Business Process Outsourcing A Management Process arising out of the pressure in a ‘boundary less’ global economy It helps in saving costs, providing flexibility and improving operational performance No longer a short term tool but a long term competitive advantage The market can be broadly classified into- Business administration Supply Chain Management Sales, Marketing and Customer Care
BPO in India Amex and GE pioneered outsourcing in India in 1990s Major advantages – Cost and Labour Growth of the industry has been more concentrated in the major cities Large BPOs are now focusing on a ‘verticalized’ approach
BPO in India The growth of BPO in India can be classified into four phases- Company owned units pioneered BPO in India Venture funded new companies Leading IT services companies enter BPO Domain/Industry Specialized BPO
Future Outlook Domestic segment to grow by 17% to reach Rs. 149bn Exports to increase at 12% to reach USD 16bn Data analytics is growing fastest at 19% Direct employment in the industry to cross 6 lakhs growing at 7%
INFOSYS: Augmented outsourcing Augmented outsourcing presents the opportunity to outsource adjacent processes of the value chain. This augmentation could be upstream or downstream as desired and beneficial by both parties. Effects: Impact on the cost of revenue side Helps client to co-create innovation Provides a pool of business experts who are have cross- functional analytical expertise.
BENEFITS - Analytical and judgmental improvements - Skill and capacity -Real world outcomes and augmentation solutions rather than modular solutions -Support s adjacent processes - Learning curve comes into rather than a niche process picture.-Develops new links to support -As the same provider works the current structure on the processes, it can improve upon the process.
Example: Sales support The provider has been contracted for: Sales support of the value chain. Support for market research and telemarketing Augmented outsourcing benefits: Improvements in channel partner assessment.
TCS: Business-Process-as-a-Service This process uses private cloud to host application needed by the client. Useful for small and medium businesses. Optimum cost solutions supported by best-in-class technology are the key to success of this model.
Benefits Use of a variable pay-as-you-use pricing model that helps to maintain minimum capital expenditure. Services available for both industry specific functions and cross industry specific functions Customized technology environments creating efficiencies Standardized business processes with state-of-the-art applications and technology
CTS and Business Process Outsourcing: A horizontal group spreading across all the verticals. USP Factors: • Customer satisfaction • Operational productivity • Strategic value • Transformation "higher-end" services BPO, IT Infrastructure Services & business consulting contributed to 15% of revenue in 2012
Business Delivery Model: Two-in-a-box • Customer relationships Manager • India-based managers - oversee offshore delivery Services Three-in-a-box • Adding a business consulting layer to its "two-in-a-box" model Organized into several verticals and horizontal units
Redefining Business ProcessOutsourcing: BPO as a simple cost play Infuses key business activities with technology levers • Better skills and industry knowledge • New technology and re-engineered processes • Knowledge-intensive and industry-specific processes • Increasing process effectiveness and efficiency.
CASE: CTS Client and Solutions in BPOCognizant was engaged by a Fortune 500 pharmaceutical client to provide end-to-end clinical data management services, for all its global R&D sites. The execution of this complex transition involved: 350+ FTEs ramped up in less than 6 months; 7 R&D sites in 4 countries; Re-badging of client employees onshore;
CASE: CTS Client and Solutions in BPO Transition to two offshore locations (Mumbai and Chennai) and one nearshore location (Budapest); Diverse set of processes, and more than 50 global applications, centralized in a single Data Management Center (DMC) High customer satisfaction scores from a survey, carried out during transition.
Future Challenges New technologies which are driving new ways of organizing and operating More collaboration More flexible business processes and technology infrastructure Ability to make (and dissolve) spontaneous connections with customers and suppliers Megatrends pushing companies from traditional business models (enterprise 1.0) to the next-generation enterprise global asset-light virtual in its operations skilled at leveraging flexible technologies
Future Trends The businesses will need to overcome multiple challenges, Securing data Nurturing an adaptive culture Developing strong change management program to sustain momentum Cognizant offers various products and services to cater to the needs of business partners and help them in the process of: Reinventing the business model to be more collaborative and less hierarchical Rethinking which activities are core to their competitive edge versus which would be better handled by a third-party with deeper and more scalable expertise Rewiring the technology architecture to be more virtual, agile, and Web 2.0-based
Services @ Future Future of Work Business Assessment Model: To help businesses reach its full potential Benchmarking and Metrics Analysis: Cognizant’s Index for Future Readiness is utilized to help change the way client work. This index is a unique repository of client and non-client survey data from top executives at approximately 200 leading enterprises and spanning 125 metrics.
Shortfall of existing business model Increasingly complex projects Reason for failure of complex projects Poor Understanding of clients requirement Changing requirements during the project development phase due to complex nature of the project Decision making process of the client is not known to the provider
Cognizant 2.0 Focus on “intellectual arbitrage” rather that “labour arbitrage” It is the ability to bring all the expertise a global services firm has around the world to bear on a client’s critical business requirements Cognizant 2.0 is a Web 2.0-based platform that enables Cognizant associates (and eventually business partners and clients) worldwide to collaborate virtually and deliver significant time-to-market, cost and IT transformational value to clients
Component of Cognizant 2.0 A high-powered knowledge management system A standardized project and workflow management system 21st-century tools to help solve their clients 21st-century challenges