How AI Enhances Outsourcing Decision-Making and Efficiency

Artificial intelligence (AI) and automation have been changing multiple sectors in the global scene. Ever since the dawn of generative AI, various industries have been adopting new technologies to improve efficiency, cut costs, and fast-track processes. The global outsourcing and offshoring sectors count among these industries.

Although they may bring expected process benefits to outsourcing or offshore staffing, emerging technologies will significantly impact offshore leased staff in the Philippines.

Jack Madrid of the IT and Business Process Association of the Philippines (IBPAP) is optimistic that adaptability will prepare Philippine remote workers to face AI challenges head-on. Offshore talents of the IBPAP have already made plans for an AI-reliant future.

However, due to the far-reaching effects of AI, industry leaders are also looking to regulate artificial intelligence outsourcing.

Key Takeaways

• AI is an Enhancer, Not a Replacement, for Outsourcing: Artificial Intelligence and automation are not seen as threats that will eliminate outsourcing jobs. Instead, they are powerful tools that will enhance efficiency, augment human decision-making, and create new, higher-value roles within the industry.
• A Strategic Shift to High-Value, Tech-Centric Roles: The integration of AI is transforming the outsourcing landscape. The most in-demand roles are shifting from traditional administrative tasks to more specialized and technical positions, such as AI and machine learning specialists, data analysts, information security analysts, and blockchain developers.
• Upskilling is the Key to Future Success: For outsourcing hubs like the Philippines to remain competitive and capitalize on new technologies, the key is to upskill the workforce. Professionals need to be trained in emerging fields like automation, data science, and cloud operations to meet the evolving demands of the global market.
• Regulation and Security are Critical, Growing Concerns: As AI becomes more deeply integrated into core business processes, regulation and security are becoming central considerations. Companies must be aware of and compliant with evolving legal frameworks, such as the EU’s AI Act, and ensure that their AI implementations address risks related to cybersecurity, data privacy, and potential biases.

What are Artificial Intelligence, Automation, and Other Emerging Technologies?

According to IBM, artificial intelligence is a technology where computers imitate or simulate human intelligence and problem-solving capacities. 

AI uses machine learning and deep learning to make accurate simulations. Machine learning is a method of data usage and algorithm creation that allows AI to imitate human learning. Deep learning is more focused on accurately following how humans make decisions.

Generative AI is a form of AI that can create content based on user prompts. This content is based on information fed to the gen AI for machine learning and deep learning. The gen AI then takes this information and forms an appropriate response to a user request.

On the other hand, automation is the use of technologies, programs, and processes to perform tasks with little to no human input. Other emerging technologies include data analytics, blockchain, virtual reality, and augmented reality.

How Can New Technologies Be Used for Outsourcing or Offshoring?

In the outsourcing or offshoring industry, new technologies are slowly being applied to perform tasks and fulfill roles. According to a 2024 analysis by the International Monetary Fund (IMF), artificial intelligence is expected to impact about 60% of jobs in advanced economies and 40% in emerging markets.

At first glance, AI may seem to threaten the livelihood of offshore Philippine workers. However, AI and other new technologies will yield new roles and responsibilities. The IBPAP forecasts the Philippine outsourcing industry to grow by 2028 with 2.5 million offshore workers and a market worth $59 billion. 

Moreover, based on a report by the World Economic Forum, new positions that will be created include:

• AI and machine learning specialists
• Business intelligence analysts
• Information security analysts
• Fintech engineers
• Data analysts and scientists
• Big data specialists
• Blockchain developers
• Process automation specialists.

In these instances, the IMF suggests that high exposure to AI and worker preparedness will allow workers to take advantage of AI capabilities. Workforces must be upskilled with digital skills, and infrastructure for such new technologies must be developed.

These recommendations apply all the more to Philippine outsourcing companies. Outsourcing and offshore technology must be developed to make space for AI, data analytics, and other new technologies. 

In the future, a list of outsourcing companies with AI in the Philippines will matter in the decision-making of businesses and organizations in major outsourcing countries. 

Shaveer Mirpuri of the Forbes Technology Council gave an example that offshore data scientists and data engineers may bring cost savings. The salaries of the offshore team may be considerably more manageable than the salaries of an onshore team.

