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Contact Center Industry: Where Do You Go From Here?


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Contact Centers and the Challenge of Social Media - Our cover story this month focuses on the new directions of growth
for the contact center industry.

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Contact Center Industry: Where Do You Go From Here?

  1. 1. Analytics Outsourcing The Next Generation of Business No Room for Heroes in Outsourcing on the Rise Pg19 Process Outsourcing Pg 22 Relationships Pg March 2011 Contact Center Industry: Where Do You Go From Here? The new rules to play by: Growth in demand in new geographies Balanced shoring Domain-driven services Unified customer experience
  2. 2. Global ServiceS A CYBERMEDIA PuBlICAtIonAn integrated media platform which connects thevarious constituents of the global technology and Pradeep Gupta business processing services industry ecosystem. Chairman & Managing Director Cyber Media (India) Ltd.Directory of ServiceS E. Abraham Mathew PresidentNewSletter Ed nairA regular digest of key industry happenings. Editor MaGaziNe Satish GuptaThe fortnightly digital magazine features research Associate Vice Presidentreports, articles and experts’ views. Available on Smriti SharmawebiNarS Services’ web-based seminars aim to impart Sruthi Ramakrishnanuseful information related to outsourcing indus- in the form of presentations and discussionsby industry specialists. niketa Chauhan Virendra KumarWe deliver indepth analysis and research reports sourcing subjects. Global ServicesMicroSiteS Cyber Media (India) Ltd. CyberHouse, B- 35, Sector 32Online resource center designed to provide Gurgaon-122001, Indiafocused content on special subjects to the out- Tel: +911 24 4822222sourcing community. Fax: +911 24 2380694eveNtS Contact:From multi-day, high-level, resort conferences to breakfast discussions we offer a numberof opportunities that connects the outsourcing Disclaimercommunity. All rights reserved. No part of this publication may be reproduced by any means without prior written permission from the publisher.cUStoM ProGraMCustomized services rendered through different letterS to the eDitormedia platforms. Send letters to, or to any of our writers. We reserve the right to editoSoUrce booK all letters. Postings submitted to our blogs andA directory of global outsourcing service providers. letters to the editor may be published in digital magazine or Website.
  3. 3. February 2011 featUreS 10 CONTACT CENTEr INDuSTry: WHErE DO yOu GO FrOM HErE? 10 by Sruthi Ramakrishnan The new rules to play by: Growth in demand in new geographies, balanced shoring, domain-driven services, and unified customer experience “ExpEctationS aRound cuStomER ExpERiEncE aRE chanGinG” 17 Andrew Kokes, Vice President, Global Product Management at Sitel, shares some insights with Sruthi Ramakrishnan on chang- ing consumer behavior and how providers can best adapt to it8 xperts thE nExt GEnERation ofCAN THIS PrOCESS GET BETTEr? BuSinESS pRocESS outSouRcinG 22by Smriti Sharma By John lutz, general manager, iBm Global processIf you are a Genpact client, there is yet another way of get-ting more out of business processes Services RuRal BpoS in india: aRE thEy ovER- hypEd? 24 19 by Kumar parakala, KpmGanalyticS outSouRcinG on thE thE EmERGinG maRKEt foR analyticS 27RiSE Excerpted from horses for Sources By Reetika Joshi, Senior Research analyst, valuenotesResearch ‘Where offshore analytics is heading in Sourcing practice2011’ by Smriti SharmaThe importance of business analytics has been on the rise. no Room foR hERoES in outSouRcinGNow it has also become an eminent candidate for outsourc- RElationShipS 29ing. How is the analytics outsourcing industry evolving? By nigel hughes, Global Services director, compass management consulting GLOBAL ServIceS DIGItAL MAGAzINe Next Issue: The New Rules in BPO Learn about what will drive the BPO sector in this April special report.
  4. 4. Editor’s NotE Contact Centers and the Challenge of Social Media o ur cover story this month focuses on the new directions of growth for the contact center industry. In the traditional sense, the con- tact center industry predates the outsourcing industry. It is only in the last decade, with the unbundling of business processes and the growth in globalization driven offshoring, that the contact center industry got folded into what we now call as the BPO industry. Both then and now, this industry continues to be a dynamic segment within BPO, marked by numerous advances in technology— CTI, IVr, IP-based contact centers, hosted contact centers and the like. These technology changes improved Ed Nair the performance of contact centers that in turn led to improved customer Editor management. The rise of social media presents a whole host of new challenges for the contact center industry. While the industry recognizes the importance of including social media as part of its customer engagement strategy, the wherewithal to do that with success is lacking. Meanwhile, the dynamic The dynamic nature nature of social media and its speed of adoption presents itself as a mov- of social media and ing target to be chased by the contact center industry.its speed of adoption While it is a tad easier for enterprises to include social media as part of its customer management strategy, the contact center industry is grap- presents itself as a pling with the challenge of delivering it as a service. There is the classic moving target to be gap between ‘knowing’ and ‘doing’ in this case. Many contact centerchased by the contact companies profess to know it, but they fall woefully short when it comes to doing it. That’s the reason this topic is still the stuff of many whitepa- center industry. pers and conferences. Part of the answer lies in technology: an industry-standard platform that effectively integrates multiple social media conversations is needed. This would take care of the need to track social media conversations (‘lis- tening’ as it is called) so that social media insights become measurable and amenable to analytics. Most of the other requirements like handling inbound social media traffic, handling outbound social media conversa- tions, analytics and reporting become possible. The other part lies in how the contact center organization structures this activity, develops special- ized skills, and proves business value. Global Services would like to know how the contact center industry is weathering the challenges in this area and the learning from it. Do write in to share the best practices that worked for you. . .GS
  5. 5. the global Services 100 Survey - 2011 Recognizing & celebRatingSeRvice PRovideR excellence! click Here to Participate Survey deadline: april 10, 2011
  6. 6. Enterprise ApplicationCan this Process GetBetter?if you are a Genpact client, there is yet another way of getting moreout of business processeby Smriti SharmaB usiness processes are the source of value for an much about managing just the part of the process that we enterprise. Cost, efficiency, effectiveness, quality ran. Most of the process management happened onshore of output, and time are some of the elementary and what really happened offshore in our captive was people process parameters amenable to various forms of management. The Team Leaders would look at the SLAsoptimization. There’s much more that can be done to proc- that were around such as accuracy, efficiency and turnaroundesses to uncover new sources of value, be it business process time. A lot of the time, while we would manage upstream andreengineering (the rage of the early nineties) or Six Sigma or downstream processes, we would not look at the inter linkageslean or software-driven BPM. Genpact, the BPO provider, is between the process.”reporting success in the process management area, based on This did not work nearly as well with multiple clients.its home-grown methodology called smart enterprise proc- Most companies when they look at processes or functionsesses (SEP). they look at them in silos, so what happens is that each Some examples of the company’s success include: A lead- function, each silo optimizes that process so it manages it toing fortune 500 global financial security company uncovered perfection. But, between different functions, there was a lot ofopportunities to improve revenues by $6-8MM. A leading value leakage. “No one was looking at the process security solutions provider improved cash flow and While you optimize your process at an individual level, who’sreduced Total Cost of Ownership (TCO) by $28- 40MM. looking at the process holistically from end to end and seeingA leading shipping, energy, logistics and retail conglomerate what value leakages happen across the way. This is the pointfound