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.
Here, there and everywhere
- The story so far
- Coming home
- Staying put
- Herd instinct
- On the turn
- The next big thing
- Rise of the software machines
- Shape up
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 (see chart). 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.
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