Excerpted from the original interview with HfS Research
On change the industry is witnessing,..
I think the industry is going through what I would call its growing pains. There are points of time in the industry’s evolution where things become a little bit hazy and there is a lot of talk and divergent viewpoints. Then ultimately a few companies break out, move through the clutter and show leadership and direction to the rest of the market. Then everything gravitates in that direction in a much more clear-headed way. Our industry is going through one of those phases where there are a lot of buzz words being thrown around and different things mean different things to people. One example is when people talk about digital, they talk about analytics, they talk about automation, they talk about outcome-based models, design thinking, platform BPO or talk about products. There are a number of different elements that get tossed around, and the fundamental underlying clarity is just beginning to emerge. It’s an exciting period. Companies that deal with these types of issues at a much more fundamental level and get it right will be really successful for their clients and for themselves, and others will struggle to change. So we are in that period of disruption in our industry right now.
The tipping point has not yet been reached, but a few companies will actually accelerate their growth rates and end up showing the rest of the industry how you can adopt these new models and take the business forward. Just take the example of moving from traditional BPO towards BPaaS. Right now there seems to be a fair amount of confusion between the ownership of the technology assets working in what I would call a platform BPO model compared to true BPaaS. There’s a very, very important difference there – the ability to offer the service and the technology over the cloud, to have it be multi-tenanted. Those are distinctive features of BPaaS, as opposed to having the platform and offering BPO on it. There’s very little leverage with platform BPO, whereas in BPaaS there’s tremendous leverage.
Clients are looking to variablize the cost structure completely and want new choices to manage risk associated with technology as well as with the service. Everybody wants to have best-of-breed technology in place and the flexibility to make changes to that underlying technology platform, both in terms of functionality and cost structure. We are seeing the evolution and creation of disruptive companies with aggregator and network models, and as you move toward these models, BPaaS is going to be a critical component. The trick I think for us is going to be how can we leverage the same SaaS architecture to provide services in a manner that’s got operating leverage on it? It’s not just a matter of providing service alongside Workday, Salesforce or NetSuite. It’s how you take that service and scale it to get the benefits of a much lower marginal expense for every incremental piece of business added to it and then pass on that benefit to your clients to share in that reward.
We’ve built a product for an area that is increasingly standardized and a lot less customized called MedConnectionSM that, at the heart of it, summarizes medical records for insurance claims. So in the claims process when someone is hurt, we take all the medical files, a whole host of documents anywhere from one page to 400 pages, and this tool will summarize all of that information into a readily accessible digital format available over the cloud that can be accessed by the adjustor who is settling that claim. Adjusters can look at these records, get the summarized content and be able to make decisions far more nimbly, effectively and accurately than you could previously, and its priced per document, not on a per-FTE basis or the amount of time that it might take somebody to do this. So, we’re road testing and creating several of these kind of examples, predominantly in our core industry verticals of insurance and healthcare, where we have the maximum subject matter expertise, understand the pain points, see where can we create this type of functionality and deliver the maximum value – to not just one customer but several. That’s what the model is based upon
It requires us to invest in the resources to architect and build these technology platforms. Right now we’ve got about 300 developers just focused on creating these types of tools and technologies to enable the commercialization of this kind of SaaS and BPaaS functionality
We are then, layering on top of this, resources to embed analytics into product functionality. Then it also requires a retooling and retraining of our sales force because the skills and ability to take this to market, communicate and sell this are very different than selling traditional FTE-based models. So it’s actually the technology, the analytics and the frontend that needs to be retooled in order to make this successful
We’ve invested and built the Business EXLerator Framework™. What that does is it optimizes a client process end to end, leveraging a number of different skill sets — Lean Six Sigma, technology, business process automation, robotics, analytics — in an integrated, real-time fashion. The way to think about it and the way we are applying it, particularly for robotics, is we bifurcate the processes we handle for our clients into complex and simple processes
The simple elements of our processes are where we apply a lot more of technology automation applied in two ways. Number one is to eliminate that exception altogether, or number two to roboticize it, so we can automate those processes totally without manual intervention. So whether it’s the elimination of the process itself or it’s the smarter more mechanical and automated way of dealing with it, which we call advanced automation, we are applying those types of techniques
For complex processes, we adopt a number of tools to manage them a lot more efficiently and increase the effectiveness of the processing capability. We leverage the full skill set of analytics, work-flow solutions, benchmarking, lean sigma and we’ll make that a lot more efficient for our clients.