On the week when Capgemini opened its wallet to make one of the largest services deals in history, with the $4 billion acquisition of IGATE, we thought it high time to focus on one business division that’s really been on fire the last couple of years – Business Process Outsourcing.
With Capgemini’s proven capabilities delivering global Finance & Accounting services (see our recent Progressive F&A Blueprint), one of the areas where the firm has needed to invest is in the industry sectors, so I, for one, am excited to see how Cap integrates IGATE’s insurance BPO delivery.
But the one aspect of BPO that keeps us grounded, is the simple fact that’s it still really about people and relationships – about talent and trust, which is why we went out and spoke to 540 business stakeholders on the topic – and you can read the report here. So, without further ado, let’s talk to geologist-cum-Capgemini’s BPO CEO, Chris Stancombe, on how his division is faring under his leadership and how he views the emerging disruption in the market…
Phil Fersht (CEO, HfS): Good afternoon Chris. Great to have you back with HfS – I think it’s been at least a year since you took the reigns as the CEO of Capgemini’s BPO business. Maybe you could start by giving us a bit of an update on how that’s really fared. In the last year, we have seen some really strong performance from your firm, from our analyst vantage point. Maybe you could share a little bit with our audience how it’s evolved internally, how you have built out the team and where you feel you are today with the business.
Chris Stancombe (CEO Capgemini BPO): Thanks for that Phil. It’s good to be back. I have been here now for ten years. And as you kindly said it’s quite a success story really with the growth that we have experienced and the position that we have established for ourselves in the market. When I took over from Hubert Giraud, we had a plan that the two of us had worked on together. With Hubert moving on and also our CFO, Oliver Pfeil, taking on a new role there was quite a significant change at the top so the first thing I wanted to bring was stability.
When we moved into the three year plan, my most conscious thoughts were how do we build on our strengths and go broader and deeper within our portfolio to bring more value to our clients. So clearly we have a number of areas of strengths. F&A is one of those, analytics is another as well as Supply Chain and HRO.
So it was really taking those strengths and being honest with ourselves around where could we really compete strongly in the market and then determining how we go broader. And to me broader really is in two areas. Firstly, focusing on value-add services that unlock new benefits for clients. And secondly, on the volume side, making sure that we leverage our size and capability to deliver processing cost effectively.
In terms of going deeper, things are working very well as we introduce better linkages with our Application and Infrastructure Services colleagues, and all the things that we have been doing on technology like robotics and artificial intelligence and how we bring that into play. We also benefit greatly from developing deeper capabilities for specific industry sectors. As you know, we group our portfolio around sectors which means we can really deepen our knowledge base and develop some very specific, very interesting propositions.
Phil: So do you feel things have really changed all that much, from a client needs perspective, in the last three years? There is obviously a lot of noise in the market around disruption and technology-driven solutions, but when you talk to clients, do you see a dramatic change in their needs? What do you think is moving the industry?
Chris: I would say there is definitely more desire for transformation now. I mean, there is widespread acceptance that just moving some process to an outsourcer and that element of the process being done better and cheaper is not the whole answer. So I think it’s more of a recognition of choosing a partner that can deliver some of the service cheaper and better but also working together to deliver a real transformational impact.
When it comes to technology-driven disruption, one of the big consequences is the speed with which transformation needs to be delivered. The Cloud means a lot of things to a lot of people. Many think you can just summon up an App and then load the app on your mobile. You have a BPO app. And then it’s done and you immediately implement. I think patience is much much lower.
So I think we have seen much more pressure for speed and the ability to convince clients that you can deliver transformation quickly at low risk. As you know, some of our assets around the Global Enterprise Model have really helped us in that because clients can see the route map against which we plan that transformation.
Phil: Chris, you know one of the areas where Capgemini fared very well in our recent F&A blueprint was in the area of talent – and when you read our new report, you’ll see we did pick up very strongly that there was a lot of satisfaction from BPO professionals, in terms of their intellectual challenge. But there was also some ambiguity where it led to in the long term, especially from less experienced staff. How do you view this, when you look at the career paths of the BPO professionals? Do you think this is something people try for a while and then move on to something else, or is BPO evolving into a genuine long-term career choice for many, and will become more widely recognized by our fellow professionals over time?
Chris: Well, Phil, my view is we have created a new profession. I have been in BPO now for 13 years and I view myself as bit of a latecomer to it. There are a lot of people that have been in BPO where that’s the only career they know. They joined as graduates, they stayed in the profession, they have a fantastic client service mentality, they are very innovative, they are very agile. They are keen to work towards continuous improvement. They recognize they want to move into new clients in new sectors. It’s a very exciting industry to be in.
