#contactcenterworld, @nasscom

Just a few weeks ago, Sherrod Brown, Senator from Ohio, talked up protecting call centre jobs in the US yet again. Before the latest round of rhetoric, he had earlier in the year introduced a bill —for a US Call Centre Workers and Consumer Protection Act — to end offshoring and support American workers.

In a signed newspaper column last month, Brown cited Reynosa in Mexico and Wuhan in China. India got a passing mention, "Too many companies have packed up their call centres across the country, and moved to India or Mexico."

If India isn’t the US’ punching bag as it was in 2005, after Tom Friedman wrote The World Is Flat, it’s because India’s business process management (BPM) industry has globalised—particularly in the US in the past five years—and grown, albeit slower without bumping up its headcount.

The deeper truth for Brown’s constituency — it’s not any one country taking away US jobs. It is technology, specifically, the automation of call centre operations.

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Diversion Ahead

In India, this is beginning to show in the industry’s path towards productivity and strategies of global firms with extensive BPM operations here. Revenue per head for India’s BPM industry has improved from $15,622 in FY08 to $23,569 in FY18.

"This bill addresses low-level work, which is being taken over by interactive voice response (IVR) and chatbots," says Keshav Murugesh, chief executive, WNS, headquartered in Mumbai and listed in the US.

According to Nasscom data, the BPM exports industry added 3,26,000 new jobs during 2008-12. The number slipped to 2,73,000 during 2013-17. It suggests a different India, whose BPM industry generated $28 billion of export revenue in FY18 and employs 1.2 million people.

"It’s not that third-party outsourcers are losing work," says NV ‘Tiger’ Tyagarajan, chief executive, Genpact. "There are a lot of services lines which have been automated while new ones have emerged."

Firms with high talent exposure to India have indeed clamped down on mass hiring.

In FY18, BPM exports saw the lowest number of employees added (36,000) in seven years, according to the Nasscom Strategic Review 2018.

Tyagarajan says talent is not easily available for new business. "There are only a few thousand machine learning (ML) and artificial intelligence (AI) experts in the world and these are in institutions like MIT or at the Googles and Amazons," he explains. Circa 2014, the alternative was to globalise and acquire expertise.

As a result, while India is still the top BPM offshoring destination, with 37% share of the $77-billion global sourcing market, the landscape has changed for BPM companies that first harnessed India for talent in the call centre wave.

Enter Automation

Industry veteran Raman Roy, chief executive, Quatrro, says the fundamental change has been in growth of non-voice business to about 60% of total industry revenue. "Revenue per head is decreasing in voice and increasing in non-voice business," he points out.

"BPM is no longer about chatting with the customer, but how well you can automate that experience using chatbots," agrees Amit Singh, head of advisory, Avendus’ IT practice. "BPM companies are leaning on technology, acquiring platforms and reskilling talent. They are trying to manage the customer experience for next-gen customers using technology."

Even as this industry struggles to accelerate revenue (7.7% growth over 2016-17) compared to the boom years, firms seek to harness ML for better margins and bag projects. "Clients are putting pressure on (BPM companies) to transform," says Ganesh Iyer, chief executive of the Indian operations of Symphony Ventures, which trains BPM firms and captive units of foreign companies in areas such as robotic process automation (RPA).

"With RPA, companies try to automate human-machine interaction," says Ravi Venkatesam, chief executive, OnTrac, which works to improve operational efficiencies. "If I am an agent in a BPM company doing back office work or sales process, there are tasks where I have to interact with the computer. Many Indian firms have started their journey in automation (of these tasks) in active projects."

India Plus

India has some inherent advantages now.

When BPO was a sunrise industry, people joined en masse, Iyer says. This created a repository of customer knowledge and employee response. "The amount of control and metric capture in BPO doesn’t happen in any other industry in India," Iyer says, referring to how key strokes are captured and errors measured.

Venkatesam says that’s why people best suited to identify automation opportunities are employees at the base of the talent pyramid. "Because they are hands-on on the computer, a process associate is actually doing repetitive rules-based tasks. He becomes a prime candidate for automation," he says. "Most often, they don’t have the mindset, which is where the opportunity lies for top management."