opportunity to reduce IT Helpdesk cost and improve of efficiency vs. effectiveness, which is each process is man-productivity by $9MM. An uS trucking major transformed aged to efficiency, but the overall effectiveness of the entireits Order-to Cash process and improved cash flow by process value chain is not something people look at. That was$40MM. really the start of SEP as a concept,” adds Sasha. Genpact experimented, tested and analyzed data from In a nutshell, SEP helps to test the effectiveness of cli-more than 200 million transactions across more than 3,000 ent’s processes by measuring points of leakage at each levelprocesses it manages for clients to determine the benchmarks of a given end-to-end process and then to apply best-in-that best-in-class companies achieve at each level in a process. class benchmarks from within and across industries. TheThe next step is to distinguish `the vital drivers of enhanced result is a client specific roadmap for maximizing processbusiness results for each process, and develop best practices effectiveness.for addressing those drivers. Developing customized client-specific- diagnosis and roadmap for achieving business results Cost arbitrage is still a factoralong with recommendations for the execution phase are the Genpact is currently engaged in comparing Penske’s existingnext steps. The end-step is to arrive at a commercial model metrics to those in SEP methodology to:that bases compensation on the results achieved. (a) identify additional metrics that should be tracked to provide deeper insight into processes which would driveSEP in the making effectiveness and efficiency improvements, andSasha Sanyal, SEP and Business Development Head, articu- (b) to benchmark Penske’s performance against proprietarylates, “The way we originally managed our business was very benchmark database.8 Globalservices March 2011
  7. 7. predictable, replicable, or sustainable over time. A good example of this 40-50 companies, and over 3,000 business processes, the can be found in electronic procurement. Sourcing and procurement SEPSM methodology replaces the trial and error approach organizations frequently acquire e-procurement technology but fail to with proven, scientific approaches. ensure that the technology is used, and used effectively. Enterprise Application FIG. 3 - A HOLISTIC, GRANULAR FRAMEWORK FOR MANAGING BUSINESS PROCESSES A Holistic, Granular Framework for 6 Managing Business Process 5 4 Solution 3 implementation to deliver business 2 Identifies drivers Offers solutions outcomes 1 Links business of performance including through process outcomes and variability and process, analytics efficiency, Maps every core benchmarks to roadmap for reengineering transformation Identifies the key key performance improvement by business process at and focused IT projects, Point IT / business outcomes measures and key leveraging ‘insights’ a granular level analytics solutions for the company performance drivers and ‘best practices’3 New SEPSM Methodology Delivers Enterprise-Level Effectiveness of the Source-To-Pay Process A few examples of insights gained to date: Frank Cocuzza, CFO, Penske Truck Leasing articulat- • Penske compares favorably to benchmarks in Average Days ed, “Our partnership with Genpact has not only provided Delinquent, a measure of collection effectiveness, and in us cost-efficient business processes, but also the process Cash Application Accuracy. rigor and metrics that enable us to achieve ever-higher • Penske has the opportunity to improve performance in the levels of performance. We look forward to continuing our Service Completion to Invoice Cycle Time, a measure progress by leveraging Genpact’s Smart Enterprise Process of billing timeliness, and in further increasing the Auto- Methodology.” GS Cash Hit rate Genpact’s wide expertise in understanding the key drivers of the order –to-cash process across geographies and indus- tries has enabled the company’s ability to provide insights into how specific focus points and improvement areas within operations can lead to a positive and significant impact to an organization’s revenues and bottomline figures. When Genpact embarked on the SEP way, the first thing they did was look at the existing processes they were running. Genpact did a diagnostic of Penske’s Order To Cash process. Existing process templates were measured along with their measurement systems, benchmark and best practices. Genpact identified gaps. Although, they were running this process for a long time, a different approach aided in identifying gaps. The entire process within order management, across order-to-cash life cycle was analyzed. What leakages were happening, what areas were not doing optimally and when were they not close to benchmarks.... all these points were studied. Within six months, it was identified that if there were about 45 metrics being measured, then there were about 38 that were best-in-class, and there were seven where there were gaps. These gaps were addressed using best practices. Five new opportunities were identified for this process through benchmarking. Next, these were then imple- mented into their process, which was then able to drive an additional outcome of almost 25 additional million dollars a year. 9 Globalservices March 2011
  8. 8. Tools & Technologies10 Globalservices February 2011
  9. 9. Tools & TechnologiesContact Center Industry: Where Do You Go From Here? The new rules to play by: Growth in demand in new geographies Balanced shoring Domain-driven services Unified customer experience11 Globalservices February 2011
  10. 10. Special ReportContact Center Industry:Where Do You Go From Here? the global contact center industry is on the path to recovery. Growth in demand in new geos, balanced shoring, domain-driven services, and unified customer experience are the new rules to play by.W ith post- recession studies showing that acquisition or retention have higher cost containments the contact center industry is on a growth when activities performed individually as compared to path again, the sunrise industry seems revenue generation. Also, the channels for acquisition to be shining again. Selection Group’s have diversified from the bricks to the clicks world.November 2010 report on call center openings and Hence a newer focus seems to throw more light oncontractions showed that new growth or expansions Customer Acquisition.”numbered most in the uS, followed by Latin America, According to a Frost & Sullivan study, the Asia PacificCanada, India and Philippines, creating over 10,000 new (APAC) region’s revenues from this industry will grow tocall center jobs. Here’s a lowdown on what is driving the $616.6M by 2016, from $287.5M in 2009. This will berecovery, and how it can be sustained. supported by the presence of multinational firms sign- ing up for outsourced services from service providers inGrowing domestic demand, MNC countries like Malaysia, Vietnam and the Philippines,contracts driving recovery which had been growth markets during the recessionIBM sees heavy demand fueled by certain factors. “In the period.last 18 months, we have started seeing heavier demand While 2009 was primarily about customer retention,coming out of Latin America, Africa and the Middle the first half (H1) of 2010 saw most markets in the AsiaEast. This is true especially in the banking, insurance Pacific strive towards customer acquisition. “As the effectand telecommunication sectors,” says John Lutz, gen- of the financial crisis erodes, enterprises are looking out-eral manager, IBM Global Process Services. Additionally, wards and readying themselves to go full steam to acquirethere is a drive for more on and near shore delivery that more customers aligned with their growth ambition inis fueling a re-balancing of centers/agents for many global the region,” says Krishna Baidya, Industry Manager forcompanies.Because of this trend, we see clients look- Frost & Sullivan’s ICT team. “The APAC geography hasing for a much more ‘balanced shore ‘ strategy. Finally, evolved from a provider of cost-effective services to a bal-companies that continued to use or adopted outsourcing ance sheet partner focusing on end-user experience andduring the recession for cost cutting objectives are now business transformation. Customer Acquisition will beextending their requirements to areas that afford them an the prime focus for every marketer due to the customerimproved customer experience, such as the integration of experience focused mindset of the buyer, the maturityadvanced customer analytics within a contact center.” of the end users, increase in consumption pattern, deep The focus is now on encompassing the entire customer penetration of the verticals and the geographical spreadexperience rather than managing only singular aspects, say of the region,” says Ahuja.rajiv Ahuja, President - ASEAN & ANZ, Aegis Limited. The increasing domestic demand for customer service“This approach would range from customer acquisition in developing markets such as India, China, Indonesiato retention to enhancing the experience and leaving and Vietnam caused a surge in demand for small andno stone in the customer’s bag unturned. Customer medium business (SMB) contact centres with less thanInteraction is a core aspect for Social Networking and the 50 to 100 seats.Services industry, which makes it important to manage This segment is also expected to impel the movethe entire experience lifecycle. This is especially true since towards a hosted model or encourage businesses to12 Globalservices March 2011