I think what we need now is to create some structure around the profession like other professions do such that therefore there is a bit of prestige. You know if you become a lawyer you are a qualified lawyer and then you have got letters that go after your name, if you are a qualified accountant similarly. I do think we need to start challenging ourselves. What are we doing for the next generation such that people are proud to be in BPO in the same way that lawyers are proud or doctors are proud and engineers are proud? It should be a similar type of professional approach. And I think that’s what we need to bring to BPO now.
Phil: Yeah – it seems that providers like yourselves are doing a good job of creating career paths because it’s your core business. You deliver BPO, Finance, IT “as-a-service” for your clients. Whereas, on your client end it’s often not their core business. It’s support operations. So do you think part of the issue is that providers are getting good at creating the career path, but it’s actually more of a struggle on the buy side to sort of figure out what it means to them?
Chris: I would say obviously it’s much much better to use a BPO provider than try and do it yourself. But in areas where you have a global business service it often becomes a separate company- a captive with its own dynamics, its own leadership. And I do think that rather than just having an accounting and finance captive and then an HR captive under separate leadership, it can all be put under a global businesses service leadership with IT as well. I have seen some very dynamic organizations that create opportunities because in those cases obviously you don’t have the multi-client multi-sector opportunity but at least you do have the multi-disciplinary opportunity.
So I think the less choice you give, then the less interesting it is for people to develop their careers. The very least you need to do is create a global business services organization.
Phil: Chris, so what do you think of the measures that both buyers and providers can take to improve the level of trust in a relationship? What do you see working?
Chris: It’s still a people’s business, isn’t it Phil? So you still have to have the good cultural match between the people in the engagement and the people on the client side. The tone has to be set from the top. So making sure you have regular meetings at the senior level, CFO to CEO. They set the tone. You talk to each other regularly. Make sure that you are transparent and open and have the right people on the account with aligned coaches. Sometimes it’s rotating two or three people through the account until you have the right people working together. So it is being sensitive on both sides you know. I mean the people have to want to work together, they have to want to build a partnership, and be aligned around the same measures. And then if you get people on both sides pulling in the same direction the tone is “We’re in this together. Let’s move it forward” When people like each other, spend time together, and build a relationship then that’s how you get that trust.
Phil: So do you think clients, in general, are warming to a more a trusting relationship with their providers?
Chris: I think it does depend on the client and what the client wants. But the good news is more clients are now open to that part of the transformation. They recognize the value of the people and their longevity, their different experiences, the knowledge they bring, and the assets that we have built. The right client wants to be able to leverage and tap into that value. So I think the evaluation of suppliers is not just around “what’s your price and what service will you agree to”. Increasingly it will be about what assets are you bringing and how you are going to help us transform ourselves, how are you going to help drive that change, create that vision for us because you’ve got a better view of what ‘good’ looks like. It’s the moment where they think “wow, that’s what we want to be like”.
Phil: And you know when we look out maybe a couple of years, how is the conversation going to evolve? Do you think it will get more and more into how much RPA can you do, how good are your analytics? Or do you think that stuff is all going to become absolutely staple to the BPO diet, and it’s going to shift beyond that? Where do you think this conversation is going to evolve to in a couple of years?
Chris: I think CFOs are going to be asking themselves “How are you going to help me drive my customer satisfaction index with the business?” The discussion in two or three years will be how are you going to help me with my measures around the customer satisfaction feedback I am getting from the business units? Also how are you going to help me with my ethics and how are you going to portray the right culture in my organization so your culture and our culture are aligned strongly? I think we are seeing now interestingly when you look at risk and compliance that more and more people are saying actually it’s the culture of an organization that manages the risk better than any policies or policing that you may put in place. If you have the right culture in your organization your risk is lower. And whether that’s ethics and compliance or it’s CSR, all of those things are important and they lower your risk.
So to me the top three critical questions that the CFO should be asking are: How do I build better customer satisfaction with my business? How do I drive value to my shareholders? And how do you help me create the right culture in the organization such that my risk is mitigated?
Phil: This has been great, Chris. I really appreciate the time today. And I look forward to sharing this with the network. It’s been really good to hear your views and how your business is faring.
Chris Stancombe (pictured) is Chief Executive Officer, BPO Division, Capgemini (Click here for bio)