BPO


“A thousand jumps without a mishap is no basis to decide to abandon your reserve parachute.” – J. Durant

There are several assumptions that I’m not going to make.  One is that there isn’t some sort of contingency plan and secondly that the plan (if it exists) is actually plausible.  The existence of a Plan B may very well exist and was thought to be durable enough to work in the event of the unexpected.   It is also quite possible that anticipated projects of markets failed to recognize that there were not only fatal flaws in service offerings but also had not considered the potential rapid acceleration of disruptive technologies.  These situations are all possible and realistic so where does this leave us in the world known as ‘outsourcing’?

The Here & Now

I should come as no surprise about certain conditions existing that leads us up to today.  Nearly 7 years ago President Obama was threatening H1b visa reform so it should become as no surprise that it would again regain visibility under President Trumps initiatives to put America back to work.  Nationalism whether in the US or India is always of utmost concern.  Employed workers reduce the possibility of civil unrest and if band-standing about the topic brings support from citizens.  But the US is not the only ones in the throws of employment concerns as you look about all of the other nations.  Some nations, such as the Philippines, who gained BPO notoriety in 2010, continues to struggle with providing sustainable employment opportunities and relies heavily on the export of human capital.

There here is that as nations of service providers we need to earn revenues in order to provide employment and foster continued growth.  What happens however is as the revenue streams shift the organization becomes challenged to remain in step.  It is possible that the size of an organization can hamper its ability to be nimble in this situation but it can also be a case that the labor force is too narrowly skilled to adapt to the rising challenges.  As a result labor falls under direct attack through downsizing.  It isn’t always about tenure but it can also be about skills and the ability to advance those skills in a reasonable time frame.

What were some of the sourcing challenge that sat in abeyance waiting for a tipping point?  As I stated back in 2011 (Frost & Sullivan/Manila), ‘The celebration of successful BPO supremacy must be short lived.  The time is NOW to transform and advance the services provided by the BPO community whether it be in Information Technology (IT) or Knowledge Processing (KPO… which we now refer to as analytics).”   The message while loud and clear went unanswered until now and the reaction has been anything other than chaotic.   In large part, the absence of a Plan B is becoming more and more apparent as a rush is being made to educate up.   Unfortunately equally concerning is that education is but an introduction and a far cry from the level of expertise that this new wave of technological disruption is causing.

Woulda-Shoulda-Coulda

What is a Plan B?   Not to sound too parochial, it a preconceived game plan that addresses anticipated and unanticipated conditions.  Often it is considered as having a Plan B when we feel amply equipped to make decisions at a moments notice.  This is not planning, this is reacting.  As with most reactions they are best serving in the moment but in the long term (and that could be as short as a couple of days).  A reaction is intended to be exercised by skilled and experience personnel who are willing to be accountable for their decisions.   The question is whether this is taking place or not?

For employees that are most apt to say NO.  This response is influenced by fear and uncertainty caused by a situation that is beyond their ability to in control of.  It may further justify or erode confidence in those making these decisions.  What is however within the control of the employee is to be aware and ready of the changing world that they are employed in.  Accepting a complacent role is not going to insulate you from the havoc caused by change and is most likely going to put you in jeopardy.

For the decision makers, the leaders, and the visionaries of the company its a profound wake-up call.   There may be a multitude of sins that has place the business in a vulnerable position,

  • too much time and effort place in self-promoting and not enough time keeping your ear to the ground for change,
  • thinking that you are a leader when in fact there is a void in the sound ability to deliver and thus creating trust issues in the market,
  • riding out the good ride as though it will never end and when it does end finding plausible but untrue reasons why it happened,
  • failure to plan, anticipate, monitor and adjust.  This is not an ancillary or optional element but one that serves as your reserve for adapting to change, and
  • viewing a plan as the end and overlooking the elements of transitioning as a part of a success formula.

It should however come as no surprise that these small elements with high impact are but the tip of the iceberg in terms of critical failings in outsourcing.  Don’t view my words as too harsh but simply a reality check and the opportunity for companies to reinvent their role engagement.

