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NASSCOM BPO Summit 2012: New Business Process Order - Raman Roy
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NASSCOM BPO Summit 2012: New Business Process Order - Raman Roy

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  • 1. New Business Process Order –Productivity Improvement and Innovation Some Thoughts Raman Roy Chairman & MD New Delhi 5th September 2012 #
  • 2. Understanding “Improvement”, “Innovation” & “Disruptive Innovation” Improvement Innovation Disruptive Innovation • Improvement refers to doing • Innovation is the creation of • A Disruptive Innovation is the same thing better better or more effective an innovation that helps products, processes, create a new market and • There are a number of services, technologies, or value network techniques which businesses ideas that are readily achieve this such as Six available to markets, • This is done by improving a Sigma and Lean governments, and society product or service in ways Technologies that the market does not expect, typically first by designing for a different set of consumers in the new market and later by lowering prices in the existing market. Source: Wikipedia Source: Wikipedia Source: Wikipedia While Improvement & Innovation do not result in a paradigm shift in the existing business order, disruptive innovation does manage to do thatQuatrro Confidential 2 www.Quatrro.com
  • 3. Disruptive Innovations have a definite life span…. Although the below innovations were disruptive at the time they came into existence during the last century, they have ceased to be disruptive now !! World Wide Web Aeroplanes Automobiles Mobile Telephony (WWW) Every Disruptive Innovation has a definite lifeline, beyond which only continuous improvement / innovations can be done by way of upgrades and process improvementsQuatrro Confidential 3 www.Quatrro.com
  • 4. Similar trend has been seen in the Global Offshoring Industry as well… Disruptive Productivity Improvement / Disruptive Innovation Innovation Innovation Transferring basic data Even though work continued to come to these locations entry work to cost with the addition of certain newer ones like Philippines and effective locations Brazil, it would still not count as disruptive BPO 1.0 BPO 2.0 BPO 3.0 BPO 4.0 (1990 – 2000) (2000 - 2005) (2005 - 2010) (2010 & Beyond) Emphasis on Cost Emphasis on greater Emphasis on value Emphasis on Platform efficiencies / depth and breadth while added end-to-end Multi tenancy, Non Productivity embracing the solutions and inclusive linear revenue growth “globalization” of growth esp. in Tier II/III and utilization of same delivery capacity cities resources across multiple clients • Cost • Real time • Specialization • Quality processing & voice • Process reengineering • Productivity • Multi faceted • Technology enabled • Era of Captives service offering Platforms • Era of 3rd party • Domestic BPO - off shoring E-governance, Rural BPO We are at the threshold of another wave of Disruptive innovation which possesses the ability to create a new market and value networkQuatrro Confidential 4 www.Quatrro.com
  • 5. Businesses need to come up with Innovative solutions to ride the wave… Organizations need to come up with solutions that result in “Re-architecting the Product-Price-Performance Equation” & “Enabling Value Creation” for its customers The 2 approaches which can be utilized to achieve this are : Exploring New Implementing Innovative 1 2 Market Segments Business Models Focusing on Small & Medium businesses Implemented through Innovative Service (SMBs) by providing revenue enhancing delivery through Software as a platform based solutions Service(SaaS), Platform as a Service(PaaS) & Infrastructure as a Service(IaaS) modelQuatrro Confidential 5 www.Quatrro.com
  • 6. Value Innovation as a strategy will help organizations penetrate this market… Costs Emphasis should be on: • Best Shore Delivery  Create uncontested market • Value Innovation space • Range of value added  Capture new demand services Value  Make competition irrelevant Innovation • Platform based solutions  Align processes in pursuit of • Expert Knowledge Services differentiation and low cost • Decision Making / Problem Solving • Providing value to customers beyond cost arbitrage • Employing an engaged workforce Buyer Value The emphasis needs to be on pioneering Value added services at attractive price points to the Mid MarketQuatrro Confidential 6 www.Quatrro.com
  • 7. Innovative Business Models will enable businesses to further tap this opportunity… Open, Capable & Outcome based / Multiple Innovative Service Affordable Cloud Transaction based Productized Delivery based offering Pricing Service Offering Organizations should Skill based routing of Multiple Productized Innovative service focus on developing processes on “the service offerings will delivery models utilizing platforms and portals cloud” will allow enable organizations to In house Technology & that have a cloud organizations to share assist their clients by IP, Platform Multi- compatible architecture same resources across offering a range of tenancy and Skill and service multiple multiple clients leading templated offerings that Based Processing will clients to cost reduction cut across multiple enable reduction in verticals time to market and leverage economies of scale Enhancing the business value for SMB clients by utilizing the above value drivers will lead to a New Business Process Order, based on the concept of disruptive innovation!Quatrro Confidential 7 www.Quatrro.com
  • 8. SMBs / Mid Market as a new market segment holds tremendous potential… Percentage SME Details Percentage SME Details Percentage SME Details 97.3% Of all enterprises 98% Of total enterprises 99.7% Of total enterprises 50% Of total GDP of U.S. 19.3 million SMEs in EU 40% Of total GDP of China 50% Of total employment. 66% Of total employment 42 million Formal SMEs in China 74% Of new jobs created in a 65 million Jobs held by SMEs 68% Of total exports year 75% Of new jobs created in a year EU USA China India Brazil Percentage SME Details 2.6 crore MSME’s in India Percentage SME Details 8% Of total GDP of India 15 million Formal and informal SMEs in Brazil 40% Of total exports 20% Of GDP of Brazil 6 crore People employed by SMEs 56% Of total employment 1.3 Million Of new jobs created in a year 26% Of aggregate wages/salaries 18% Growth rate of SMEs over 5 years 2.4% Of Brazil’s exports Source: Industry Outlook, respective countries Over 97% of world businesses are SMBs which constitutes predominantly an untapped segment as there is no single service provider which is servicing the requirements through “Offshore Service Delivery”Quatrro Confidential 8 www.Quatrro.com
  • 9. Large, Underpenetrated SMB Market While serving the HEAD of the market isn’t a bad strategy and can build a great business, serving the TAIL efficiently can be even more compelling Channel Sales in Pursuit of Company Revenue / # of Employees Small & Medium Businesses “millions of markets of dozens” in addition to “dozens of markets of millions” 500 5,000 20,000 # of Companies …However targeting the tail provides its own challenges including providing the right product and building a cost effective business modelQuatrro Confidential 9 www.Quatrro.com
  • 10. The tip of the Iceberg is already visible… …the key will be to realize the hidden potential!!!!Quatrro Confidential 10 www.Quatrro.com
  • 11. Thank You ! Happy to Answer Questions Raman Roy Chairman & Managing Director Email: raman.roy@quatrro.com | Website: www.quatrro.comQuatrro Confidential 11 www.Quatrro.com