“The Philippines’ economically important call-center industry has joined the growing list of businesses at risk of being gobbled up by automation,” writes The Wall Street Journal (June 22, 2016). In recent years, the Philippines, like India, has capitalized on its relatively large pool of English speakers to attract Western companies eager to cut costs by shifting customer service and other tasks to lower-wage countries.
But robots already are starting to displace some humans from low-end tasks such as monitoring the performance of digital networks. And, while robots aren’t yet smart enough to replace the human phone operators who do jobs like fielding calls from bank clients or helping people reset their modems, they will be within 5 years or so, say industry experts. Automation has also taken a significant toll on India’s outsourcing industry, which is heavily involved in networking and information-technology services. Not long ago, some of those services, such as network monitoring, required dozens of human network engineers, but can now be done with a handful of people who oversee a largely automated system.
Climbing the value ladder won’t be easy. TaskUs, a U.S.-based outsourcing company with operations in the Philippines, is among those that are trying. “Innovation is the key to survival,” said its CEO. He says just 1/10 of the company’s 5,000 employees actually are answering phones. Most are managing content on websites or handling customer relations via online chat. A decade ago, nearly all Philippine outsourcing work was phone-based. Now, it is just 60%.
Classroom discussion questions:
- What must the call center industries in India and the Philippines do to survive?
- What are the implications for U.S. operations managers?