Business & Strategy

Robots killed the BPO star. Or will they?

Strategy adopted by leaders will determine whether the industry plunges to its destruction or if it will emerge as an early pioneer

Updated: Feb 2, 2016 11:40:46 AM UTC

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The pure play BPM companies have to rapidly morph into technology centric companies

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Today, Uber - the world’s largest taxi company - owns no vehicles. Facebook - the world’s most popular media owner - creates no content. Alibaba- the most valuable retailer - has no inventory and Airbnb - the world’s largest accommodation provider - owns no real estate.

Circa 2020. The largest business process management companies will have more robots than people. The business process management industry as we know it now will no longer exist. Following the successful initiatives on the AI (artificial intelligence) front, undertaken by Open AI and Microsoft among many others, enterprise processes can now be executed with ease by the use of ‘bots’ or intelligent software programs. From managing calendars at the office to shopping, one will use of course be using AI to drive cars? (To think of an AI capable enough to drive cars in the Indian traffic still sounds a little far-fetched.) This advancement in technology has decimated the large BPM industries in countries like India, Philippines and Poland by introducing cloud robo farms, which can work 24/7 without challenges like employee turnover, strong accents and clerical errors.

While a lot of ‘analysts’ are writing such epitaphs for the industry, I believe that it is not going to be a one-way street for many in this business.

But we are definitely at an inflection point. The strategy adopted by industry leaders will determine whether the industry plunges to its destruction or if it will emerge as an early pioneer and leader, in a much larger technology-enabled services space that caters to large corporations as well as small and medium business.

Why the big fuss about the BPM industry? bpo

Source: NASSCOM
So what’s changed? What’s threatening this sector?

  • Advent of technology, enabling rapid automation around user objects & interface (robotic process automation)
  • Machine learning technologies and rapid adoption of cloud based software platforms that are more homogenous and which ‘talk’ to each other
  • IT service companies (many of which have the business process service businesses) are driving this automation very rapidly
  • Most of the large legacy global enterprises have already adopted offshore outsourcing
  • Rising wages and high employee churn. Political environment in the West, forcing governments to disincentive offshoring.

Hold on before you add this to the New Year blues list! Let’s take a ‘glass half full’ view

  • Large scale deployment of service automation technologies require a large workforce that understands these processes (example finance and accounting) and can configure automation bots (similar to configuring phone apps) which country can provide these skill sets in large numbers? Which country has a strong heritage in both IT & BPO services?  You got your answer.
  • Real time translation technologies and video communication are becoming mainstream (the enterprise adoption has been slower than consumer adoption) and this is driving more work from near shore locations to countries like India.
  • With IOT (Internet of things) and mobile technologies becoming pervasive, there are petabytes of data being recorded across the world on a daily basis. You need people beyond big data analytics platform to clean, make sense and interpret this data. The demand for these services exists.
  • Reducing dependency on semi-skilled personnel with limited experience has been one of the banes in this industry. Robotic automation will eliminate this impediment associated with perceptions around offshore centric service experience.

Yes, this can be the golden opportunity for India & the BPM industry to reinvent and ride the next wave of Enterprise Business Process & Technology Services.
So can the industry ignore the “death by RPA” prophecy and rest on its laurels? It absolutely cannot.
“In the long history of humankind those who learnt to collaborate and improvise most effectively have prevailed”- Charles Darwin, Descent of man.

  • The BPM Shared services industry has to pioneer the drive towards automation & cloud adoption technologies
  • People revenues have to be cannibalised and compensated  with the more profitable integrated tech and service revenues
  • The pure play BPM companies have to rapidly morph into technology centric companies
  • Buy rapidly growing service automation technology platforms before they become unicorns
  • An ‘Automate from India’ campaign like ‘Make in India’ by industry bodies and government. Because affirmative action in this area can help us be at the vanguard of this industry for a decade
  • Last but not the least, companies need to cross-skill their pure play tech or process personnel to have an integrated process and tech skill set

Ultimately, automation should not be seen as cannibalisation but as amplification. Did video kill the radio? Forty years later, it still exists albeit in a new form. Radio transformed to internet radio and VHS evolved to VCD, DVD, and Blu-Ray and so on.
So where are my bets on?

  • India will lead  in an industry called ‘Integrated As a Service’  technology & services sector (Not IT or BPO)
  • Death of the pure play BPO industry
  • Virtual assistants replacing call centres in large scale
  • Uber-like Integrated services across the globe, staffed by ‘ubersied’ or skilled, experienced work force operating primarily from their homes; or from offices, if their vehicle number matches to the ones that can be on that day as per the odd even scheme!!!!

- By Prasanth Nair, Associate Vice President, Finance & Accounting Services, Infosys BPO

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