Global Services - Outlook 2012 3 Pointers from Industry Leaders

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BPO : Market Dynamics

Tuesday, January 03, 2012

Outlook 2012 3 Pointers from Industry Leaders

Smriti Sharma and Sourabh Chandra Pushp

3 Pointers for ITO/ BPO in 2012

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Anoop Sagoo, BPO Cross Operating Group Lead, Accenture

1. In both ITO and BPO, high performing businesses will continue to extract significantly more value out of their investments if they approach outsourcing as a partnership with their service providers. Buyers are looking at outsourcing as a driver of business value -- to help operate their businesses better and to deliver measurable business outcomes – and that is best achieved with a true business partner. To that end, we expect clients to be much more discerning about their outsourcing providers.

2. As a business partner, clients will expect a far greater expertise in vertical industry knowledge from their providers as well as the latest combined BPO and IT outsourcing capabilities. Providers will need to possess industry, technical and functional knowledge. They will need the proven ability to deliver end-to-end processes and deploy analytics in order to identify opportunities to improve and add value to a client’s business. And they need a strong transformational capability by making change management a priority.

3. Those providers with the ability to bring these elements to their clients will be well-placed to succeed in 2012 – and those that continue to view the market as one in which it's all about “lift and shift”, transactional processing and cost alone will be challenged.

Brian J Manning, President and Managing Director, CSC India

1. Increased adaptability of cloud services: The global market for cloud services is predicted to surge to US$148.8B in 2014 from US $68.3 billion in 2010. This shows that there will be a huge transformation in the business model of any organization. The cloud service providers should work aggressively on finding out the solutions to cloud security as its one of the biggest issues when we talk about cloud.

2. Enterprises Mobility Market will grow dramatically: Mobility market is predicted to grow to $7670.4M by 2016. We are experiencing an increased demand in testing services for mobility apps especially during 2011. We expect this to increase further in 2012. With rise in the numbers of private application stores, mobility services are acting as fuel in promoting information communication technology globally. Thus, new applications that are developed by any organization must leverage rich browser and mobile devices to support end-user demands for a movement from PCs to mobile devices.

3. Adoption of "as a service" offerings: Most of services offered by software vendors today will soon be offered as “as-a-Service” because it gives cost efficiency which is acceptable to most of the customers. As such, enterprises will eventually be forced to standardize their processes (for competitive-parity business functions), to embrace the lowest-cost solutions in order to ensure that underlying cost structures meet industry averages. As a result, clients will need to clearly identify business processes providing competitive parity, along with their underlying IT services, for analyzing "as a service" potential.

Andrew Kokes, vice president, global product management, Sitel

1. Diversify overall enterprise support to include at least 10-20% home-based agent labor.
2. Review collections strategy to identify opportunities to prevent good payors from becoming routinely past due.
3. Migrate technology investments to hosted models that scale web engagement and customer experience solutions as needed.

Partha De Sarkar, CEO HGS

For providers:
1. Move towards op-ex model (from cap-ex).
2. Diversify to increase reach and expand portfolio.
3. Look at long-term engagements.

For buyers:
1. Have a streamlined internal process to define the outsourcing needs and vet a prospective provider.
2. Use outsourcing not to just reduce costs, but to increase value.
3. Look at long-term engagements

For both: What is needed is an integrated relationship between the client and the provider whereby each has a stake in the other. The two parties must act as one in a business association that goes beyond a cost reduction exercise to function as a true partnership.

Arvind Thakur,CEO, NIIT Technologies Ltd

1. Tap into newer verticals – Heath care, retail, energy public sector.
2. There is global economic activity shifting to east. I would say increase activity in Asia region.
3. Traditionally, the industry has focused on large accounts but with the advent of cloud there is the big opportunity in the long tail which is to reach out to the SMB segment.

Deepak J Patel, CEO, Aditya Birla Minacs

1. Generic providers’ will be commoditized. So, there is need for a lot of specialization. Specialization can be on industry capabilities, on technical capabilities, on the tools and technology that you bring to the table etc. But it is going to be a more specialized game. People who are very generalist will approach commoditization and then it is just a pricing game.

2. Demonstrated capability is going to be another big factor; in truly being able to harness the opportunity. When you are trying to outsource the core pieces of your business, it implies higher amount of risk in the customers mind because now you are relying on some third party to do what you use to call core yesterday In order to win that one needs very specialized and demonstrated capability to be able to harness it.

3. You cannot wait for such businesses and for the customer to tell you. You will have to have the innovation engine that you will lead to create idea and thought leadership to make sure that the processes that you are running for your customers are operating at best in class level.

Lalit Dhingra, president of NIIT Technologies, Inc.; director of NIIT Media Technologies and managing director of NIIT Healthcare Technologies.

1. Vertical focus, creative win-win contracts will be the new normal.
2. Cloud will be widespread by 2014.
3. Voice based BPO services will be delivered from many Tier 2 and 3 cities in the US

Prakash Sreewastav, CEO, WINIT

1. Mobility being new and agile companies who have created skills on this will be wanted. Mobility outsourcing will be played on a level field where niche companies can compete and win against the big guns.

2. Companies will come looking for than fixed bid, low value projects. Companies are looking for their outsourcing vendor to create more value for them and be associated for the long term.

3. Design will matter. Smartphones provide great user experience. Work delivered by outsourcing companies need to maintain and if not enhance the user experience.

Buyer	Department of State
Provider	Stanley Associates
Value	USD 1400 million

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Buyer	Department of State
Provider	CSC
Value	USD 1400 million

Read more