Let's examine each point in detail to get a better understanding of what it takes to make this transition.

Acquiring process understanding is important, yet not straightforward. Companies need to understand the big picture as well as every nuance of implementing a process. The legal implications are especially important to under<147,1,7>stand while dealing with end-customers. Areas such as claims processing offer great potential; at the same time, the intricacies involved in adjudicating a claim are numerous. How can companies then acquire this competency in a way that allows for scalability? In other words, it is not enough (like in IT services) to have one or two people who "understand" the domain, while the majority of the project team comprises technologists. Here is where the ability of the core team to understand the process, and partition it into smaller components and train the larger team in specifics becomes very necessary.

The other interesting, but not very obvious solution, is to apply technology to simplify the implementation of processes. What this entails is an extraordinary understanding of relevant technologies and the ability to identify which technology can be applied to a specific process. BPO companies would need to invest in application technology teams, a practice that is not very prevalent today. Also, finding the right set of people who know how to conceptualise such technology solutions is not very easy. So, companies that master this aspect would have indeed found a sustainable competitive edge.

Then there is the ability to integrate contact-centre services with true back-office capabilities. This is, in some sense, easier than the first two. However, it requires companies to think differently. Till date, most companies have decided on one or the other model, driven by various considerations such as ease of procuring business as well as investment required. This has resulted, by and large, in two kinds of players — call centres that offer low-end customer support and back-office players who support simple processes.

Against this backdrop, consider this scenario. If your company had to offer more value-added services, such as end-to-end loan-processing, you would need a combination of both customer service and business process capability. Thus, you would need to approach the market with an integrated offering.

Finally, the ability of your company to take risks, or, commit to service delivery standards that are stringent, would be another criterion that would determine if your company can evolve into a true BPO company. And, unless the company has genuine and deep competencies that run through the organisation, its ability to confidently commit to such SLAs would be limited.

What kind of companies will make this transition most comfortably? In our view, there will be two categories of players that will succeed — those that have an excellent understanding of technology and apply it smartly to process automation and so make end-to-end processing more feasible, and those that understand a vertical very deeply, and are hence able to offer value-added business process management services.

As a corollary, we will witness the emergence of next generation players focused on few areas or verticals.

The author is CEO, Prayag Consulting, a strategic and operational consulting firm focussing on the high-tech industry and can be reached at sudha.kumar@prayagconsulting.com

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