  11. 11. Contact Center Industry: Where Do You Go From Here?consider domestic outsourcing options. “Key value Industry, processes have maturedproposition for hosted contact center model lies in its “Contact centers cannot today be used in the sameflexibility, scalability and total cost of ownership (TCO). terminology as you would have used five years ago,Flexible pricing options allow smaller businesses to set up because today the industry has matured,” says centers when the cost factor may have made an “Prospects too have matured, looking at what vendorson-premise deployment prohibitive,” says Baidya. can provide– more than only people (or bodies) to han- In developed economies like Australia, Japan and South dle the lowest end of the value chain, which is takingKorea, migration toward IP-based systems (telephony, calls. So processes have matured, and they are looking atunified communications) helped the industry remain ‘how can I as a vendor create a strategic impact?’ So issustainable. This, combined with the above-average levels there a product or service which can impact their toplineof Internet service (fast broadband and high broadband or bottomline- that sort of a solution always has demand,penetration rate), enabled an increase in the uptake of that is not going to fade.”professional services like financial analysis. While voice processes still comprise the mainstay, Australia’s contact center industry returned to growth the uptake in non- voice is on the rise. “We have seen ain 2010, generating total revenues of $55B, represent- rise in non-voice channels that is being driven both bying an increase of 13 percent over the previous year. The enterprise needs to reduce costs and consumer desiresnumber of contact center seats also grew by three percent to be served anytime, anywhere. Agent voice remainsto a total of 198,000, according to a benchmarking report the heaviest used channel, hence the most in demand,”by and sponsored by rightNow. Contact says IBM’s Lutz.centers also reported an average increase of 15 percent inoperating budgets last year. Participants in the Frost & Vertical- specific is the way to go –Sullivan study expect the consolidation of contact centres The resumption of enhancements and expansions byto result in higher spending in the more than 200 seats domestic banks in the Asia Pacific led to significant contri-contact center segment in China, Australia and Japan. butions from the banking, financial services and insurance On the whole, the industry is expected to grow at an (BFSI) sectors in H1 2010, the Frost & Sullivan reportannual rate of 11.5 percent through 2016. says. “Which are the domains that you are offering, andOnshore+ Offshore+ Nearshore= what do you offer in those domains- that’s the differ-Rightshore entiator today,” says ramani. “If I create a product orThe ‘balanced shore’ strategy mentioned by IBM’s Lutz service in the Healthcare segment, and that is the sweet-finds resonance among other providers. “rather than spot people are witnessing today, people then come andbeing a purely offshoring branded player, we have a quickly buy that. Otherwise, if you have to sell inboundconcept called rightshoring, which is identifying right or outbound, there are 20 people selling the same set ofprocesses or projects for the right locations,” says Suresh services.”ramani, COO, Intelenet Global Services. “We have Building domain knowledge and capabilities in thethe onshore model, which is having facilities within the booming verticals is what providers are looking to docountries where the job is actually being worked out of, now. “Healthcare, Banking, and Travel, Transportationwhether it is the uS or the uK. We have the nearshore and Hospitality taken together are three segments whichcenter- Guatemala (where Intelenet has opened its newest are seeing people wanting to buy services. IT spends havefacility) could be considered a nearshore center- and then also increased from where they were in the last 2 years,we have low cost centers like India and Philippines. meaning that businesses in the top line are supposed to This has been our game plan for the last 3- 4 years. grow. If we as a company can offer a product cum serviceWe have presence in the three segments, i.e., nearshore, entity in these domains, I think we will have a really goodonshore and offshore.” market to tap into,” he says. But that does not mean that offshoring has lost its “Telecom and retail sectors are expected to see steadycharm. Offshore deployments, alongside onshore resources growth, especially in the markets of India, Indonesia,is very much a viable business model, especially in EMEA China and Korea. Government spending on citizencountries like Poland and South Africa, where the agents services in the ASEAN markets, India and China iscan compete against their onshore counterparts in terms growing at a double digit rate. Other verticals that areof sophistication, cultural compatibility and customer growing sporadically across the (APAC) region are Travelempathy. It is also favorable in terms of cost advantage, & Hospitality, retail & utilities, entertainment andscalability and commercial sophistication. Manufacturing,” says Baidya.13 Globalservices March 2011
  12. 12. Special Report Additional growth will be technology-led and non- for example Customer Experience 2.0 and the Globalcapex led therefore there will be increased focus towards CrM Consulting Framework, to drive customerTravel & Hospitality, Healthcare, Hi-Tech, Govt. & interactions.Education and utilities. At Aegis, we see our technol- At the same time, companies should not lose focusogy practice taking a centre stage in leading this growth on human resource. “Call centers should continue tostory. invest most in their biggest assets: their talent. People are by far the most important part of any call centerSmarter technology, and rise of social because they make the difference between good servicemedia and great service. Companies should be deploying first-The Frost & Sullivan report says that mature markets class recruitment, training and on-going support at alllike Australia, Singapore and Hong Kong are investing points of the employee lifecycle,” says Joe Doyle, Vicein applications such as analytics and social media inte- President, Global Marketing, Sitel. Alongside, he expectsgration, while the high-growth markets of India, China to see increased investments in emerging technologiesand Philippines are investing in workforce optimization that compliment traditional customer service approaches.and self-service applications. “The theme of customer This includes chat and intelligent chat, and social mediaacquisition is likely to drive technology investments CrM support.from contact centers in the region (APAC) in the near to Social media is an area which is set to see a lot ofmid-term with priority in growth-aiding technologies or action in the coming times, though companies are notprocesses. This could lead to simply expanding contact very clear about the course of that action. “They knowcenter capacity, to investing in advanced outbound dial- its where their customers are going, at least a section ofers, or in Analytics to help fine-tune sales strategies,” says them. But they are not quite sure how to engage withBaidya. “In advanced markets significant investments are them,” he says.towards analytics, likely to propel contact centers as a “There seems to be quite a big debate as to should theyStrategic part of the organization, not just a profit center use existing portals around them, like youTube, Twitteror cost center.” and other well- established online media, monitor those, “Several capabilities within a contact center require and create their own page on one of them. There are quiteinvestment that can drive smarter interactions with cus- a few high- profile examples where organizations havetomers,” says IBM’s Lutz. These capabilities are namely, started to place commercials on youTube.1. Analytics --- cloud or SaaS based customer analytics The