On the other hand, business process outsourcing (BPO) is contracting of the operations and responsibilities of a specific business process to a third-party service provider, whether local or foreign. BPO has started to pick up with routine business functions such as accounting, customer service and human resource management
Due to the growth of machine learning, artificial intelligence and other technology options, these routine BPO areas are being taken over by machine. Scopes are also emerging for contracting out certain portion of virtually all work processes to remote service providers once internet-enabled semi-autonomous devices are integrated in those work processes-whether driving trucks or looking after household appliances. For example, if we upgrade lighting devices of a commercial building with IoT bulbs with the support of necessary software interface, someone from a remote place can keep monitoring their status of operation and tuning them on & off as when required to minimise energy cost. Such opportunity of outsourcing the lighting management process to remote service providers opens the possibility of bringing multidimensional benefits.
According to various statistics, there will be 34 billion devices connected to the internet by 2020, up from 10 billion in 2015. It's also estimated that nearly $6.0 trillion will be spent on IoT solutions over the next five years. Upon adopting such staggering number of IoT devices making such huge investment, businesses are looking for 1) the opportunity of lowering operating costs, 2) increasing productivity, and 3) expanding to new markets or developing new product offerings. Similarly, governments being the second largest adopters of IoT are looking for the opportunity of increasing productivity, decreasing costs, and improving citizens' quality of life. Consumers being the 3rd largest market segments are also looking for the opportunity of getting things done at a lower cost in a more convenient way. Forecasts made by reputed analysts indicate the potential of market for IoT devices and associated services. To materialize such potential, adoption of IoT devices should lead to enhancing the bottom line of economics of production: ability to create a higher value at a lower cost.
According to a recent article published in The Economist, IoT providers focused on homes to demonstrate how coffee pots that turn on when the alarm clock rings, lighting and blinds that adjust to the time of day, and fridges that send an alert when the milk runs out make living more comfortable as well as less costly than before. Despite some demonstrations, consumers are still largely resistant to making their homes "smart" as they are not seeing the value for money. It seems that technology alone is failing to deliver the intended value. It's time to replace on-site human operators with remote supervisors to realize the underlying potential. The replacement of 3.4 million truckers in the USA with self-driving capability is promising in that the potential saving to the freight transportation industry is estimated to be $168bn annually. The savings are expected to come from labor ($70bn), fuel efficiency ($35bn), productivity ($27bn) and accidents ($36bn), before including any estimates from non-truck freight modes like air and rail, according to a recent article published in the Guardian. But it may be impossible to realize it without having the presence of remote supervisors in the loop to deal with unforeseen situations. Such necessity of having the presence of remote supervisors to unlock the economic potential of automation in unstructured environment is opening the opportunity of creating a very large-scale new BPO industry to realize the potential of IoT. With the growing aging populations in Japan, USA and Europe, IoT-assistive semiautonomous devices, commonly termed robotic care givers, is creating the opportunity of teleporting consciousness of millions of caregivers from the South Asia within those robotic devices over the internet to look after senior citizens with the warmth of human feelings.
It seems that after reaching the peak of inflated expectations, IoT has been touching the trough of disillusionment. Early success stories triggered by technology breakthrough and publicity should be spelled out into instances to build understanding about how technology can translate the potential into real benefit. Upon building this understanding, mainstream adoption will likely to take off to reach to plateau of productivity over the next couple of decades.
Like human beings, an industry grows in S-shaped life cycle. In such a life cycle, there are three major stages: Ferment, Takeoff and Maturity. The BPO around IoT industry is now at the ferment stage. Many issues are unaddressed in the midst of uncertainty. Over next several years, dominant designs and business models will likely be determined to give a shape to the competition as well as the regulatory scenario of this emerging industry. It's time to get into position before the competition picks up. Once the industry takes off reaching maturity developing very predictable business model, the catch up strategy fails to repeat the success. Due to economies of scale and scope advantages, market leaders will invariable keep outperforming new entrants by delivering better services at lower cost.
Instead of being late entrant, Bangladesh should take steps to enter at the ferment stage of this nascent industry. Here are a few recommendations to prepare the country in this regard:
There is the need to develop IoT and BPO R&D as well as venture incubation facilities in selected universities. These R&D facilities will keep monitoring global development and demonstrating emerging concepts. Such capacity is crucial to keep us in touch with global development and prepare us to be at the right place at the right time with the right capacity to benefit from unfolding opportunities. Such R&D establishment will also enable the detection of software innovation opportunities in IoT-centric BPO space and capitalisation of those opportunities as new products and services leading to new venture incubation, and/or growth of existing software firms.1. The government should identify opportunities to benefit from IoT by contracting out supervision and operation of selected suitable facilities to remote service providers. Some of the candidate applications could be supervising food storages and lighting systems of major cities.
2. Banks should come forward with the risk capital financing facility to support entrepreneurships around such emerging opportunities to create window of opportunities of investing their capital to produce profitable return.
3. Facilities should be there for development of partnerships between local potential providers and emerging global intermediaries, such as device makers like Nest or service providers like Uber.
4. There should be country-wide affordable broadband connectivity to facilitate the exploitation of benefit from such emerging opportunities. For this reason, nation-wide backbone transmission service market should be revitalized to make bandwidth-intensive broadband accessible as well as affordable across the country, including the rural areas.
At the end of the day, it's the economics of production and consumption, which drives the adoption of innovation. Such economics should create both consumer and producer surpluses. IoT is opening the door to remotely connect cognitive capability of millions of youths of developing countries to dumb machines across the world. The Tech community should close the loop connecting remote human observers and controller with IoT devices to deliver value for which customers will be willing to pay to generate profit. It is time to lend brains of developing countries to dumb machines for having Smarter World. The invisible brains of developing countries should be integrated with billions of dumb machines to have smarter world to fuel the growth of smart economy in the 21st century, which will make our lives more comfortable, safer and energy efficient. It seems to be a wonderful opportunity for blending capabilities of advanced economies with that of developing ones to build a better world. Once such an opportunity is backed by the economics of production and the technology maturity, the business is bound to take off. It's our time to step in at this ferment stage, before it's too late to repent for being late entrant--like in the past with the feeling that the opportunity-bus has already departed.
M. Rokonuzzaman, Ph.D
Academic, Researcher and Activist: Technology, Innovation and Policy
Professor, Department of Electrical and Computer Engineering
North South University, Dhaka, Bangladesh