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Technology Calling: BPO and ITeS companies focus on enterprise and mobility solutions

April 25, 2017
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The information technology (IT), IT-enabled services (ITeS) and business process outsourcing/management (BPO/M) industry has not only fuelled social and economic growth, but has also helped transform the country’s image on the global platform. The sector’s contribution to the GDP has increased from a meagre 1.2 per cent in 1998 to around 9.5 per cent in 2015.

The sector was one of the early adopters of technology. This is because call centres and BPOs are responsible for timely service delivery and ITeS for providing cutting edge technology solutions to clients. Therefore, these companies have to stay a step ahead of other industries in adopting advanced technology solutions for strengthening their own telecom and IT networks. Moreover, most enterprises offering IT services cater to clients across geographies and time zones, and hence require technological solutions to better manage their operations.

The next phase of technological growth in the sector is being driven by internet of things (IoT), mobility, cloud, 3D printing and automation. Notably, while the sector itself is using technology to improve operational efficiency, the growing uptake of various advanced solutions in other sectors has also unleashed new business opportunities for ITeS and BPM companies.

A look at the key technology trends in the ITeS and BPO/M industry...

Enterprise applications

Organisations in the IT space are using enterprise and mobility applications within the company to encourage collaboration among employees and increase

productivity. The most widely used tools include chat, and audio- and videoconferencing to facilitate regular communication among employees. Other enterprise applications deployed by companies are web hosting, voice over internet protocol, corporate intranet, push alerts, mobile access, supply chain management and customer relationship management.

The sector has also seen rapid uptake of the bring-your-own-device strategy. As a result, maintaining a remote and mobile workforce has become easier. This has strengthened the need for smooth and efficient employee collaboration platforms so that employees based in different cities can seamlessly collaborate on projects and assignments.

Given that organisations in this segment need to handle huge volumes of highly sensitive data, security is of utmost importance. The majority of organisations have a multi-tiered security system to protect their infrastructure from external as well as internal threats. The most commonly used security tools include built-in server security, firewalls, antivirus packages, password protection, and intrusion-prevention systems. Further, in order to ensure security within their premises, a large number of organisations track emails and store crucial data on password-

protected servers. For example, Infosys BPO uses security, incident and event management solutions to get an overview of the company’s IT infrastructure security through log correlation and analytics.

Cloud computing

Cloud computing is revolutionising the way BPO service providers extend their offerings. BPO applications can now be made available on demand, eliminating the need to invest in IT infrastructure and thereby reducing costs considerably. The benefits can be seen particularly in organisations with legacy systems that demand high maintenance and upgrades. They can now move to a cloud platform and outsource their business processes.

The key advantages that cloud brings to the BPO landscape are as follows.

• Cost reduction: Using cloud solutions, BPO enterprises can do away with legacy IT hardware and investments in human resources for maintaining and supporting the infrastructure. The pay-per-use feature of cloud-based solutions helps enterprises align costs with business performance.

• Scalability: Cloud computing allows BPOs to scale up or down quickly, without impacting operational efficiency. Enterprises can also update applications dynamically on the cloud.

• Agility: BPO service providers can leverage cloud computing to bring down the processing time for data-intensive business processes. For instance, they can offer data processing workflow, from documentation and image processing to publishing, at a reduced turnaround time.

• Reliability: Hosting applications on the cloud rather than in complex traditional infrastructure lends greater reliability to the system as the latter is prone to downtime.

Despite these benefits, many enterprises in the BPO space are wary of adopting cloud solutions owing to security concerns. The risk, however, can be mitigated by carefully selecting a cloud vendor and conducting a security review of the vendor by a third-party assessor. Undoubtedly, the benefits of cloud computing in BPOs far outweigh the concerns.

Going forward, the key factor that will drive further uptake of cloud in BPOs is the commoditisation of cloud computing as it becomes more pervasive. It will then become a more widely accepted platform for outsourcing entire business processes using the shared service model.

Big data

Since IT, BPO and ITeS companies have to handle huge volumes of data and analyse these to help clients make informed decisions, these players are making significant investments in big data. Most of the data handled by employees in this segment is in unstructured, raw forms (such as audio, video and messages on social networks). Processing large volumes of data using traditional data processing applications is becoming increasingly difficult for companies. However, big data applications enable companies to better structure and analyse the data.

Social media

A well-defined social media strategy has become a survival tool for most corporate workplaces. Most companies are increasingly feeling the need to track social media conversations to understand consumer preferences and perceptions regarding their products and services.

This has opened up new business opportunities for BPO companies. The three aspects of social media relevant to most enterprises are listening to conversations, examining customer analytics and responding to conversations, all of which can be provided as a service. BPOs can provide their clients with all the three capabilities without the latter having to worry about hiring or investing in new resources to gain traction on social media. A BPO can monitor any comment posted on social media about its client and also identify new trends among customers.

Hence, a BPO service provider can help a company focus on selling and growing its business, while it looks after the company’s social media elements, providing the infrastructure, processes, technology and intelligence to interpret customer data analytics and respond accordingly.

Given these benefits, BPOs in India are now offering to monitor social media and are reaching out through platforms as they manage customer relations for their clients. In 2011, GenPact, one of the largest BPOs in India, acquired EmPower Research, an integrated media and business research company with capabilities in social media research, media monitoring and measurement, for an undisclosed amount. Other BPO providers that have made a foray into social media management services include Wipro, Teleperformance and contact centre outsourcing firm Sitel.

Fallouts of technology and possible solutions

Advances in technology have paved the way for process automation where work is done by robotic agents or supercomputers. Artificial intelligence and robots are currently best suited for repetitive work – work that is currently outsourced to BPO companies. The benefits of automation powered by artificial intelligence are obvious, since supercomputers and robots perform the same tasks as humans, and companies need not incur wage, health benefits and other labour-related expenses. According to some statistics, robots are three times cheaper than offshore professionals and their expenses are nine times lower than those of a worker.

These are warning bells for the IT industry. According to industry estimates, automation, artificial intelligence, or other forms of “digital labour” that can perform low- to high-skill jobs could eliminate up to 1.4 million jobs, or 9 per cent of the global IT services and BPO workforce by 2021. This could have far-reaching implications for the Indian IT services sector, which is estimated to employ about 3.5 million people. Globally, the sector employs about 15 million people. Non-introduction of artificial intelligence in the industry could thus be fatal for many BPO companies. The efficiency of artificial intelligence will prompt many businesses to stop outsourcing altogether.

To this end, BPO companies need to take urgent steps to remain competitive during this wave of ongoing change. BPO firms can integrate automation into their own package of services. This would mean undergoing a painful transition where some staff will be laid off. However, the BPO company will thrive in the long run because it would be offering a service that is growing in popularity and its business costs would also fall. Another option for the BPO company is to move from basic operations to more high-end services that require creative and analytical thinking.

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