The outputs of excellence

IndiaTimes Infotech
THURSDAY, SEPTEMBER 15, 2005 05:14:41 PM]

With a CAGR of about 55% per annum over the past four years, there can be little doubt that captains in the BPO industry in India ought to be justifiably proud of their track record, confident of the current performance and hugely optimistic of the future. But, what really does the future demand of this industry.

Moving beyond Quality or Six Sigma, what can be the high-level outputs of such an excellence model that is also relevant to our business? Applicable almost to all of us with equal emphasis are: i) Scalability ii) Productivity iii) Risk management and iv) service.

Scalability: Consider a scenario where a tsunami of new businesses flow our way. Our current capability to ‘scale up’ to a different level is a huge challenge. The initial resource pool that was directly employable is now drying up and although the talent pipeline is good, longer-term initiatives like training should be undertaken. Scalability is therefore our ability to absorb volume growth without the need for major investments or cost spikes.

Ability to ‘turn-off’ costs and bring in flexibility as volumes move will determine the winners. Creating volume-insensitive processes is a great step in this direction. In effect, we need to consciously erode the single-function model and aggregate activities by processes rather than by product or business line. In this context, every CEO in this business knows that if there is one strategic direction to ensure sustained improved results, it is by employing fewer people per process. Without this approach, achieving operational excellence is bound to be sub-optimal.

Productivity: Closely linked to this is productivity and the application of methods that dramatically increase operational throughput for same or lower inputs. This is easier said than done. A key enabler is the ability of our clients to influence their customer behaviour and channelise the quality of inputs that will lead to a spike in ‘straight through processing’. The actual metric may vary and range from revenue to FTE to cycle times or for that matter, anything relevant to the business. The key, of course, is to baseline a metric and drive improvement. Can we ‘robotise’ our processes in a manner similar to what the giant automobile factories of the 1900s did with the production of the chassis?

Risk Management: If there is one ‘output’ that can cause terminal damage to a business or indeed for the whole BPO industry, it is weak risk management. No amount of scalability, service or productivity will matter if areas like operational risk, reputation risk, data confidentiality, compliance risk and fraud risk are compromised. We need to adopt a cost-benefit model to identify and manage these risks. Tiering of risks according to ‘criticality’ of the risk profile is another angle to consider. Potential litigation, Globalisation, regulatory demands and our customer’s expectations are key levers to assess our efforts in this area – often non-negotiable.

Service: Clearly, while cost arbitrage is the bedrock our businesses, customer service and value fulfillment will propel it to global levels. Operation managers need to adopt a true end-to-end perspective of their deliveries, take accountability for end-results to ‘real’ end customers and engage in understanding the success drivers of our customer’s customer.

Different Enablers to the Outputs
And just as important, different situations call for different strategic drivers that exert a varied influence on these four outputs. Despite our selfawareness of these aspects, business leaders cannot achieve anything if our core people management practices are found wanting. Again, all four outputs of an excellence model described above cannot be used mechanically.

Employees today complain of ‘initiative fatigue’ and we need to guard against it. Uncovering new frontiers of opportunities as a challenge for our staff and simultaneously adding value to our customers is a good alternative. For example, it may be worth exploring how an outsourced transaction processing centre can identify opportunities for revenue enhancement for the clients?

In summary therefore, the challenge for all of us is adopt a lean ‘manufacturing’ model and to just do it. Execute. 24X366. As someone said, ‘The spotlight is on the backstage now’.

Sreeram Iyer, head of Scope International, Chennai