The evolving trends in the BPO world and how the new delivery concepts are coming into play

1. The Evolving World of BPO
Vishal Sadar

2. BPO delivery model has been ever evolving:
• Earlier - Labor arbitrage, a focus on moving work to low cost
locations
• Now - The world of Globalization.
In today’s day and age, the economic uncertainties have forced us
to revise our thinking and devise new options to provide business
impact by creating newer delivery models; a strategic driver to
attain business value.

3. The chart below shows just how much model has
transformed in the last 2+ decades:

4. Rise of the H&S Model
 In this new world of Globalization, companies are growing exponentially
and reaching new customers and markets daily.
 This has changed the dynamic of the outsourcing world for our clients and
thus they now require service delivery (which is centrally managed but
local delivery is customized as per the requirement of their local customer
in their local language and culture).
 The need for our clients to have a centralized near shore management
center and globally dispersed ‘in-country’ language delivery centers has
given rise to the Hub and Spoke model in the outsourcing world.
 The need is to establish a highly robust management framework to
coordinate globally dispersed centers, build relationships, instill a collective
identity and ultimately deliver successfully on the client’s outsourcing
mandate.
 This approach is already widely used in the Aviation, Manufacturing and
Logistics business.

5. What is The Hub & Spoke Model?
 The Hub and Spoke (H&S) model is used when there are multiple locations
sourcing, with a central location called the ‘Hub.’ The location provides a
single point of contact to the client, whilst the in-country extensions, called
‘Spokes’, which are spread across the globe.
 The ‘Hub’, as aforementioned is centralized and has responsibilities such as
people development, client relationship management and Quality and
compliance related matters whilst driving a common delivery standard to
its satellite locations.
 A ‘Spoke’ is a delivery center set up in a country providing services to the
client’s customers in a local and customized manner in line with the culture
and legislative requirements of the country. The spoke works closely with
the client’s local office and reports the performance to them.

6. What is The Hub & Spoke Model?
 The key objective of the Hub & Spoke model is to provide greater flexibility
to the client in selecting locations out of a portfolio of delivery centers that
adequately fulfills all business needs. The Hub & Spoke model is expected
to be complimentary to the standard practices followed in the industry at
present.

7. Advantages of H&S model
 Capabilities development: Enables the use of regional capabilities such as
specific skills and languages to develop world class quality of services.
Allows centralized control for skill development, resource utilization,
operational efficiency and having uniform operational processes across
spokes.
 Cost advantage: This model ensures higher quality of service at lower costs
to service customers by leveraging locally highly skilled resources providing
 Improved time-to-market: Allows delivery centers to locally source talent
where the capability is available. This creates a quicker turnaround time.
 Lower cost for deployment of technology: This ensures there is little/no
incremental investment in technology for every new center that is setup
for the same kind of operations.

8. Key Challenges in deploying the model
 Differences in culture and time zones: With hubs in various parts of the
world, there may be cultural differences, time zone etc. challenges that we
should be aware of.
 Project management: At the time of transition, it is critical to have a Spoke
Project Manager taking care of the deployment of the project under the
supervision of the overall Program Manager. The project status, milestones
and deliverables must be tracked and updated on a regular basis ensuring
that updates from all spokes are reported consistently.
 Ensuring data confidentiality and security: In a multi-location firm,
protecting intellectual property rights and data is critical. It is important to
ensure that there is a mechanism for ensuring network security, data
security and physical security.

9. Success Factors of having a H&S model
 Make the brand stronger and globally recognized using a wide network of
delivery centers
 A strong setup of the technology platform which is nimble and accessible
across the globe
 A robust governance structure within the organization which is effective
remotely
 Quality and Risk Management to ensure consistency across the delivery
centers
 Proactive risk mitigation tools and strategies
 Consistent and harmonized operating processes
 Strong global management and local expertise in delivery centers

10. Conclusion
In the near future, this is a trend that will gain strength and popularity as our
clients look at our capability in delivering operations using our well
established network of delivery centers. The H&S model does not look to
replace the current approach towards outsourcing, but to further build upon
it. In an ever-changing world, where technology is developing at lightning
speed, the Hub and Spoke model is a step in the right direction towards the
adaption needed by firms to match the evolving requirements of their clients.