the BPO industry. This is primarily due to the following factors:

  • Impersonal interactions. Chatbots, intelligence-simulated machines, have limitations in providing personalized services, resulting in interactions that feel impersonal to customers.
  • Incorrect resolutions. Chatbots may not always fully grasp customer issues, leading to inappropriate solutions. Such occurrences can leave customers feeling unhappy and dissatisfied.

Chatbot: The Friend Perspective

Let us see how chatbots can become BPO providers’ allies in improving business operations.

1. Real Agent and Customer Empowerment

Is chatbot technology a potential threat to the BPO industry? Not necessarily! Chatbots have the capacity to provide valuable assistance to both agents and customers in various ways. Here are a few instances:

  • Reduced agent workload.  As previously mentioned, chatbots excel at handling routine and repetitive tasks. This reduces the workload of BPO agents and allows them to concentrate on their core competencies.
  • Self-service solution. Chatbots can potentially empower customers by guiding them to solutions for their inquiries. For instance, chatbots can address frequently asked questions (FAQs) and direct customers to valuable resources, such as troubleshooting guides and online tutorials.

2. Significant Cost Efficiency

Certain business leaders initially viewed chatbots as a potential threat to the BPO industry. However, their perspectives quickly shifted as they recognized the potential for this technology to diminish operational and labor expenditures while enhancing efficiency and productivity. Delve into the specifics below:

  • Increased efficiency.  Chatbots excel at efficiently managing routine and repetitive tasks. Through automation, they reduce manual labor and expedite processes, ultimately elevating overall efficiency.
  • Cost savings. Outsourcing on its own can yield significant cost savings for your business. Integrating chatbots can further decrease workforce requirements and streamline specific processes, resulting in long-term cost savings.

3. Increased Customer Satisfaction

AI technology has become a game-changer in the service industry. According to Zendesk, customers in the Americas expect AI to make life easier (47% of respondents), save contact time (48%), eliminate repeat issues (48%), and improve customer service quality (42%).

So, is chatbot technology a threat to the BPO industry? The use cases for AI in BPO, particularly in customer service, suggest that employing this technology properly can enhance customer satisfaction. Here is how:

  • Prompt issue resolution. Chatbots handle non-core functions, so BPO agents can focus on resolving customer issues. The more immediate and accurate the resolutions are, the more satisfied and happy customers will be.
  • Enhanced customer experience. Chatbots and live customer service representatives can help improve service efficiency and quality. That cooperation can enhance the customer experience and increase customer satisfaction.

The Bottom Line

The rise of chatbots in the BPO industry is really happening. They empower agents and customers, reduce costs, increase efficiency, and enhance customer satisfaction. But on the flip side, they can replace agents, limit BPO services, and cause customer dissatisfaction.

So that raises the question: Is chatbot technology a threat to the BPO industry? Or is it a friend to service providers? The answers lie in how you make use of this AI technology. 

As AI-powered chatbots have pros and cons, employing human agents and chatbots is best. Capitalize on this AI technology, but leave critical processes to humans for personalized customer interactions and quality services.

Looking to employ both BPO agents and chatbots? Unity Communications can help you with its skilled talent and advanced technology. Let’s connect today to see how we can help you!

Dion Jay Tality
Dion Jay Tality is a content writer and one of the creative forces behind Unity Connect’s blog posts and marketing copy. Before joining Unity Communications, he spent over five years in the BPO industry, wearing various hats—from being a CSR and email and chat support specialist to being an SME and QA analyst. Name it; he tried it! Passionate about writing, Dion loves to bring ideas to life through the power of words. When he’s not busy crafting content, you might find him working out, enjoying mindful walking, exploring conspiracy theories, or singing at the top of his lungs.
Dion Jay Tality

Dion Jay Tality

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