The Effect of Artificial Intelligence (AI) on Business Outsourcing

by Marika Kim

Dec 11

There has been a tidal wave-like effect on the software industry as a result of artificial intelligence (AI) advancement. Several manual tasks have been eliminated in the process of automating many different applications. AI has changed both the software and business process outsourcing (BPO) industries over time.

It’s safe to say that, thanks to AI and the way it’s changing outsourcing, the world of digital services will have a brighter future. It’s not surprising that AI is being developed quickly and that businesses are relying more and more on outsourcing vendors instead of traditional in-house development teams.

The growth of AI is thought to be exponential and will eventually begin a technological deviation—a phase characterized by an unstoppable process. It is having an effect on the software outsourcing market because it has better automation, better control, a competitive edge, lower costs, better contracts, and more security.

Outsourcing Will Change in These Ways, Thanks to A.I.

1. Enhanced Automation

Being able to get things done right away is critical to staying on top of your game in the business world. The use of artificial intelligence (AI) can improve the speed at which tasks can be completed. When formulating IT operations strategies for businesses, technology leaders must keep time constraints in mind. As a result, when an emergency like a system failure affects the entire organization, it can have an adverse effect on production and the bottom line.

AI’s machine learning and deep learning can improve automation because they let software programs learn on their own instead of just following a script. In order to free up employees to work on more important projects or tasks, functions like understanding and decision-making may be outsourced. IT companies that use AI in their business models can give businesses solutions that can understand data better than humans can. This increases productivity and reduces the chance of human error.

2. Cost Reduction

As a result of its speed and reliability, AI technology has the potential to reduce the cost of outsourcing. When outsourcing a department, hidden costs like on-the-job training can be reduced or eliminated. Machine learning techniques such as deep learning can help to reduce these hidden costs, as AI technology is able to train itself on tasks. Another advantage of using technology is that it doesn’t require a physical location like a human. Suppliers whose business models include an AI strategy can expect to see a big drop in their labor costs as a result.

3. New and Improved Contracts with Flexible Clauses

AI opens up new possibilities for outsourcing that could change the service terms and service-level agreements that are already in place. It will also have an effect on contract negotiations by executives. Cost will no longer be a sustainable competitive advantage as economies of scale are created as time, technological advancements, and increased demand combine to give an enterprise buyer more flexibility in price and terms.

Because it has the potential to tie a company to a single supplier, CIOs and technology leaders should be aware of how AI will affect contracts regarding ownership of the technology. If the company’s plan is to bring AI technology back in-house, it is critical that ownership terms be negotiated.

4. Increased Security

Data security breaches and compromised personal information are two of the most common consequences of outsourcing. Vulnerabilities in enterprise infrastructure can be used by untrained employees or people with bad intentions, who may not put sensitive data first.

If an AI system has been taught to do the right things, you can trust it as a resource. The current AI technology concentrates rather than emulates human intelligence, as IBM “Security Intelligence” writer Rick M. Robinson points out in an article on safety when using AI for business processes. AI technology and human knowledge can be used together to predict and find security breaches. AI2 at MIT, which uses human experts and big data to predict more than 75% of cyber attacks, is a good example of this phenomenon. IT outsourcing companies that incorporate AI technology, or offer the option of releasing the technology to your enterprise after a predetermined licensing period, can increase your enterprise’s security.


Through automation, AI can promote efficiency, reduce costs, provide control, increase security and improve contract negotiation terms for business process outsourcing.

To meet the needs of the modern world, outsourcing is constantly evolving and expanding. When it comes to expanding your business, ADDMORE has the technology and resources to help. AOI offers a wide range of affordable offshore and outsourcing options for clients all over the world, with offices in the United States, Ireland, the United Kingdom, Australia, and the Middle East, among others.

Visit ADDMORE’s website to learn how ADDMORE’s business process outsourcing (BPO) services can benefit your company and the industries you currently serve.


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