The End of Call Centres Will Devastate Manila and Philippines

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1.2 million Filipinos work in call centres based in Manila and across the Philippines.  The BPO industry has been a blessing for the nation and has created a middle-class that was nearly non-existent before the late nineteen-nineties.  Trickle down businesses in the capital city have flourished over the last two decades and depend heavily on the disposable income of twenty-something call centre representatives (CSR) who, in many cases, have few bills to pay.  Whether you’re working in Ortigas, Eastwood or the BGC, you’ll find Karaoke bars that stay open 24 hours a day, and a multitude of coffee shops and fast food joints that also never close.  Since much of downtown Manila caters to the needs of call centre employees, I have to ask the following:  When one tech magazine after another report on the future automation of all call centres, why do local and federal authorities seem so nonplussed about the eventuality?

Eighty percent of all call centre jobs will disappear by 2025; please don’t doubt this.  With an average salary of $450 per month, that results in 5.2 Billion USD disappearing from the Philippine economy.  What industry will replace all these jobs?  Six percent of the Philippine GDP is from call centres and the elimination of these dollars will cause an economic fallout that the Philippines has never experienced before.  The 24-hour Karaoke bars will close down and the coffee shops will let employees go or just call it quits.  The employees who share nice downtown apartments with other CSRs will move back in with their parents and buildings will cut rents in half and still have no tenants.

Doom and gloom?  Well, yes, it is and Filipinos should start preparing for the inevitable.  They won’t…because Filipinos have a money in, money out mentality and that’s unfortunate.

If you are presently a call centre employee and have been for a while, I want you to ask yourself the following:  Has the software you’ve been working with changed in the last five to ten years?  Is it more efficient?  I was in the call centre/help desk business for a very long time, here in Canada.  I once worked in a bank call centre with one hundred and fifty employees.  There are less than forty now and it’s because of automation and more efficient software.  Five years from now, that same call centre will employ ten CSRs maximum.  I was told by an employee that although business has neither increased or decreased, at least one CSR is let go every month.

Celaton is a software company, headquartered in London, England.  They are one of several companies that have created, and are still perfecting, software that can mimic any call centre function other than upselling product.  Help desks, for instance, will be replaced by virtual bot assistants who can answer any question and understand any accent.  Chat box questions will be answered by virtual software that can decipher complex typos and bad grammar.  This is happening now; it is not a future development.  It is happening now!

Another factor to consider is the telecom infrastructure in Manila.  New technologies will require faster broadband capability and almost one hundred percent reliability.  The Philippines cannot handle such expectations, especially something that will require huge investment in infrastructure.  Who is going to pay for this knowing that automation will be crushing the industry? 

If you’re a CSR right now, ask yourself what you will do five years from now when that BPO company that has supplied you with a paycheque decides to move their call centre operations back home?  What are you going to do?

What’s scary is that there is no replacement industry and there is no plan to create a replacement industry.  The Philippines seems ambivalent when it comes to creating new industry and seemingly prefers to wait for foreigners, such as Japan, to offer big dollars to exploit resources and the workforce.  I hope that Filipinos take matters into their own hands and become independent.  As it stands now, when this economic retraction begins, Manila will be in chaos and an entire nation will suffer through a recession never experienced before.  

Stop kidding yourself, the demise of the call centre industry in the Philippines is going to happen.  Prepare now.

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31 COMMENTS

  1. A friend of mine actually posted this on her Facebook Timeline, and tagged/mentioned me, asking for my response. Well, here they are:

    1. The human voice is spoken with empathy and emotions; virtual bot assistants can’t do that.

    2. Software with the sophistication of all the human voice mimicry you can imagine will be expensive. Hence, real-people call centers will still be cheaper on the fly, especially if the cost of the latter is paid monthly, compared to the one-time cost of purchasing the everything-on-it software.

    3. Human voice mimicry cannot copy the ad libs and millisecond responses of a real person. Not one software has passed the Turing Test. Artificial intelligence is still, today, a philosophy and a concept.

    4. Despite all the chat and text messaging channels to deliver customer care and support, including sound-alike human voice mimicry, it has not delivered near-perfect customer service. The real person still needs to intercede. Again, there is no empathy and emotion in any AI-oriented voice software.

    5. That’s why the Philippines took over India as the call center capital of the world. It wasn’t diction nor was it intonation; it was culture. When a complaining American talks to an Indian, the latter sounds indifferent, sometimes defensive. But that’s not intentional; it’s culture. If they think they are right, they will tell you so. FIlipinos, on the other hand, are submissive by culture. If you tell a Filipino he or she is wrong, they answer back, “I’m sorry.” No defense mechanism in place. Even the intonation is so apologetic.