other school of thought is that they would be and the ability to embed findings into operations better off controlling it a little more and creating still a in a real time fashion; the use of predictive analyt- forum where people could go online and ask and answer ics to change the outcome of an interaction with a questions and interact with other customers, instead of customer. doing it within the confines of the company’s message2. Knowledge Management --- The impact that a board or their website.” robust, current KM database can have on each and every customer interaction should not be underes- Entering an era of complexity timated. Lack of investment in this core asset can One thing that service providers are clear about is the have a direct, negative impact on consistency across increasing complexity that the industry is witnessing. This channel and your overall brand. can be both a challenge and opportunity. “The growing3. unified Communications --- Customers want their volume of data, number of channel options, and degree of interactions with an enterprise to be consistent, variation across customer bases is creating a significantly relevant, and timely. Linking channels together to more complex environment to navigate,” says Lutz. “The understand what your customers are doing beyond opportunity resides in making sense of the complexity the contact center allows for a more successful and making each interaction ‘simple’. Leading enter- interaction. prises in their respective industries have successfully used the ability to do this as a differentiator. This ties back “Agent voice remains the heaviest used channel, to the importance of investment in analytics, knowledgehence the most in demand. However, enterprises at management and unified communications. The notionthe forefront of the customer experience have success- of a single view of the customer will once again take prec-fully blended all channels seamlessly to meet customer edence as enterprises recognize that channel profusiondriven interactions,” he says. In IBM’s case, it has has to be managed and the opportunity exists to bind allbeen leveraging its software and consulting assets, customer activity together in one space.” GS14 Globalservices March 2011
  13. 13. COUNTRY-IN-FOCUS Ensuring Global Visibility A special feature for countries to showcase their uniqueness There are numerous outsourcing destinations that exist as great alternatives to India and China. Inviting Countries to showcase capabilities that accentuate their uniqueness.Examples of Country-in-focus feature Egypt Philippines Jordan JORDAN For more information write to
  14. 14. Special Report“Expectations AroundCustomer Experience AreChanging”the Accenture 2010 Global Consumer survey released last monthhighlighted important aspects of consumer attitudes and behaviors.the survey, which had participation from more than 5,800 people in17 countries (in both mature and emerging markets) across 10 indus-tries, shows a decline in consumers switching providers due specifi-cally to poor customer service. despite this, customer service remainsa significant issue. Andrew Kokes, Vice President, Global ProductManagement at sitel, shared some insights with Sruthi Ramakrishnanon changing consumer behavior and how providers can best adapt toit. Excerpts from the interview:GS: to what extent does customer service really affect experience for their customers; limiting the effort of theconsumers’ decision to switch service providers? customer, opening additional contact channels and makingAK: The customer experience is really the differentiating product support more widely an open platform.factor in an otherwise capability-neutral product environ-ment. There are constantly new products with new feature GS: How have consumer expectations changed? Howfunctionalities. The rate of change is so rapid that a cus- much of this change can be attributed to the popularitytomer need only wait a matter of days sometimes for the of social media?next great thing to come to their service provider. Bells AK: Today up to 81% of smartphone users start theirand whistles are a basic customer expectation with the dif- customer experience with the company online. This isferentiating factor being how a product makes them feel. indicative of the fact that the customer wants to be ableThe brand image, the price point and the experience the to service themselves online, either through connectingcustomer has have with a product is what’s in it for them. to other consumers via an online forum or through theThese are the reasons a customer would move from one company’s own website.product or brand to another. Social media is one such evolving channel in a larger The actual customer-company relationship remains online and mobile world. This means that there is a muchthe unique element that can affect a consumer’s decision broader web customer experience that companies needto stay or switch providers. Exceptional customer service to be able to understand and support. Sitel sees two keyis the face and voice of the brand experience, and is the opportunities of which service providers need to be awarefoundation that a company needs to successfully attract in this case:and nurture their customer connections. n Web Conversion—When a customer goes online with It is also important to note that the expectations around the intent of purchasing a product, a provider canthe customer experience are changing. Successful companies have a 20% increase in online incremental conversionare ones that are constantly evolving and adapting to the by providing support at the moment the consumer ischanging demands and demographics to shape a personalize looking to buy. Simply by offering the consumer some16 Globalservices March 2011
  15. 15. “Expectations Around Customer Experience Are Changing” level of live support in the web buying channel, the entire customer experience. As the customer experience provider can increase the chances of sale. evolves across new communication channels, we aren Web retention—When customers begin their experi- offering technologies that allow you to build a complete ence online, they expect to resolve their issue online. customer profile from their three big experiences - web, The key for providers is to be there for the customer at call center and social, blending all of these elements into a the point before a consumer clicks away from the Web multi-channel social CrM strategy. site because they either can’t find what they are looking We are using data analytics and web engagement tech- for or when the information is too complicated. nologies to offer proactive service and sales chat services. Technologies are becoming much more intelligent in theGS: How do you explain the disconnect between cus- way that they allow you to monitor customer behavior andtomers’ expectations and the service given by the pro- predict buying signs or support opportunities at preciseviders? How can the two be better aligned? moments of truth to drive online sales conversion or webAK: Company culture plays a crucial role in how a pro- retention.vider is responding to customers’ needs and expectations. We are deploying artificial intelligence tools in theProviders that have a real emphasis on the customer expe- voice environment, to do complex matching of customersrience, customer relationships, and the overall customer to agents. We look at the demographics of the customerengagement are certainly better connected with their cus- population and psychographic profile of the agent popula-tomers and tuned in to their needs and behavior. tion and do intelligent pairing based on specific business Studies of the largest consumer brands in the world objectives, like improving sales conversion, first call reso-have shown that there is a very strong correlation between lution or customer satisfaction. The agent-caller matchingcompanies that are highly engaged across multiple chan- technology uses key variables to create a level of empathynels with their customers and the overall level of top line which potentially doesn’t exist when calls are routed solelyrevenue and profitability, versus those companies that on agent skills or availability.have a lower level of engagement in relationship with theircustomers which have, over the past couple of years, seen GS: Is the contact center industry seeing a rebounda decline in revenue and profitability. post-recession? If so, what is driving it? Company culture that is focused on the engagement, AK: At a macro scale, companies are focused on getting backcommitment, and development of a positive relationship to growth. Thee call center industry is becoming focused onwith their customers rather than purely on cost-cutting customers and a dedication to growth and sales through