Outsourcing has been a core part of customer experience operations for decades. It helped organisations scale support, manage costs, and expand into new markets. For a long time, the model was relatively stable: humans handled interactions, technology supported efficiency, and success was measured largely by volume and cost.
That model is now under pressure.
Generative AI is changing not just how customer interactions are handled, but how CX leaders think about ownership, accountability, and value creation. As AI moves from experimentation to production, outsourcing is being re-examined at a structural level. Not because it no longer works, but because what organisations need from outsourcing has fundamentally changed.
Classic outsourcing models were built around predictability. Forecast volumes. Staff accordingly. Optimise for efficiency. Measure success through metrics like average handle time, cost per contact, and adherence.
That approach worked when customer interactions were largely transactional and channels were limited. Today's reality looks very different.
Customer journeys span channels, systems, and moments over time. Issues are rarely isolated. Context matters. Speed matters. Continuity matters. Gartner research indicates that 84% of customer service and support leaders agreed that customers have higher expectations for service now than in the past.
In this environment, outsourcing models that focus only on labour arbitrage and throughput struggle to keep up. They often introduce new challenges:
CX leaders aren't abandoning outsourcing because of cost. They're rethinking it because experience quality is harder to protect under old assumptions.
Generative AI introduces a new layer into customer experience delivery. It can summarise conversations, suggest responses, surface knowledge instantly, and automate large portions of routine work.
The adoption trajectory is steep: McKinsey's 2024 research shows that 65% of organizations are now regularly using gen AI, nearly double the percentage from just ten months prior. Overall AI adoption has jumped from roughly 50% over several years to 72% in 2024.
This has two major implications for outsourcing.
First, not all work needs to be done by humans anymore. Many repetitive, low-judgement interactions can be handled or assisted by AI. That shifts the role of agents toward higher-value conversations that require judgement, empathy, and decision-making. Gartner predicts that by 2027, unofficial third-party GenAI tools will resolve 40% of customer service issues, fundamentally shifting where service happens.
Second, AI changes what "good performance" looks like. Speed alone is no longer the differentiator. Quality, consistency, and correct use of context become far more important.
Outsourcing partners that were optimised for volume now need to operate in environments where humans and AI work together, and where mistakes carry higher downstream impact.
This moment has triggered deeper questions for CX leaders:
When AI drafts responses, routes conversations, or resolves issues autonomously, accountability becomes less clear. Deloitte's 2024 Global Outsourcing Survey reveals that 83% of executives are now leveraging AI as part of their outsourced services (AI-powered outsourcing), and 20% are already developing strategies to manage these digital workers. Leaders are asking whether vendors are equipped to manage AI responsibly, monitor quality, and intervene when needed.
GenAI amplifies inconsistency if systems are fragmented. Different vendors using different tools, prompts, or data sources can produce wildly different experiences. Without orchestration, AI accelerates fragmentation instead of fixing it.
AI can reduce costs, but it can also magnify poor design. McKinsey research demonstrates that organizations using Gen AI-enabled customer service agents saw a 14% increase in issue resolution per hour and a 9% reduction in time spent handling issues—but only when implemented thoughtfully.
CX leaders are increasingly prioritising outcomes like resolution quality, customer trust, and long-term loyalty over short-term efficiency gains.
These questions aren't about replacing outsourcing. They're about redefining what outsourcing is responsible for.
What's replacing the old model isn't a single new template. It's a shift in emphasis.
Outsourcing is no longer just about how many agents are available. It's about whether the partner can operate effectively in a human-plus-AI environment.
That includes training agents to work with AI assistance, knowing when to rely on automation, and understanding when human intervention is required. Gartner found that 85% of customer service leaders will explore or pilot a customer-facing conversational GenAI solution in 2025, and more than 75% feel pressure from executive leadership to implement GenAI.
CX leaders are pushing for clearer accountability around experience outcomes, not just interaction handling. Vendors are increasingly expected to contribute to improvements in resolution, satisfaction, and continuity.
The market is responding: the global customer experience BPO market reached USD 102.03 billion in 2024 and is projected to reach USD 296.29 billion by 2033, growing at a CAGR of 12.8%—driven by this shift toward strategic, outcome-focused partnerships.
Outsourcing now sits inside broader CX ecosystems that include AI platforms, CRM systems, analytics, and feedback loops. Partners must be able to integrate, not operate in isolation.
Despite the excitement around GenAI, many outsourcing setups struggle to deliver meaningful improvements because:
McKinsey's research highlights that 44% of organizations have experienced at least one negative consequence from the use of gen AI, with inaccuracy being the most commonly reported risk. In these cases, AI creates the illusion of progress while underlying issues remain unresolved. CX leaders are becoming more cautious, realising that technology without structure creates risk, not value.
The expectations placed on outsourcing partners are changing. Deloitte's survey indicates that organizations are rethinking their talent strategies to gain more control and build strategic capabilities internally, with insourcing and Global In-house Centers (GICs) regaining momentum. Leaders are prioritising partners who can:
Flexibility, orchestration, and accountability are becoming more important than rigid service models. Gartner research shows that 45% of customers now report using GenAI in their personal life, at work, or both, fundamentally changing how they approach customer service.
GenAI is not eliminating the need for outsourcing. It is forcing a reset of assumptions around how outsourcing works, what it is responsible for, and how success is measured.
The data tells the story: McKinsey's research shows that 23% of organizations are already scaling agentic AI systems somewhere in their enterprises, with an additional 39% experimenting with AI agents. Meanwhile, Gartner's customer service leaders report that 64% plan to spend more time learning about technology next year to meet these challenges.
CX leaders who rethink outsourcing now have an opportunity to move beyond cost optimisation and toward experience resilience. Those who don't risk amplifying fragmentation at scale.
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