How the BPM industry shed a poor image to become a serious tech player

The typical 'back-office' has fought hard against perceptions of a low-value industry known for data thefts and morphed into a leading player in the new-age tech space

"It's the new El Dorado for BPO companies- bringing technology to our service offerings...It is no longer about labour arbitrage, but increasingly about value and technology arbitrage. Five years from now, I see my firm as a technology player rather than a BPM player," says Partha DeSarkar, chief executive officer at business process management firm Hinduja Global Solutions.

DeSarkar is neither alone, nor off the mark when he says this. The Bengaluru-based company is among many peers who have successfully made the switch from being the back office or handling telemarketing calls to delivering high-value technology work. 

The shift in BPM firms began some four years ago, when the sector began taking to automation, which became more affordable and accessible due to the widespread adoption of cloud and open-source technologies. 

The result: BPM firms are bagging more and more higher-technology, higher-value deals.

"We were reacing out to people who were providing the Cricket World Cup streaming services last year...We support one of the largest content providers in India, all their TV channels, all their entertainment content, support for serials, (and also work with) the largest retailer in the world, and the largest fast food company in the world," says DeSarkar. 

Another example is Genpact, which has been at the forefront of high-value, high-tech projects. Last year, the firm said its Indian engineers were working on real-time solutions for Envision Virgin Racing Team for the Formula E Championship – the world’s first fully electric car racing event.

The Gurugram-based firm uses its own artificial intelligence platform Cora, which collects and analyses the available data and makes recommendations about energy management, speed, or passing strategies. 

Last year, BPM exports grew 8.3 per cent while the domestic business grew by 7.7 per cent, according to data from industry body Nasscom. 

Robotic process automation has been playing a key role in BPM growth, as customers look to automate low-hanging fruit and shift their focus to more strategic work. These firms are increasingly hiring highly skilled people to work on complex projects. 

What this means is that lower judgement, low-value work like document processing, responding to customer queries, reading and organising data, or making relevant suggestions based on records of previous queries gets done by automated services. 

And the increasing use of new technologies means there is an opportunity for higher margin higher value services. 

For instance, in its recently declared December quarter results, WNS Global posted an adjusted revenue of 23 per cent. 

The firm increased the number of clients generating over $1 million dollars revenue from 82 to 128.  As many as 95 of these clients are under $5 million in annual revenue. "This provided WNS with a significant growth opportunity over the next few years as these clients mature and evolve,” CEO Keshav Murugesh said at the time. 

Over the years, India has been challenged by other countries like The Philippines, Vietnam, Bangladesh, Sri Lanka, Indonesia, China and Poland as low-cost destinations.

However, with its huge talent pool of engineers and professionals, India has an advantage when it comes to providing higher value work. 

There is however, still a perception battle that BPM has to fight. 

"We often pitch for projects that the large IT services guys also bid for. While we have better capability and in-house expertise in some cases, the perception that the BPM industry is low-value work often gets in the way of winning projects," said a Gurugram-based employee at a large BPM firm. 

The "perception battle" has seen many phases - from being considered low-end business to fly-by-night operators that brought disrepute to the entire sector, and reports of cybercrime and data theft surfacing around 2013-14, the BPM industry has had to deal with several similar issues. 

Over the next two years, it worked with industry and academia to restore and rebuild trust in the industry, and from the looks of it, has succeeded in its mission so far.