Future Outlook: Indian BPO Industry

The article “Outsourcing 2.0, the future”, that I wrote on 24th of Feb 2019, has been generating a lot of interest in the BPO industry as a result of which my inbox is full of requests for a write up addressing the specifics of the Indian BPO/BPM industry, so here I am! I’ll link the article towards the end of this one for those of you who would want to read it. Before we talk about the future of the BPO/BPM industry, I think it is vital to dwell upon its history a bit to understand, broadly, how it came into being and why it is important to a large section of the society, beyond the economic circuit. Outsourcing started as a cost-saving major, developed economies started shipping non-core, low-value jobs to destinations which had labor skilled for the job available in large numbers. India became a popular destination, thanks to its colonial past which indelibly impacted the creation of curriculum for primary education in the country, even post-independence. English is taught as one of the three languages that all Indian students study. We’re also a country with a good supply of human capital (one of the few benefits of out of control population bust). For a little over 3 decades, the business of outsourcing has been blossoming here.  A democratic, aspirational, developing economy that had just got liberalised, made a perfect breeding ground for the service industry to thrive. This business model brought with itself prosperity, it created billionaires, millions of jobs as direct benefits, indirectly too, this new phenomenon in the post industrialised world, gave an unforeseen boom to the real estate industry, among others. Cities like Gurgaon, Hyderabad & Bangalore owe all of its development to this single industry. The story has not been one with all positives though, it has seriously dented spread of higher education in India, a significant portion (68.32%) of those who started earning in this industry before completing their bachelors did not complete their higher education. As a result of which their long term growth prospects got stunted, but then it also boils down to personal choices that people make and it will be unfair to blame the industry for this entirely. Business standard says and I quote “The IT-BPO industry grew by 8 percent in 2017, leading to an aggregate revenue of $154 Billion. Further, in 2017, the BPO sector contributed 7.7 percent to India’s GDP”. I pull this stat up to familiarize you with the enormity of its economic spread.

The rationale behind sustaining large workforces emerged from the difference between wages in the US and in India; for a certain set and category of jobs, the delta was so huge that even if an inflation of 8% were to be applied on annual Indian wages it would’ve taken more than 3 decades for it to become comparable, in the days of early germination of the Industry. Right at the base of this rationale was the confidence that the wages will grow stronger in the US also, at least at the rate of 2 to 5% year on year. Reality did follow this plan but for a duration a lot shorter than what was expected at the beginning. Let’s just say progress happened rather swiftly. I know you are tired of hearing of ‘technology, the devil’, but I’m here to tell you that it is not the only contributor, it certainly holds most of the chips but there are other factors too which can’t be ignored if the goal is to understand it clearly and should I say comprehensively. Without getting into too much detail, let me quickly outline a few factors, which are noteworthy.

Global Recession: It taught corporate America cost-cutting, non-core tasks got axed first. Optimization becomes very core of running a business, post the meltdown.

Smartphone : Post Blackberry, both Apple and Android smartphones opened up the floodgates of application that ran comfortably on handheld small-screen, always-connected devices, people learned to do basic stuff themselves. Popularisation of self help as a cultural imperative in the west akin to modernisation propelled industry-wide restructuring of customer education/support organisation and cost.

Internet: Proliferation of internet reduced lag, empowered people to access information in massive quantity and mostly free of charge. It enabled the culture of comparison, making decisions informed, calculated and in many cases swifter than before and most importantly independent, in an unassisted manner. 

Automation: Robotic process automation, text to speech, AI-powered BOT, advance analytics, computer vision, OCR, virtual reality, mixed reality, augmented reality, internet of things: these changed the game completely. A structured task which does not require cognitive decision making or understanding of context can be automated at an astonishing speed and at a surprisingly thin investment.

Job crisis in the west: Economy in the developed world slumped, jobs that were being sent outside to developing countries to save cost suddenly started getting perceived and then projected as the reason for natives losing livelihood. Political movements around the world gained momentum which forced legislators to regulate offshoring.

Geopolitical shift: Politicians around the world submitted to ostensibly right-wing stance to solve job crisis that they were facing in their countries. Public opinion on imposing penalties for sending jobs outside gained ground. Crashing domestic consumer demands exerted additional pressure on the governments. 

Territorialism: Rise of protectionism, opened the world to Trump's America and Brexit in the UK.

All of these factors started stressing the growth of the outsourcing industry hugely. Voice-based businesses, the cash cow of Indian BPO majors started growing pale. Majority of high-value voice business in a matter of 4 years got converted into backend jobs; there too, whatever the tech at the moment couldn’t accomplish accurately comes to countries like ours. It won’t be wrong to say that the BPO industry of today is surviving on the breadcrumbs, quite literally. Large players because of their size they are able to aggregate more, and given the fact that the size of the western economy is still huge when compared to ours, the leftover is satisfactorily satiating the hunger of the big guns. But writings on the wall is unmistakably legible now which has forced progressive organizations to look for greener pastures elsewhere. We’re at the beginning of the end!

Organizations are not ideal, we do witness them facing up the challenges in ways that they think is best. Let’s try and briefly touch upon how the industry is preparing to answer the question that is questioning its very existence.

Large corporations: They have the luxury of wealth, geographical presence and size, intellect and prominence, they are smartly diversifying into newer arenas; Data, digitalization, process re-engineering & consulting being a few of them. They are making a significant investment of time, effort and money in upskilling their manpower in technologies of the future. Some of them have even shown the courage to shed low margin business and focus only on high-value contracts. It is all about operating cash and PAT now.

