Wage arbitrage – the chief selling point for Indian and South-East Asian business process outsourcing companies – will soon disappear , says Tanvir Ali Khan, Vice-President and Global Head, BPO, Dell Services.

With the evolution of software to cut human contribution in business processing, offshoring work will slow down. On the other hand, the BPO industry is transforming from a low-skill “back-office” player into a vital service provider where the accent is on cost reduction for clients and pointing to new avenues of income. Dell Services, which started a 2,500-seat BPO centre in Coimbatore on Thursday plans to recruit thousands more this year for its new campuses in Noida and Coimbatore.

Personal computer manufacturer Dell acquired Perot Systems Corp for $3.9 billion in 2009, and now holds a dominant market share in healthcare business processes in the US. It competes with IBM and Accenture, and Indian multinationals such as Infosys BPO and Tata Consultancy Services.

What are the game-changers transforming the BPO industry?

Automating business processes, already a buzzword, will spread to every BPO this year. Last year, we took the initial steps in this direction. In 2014, we will further this drive to greatly eliminate human decision-making in many of the transactions we process. By automation, about 40 per cent of the work will be taken care of by software. Our modality is a man-machine combination – software performs portions of a complex job where human intervention is unnecessary. The other way to automate is robotic automation, one in which the entire process is hands-free.

Will this not cut down on staff requirements?

Hugely. For example, processing insurance claims constitute a sizeable portion of Dell BPO’s offerings. It’s labour-intensive. Through automation, we are adjudicating about 90 per cent of the claims now. Five years ago, the mantra was: Go to India, and get the job done at $10 an hour. Now, that game has changed: At Dell, many of our processes have been automated, cutting down the need for low-skill employees. An example would be the transition of medical coding from International Classification of Diseases 9 to ICD 10. Though it presents huge business opportunity for BPOs, it does not translate into need for more hands in India, because of our automation processes.

Similar is the case in many processes in banking and financial services sectors. On top of that, need for services in American-accented English and cultural compatibility is forcing firms to retain important tasks in the US, and near-shore countries.

With increasing complexity, will Dell look to strike a balance in manpower between the US and emerging nations?

We do have such a balance. A third of our employees are in the US, while the rest are in India and other Asian countries. There will not be any trimming headcount as a result of automation, because what get automated are the simple tasks. A complex heart attack claim needs domain competence for processing, so need for skill will get dire. This could increase training costs for companies.

How will Dell differentiate itself to outdo competition?

The pitch that back-offices reduce costs of service delivery for clients is an old hand, much exploited. Dell will look at cutting the cost of care for hospitals and physicians in the US. We think cost avoidance for health insurance companies is ripe as an offering. Another area we will look at is Fraud, Waste and Abuse. This involves protecting hospitals from false claims, which require an extensive repository of clinical data.

Would you begin employee recruitment for the new verticals?

Our new BPO site in Noida has just begun recently, and another in Coimbatore, Tamil Nadu, which can accommodate 2,500 employees went live yesterday officially. We plan to recruit close to a few thousand people in services this year. As of now the staff strength is about 40,000.

bharani.v@thehindu.co.in

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