To be poised as some of the best AI offshoring companies in the world, the Philippine workforce must learn automation, data science, data analytics, business analytics, cloud operations, and blockchain technology. New skills give Philippine remote workers the capabilities for future work.

Related articles:

• How Much Does It Cost to Hire Remote Workers in the Philippines?
• Discover Potential Cost Savings—Use This Offshoring Salary Calculator

How Can New Technologies Improve Outsourcing or Offshoring?

In light of the influence of AI and new technologies, AI may be used either as a tool or as a service in the outsourcing or offshoring industry.

Offer AI Outsourcing Services

AI outsourcing companies are not yet common. However, AI development will only grow as a field of work. 

Rather than hiring for AI offshoring companies later, organizations may pool offshore artificial intelligence developers today. Teams of experts in new technologies may leverage companies to face the outsourcing needs of the future.

Not all organizations will have the infrastructure and workforce capabilities to support an AI, automation, or blockchain system. Small and medium enterprises will need external assistance to perform advanced technological processes and tasks for them.

These companies will become the market that is ripe for targeting by AI-ready outsourcing organizations. This way, cost-efficiency may still be promoted and may continue to be a big draw for those who need offshore AI developers.

In addition, AI services may be a boon to the global talent shortage. A strong offshore team with AI capabilities may provide the necessary expertise to small and medium businesses that have difficulty finding in-house talent.

Build Efficiency Across the Board

Aside from AI outsourcing services, offshore companies and organizations can also develop intelligent workflows. Automation has capabilities that can be applied to finance, human resources, procurement, and customer operations. Such an application can cut through tedious, repetitive tasks, allowing offshore workers and their companies to focus on their core responsibilities.

This is called Robotic Process Automation (RPA). Robots interact with systems and applications to perform repetitive tasks that take human workers time to do. However, the process is not altogether human-less since human intervention may still be required minimally.

Augment Human Decision-Making

Business intelligence can be used to enhance the decision-making process of humans, especially in offshore strategizing. The application takes machine learning algorithms and data analytics to process insights. AI then scrutinizes the data to find patterns, trends, and connections. Human analysts, leaders, and decision-makers may then make more accurate choices.

The application is useful, as it allows business intelligence to cover vast amounts of data that may be too taxing for human analysts to study. At the same time, it cuts down on analysis time and helps analysts discover insights that may not be readily apparent.

What to Look Out for When Using New Technologies?

As much as AI may greatly benefit outsourcing or offshoring companies, concerns also exist about the unchecked impact of AI. Many have called for regulation. 

In the US, the federal government has yet to pass regulations for AI. However, sector-specific and state agencies have attempted to address the impact of AI. 

For example, the Federal Trade Commission is aiming to protect consumers. Meanwhile, the California Consumer Privacy Act placed limits on businesses that use AI technology and process consumer data.

In the EU, the landmark Artificial Intelligence Act was formally approved and passed into law in 2024, establishing a comprehensive risk-based framework for AI development and deployment. This information is vital to AI system functions.

For one, a risk-based approach helps assess what limits should be established for AI. Lawmakers are looking at AI applied to privacy, non-discrimination, and cybersecurity. 

In this sense, outsourcing or offshoring organizations must check what risks the implementation of AI may bring. Efficiency and cost savings are well and good, yet factors such as cybersecurity and privacy are equally important.

In addition, industry leaders are calling for sector-specific AI applications. ChatGPT is still a sector-agnostic program. Applied to specific industries, flaws, errors, and biases may surface. For this reason, sector-specific AI is needed for adherence to sector-specific rules and needs.

Enhancing Outsourcing or Offshoring with New Technologies

The outsourcing or offshoring industry will forever change with the emergence of AI, automation, data analytics, and other new technologies. With that, the Philippine remote workforces must be prepared with new skills and knowledge in tech-related areas.

Integrating AI strategically helps your business scale. Processes may be streamlined, and cost savings as well as efficiency may rise with AI’s help. Although regulation is also needed to keep AI in check, the impact of the tech is clear. The only way forward is to embrace AI and the changes it brings.

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