Robots and business executives are marching towards a new frontier in employee outsourcing, as algorithms replace technical support staff who perform repetitive tasks.
US firm IPsoft has recently established an Australian office to sell automation software that allows robots to replace humans in low-level roles such as helpdesk support. It already supplies virtual workers for companies such as Pfizer and Autodesk, and claims to have addressed more than 17 billion customer "incidents" without human intervention.
The company recently struck a deal with Indian outsourcing giant Infosys to sell more virtual IT engineers to answer queries such as when a computer user needs to have their password changed by their company's helpdesk.
The difference between IPsoft's "robots" and automated customer service agents, available via chat windows on some websites, is the software's ability to learn with each job performed.
"A virtual engineer is competent from day one and they continue to grow in knowledge," said Jonathan Crane, chief commercial officer, IPsoft. "They don't take vacation and they don't need training."
Mr Crane said the out-of-the-box software could deliver 30 per cent savings compared with traditional outsourcing services, and 80 per cent savings if implemented for specific environments. In the case of Infosys, on some infrastructure management projects it has cut the number of people required from 100 to 50.
"We look at incidents and events and use scripted automation to address those. We add more innovation, and that's how outsourcers can differentiate among themselves."
Low-level helpdesk roles have the highest staff turnover and automation provides a way for companies handling outsourced employees on behalf of clients to maintain their profit margins as their cost arbitrage advantage disappears, Mr Crane said.
While robots are honing technology cost-cutting, other players are trying to boost revenues by making the humans smarter.
At the opposing end of the outsourcing spectrum is the "business outcome model" where client and outsourcer work towards the same performance metric. For example, an outsourcer working for an insurance company might be paid on the number of policies sold.
Mid-size Indian IT outsourcer iGATE has pinned its colours to iTOPS, its outcomes-based model, and signed its first two Australian customers, Victoria's Residential Tenancies Bond Authority and Regional Development Australia - Tasmania.
The company vice-president in Australia, Ananth Basavaraju, said the customers were a beachhead for local expansion.
IGATE plans to increase Australian revenues seven-fold by 2017, to $250 million.
Last year it generated $35 million via 500 consultants, with about 100 based locally, mainly in Victoria. It expects to have 3000 consultants servicing local customers in four years.
At the moment, iTOPS revenue contributes about 30 per cent of the company's total.
Ovum Australia principal analyst Jens Butler said it would take time before the new models became the dominant way to outsource.