Metamorphism

It is far to easy to either live life in the moment or react to the ebb-and-tide of change.  But nearly a decade ago the word in favor was ‘sustainability’ and it didn’t just pertain to startup enterprises it served equally well for established institutions.  It was however difficult to envision sustainability when you were living in that moment.  Probably for that reason alone the notion of considering a Plan B was viewed more as an opinion than as a necessity.   Looking over thousands of Plan A’s and B’s they fail on content but do exceedingly well on form.  The plans also tend to portray the world as some sort of orderly process that takes place and relies heavily on past performance, despite changing social and consumer interests that add the element of context.  These and the lack of diverse thinking, because of confidentiality trust concerns, has created a storybook saga where the element of realism was more wishful that plausible.

Not everyone has been doom and gloom on either not having or having but poorly orchestrated plans that address planned and disruptive change that has been tempered by current situations.  The few companies are surprisingly small but are riding the wave of current success and in doing so are forced by institutional investment circumstances to think ahead and anticipate.  They have also, possibly caused by having done this for a period of time, has immortalized planning and specifically a plan B mindset into their regular protocol.

Circling Back

Let’s return back to outsourcing and where we go from here.  Whether you have a plan, a Plan B, it’s not working or it is the reality is what we face and what the clock looks like.  In all cases we have a small amount of time to transform and perform.  This opportunity is fueled by the customer and their drive to embark on significant technological change.  It is a bitter pill for the customer to swallow when shifting off of legacy linear solution technology in favor of more aggressive, machine driven solutions.  Not only does risk need to be mitigated but trust needs to be earned through concept, technology and custodians.   Secondly, there is an opportunity for adaption of present intervening environments.   When dealing with such elements as machine learning, artifical intelligence, robotics (both mechanical and intellectual) and advanced analytics these do not permit a lift and drop approach.  They must be carefully crafted, deployed, adjusted and grown in order to further reduce the impact of risk that they introduce.  This provides both a service opportunity to providers but also invaluable time to grow accustom to a greatly different paradigm.   Despite what one might think humans are resistant to change.  A study by the University of North Carolina (USA/2000) illustrated that people resist change, despite unhappiness with present circumstances, based on known vs. unknown trust.  A lack of participation in change only added to the reservations that they had that change could take place and if not that they wouldn’t be held to blame for it failure.

For sourcing companies there are immediate course adjustments that will be necessary.  Obviously resource levels will require adjustment, locations modified, work modes modified and reinvestment employed with these only being a few of the many things that need to be put into play.  It will however also require a shift in thinking about the role of the business, the attitude towards labor resources and even a willingness to trust from both within and from outside.  Historically openness has been cautiously provided when it came to business relationships, but the door of local proprietary behavior has been shut on operational improvements.  If at all, it has been relegated to a simple one way providing of inward value without the opportunity for shared and mutual inclusion.

Is there hope for the future, of course there is always hope.  Is it too late to make change?  Let’s just say we need to get moving and not adopt a wait and see.  It will be too late if the need is already here and you have nothing to offer except hopes and promises that can’t be fulfilled.

 

In the spring of 2011 Frost & Sullivan held a BPO event in Manila.  Held on the heals of the much welcomed attainment of #1 global status as the lead in BPO services the Philippine BPO celebration was in full swing.  There is nothing like a celebration in the Philippines and nothing can dampen the opportunity or the spirit of such revelry.  So it comes as no big surprise that the words I shared at that event were drowned out by the merriment that was being enjoyed.  It was no small feat that rising to this level of achievement over India had taken place.  The future was all bright and there was a sense of invincibility.