Mid Sized Organisations: This is a rather volatile segment in which some still see light at the end of the tunnel. The game of valuation at the moment seems lucrative in pockets. Consolidation is in progress in this segment, all the work that the large ones are not interested in doing for they either being low value or thin on margin is effortlessly flowing to organizations of this segment. Much like water flows from higher to lower planes, they are happily grabbing new businesses at the cost of margin, sometimes ignorant of the fact that what is flowing to them is not work that requires the real application of mind, most of it is basically two to five-step process. It with a small investment can be automated. Let me give you an example here, many companies have invested in the large establishment for the digitization of physical forms: jobs. The ubiquitous smartphone is digitizing the data at the very source, eliminating the need for forms to travel to the digitalization centers. This has wiped an entire industry away, in a blink. Love of fading times is not lost on them as yet. 

Small Player: The least said about them the better, they are running modern-day cruel body shops, disgusted with their business they are in it because they do not know any better and are willing to give an arm to anyone who can promise them a way out of the rut. Things have become so strange that even the champions of efficiency have lost their way quite literally. They are urging to be bailed out. 

So is it all grim and sad? Not exactly It is yet another cusp playing itself out. Outsourcing as a concept is not going to end, there will always be, ‘core and non-core’ jobs and there will always be a need for people to do things. But it is certainly the end of the road for those who are unwilling to move up the value chain, romantics of the past will soon become history, the forgettable part of it. The future belongs to those who are willing to experiment and wish to disrupt. 

Domestic players are in graver danger because they do not even have the cushion of exchange rates, extinction is staring at them in the eye. Single-digit PAT, which gets even weaker and uninteresting when depreciation is applied on it. It just does not make financial sense, to keep all your eggs in the basket of voice. It is bound to end, in less than a couple of years.

Please understand, you can’t make an omelet without breaking the egg!

The future in the outsourcing/service industry belongs to those who know to deliver intelligent end to end solutions and for those who have the wherewithal to make existing systems aware of context, efficient, accurate, reliable, secure and sustainable. Let me say again, the ‘old’ is progressing towards a demise at a dangerous pace. So what does the future look like? Simply put one of the two things.

1. Product ( tech or otherwise)
2. Data 

Tech products will get the job done and not humans in the days to come, the kind of work that does not require imagination and complex context-based cognitive decision making, as the first input. So, what should you do? Take a good hard look at what is it that you understand really well? Or simply which part of the entire business that you have existed thus far it should be automated, not as a work unit or set of tasks but a complete role. Let’s take the example of what Google, Apple, Amazon, and Samsung are doing with their voice assistants. They are trying to replace that person, whose sole job role was to hear the needs of the master and then go search for information and then come back with relevant details. What do these digital assistants do? You give them the same instructions that you would give to your human assistant but the output is so much better in areas that it has its command over; you get the results without discernible lag, so you prefer it. Not only does it make things simpler, quicker but also accurate - you get the point. 

Apply your mind, invite intellect to study what should you build to solve and then go for it. Due diligence that you would apply before making any important decision must be conducted here as well. Try to be objective about the whole thing, always remember that you have to accept change and that even when you do not accept it, it still happens, so no point, not accepting it. Remember, if you do not build it someone else will and you will be left to survive in the shrunken ground. First-mover advantages those who know how to pull off a great show, though. 

A for Analytics; yes this is the world that we are headed towards. Data is the new gold, new oil and everything else that makes sense. Data makes decision richer and those who know to model data in ways that make decision making better will see acceptability and will rule the next upturn. The science around statistics-based prediction is invaluable. Data is being used along with understanding from behavioral psychology and neural sciences to predict customer buying and consumption behavior. The ecosystem is currently not completely ready but is coming together at a great pace. The future belongs to those who can work with data & understand human behavior. 

In the same breath, we must also acknowledge that this change is not going to be a cakewalk or easily comprehensible to all but then we know from history that old makes way for the new. Unless some lose, others can’t win, so in that spirit it is ok! The bigger picture will still be just as heterogeneous, vibrant and happy as always; with or without people and business models and practices from the past. 

Towards the end, we must also spend a little bit of time in understanding what causes delusion, indecision & inaction? Why are these dying sectors not reacting with the sense of urgency that is warranted? Let me take you to that old frog experiment in which the psychologist turned the temperature higher at a rate slower than frogs ability to adapt as a result the frog died of heat but did not feel the need to jump out. Businesses also become comfortable with the status quo, they block their own sensors sometimes with over-confidence, comfort, or plain incompetence that surrounds them dressed as top executives ( brainless leadership team). Conduct a small experiment: for the last 30 years, pull top 100 organisations in any segment and then compare the list you will see only 8% survive beyond 1^st decade in the leadership position, the story at the end of the 2^nd decade is less than 5% and after the 3^rd decade the number comes down to 2%! 

Why? 

Because they did not change and thus perished!

I hope you, do!

Till we meet again, goodbye!

Link to: Outsourcing 2.0, the future!

http://www.lavkush.co.in/2019/02/outsourcing-2-0-the-future/

You need Omni-channel & More!

The relationship between a customer and a brand revolves around a multitude of interactions that happens between them in the course of their journey together.

