How enterprises can have their BPO cake and eat it, too

We are still operating within the constraints of the Digital Dichotomy—the twin pressures of macroeconomic demands to tighten our belts—alongside urgent calls to innovate in the face of the emerging capabilities of AI. The net result is that many enterprise leaders must demand more for the same (and many require more for less) from their service providers. But can we have our cake AND eat it?

Global services firm WNS believes its newly branded WNS Analytics—announced at the firm’s London Infinity event—holds the answer. WNS Analytics combines the domain expertise and scalable technology capabilities of WNS with digitally-led market intelligence and analytics solutions, including those added with the $125 million December 2022 acquisition of The Smart Cube. Business unit leader Gautam Singh believes the combination delivers a tasty cake that enterprise leaders can both have and eat—in the form of improved outcomes from their business processes at lowered costs.

Forget putting an AI and analytics ‘cherry’ on top—integrate the cherries for a tastier ‘black forest’ outcome

Exhibit 1: Gautam Singh announces the formation of WNS Analytics at the firm’s Infinity event in London. Note the not-so-subtle emphasis on AI.

Source: HFS Research 2024

HFS caught up with Gautam immediately after the announcement of WNS Analytics. He joined WNS with the acquisition of The Smart Cube, where he had been founder and CEO.

The new unit’s combined capabilities integrate technology, analytics, and domain expertise to reimagine workflows for WNS’ clients. Gautam believes adding analytics and AI into workflows in a disjointed manner should be compared to simply adding a cherry on top of a vanilla cake. Instead, the cherry should be integrated as a component. In this way, enterprises can benefit from a revamped approach of AI + human intelligence (HI) and analytics, in what he describes as a black forest cake of combined components—all at the same or lower cost. The unit’s domain-specific AI-led assets make it easier for enterprises to accelerate their journey, too.

Such claims are easily made, but Gautam can back them up with examples. In one case, the team tackled a leading grocery retailer’s pricing challenges. They started with a hyper-personalization model for pricing. The team—which combined client and service provider staff in a center of excellence—applied smart analytics to both location and individual preferences, resulting in store prices that varied from location to location. The model sets prices decided by its predictions of price elasticity. The team applied similar models of personalization and prediction to individuals’ online shopping.

Retail grocery chain achieved an ROI of 15:1

With the application of advanced analytics and automation, price changes can be made in real time without the need for large teams fulfilling back-office pricing functions. The net result has been an uplift in revenue AND a reduction in cost. For every dollar spent on the project, the client has seen a return of $15.

Domain expertise, an emphasis on co-creating value with clients, and outcome-based pricing put WNS in a solid position to support enterprises as the demand for using advanced analytics and technology to help the jump to a new S-curve of value becomes ever more urgent.

Exhibit 2: Enterprises need to make a leap to new value—technology will drive it

Source: HFS Research, 2023

Many enterprises still demand the human touch

WNS must be sure it keeps pace with the accelerating capabilities of AI and GenAI to ensure technology arbitrage is at the heart of its offer to the enterprise. However, it must balance this with its ability to supply outsourced labor, which many of its clients still demand. HFS spoke to several WNS prospects at the London event, who remained focused on labor rather than technology arbitrage.

The secret may be in CEO Keshav R. Murugesh’s emphasis that human ingenuity will remain the key differentiator in this jump to the new. He said at Infinity that WNS would maintain its ‘human-in-the-success-loop’ approach, with humans in, on, behind, and above the loops of automation. In this way, firms wanting the personality and reassurance of the human touch can take advantage of the increasing capabilities that technologies such as generative AI are bringing to the process table.

The Bottom Line: Enterprise leaders must make the right arbitrage choices or end up chowing down on a cake that is already going stale

Enterprise leaders can have their cake and eat it, too—innovating toward stronger outcomes at lower costs. That was once the offer from simple off-shoring—but that cake is already going stale. The labor arbitrage model may offer you immediate savings vs. your current costs, but that will still leave you behind competitors who have already been on that journey and are now looking to technology arbitrage for a fresher advantage.