While some make predictions on the basis of a hope that no one will remember when it doesn’t take place.  I chose my words careful in issuing a warning that while celebrations are taking place it is also the time to look towards reinvention.  Clients were investing heavily in technology and in doing so it remained committed to solutions that provided long term value and not simply long term reduced cost containment.  This being the case in supporting a month-on-month commitment to manual and voice based BPO support.  The investment in technology would inevitably lead to some form of replacement for shifting from people to an asset invested technology solution.  At that time we weren’t talking artificial intelligence or robots, I was simply looking at a commitment to technologies that could dutifully provided consistent support with a minimum of added capital investment (vs. expensed loss).

Now that the vogue technologies have reached a level of interest concerns have been raised.  IBAP (Information Technology and Business Processing Association of the Philippines – 5/12/2017) is stepping up measures to address the impact of artificial intelligence (AI) on the BPO industry.  Conferences like the Digital Transformation Summit are also adding to the pace by increasing the interchange on what measures need to be taken now in order to combat the effect that might occur on the BPO industry.  Leading Data Analytics Super Star Dan Mayer has weighed in with the importance to embrace the change by shifting focus to data analytics services.  Finally, even the government (DOST – 2/20/2017 – Fortunato dela Peña) has jumped on board to address the real possibilities of AI based impact on the BPO sector.  So the question is why did the message miss being heard?  But even more importantly why didn’t any of the leading analyst groups (Gartner, McKinsey, HfS…) see or hear it either?  It appears as though there was an intermediate fixation with a much broader expanse of technologies dealing with the cloud, Internet-of-Things (IoT), Big Data and Shared Services leaving way for those up-and-coming technologies to remain as background noise.

I don’t want to be too cynical but the story doesn’t end with an acknowledgement of change.  Its not even going to end with a concern and a grass roots movement to follow a correction path.  What is about to happen will be a groundswell of concern by executive management to not only understand the potential accompanied by the ebb-and-tide effect of change.  It will involve significant strategic decisions being made that will lead to tactical plans being crafted.   History however is a horrifying reminder that shifts, such as this have painful paths.  These are littered by potholes of interruptions and a steep learning curves.

There are many questions that remain unanswered.

  • Can #BPO as a service transition to providing high value/high risk value services (this sector was once called ‘knowledge based outsourcing’… #KPO)?
  • Will customers trust offshore institutions with this level of operational intimacy and have the stakes changed for what a provider will be required to maintain (e.g. institutional security)?
  • Cradle to grave time… trained to capability (is it doable given the current state of AI and robotics considerations)?
  • What mindset change will be necessary to make the shift?  Those that have already set an information technology business unit will find the shift easier.  HOWEVER, it isn’t just about technology enable AI, robotics or analytics its about understanding the various industries being serviced.
  • What should be happening now?  Obviously action but what kind?  Waiting is not suitable at the present, a plan needs to be formed.  But more important is the need to understand that success requires intense consideration for #transitioning.

As early as May 2017 the DTI continues to track progress and goals of BPO as though nothing has changed.  This is of concern, it also echos my concern why the messages of dutiful messengers is not reaching those that can address change and the elements necessary to respond to the ever changing technology and commerce worlds.   You cannot rely upon revenue predictions or employment numbers to remain the same, even if you capture a significant segment of the AI/Robotics/Analytics markets.  There will be reductions in head counts, increases in both revenue and cost predictions and an investment in capital assets to support these sciences.  You cannot expect that these will follow the historical ‘life-and-drop’ paradigm of BPO.  There will be issues of trans border data transfer, security, time sensitivity, ground up development, repository control and matters as simple as general understanding of socio-business transference.  In short, allot to be done in a short period of time.

In closing, I remember the day when the Philippines became #1 in the BPO sector.  I remember some of my Indian clients exclaiming that it was always their plan to shift away from BPO (which I considered to be just a sour grapes comment).  Was it that they saw something that others were seeing but from a different perspective, was it that BPO was the low end of the outsourcing food chain in terms of complexity and cost or was it simply ill sentiments?  Regardless, we need to look at conditions not with a focus on critique but with a look towards the potential opportunities that need to be acted upon now.

#BPO #Analytics #AI #Robotics #Transition #TransitionalSciences