Points of View

What Enterprises Can Learn from Digital Natives Using BPO for Innovation

Jul 6, 2016 Barbra McGann Melissa O'Brien

There’s a new set of ambitious, demanding BPO clients, and they’re changing what the future of BPO looks like for all of us: born in the cloud enterprises, digital natives and unicorns. These companies, like Nest, Slack, Google, Facebook and AirBnB, are turning to service providers with a growth agenda, looking for fast and flexible global resourcing. Their products and services evolve quickly; they are rooted in creating a customer experience, and growing through use of data, digital technology, and relationships.

 

In the same vein, many established enterprises like GE and P&G are looking to reinvent themselves in order to keep pace with disruption; and certainly those that aren’t looking to do so, should be. These established enterprises and the service providers that partner (or want to partner) with them would do well to consider how these born-in-the-cloud companies are approaching BPO.

 

Digital natives demand speed and agility in a way that established enterprises haven’t in the past; they are looking for partners who are also thinking about the customer experience, do collaborative engagement instinctively, and aren’t mired by legacy systems and thinking.

 

It’s about growth. Companies born in the digital world are not just looking at their outsourcing partners as a way to help them cut costs, which is traditionally the point at which an enterprise will send out an RFP for a service provider to help with F&A, HR, or Customer Care. A key driver is the ability to tap into existing resources that can take care of the operations that are not unique to their business; and then also into additional resources that can help support business expansion in new global locations. Cognizant, for example, in the Communications & Technology BPS practice, taps into its network of people to do field work on local data and digital market work for small and medium sized businesses quickly, leveraging its secure infrastructure.

 

Agility and anticipation are paramount. These companies that are on the fast track to growth are used to movement—clients expect agility and flexibility from the “get go” versus a slow, methodical transition. This is driven by consumer demand and how they are expecting to communicate and have personal services that are easy. “Support is the new product and speed is the new cost,” is the way that Mahesh Jadhav, Global Business Head for Communications and Technology BPS at Cognizant, describes it. “We incubate services and if it works, great, if not, then we pull it down and change.” These “exponential services,” will quickly test new ideas and opportunities and help scale what works, or ramp down what doesn’t. It also depends highly on understanding client needs through observation, analytics, and interaction, rather than constantly asking what they need. This use of design thinking is in line with and intuitive to customer-centric born in the cloud companies.

 

Talent and technology factor together in progressing the solution. A lot of business process services are labor oriented initially and then bring in machine learning. The human element won’t go away, but rather will be more relevant around training and coaching—or simply being “observed” by the machine—to improve the algorithm rather than perform the tasks themselves. Digital natives are evolving so fast that their processes change frequently—and the policies and procedures that BPO staff follows also need to stay up to date, using the right technology to disseminate the updates quickly and effectively. It requires the right balance and interaction of mind and machine to make sure the frequent changes happen smoothly. 

 

On the whole, any company looking to thrive in the digital world needs to have more of a “born in the cloud” approach to partnering. What we saw at Cognizant in our briefing is an example of a service provider that has shaped a strategy, identified the talent, and invested in experience that can also help enterprise clients work through a game plan to incubate new ideas, and position themselves to operate more like these born in the cloud disruptors. It’s also an example of how service providers themselves need to be on their own path to defending from digital native disruption, changing their culture and the way they do things. The critical element is the focus on the customer—how can any company create, broker, and deliver an experience—at pace and with agility.