Customers expect to get all that they have signed up for and more without having to pay extra and the brands wish to make use of every possible opportunity to serve to the best of their abilities and resources, they create products, services, and related loops for the customers to keep coming back to them when in need & even otherwise. These objectives may appear conflicting from a distance but they actually are complimenting in nature. Companies spend a lot of time and money in preparing the foundation, as it were, for them to give prospects and customers a tour of their capabilities, educating them on the entire range of products and services is vital to gaining a larger share of the customer wallet. Investments are made in creating soothing, easy-on-the-eye, and nearly omnipresent digital footprint, from good looking, responsive &  intuitive websites to active social media participation. More traditional, brick and mortar establishments are also brought into the play, from choosing the right real estate to designing and erecting swanky showrooms: companies do it all. Not to mention that maintenance of both digital and physical assets come at a cost.

The question then is, is it enough to deliver an excellent customer experience? Do customers care about better or smarter solutions? These questions are important, no matter how complete a solution might appear to its creator if the customer/ end users do not see the considerable value and/or cozy comfort or both in it, it is not of good use and often will deliver less than ideal outcomes.

To understand this better, let’s take two examples.

Scenario #1

Customer: Payal Singh.

Need: Booking a holiday.

Chain of events :

1. Payal goes to the website, logs in with her credentials.
2. Provides her search criteria.
3. Makes to the relevant selection of the airline.
4. Provides passengers details.
5. Comes to the payment page.
6. Keys in the banking details.
7. Is greeted by transaction failure.
8. She tries one more time only to face a repeat of the error.
9. She goes back to the home page and starts her search for the ‘contact us’ page.
10. She finds the customer support number and calls up.
11. She is greeted by the IVR and a never-ending list of irrelevant options.
12. After spending, longer than she had expected to, she reaches the agent.
13. The agent greets her and waits for the customer to share her reason for calling.
14. The customer by then is already frustrated but keeps her cool and explains the entire story to the agent.
15. The agent places the call on hold, checks the information.
16. Comes back from hold and tries to authenticate the customer one more time because, in his book, it is customer account-specific information and must only be divulged to the right party.
17. Post +ve verification, says that the payment gateway is down and she must try another time.

The customer bangs the phone feeling absolutely frustrated, infuriated & disheartened. Despite putting in much effort and time she is still without a definitive resolution, she doubts if she should give the brand another chance. She tweets about the horrible experience before the agent finishes his shift her entire followers have read about it: some have liked and retweeted the incident too, causing the brand a lost sale and tarnished online reputation.

Net-net nothing has been achieved so far, neither by the customer nor by the organization. Both have had to face negative experiences and are displeased with the way things have turned out.

Let’s look at another example.

Scenario #2

Customer: Iqbal Ahmed.

Need: Booking a holiday.

Chain of events: Identical till step number 7.

8) Is greeted by transaction failure alert.

9) Right after the failure message, the pop up saying “ Allow us to help you” appears.

10) Iqbal clicks on the pop-up and reads,

1. Would you like us to call you back?
2. You can chat with us too.

11) Customer clicks on the chat option.

12) Agent “Ram” greets the customer and says, apologies for the error, allow me to check it and get back to you.

13) Iqbal feeling exasperated scrolls up and hits on the “Would you like us to call you back?” button.

14) Chat window gets updated, Ram will call you on your registered number “9835098350” in 2 minutes.

15) Before the customer could pour himself a cup of coffee, his phone rings.

16) The caller, the same agent he had initiated his chat with, greets him with a solution.

1. The agent from his integrated CRM was able to see the stage in which the customer had invoked the chat.
2. He had studied customer history and was aware of the complete profile.
3. There wasn’t a need for the customer to repeat the issue.
4. The customer had the option to choose between chat and voice support.
5. Both channels were instant.

17) He offered the customer an alternative and guided him through the steps.

18) Flight tickets were done.

19) The agent from the customer history could find out that he was looking for his wedding anniversary and then suggested, below options and offered additional & special anniversary discount to him.

1. Airport pick up
2. Options for beach facing hotel room.
3. Candlelight dinner in perfect settings.
4. Private musical show.
5. Florist Options.
6. Tour of the city
7. Photographer on call.
8. Suggested a variety of cakes to choose from.
9. He also presented to the customer with the option to visit the famous state museum in the city on the day of his return.

20) The customer was delighted and took a few options suggested.

1. The agent had access to his past bookings and the profile of the customer.
2. His integrated CRM suggested smart related bundles.
3. Given the size of the booking, he could provide the customer with a pre-authorized, on the spot discount.
4. Planned the entire holiday and not just flight tickets.

21- The agent also took permission from the customer and blocked his calendar and provisioned for auto call reminders for key activities.

22- The call ended with a happy customer and a happier business.

Which is going to be the most likely seen in your organization?

Scenario 1 or 2?

If it is 1, you most certainly need to urgently deploy an Omnichannel support layer integrated smartly with the CRM/order management system. It will not only prepare you to provide customers with instant resolution but will also make you present at whichever mode that the customer would like you to assist him on? Intelligent integration with the order management/CRM tool as depicted in example 2 will also enable the service agent to help the customer make logical choices related to their need, resulting in bounty upsell/upgrade opportunity for the business and desirable convenience for the customer: resulting in a stronger relationship between the two.

When presented options of upgrade/upsell are contextual in nature those options appear meaningful to the customers and they are more likely to buy from you again. In the entire process, we saw how a potential deal-breaker “transaction failed” turned into a delightful customer experience in scenario 2; and it achieved a great experience without making the customer toil, like in the first undesirable case that we looked at. Customers love being spoilt with pleasant options but at the same time, they hate having to work for it. It is therefore important that when you design your systems, you keep the customer effort index in mind.

