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How India's services sector is a perfect springboard for automation

January 2019

Read Time: 4 minutes

In an increasingly digital world, smart algorithms, bots and AI tools have made their way into organisations. Orchestration tools intelligently analyse the nature of work and available capacity, before deciding to pass it on to a human or to a machine, for processing. Work packets get passed between machines and humans seamlessly. 

Voice recognition software monitors quality of interaction between humans and the external world and has the ability to escalate matters and intervene in real time. Gone are the days where supervisors walked the aisles to troubleshoot.

While it’s hard to argue against the productivity gains, industrial bots, along with the associated price tags and lack of local support in countries like India, are less likely to effect mass replacement of blue-collar human talent. However, the services sector, with its largely higher cost talent pool, is a different ball game altogether, especially the BPM industry. The G2000 clientele, that outsourcing companies address, are perfectly amenable to experimenting with intelligent automation. The BPM industry has now truly entered unchartered territory. 

Production capacity Vs thinking capacity?

Traditional mindsets are wilting. Outsourced BPM operations today are less about cost centre management and more about revenue generation. Production capacity is being replaced by thinking capacity, as a measure of scale. Rule based work is making way for judgement-based activity. The epicentre is moving away from efficiency of operations to effectiveness of outcome and is heading in the direction of creating better experience for end clients. The call centre, that since long ago had morphed into a multi-channel contact centre, is now intelligent enough to toggle the interaction with live customers across multiple channels, and requires less and less human intervention. 

If one were to ask Siri if Alexa was better, one of the answers offered is “I am older…so I’ve had more time to perfect my bad jokes”. Depending on its mood, it (or shall we say, she?) could even respond with “I offer no resistance to helpful assistants.”

While automation is depleting the amount of simple voice related work, the work pertaining to training of digital assistants is surging. Language training of digital assistants is the new voice work for call centre agents! According to Nasscom, out of the 1.4 million employees in the Indian BPMindustry, nearly 800,000 might have to be retrained to partake in the digital revolution. Humans have to evolve as machines join the workforce.

According to Innosight, nearly 50% of the companies in the S&P500 list today, are expected to be replaced in the next decade. 

Outsourcing service providers, that largely used technology for workflow management, would have to inject strong elements of digital interaction, robotics, platforms and analytics, into their offerings. Companies proficient in lift and shift models of yore, would have to develop institutional muscle around consulting and process re-engineering. Business models are changing to foster deeper relationships with end clients — value sharing arrangements, co-creations of IPs and development of solutions that enable everything as a service. As business models anchored around network effect and demand side economies of scale become more pervasive, laggards risk digital exclusion, and likely fatality. 

The twain shall finally meet 

The analog way of doing business is undergoing a sea change. In the manufacturing world, concepts like rapid prototyping are being replaced by digital twins. The double entry system of book keeping is being replaced by blockchain technologies, which is essentially a triple entry system of book keeping. The inefficiencies in the traditional marketing methodologies are making way for ‘just-in-time’ marketing that embrace digital channels and respond in real time. The list goes on. 

Indian IT and BPM industries have co-existed, for decades, without the promise of convergence really playing out. However, in a fast digitalising world, technology platform driven outsourcing services are becoming the norm and industry and technology consulting skills are becoming critical differentiators. Analytical superiority and agility have become the difference between success and failure for end clients. In such a world, the traditional barriers to convergence, between IT and BPM, would crumble at an increasing pace. In the world of digital twins, IT and BPM services would form the digital cousins, which will join forces to deliver the true value that new age clients expect. 

Author: Amit Singh , Co-head Enterprise Technology and Services, Avendus Capital

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