Fear-mongering statements about automation are nothing new. Back in 2015, before Horses for Sources and Gartner clashed over the threat of Robobosses earlier this year, Inter-American Development Bank President Luis Alberto Moreno stated that automation would “hit the Caribbean Contact Center industry hard”, adding that around half of the most popular occupations would become obsolete.
The Caribbean’s ambitious rise to regional contact center dominance, particularly in countries like Jamaica, is occurring due to its high level of English language capabilities, cultural and time zone affinity to the U.S., and governmental support of the industry. Nations in the Caribbean have been relatively insulated from the impact of automation due to its primary capacity as a voice-centric destination, with the channel representing over 85% of BPO volume compared to non-voice processes. So how accurate are Moreno’s statements and what level of automation adoption has occurred in the region since his predictions?
Automation is impacting the entire global BPO industry, and the Caribbean region is no exception, but, according to Anupam Govil, President/Partner at Avasense Inc/Avasant LLC, the prediction that automation will be the bane of Caribbean contact center industry is a bit premature. “In the contact center industry, automation is being leveraged differently than the back-office/transaction processing industry,” he said. “As BPO providers retool their global delivery model to incorporate robotics process automation (RPA), they are clearly lowering their hiring in certain functional areas and skill levels.”
Automation is most commonly expected to impact finance & accounting, service desk support, software testing, and transaction processing in industries like banking, insurance, and healthcare. The threat on the region’s contact centers is currently very minor, primarily focusing on pre-call setup and post-call wrap-up. “Due to an improvement in natural language processing (NLP) and interactive voice response (IVR) technologies as well as the rise of artificial intelligence (AI) driven analytics, agent roles are being re-shaped and productivity is being enhanced,” continued Govil. “This does have an impact on the overall headcount in a contact center, however it is not as significant as the replacement of human agents with IVRs for Level 1 interactions, which has been ongoing for over ten years. In fact, overall, the contact center industry is expected to continue to grow at about 8% per annum due to consumer demand and improved economic conditions.”
Climate of Shifting Demands
Customer care and loyalty programs are more commonly being relied upon by SMEs due to a boom in e-commerce, subsequently driving up the demand for contact center services. Countries in the Caribbean are in a unique position to benefit from this as more customer support functions shift to the nearshore, creating a significant decline in the Indian contact center industry. “Overall this will drive additional contact center jobs in the Caribbean region over the next three years and we expect this industry to grow at 8 to 10% per annum,” said Govil. “However, we are seeing a decrease in interest for non-voice back-office functions in the Caribbean as those processes are being consolidated in Central America, India, and Philippines, and new demand is being offset by increased process automation. It is our belief that the overall BPO industry will grow within the Caribbean at 5-6% per annum.”
As agent skills grow and mature, and infrastructure is improved, the Caribbean IT-BPO industry becomes more sustainable. To negate the effects of automation, there is greater emphasis on upskilling and developing technical and industry/domain-specific talent. The shift towards platform-based BPO (BPaaS), analytics-driven services, and cloud-centric services is also creating new demand, according to Govil. “It is important to realize that the driver of automation within the contact center industry is agent performance enhancement rather than headcount reduction,” he said. “So, contact centers are relatively immune to this phenomenon. The region has to evolve its service value chain and shift more towards domain and knowledge based services to ensure long term sustainability.”
Is Automation Changing Things Already?
Over the last year, automation has affected investments in F&A, transaction processing and service desk areas, but that is being offset by the continued growth of the contact center industry in the region, led by the success of Jamaica and Dominican Republic. Emerging demand in locations such as Haiti (for French/English) and Belize (English) as well as Trinidad (F&A) will keep the momentum in the direction of Caribbean.
Heriberto Rosado, Site Director at Convergys in Dominican Republic, expects to see the region adopt more automation solutions in the future as a means of cost reduction, providing more assistance over chat or providing more information on their website to allow customers to avoid one-to-one customer service. “Communication is no longer limited to just making a phone call, so utilizing the various means to provide information to customers is a priority for companies,” he said. “I have seen some automation being implemented in the region already. For example, Delta Airlines have implemented a system to encourage their customers to take advantage of the different communication channels available to them for things like ticket sales.”
Low Cost = Low Risk of Automation Implementation
Logically, the first regions that companies will target to reduce costs are the ones that cost more, such as onshore U.S.-based contact centers. Cost-effective nearshore locations like the Caribbean will eventually be affected, but Rosado doesn’t expect this for five to ten years. “It’s not about reducing headcounts, because it’s essential that companies in our industry can provide scale,” he said. “While support roles might be the first roles to go, the Caribbean is likely to be the last place where automation-based cost reductions will need to take place. Even so, you need a minimum amount of agents to be there in case of any outages or technology failures. You can’t put all your resources into automation, because one issue could wreck the whole system.”
It seems like the Caribbean workforce is safe from automation for now, providing the perfect chance for vendors to advance their skills and offerings for a future of higher-value services.