If you do all the work for your consumer, your consumer will love you more. Most organizations have all the tech, people, and other infrastructure that is needed to create scenario 2 like a rich experience. What they lack is omnichannel and supported intelligent integrations. They do not use customer profile/ purchase history data intelligently to create circumstantial product bouquet, which makes them incapable of churning out products that can be upsold at that right instance quickly and they most certainly do not have a single screen for their support agent, which makes responses appear fragmented, ill-informed and mostly random to the customer, causing poor memory of the brand.

Integrate your CRM/order management system with a capable Omni Channel solution, keep all options open for your customers to choose from, restricting your customers either to only voice or only data ( ChatBOT, email, form-based interaction, etc) is not a wise choice to make. Use data analytics to create a meaningful product/ service bundles and most importantly have a single screen set up, so that the support agent without sweating is able to give the most accurate and the most relevant information to the customer, thereby reducing customer effort.

Omnichannel is a good choice to make, invest in your systems to elevate the quality of customer interactions.

Happy serving!

Glitter ≠ Gold!

All that glitters is not gold, this golden phrase applies to customer centricity just as much as it does to other things. If you were to look at one common publically pronounced feature between organization of all scales and statures: old and new age and also between successful, just hanging around and stark failures; you’ll find that all of them have sung praises for their customers, some louder and in denser perfunctory pitch than the others. Unfortunately, saying and doing are not the same thing, as of yet. We have enough data in the common knowledge to prove that the organizations that care about their customers in the true sense of the word and in spirit, not only do well but also go on to become a groundbreaking success. All brands of repute and recognization have happy customers in common. I would not name organizations at this stage but would rather ask you to think of a few brands that you have interacted with lately to meet your need, list them and then alongside, rate your experience with them on a scale of 1 to 5, 1 being lowest and 5 being the highest. Take a moment now to do some research on these organizations to see if those who served you well were also sound business performance/revenue wise? People to people variation adjusted, you’d witness that the brand that delivered a better experience are also those that are doing excellent or at least better than the ones that annoyed you unwarranted, at least 85% of the times. Well, if your experiment tells you otherwise, I suggest you expand your sample wrt to time & interactions and then repeat, you’ll notice a confirmatory trend emerge.

If even then you see that those who cared little are doing better; take it with a pinch of salt for every dog has his day; good thing is that dog will not have all the days to itself, surely, it will move out of the 15% short term exception that we spoke about earlier into the oblivion, never to return. Like there's now no debate on the fact that open defecation is unhealthy, in the business world there is consensus on considering ‘customer experience’ as an item to strategic importance.

Many progressive groups are creating positions like chief experience officer/ principal support office etc to drive the mandate of customer experience across the group. They are moving away from having people lead a certain line of business in solitude and are now marching towards onboarding people with appropriate intellect and sufficient seniority to lead the entire machinery. In some cases, business operation leaders have been made accountable to the office and chair of experience officer to make sure that the business, in particular, the sales/delivery functions do not get carried away and foolishly trade short term growth for long term experience damage. I find it to be a good way of defining and demonstrating intent.

We perhaps cannot emphasize enough on the fact that the world around us is rapidly changing, in most cases at a pace stronger than the speed of adaptability of most organizations. The hunger to receive greater value from the limited investment is growing faster than ever in the minds of the customers, it won’t be an understatement to say that it is almost insatiable. To make matters even more complex, with it, what is also gaining ground is the unforgiving attitude of the customers. Think of it, in a market as crowded as ours and in times as lucid, in which 73% of moving population has 1.5 computing devices each (smartphones) with them, 96% of which is connected to the internet 67% of the day. No idea in today’s world is unique, before you know it a bunch of passionate people with a few computers on table in a garage and big dreams in their eyes will create a cooler organization to deliver what you considered your proprietary service and if they also happen to be folks who understand service and experience ; God save you! So, how do we approach this? In most simple terms, you need to have people who understand service, who are progressive and if not visionary at least thinkers who know to apply their minds to imagine what might be of value to customers in days to come and then set up the backend operations in motion to deliver solutions if not ahead of time at least not behind it.

Customers no longer see sore encounters as problems in isolation. Gone are the days when a rude salesman at the retail outlet was seen as a bad apple, today, one such bad experience is all that a customer needs to not only not buy but also quickly taps on the blue screens to let their entire new age friends and followers know about it. Connected world amplifies error in ways that expose the brand’s vulnerability in ways most egregious. So you got to cover the entire spectrum of things to deliver one excellent experience. Interaction between a customer and a brand, as we know it, happens at various levels starting with the customer gaining awareness of the product and or service, goes on to the period when they conduct discovery around what they have already gathered, specs are compared, prices are gauged at this stage customer also often seeks feedback from existing users. Technology provides for review to be read. From all of these customers cultivate interest, and then the forecasted purchase happens. Things do not stop there, they become vigilant for post-sale service and if you do things right not only will you get repeat purchase but also cause the customer to give you advocacy benefits; all of it put together is customer experience in its totality.

I quoted, the below findings from a reputed research firm in the customer fest panel discussion that I attended last month and it is so apt that I do not get tired of quoting i again and again. On my website, I have embedded the video of the 7 minutes talk, that I gave, should it interest you, you can watch it as well.

The research finding:

When Bain & Company asked organizations to rate their quality of customer experience, 80% believe they are delivering a superior experience. This is compared to only 8% of customers who believe they are receiving a great customer experience.

