Artificial Intelligence is reshaping almost every industry today. Unsurprisingly, one of the biggest question marks is around its impact on outsourcing and the BPO industry, a sector historically built on people, scale, and process excellence.
There are high expectations from stakeholders and customers alike, expectations to digitize work, improve speed and accuracy, and unlock efficiencies that go beyond traditional labour arbitrage. AI is no longer a future discussion; it is firmly a present-day strategic consideration.
Yet, while the promise is significant, the reality of adoption is far more nuanced.
Catching the AI Wave
Digitalization and automation have always been part of the DNA of outsourcing companies. From workflow optimization to ERP led process standardization, BPOs have consistently evolved alongside technology.
AI represents the next and arguably the most powerful wave in this evolution. It is therefore vital that every BPO organization embraces AI adoption as a strategic priority, not as an experiment or a point solution, but as part of a longer-term transformation agenda.
However, how to adopt AI is far less straightforward than the rhetoric suggests. Recent research highlights this gap clearly. While almost all organizations express a desire to adopt AI and many have launched initiatives, nearly two thirds remain stuck in pilot phases. Only a very small minority have been able to demonstrate material, sustained impact on their bottom line. These so called “AI High Performers” remain the exception rather than the rule.
This tells us one thing clearly, AI success is less about enthusiasm and more about disciplined execution.
Three Practical Areas for AI Adoption in BPOs
From an outsourcing perspective, AI adoption broadly falls into three categories,
- Productivity Enablement Tools
Tools such as Microsoft Copilot, ChatGPT, and similar role-based assistants are already transforming how individuals work. Whether in HR, Finance, IT, or Operations, these tools help employees draft content, analyze data, and reduce low value manual effort.
The benefits are real, but incremental. Productivity gains often translate to saving 15–30 minutes per person per day. While meaningful at scale, these tools on their own are unlikely to fundamentally reshape operating models.
Their true value lies in workforce enablement, helping people work better, faster, and with greater confidence.
- ERP Embedded AI
Modern enterprise platforms now come with AI embedded at their core. SAP’s Joule, Oracle’s AI assistants, and Microsoft Dynamics’ Copilot are examples of ERP native AI that enable natural language queries, smarter approvals, and predictive insights.
For organizations already operating on mature ERP platforms, this represents a logical next step. These tools improve decision making, reduce dependency on specialist reporting skills, and bring intelligence closer to business users.
However, impact is still bound by process design. AI cannot compensate for poor data structures or fragmented workflows.
- Agentic AI – The Transformational Opportunity
Agentic AI represents the most significant and most complex opportunity.
These are AI systems that can execute tasks autonomously within defined guardrails. Common early use cases include AI driven call agents handling standard customer queries, with escalation to human agents for more complex scenarios.
Other strong candidates include invoice processing, supplier interactions, and high-volume HR processes. The objective is not full automation, but intelligent automation reducing human intervention while retaining oversight and judgment.
Importantly, in almost all real-world enterprise use cases, a human in the loop remains essential. The idea that entire workforce can be replaced overnight by AI is neither realistic nor responsible.
Challenges of AI in the BPO Industry
Despite the promise, there are real challenges that cannot be ignored.
Information Security and Trust
Data security remains the single biggest concern. Even leaders within AI companies acknowledge that many AI systems operate as “black boxes,” making governance and explainability difficult.
At Infomate and within the wider John Keells Group we adopt a conservative, risk aware approach. The use of AI is aligned strictly to enterprise approved platforms, operating within defined security perimeters. Open, public AI tools are not encouraged for official or sensitive work.
Trust must be built deliberately, not assumed.
Cost and ROI
AI is not inexpensive. Beyond initial development, ongoing consumption costs, infrastructure requirements, and vendor dependencies can quickly erode expected returns.
For many use cases, the cost comparison with skilled human talent in locations like Sri Lanka still demands careful evaluation. AI investments must be justified by clear, sustainable value not by hype.
Skills and Capability
The industry is still developing the talent required to conceptualise AI solutions, manage exceptions, and design intelligent workflows. Technology alone is not enough; the real differentiator lies in people who can bridge business context with AI capability.
This capability gap will take time to close.
A Pragmatic Way Forward
AI adoption is not about replacing entire workforces. A far more practical approach is to educate and empower employees, encouraging experimentation, structured learning, and continuous improvement.
For agentic AI in particular, integration is critical. Secure API connectivity across systems requires close collaboration with customers and their information security teams, ensuring compliance with enterprise safeguards.
This is not a plug and play journey, but it is an inevitable one.
Will AI Make the BPO Industry Redundant?
This is the question most often asked.
The answer, increasingly echoed by industry leaders, is a clear no.
The outsourcing industry will continue to grow and evolve. What will change is how work is delivered. The future BPO model will be a blend of skilled professionals working alongside AI a partnership where human judgment, empathy, and exception handling are amplified by intelligent technology.
The idea is not “people versus AI,” but people with AI perhaps even a form of digital twin supporting each role.
Infomate’s Approach to AI in BPO
At Infomate, we began this journey deliberately and responsibly. We are building internal capability, engaging with customers on realistic AI enabled use cases, and integrating AI into broader automation initiatives always with security, sustainability, and long term value in mind.
Our focus is not on chasing short-term trends, but on helping our clients navigate AI adoption in a way that is safe, practical, and genuinely transformative.
The next wave of digital and AI enabled outsourcing is emerging. We are excited to be part of shaping it together with our customers.
Jehan Perinpanayagam