Indian BPO Becomes BPM

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The Indian National Association for Software and Services Companies (NASSCOM)is spearheading the change, a step welcomed by most C-suite professionals in the industry. The move obviously is to shift the focus from the "outsourcing" part to the value added proposition of managing business processes.

According to a November 2012 report by HfS Research, 67 percent of the 871 clients surveyed in the US wanted the 'O' to go. Phil Fersht, founder and CEO of HfS Research, told the Nasscom BPO Summit in Gurgaon, "The US elections and the negative connotations around 'outsourcing' could be the reason behind this exacerbated need."

The fact is that this industry not only drives business efficiency and promotes business optimization, it also transforms businesses by making them globally competitive, in a most cost-effective manner. So, it is wrong to view it as an industry that shifts jobs from Place A to B, destabilizing economies. It is about business value acceleration.

So the second step is to rebrand the industry in such a way that it tells the India success story better, highlights the future potential, and corrects poor perceptions.

Ironically, the clients of Indian BPM industry are well aware of the evolution (from transactional work to transformational projects) of this segment. It is the political and social atmosphere that is causing the greatest issue.

The BPM segment provides 1.98 million direct jobs and 7.5 million indirect jobs. With a CAGR of 17 percent for the past six years, it is expanding into smaller cities with a vision of providing employment to 25 million by 2015. Unfortunately, the negative image has stuck. So much so that parents are discouraging their children from joining the industry and youngsters are seeking alternative career paths. This comes at a time when the industry has matured from a shift and cost arbitration operation to high-value business management employing experts in the fields of finance, analytics, aviation, law and healthcare: 15 percent to 20 percent of the workforce comprises engineers, doctors, lawyers, accountants, and PhDs. In addition to 500 Indian companies, about 200 MNCs have set up shop in India in this sector.

The third move is for industry leaders to come together to bust the myths around the segment. Genpact, Tata Consultancy Services, Aegis, WNS, Infosys BPO, Wipro BP, Cognizant, Firstsource, and others are rallying together.

On behalf of NASSCOM, TCS in association with a third party will conduct a study on the perceptions about the erstwhile BPO business among various stakeholders -- academia, students, parents, employees, companies, and the general public. Finer details of the image correction exercise will then be worked out.

Arising out of this will be separate initiatives for talent pool development, branding, travel cost optimization, and streamlining of employment processes of the industry. A taskforce of senior executives will compile good practices and methodologies, while some companies will take up action plans with implementation timelines for allotted thrust areas.

Lastly, NASSCOM has set up a committee headed by Infosys co-founder and chairman emeritus, N R Naryana Murthy to draw a roadmap for the next decade. This is because most old contracts signed 10 years ago are coming up for renewal now. With global clients looking to reduce smaller deals and engage with BPM "partners" for the next 10 years, the industry envisages a 25 percent increase in large projects. So it is important for the association to keep pace in terms of infrastructure to address the opportunities in not just BPM, but core IT, infrastructure, digital solutions, and engineering services.

In fact, Nasscom is also engaging with competitor countries to improve trade interactions and help member companies to understand the market potential and set up operations there. On its radar are Latin America, China, Japan, Africa, Middle East, and Canada. Nasscom president Som Mittal was quoted in the Times of India saying, "It is important for enterprises to enter under-penetrated markets and also to intensify their focus on geographies that offer sizable expansion opportunities."

The industry is doing whatever it takes to stay ahead, but given the competition, world job crisis, and perception issues, it will take more than a name change.