As we endlessly debate the future of the global IT service delivery in the wake of advances in automation, digital disruption and the ability to maintain double digit growth rates, one area that has steadfastly kept to respectable growth and improved delivery confidence is our beloved business process outsourcing services.
In fact, we are about to reveal to all of you that the growth in Indian-heritage BPO has been consistently out-performing IT services over the last year. Why? Because BPO is several years behind IT in terms of widespread adoption, but is now coming to the forefront as processes can be better-enabled by cloud platforms and maturing global delivery models.
In this vein, I thought it timely to interview Dina Kholkar, TCS’ global head of BPS, who has helped steer his division to $1.9 billion at a 6% growth clip… making BPS now represent 12% of the total TCS business…
Phil Fersht, CEO and Chief Analyst, HfS: Good evening, Dina. It’s great to have you on HfS for the first time. You’ve been one of the best kept secrets behind the exciting growth in the Business Process Services (BPO) team at TCS. Maybe you can share a little bit about yourself, your own background and how you ended up leading the highest-growth division in TCS today.
Dinanath (Dina) Kholkar, Vice President and Global Head of BPS at Tata Consultancy Services: Sure, Phil. I’ve been at TCS for a very long time. This is my 27th year in TCS! I started in 1990 as part of the IT business. I managed a few IT projects, went on to manage accounts across different geographies, different types of roles. The longest stint I had was in the capital markets area. I also spent a few years in TCS’ R&D unit, predominantly focusing on data warehousing and data mining. Those were the years when data had started becoming a focus in many organizations. I did have a stint in operations when I was managing customers, but I never really managed the business of running operations until I got the opportunity to manage e-Serve, which TCS had acquired from Citibank. After a few years, when it was integrated into TCS, I took on the role of the overall head of the TCS BPS business. So we’ve had quite an exciting and an interesting journey, a journey filled with lot of learning and a lot of customers we’ve been able to positively impact over the years. And I feel quite proud about the type of opportunities that I have gotten and the way I have delivered on the objectives that TCS has laid out for itself.
Phil: So what can you share with us then about the secret sauce at TCS? What is it that makes you guys really tick?
Dina: One thing which I have always seen probably over multiple generations—and all three CEO leaders of TCS—really strikes me is the customer centricity. We go the distance, which means we do whatever we need to do for the customer. We do the right things and ensure that we are taking care of the customer’s business, bringing all we have as an organization to solve problems that the customer has. I think that customer centricity is paramount in the organization. I think we also support and move with our customers. And a lot of our customers have enabled us to expand, to diversify, and take those new skills to new business lines. For example, we were predominately an IT business, but many of our customers felt we could expand and provide business process services and infrastructure services, which is why we started delivering those services.
I think customers have benefitted from our service predominantly because of our relentless focus on them. And, more holistically, look at Tata Group over a long period of time and you’ll understand the philosophy that we bring into doing the business, the ethics that we have and the overall commitment to society. There is a lot of pride in what we have managed at TCS and in the Tata Group. All in all, I think it is very important for us to delight our customers and continue to make a difference in society through the companies that we work for.
I think it’s really an ecosystem and an environment which is exciting to work with. And it’s a joy to collaborate with my colleagues. There is never an instance where I needed help and didn’t get it. You know there are always people wanting to help you whenever you need it.
Phil: So, Dina, when we look at the inflection point that’s going on in BPO services today, where do you see the challenges and opportunities for a firm like TCS? And how do you see TCS getting ahead of this disruption curve?
Dina: I would say, let’s step back and look at TCS as an organization and the way we actually started the entire BPS business. We focused predominantly on the core part of the customer’s business from an operations point of view. So in a way we actually disrupted the typical functions of operations by actually focusing a lot on the core part of the domain. The reason why we did that was we believed that, with the DNA of IT and innovation transformation we had, we could actually present more value to our customers right from the time we engage with them.
The entire idea about IT-BPS synergy and bringing value by leveraging technology into core operations is pretty much driven by us an organization. The entire digital economy has been a great change for us because it enables us to digitally reimagine our customer’s business. So when we look at where we were with BPS as a business a few years ago, we were managing SLAs, focusing on operational metrics. We have now moved and matured into leading change, influencing the entire digital journey of our customers and clearly making a difference to the business metrics. And with that, we have connected to business heads—to the CEOs and the CFOs and even in some cases the board members of our customers that we service. So clearly, I think BPS as a business has the potential to make an impact through the entire journey companies take as they embark on Digital Re-imagination™.
