The BPM industry is undergoing fundamental changes, brought on by uncertain macro-economic conditions, regulatory requirements, emerging as well as disruptive technologies, and evolving customer requirements. In response to these changing requirements, BPM companies are transforming their businesses to include newer service offerings and developing new business models in response to these changes. The business paradigm has therefore evolved to meet market volatilities, coupled with technology adoption and automation. While the need for cost reduction remains, client organizations also have been compelled to become more agile and responsive.
With this perspective, NASSCOM conducted a qualitative research among CEOs of some of the leading BPM companies in India. The research aimed at understanding the strategic imperatives of the CEOs in the near term to align their business goals. Following are the key findings-
From ‘Operations’ to ‘Customer’ focused
The market environment is becoming increasingly competitive, with clients focusing on providing best-in-class customer experience and thereby enhancing customer loyalty. The clients’ markets are consolidating with frequent mergers and acquisitions rapidly resulting in consolidation in their business landscape; take the example of the healthcare industry in the US where consolidation has changed the business environment dramatically. Moreover, with rapid changes in technology and customer behavior, clients are re-focusing on priorities such as cybersecurity. As a result, BPM firms are becoming increasingly customer centric and aligning their business models to the clients’ business. The outlook has now become customer centric, focusing on advocacy to build the customers’ brand. A deep understanding of the customers’ business and its challenges is critical for BPM companies. BPM companies will also focus on key issues in the client industry such as cybersecurity, consolidation and soon. The goal is to deliver value and improve top-line while being a partner to customers.
How can the Indian BPM industry move from being ‘Operations’ to being ‘Customer’ focused?
- Build deep understanding of customers’ businesses, and align business models to them
- Become customer centric, focus on creating great customer experiences
- Push the envelope, educate customers on what is possible, co-innovate with them, and create security driven mind-sets and solutions
From ‘Process Experts’ to ‘Solution Providers’
The market environment is becoming increasingly competitive, with clients seeking partners that can help them resolve business problems. BPM companies need to harness agile technology platforms which combine process expertise with domain knowledge and real time analytics to provide solutions to clients.
Technology is a critical differentiator in a fiercely competitive market. Legacy technology is gradually becoming obsolete, and component technology is the game changer. Recognizing the key role played by start-ups, several BPM firms are now partnering with start-ups to leverage these component technologies.
How can the Indian BPM industry move from being ‘Process Experts’ to ‘Solution Providers’?
- Technology a critical differentiator-Legacy technology to go obsolete, component technology the game changer
- Harness agile technology platforms; combine process expertise with domain knowledge and real time analytics
- Automation is a game changer, leverage it as an opportunity and create partnerships that will help deliver complete solutions
From ‘Cost savers’ to ‘Digital transformation specialists’
There is a new paradigm emerging where in transformation is enabled by digitization and technology. Digitization has provided the ability to extend the reach of organizations, improve management decisions, and speed the development of new products and services. Digital transformation is therefore about finding out what data can do to your business with real time customer engagement, and leverages collective intelligence of employees, partners and customers. Using social, mobile, analytics and cloud based technologies to provide anytime anywhere predictive and contextual insights further enhances the value driven by this transformation.
How can the Indian BPM industry move From ‘Cost savers’ to ‘Digital transformation specialists’?
- Using tools, automation and software to deliver transformation, and increase breadth of services
- Using social, mobile, analytics and cloud based technologies to provide anytime anywhere predictive and contextual insights
- Pick selective bets- vertical, geographic or service-lines, and develop end to end solutions in those spaces
From ‘Order-driven’ to ‘Outcome-driven’
Clients are demanding integrated services rather than piecemeal. These integrated sourcing deals are leading to outcome driven models. As strategic partners for clients, BPM companies are now playing a role indirectly impacting client revenues and profitability, thereby taking responsibility for the client’s business outcomes. There are several examples already in play-end-to end actuarial services for the insurance industry; predictive analytics models for managing demands and forecasts in the retail industry; or multi-channel customer interactions in the hospitality industry.
In a sense, the transformation reflects the journey of the industry from the back-office to the front end and at the decision makers’ table. BPM companies are also gradually creating new pricing models that can appeal to new customer segments. The key would be to put skin in the game, make investments, and showcase proof of concepts to gain customer business and loyalty
How can Indian BPM companies change from being ‘Order-driven’ to ‘Outcome-driven’?
- Become strategic partners for clients, directly impacting client revenues and profitability-taking responsibility for the client’s business outcomes
- Create new pricing models that can appeal to new customer segments
- Shift from providing back-end piecemeal services to front-end integrated solutions
- Put skin in the game, make investments, show-case proof of concepts to gain customer business and loyalty
From ‘Scale driven’ to ‘Skill driven’
With the changes in engagement models with clients, there is a need to re-think internal organizational structures as well. BPM companies must transform their internal HR and operational metrics to adapt to the demands of the market and create a flexible, agile and analytics driven organization. The focus is on renewed organizational change management and organizational behavior. BPM firms must transform their HR model to re-think their hiring, training and retention models. The organizational change management has to begin with a change in the mind-set of the management.
How can Indian BPM companies move from ‘Scale driven’ to ‘Skill driven’?
- With changes in delivery models, there is a need to focus on re-think internal organizational structures
- Create organizational ‘change management’ programs to start with a change in the mindset of the existing management
- Transform current HR models and re-think hiring, training and retention models-focus on agility and productivity
- Shift focus from building India centric talent pool to global subject matter experts with analytical thinking and business knowledge
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