LPO’s Ability to Innovate
May 18, 2010
I read an interesting blog article today on the Japanese and their ‘reverse outsourcing’ experience. This made me wonder how and if we could apply this concept to our industry. Perhaps it is somewhat premature given LPO’s relative nascent state in the marketplace. But it’s worth taking a little time looking back and studying how the Japanese industries have managed their growth. In the U.S. automobile market the Japanese made considerable progress grabbing market share from the “Big 3” automakers compared to the early days of their entrance in the 1970’s. They are now arguably the leaders in the U.S. auto industry. That is the beauty of the competitive marketplace. They went from being unrecognized, foreign automakers, importing their product into the U.S., to effectively becoming industry game changers setting up manufacturing plants in the U.S.
It’s interesting to hear about Infosys, Tata Consulting, and others making similar moves setting up “shop” on U.S. soil. It says a lot about the maturity of the industry and its ability to come back and compete in the same market it was being ‘offshored’ from. There are a handful of LPOs who have setup a presence as well. To maintain or achieve the same level of success enjoyed while being ‘offshored’ becomes a bit more challenging.
The Japanese automakers have been able to achieve this largely due to their ability to innovate. They did more than just maintain their competitiveness when they setup their manufacturing processes onshore. They brought with them their processes and managerial tools that helped them succeed in the first place. Even though their factories were located in the U.S., they still edged out the Big 3 largely due to fresh ways of managing Lean Manufacturing operations such as Kanban. Kanban was an innovative means of managing inventories in the manufacturing process unseen in the industry. It took cost and unnecessary steps out of the supply chain processes that went into producing automobiles.
Putting this back to the LPO perspective, I struggled with what the Indian LPO’s Kanban could be? What is the innovative game changer that we posses and can bring to the table? Cost competitiveness alone is not going to propel the industry’s longevity. Nor does the next innovative idea come to us overnight. The creative minds behind Kanban developed the practice through many trials of error and rework. But the need and desire to change how their processes were carried out was apparent to them, thus driving their need to explore ways to change.
I suppose LPO will find its innovative Kanban as time goes on, and it is perhaps not very apparent to us today since we are early in our industry’s lifespan. The takeaway here is for us to dig and uncover the opportunities that allow for us to innovate.
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3 Responses to “LPO’s Ability to Innovate”
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James,
Extremely valid thought. For enabling innovation, we need to look at the law firms holistically. Towards that, we are working on creating a vision around “Law firm of the future” wherein LPO will be one of the components in terms of services that we can provide to a law firm. It will also include consulting, BPO, KPO, IT etc. Once you take this approach, it enables us to provide more senior management focus, engage with law firms at a strategic level and also get scale for running a profitable business yet investing in the relationship through process reengineering and technical experts.
Regards
Rahul
Rahul – Glad you saw through my innovation example of the auto-industry. (Sadly, many visitors to my blog did not.) It’s somewhat natural that the holistic approach is the one which will add the most value in the end.
Interesting blog, I’d like to know if all LPO providers follow same process from finding a client, understanding their requirements, sending it to offshore, executing in offshore, and finally delivering it back to the client. I’m sure LPO providers who can innovate in their processes can get more customers.