Cleary, companies, and customers are not always on the same page, especially, the leadership team, those who spend days and weeks without really getting in touch with a real customer, personally. If you happen to be one such person, you do not necessarily have to step out to meet customers, while if you do that it will be awesome. What you can and must alternatively do is listen to recordings of support calls or read emails. Every now and then, make time to respond to customers on your own, unassisted. And you will know exactly how fragmented your systems are, which all parts need repair and what (people, process, technology) must be replaced right away. Employee satisfaction is also a good indicator and so is attrition (the bad attrition). Unhappy people do not create great customer experience and if you see imminent brain drain, great people leaving your organization; you should know all is not well. Well, now that you have a good sense of how your customers see you, you must take credible, verifiable, sustained & resolute action to change things for better as swiftly as you possibly can.

Every company is different, every customer is unique; yet, there are a few principles that are ubiquitous and in some sense form the basis of creating a customer-centric organization. Five fundamentals of creating a formidable foundation of fantastic experience that comes to my mind are.

1. Clear customer experience vision: It is vital to include customer experience in the statement of direction, with financial goals you should also have unambiguously documented service performance objectives. You can take inspiration from benchmark studies of your industry but you have to have it. You must also invest effort, time and money in making sure that everyone in your corporation understands what those visions, goals, and principles are with clarity and confidence so much so that they should be able to articulate it without difficulty in their own words. COPC standard of service is also in conformance of this, tip.

2. Know your customers: It is inevitable, you have to know who your customers are, where do they come from, what their needs, wants and preferences are. In a market as diverse as modern day India, you are most likely to find every kind of imaginable customer in your mix. Broadly categorize them, give them personas and personalities; age-old, marketing and profiling technique. Create suitable approaches for each of these personas and then train your staff on it: operationalize the model. Make sure your profiling is data based, flex your analytical muscle to its full glory here.

3. Create customer engagement roadmap: Research by the Journal of Consumer Research has found that more than 50% of the experience is based on emotion as emotions shape the attitudes that drive decisions, the same research also says that business that optimizes for an emotional connection outperforms competitors by 80% in sales growth. So go out there and express yourself, remember every interaction with the customer is an opportunity to win his loyalty. Build a comprehensive moment of truth map of your customer journey and make sure you leave nothing to chance. Prepare well, it is the least that you must do.

4. Feedback is gold: Nothing will give you better insight than the voice of your customers, tap into that rich source. Get as close to real-time as possible, deploy the tools of measuring customer satisfaction. When it comes to feedback, equally critical & perhaps more estimable is the feedback that your employees can give you. Remember, your employees serve your customers - they know it. Create an environment conducive to the seamless and fearless exchange of information. I have written an entire article on this item. Linking it here for those of you who wish to hear a little more from me ;)

Article: Customer Feedback, should you care?

Link:  http://www.lavkush.co.in/2017/12/customer-feedback-should-you-care/

5. Execute with energy, enthusiasm, and urgency: Broken parts can broadly be categorized into two segments 1) education failure 2) malfunction; both of these come into existence because, there are gaps in either process, the skill of employees, systems, and sometimes even all. Some are contributed by faulty technology too but for the sake of simplicity, we can say that the process encompasses systems too. Have strong process reengineering in place, complement it with an intelligent framework to measure the skill level of your staff against desired standards so that time-bound plans for upskilling of resources can be created. At times you might have to hire from outside to speed the process, should the situation demand it, do not hesitate.

These 5 steps are not the whole deal but do serve as a great beginning. Let’s aim to create excellent customer experiences at every turn.

BTW, I’ve shifted my articles to my own website from the Google blogger platform that I used to benefit from earlier, do look around and let me know if you like what you see. Bye-bye.

Outsourcing 2.0, the future!

It is impossible to attempt predicting the future without taking history into account; the posterior view of linear time. The history of outsourcing is intensely integrated into the history of the growth of the modern business enterprise, many believe that it rose in the second half of the 19th Century. Historians and economists in the past fifty years have helped us to understand this sudden and prominent phenomenon of growth, one such legend is Mr. Alfred D. Chandler, do read his work. Much has been said regarding outsourcing in the past couple of years. This business practice has suddenly grabbed center stage attention and is now the focus of politicians, the press, companies, and workers alike. Organizations in the outsourcing space are also constantly applying thought to understand how should they reinvent themselves to remain relevant, as they face their toughest challenge in the present era. A business that found its existing space between the value difference of a rupee and a dollar (speaking strictly in the Indian context) initially and in not too much time became a darling even on a transaction that was between the same currency, faces an existential challenge now. The rationale for the rupee to rupee transaction came from the differentiation of core and non-core tasks for an organization. Offshoring, mainly from stronger currencies to the weaker ones flourished for the first decade, almost fanatically. India gained immensely from this fad that was catching up. IT and ITES provided employment to over 3 hundred thousand people, major businesses,  houses came into being: Wipro, Infosys, Concentrix, HCL, Tech Mahindra, and many others. Companies in the western world saw value in saving money and at the same time dealing with a race that was hardworking, ambitious, hungry for growth, and also particularly skilled for doing the job just right.

The growth and meaning of outsourcing are increasingly getting flatlined; cost pressures are driving the value down, from the perspective of the service providers. The political scene around the world is not helping either, mass protests in favor of keeping the jobs onshore have become common. Major political events in the recent past have revolved around it, the rise of President Trump, the ill effects of Brexit; the mounting of obscurantists and protectionists ideologies around the world have hurt the prospects of the thriving outsourcing industry in our country. Both IT and ITES have suffered immensely, we do not see too many new players making a move. But thankfully, all is not lost. India is growing, one could argue that it could have grown faster had a few things not happened, but then those are hypothetical arguments; we remain among the fastest-growing economies in the world. A new breed of entrepreneurs have come into the fray and are solving real issues interestingly applying technologies that are now available at a much cheaper cost, than it would have been let's say a decade ago. The eco-system is ready. Would Ola or Flipkart have become such spectacular successes in 1980ties in India? The answer to that question is a clear no. Now is the time for it and it is a great thing to happen to us as a country, society, and also the economy.

