'The most important challenge for BPO industry will be people'

The interview was first published in globalservicesmedia.com

What will be the impact of changing technologies on the BPO services industry?
Continued advances in software-as-a-service (SaaS) and business-process-as-a-service (BPaaS) offerings will see a shift towards configurable, cloud-based delivery models where services are enacted directly in technology platforms. These more highly standardized platform-based services will gradually replace traditional labor-intensive transactional models as existing BPO contracts come to term for renewal and as new clients gain experience with cloud services.

But next-generation BPO is also about transforming processes through technologies like social media and mobility, as well as cloud, and applying analytics across the end-to-end service platform to deliver insights and create new value. This is all about enabling clients to become digital businesses and providers becoming digital service providers. Ultimately, social media technologies will help drive a new service vision - what we call 6th generation BPO - in which social media is used as a platform to build learning communities centered on processes provided via BPO.

Advances in hardware - smartphones and tablets, for instance - are also having an impact, transforming them from channels of convenience to a primary means of interaction. As such, organizations will increasingly demand access to management and reporting capabilities for their outsourced business processes via mobile devices - anytime, anywhere.

What hiring and recruitment trends are expected to be seen in the changing BPO services industry?
Talent will become a major issue - perhaps the major issue - facing the BPO industry in the coming years. A recent report from HfS Research, sponsored by Accenture, highlights the urgent need for buyers and providers to increase their investments in training and developing their outsourcing management staff in areas that are strategic to their business. This has already become a critical requirement as the BPO value proposition has evolved from cost-reduction to insights, innovation, and business outcomes. The good news is that the increasing deployment of technology in service delivery will free up people for more meaningful and value-added work, but the industry as a whole - buyers as well as providers - will need to step up to the challenge and start investing in their people.

Buyers will also need to recognize and treat their service provider's staff as an extension of their enterprise, and carefully evaluate potential providers' talent when making sourcing decisions. Enterprise outsourcing executives will need to work in tandem with their service providers to create an environment of learning and innovation in order to achieve maximum value from their BPO engagements.

Which will the most prominent locations for BPO?
Global delivery capability is absolutely key to successful BPO engagements, to leverage the best talent and to support clients wherever they operate. Global delivery offers the advantages of both concentration (economies of scale, immersion environment, multi-capability, low cost) and diversification (enhanced disaster recovery, multiple language coverage, time-zone coverage, industry specific skills). But global delivery depends critically on well-defined, easily repeatable methodologies to improve business performance, as well as industry expertise and skills in high-demand disciplines such as analytics.

What will be the biggest challege for BPO service providers?
Quite simply, BPO providers will need to focus on delivering business value, not just cost reduction. The role of technology will become increasingly important as services are enacted directly in technology platforms and technology becomes a source of operational improvements and business innovation. Service providers will need to consider how social, mobile and cloud technologies can transform service delivery to help clients move from keeping up to setting the pace.

But the most important challenge for the BPO industry will be people - recruiting, motivating, recognizing, rewarding, and developing talent will be the overriding challenge for the BPO industry. People are the only sustainable, long-term source of competitive advantage - for providers as well as buyers. The BPO industry as a whole will be challenged to change a prevailing mindset that people are a commodity - "labor"" - that can be arbitraged, and invest to build their industry knowledge and expertise in order to meet the unique needs of constantly changing vertical markets.