Building AI Into Outsourcing Solutions – with Andy Schachtel of Sourcefit

Artificial intelligence is shaking up the outsourcing industry, and Andy Schachtel, Founder and CEO of Sourcefit, is leaning into the change. 

Since starting Sourcefit in 2009, Andy has watched the industry evolve from cost-saving staff augmentation into a space where technology and people are inseparably linked. 

In this episode, he shares how Sourcefit is building AI solutions to complement its global outsourcing services and why the “future BPO” will always include humans in the loop.

Sourcefit and its place in the current outsourcing environment

Andy started Sourcefit in the Philippines 15 years ago and has since expanded operations to the Dominican Republic, Madagascar, and South Africa. The company offers a spectrum of services—from employer-of-record (EOR) arrangements to fully managed outsourcing solutions.

The industry, however, looks very different today compared to when he founded the company. Andy explained:

“Whereas before [clients] might be looking from their perspective of people and teams, now we feel like there’s been a transition to people looking more towards technology solutions. 

We’ll never be just a sole provider of people. It’ll always be some combination of people and technology.”

That shift has pushed Sourcefit to reimagine its role—not just as a staffing provider but as a partner that blends outsourcing expertise with automation and AI.

Disruption and reality of AI

AI’s impact is undeniable, but Andy cautions against the hype cycle that often follows new technology. He sees both real disruption and practical limits.

“There’s what some people call the productivity paradox. I saw a report by Gartner that 40% of agentic AI projects will have been abandoned this year because companies had such high hopes for AI, [but] actually on the ground there’s so many problems with integrating or implementing AI in an enterprise environment. 

Andy points to recurring issues in security and reliability. 

For Andy, the sweet spot lies in targeted applications that drive efficiency without overpromising. Document processing is one example:

“Our AI solution is able to get 99.9% accuracy. It saved [our client] 90% of the time on that process. That’s gold right there.”

However, he emphasizes that it’s not a “super intelligent agent,” but rather a piece of a workflow. This pragmatic approach is why Sourcefit designs every AI tool with “human in the loop” oversight. 

“There’s not a single one [of our solutions] that has eliminated everyone. Every system that we’re developing has a workflow that involves a human-in-the-loop to just confirm or check things [and] control things.”

A new business model of staffing and technology

The introduction of AI has also forced outsourcing firms to rethink business models. Traditionally, BPOs earned revenue by billing for headcount. But as Andy explained, that math changes when automation replaces people:

“Let’s say we have 10 people working on a process and make $3,000 in gross margin. If we develop a solution we can charge $3,000 a month for, that’s the same margin [but] with much less cost in delivering it.”

Clients are eager for these solutions.

“Every single one of our clients is interested in a solution like this. And all of our new clients, once we start talking about other kinds of solutions for optimizations, automations– then they’re all willing to listen.” 

Still, Andy isn’t predicting a future where BPOs become pure SaaS companies. Instead, Sourcefit is combining recurring service models with scalable tech solutions, ensuring clients save costs without losing operational resilience.

The future-proofed BPO as a unique advantage

As large outsourcing giants wrestle with market pressures, Andy believes mid-sized firms like Sourcefit are positioned to thrive. The key, he says, is trust and operational closeness.

“If we come to a client and say, ‘We found a way to cut 50% of the time on this process by adding this automation,’ that’s a fairly easy sell as opposed to a technology company coming in.”

Sourcefit is also preparing for the next stage of digital transformation with its new platform, Knit, and its AI solutions brand, WorkingAI. These tools are designed not only to streamline workflows but also to help small and mid-sized businesses manage increasingly complex tech stacks.

“BPO companies have a unique place and advantage in this sphere compared to pure technology plays because we’ve been there, working with these companies [on] their processes [and] workflows.”

For Andy, the future of outsourcing is clear: it’s not “bums in seats,” and it’s not fully automated bots. It’s a smart combination of people, platforms, and processes—designed to evolve with client needs.

“For now and the foreseeable future, [it’s] gonna be human-in-the-loop. AI, it needs people as well. It’s just like an improvement.”

You can visit Sourcefit’s website and contact them at [email protected]. 

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