If the political climate was unfavorable and stunting the growth of outsourcing agencies vigorously, the advent of technology: penetration of internet, the rise of automation, AI and ML are together making it almost impossible for small players to exist. Jobs that required humans back then are being done in a few taps a lot more satisfyingly and swiftly. ITES providers are dying a slow death, many are bleeding profusely with no real sight of a breakeven, let alone profit and prosperity. Many renowned businesses have done away with their domestic business or are in the process of walking out, Sutherland &  Mphasis are classic examples. More than 40% of small and medium domestic BPOs had to shut shop, in the last 6 yrs. The scene is not all that good for those who aren’t comfortable with being on their toes all the time, either. There are organizations like Aegis, Karvy DigiKonnect, connectQ, 1point1, Megus, etc who are trying to walk in the opposite direction of the wind and have created for themselves results that are not bad, if not all that encouraging, in all the quarters of the year. But there is hope. And that is exactly what we are trying to discuss here.

A workforce that began with handling transactions on prescribed SOPs have in these years become rich in experience and now have valuable insight into how various businesses are conducted, not only have they mastered their game of efficiency but have also educated and trained themselves on the craft to a degree that they now carry invaluable perspicacity into the world of the consumers and deep understanding of the technology that makes the customer experience come about. Cross-pollination of talent has graduated the industry into a formidable group, one that is capable of rewriting the rules of the game. This development is part evolutionary and part forced and therefore, not easy for everyone to get to.



The time has come for the outsourcing industry to shed its dead weight of unskilled manpower, onboard forward thinkers, and retain only high performers; the average and the below-average must go. This industry has to prepare itself to walk out of the shadow of the transaction and shine in the light of experience. It is apt for the service providers to fight for increasing their share of influence, the only way for them to exist is if they muster the courage to secure a seat at the thought leadership table. A transition from a low value, labor-based output to a high-value intellect based outcome will have to be made. Service providers will have to become providers of knowledge and acumen and not just efficiency.



Doing the job, quicker, better, and at low cost is no longer lucrative, there is a need to invent ways to do them differently, trying different business solutions. The construct of the ‘different’ is in making the delivery consultative, one in which the providers do not only bring manpower but also industry acumen, knowledge of framing service philosophies, the capability of defining experience, designing its machinery, and then delivering results which are second to none. Technology is here to stay, providers will have to befriend the trend, work towards creating the capabilities of automation in-house, start offering a data first, and voice second service offering. The conventional mode of isolated support on voice, data, and chat channels will have to be united into an omnichannel environment, flexible enough to extend the customers the choice to choose: voice or text, self-help or assisted guidance, with solid CRM integration, one that is capable of building context and providing for predictive customer behavior. Service providers will have to become solution architects. The change will have to be welcomed into the organization and the way of its inner working. If I may borrow from Robin Sharma;



All change is tough at the beginning, messy in the middle, and gorgeous at the end.



Here are a few things that service providers should do to transform.



De-age your leadership team - All of those 25 to 30 yrs + experience folks are good, they bring a lot of value but if they are made in charge of driving transformation, it wouldn't come about just as swiftly or effectively. You need to bring in a fresh perspective, bright and young people with the required skillset to populate your leadership team. Studies have shown that after a certain age and getting certain success in life the fire in the belly goes off for 98% of the people and that alone is a reason for you to look at your leadership team to see if you have such satisfied people around? If so, it's time for you to get people who relate to the change and have a better handle on contemporary settings and above all are willing to walk that extra mile and have the desire and the determination to make their mark.

Alter your service offering - Your service offering has to be a happy marriage between technology, business acumen, skilled manpower, and growth infrastructure. You’ll need to modify your solutions for them to make sense to the market and the customers that you wish to service. You need to be able to partner with the organization with which you are doing business with offerings, creating service strategy, forming the budget, laying the logical and physical service infrastructure, sourcing, training, execution - all of it. You need to take a leap from business process outsourcing into the realm of experience outsourcing.

Responsible billing model: Try to slowly move away from transaction billing to outcome-based invoicing. It is not going to be easy. Today you bill for transactions (calls/email/chat) you handle tomorrow you’ll charge on outcomes, let’s say a threshold of customer satisfaction, first, call resolution, churn %, repeat purchase, etc,  keeping the service cost below a certain limit for the exchange of x% of profit. I’m just saying. Commercial viability will have to be worked out but if service providers have to grow in the value chain they will need to value outcomes more than a transaction. And in the process will come into effect a high-performance culture because then the substandard outcome will mean substandard billing. Focus on performance will be much higher. And because it is a high-value job .. service providers will get to command much better prices.

Driving innovation as a core product: Organizations will have to increasingly invest in a thinking workforce, currently, the focus is only on doing (executing) which is why you have a mob of the unintelligent and the uninspiring, who are satisfied doing what they have always done, without thinking of finding different and better ways of solving the issue. Service providers will need to get creative, run of the mill thought processes will have to be now killed, deliberately. For the culture of ideation to thrive within the organization, leaders will have to reward thinkers, demonstrate a willingness to accept the nonnormal and above all, they will need to give the message that they value thinking as much as they value doing, if not more. Take up a few high-value high impact ambitious projects and run them so that the workforce has something to relate to.

