COVID-19 is permanently shaking up the global outsourcing industry as lockdowns from Bangalore to Manila prompt firms to “reshore” jobs and, with artificial intelligence (AI), to move further away from needing humans at all.
Restrictions on normal activity in these countries and others have created a logistical nightmare for the managers of call centers and other back-office operations for foreign corporations.
Having their staff work from home is difficult because of rules governing the handling of sensitive material, such as financial transactions for bank customers from Scotland to San Francisco.
Moreover, many workers in places such as India and the Philippines live in crowded housing with poor quality broadband, while some firms do not have enough equipment like laptops to provide to staff.
“The outsourcing industry doesn’t lend itself to working from home,” said consultant Vivek Sood, author of Outsourcing 3.0.
“We are talking about companies which used to ask employees to leave even their pens and pencils outside the office because of security concerns,” Sood said.
Desperate to stay operational, some firms have resorted to having staff live at their place of work.
Vodafone India, for example, said that it has “organized temporary stay arrangements at our data center locations, [and] made food and groceries available at critical locations.”
Similar practices by others have sparked the ire of trade unions.
Business Process Outsourcing Industry Employees’ Network president Mylene Cabalona said that the union had received reports of some workers “effectively quarantined and locked down in their offices.”
The Financial Times early this month published photos that it said appeared to show workers sleeping on the floor of a call center in the Philippines, living in what they described as “subhuman” conditions.
Anthony Esguerra, who works at a Manila firm handling data for a Chinese online gaming company, said that 80 percent of its operations were disrupted.
“The workflow of processing players’ requests really slowed down, since our Internet access was limited compared to when we were working at the office,” he said.
Companies such as telecom firm Spark New Zealand and Taiwanese computer maker Acer, which uses a Philippine facility to serve Australian and New Zealand customers, have simply told people not to call.
Australia’s Telstra and Optus and Britain’s Virgin Media — all of which have offshore units in India and the Philippines — have announced plans to recruit hundreds of staff back home.
However, the bigger lasting change from the pandemic will likely involve the wider use of AI to handle tasks currently performed by human beings, experts said.
“AI doesn’t go on strike, it can work 24/7 and throws up fewer complications,” said Michael Czinkota, who teaches international business at Washington’s Georgetown University.
Telstra, which was already planning to cut customer service calls by two-thirds by 2022, now plans to accelerate its use of AI.
“[We] will be using this as an opportunity to further digitize and automate our business,” chief executive officer Andy Penn told the Sydney Morning Herald this month.
“COVID-19 [has] achieved in six to eight weeks what the evangelists of automation have not managed ... for more than five years,” Ilan Oshri from the University of Auckland’s Graduate School of Management said.
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