Is Artificial Intelligence a threat to outsourcing industry?

The era of machines has arrived and it is going to be everywhere in our lives. We have been discussing, anticipating, predicting & arguing about AI & it is going to impact us in all directions. Before understanding the impact, we need to look into the rationale behind the offshoring. The main reasons for offshoring are;

• Cost reduction
• Focus on core competency
• Lack of available skills locally
• Risk sharing
• Tap in to global knowledge pool
• Flexibility

While some of the above points can be directly fulfilled by AI, not everything can be. So smart offshoring providers will convert the threat of AI to an opportunity.

Here is what will happen in future!

AI will not disrupt the offshoring industry as much as it is said. Why?

Companies are now adopting technology, but aren’t sure how to apply it to their organisation to reap the business benefits. For AI specifically, according to a report by McKinsey and Company, approximately 49% of activities that require human interaction and management—ranging from processing data to communicating with stakeholders—will be difficult to automate by 2030.

While this need for human interaction may lead to the initial neglect of automation, companies may still choose to automate some tasks to increase efficiency and keep up with competition. If this is the case, businesses will need to train internal employees in AI management, or outsource trained staff. Outsourcing engineers who specialise in AI and machine learning is a great way to ensure that the organisation can utilise a diverse range of technological expertise.

There are few other factors that backs our view that AI is not a threat to the Outsourcing industry in the near future.

AI will not be cheap!

If you are to use AI to do your work, there are going to be multiple cost components to incur. The AI itself is not cheap at this point of time. The costs of training AI models, infrastructure to run AI, staff training to adapt to AI, etc. will be hidden costs of AI. When added together, the cost of AI will be significant. Therefore AI will not be a commodity.

It will not be practical for small companies who do not have IT staff in house. Therefore AI will not be practical unless you are a large organization

Tailored Outsourcing

Outsourcing can provide a diverse range of competencies where technical skill sets are needed, all in accordance with a company’s specific needs.

Through evaluating current staff and then assessing their current skills in comparison to the specific skills needed for the technology they are seeking to implement, the organisation can decide on the amount of outsourced experts that are needed. By nearshoring a team of individuals, the competence of the organisation’s team can be boosted, while still allowing the organisation to have full project control.

Alternatively, if a company has a project that requires a larger number of engineers, outsourcing a full software team allows the outsourced team to work exclusively on the assignment as an extension of the in-house team. This not only extends the team’s capacity with specific knowledge and skills, but also speeds up the development process.

If an agile team is outsourced or nearshored, outsourced people and developers can introduce regular verification and adaptation stages to test an organisation’s product or solution in the real world. This way, if anticipating future product demand, organisations can still increase their production while also easily keeping an eye on their projects. The team will use agile frameworks and work with outsourced technical experts to carefully analyse the project’s aims and design a solution that will deliver the organisation’s vision. This will all take effect alongside a continuous delivery of business value in the process.

New technology is continuously being introduced to the world — from AI. If an organisation decides to begin using one of these technologies, outsourced teams can help to bring the essential skills to that company and project.

By working closely with company executives, the organisation’s vision for their technology is maintained throughout the project. Training internal teams can be costly and time consuming, so outsourcing and nearshoring offers an easy, affordable and reliable solution in the era of rapid technology development

To know more you can drop your queries or connect with us through our email: admin@glocalpinnacle.com