What It’s Going to Take for the BPM Industry to Maintain its Edge
This blog is authored by Rohit Kapoor, Vice Chairman and CEO, EXL. Listen to him at NASSCOM BPM Strategy Summit 2017
No one who is part of the BPM industry should be surprised at the volume and velocity of change it faces today.
Given the nature of our work, we’re in the trenches everyday with clients who are facing disruption on multiple fronts, whether from changing customer preferences, new, innovative competitors, or simply finding value in digital technologies. No business today, regardless of the industry it’s in, can afford to sit still. As service providers, neither can we.
The BPM industry has evolved greatly since inception. Provider capabilities are more advanced and positioned to deliver greater value than ever before. However, the evolution of the BPM industry has been, by and large, a gradual one focused on incremental change. That won’t suffice in the Digital Era, where speed is a capability.
The primary force of change in our industry today is digital transformation. Our clients are working to increase and enhance customer experience, to contextualize and personalize product and service offerings, and deliver a more seamless experience across the front, middle and back offices.
The imperative of digital transformation, both within our own companies and in our abilities to support our clients’ transformation, will require a step-change across multiple dimensions. Personally, I think this is tremendously exciting, and I know many of my colleagues do, as well.
While individual BPM company strategies might differ, there are common steps we must all weave into our thinking and action to maintain our edge. I’ll quickly touch on five key items below.
- Disrupt yourself first to create a culture of innovation
A digital culture must move at the pace of the digital world. Companies must transform to challenge the status quo and leaders have a choice of waiting for disruption from outside forces or to disrupt themselves.
A culture of innovation combines strategic planning at the executive level with contributions from all employees throughout the company. Pursuing disruption requires breaking down silos that exist across functions, geographies and product lines in order for everyone to contribute to change. Companies must question existing operating models and their suite of solutions and capabilities. Given our role as service providers, we need to examine whether our current strategies will help our clients thrive in the digital era.
2. Earn your role as a strategic partner
The premium that digital transformation places on innovation and speed has opened the door for greater collaboration between service providers and their clients than ever before. Business leaders expect more from service providers and are not only more willing to accept outside-in perspectives, they are actively pursuing them.
This is an exciting change in mindset. More than ever before, BPM providers have a seat at the table. To maintain its edge, the BPM industry needs to be willing to step in and embrace their role as a strategic partner whether through proactive problem solving, innovative solutions, client co-creation, or other avenues.
3. Find new ways to deliver value
One of the key ways a service provider can earn the role of strategic partner is to find new ways to deliver value. Today that means supporting client efforts to grow revenue, typically with advanced capabilities such as predictive analytics, data transformation, outside data sources and other value-add digital technologies.
In the past, the value proposition of the BPM industry centered on labor arbitrage and incremental process improvements, but what sufficed more than 10 years ago won’t do so today. Because digital transformation efforts are focused on the end customer, providers have an opportunity to greatly influence a client’s top line like never before. Couple this with provider advancements in areas such as data analytics, which can unlock new insights about current and potential customers, digital interaction channels that simplify and improve interactions, or advanced automation, which can than deliver a multiplier of productivity benefits that not only save time and cost but enhance experience through faster turnaround and fewer errors. The value proposition of our industry is changing greatly.
4. Experiment with different approaches to risk-sharing
Core and non-core areas are being redefined as BPM clients use digital transformation to enhance client relationships, and grow or protect revenue. At the same time, our clients want partners to increasingly own outcomes.
Strategic partnerships between customers and service providers foster alignment to deliver on organizational goals. As companies and their providers move away from traditional SLAs to focus more on outcomes, the industry will increasingly move toward transaction-based and outcome-based pricing. Digital transformation also greater enables opportunities for co-innovation. We’re in the early days, but the trend should accelerate based on individual companies’ relationships with their providers.
5. Embrace and invest in advanced automation
Coming full circle, as providers review business models, find new ways of creating value and become strategic partners, BPM providers need to continue to proactively embrace advanced automation, whether that means robotics, machine learning or AI. We can debate the hype around the magnitude that these technologies will disrupt the industry, and the degree they will completely eliminate manual work and cannibalize revenue.
Savvy providers and clients also recognize that these are tools to be leverages as part of broader transformation efforts across the front, middle and back offices.
However we must all recognize that automation of business process is top of mind across industry stakeholders, from clients to the investment community. Most BPM providers recognize this and are seeing automation as an opportunity as opposed to a threat. At EXL, we’ve been transparent about our willingness to cannibalize revenue based on the belief that what benefits the clients will ultimately benefit EXL. We also see several business opportunities from our investments in automation capability development from implementation to end-to-end process digitization.
Anyone who still has not embraced automation needs to realize that whether they do or not, their clients already have.