newis one that will cultivate loyal customers with greater channels. Many brands saw incredible shrinkage in overallLifetime Customer Value. top line, and there is now pressure on these companies to get back to growth and overall profitability. As a result Sitel seesGS: Price is no longer the differentiator for selecting a more intense focus on leveraging the customer experience toservice provider. What is the new differentiator? upsell and cross sell opportunities.AK: Although price is still a big consideration when select-ing a service provider, the bottom line is relationship and GS: Which are the services seeing more demand?trust. To earn trust Sitel emphasizes return on Customer AK: In terms of demand, customers are craving moreInvestment (roCI) as our key metric. roCI is a measur- self-service and online or mobile communication stick that we put against everything we do and every Sitel sees strong growth in multi-channel support pro-investment we make. grams, with increasing emphasis on driving web retention When a company commits their direct customer for customer support and web conversion where sellinginteraction to a service provider, it requires a high degree opportunities exist.of confidence. There are a lot of different factors that go The call center agent is evolving into more of a tier 2into building and earning that trust. There is of course the or tier 3 type of support as opposed to basic triage.expectation that the price will be in a competitive range, Customers are already answering basic questions throughbut at the end of the day, I’m going to place my business Google, company websites, forums, and social networks,with someone I trust will meet my service expectations and so agent are dealing with more complex questions. It’sprovide the best customer experience. not that there is less voice interactions, rather more cus- tomer touch point opportunities. Sophisticated compa-GS: How can technology be used to boost customer nies need to be able to communicate with social custom-experience? ers and online networks because that’s how the customerAK: Sitel technology is used to enable and optimize the is communicating. GS17 Globalservices March 2011
  16. 16. Industry- Specific ProcesscsAnalytics Outsourcingon the Risethe importance of business analytics has been on the rise. Now it hasalso become an eminent candidate for outsourcing. How is the ana-lytics outsourcing industry evolving?horses for Sources ResearchA nalytics does not fit perfectly into the traditional systems. Hence, most of these products are now available outsourcing model; the level of data sensitiv- as services. ity is extremely high and the nature of work is Increasing demand of analytics resulted in the emer- complex. These pitfalls have made some clients gence of pure play analytics service provider. These pro-set up or expand captive units instead of outsourcing. viders encapsulate domain knowledge and technologicalHowever, in the past decade, third-party providers have and statistical expertise. As the process of developing andarmed themselves with commendable expertise in ana- deploying analytics solutions stabilized, work could belytics. Also, holistic solutions for business problems are broken distributed amongst multiple vendors and/or cap-introduced via combing analytics and market research. tive units. The emergence of offshore locations boastingConsultants are backing their recommendations with ana- of strong Information and Communication Technologylytics. These factors have helped the entry of good players (ICT) infrastructure enabled offshoring of analytics serv-in the last few years. ices to locations such as India. There are two routes to analytics currently beingfollowed: Cost arbitrage is still a factor Leveraging IT and BPO offshoring experience and eco- The cost of developing analytics solutions are very highsystem: Companies that are already outsourcing are using and can be restrictive (especially for small and mid-sizedtheir current IT-BPO experience to source analytical solu- companies. Presently, Fortune 500 companies are thetions, at times, giving preference to the same service pro- majority of analytics users. According to HFS research, forvider. The third-party service provider in lieu of climbing a typical analytics project, talent cost is the 60 percent orup the value chain developed analytics solution. In-house 70 percent of the total cost. The advantage of accessing tal-analytics gives clients better SLAs and better time-to-mar- ent from locations such as India, Singapore or Hong Kongket results. Analytics is employed to drive improvements yield a saving. Also, other costs – infrastructure- beingin the effectiveness and efficiencies of offshored BPO-IT much lower than in onshore locations, cost arbitrage canservices and beyond. range up to 50 percent for offshore locations. However, Availability of cross-functional, multi-skilled talent: high-level analytics strategies ensure that cost saving isInitially, when the analytical industry evolved, companies overrun by other factors.tried to develop and deploy analytics solutions. However, Credibility, accuracy and timeliness of business insightsas technical industry got more complex and the scale and from data analytics are critical to business. Offshore deliv-scope of analytics expanded, it became difficult to hire, ery centers are attractive as they come with faster time tomaintain, and retain the specialized manpower internally. market and also provide accompanying support service onThis ensured companies started looking out for third-party a 24x7 basis.service providers. Meanwhile software companies developed complex, Recommendations for buyershighly configurable, vertical-specific analytics and data 1. Acknowledge the imperative nature of analytics:mining products. However, organizations found it dif- Buyers should evaluate their business function in orderficult to support talent that would run and maintain these to identify areas that may benefit from analytics activity.18 Globalservices March 2011
  17. 17. Industry- Specific Processcs Analytics is easier to apply when a business process is carved out (eg. F&A).2. Evaluate different options for outsourcing first- timers and veterans: Companies with experience in undertaking analytics will be comfortable with niche analytics providers, reason being extremely specific nature of work and confidence in analytics solution. Companies that have existing outsourcing relationship should include analytics as an essential component or should discuss driving business value with vendors.3. Develop partners out of specific providers: Companies with mature analytics outsourcing relationship may consider gain-sharing as a pricing model.4. Evaluate the feasibility of outsourcing alternatives: Certain companies are doubtful about outsourcing analytics due to data security issues. To cater to them, 3. Collaborate to innovate: Niche players and large BPOs several vendors offer onsite delivery teams. Creating joining hands on analytics projects and offering more captive centers in offshore that specialize in analytics !is » value to the end client is an example. GS »! also a good option.Recommendations for service providers »! »! (Fully excerpted from Horses for Sources Research titled ‘Where offshore1.Stay true: there is no one right answer: Providers should analytics is heading in 2011’ by Smriti Sharma. The recent report build on their strengths and escape from the “me-too” »! »! provides useful perspectives on understanding the emerging dynam- coping mechanism. A more focused approach than an ics of analytics outsourcing. Full report can be obtained from www. ‘everything under one roof ’ will serve providers better. )2.lead with domain knowledge: Providers must embrace a contextual understanding of clients business, they should align analysis to industry movements and to clients unique issues and opportunities. By coupling business sense and analysis providers can differenti- ate themselves and the only way to do this is through domain experience.19 Globalservices March 2011
  18. 18. Digital Magazine Every GLOBAL SERVICES DIGITAL MAGAZINE Frequency: Monthly Format: Digital Magazine & Downloadable PDF Number of Pages: 30-40 Distribution: 115, 000 Opt-in Global Subscribers + Distribution through various social media networksTo advertise or for more information contact Niketa Chauhan at
