Business process outsourcing (BPO) has long been a default to scale up operations. According to Deloitte, more than 70% of companies outsource at least one business function, with customer service and lead generation among the top areas where BPO service providers can jump in.
But popularity alone does not mean the solution always works. In fact, as buyer expectations rise across industries, BPO is starting to show cracks and is sometimes unable to keep up.
Customer support can be delayed. Depending on the BPO provider, rep and answer quality can be inconsistent. And that’s before discussing the rising cost of outsourcing, which can work against one of the key reasons to move to BPO, to begin with.
That’s where AI-powered platforms are stepping in. Through instant, intelligent, and always-on engagement, AI solutions are beginning to overtake BPO as the go-to solutions for organizations across industries.
What is BPO, and Why Are They Popular?
BPO, short for business process outsourcing, involves hiring external vendors to manage functions like customer support and lead outreach. It can also extend to HR, IT, and other functions, but for the purposes of this guide, we will focus on customer outreach.
Companies across industries use BPO providers to reduce overhead, extend their hours of availability, and scale their customer outreach without having to hire additional internal staff. It’s an especially common function in industries like finance, education, and homebuilding, where human-led conversations matter to customers on long sales cycles with significant buying decisions.
Why the BPO Model Is Starting to Break Down
Despite its popularity, the cracks in BPO are beginning to show. Most importantly, customer expectations have changed over the past decade. They now expect real-time responses, smooth handoffs between different channels and stages of the sales journey, and personalized experiences from the moment they start to engage.
In addition, BPOs rely on human labor. They can help to extend hours, but will still be limited in hours, depending on the budget. Onboarding can be significant, and even when complete, can still lead to inconsistency in how human agents operating on behalf of the company represent it.
For high-touch and high-consideration products and services, these drawbacks can quickly become significant. Every missed, misleading, or delayed interaction can cost a sale and impact the bottom line. As customers begin to expect more, BPO is falling short, and AI is beginning to fill the gap.
6 Reasons Why AI Is the Modern Alternative to BPOs
BPOs are designed to help companies scale up their customer support efforts, but they weren’t built for today’s expectations. It’s why AI-powered platforms are beginning to replace them, providing smarter, more consistent, and more efficient outreach across every touchpoint.
1. AI Can Respond Instantly, Whenever Your Audience Reaches Out
BPO can extend your available hours for lead follow-ups and customer service. True 24/7/365 availability, though, remains prohibitively expensive. And yet, your audience’s questions do not follow regular business hours.
Leads convert better when followed up with immediately, and customers are more satisfied when their concerns don’t have to wait. AI can engage customers seconds after filling out a form, texting, or sending a chat message. There is no wait or lag, because AI doesn’t need training cycles or even take a break. It’s online, no matter the time or day.
BPOs can help to extend your business hours, but they still run on shifts. Your audience doesn’t. Weekends and late nights don’t reduce availability. Instead, your customers can get answers right away, without waiting for a ticket to be assigned or a rep to come online.
2. AI Is More Cost-Effective at Scale
The BPO model is, in large part, based on cost effectiveness. But costs will still increase as your volume grows. More leads and customer inquiries mean needing to support more reps, manage more training, and plan more supervision.
AI solutions, on the other hand, can handle surges in demand without requiring extra headcount. Economies of scale kick in almost instantly, with the core software and platform as the only investment needed. You won’t need extra agents, no matter if one or ten customers need help over the weekend.
Long-term, that means saving on staffing and operations. But it also means reducing the opportunity costs that come from leads who would have otherwise gone cold because no one could reach out. Companies can increase their outreach output without the need for additional overhead.
3. AI Can Deliver Consistent, High-Quality Conversations
BPOs require extensive onboarding into your brand and knowledge base. And even with that onboarding, they can still vary significantly in the skill of the reps they employ, their tone, and their adherence to the script they need to follow. When they follow closely, they may not be intuitive enough to deviate or go beyond it while remaining within your brand.
Conversational AI platforms, on the other hand, are built to offer standardized conversations that hit the right tone every time. Because they’re built on the same knowledge base, consistency will not be a concern. And when trained the right way, they can deliver all conversations in a tone aligned with your brand.
That consistency builds trust with your audience. It also ensures that one bad shift doesn’t compromise the entire lead or customer experience.
4. AI Can Qualify Leads in Real Time
When it comes to lead generation, BPO follows one of two scripts. Agents either perform cold outreach or only receive leads generated through the website for follow-ups. AI is more dynamic, with conversational tools naturally answering questions the moment your audience has them, then classifying them as leads.
As the conversations continue, the software can also begin to collect key details that qualify some of the leads. For example, they might learn more about what sales funnel stage the user is in, along with their budget, timeline, and overall interest level. By the time leads get to the human sales team, they’re filtered enough to ensure only the most relevant leads take up human time.
This benefit is especially valuable for industries with long and complex sales journeys. In these industries, customers will have a wide range of questions before they commit. Outsourced sales reps may not know how to guide a conversation from answers to gathering more qualifying information. With AI, the process is automated, naturally nurturing leads through the buying journey.
5. AI Can Integrate With the Tools You Already Use
Almost by necessity, BPOs tend to operate in their own systems. They’ll record the data from phone calls and other outreach, then manually enter the data in sheets that can be shared with your organization. Any other approach creates cybersecurity concerns with outsourced agents having access to vital customer information.
Conversational AI tools avoid those silos. Instead, they integrate directly with the customer relationship management tools you’re using to manage and coordinate your outreach. Verse, for example, integrates with Salesforce, HubSpot, and other CRMs to keep all lead and customer data in sync.
As a result, the information from all of your lead interactions is gathered in a single source. No data is missing, no work is duplicated, and no data handoffs are dropped. Instead, lead and customer engagement become part of your core data infrastructure, unified to help nurture and help your audience as you build trust and loyalty over time.
6. AI Delivers Actionable Audience Insights
Any relationship with a BPO provider will include at least some reporting on call logs and KPIs like first call resolution. But beyond surface-level metrics, they don’t provide much in terms of insights that can truly help you understand your audience and improve your engagement over time.
Some AI platforms go much further. They provide real-time reporting on how quickly leads are engaged, which qualification questions may lead to a drop-off in engagement, and which campaigns generate the highest-converting inquiries.
Every conversation becomes measurable, resulting in structured, usable data for improvement. That includes real-time visibility into response times, qualification rates, drop-offs, and conversion triggers. Unlike the basic activity logs of BPOs, conversational AI provides actionable data to continually improve how you engage with your customers and leads.
The Shift From BPO to AI Is Already Underway
BPOs have long been successful in helping organizations scale, especially during a time when reach mattered more than speed or precision. But as customer expectations have shifted, the tools used to engage them need to shift with them. Especially for organizations with complex sales, high lead volume, and long buyer journeys, AI provides an increasingly relevant and beneficial alternative.
Platforms like Verse can supplement your existing efforts. Better yet, they can replace legacy models with smarter, faster, and more consistent customer outreach.
Instant response, 24/7 availability, and intelligent lead qualifications are just some of the many ways in which conversational AI can accommodate modern buying journeys. If your organization is struggling to keep up with rising lead volume or to deliver timely and consistent customer support, it might be time to make the switch.
Book a demo to see how Verse can transform your engagement strategy.