That’s why—contrary to what Senator Brown says—it’s no longer about chatting with customers, but how well that experience can be automated into chatbots. That technology expertise doesn’t reside in one country. It is globally distributed.

Similarly, BPM industry’s analytics play is not about data but developing tools and technology to enable clients to use customer data meaningfully, says Singh.

The $762-million EXL Service Holdings hired talent in the US to strengthen analytics and other practices. In 2016, it appointed Mike Toma from Automated Data Processing (ADP) as chief technology officer.

In late 2017, EXL brought in Shawn Salkeld as vice-president of its healthcare practice and Ahson Pai as partner of its digital consulting practice. "We are growing data management and predictive modelling and also doing ML, AI in analytics," says Rohit Kapoor, chief executive, EXL.

Even at WNS, 19% of its revenue comes from analytics, which uses 2,500 of its 35,657 employees.

"The market is strong and there’s business for everybody," Murugesh says. So, as Tyagarajan says, while the size of the traditional market has shrunk, "new markets have emerged." Last December, Genpact hired former McKinsey partner Jay Scanlan to head growth ecosystems.

However, it looks very different for many BPM firms capitalised in India.

Creative Destruction

In March, the Essar Group sold its last bunch of assets in BPM firm Aegis to private equity investor Capital Square Partners and a publicly-listed US company Startek. In 2014, it had sold Aegis’ operations in the US, the Philippines and Costa Rica to Teleperformance.

Companies such as Aegis and Aditya Birla Minacs, which were at fifth and eight position, respectively, in Nasscom’s 2010 BPO rankings, have been swallowed by global companies. Synnex Corporation’s Concentrix picked up Minacs from Aditya Birla Group in August 2016, three years after the Fremont-headquartered company bought out Daksh in India from IBM.

In the current climate, its nationality that matters. Winds are blowing onshore.

"We are a US company with whollyowned subsidiaries," says Kapoor.

Genpact, is no different, incorporated and listed in the US. When asked about Senator Brown’s anti-offshoring bill, Murugesh says if it becomes legislation, it could be very different from how it was introduced in Senate. But he adds, "We are US-listed."

Every BPM firm has warned shareholders about protectionism, where outsourcing and immigration reform has been a focus of the current US administration.

Many India-listed companies have been expanding overseas, like Hinduja Global SolutionsNSE 2.38 %. With 34 delivery centres in India, it grew in the US (eight centres), four in Jamaica, three in the UK and 10 in Canada (with buyout of On-line Support Inc) in 2013. Back then, chief executive Partha DeSarkar’s rationale was clear, "Given the political climate around protectionism across both the US and Europe, having a strong onshore presence is a good model. We have invested in those countries and created jobs." Last week, it acquired digital consulting services company Element Solutions in the US.

In the past two years Genpact made three strategic acquisitions in 2016, followed by three in the US last year (TandemSeven, BrightClaim and RAGE Frameworks), as well as five business acquisition transactions such as Birlasoft in India and Lease Dimensions. In the same period, EXL bought out Liss Systems for its insurance expertise, IQR and Datasource— US firms dealing with analytics—and, in December 2017, Health Integrated.

In effect, many of the erstwhile business process outsourcing (BPO) companies have trumped big brother India’s $69-billion IT services exports industry in two attributes — globalising through expansion and acquisitions and demonstrating non-linear growth through automation.

In other words, BPM firms have begun to grow revenue without linear increase in hiring. While this has been made easy as their headcount is far lesser than IT companies, there are more instances of non-linear growth. "There’s renewed interest in BPM as it gives a higher degree of revenue visibility, certainty and stickiness," says Singh.

"We don’t describe ourselves as a BPO company," Tyagarajan says. "We are a professional services company designing solutions for clients, to transform and run things for them."

Sounds like business as usual, but with more stars and stripes in their operations, BPM firms have found a way to make US senators pause to think how call centre jobs are really going out of America.

#contactcenterworld, @nasscom

Posted by Veronica Silva Cusi, news correspondent
Source: https://economictimes.indiatimes.com