Tech Strategy

How AI Is Transforming IT Outsourcing

AI can increasingly handle the tasks assigned to outsourced IT teams. 

Businesses outsource mainly to cut costs, and AI promises to shift businesses’reliance on people to machines. 

With companies able to spend less on remote hiring, IT vendors are integrating AI to remain cost-effective and relevant to businesses.

Check out a related article:

As AI improves, though, the need for large remote teams will continue to dwindle.

Here, we explore how AI is changing the way both businesses and IT outsourcing firms use human labor.

1. Automation Is Replacing Traditional Outsourcing Models

As AI becomes more responsive and complex, the need to hire a large IT staff decreases. 

Many human IT interactions can be replaced by repeatable instructions and processes of automated AI software.

Instead of just following commands, for example, some AI programs can make "judgment calls" based on large data sets – in other words, using information to make a decision with a specific goal in mind. 

Once the machine learning in AI has been programmed to understand a specific process, it can automatically perform a range of tasks formerly executed by humans, including:

Check out a related article:

  • Password resets
  • Ticket processing
  • Self-service resolutions and provisioning
  • Third-party remediations and orchestration

Automation also can help IT staff interpret and act upon information, and with fewer errors. 

This allows for greater efficiency and productivity system-wide, including fewer repairs, slowdowns, and customer wait times.

For example, the insurance company Lemonade used AI-automated templating to resolve an insurance claim in just three seconds. By contrast, settling a claim is typically a 30-45 day process that requires constant human attention. 

AI promises to streamline software testing and other IT functions and reduce headcounts by automating a variety of tasks. It also shortens the typically lengthy deployment processes for IT teams.

2. Lower Outsourcing Costs 

People are the most expensive part of a business. AI decreases the cost of IT outsourcing by reducing the need for human labor.

For example, AI can help companies reduce the costs of their IT service desk. Companies can shift a high-volume workload to relatively few persons by automating workflows, categorizations, and ticket routing.

Reduced reliance on outsourced IT teams also frees up funds to hire local talent.

Meanwhile, the costs associated with training and on-boarding these team members also decline.

Companies hiring remotely should seek vendors with AI capabilities, as these vendors will be more cost-effective and competent than those without. 

To secure business going forward, IT vendors may expand their service offerings into comprehensive, round-the-clock packages that use AI and humans to handle every aspect of IT for clients.

Alternatively, many businesses opt to invest in AI as a one-time automated purchase. 

Since AI is in the cloud, the cost of adopting and deploying these solutions is also much less than paying for an outsourced team, smaller though it may be.

3. Heightened Focus on Security

AI limits a company’s exposure to security threats by decreasing the surface area for vulnerabilities.

According to Govtech, employees are the greatest threat to a company’s data security.

Workers who lack proper training, act carelessly, or have malicious intent can compromise a company’s data. 

For example, much of the damage caused by the WannaCry malware virus arose from employee negligence, though in no way malicious. Even after Microsoft issued a patch to protect companies from external threats, workers continued to expose companies to risk.

Integrating AI with information systems can minimize the risk of trespassing, data leaks, or security attacks. Automated security processes further help to minimize breaches, while also easing compliance and auditing processes.

The pattern recognition software in AI can also help to predict and prevent security breaches. According to Rick Robinson of IBM, AI can forecast three-quarters of incoming cyber attacks.

It’s critical to evaluate the security record of a prospective IT vendor. A quality partner should be ISO compliant and demonstrate up-to-date protections for all AI.

Businesses can reduce their exposure to security threats by integrating AI into IT systems, and only partnering with service providers who do the same.

AI is Transforming IT Outsourcing

AI can perform much of the work of outsourced IT teams, but cheaper.

With savings top of mind, businesses will continue to augment their IT function with AI, whether in-house or through outsourced, AI-equipped teams. 

As the need for large IT staff diminishes, IT vendors must integrate AI to provide a relevant, cost-effective solution that will retain businesses.

Grayson Kemper is a Content and Editorial Manager for Clutch, a data and insight-driven research and reviews platform designed to help businesses identify, vet, and make an informed decision about the best business services and software solutions for their needs.

Leave a comment