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Who moved that Detroit worker’s job?

July 17, 2009

Actually, no one. Just think about it. Could that ubiquitous blue-collar worker slaving his nights off in a seedy, little call centre somewhere in Meerut (India) have robbed the Detroit worker of his job, or did it get snapped up by another white-collar worker in his home country?

Phil Gilbert, an expert in BPM operations, thinks, it’s the latter. After visiting his brand new TCS-Lombardi Insurance Solutions Lab in Bangalore, recently, Gilbert has came to the conclusion that the only way, the old manufacturing and service economies can be saved in the US is by rebuilding them from the ground up. Because if at all there is a threat posed to their survival, it’s by their own internal inefficiencies; not by some third party, blue collar, tech worker, trying to make his own ends meet in some far-away, foreign land.

“We need a new service-enabled economy that lowers business risks, lowers business costs and increases the number of local jobs,” he asserts, while driving home (pun intended!) the example of car manufacturers.

businessProcessEfficiency Who moved that Detroit worker’s job?
Fact is that the IT services industry has matured to an extent that corporates have now begun to look not just for plain vanilla cost saving (which of course is still a major driver for this industry) but also process improvement from an outsourced deal, especially if its related to a KPO kind of operation.

This makes BPM through outsourcing even more exciting and challenging. “One of the things we were most excited about was hearing from the decentralized clients with the largest cost base…..as a client, you might want to fix broken processes first or give it to outsourcer but be aware of the agenda – you should be asking for a greater benefit if you opt for the latter” observed Nick Jarman, Global Head of Shared Services, PWC at a recently concluded global SSON G8 series.

A sad fact is that most outsourcing deals go sour not due to insufficient cost saving or even process improvement (which may be there) but due to poor vendor management. However if BPM were made one of the key goals of an outsourcing deal, it might be easy for teams (both onsite and offshore) to stay focused on the task at hand and over time learn to better manage and monitor their project outcomes.

Customers frequently enter ITO arrangements without understanding the structure required for effective vendor management, and they assume that tactical activities alone might yield the desired financial benefits. This is a mistaken belief, say Rajesh Bhat and Jesse Decker of IT Management.

Unless process improvement and standardization is made integral to the outsourced project, in the manner Genpact Ltd and ExlService Holdings Inc. are helping their clients re-engineer their business processes, third party vendors stand little chance of climbing up the value chain.

“Process management is the core of the back-office service industry,” says a report in Mint, a leading business daily in India. This could indeed be the next, big frontier for Indian IT service providers to capture. One estimate is that such process improvement can help customers save as much as 30-40% of what they were spending on a process—without outsourcing.

“Today, we are getting a lot of enquiries from customers saying, ‘I don’t want to outsource; come and take a look at our processes; help me re-engineer it and improve them’,” said Rohit Kapoor, president and chief executive of EXL to the Mint reporter.

While struggling to keep their heads above water, IT customers are beginning to realize that eventually it’s not so much about outsourcing as about right-sourcing. Indeed, in times to come, outsourcing may emerge as the chief process streamlining strategy.

Related posts:

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  2. Intelligent outsourcing: Money is not (that) important
  3. As BPO vendors enter the survival of the fittest phase, will your BPO or vendor be among the lucky ones?
  4. Offshore publishing picks up
  5. Procurement Outsourcing Growing


Written by Radhika · Filed Under BPO Blogs 

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