Reinventing BPO From BPO To BPM

By: Pramod Bhasin, Founder & Former, CEO, Genpact

The entire world’s industry seems to be converting into a services business. As automation takes over and industrial production becomes dominated by robots and automated assembly lines, and every type of industry drives for efficiency, many of the largest companies in the world will be service companies, who are also creating the jobs which earlier may have been created by the manufacturing industry. This shift that has happened gradually over the years, has profound implications for how economies grow and how cities themselves will evolve. And particularly in countries like India, it can dramatically change the outlook for the economy and our competitive position in the world.

BEING OPTIMISTIC

Amongst all the dire warnings being sounded around the world regarding Artificial Intelligence and Automation and Machine Learning, and what that will do to jobs, I remain immensely optimistic. Technology has always helped create more, not fewer jobs, and technological changes have always led to great progress and development, not less. Remember computers and software packages and banking automation and the dire warnings that came with them? All of these have led to enormous growth in their industries. And that’s what will happen to ours where human ingenuity and entrepreneurship will leverage this technology for growth. This is one person’s opinion, but the future of BPM if handled well is very bright and actually better than the IT industry where the traditional coding and ADM jobs will be under far great threat.

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The IT industry has been around now for more than three decades. And BPO which we started around 1996 principally through GE Capital, has now been around for two decades. I think we sometimes forget how recent all this development is! Gurgaon didn’t exist in its current form at all, it was truly a ‘gaon’. The burst of energy provided by the employment of so many young people has transformed it into this thriving metropolis with its chaos and traffic and yet enormous vitality and character. When we started we couldn’t find a decent office other than warehouses on what was then called the highway.

And now Gurgaon is a thriving metropolis that in so many ways represents the future face of India. And the BPO industry has helped transform many other towns, like Jaipur and Hyderabad and Pune. It’s been amazing ride if only we had the time to sit back and record and admire it! As GE and then Genpact, we have also taken this expertise to other parts of the world.

As we know, initially we were all about labor arbitrage and pretty good quality. Phrases like “come for cost and stay for quality” stated our intent and purpose very clearly. And this differential in costs will continue to last for a few more decades, it’s going to be a while before our wage costs catch up with the most developed countries like the US where the bulk of our customers are. And our expertise has grown during this time with specialization in many domains---banking, technology, insurance, healthcare, Pharma-where our understanding of the processes is now very very deep. Initially, we may have carved out pieces of a process to be served out of low-cost countries around the world but that changed quickly and now the entire end to end process is being delivered from India and other global locations. That required a different level of expertise, training, and global delivery capabilities.

And a lot of the simpler work that we used to do in the late 90’s and early 2000 has been automated and eliminated and higher value-added work has been added in its place. Genpact really drove expertise in subjects such as Six Sigma and Lean India must be one of the countries with the maximum number of people trained in these fields, and it was adopted by customers and competitors. This industry has driven employment for millions of people, changed the face of our cities and towns, and along with IT, given India a global brand and reputation.

DECODING BPM

But what does BPM mean today and what will it mean 10 years from now? Have we optimized its promise and what does the phrase of evolving from BPO to BPM really mean. The Science behind Business Process Management (BPM) is hardly understood well. But in very simplistic terms, BPM means managing business processes end to end to achieve desired outcomes. For a Bank, we may deliver a mortgage process end to end which would include all the elements of the process itself, related technology and analytics, and critically judgment the needs to be applied at various points. Efficient Business Processes are competitive differentiators. While one bank may approve mortgages within 15 days, another might take 30. Our job as BPM Experts is helping understand why it takes 15 days extra, and how can we make these the best in class and most efficient processes for our clients.

Over the course of time, our industry has accumulated enormous expertise in thousands of business processes-and an expertise that encompasses all the elements from manual transactions to technology platforms, deep analytics—with an ability to apply best practices from much different industry. But amazingly this Science of BPM isn’t taught anywhere by any colleges like coding and programming and computer sciences, or finance and accounting.

Every industry creates its own version, optimizes it at various levels and delivers a varying customer experience. But this begs the question of why shouldn’t there be a standard process followed by most companies for paying bills, or ordering material or managing a supply chain. The usual answer is that most industries are different which is, of course, true, but even then perhaps 60% to 80% of the process is sometimes very similar across industries, for instance, the process of paying bills.

THE WAY FORWARD

This may sound mundane, but a company that can process their bill payments really efficiently, can get early payment discounts, improve cash flows, order goods just in time and build a great relationship with their vendors. I am taking a very simple example to make the point, imagine being able to process mortgages end to end within a few days as opposed to weeks, or settling insurance claims immediately or managing your supply chain well to bring down inventory costs.

This is where BPM is or should be headed. We need to deliver outcomes and results to our clients, not transactional processes. And we need to build “products” that deliver these outcomes. There are many examples of this already. The best one being Payroll companies that provide an end to end solution to companies for their payroll needs around the world. But this model can and should be applied to many many industries-mortgages, banking products such as KYC, or inventory management. And with the application of Artificial Intelligence and Machine Learning, these processes and products that deliver defined outcomes will increasingly become the way the world thinks about BPM and buys these services.

There is a Science that needs to be developed here that thinks about business processes as we do about manufacturing and engineering, with standardized tem­plates and specific technologies and tools that focus on process improvement. These can eliminate the commonest errors that generally exist in most processes, which is what a large part of the BPO industry actually helps correct, such as unpaid bills, surplus inventories, queries from customers, all of which shouldn’t exist in the first place.

We really haven’t progressed forward as much as we could have in this industry. Processes are still being transferred from clients to service providers generally in the same way as a decade ago, standardization hasn’t-progressed as much as it could have and new tools haven’t been developed to the level they should. This will be a long journey as industries optimise around BPM the way they do around manufacturing or software programming.

And there is a huge opportunity here. To create new products, drive process improvement to new levels, find ways of efficiently and effectively serving medium scale companies, moving into other geographies. Latin America, Africa, Asia remain relatively untouched. Most of all we have the ability to move into smaller cities and create hundreds of thousands of jobs, as we have already done in the major cities. This is an industry where the variety of graduates that can get jobs is the highest--and it provides a platform for people to launch into other careers. Our BPM employees are now working at so many different industries-banking, insurance, healthcare, IT, hospitality, retail, airlines!

It has also helped empower women since the proportion of women employees in our industry is much higher than most other industries. And this economic empowerment in an atmosphere that is generally considered safe will fuel their personal growth.

As an architect of this industry, my proudest moment is always when ex-employees come up and thank me (there’s really nothing to thank me for anyway) for helping make their careers with us, for giving them the exposure to go out and conquer the world in their own ways.

India should rightfully own this industry and lead it across the globe not just in volume but in expertise. We have already built up enough raw expertise but we must now harness this in new products and services and show the world that we can be innovative and creative and take BPM to a completely different level of service and quality. If we can do that and move away from the old labor arbitrage, FTE charging model, we will be more profitable and more scalable, and really have an industry where we are the undisputed champions in the world.