Yes India is the largest provider of IT & BPO services in the world; has traditionally out performed growth expectations as outsourcing of ITES services has grown across sectors & segments.
All this started, with enterprise, large (typically MNC) companies outsourcing back office and software development & management services to their captives in India, which progressed to outsourcing to large and mid-sized independent service providers(who also became MNC over time, with delivery centers in many countries, although in most situations the largest volume of work was often done from India).
With growth outsourcing across sectors & segments and countries, the industry has seen exponential growth, with a consensus emerging that the biggest benefit is that outsourcing enables buyer to focus on their “core”, while outsourcing “non-core”.
So, while earlier the primary focus was on cost savings for buyer, it has now largely shifted, to domain expertise & quality of services.
And meanwhile there is rapid change all around. So quality & predictability of services delivery, simplicity of engagement, providing integrated, end to end outsourcing solution, as well as the capability of the provider to provide solutions which catalyzes the buyer’s business andto deal with the volatility in the business environment are now all important. Industry has matured and with more focus on domain expertise, service providers have transformed themselves into strategic partners, to the buyer of services.
Success in outsourcing & offshoring by enterprise companies, led to emulation by SMB sector
The success of outsourcing in the large enterprises led to greater acceptance of this operating model and is now accepted in management circles and across all businesses/ organizations as a strategic imperative for success. So supply chain management, which originated largely a manufacturing sector, has metamorphosed to outsourcing & offshoring for ITES & Business services. And given general acceptance of this outsourcing model across, the SMB sector has also joined the fray.
Over last few years, movement of services between the SMB buyers of services and SMB providers of services (i.e. south – south purchase and sale of services) has gained momentum and our view is that this will continue to further accelerate, catalyzed by following:
· Outsourcing has gained respectability ( as explained above), as a strategic imperative, critical for enabling organizations to deal with the continuous & fast pace of change around us and even as a growth andprofitability enabler.
· Cloud based software/solutions, which when bundled with the traditional service offerings make outsourcing solutions end to end, very agile, simpler and easy to plug and play
· Outcome based solutions & services, the ‘as a service” economy is evolving
Simplicity, outcome based & even lower prices – thanks to the cloud.
And so here is a summary, drawn from our years of experience in the industry, of what essentially the buyers want, especially in the demanding international markets:
· Domain focused provider who understands the business and challenges of the buyer’s industry
· Is familiar with modern trends and innovative practices like SMAC, digitalization
· Is a digital & social nativeand all communicationfrom the provider across levels is reflective of a high level of industry maturity, thought leadership
· Is a thought leader, who understands the evolving needs of the buyer’s industry and not just a provider that says “I will do what you want me to do”.
· Sees its primary role as contribution to the improvement of the buyer’s business/organisation – i.e. operates & behaves like a strategic partner.
We find that most SMB players in the ITES Sector, particularly those graduating from the small to the mid-sized ranks or wanting to grow from mid to large, are unfortunately often caught in a time warp of yesteryears.
Perhaps this is because, they are led by founders and executives who honed their IT & BPO skills in the previous era of time and material ITES industry, where you just executed, what client asked you to do, including providing engineers and back office staff to do BPO or software development work.
Their approach is thus somewhat reactive and unfortunately service providers rarely lead the conversations on industry or domain strength or provide thought leadership on latest evolving trends/tools and new practices in the ITES and implications forindustry and implications of the same for client.
Our view is that basics like the following are rarely in place, but are absolutely critical for success & growth in the ITES services sector today:
· Evolved operating structure, withmatured delivery structure, including independent quality, risk mitigation and operating compliance, internal operational audit functions
· Robust delivery, project management, operations migration, transition and change management protocols (including proper documentation & validation of process adherence) and practices
· Effective business continuity planning & processes, data security and cyber security practices are embedded in the infrastructure people practices, with comprehensive SOP and processes, and built in checks to ensure predictability.
· Client relationship management at different levels and layers to ensure a two way regular engagement and transparent communication protocols, with evolved MIS and active/smooth collaboration, with an embedded “no surprises for client” culture.
· Provider is a specialist: operates in-house centers of excellence in its chosen domain(s), which helps the service provider (and in turn its clients), to stay on the cutting edge.
· Integrated marketing, sales andrelationship management and service delivery
· Evolved pricing & operating models which align the interest of the provider and buyers seamlessly – and create a win – win on a continuous basis.
· Deep operational understanding of the latest emerging trends likecloud , digitalization, SMAC, etc and ability to integrate the same into innovative solution for their clients and lead the way toguide the client to navigate such and other emerging changes like internet of things.
· Realize that the way to market and win deals today has changed, that it is imperative to become a digital native as an organisation and use cutting edge social marketing & content development & communication tools to market & communicate strengths to prospective/existing clients (shift from out-bound marketing to inbound marketing to generate leads and prospects) for driving their growth.
There is thus a need for SMB ITES players to come out of the time wrap.
In summary the ITES service provider needs to be not just a vanilla basic IT or BPO service provider, but a consultant to their client and an embedded integrated outcome based innovative services solution provider, who is contributing actively strategically & operationally and on the cutting edge in its chosen domain(s), and effectively support the client navigate the fast pace of change today.
Hexagon Consulting outsourcing consulting practice’s consultants have extensive & cutting edge experience in the ITES sector across domestic and international markets which enables us to support SMB and mid-sized ITES players bridge some of the above opportunity areas.
Write to us at contact@hexagonconsulting.co to schedule a chat or just share your thoughts on this blog post – we’d love to hear your perspective.
Thanks.