Why Automation is not Going to Replace Outsourcing?

Artificial Intelligence and its impact on Outsourcing


Hitting and destroying the machines to prevent their unemployment could have been perceived as a plausible idea for employees on 18th century while short term factors were in consideration, but they were not able to understand that in long term these machines were about to improve their lives. The new production techniques from the Industrial Revolution proved to be one of the most progressive insurgencies for mankind. The need for new professions increased, productivity grew, the number of commodities rose, and eventually the overall welfare was improved.

The history could repeat itself. Nonetheless, this time it is not the invention of new production machines that is grabbing the headlines, but the Artificial Intelligence, the intelligence demonstrated by the machines! According to a study of Oxford University, 47% of all jobs in the United Stated are at risk of “computerization”. The same concerns again, people will lose jobs and we will need time to adapt with the automation phenomena. However, the bright side is that in the long run we can expect again an improvement of the society as a whole and an increase of the standard of living.

One thing must be emphasized, people should be aware of the jobs that are going to be mostly affected by AI, and they should understand how it will affect the global economic system as well.

Which are most vulnerable professions to AI?
High skilled and low skilled jobs have been less vulnerable to AI process so far. Jobs that need creativity, face to face interaction, and generally physical jobs are more resistant to AI. Jobs that require high skills and human interaction, like management, medicine, engineering, data scientists, education and other professions are still reserved only for humans.

The most affected category are middle-skilled workers. A recently released report from the Organization for Economic Co-operation and Development (OECD), found that across OECD-member countries, the share of workers in middle-skill jobs fell from 49% in 1995 to under 40% in 2015.

How will AI affect outsourcing process?
Instead of outsourcing, the companies could try to automate some of the business functions. But is this the best idea? Why is outsourcing still a better option than automation of jobs? There are 3 main answers to this question;

1. Building human to human relationship
From customer perspective, it is a different experience communicating with robots instead of humans. A professional company is aware that building human relationship with clients is crucial, and they are conscious that using computers to communicate with their customers can be perceived as offensive to them. This is one of the reasons why professional businesses will choose outsourcing instead of using automation to some of company functions.

2. Customer Service Quality
Concerning human to human relationship, similarly, the human ability to communicate, to understand emotions, be attentive, be able to read customers, and the ability to use subjective judgment will be major concerns to consider before deciding to automate your company’s business processes. These are some of the characteristics that AI is not able yet to copy from humans. And yet these characteristics have immense importance for providing a qualitative customer service.

3. Some of the outsourcing jobs need highly skilled employees
Highly skilled workers are not going to be replaced by AI. Many decisions undoubtedly will need human reasoning for future time to come. For example; doctors, data analysts, judges, business executives, privacy advocates, relationship building strategists, trainers, teachers, consulters, may be jobs that use automation as a tool, but ultimately, they will need that human touch in order to interpret complicated matters with sound reasoning.

Looking back to the Industrial Revolution, it really led to an extraordinary high standard of living for most of the employees. But this prosperity didn’t instantly materialize. There was a period in which life inside of factories was miserable for the laboring class. It included paltry wages, terrible working conditions, and child labor.
Today, during what the World Economic Forum has dubbed the “fourth industrial revolution,” even optimists expect short-term labor displacement, wage depression, and, for some workers, pain.

But in the long run, as history teaches us, everyone will benefit from this revolution, the total welfare will be improved and the globally established economic system including outsourcing phenomena will continue to thrive.