More than just BPO

The term business process outsourcing (BPO) is rapidly becoming obsolete. The phenomenon we are witnessing is that India is driving the globalisation of business services’ industries, similar in size, scale and impact to the globalisation of many other industries such as manufacturing, electronics, etc.

Our industry has grown very rapidly since inception only 10 years ago. It has provided new ways for companies to enhance productivity and efficiency, changed the definition of what are core and non-core operations for individual companies, and provided a vast array of training and careers for our young employees.

We grew out of the basic advantage of labour arbitrage — out of having a young, energetic well-trained work force that has delivered at really high levels of customer satisfaction. New companies, new captives, new businesses were built on this fundamental premise of leveraging global intellect and talent.

But now the world has changed in a very short time frame. Nobody knows where the bottom is for this recession. The impact on industries has been profound and every country is being impacted to varying degrees. And while individual governments, including ours, are acting swiftly, a mechanism for a coordinated global response needs to be constructed urgently.

What does this mean for us and our industry? The fact is that rising unemployment in our target markets can have a real impact on our business, and we have to be extremely sensitive to the pain our customers and their employees are feeling and their real needs to drive down costs and improve cash flows.

Through this turbulence, this industry is ideally placed to be part of the solution to the problems caused by the recession. The reasons are pretty simple and compelling. The IT-enabled services (ITES)/BPO industry essentially does non-discretionary work — the type of work that keeps companies running, that keeps the lights on, that is not going to be subject to discretionary project and budget cuts.

But we will really become part of the solution, if we use this crisis to reset the bar for our cost of operations, focus on building real world class domain expertise in specific industries and horizontals (FLA, supply chain, analytics, etc) —and take them to our customers, as real experts and not arbiters of labour. That’s why the BPO term is obsolete, because right now customers want real expertise to help drive efficiencies and productivity — year on year!!

We have the intellect and the strength. Companies based out of India are delivering terrific value and complex services — we now need to evolve to a new level of products and services, which the world needs. When we become a real solution provider to the issues faced by our customers, our growth will remain strong in the short- and the long-term.

The author is vice-chairman, Nasscom, and president & CEO, Genpact