Monthly Archives: July 2017

Renaissance of ITeS Companies.

 

ITeS industry is witnessing dramatic changes. From initial years of voice based support it evolved to support non-voice requirements of many a Fortune 500’s. They brought process efficiencies and cost advantages to their client organizations.  However, in last few quarters, these companies are witnessing a double whammy on customer and technology fronts. With increasing automation, emergence of AI and ML on the corner many of these firms are worried about the likely drop in revenues. On the other hand, customers are seeking out a partner to manage and deliver business excellence, not just cost arbitrage advantages. Companies outsourcing are looking beyond cost arbitrage and buyer-vendor relationships but one that sustains long term value and flexibility. Many contracts are becoming more flexible, with more leeway to buyer changing needs. According to IAOP research 80% of customers are looking at outsourcing to improve business performance and their overall business models.  A major shift is also coming from segments that hitherto did not outsource much, mid rung players.  In coming years, about 2/3rd of requirements is expected to be driven by midsize companies. Unlike their large counterparts, midsize companies are not just seeking scale efficiencies, but instead to import functional expertise from outsourced partners to remain competitive. ITeS markets is moving away from a transactional cost focussed relationship to a multi-term outcome focussed ownership driven managed service play.

What is therefore needed is look beyond voice and non-voice support centres, but becoming functional support partners who can manage revenues and costs and offering omnichannel customer engagement. Transformation journey of ITeS companies can happen if they pursue a 8 steps journey as described below.

On the lines of Chinese proverb, all long journeys start with small step, the first step required to consider what is required to position them from a FTE based company to non-FTE based company. First step is to envision the offerings beyond FTE model and define the elements of the offerings that address the pain areas of the customers.  Automated services, augmented management routines or standardized processes that can eliminate the “friction” in the client organization, whether on the revenue side or the cost side or both are the keys to enriched offering. Realign complete service delivery, HR, training and support for transformation. This would mean identifying existing contracts where optimization of resources can happen, codification of SOP and routines can happen, and recruitment options that offer continuous stream of low cost resources with right attitude.  Define service offerings that may extend beyond the process and that can impact financial or non-financial aspects of client business.  While FTE continue to be a revenue stream, extend the offerings to cover solutions that impact revenue, cost, asset utilization or customer experience using technology.  Design services that exploit the elasticity of cloud and automation of benefits of RPA, analytics and other tools. Once relevant offerings are identified it is important to rearrange organizational units so that some can prepare the ground work in terms of definition, validation, structuring and packaging of the offering. RPA helps companies to automate repetitive manual tasks so that attrition and knowledge management challenges can also be better addressed. From a delivery side, RPA eliminate human variance, help standardize process routines, and reuse of process components. Automation helps companies move from pain vanilla services to high value “production”.  The offering becomes highly scalable, knowledge intensive and opens consulting opportunities for ITES companies.

Invest in a tightly joined at hip sales and marketing motions so that repositioning is consistently and continuously managed. Develop a smart marketing team that consistently conveys the change and reinforces new positioning. Sales organization has to be revised to ensure segments are appropriately covered by complementing inside sales and direct sales resources. High touch direct sales resources are key to drive transformation and appropriate sales enablement activities including training, marketing assets and walkthroughs is required. Finally, the key is to manage the transformation while being asset and investment light. For this, ITeS companies need to exploit the ecosystem of partners who can offer complementary advantages.

There is no silver bullet for effective transformation and positive outcomes. Along with multiple actions, mind-set changes, behavioural corrections, transformations are successful when resources and initiatives complement each other. For transformation to be successful, management must follow a comprehensive approach. Transformation requires high intensity of both intent and follow up.  Intensity can be sustained with dedicated outcome driven reviews. Finally, no transformation is possible without adequate ownership and self-management of teams and people.

Dr TR Madan Mohan