  19. 19. xperts By John Lutz, general manager, IBM Global Process Services The Next Generation of Business Process Outsourcing As BPo continues to evolve as a business strategy, it is clearer than ever that senior decision makers are looking beyond the tactical, cost-reducing benefits of yesterday’s BPo engagements to higher order benefitsl ike many other segments of the services industry, busi- ness process outsourcing (BPO) has matured andevolved, following a path over thepast decade from pure cost cutting,to improved efficiency, to strategictransformation and business modelchange. As it has evolved it hasbecome more strategically significantto businesses no matter the marketsegment or area of focus. As BPO continues to evolve as abusiness strategy, it is clearer than everthat senior decision makers are look-ing beyond the tactical, cost-reducingbenefits of yesterday’s BPO engage-ments to higher order benefits --- forexample, improving financial flex-ibility, driving free cash flow, increas-ing market penetration, expanding inemerging markets and strengthening For example, a recent survey dis- competitive agility and enhancedcustomer satisfaction, among them. closed that more than 60 percent of customer service. This is not to say that the origi- the senior executives polled said that In our conversations with a rangenal benefits of BPO have lost their BPO plays a very important role of c-suite decision makers, we’veappeal. Cost-saving still matters. in supporting their business models identified three specific areas whereImproved efficiency is not going out and that they expect that figure will they hoped to gain operationalof style. But these now fall into the grow in the next three years. As advantages from BPO:category of “table stakes”--- and the an indication of the kind of busi- n Strengthen their position with-expectations that clients have of their ness model support these executives in their company’s ecosystem.BPO providers are increasingly more found most valuable they pointed Provide innovation to differentiateambitious than ever. to higher productivity, improved them from their competitors and21 Globalservices February 2011
  20. 20. BPO Next gen establish sustainable performance tailored to accommodate unique ele- improvements. Develop forward-looking insight “The road is going ments of their industry. An example is a services engagement to speed to get bumpier forn in order to anticipate and respond claims processing via a cloud designedn to future events. Create operational flexibility so pure-play BPO pro- especially for a major health insurer. Meanwhile, business analytics --- they can quickly make the most of viders whose capa- while already delivering clients the rapidly emerging opportunities. bilities in CRM, HR, capability to analyze past events and, in some cases, near real-time data, Given these findings, how should and other segments and moving steadily into delivery ofwe look at the next generation ofBPO? are merely “horizon- expanded predictive analytics --- will grow more vertically specialized in The primary areas of BPO have tal,” as opposed to the future. For example, real-timebeen well-established in recent monitoring of customer interactionsyears: the deeper, industry- have helped a global airline improven Human resources and Learning specific knowledge customer satisfaction 15 points andn Supply Chain Management & increased revenue by $15 million in Procurement that business model just the first year of implementation.n Customer relationship transformation In another example, a major auto Management manufacturer put a tailored out-n Finance & Administration demands,” bound retention program into place that helped convert roughly one out While these areas are likely to of three engagements into a newremain vital capabilities in the future, purchase through the use of a newsome dramatic shifts in the grow- BPO technology called “voice of theing demands for business expertise customer analytics.”and the emerging technologies that In short, the next generation ofsupport BPO are keys to fulfilling BPO will be driven by client demandthe expectations that client decision for an evolving blend of historicalmakers have for making BPO pay off cost efficiencies with business modelmoving forward. transformations and predictive ana- In terms of expertise, the road is lytics, all delivered with an increasinggoing to get bumpier for pure-play industry-specific focus.. GSBPO providers whose capabilities inCrM, Hr, and other segments are collaborate are increasingly tailored John M Lutz is general manager, IBM Glo-merely “horizontal,” as opposed to to an industry and specific elements bal Process Servicesthe deeper, industry-specific knowl- of that industry.edge that business model transfor- So why would BPO follow anymation demands. This is a familiar different path?evolutionary pattern that the IT and In fact, a closer look at two ofservices industry has seen before, and the key technologies helping driveit is reflected in the premium clients operational improvement, businessplace on higher-value vertical indus- model transformation and markettry support vs. the increasingly com- expansion --- cloud computing andmoditized, price-sensitive state of business analytics --- make it clearmuch of today’s hardware. Software, they have the potential to becomeboth applications and middleware, even more powerful assets when theyhave become more industry-specific; offer industry-specific delivers its greatest value While cloud enables a more effi-to clients when it encompasses deep- cient, pervasive process delivery iner industry knowledge. Even research general, clients will find greater valueprojects in which vendors and clients if their private cloud model can be22 Globalservices February 2011
  21. 21. xperts by Kumar Parakala, KPMG Rural BPOs in India: Are they over-hyped? rural BPos are fraught with several challenges that need to be addressed before they can really go to the next levelt he rural BPO phenom- 70 – 100. For a similar resource within that area. Normally there is enon in India started about the salary in urban BPO could be migration of educated youth to tier five years ago. Since then around uSD 150 – 220. I or tier II cities. rural BPO pro- outsourcing to rural BPOs n low operating costs - rural BPOs vides opportunities at arms lengthor villages has been a catchy concept offer a 30 – 40 percent operating for the educated, especially forwith zesty entrepreneurs setting-up cost arbitrage over urban BPOs women who are normally restrictedrural BPOs, large Indian corporations n Virtually absent attrition levels - from moving out of their place ofstarting their BPOs in villages as a urban BPOs have attrition as high residence.corporate social responsibility (CSr) as 50 percent, while rural BPOs Additionally, several state govern-activity or tying-up with local NGOs have virtually no attrition ments have offered incentives to set-to promote BPOs in rural villages. n Rural transformation - rural up rural BPOs within the country. recently, Infosys announced its BPOs are increasing employment Most of the rural BPOs set ambitiousplans to partner with rural BPOs opportunities that were hitherto targets looking at the initial successacross India to reduce cost and take unavailable for the educated rural they received. Few of the BPOs thatthe advantage of vernacular language population, creating wealth for were set in past five years and theirsupport required to operate in the rural societies and supporting their proposed plans are shown in the fig-domestic market. The company has growth and development. In this ure below. If we take a stock of theiralready partnered with two rural process of transformation, these current status it is hard to believeBPOs; ruralShores and DesiCrew BPOs help in retaining at least a per- that rural BPOs will see a growth rateSolutions and set up centers in the centage of the educated workforce like their urban counterparts in thisvillages of Andhra Pradesh. According NASSCOM estimates, there are rural BPOs have come up as anaround 50 odd rural BPOs in India “Rural BPOs have alternative for low-end, low-skilledspread across the nation employing come up as an data entry work that proves to beabout 5,000 rural youth and these costly when worked out of a tier I ornumbers are growing. alternative for low- a tier II BPO. Typical services offered rural India offers a very cost-effective solution to urban India’s end, low-skilled by rural BPOs include: n Digitization services- data entry,BPO challenges of increasing labor data entry work converting documents to ‘PDF’costs, high attrition rates, employeeambition and growth prospect issues, that proves to be format, book digitization, typing, scanning, conversion of hard copyetc. Typical advantages that are often costly when worked into soft copytouted about rural BPOs are:n low cost labor - Average employee out of a tier I or a n Voice based services- inbound and outbound calling (typically tele- salary in rural BPO is around uSD tier II BPO” sales, tele-marketing, and customer23 Globalservices February 2011
