Automation to replace outsourced clerical jobs: McCarthy

BANGALORE: "As technology improves and more jobs are automated, three fourths of the transformation oriented, clerical jobs that are outsourced today will disappear. Some companies will offshore it for a short term but eventually they will be eliminated," was the stark statement of Forrester Research group director, John McCarthy.

He was addressing a select gathering on the theme of how BPO and outsourcing will change the dynamics of IT services organized by Nasscom. He states immense fragmentation or segmenting of the BPO market combined with an aggressive price war as the immediate future of BPO. He was emphatic that even while the offshoring trend will not abate with predictions of over 3.3 million US jobs moving offshore by 2015, most of the work involving simple reformatting or repackaging of information will become redundant and be done away with.

McCarthy was quoting analysis from a recent research conducted by Forrester where it had spoken with over 400 business heads and CFOs on IT attitudes and effectiveness along with 46 vendors from India, China, Russia, Philippines and the US.

"The challenges encountered by companies who have outsourced their BPO operations are similar to those who have offshored their development activities. These include lack of efficient management, proper processes and performance assessment of vendors. The one important difference though is that customers are beginning to feel that vendors overstate their process expertise. Considering that BPO is in its nascent stages and that most offshoring happens in the sphere of simple transaction work, its disturbing that customers are already beginning to smell a rat and do not trust vendors with their statements of domain knowledge," said McCarthy.

He also spoke at length on the different customer segments and their perceptions towards offshoring, offering suggestions to vendors on how to offer the best value to these segments. An in-depth look at segments within BPO vendors followed which included bulk transaction processing services, to broad shared services and niche vertical application finally moving onto client’s core focus offerings.

Speaking on the hype that surrounded the BPO segment, McCarthy said, "There are a whole lot of vendors out there who are starving to death for those huge mammoth deals to close. Those large, boil the ocean deals are not going to happen."

Even while making these dire statements, McCarthy also pointed out that the research did establish that a ten year BPO contract, which is offshored can reduce the base cost of $100 down to $43 for the client. He cautioned that though customer needs for BPO were clear and present, the solution in availability of skills among vendors, which includes deep process understanding, operational excellence and consulting expertise among others, is a lot more complex.

(CNS)