    5. And lastly, overall, I still believe the total cost of ownership (TCO) of leasing customer contact services from a call center far outweighs buying, installing, managing, maintaining and troubleshooting human voice mimicry software.

    This article is pure opinion. It has no references and factual basis to declare the doomsday scenario of the Philippine call center industry. Artificial intelligence in human voice mimicry and responses? Not yet. Not in the next 50 years. Or not until Star Trek literally exists.

    Addendum: I work in the telephony solutions market, the makers of the second most popular open-source telephony software in the world, used mostly by call centers. An AI module in the open-source market is available for integration, besides the non-voice components we have added to a growing software yet simplified many things to make it very easy for the user and the admin. But the AI module only mimics preprogrammed responses. Human logic isn’t there; intonation isn’t there; empathy isn’t there; nor is emotion. Simply put, I know where we are heading. If we knew of the doomsday scenario written above, then we should have started creating our exit strategy out of this industry. But we haven’t, because we know it may (not “it will”) happen by the time we’re all dead. Maybe.

    • The article and it’s topic is nothing short of a MYTH. Where did they get their sources to say that the end is 2025 when customers left and right are breathing a relieved sigh when they finally got a human operator after getting through the machine? Sure it is very possible that humans will get replaced but we will be lucky to even witnessed that within our lifetime. This article can be compared to people who was propagating that the end of the world last 2012. Full of fear, full of opinion zero facts.

      • Let me answer your question with some first hand knowledge. I lived in The Philippines for the past 14 years and just returned to the US in mid October and I will NEVER return to PI. I was hoping that after dealing with (edited) Filipinos who can’t even BEGIN to understand or speak proper English.

        Sure as anything, the first time I had a question about my internet/TV bill and called Customer Service, I got a (edited) Filipina in Manila. She was worse than useless and eventually I managed to get a person in America to assist me. That person was not very well educated either, but she at least understood my English, and me hers.

        When I eventually complained about being forced to speak to a Filipino first, she told me that within the year (possibly a bit longer) the company, Spectrum https://www.spectrum.com/ will return ALL call center positions to the US and that will eliminate a large number of Philippine call center positions. Here also is one reason why The Philippines will lose call center and internet dependent businesses. My internet speed is this, and I live in a very rural area. http://www.speedtest.net/my-result/6798803915 When I related this story to my agent in my phone company (AT & T) he told me that AT & T brought all their jobs back to the US more than a year ago. Anyone who thinks the call center business is not going to end is just hiding their head in the sand and those who think voice recognition and the like will never replace humans because of some “lack of empathy” or other idea is also refusing to accept reality. I would rather talk to a human than a machine, but machines are here and will replace humans soon. It doesn’t take much of a machine to (edited) than a Filipino, so just prepare if you are a Filipino working in the call center business or any peripheral business.

        (This is a site that caters to Filipinos. PLS be respectful. Admin Moderator)

        • If your profile is to be believed, then you are married to a Filipina. How ironic that you are married to someone whose race you hate so much?

    • Very good reply Raffy. The author of this article is overreacting to this automation trend. Also he is not confident enough to put his/her real name on the article. As always your writing is exceptional. You should really consider making a book.

    • Amen to your 5 points Rafael Pekson II. While I agree to preparing employees to develop their skills and competencies as more is expected of them — i.e. a customer support staff who answers complaints or provides product info. is now expected to have technical skills, upsell while doing this through voice, chat or even through mail. Soon this same agent will get more premium if they can speak not just in English but also in Mandarin, Nihonggo, French, etc.

      AI is more applicable in animation, maybe medical transcription, legal research, engineering designs where software or algorithms takes precedence over spontaneous human responses and all the psychological dynamics that go with it.

      I have been the Head of Human Resources and Talent Acquisition in the top BPO companies for the last 15 years and I haven’t seen thousands of call center agents being laid off because of a groundbreaking software that takes their place. If there is any threat, its sometimes the propensity of agents to commit fraud in some financial institutions resulting to termination of the same.

      The sky is not falling . . .

  2. https://ph.yahoo.com/finance/news/rise-machines-philippine-outsourcing-industry-braces-ai-032326177–finance.html

    1st to be affected are
    Call or Contact Centers – inbound/outbound services for sales, technical support, directory,etc.

    BPO consist of not only Call or Contact Centers. In the Philippines, the major component of BPO industry are Architecture, Engineering, Animation & I.T. intensive services, data Transcription, and the IPO or Industrial Process Outsourcing includes Ship building or Modular Buildings/Structures.

    The Philippines’ share of the global outsourcing pie, estimated to reach about $250 billion by 2022, is forecast by the industry to reach 15 percent by that year.