Decentralize work (WFH): Cluttering the real state in today’s world is not only ineffective but also inefficient - the outsourcing industry will have to learn to ‘work from home’. A model that is a mixture of on-premise + Work from home has the capability of bringing the billing cost down with leaving larger room for service providers to expand profits, alongside creating a more independent, flexible, and happier workforce. I’m not even counting the environmental benefits of reduced vehicular traffic or saving of travel time, here. For far too long leaders have seen the outsourcing industry set up to be like manufacturing, that must change NOW!

Diversify into Tech Products: Voice can and should not be your only stream of revenue. You’ll need to create a 1st party tech platform/solution to survive.

Gartner says that by 2020 85% of the transaction will move to the unassisted category, the machine will take over man, we already see that reality manifesting itself in our day to day interaction with the world. If service providers do not invest in this critical adaptation now, they will soon be extinct.



On that note, I end this .. until we meet again.

 

From service to “Customer Experience” !

Hi People, 

How have you been? Thanks for your time and suggestions on the last article .. I appreciate every minute that you spend on my blog and deeply care for the suggestions and recommendations that you make. Many of you have requested that I keep the customer experience series going. Your wish is my command, in every sense of the expression. This is the fourth one that we are doing today, together as always. I shall link the other three at the end of this blog, to save you time and effort of finding it, in case you happen to be one who is reading this articles as the first one from the series. Well, then let’s get started!

Customer service for the future; is what we shall explore today. BTW, do we still just use customer ‘service’? Service is undeniably critical but, if I may say so, has outlived its utility. Service alone isn’t exciting anymore, so much so that excellent customer service practices of yesterday has become “hygiene” for operation today & are listed in the bucket labeled “bare minimum” in the minds of the customers. The customer is that one person or group that keep us going .. that is where the payment for all that we offer comes from ... therefore imp, isn’t it?

The transformation that we are going thru is rapid, every sphere of life is undergoing massive modification as we speak. We do not do things the way we used to let's say a decade ago. In very little time .. a lot has changed and perhaps forever. How many of us write letters now? Do you even recall walking to a bank branch for withdrawing cash or even making a deposit? The favorite bookstore for most of us is no longer crosswords but Flipkart.com / amazon.com - not to say that we do not like stores but we prefer shopping from our homes more. Fundamentally, things have changed, instead of us reaching the goods/services, the goods /services travel to reach us and on that organization compete .. who reaches faster .. fresher .. fuller etc. Take a look at the humble Pizza, '30 minutes delivery or free' has become more imp than the pizza itself, at least from the narrative that is being built. A whole lot of organizations, some close to a billion dollars have come into being, aggregating stuff .. Ola, Uber, Zomato, Swiggy; you name it - ridding on this wind of change.

The moot point that I’m trying to make here is that; the wind of change is not just blowing but is sweeping everything that is coming in its way and it is all for the good - I can say this today, not sure how will it be seen a decade from now. When we have all depleted natural resources greatly to fuel our outrageous ambitions; but then we must leave that discussion for some other time ( do hit me on my email if you’d like to hear the environmentalist, that I hide inside me, glaring about the changes that I see).  Considerable change in customer expectations is putting a tough challenge to the organization to manage, meet and exceed what is to be delivered to the customer, day in and day out.  

Before we get into specifics let’s just get the definition out of the way.

When you fix a problem that the customer has reported and done it promptly, polity and in a manner that makes the customer feel safe, it can easily be called service. Customer experience, however, is a different ball game it is not only about reactive care/support but also all the proactive measures that you take to ensure that customers do not go thru any of this ever on your platform. In one of my articles, I’ve argued that a set up that minimizes or better yet completely eliminates the need for customer service is the best firm for customer service. Attaining that is not easy, it would mean every nut and bolt of the organization is tightened and enough that before something reaches the customer it is 100% complete, and what follows it is a series of customer education; one that brings the customer up to speed. There the level of customer education is elevated … to the standard of advisory!! You need to make sure that you advise your customers on matters that matter to him, and the quality of advisory is so good that they become dependent on you. More like a dictionary .. when you do not know a word .. that is the only solution that you have .. you consume it on the web or flip physical pages .. .it is dictionary service that gets you to the meaning. That is what is needed for brands to create dictionary grade accuracy and reality and recognition.

What is also abundantly clear is that incremental enhancements to do with reducing cost can no longer be passed to the customers as a gesture of service, let alone, experience. You can no longer shut the telephone line and say that we are doing so because we care for our customers, phone in our view is an intrusive method so we decided to go all and ‘only’ digital. Your customer will read right thru it and know that you are cutting corners to grow your balance sheets fatter at the cost of customer experience and they will not miss a beat in choosing your competition over you should there be any offering what in their mind is better customer support. We need to understand that free flow of information is now a reality, customers can read reviews, learn about how others have experienced your brand in a matter of moments - it is all out there available and free! The way we learn about a product or a service, the way we compare and the purchase decision that we make today is supplied with a decent amount of data & research. Impulsive purchases are no longer the largest contributors of growth and certainly not a reason for a repeat purchase. A continued association is only possible if you service your customer well. There is no other way, really. 

It is as simple as this; if you want the customers to remain loyal to you and get you more users you’ll have to invest in their experience, sweat for them to feel the breeze of convenience. If you do not make "customer experience" your priority you will no longer remain your customer’s either. Make the choice, while you still can!