From a challenges perspective, clearly we have a large workforce which predominantly focuses on managing and running day-to-day operations with a significant amount of repetitive tasks. And as we drive our robotic automation agenda, using some of the relations that we are building that specifically focus on cognitive learning, we will definitely see a need for driving a lot of competency development initiatives to retool and retrain our people. And that is a journey we have already embarked on. You might have heard about the entire focus that we had on digital—within the BPS organization itself, specifically around data science and automation.
We have already started the journey of retooling our people, getting them to a different set of competencies which are required as the new order sets in the BPS organization. As far as disruption goes, we may not necessarily come up with solutions within the space we currently operate in. The disruption we will look at will be in areas where we don’t necessarily have a focus. We can potentially bring in disruption using some of the cognitive learning solutions that we are building and you will soon see some of these make an impact as we roll them out.
We are working with TCS’ Digitate unit, which has developed ignio™—enhancing it and focusing on certain areas which we believe have the potential to disrupt the marketplace and make a big difference to the entire Digital Re-imagination™ journey of our customers.
Phil: That’s very interesting. So, as we look at shifting value propositions towards outcomes and getting away from this linear scale that we have been obsessed with for so long, there has been a lot of talk about Design Thinking. How do you think this can be applied to BPS? Is this something that you, at TCS, are taking seriously?
Dina: Absolutely. You know, one of the things which I have been driving personally, given the businesses that I manage, is a multi-industry mix. One of the biggest themes that I have been driving is the interconnectedness of technology-leveraging the solutions of one industry for a completely different industry. Design thinking has been a very integral part of our entire journey. We have been embarking on building relationships with some of our partners in academia. We have a very strong alliance with the National Institute of Design in India and the Royal College of Arts in the UK. Plus, you may be aware that we have created a design studio in our Santa Clara office, where we bring in people with different capabilities and different types of skills to solve core problems. It is not just about creating solutions for the current set of issues that our customers have in their businesses, but about helping them completely reimagine their business.
You may be aware that as part of the BPS business, we launched our ValueBPS™ framework. Design thinking has been an integral part of the entire framework. We have been able to bring in different levers to solve customers’ problems, and these solutions that we are creating are very high on business impact. So as a leader, I have completely relooked at how we are currently selling value propositions to our customers and how we are bringing value to our customers.
And as I mentioned, the agility and the ability to actually make a big impact to the business is playing a big role in the way we are going forward. So the very core of our entire approach is the design thinking mode and we do believe that there is a tremendous amount of potential to help people in different walks of life solve problems from the perspective of a consumer of the end-service. And I think that will make a lot of difference to the industry.
Phil: So I am going to get to my final question here, Dina, which is: If you were given the keys to the BPO kingdom – and you rule the BPO world for one week – what’s the one thing you would do to change this industry for the better?
Dina: One thing I see when I look at the industry is that it has not gotten the credit for the knowledge and expertise that it really provides. If you really look at the types of services that we provide across industries, across different geographies, the tremendous depth of knowledge that the industry has is phenomenal. And one key difference is that we’ve probably not looked at the mechanisms of learning and specifically using cognitive learning. I believe that this can really disrupt the industry. It can learn global systems and learn about businesses across the board. A combination of people who have the expertise in running some of these operations, in creating solutions plus machine learning will make a big difference in the industry.
Today, the industry as it exists is probably a small fraction of what potentially is there as a market. And I personally believe that bringing in machine learning into the entire industry would free up people who have the expertise and the ability to do much more intellectually challenging things. Mobilizing that skill would be very important. So I would primarily focus on what is it that we can do to reimagine the BPS business itself. If we talk about Digital Re-imagination™ in the context of our customers, why can’t we reimagine our business? And I think that will be the key thing. What does Digital Re-imagination™ really mean to our business?
And one of the key things which we will look at is how to leverage the multiple levers that are available—what we call the Digital Five Forces, including cognitive learning and artificial intelligence. This is one key element I would drive. We have a huge amount of human capital in the industry, and how we are able to maximize the benefit of that human capital will make a difference to the industry as we go forward.
Phil: That’s a fantastic answer, Dina =) I really appreciate your perspective today and I look forward to sharing it with our community. It’s great to hear about the energy and the passion behind the TCS BPS business, which has been growing so well. So thank you very much for your time today.
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