Hi, Robot

Expert systems; artificial intelligence; by whatever name they may travel, these areas represent, in this writer’s view, one of the key areas of process transformation. It is not something in the future but is upon us now. Firms like IPsoft are already creating expert systems to handle various types of issues and inquiries without human intervention.

Chetan Dube, IPsoft’s founder and CEO, believed that the IT infrastructure of the future would be managed not by people, but by expert systems. He envisioned a world in which the mundane engineering chores would be automated, freeing engineers and technologists to focus on creative endeavors and innovation. So in 1998, Dube founded IPsoft based on this principle (IPsoft website).

Another firm is Blue Prism:

Blue Prism software enables business operations to be agile and cost-effective through rapid automation of manual, rules based, back office administrative processes, reducing cost and improving accuracy by creating a “virtual workforce”.

The virtual workforce is built by the operational teams themselves using the “self-service” robotic automation technology from Blue Prism to rapidly build and deploy their own automations through leveraging the presentation layer of existing enterprise applications. Critically, the automations are built by the business but are fully managed within an IT governed framework.

 The Economist, in a report on outsourcing and offshoring, reports:

Eliza Doolittle enters the stage unkempt and talking in a strong Cockney accent, but by the end of George Bernard Shaw’s play “Pygmalion” she speaks in a much more ladylike fashion. Another Eliza was invented by Joseph Weizenbaum, a scientist from the Massachusetts Institute of Technology, in the early 1960s. His computer program was named after Shaw’s character because it learned to speak more clearly over time. It played the role of a psychotherapist, sometimes well enough to convince patients that it was human.

Now a third Eliza, named after Mr Weizenbaum’s invention, is set to turn the offshoring business upside down. IPsoft is a young company started by Chetan Dube, a former mathematics professor at New York University. He reckons that artificial intelligence can take over most of the routine information-technology and business-process tasks currently performed by workers in offshore locations. “The last decade was about replacing labour with cheaper labour,” says Mr Dube. “The coming decade will be about replacing cheaper labour with autonomics.”

IPsoft’s Eliza, a “virtual service-desk employee” that learns on the job and can reply to e-mail, answer phone calls and hold conversations, is being tested by several multinationals. At one American media giant she is answering 62,000 calls a month from the firm’s information-technology staff. She is able to solve two out of three of the problems without human help. At IPsoft’s media-industry customer Eliza has replaced India’s Tata Consulting Services.

Mr Dube is sorry to see so much of India’s intellectual capital being expended on mundane, repetitive tasks. Much of the work that is offshored is boring, which helps to explain the industry’s huge labour turnover. A small British start-up, Blue Prism, has developed a software-development toolkit that allows people within a company to create their own software “robots” to automate business processes. “Greetings from Robotistan, outsourcing’s cheapest new destination,” wrote HfS Research, an outsourcing blog.

The economics of Robotistan are certainly compelling. An onshore information-technology worker may cost $80,000 a year and an offshore one perhaps $30,000, wrote James Slaby, HfS’s research director, in a recent report. But Blue Prism’s robots cost at most $15,000 a year. They can perform only routine, rules-driven tasks, but there are plenty of those about. One telecoms company, says HfS, replaced 45 offshore employees, costing a total of $1.35m a year, with ten of Blue Prism’s software robots, costing $100,000. The telecoms firm then spent its savings of $1.25m on hiring 12 new people to do more innovative work locally at its headquarters.

But nationality still plays a part. Because Indians often speak strongly accented English, the country lost a lot of call-centre business to the Philippines. Mr Dube’s Eliza will have a slight American twang, modelled on a Filipino call-centre operator.

Note: see a previous post “The Philippines: The New Capital of Call Centers.”