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Rohit Kapoor\u00a0(right), Chair of the\u00a0NASSCOM<\/span>BPM Council, hosts his first summit in Bangalore<\/em><\/span><\/p>\n It was good times revisited in Bangalore last week, where the Indian-heritage BPM\u00a0(BPO) services firms gathered for their annual reality check, courtesy of NASSCOM, India’s leading IT and BPM services body.\u00a0 We were pleased to get the chance to meet with many of the industry’s finest and have some frank exchanges on what this industry must do to stay relevant and keep eking out a growth curve.\u00a0<\/p>\n And, similar to the recent HfS\u00a0summit in Chicago, the conversation has moved rapidly along in recent months with a genuine\u00a0buzz of excitement about the future.\u00a0 In short, most folks are stepping out of the comfort zone and attempting to embrace the emergence of technology-driven value levers as part of the very fabric of the future of business process services. However we look at this, we’re becoming a data services industry that supports the inexorable enterprise\u00a0drive towards Digital Operations<\/a>.\u00a0<\/p>\n The NASSCOM folks fondly remember how we once described<\/a> the Indian-heritage BPM\u00a0(BPO) industry rather like a “biryani” –\u00a0(a mixed rice dish comprised of many different ingredients that also has many different regional variants across India).\u00a0 At that time, three years ago, we called out all the ingredients the industry needed to embrace to reach that next level, namely partnerships, platform plays and RPA.\u00a0 Fast-forwarding to last week’s BPM\u00a0bonanza in Bangalore, we can proclaim that a pretty tasty\u00a0biryani\u00a0is being regularly served up, and now we are enjoying one of my favorite dishes, the “bhuna”.\u00a0Bhuna is a cooking process where spices are gently fried in plenty of oil to bring out their flavor. The Indian curry dish “bhuna” is an extension of that process where meat is added to the spices and then cooked in its own juices which results in deep strong flavours but very little sauce.<\/p>\n Much the same can be said of the current state of the Indian-flavored BPM industry, where the baseline delivery of process services have been nicely spiced with disciplined execution, competitive pricing, RPA\u00a0capabilities and process standardization, and the added meat is providing new levers of value with emerging intelligent automation and analytics capabilities.\u00a0 The missing potatoes are the added element\u00a0of risk that BPM services providers need to take to fix the data underbellies of their clients so they can truly start to benefit from the fruits of having digital operations to support their clients.\u00a0 We\u2019ve reached the era where real data transformation is the missing ingredient that can really take this industry to the next level.<\/p>\n Having met with most of the key BPM service providers with key Indian delivery ties at the annual NASSCOMBPM summit in Bangalore, these were my takeaways:<\/p>\n The mood is upbeat as the Indian BPM leaders are (largely) facing up to reality and embrace the opportunity.\u00a0 <\/strong>Over\u00a0the last couple of years at the annual\u00a0NASSCOM reality check, we witnessed heated arguments regarding the viability of the long-term viability of BPM.\u00a0 Several service provider leaders have defended the value of the traditional labor arbitrage model, while others have called for a reality check that the old model is dead<\/em> and we need to conform to a very different world of outcome-driven, automation-centric\u00a0models that aggressively cannibalize obsolete engagements. In short, the underlying feeling has been one of doom and gloom, and we’re simply waiting for this impending nose-dive for the industry. This year, most people seem to have taken a crash-course in reality and have realized the answer lies somewhere in-between<\/em> – the old model provided a valuable lever to drive out costs and tee up the next phase of engagements – and the current crop of service providers should be smart enough to invest with clients to derive value out of several additional value levers, in addition to providing affordable, global talent.\u00a0 Yes, it is possible to advance the traditional labor-driven model into the digital age without making too much of a sacrifice on the profit margins.\u00a0\u00a0<\/p>\n The mid-tier service providers are showing the way.\u00a0<\/strong> As the large FTE monster deals dry up and we’re left with smaller engagements that require less staff, more automation and better analytics-driven outcomes – and most of the mega providers simply cannot afford to scale-down<\/em> to be competitive.\u00a0 The likes of EXL, WNS, CSS Corp, Sutherland, Concentrix, Hexaware\u00a0et al are all competing for the smaller, tastier deals on the table that require real attention and focus.\u00a0 Plus most clients are now eager to explore relationships with smaller competitors who roll out of the red carpet for them… the crux of the issue here is that the mega-deals of the past are not coming back, and if the large providers cannot accept\u00a0this, they are going to be left defending that they have for the next decade, as opposed to growing their businesses and investing in their capabilities along the way.\u00a0 This is going to get worse before it gets better – and everyone knows it.<\/p>\n Most of the BPM providers are still confusing everyone with their “strategies”.\u00a0<\/strong> I challenged nearly every service provider to articulate their value proposition\u00a0in three bullet\u00a0points.\u00a0 They all failed miserably.\u00a0 Being all things to all people<\/em> is the recipe for bland failure in this attention-deprived world, and spinning the same marketing mush as everyone else has become the disease of our industry for the past couple of decades.\u00a0 It’s time to crush the vernacular and talk openly about what we all stand for<\/em>.\u00a0 Sadly, I do not expect anything to change soon…<\/p>\n This industry desperately needs new blood.\u00a0<\/strong> As per the last 10+\u00a0years I have been coming to this event, we are subjected to many of the same folks spinning the same old stories and viewpoints.\u00a0 We need to meet more of the emerging talent and hear from some of the newer thinkers.\u00a0 They do exist and need to be blooded… otherwise, we come across like an industry without a succession plan.<\/p>\n There is a chasm between BPM and IT services, which is a real missed opportunity for India.\u00a0<\/strong> The divide between the process people and the tech people in India seems to be greater than ever, at a time when automation and digitalization are closing that gap.\u00a0 India needs to embrace hybrid delivery and present a united front between BPM\u00a0and IT at its flagship events.\u00a0 The RPA\u00a0and AI discussion at the BPM level is so much more real and actionable than when the techies discuss it… As we discussed here<\/a>, the worlds of software, business operations and services have always been chasms apart \u2013 different mindsets, vernaculars, conversations, ideas of what constitutes value \u2013 and vastly different cultures.\u00a0 NASSCOM\u00a0needs to help bring together these mindsets and drive the conversation forward as a unified industry, not several soloed sub-industries.\u00a0\u00a0<\/p>\n There is a lack of\u00a0exciting up-and-coming digitally-centric BPM firms appearing in an industry in real need of some disruption.\u00a0<\/strong> While the mid-tier BPM\u00a0firms are clearly enjoying something of a modest renaissance period, there really isn’t much coming up behind them – at least they are not on display ay India’s flagship BPM\u00a0summit.\u00a0 Where are the Indian digital pureplays and fintechs?\u00a0 Sure, we met some exciting Indian RPA\u00a0software firms, such as Intellibot<\/a> and Option 3<\/a>, but there seems to be precious few emerging human-plus-tech process delivery firms emerging to get us excited.\u00a0 We need these firms to be wheeled out, wrapped in cotton wool and showcased as the future of Indian services.<\/p>\n