NASSCOM BPO Summit 2012: New Business Process Order - Raman Roy
Transcript of NASSCOM BPO Summit 2012: New Business Process Order - Raman Roy
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New Business Process Order –Productivity Improvement and
InnovationSome Thoughts
Raman RoyChairman & MD
New Delhi 5th September 2012
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Understanding “Improvement”, “Innovation” & “Disruptive Innovation”
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• A Disruptive Innovation is an innovation that helps create a new market and
value network
• This is done by improving a product or service in ways
that the market does not expect, typically first by designing for a different set of consumers in the new market and later by lowering prices in the existing market.
• Innovation is the creation
of better or more effective products, processes, services, technologies, or ideas that are readily available to markets, governments, and society
• Improvement refers to doing the same thing better
• There are a number of techniques which businesses achieve this such as Six Sigma and Lean Technologies
Disruptive InnovationInnovationImprovement
While Improvement & Innovation do not result in a paradigm shift in the existing business order, disruptive innovation does manage to do that
Source: Wikipedia Source: Wikipedia Source: Wikipedia
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Disruptive Innovations have a definite life span….
Although the below innovations were disruptive at the time they came into existence during the last century, they have ceased to be disruptive now !!
Aeroplanes World Wide Web (WWW) Automobiles Mobile Telephony
Every Disruptive Innovation has a definite lifeline, beyond which only continuous improvement / innovations can be done by way of upgrades
and process improvements
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BPO 1.0 (1990 – 2000)
Emphasis on Cost efficiencies / Productivity
BPO 2.0(2000 - 2005)
Emphasis on greater depth and breadth
while embracing the “globalization” of delivery capacity
BPO 3.0(2005 - 2010)
Emphasis on value added end-to-end
solutions and inclusive growth esp. in Tier II/III
cities
BPO 4.0(2010 & Beyond)
Emphasis on Platform Multi tenancy, Non
linear revenue growth and utilization of same
resources across multiple clients
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Similar trend has been seen in the Global Offshoring Industry as well…
We are at the threshold of another wave of Disruptive innovation which possesses the ability to create a new market and value network
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Productivity Improvement / Innovation
Disruptive Innovation
• Specialization• Process reengineering• Technology enabled Platforms• Domestic BPO - E-governance, Rural BPO
• Cost• Quality• Productivity• Era of Captives
• Real time processing & voice
• Multi faceted service offering
• Era of 3rd party off shoring
Disruptive Innovation
Transferring basic data entry work to cost effective locations
Even though work continued to come to these locations with the addition of certain newer ones like Philippines and
Brazil, it would still not count as disruptive
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Businesses need to come up with Innovative solutions to ride the wave…
Exploring New Market Segments
Implementing Innovative Business Models1 2
The 2 approaches which can be utilized to achieve this are :
Organizations need to come up withsolutions that result in
“Re-architecting the Product-Price-Performance Equation”
&“Enabling Value Creation”
for its customers
Focusing on Small & Medium businesses (SMBs) by providing revenue enhancing platform based solutions
Implemented through Innovative Service delivery through Software as a Service(SaaS), Platform as a Service(PaaS) & Infrastructure as a Service(IaaS) model
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Value Innovation as a strategy will help organizations penetrate this market…
Create uncontested market space
Capture new demand Make competition irrelevant Align processes in pursuit of
differentiation and low cost
Costs
Buyer Value
ValueInnovation
Emphasis should be on:
• Best Shore Delivery• Value Innovation• Range of value added services• Platform based solutions• Expert Knowledge
Services• Decision Making /
Problem Solving
• Providing value to customers beyond cost arbitrage
• Employing an engaged workforce
The emphasis needs to be on pioneering Value added services at attractive price points to the Mid Market
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Innovative Business Models will enable businesses to further tap this opportunity…
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Open, Capable & Affordable Cloud
based offering
Outcome based / Transaction based
Pricing
Multiple Productized
Service Offering
Innovative Service Delivery
Organizations should focus on developing platforms and portals that have a cloud compatible architecture and service multiple clients
Skill based routing of processes on “the cloud” will allow organizations to share same resources across multiple clients leading to cost reduction
Multiple Productized service offerings will enable organizations to assist their clients by offering a range of templated offerings that cut across multiple verticals
Innovative service delivery models utilizing In house Technology & IP, Platform Multi-tenancy and Skill Based Processing will enable reduction in time to market and leverage economies of scale
Enhancing the business value for SMB clients by utilizing the above value drivers will lead to a New Business Process Order, based on the concept of
disruptive innovation!
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SMBs / Mid Market as a new market segment holds tremendous potential…
Percentage
SME Details
15 million Formal and informal SMEs in Brazil20% Of GDP of Brazil56% Of total employment26% Of aggregate wages/salaries2.4% Of Brazil’s exports
Percentage SME Details97.3% Of all enterprises50% Of total GDP of U.S.50% Of total employment.74% Of new jobs created in
a year
Percentage
SME Details
99.7% Of total enterprises40% Of total GDP of China42 million Formal SMEs in China68% Of total exports75% Of new jobs created in a year
Percentage
SME Details
2.6 crore MSME’s in India8% Of total GDP of India40% Of total exports6 crore People employed by SMEs1.3 Million Of new jobs created in a year18% Growth rate of SMEs over 5 years
Percentage SME Details98% Of total enterprises19.3 million SMEs in EU66% Of total employment65 million Jobs held by SMEs
Source: Industry Outlook, respective countries
Brazil
ChinaUSA
India
EU
Over 97% of world businesses are SMBs which constitutes predominantly an untapped segment as there is no single service provider which is
servicing the requirements through “Offshore Service Delivery”
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Large, Underpenetrated SMB Market
Channel Sales in Pursuit of Small & Medium Businesses
500 5,000 20,000
“millions of markets of dozens” in addition to
“dozens of markets of millions”
Com
pany
Rev
enue
/ #
of E
mpl
oyee
s
# of Companies
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While serving the HEAD of the market isn’t a bad strategy and can build a great business, serving the TAIL efficiently can be even more compelling
…However targeting the tail provides its own challenges including providing the right product and building a cost effective business model
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The tip of the Iceberg is already visible…
…the key will be to realize the hidden potential!!!!
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Raman RoyChairman & Managing Director
Email: [email protected] | Website: www.quatrro.com
Thank You !
Happy to Answer Questions
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