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

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Written by Dion Jay Tality


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 the power of 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

With its current limitations, employing chatbots in various BPO processes without human intervention can harm your business. Thus, some might argue that chatbots threaten the BPO industry. This AI technology has the following limitations:

  • Lack of emotional quotient (EQ). While machine learning (ML) allows chatbots to think, they have no EQ. Unfortunately, active listening, empathy, and understanding are essential in BPO customer service.
  • Inability to handle complex questions. Chatbots are still evolving and cannot handle complicated inquiries and issues. You still need BPO agents to deal with complex cases.

3. Considerable Trust Issues and Customer Dissatisfaction

Because chatbots have limitations, consumers consider them a threat and cannot trust them completely. Worse comes to worst, these chatbots can mess up inquiries and requests, causing customer dissatisfaction in the BPO industry, through the following:

  • Impersonal interactions. Chatbots can only do so much. As intelligence-simulated machines, they cannot currently offer personalized services.
  • Incorrect resolutions. Chatbots might not fully understand customer issues, leading to inappropriate solutions. That can make customers 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 threat to the BPO industry? Not necessarily! Chatbots can help both agents and customers in more ways than one. Here are a few examples:

  • Reduced agent workload. As mentioned, chatbots can handle routine, repetitive tasks. Not only can they reduce the BPO agents’ workload, but they can also allow them to focus on their core competencies.
  • Self-service solution. Chatbots can empower customers by helping them find solutions to their problems. For example, chatbots can answer frequently asked questions (FAQs) and refer customers to resources, such as troubleshooting guides and online tutorials.

2. Significant Cost Efficiency

Some business leaders think that chatbots are a threat to the BPO industry. But they quickly changed their minds after realizing this technology could help reduce operating and labor costs while increasing efficiency and productivity. Check out the details below: 

  • Increased efficiency. Chatbots can handle routine, repetitive tasks more efficiently. Automation helps reduce manual work and accelerate processes, boosting overall efficiency.
  • Cost savings. Outsourcing alone can cut your business expenses. Integrating chatbots can reduce workforce headcount and simplify specific processes, helping you save money in the long term.

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!

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Author - DIon Jay

About The Author

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.

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