Championing the cause of customer is rather easy if you are a small org or let’s say a single identity; it is that much more difficult if you have a group of companies or an org that is well spread out in vast geographies. But there is a way out and I’m here to present that to you in what I call a customer experience toolkit :) 

It has five elements; much like our universe that is made up of five elements ( air, water, earth, sky, & fire); accordingly to the wisdom of the Vedas ( Veda for some other time). 

Here is the list in no particular order.

1. Create customer centricity organization/Group.
2. Integrate customer touch points 
3. Customer interface based innovation 
4. Sell “service” for revenue  
5. Build high-performance operations.

Let’s get down to each one of them, individually. 

Create customer centricity organization/ Group: Our values are important because they help us to grow and develop. They help us to create the future we want to experience. Every individual and every organization is involved in making hundreds of decisions every day. The decisions we make are a reflection of our values and beliefs, and they are always directed towards a specific purpose. And purpose singularly should be “customer satisfaction”. You’ve to encourage all your people to think from the customer’s perspective. Everyone has to do it not just customer-facing units. From person working the accounts, the tech guys designing systems, to the IT personal fixing computers to the pantry staff to the security guard, everyone right up till the CEO/MD must make sure that every decision that they make; is made for the customer. I’m not saying make your organization non-profit charity but you have to make it sensitive to what your customers care about .. and that will be a good beginning.

Integrate customer touch points: Synergy gets built when you integrate smartly, you have to integrate your product lines; you can’t be selling one thing from one store and another from some other even if they are related. It is like selling a pen at one store and ink at the other to create a specialization, while it helps your logistics it doesn’t help the customer. The customer would want both the fountain pen and the ink to be available at the same store, placed beside each other. If you are a group that offers multiple products .. you got to integrate similar ones together. This integration will keep your customers from getting confused. After product lines coming together comes Sale and service integration; You can’t deny service at the point of sale, for all practical purposes it is the point of sale that the customer first gets introduced to, you have to make use of that familiarity to make your service outlet coexist with POS. Service where you sell and sell more because of your good service.( that is what Apple does). And then comes the touch point integration; Go omnichannel, make use of customer history and profile information to make your pitch contextual and win the customer over with detail, quality, and speed.

Customer interface based innovation: Organization needs to keep reinventing themselves by shifting their focus to truly reshaping the customer interface as a core driver for new value. Again, technology and service innovation is no longer solely used to enhance productivity and drive down staff costs. You have to be on the latest technology platform and keep your plan for migration into the future techs ready. Deploy state-of-the-art voice recognition systems not only to understand what customers say using natural language but also to detect emotional “vibes” thus making the routing system that delivers the call intuitive and intelligent. In addition to applying channel-specific technology innovations, more companies are leveraging technology to enhance the interplay of channels. Turn the ordinary business of technology troubleshooting into a customer adventure, a game for instance. Classic Web service features include live chats with service agents, moderated communities and forums, employee and user blogs, and product demonstration videos. Two-way interfaces capture customer suggestions and allow service agents to comment or directly follow up. Striking a smart balance between contact automation and human interaction is a key success factor for service organizations.

Sell “service” for revenue: Service is of strategic importance in a market that is crowded with low-cost options, the way for you to gain customer’s attention is by serving them right. A shift in mindset from contact avoidance to active contact management is one of the most fundamental changes in next-generation customer service. Rather than decreasing contact time with the customer to reduce cost, organizations must discover new value by using each contact to generate new consumer insights, build loyalty, and leverage the interaction for cross-selling and up-selling. Make customer- specific recommendations, for example, the system displays products and services already purchased by the customer on the line, automatically proposes new products and services, and simultaneously provides the agent with a script to help pitch those recommendations. This can also be applied to larger groups who have more than one organization. When you make a pitch for one service .. make sure you let your customers also know about some of the other capabilities that your company has to offer. 

Build high-performance operations:  Before we get into explaining why high-performance operations is non-negotiable, let us take a moment to understand how imp it is to keep the workforce meaningfully engaged, highly motivated and goal oriented. An unhappy person can never generate great results.. you have to work towards making sure that you pay right, you pay on time, you give your staff the tools and space needed to perform and above all make them feel needed. Value the person behind the title and it will all start falling into place. You have to, however, make sure that from a design perspective your companies/groups goal is very well distributed towards each function and all employees .. KRA and goal setting is a great tool to apply in this case. Poor service actually drives customers away; in others, inefficient processes are inordinately expensive. Focus primarily on changing or optimizing existing operations—processes, systems, and staff qualifications. Employee motivation is a prerequisite for efficient operations and high-quality service. Set realistic yet ambitious targets and use predictive and predictive analysis to sound early warning alarms and then if it comes to that .. you have to performance manage your people, indiscriminately & dispassionately.

Well, we are done with our toolkit. I do not claim that these are the perfect set or one that will solve all problems but I can with reasonable confidence can say that there is no way it will not work. These come from a mix of my own work experience, reading, and imagination using the former two.

As promised here is the link of the other three articles written for the customer experience series.. 

#1 Customer Experience - It matters!

https://lkstates.blogspot.com/2017/10/customer-experience-it-matters_28.html

#2 Customer Feedback, should you care? 

https://lkstates.blogspot.com/2017/12/customer-feedback-should-you-care-enough.html 

#3 Service & Churn!

https://lkstates.blogspot.com/2018/04/service-churn.html 

See you in the next one .. you have a pleasant Sunday!