Will ChatGPT take big toll on BPM firms now?

Bengaluru Business Process Management (BPM) firms are likely to face growth bumps in the near-term as generative AI tools such as ChatGPT brings in disruptive changes in their business models through rising automation.

According to industry experts, verticals like HR (human resources), finance, and other transaction-based operations are the first to get impacted owing to such tools.

Indian pure-play BPM firms along with BPM subsidiaries of most IT services companies are already facing the risk of more tasks getting automated through ChatGPT kind of tools. Any large scale play out of this phenomenon is expected to hit the earnings of IT-BPM firms which provide client-servicing solutions by deploying manpower.

“In a recent interview, IBM CEO, Arvind Krishna has said that AI and automation will replace up to 30 per cent of non-customer-facing roles at IBM over the next five years. If we take this as the benchmark, AI is definitely going to replace jobs through automation. The impact of such automation is more on Indian BPM firms in the short-run,” Pareekh Jain, an IT outsourcing advisor and Founder of Pareekh Consulting told the Bizz Buzz.

He, however, added that the medium-term impact has to be gauged with the ability of BPM firms to create value-added jobs in the future.

Indian BPM firms have been increasingly using automation tools in recent years by leveraging emerging technologies including AI, ML and big data among others. However, generative AI tools like ChatGPT has the ability to bring in sudden disruption as leveraging these tools, automation percentage can be increased substantially. Therefore, sources in the know said Indian BPM firms face risks to their current business model.

“Verticals like HR, finance, and related transaction-based work will face the impact of such tools as automation percentage can be increased in a significant way. However, most Indian BPM firms are integrating ChatGPT tools fast with a search for value-added work,” Jain added.

Genpact, WNS, Teleperformance, Concentrix, Accenture, TCS, Infosys, Wipro, HCL Tech, and many mid-tier firms provide BPM services to global clients as a pure-play BPM player or through their subsidiaries. HR sources said that job growth in these BPM units is likely to be subdued in the coming quarters given the focus on automation.

“If you see, overall job growth is not likely to be much in coming years. This is due to the fact that many data entry, analysis and other tasks will be replaced by ChatGPT kind of tools,” said an industry source working on the HR industry. Earlier, skilling firm FunctionUp’s management has told the Bizz Buzz that opening for many entry level data science roles are getting squee.

Outsourcing

in Risk

n More tasks getting automated through ChatGPT like tools

n IBM CEO says 30% HR functions will get automated

n So, Indian BPM firms face risks to their current biz model.

n BPM cos need to create value-added jobs in future