    To get there however, the Southeast Asian nation must prove to the world it has more to offer than just a pool of English-speaking talent. BPO executives said the country has to take on high-value outsourcing jobs in research and analytics and turn the headwinds from Artificial Intelligence into an opportunity.

    IBPAP has projected a rise in the number of mid- and high-skilled jobs or those that require abstract thinking and specialised expertise which should bring overall headcount in the BPO sector to 1.8 million by 2022.

  3. There is a need to diversify, from Call Center business to other emerging markets. Call Center is just one of the option in Business Process Management (BPM) and we haven’t explored all other facets, namely: strategic alignment, governance, method, IT, people and culture. Call Center is just one line of business that we mastered, it is time to look at other opportunities. For instance, RPA (RoboticProcess Automation) will surely replace most (if not all) of the swivel-chair tasks that our BPO industry is currently enjoying and the sooner we get our feet wet with this technology, the sooner we transition to another source of revenue. Clearly, RPA is new but the adoption rate (e.g. Australia, US and UK) is already accelerating. It is not too late….but we need to act now!

  4. A big MYTH! As one of the big bosses of a big bpo company operating in PH said. There WILL be an end to call centers not just in PH but in the whole world but that is after they perfected the embryonic technology of AI technology they are developing. 2025?! Why even now automated system still needs to be man handled by stressed IT specialists?! Why almost every single time a customer will exclaim “FINALLY A HUMAN!”/”ARE YOU A ROBOT?”. Never did I received a call demanding the customer to be transferred to the AI/System? That alone will show that this article is nothing short of personal opinion and fear mongering without even giving conclusive facts and sources where the author got his/her info. I’d rather believe the bosses/owners of bpo companies than an article without factual basis. Again this article like its topic is nothing short of a MYTH!

  5. Good. Nakakahiya. Dapat manufacturing and engineering gaya nang sa tsina making products from 1st world countries like usa and japan. I tapon yang call center sa india. Kakahiya

  6. There is only one thing I absolutely hate even more than talking to a customer service representative, and that is listening to automated bots attempt to “help” me solve my problem. It’s frustrating. I cannot imagine bots successfully replacing a person and improving the service at the same time.

  7. just like the factory they replace it with robotic arm’s, but still machine needs an operator. and some factors still offers manpower.

    call center could nor might be, replace with robots, bots, or autobots. hmmm answering almost all question ? hmmm they would need a “Ai” computer to do that.

  8. Hi,
    I don’t know anything about AI in call centers but I think the writer has the point because of the following and not “bots or whatever”.

    I never phone a contact center or call center as you call them. Ever. I can find anything I want on the company website. Maybe it’s different in other countries, but I work for a major credit card company and I can tell you that we have no new jobs for agents. None. We outsourced for awhile but I’m pretty sure that the overseas center has been culled to nearly nothing. My buddy Brett has been the call center guru for twenty years and in the heyday he used to interview twenty times a week, easily. Not anymore. Here’s why I think the industry is dead:

    1. First off, I read a comment about cost and it’s a good point but fifteen years ago I paid $2000 for a fifty inch TV and last year I bought a 4K 50 inch flat screen for four hundred dollars at Walmart. Cost is an irrelevant discussion point especially if several companies are vying for the same business.

    2. The world has changed, especially with anyone under thirty. Hell, even an older guy like me. I would rather text than talk and I sure as hell am not going to speak with a call center even if I’m looking for “empathy” (seriously? That is such a 1990’s comment, it’s laughable). No, I will search on Google or comb the company website to fix or complete a task. we have millions of customers in my organization and everything can be resolved via the website and/or email. We used to have a big three story building just for our agents but now they share one floor with the IT gang. There is a need for a call center, I believe, but only as part of the longer transition to newer technology.

    3. What modern business is going to spend thousands or millions of dollars on a call center unless it’s for selling stuff and even that is so annoying.

    4. The Trump effect. This could be a long shot but he is walking on water as far as the economy is concerned in the US and he doesn’t want it to stop. There is already talk of a special tax for outsourcing and I’m betting that it will be legislated next year before the 2018 mid-term elections. With lower business tax already becoming a reality, I can see a lot of stuff coming back stateside. Trump will shame any company that outsources.

    Someone asked what kind of business could replace call centers and based on this article I would say anything that has to do with Robotics or the environment.

    • Agree…showed my wife an article celebrating the implementation of the first corn combine in the US….early 1900s. I have never seen a combine in the Philippines!!

  9. All wealthy countries in the world have something in common: all have strong manufacturing base. Production of goods has always been the backbone of wealth-creation. Walang problema sa service-oriented industries, but it’s time we shift to producing goods than just being consumers of goods exported to us.

  10. “Artificial intelligence is still, today, a philosophy and a concept.”

