Transformation is the next wave for BPO

BANGALORE, INDIA: The BPO industry's trend tide is rising. The industry is gearing up from just being a transactional process based to transform into an end-to-end solution provider.

The NASSCOM BPO Strategy Summit 2009 here witnessed a great deal of talk on this shifting trend of the industry.

“The need of the hour is to be more transformational,” said Rahul Singh, CEO and MD TCS e- Serve Ltd.

He further added that the client expectations are changing and the industry is moving rapidly ahead from just being an ITO. There is a lot of push towards the service provider in giving more value.

The panelists agreed that the challenge before the service providers today for making this transformation is to set up the capability to do so.

“Transformation cannot be achieved only in a part of the activity. You have to start providing long-term competitive advantage and develop a win-win situation for both the clients as well service providers,” said Harpreet Duggal, senior vice president and head - India Business, Genpact.

The several factors that would help in this process include innovation, expertise, effectiveness etc.

Vendors need to build the capability of understanding the clients needs and having an expertise on the business domain. Also the factor of innovation in various levels such as in new business models, pricing models is required.

The vendor approach needs to be changed from just being a service player to having an ownership value towards the whole process.

“Your equation with the client no longer is based on limited business process, it has moved to managing and providing the end to end solution,” added Harpreet.

Adding to Harpreet's views, Randy Walker, GM, Managed Business Process Services - Growth Markets Unit, IBM Daksh said, “The current financial crisis has put clients under pressure. They need change and demand change in terms of value and true business outcomes.”

Further highlighting the cost part of it, Randy added that today cash is the king and clients are looking at driving their business with operational savings and are more focused on the outcomes. The pressure today is to do more with less.

He further said, “The trend is moving away from the labor arbitrage to transform the process with technology, tools, bringing in new legacy platforms, new price points. The vendor should have the flexibility to change along with the clients.”

The addressable market size for the Indian BPO industry would grow three times more by 2020, says NASSCOM.

It expects the domestic market size to grow from 10 billion USD to 12 billion USD and the export market size to grow from 50 billion USD to 175 billion USD.

To address this huge market size, NASSCOM suggests transformation and evolution of the industry from labor centric-service model to and IT-centric approach.