The digital era is forcing service provider companies to restructure themselves internally too. Take the case of Xchanging, the London-based company with revenue of £406.8m, which provides business processing, technology and procurement services to global customers across multiple industries. The company has about 3,000 of the global 8,800 workforce based in India.
“Companies today are looking to remodel their businesses in ways that are more flexible, on demand, and beneficial for the long-term. CXOs are outsourcing key business processes, to accelerate growth and gain competitive advantage in this global environment, said Guruprasad Bhat, Director-Finance (BPS and Enterprise), Xchanging.
In this role, Guruprasad is charged with aligning emerging digital technology with financial processes. He cited the example of how Xchanging reorganized itself three years ago from a siloed structure to a more integrated one, with specific reference to the insurance industry and F&A (finance and accounting) processes.
Aligning to Market Needs
One of Xchanging’s key customer verticals is the insurance and financial services segment for which it delivers the entire spectrum of services from authorization to insurance claims and beyond which it delivers highly differentiated services at the high end. Guruprasad calls this strategy as ‘inch-wide and mile-deep’. This is where the company is focused on bringing innovation to prove higher business value. The strategy involves a mix of insurance industry product platforms and services-led multi-product portfolio. The company has invested in both areas; it calls the former as capital ‘T’ and the latter as small‘t’.
Whereas for the mid-market and low-end market, the old model still works, says Guruprasad. The bigger customers want a platform-based approach, which stands for an approach that integrates technology with process knowledge using its own IP as the glue. For example, Xchanging delivers finance and accounting services leveraging its proprietary technology tools such as: X-flow for business process management; Vault, a savings management tool; X-Pro which is an integrated P2P solution; and X-Act for operations management. Says Guruprasad,“We have always onboarded many of our key customers on our platforms.”
The Digital Shift
Technology is used to displace labor. In the outsourcing and offshoring industry, the game has shifted from labor arbitrage to knowledge arbitrage. Integrating technology to handle financial processes has been the traditional approach to improve performance and enhance value. But the new set of digital technologies creates more opportunities and throws up new possibilities. Service providers like Xchanging cannot afford to ignore these paradigms; they have to race to the fore in making themselves more competitive or even stay relevant.
There are two questions that organizations need to answer. Says Guruprasad, “The first one is— how do we fund these initiatives and the second one is— how do we commercialize. At Xchanging, we have set aside investments to work on new technologies. This answers the first question.” Xchanging has been doing pilots on using robotics to automate finance processes, measuring its impact, and perfecting the process of deployment. The approach to commercializing is trickier, Guruprasad admits. Elaborating on this, he says that the difficult part is that of correlating the effort, which is the input with the output and then coming up with the right commercial terms. But for this to happen, Guruprasad says that both service provider and the customer have to agree on the metrics of output-based processing. However, the prevailing rule is still largely on transaction-based pricing. What it means is that the customer too has to change when service providers introduce technology to alter the dynamics of business processing.
Robots on the Job
There is a lot of talk about using robotics-based automation of processes in the BPM industry. Guruprasad is of the opinion that robotics is the low hanging fruit. It is now a ready option for rule-based processes that require minimal judgment; for example OCR-based processes lend it easy to be robotized, but for variable data and judgment-based processes, robotics is complex.
Xchanging become the first service provider globally to receive the Enterprise Capability Certification status from Blue Prism, the virtual workforce company, following a framework assessment of Xchanging’s Robotics Process Automation (RPA).
Here’s the accepted definition of RPA: RPA is the application of technology that allows employees in a company to configure computer software or a “robot” to capture and interpret existing applications for processing a transaction, manipulating data, triggering responses and communicating with other digital systems. The accredited status, which is measured against the Horses for Sources RPA maturity roadmap, shows that Xchanging has implemented an “industrialised” platform.
Empowering the CFO with Analytics
Analytics provide a higher order value when integrated with processes. At a CFO Roundtable Xchanging hosted in London, it emerged that a case could be made for ceding ownership of analytics to the CFO. This is because most CFOs have traditionally led and used data-driven analytics for the strategic aspects of managing the business, the company felt.
Xchanging claims that it has analytics embedded into most of its services including finance and accounting because the company believes that big data and visualization of performance indicators are critical tools for any CFO. CFOs rely on data and analytics and they need them to be timely and accurate.