Relooking at BPO through a Digital Lens
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COVID-19 has been a major disruption for people-intensive industries and the BPO sector is no exception. However, some of the forward-looking BPO organisations are using this disruption as an opportunity to re-evaluate how they do business and how they can make themselves resilient and future-proof. In many of these conversations, technology and process reengineering are emerging as the two common vectors in their journey to transform into a “New Age BPO” company. 

Ecosystm research finds that running large, people-intensive centres can have a diverse range of challenges (Figure 1).

Challenges of Operating a BPO

The transformation must address the top three pain points that have been plaguing the BPO industry:

  • Staff scheduling and growing cost due to resource shortage in metro cities
  • Managing physical and IT security with data security and industry best practices in mind
  • Work/performance metrics that drive cost pressure and minimise differentiation

The New Age BPO

The wave of movement of the BPO centres away from expensive metro locations to tier 2 and tier 3 towns will now become even more significant – across all countries. This will enable BPOs to tap into a larger resources pool and at a much lower cost to the business. This will mean investments in process re-engineering and technology. But, before this journey starts, it is very important for these organisations to reimagine themselves in the context of value and differentiation – and it can no longer just be “I can do it faster and cheaper”!

Becoming a New Age BPO will mean replacing the traditional mindset of ferrying a large number of employees to the office around 24-hour shifts, by technology-enabled processes. Technology will enable these organisations to be a lot more agile, put the same (or better) safeguards on data and privacy, and drive better work efficiency. 

For this transformation to happen, it is important for the BPO organisation to not just bounce back to what they have been used to, but should show a willingness to “bounce forward”, as my colleague Tim Sheedy puts it. This means that they take this disruption as an opportunity to relook at their staffing plans, business processes, and customer engagement – and leverage the right technologies to address areas of improvement in all three fronts. At the same time, technology adoption should not be done in silos. The comprehensive technology adoption plan must be designed to address all three areas (staffing, process, and customer engagement) simultaneously. The technology should also be architected to be scalable (by geography and staff levels) and allow better manageability in terms of real-time reporting and work allocation.

It will be a fine balance. But the good news is that the technology is not only available to address these areas but is also mature enough to be cost-effective. Of course, this will require the organisation to view technology as a strategic investment. 

Another aspect of technology-led transformation that will benefit BPO organisations is the transparency that technology can provide and the opportunity to build better trust. This will be driven by full visibility of what is actually happening and the ability to provide real-time progress reports on issues raised. This means that quarterly site visits by clients to “show and tell” can be avoided. The discussions can be about specific points of interest and improvement rather than the “feel good factors” that these visits usually provide.

So, in many ways COVID-19 has accelerated the evolution of the “New Age BPO sector” and the intersection of this wave with the digital transformation wave will have a positive long-term impact on the BPO sectors in popular destinations such as India, the Philippines, Brazil, Mexico and others across the world.

Without this transformation, BPO organisations will keep pushing themselves into a tight corner and eventually be replaced by nimble and technology-savvy competitors that are focused on process and industry differentiation.

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Venu Reddy brings more than 24 years of experience in managing high performing teams and delivering research insights, advisory and consulting services to the Technology industry. During his extensive leadership career in technology advisory firms IDC and AMI Partners and prior to that as a technology leader at EDS, he has built extensive technology and market expertise that spans areas including Outsourcing, IT Services, Software, SMB, and cloud to name a few. Venu’s insights and understanding of market dynamics & business processes in the context of "how can IT enable/enhance the business processes” enables him to advise on new solutions that IT vendors need to build to address the market opportunities. Venu’s previous roles include leading the market research and analysis for consulting projects in India and across the Asia/Pacific region, developing and managing the research teams to offer clients valuable market analysis, intelligence, insight and advice to help grow their business. With extensive local, regional and global experience in the IT services industry, Venu provides a unique perspective on the dynamics driving the IT enabled business ecosystem. In his spare time, Venu enjoys terrace gardening, and spending endless hours in the nature. He lives by his moto of “Live and learn” and hence spends time to enjoy life and keep learning.


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