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Automation and outsourcing, the future of business

IN today's rapidly changing economy, outsourcing has become a popular strategy for businesses seeking to focus on their core competencies and strategic priorities while leaving non-core functions to third-party providers who can perform these functions more efficiently and effectively.

In the Philippines, I remember when the outsourcing industry experienced rapid growth in the early 2000s, with the government passing laws that encouraged foreign investors to do business in the country. Additionally, economic zones offered incentives to businesses that helped the industry continue to grow even more.

In recent times, the Covid-19 pandemic accelerated the trend of outsourcing work as many companies have been forced to adopt remote work policies and digital solutions to maintain their operations, such as cloud-based tools, collaboration software and videoconferencing platforms. With more employees working remotely and companies seeking to cut costs, outsourcing has become an increasingly attractive option for many businesses.

However, while outsourcing can help businesses in achieving their objectives, it is not always a flawless resolution.

While some employees felt empowered by the change of responsibilities and workload because of their company's outsourcing, some have seen this as taking on additional work like managing relationships with external vendors or coordinating with the outsourced team to ensure that projects are completed on time and within budget, and other administrative tasks. Fortunately, the emergence of artificial intelligence (AI) has helped address some of these challenges.

AI-powered systems and tools can automate a wide range of administrative tasks, from data entry to scheduling, freeing up human resources for more strategic work. Chatbots or virtual assistants can also provide basic information technology support and handle customer inquiries, improving customer service and satisfaction. By combining the benefits of outsourcing and AI, businesses can achieve a more efficient and cost-effective workflow.

However, the successful integration of AI into outsourcing operations requires careful planning, strategic implementation, and monitoring and evaluation. Businesses should be mindful of the potential challenges of using AI to replicate communication and collaboration between teams located in different parts of the world.

In conclusion, outsourcing and AI have the potential to transform businesses. However, businesses need to approach these strategies with caution and careful consideration. While AI can help manage additional tasks, it cannot replace the human touch entirely. Therefore, it's essential to strike a balance between human expertise and technological advancements to achieve long-term success.


Sherry Pena is a practice director at KNAV P.A. Philippine office. She is a certified public accountant in the Philippines, a certified practicing accountant in Australia and an Asean chartered professional accountant. The views and opinions of this article are that of the author and do not represent those of the said institutions.

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