    No. Artificial intelligence is now a reality. It is no longer a fiction hollywood story. AI is already being used in medicine. If AI is already applied in human healthcare, then for sure, it is already used in telecommunications. Better be prepared than resist the reality.

  11. I was beginning to believe this article, untill I saw who the author was! He is well known in the ex-pat community here as A Filipino hater.

    • What author are you referring to? If you are referring to Mr. Lynch, he did not write the article and is unknown to this website. The article was written by me; someone who is very concerned for Filipinos and adores the country and is in the process of building a home for street children. I also have 20 years of call centre experience as a CSR, Supervisor, Manager and owner of call centers. Please be careful with your assumptions, but at the same time, I certainly appreciate your input. You are welcome to post at any time.
      p.s. I hope I am very, very wrong about the future of call centres and I apologize to my Filipino friends if I have upset you. That was not my intent.

      Robert J

  12. I don’t believe that the call center industry will disappear because of the simple fact that people will prefer to interact with humans. The least expensive call center agent is still better than the most expensive hi-tech AI currently available.
    The majority of people will prefer to interect with people and not simply tap links on their screen or google the information with pre-recorded answers. We are no-where close to mimicing human interaction, I mean we can’t even perfect self driving cars (Tesla isn’t yet safe to drive out of the highway) which I believe is less complicated than mimicing the genuine sound of a human voice.
    Humans will build majestic buildings, come up with complicated algorithms, and maybe discover new elements but we are not anywhere near to mimicing the way a human mind project it’s thoughts through a genuine human voice.

  13. I agree on many things that are written in this article, except for the year as nobody really knows the exact year on when it will happen. It is already a fact that call centers or contact centers will replace by AI. Capitalists, technologists, and people who are working in AI development are aware of this. Forbes and The Economist even have articles about this. We don’t know when will PH be affected by this, but it will happen for sure. I believe the year 2025 is a (little) bit late. With the current pace of AI development, it could happen even before 2020.

    https://www.forbes.com/sites/forrester/2017/02/07/top-trends-for-customer-service-in-2017-operations-become-smarter-and-more-strategic/#4d4904e91b95

    https://www.forbes.com/sites/blakemorgan/2016/02/16/the-economist-predicts-robots-will-replace-contact-centers/#34b918c51e74

    Lastly, Millennials are slowly replacing the previous generation as a dominant customers. The previous generation prefer calls and human-interaction but Millennials prefer email, self-service and chatbots as they grew with digital technology on their hands.

    https://www.forbes.com/sites/micahsolomon/2016/12/27/millennial-customers-will-dominate-2017-is-your-customer-service-experience-ready/#7a45e88444d0

  14. just stop living in the old age of technology. I am a developer and I know the vast potential of AI overtaking most jobs that are manually done up to this date (not just a BPO Industry). Stop being ignorant about the technology trends. Adapt and survive. Learn something else and be prepared if your job goes to extinction in the future. This is why education and learning new things are important. The problem with some Filipinos especially those in the BPO Industry (not all) is that once they earned 40k up, they just stop learning. Come on! Let’s admit it the BPO Industry especially in the Philippines just caters desperate, drop-outs, and people who did not succeed in their career paths. What will you do now if the industry is gone? Sagot!

  15. I spent the last 20 mins reading through this article and all comments. Found everything very insightful.

    I’m an Indian, working in the call center industry and been in the Philippines for the last 5-6 years…(oh and I absolutely love it here).

    Trying to perhaps present my ‘fears’ if you will… it ain’t the demise of the call center industry that I’m worried about…everything will evolve…as some comments rightfully present it…as we progress in science and technology…things will improve and hence there probably will be alternates to calling a call center to get a query resolved…will it completely kill the call center industry in the Philippines…I don’t know if anyone can predict that…and by the way…if ever that happens (death of call centres)…it won’t be just in the Philippines….it will be everywhere…so if ever…this will be a ‘Global’ problem not a ‘Philippines’ problem.

    But I personally feel we have bigger things to worry/think/ponder about when it comes to enhanced techonological advancements (some call it Robotics, Artificial Intelligence, Machine Learning, Neural Networking or the most popular one Block Chain). The concept of ‘Value’ is changing fast…real fast…for the longest time…the world ‘Valued’ everything in terms of Dollars…it is fast moving into things like ‘Cryptocurrencies’ like Bitcoins…where 1 bitcoin is worth several thousands of dollars and that is unregulated currency, totally controlled by machines! So if you have a six figure salary…in times to come…it perhaps may turn into a 2 figure salary…

    Yes technological advancements are becoming real…are they a threat…dont know.

    Are call centres in the Philippines about to die…don’t know.

    Are we moving towards a New World Order…perhaps YES…really fast.

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