  22. 22. Rural BPOReality check on some of the Rural-BPOs rurAL BPO LOcAtION PrOPOSeD PLANS curreNt StAtuS ServIceS OFFereD Desicrew Six delivery centers Planned to employ By August 2010, Digitization services such as data entry Solutions across tamil Nadu 1,000 people by end Desicrew had and data conversion. content creation of 2010 and 5,000 around 170 and validation, GIS based mapping employees in 50 employees in six services, transcription and localization centers across India delivery centers by 2015 across tamil Nadu Source for Bagar, rajasthan Plans to hire 500 As of early 2010, the Data entry, web research and local change employees by operation had around language call services the end of 2012 25 employees in by following a Bagar ‘hub and spoke’ system comprising centers with 30–50 employees each. ruralShores Seven delivery Mission to establish Between 100-300 Data capture, documents processing, centers throughout 500 centers and people in seven expense processing, Image indexing, South, West and employment for delivery centers reports generation, trend analysis east India. 100,000 rural youth by around 2015 SourcePilani Pilani, rajasthan Plans to grow to 150 By September 2010 Medical transcription, call center employees by 2010 the company had 60 customer support end and five centers employees and a strength of 500 by 2015 eGramIt three villages of No available About 500 rural Digitization, vendor payment Andhra Pradesh information on youth in 3 villages of processing, translation services, desk growth plans Andhra Pradesh by research, voice support 2010Source: company websites, Media articles, KPMG research and Analysis care for telecom companies requir- clients or operating as a sub-con- require extended hours of uninter- ing local language capabilities) tractor to a foreign MNC client. rupted power. This often limits the While quality issues can be As such this BPO works on a bare gamut of services that the BPOtaken care of through Service Level minimum infrastructure including could offer.Agreements (SLAs), there are other a small office with a broadband n Access to funding - Most of theissues that need to be addressed before or leased line to support connec- rural BPOs who have seen somerural BPOs can really be relevant tivity. It is usually tough to get a success or have reached break-evenin the interest of the larger IT-BPO broadband connection in Indian by now are being nurtured by largeindustry in the long run. villages so these BPOs have to Indian corporations or have man- rural BPOs are fraught with sever- manage with low-speed dial-in aged to receive funding throughal challenges that need to be addressed connections. Long and extended venture capitalists based on thebefore they can really go to the next power cuts from a few hours on social impact that the businesslevel. the lower side to a few days on the could cause. In many cases then Infrastructure- An average rural extreme side are taken for granted investing party is being served by BPO is a small set-up of 10 to in Indian villages. Hence, power the BPO, as far as corporations are 50 full-time equivalents (FTEs) back-up is an absolute essential to involved. A strong business case employee capacity, providing low- keep the business running. Such a with scalability and growth pros- end data entry work to domestic set-up is also riskier for services that pects remains unclear.24 Globalservices February 2011
  23. 23. Rural BPOn talent Management- Most of the investing parties, be it public or pri- initiatives including online data entry workforce in rural BPOs is either vate and parallel marketing initiatives of affidavits during elections, assisting college drop-out or having elemen- to begin with, sustaining rural BPOs banks in financial inclusion initiatives tary education. The organization and transforming rural economy at by providing voice and non-voice structure is quite flat with prob- a national scale remains a distant support for micro-finance activities ably just two to three layers till the reality. including periodic calling, application management. At the team lead- With the limited talent willing filling, repayment collection, feedback ers role these BPOs try to recruit to actually work in a rural set-up, collection, etc. Additionally, local talent who are city educated but these BPOs cannot work beyond the NGOs can partner with these BPOs having roots in villages so that they low-end services in the coming years. to present their case to large domestic are open to such openings and are Training employees to deliver more BPOs and other large corporations sensitized to the village culture. high-end services will not prove to be who are willing to sub-contract their They typically take up a rural BPO cost-effective and good business sense. BPO work as a part of their corporate job because the cost of living in The whole idea of cost-effectiveness social responsibility initiative. the city does not leave them with for low-end work delivered through With the challenges that urban enough savings at the same time a rural BPO will be under question. BPOs are facing in terms of growing staying away from their families. Given these limitations, rural BPOs global competition, escalating costs Additionally, getting trained man- might not scale-up to offer a range of and high attrition levels, companies power for IT infrastructure main- services across different verticals like can have a serious look at what rural tenance and management requires their urban counterpart. BPOs have to offer. High end work skills that are not available in the still can continue with the tier I cities, villages. In such cases rural BPOs Moving forward and high volume, low-end work can have to get the support from the rural BPOs are expected to grow be certainly offshored to rural BPOs most optimum resources in near-by organically up to a limit for remain- centers to continue to take advantage cities. ing manageable with the resources of India as an offshoring destination.n Business and service scalability- available and making business sense. An average rural BPO offers low In order to achieve its ultimate goal Conclusion end digitization services. With the of being a social venture transforming The rural BPO wave in India has just limited resources that the BPO has, rural communities and operating as a begun and is quite difficult to predict it is very difficult to scale-up this business enterprise it is advisable for which direction the market forces will business assuming there is growth such BPOs to operate in a hub and take these BPOs. rural India is in number of similar clients or spoke model. This is similar to the becoming more and more a growth growth is work volume or both. analogy of milk co-operatives that area for businesses like telecom, Attracting qualified talent in num- materially transformed rural commu- FMCG and other goods who want to bers is a task in itself. It’s only the nities in Gujarat, India. penetrate deeper in these geographies. larger rural BPOs that can afford to rural BPOs could develop a pan- Additionally, with NASSCOM esti- train and sustain fresh recruits and India set-up through a decentralized mates for domestic BPO market in keep hiring. hub and spoke model. In such a Fy11 to be around uSD 2.8 billion, According to NASSCOM, the model, each unit or center in the there is a large opportunity for rural2015 projections being put out by network of the BPO will provide the BPO to tap and remain relevant. GSthe leading rural BPOs are about actual services that will be delivered1,000 centers and 150,000 employ- to a regional center or hub which will Kumar Parakala is Head of IT Advisoryees. Although this figure is achievable further assimilate the content and KPMG in India and EMA,COO Advisory,statistically, given the number of rural deliver it to a central location that KPMG in India Global Head for Sourcingyouth having basic understanding delivers the final output to the cli- Advisoryin computers and English language ent. Every center is in this way couldrequired for low-end BPO work, such be an entrepreneurial initiative andan enormous growth (CAGr of 100 responsible for its own profitabilitypercent from 2010 to 2015) will and for more investments and more From a business development per-business flowing in. unless there is spective, it makes more sense for ruralsignificant back-up of funding from BPOs to support local government25 Globalservices February 2011
