Meet the next-generation BPM industry

To kick off the recent NASSCOM Business Process Innovation Showcase on The Transformation Journey: Putting India on the Global Map, HFS President of Research and Advisory Services, Saurabh Gupta, moderated a star-studded panel of industry titans. We heard from Radhakrishnan Anantha, EVP, CEO; MD, Infosys BPM; Mamatha Madireddy, MD, HSBC; and Samir Malhotra, SVP; Global Delivery Head, Cognizant, on scaling the Indian BPM (business process management) industry.

Enterprises are in a hurry to develop functioning models for a virtual workforce and hyperconnected supply chains. However, new challenges from post-pandemic economic unrest, military tensions from Europe to Asia (e.g. Taiwan/China) and talent shortages are making these ambitions difficult to obtain. While it is too early to predict the long-term outcomes and trends these challenges will prompt, the most likely scenario suggests that organizations will operate in a next-normal environment for the foreseeable future. While enterprises start to plot their transition to a next-generation operating model suited to the next normal, the three most-impacted stakeholders are customers, employees, and the services firms.

Seeing the opportunities emerging from a crisis is not the same as being able to seize them. In this interaction with the leaders of the largest services firms, we found that they view this disruption as an opportunity to reinvent and drive digital as a core to unlock new sources of value.

The BPM industry is evolving from an effort to outcomes and experiences

Infosys leader Radhakrishnan believes the BPM industry is at an inflection, and it’s an opportunity for the industry to help its enterprise clients across diverse industries and services to leverage digital to drive differentiated outcomes and values. Service providers need to function in what HFS calls a “OneEcosystem” in partnership with all stakeholders to drive digital in the context of business processes, use data to create insights for outcomes, and innovate the operating model to gain a competitive advantage.

HFS released a report at the event, The Evolution of BPM Services| Cost, Outcomes, And Growth, echoing these thoughts; it highlights the current state of the BPM industry and the readiness of the BPM service providers to adapt and evolve with the changing needs of global enterprises.

Exhibit 1: The BPM industry needs to focus on driving engagement to Stage 2

Source: HFS Research in partnership with NASSCOM, 2022

Challenge and opportunity are two sides of the same coin; the unknown forces everyone to think differently; the ability to grab and convert that to an opportunity creates a catalyst for change—pivot your thinking and your organization’s thinking.

— Radhakrishnan Anantha, EVP, CEO; MD, Infosys BPM

HSBC’s Mamatha Madireddy believes the unknown is worrying for the banking industry and will trigger new laws and regulations. However, she recognizes the industry’s effort to collaborate to make this an opportunity and show resilience in the face of the unknown. In recent times, she has seen the bank introduce new tools and technologies; conversations move from cost to innovation and growth; data and AI become core, and transformations are less piecemeal and more end-to-end.

As operating models are forced to overhaul, digital is no longer science fiction you get to in five to ten years but imperative for the survival of the industry. Emerging technology like cloud, 5G, and metaverse virtual experiences have become mainstream.

It is not the coolness of technology but how we apply it in context to solve a business problem.

— Radhakrishnan Anantha, EVP, CEO; MD, Infosys BPM

The workforce is shifting from stable to flexible

India’s role in the world economy is growing; it is no longer seen just as a back-end factory of the world but as a place where ideas and innovation originate. The future of work is the key focus for businesses, large or small, worldwide. Now leaders must deal with employees who do not necessarily want to return to the office, and organizations are seeking the right balance in working models.

The collective experience of the pandemic has fundamentally reshaped the way people think about work. While employees are rethinking whether it is worth returning to work, the BPM industry is searching for the right balance to retain its talent. Radhakrishnan explains his point of view is that the future of work is not being tethered to a specific model. At different touchpoints in the lifecycle of an engagement, the work model can oscillate between physical presence to remote.

We believe the leaders of the industry have embraced the flexible and hybrid model, as there is no going back. They are working toward redesigning physical spaces for flexible work engagements, facilitating the right collaboration and inclusion, building trust, and enabling productivity measures for the new remote and hybrid model.

Understand where the talent pool is, what attracts them, and how to facilitate more collaboration. We are learning in this journey, leadership plays a crucial role…there is no prescribed playbook, and our responsiveness and agility to change those are important factors. We now talk about leaders showing empathy, being there, walking the talk.

— Mamatha Madireddy, MD, HSBC

Sharpen the narrative of the BPM industry to attract top talent

Since business leaders know talent is valuable and scarce, the assumption is that they would know how to find them. However, the scarcer top talent becomes, the more companies that aren’t on top of their game will find their best people cherry-picked by companies that are.

So how do you attract and retain top talent in the BPM industry? Samir Malhotra believes that within this industry, the opportunity to work across a breadth of services, industries, and verticals cannot be found in any start-ups or other industries. As early adopters of technology, the depth of technology embedded in engagements across the BPM industry should be showcased and publicized. Lastly, this generation is eager to be challenged, contribute, and create a larger impact. If service providers can provide the necessary opportunities, top talent will naturally gravitate to this industry.

Be ambassadors of our industry. Reposition the industry; we see this as an inflection point. This is where cool technology delivers the value of outcomes. Sharply communicate the narrative.

— Samir Malhotra, SVP; Global Delivery Head, Cognizant

The Bottom Line: The BPM services industry has a huge opportunity to change its value proposition from “cost” to “effort and experience” for all stakeholders. Industry leaders must be the champions of this change, or else new companies will emerge and unseat them.

New world challenges and the changing nature of the workforce have created new opportunities for the BPM industry. While the industry is at a pivotal point, the onus is on the leaders to become champions of the industry narrative and embark on large-scale change efforts that focus on reinforcing this narrative. Service providers need to function as a OneEcosystem with digital at its core to drive shared outcomes and purposes cascading across all stakeholders.