Will Smart Machines destabilize the Offshore Model?

March 31, 2016 11:02 am | Updated 6 months ago.

By Arup Gupta

The concept of replacing manual effort using automation through usage of technology is nothing new. In fact the automation not only reduces cost but can also significantly improve the quality, accuracy and predictability of the output.  Extending this logic, any effort that can be performed by a machine, be it a computer or a robot or a drone, will eventually be automated. Moreover, the scope of automation keeps continuously increasing as the machines become more and more intelligent. It is, therefore, only natural to ask if offshore outsourcing is ultimately going to be replaced by smart machines.

The tasks that have the following characteristics either have already been replaced by smart machines or will eventually be replaced:

  1. Tasks that are repetitive in nature, no matter how complex
  2. Tasks that simply require integrating and analyzing data from multiple computer systems
  3. Tasks that do not require complex human interactions
  4. Tasks that do not require strategy based actions.

If we analyze the type of work that is outsourced today and apply the above criteria, then we will be able to clearly see which parts will get automated or taken over by smart machines, as they continue to evolve and which parts will continue to be outsourced, at least for  a considerable period in future.

  1. Custom Application Development:

While development of applications relating to operations and resource planning of an organization are being replaced by ERP and other off-the-shelf Solutions, there will still be need to develop applications for specific business areas that give competitive advantage to a company compared to its rivals in the business. To be able to meaningfully participate in development of these custom applications, the offshore vendors will need to significantly invest in developing domain and technology competency to enable them to capture differentiated knowledge into these applications. Only then will these applications meet the objective of making the customer competitive in their area of business.

  1. Business Process Outsourcing:

This is one area which stands the maximum risk of being automated or being taken over by smart machines. For example, Call Centers have been heavily optimized over the last couple of decades by advent of many call center products that now replace humans by machines. Sophisticated web crawlers are now available that can go thru multiple websites and provide a detailed comparative analysis of product features being provided by competing companies. Artificial Intelligence (AI) based tools are now available that can, based on past responses, provide answers to complex queries that need access to multiple databases and systems.

  1. Application Maintenance and Support:

This is one area that we believe will continue to be a candidate for outsourcing. The primary reasons for this are:

  1. Fixing a defect not only requires knowledge of the application and the underlying business, but also requires knowledge of the code, the associated databases, inter-dependency with other applications etc.
  2. Every application has a limited lifespan and, therefore, to develop a product or tool that can automate all aspects of maintenance and support for all types of applications will not be commercially viable. In any case, Offshore Vendors always develop tools to automate specific areas of application maintenance and support to optimize the cost and effort.
  • Last but not the least is the readability, maintainability and the performance aspect of the application. Inserting machine generated code into an existing application to fix defects, will severely impact the future maintainability of the application by humans.

QA and Testing: While plethora of tools have emerged to automate all aspects of Testing including Performance and Stress testing, the exercise of creating test cases to comprehensively test an application will continue to require high degree of expertise and skills.