  24. 24. xperts By Reetika Joshi, Senior Research Analyst, ValueNotes Sourcing Practice The Emerging Market for Analytics As investments in it soar further, there is an increasing need to convert organizational data into knowledge, by using analytics on a more sustained basist he rural BPO phenome- into meaningful business insights and The outsourcing angle non in India started about knowledge is difficult, and calls for a The lack of technical skills, statis- five years ago. Since then new approach in design and deploy- tics related capabilities, the broader outsourcing to rural BPOs ment. In defining a problem, busi- organization culture and the absenceor villages has been a catchy concept nesses need clear and closed-ended of a proactive problem-solving teamwith zesty entrepreneurs setting-up definitions, compared to the broad hold back organizations from apply-rural BPOs, large Indian corporations based scope of business problem defi- ing analytics to specific business prob-starting their BPOs in villages as a nitions in management consulting/ lems. Furthermore, to use analyticscorporate social responsibility (CSr) strategy formulation. Solution deliv- on a continued basis, companies needactivity or tying-up with local NGOs ery too, calls for deriving data from both a framework and an operationalto promote BPOs in rural villages. multiple sources, and aligning analysis model to overcome the organizational Organizations typically focus on with business needs. barriers. Organizations are addressingthe meticulous capture and meas- Establishing an analytics process in this problem either by developing ana-urement of transactional data, for an organization can be thus broadly lytics teams and culture in-house andbenchmarking performance. The data classified into three broad steps: or outsourcing their analytics relatedaggregated is used as input for man- EstaBlishing analytics fOR an ORganizatiOnagement information systems, datawarehouses, etc. - again aimed atmeasuring performance. Companieshave made heavy investments in tech-nology infrastructure to collect thisdata. However, very little attention ispaid to transforming it to knowledge/business insights, to achieve specificbusiness results, beyond process opti-mization. Today, as the investments inIT soar further, there is an increasingneed to convert organizational datainto knowledge, by using analytics ona more sustained basis. Analytics refers to the gatheringand interpreting/analyzing of histori-cal data to facilitate business decision-making and planning. The processof transformation of historical data26 Globalservices February 2011
  25. 25. Emerging Marketrequirements to a third party service Within these broad categories,provider. Technology has enabled the there are a variety of specific activi- “The process ofbreaking of the analytics process into ties that can be outsourced/offshored.discrete components of work, which There is also a variance in the offsho- transformation ofcan be outsourced/offshored. rability of these services, elaborated historical data into Services offshored in analytics can below.range across various areas across the The execution of complete projects meaningful businessvalue chain or involve end to end often require an onshore presence, insights and knowl-delivery of the project. From the off- as the offshorability of knowledgeshoring perspective, the activities in intensive and core analytics activities edge is difficult,an analytics project can be categorized is relatively low. Although activities and calls for a newinto four broad groups, based on their that are highly customized or dis-genesis. crete can be largely standardized and approach in design and deployment”EstaBlishing analytics fOR an ORganizatiOn TyPe Of acTiviTy GeNesis Of acTiviTy TyPical acTiviTies automated, the requirement varies Knowledge intensive Based on reasoning, - research design significantly between projects. This in judgment and - Data collection and validation turn lowers the offshorability of these interpretative abilities - Intuitive analytics activities. Discrete processes can be broken down and - Data tabulation disintegrated into multiple - Data preparation Is outsourcing going to grow? locations - cleaning of data As the use of analytics in prob- - Warehousing lem solving becomes more widespread Highly customized – Specific to the project - Study methodology and ‘industry standard’, organizations specific to project - Developing statistical model will have to evolve in terms of their core activities to High levels of IP involved - verbal presentation frameworks and operational models analytics – drive results - customized dashboards to in deploying analytics related work. view results This will help them see significant - Management consulting - Analytics products value from data in the form of knowl-Source: valueNotes research edge and insights. Offshoring analytics is complex, as the intermediate steps involved needOffshORaBility and lEvEl Of OffshORing in analytics coordination on a continuous basis. Over the past few years however, the outsourcing and offshoring of analytics by the corporate segment has grown. Amongst the companies that do not outsource, the trend to outsource at least some tasks in the analytics value chain (such as data cleaning) is on the rise. Over the next few years, as the outsourcing/offshoring model and the service provider landscape evolve, we will see greater confidence among client organizations, driving the transition of ‘high value’ analytics offshore. GS Reetika Joshi is Senior Research Analyst atSource: valueNotes research ValueNotes Sourcing Practice27 Globalservices February 2011
  26. 26. xperts By Nigel Hughes, Global Services Director, Compass Management Consulting No Room for Heroes in Outsourcing Relationships outsourcing relationships dominated by the individualistic, “hero” dynamic are at risk, and both parties need to be aware of how to address themt he rural BPO phenome- supplementing the service provider nH: What do you mean by a “hero” non in India started about team, unintentionally circumventing culture and what problems can it five years ago. Since then process with the intent of satisfying cause in service delivery? outsourcing to rural BPOs business user requests. This lack of tD: When you look at the IT organi-or villages has been a catchy concept discipline and failure to adhere to zations of many Fortune 500 compa-with zesty entrepreneurs setting-up standardization resulted in lower than nies, the places that are consistentlyrural BPOs, large Indian corporations expected productivity, ambiguity in ranked as some of the best places tostarting their BPOs in villages as a roles between client and service pro- work, the culture is all about people,corporate social responsibility (CSr) vider, and ultimately an inability to customer satisfaction and personalizedactivity or tying-up with local NGOs achieve contractual obligations – all service. It’s about teamwork and col-to promote BPOs in rural villages. originating from the core objective of laboration. When a problem occurs, A recent performance analysis of driving business satisfaction. people swarm to fix it, they stay upan offshore managed service operation While cooperation and mutual all night if they have to. They strive toconducted by sourcing consultancy commitment to shared goals are cer- become heroes.TPI concluded that a high degree of tainly laudable and clearly recognized The trouble with this approachcooperation existed between the cli- as essential to an effective sourcing is that it’s very reactive. By its veryent and service provider teams. Both relationship, this example illustrates nature, stress becomes a critical suc-the client – a u.S.-based Fortune 500 that a positive culture is no substi- cess measure. Companies that fosterfirm – and the vendor – a major India- tute for the process discipline and this culture often reward the heroesbased service provider – were found to operational rigor that managed serv- and further reinforce this team players, mutually committed ices delivery models require. Indeed, As you might imagine, individualsto the partnership and proactively as TPI found, a seemingly positive seeking to become heroes tend toseeking ways to optimize and inte- culture can conceal serious underly- lose sight of the value of a disciplinedgrate their application development ing issues that may contribute to process. An IT organization can’t pre-and maintenance (ADM) operations. inefficiency. dict performance and the executionWhat’s more, TPI’s analysis showed, I recently spoke with Todd Dreger, of tasks when everyone is reacting tocustomer satisfaction among business a Partner at TPI in its Operational the moment and earning a reward.users was at acceptable levels. Strategy Practice, about some of the It’s extremely inefficient. In this par- Digging deeper, however, TPI key challenges and opportunities ticular case, the client had high-level,found that senior staff members businesses face in managing global senior people doing menial tasks,on the client side were consistently sourcing operations. duplicating the efforts of the service28 Globalservices February 2011