A CAPTIVATING FUTURE
The off-shore outsourcing industry in India is a mature and stable one, having proven its worth and value beyond question over the last two and a half decades. This is why it continues to be an attractive element of operating strategy for so many global businesses using their own in-house centres or working with a third party provider.
Every day, more is being done off-shore, a large chunk of it in India. This is especially true in the areas of Engineering and R&D Services, IT Services, Finance, HR, Marketing and Sales Support and Procurement Support with new service areas being constantly added in. Off-shore support today is more than just running a ‘black-box back office’ and is more operating as an arm of the core business.
Technology is a generous friend and a merciless master. The discoveries and innovations that spawn billion dollar industries and commercial ecosystems are wiped out almost overnight by a new set of technological developments. Mr. Edison’s innovations created a thriving recording industry around the world which is unrecognisable today, having been decimated by the internet and the world wide web. Something similar has happened to the broadcasting and print publishing businesses. One can trace this trend back as far as one cares to. The cycle is inevitable.
The future is about probabilities and possibilities, rarely about certainties. Looking ahead is an enticing thing. What happened in the past is rarely an indication of what’s waiting around the corner, since changes rarely take linear paths. However, sometimes we’re staring down a straight road, or down the barrel of a gun, depending on one’s perspective and timing. Either way, there are some things that we can tell are most likely coming at us. One can anticipate probable and possible changes and be prepared for them.
Over the past few years, some technologies have taken quantum leaps and are now ready for very practical application. They are already entering the commercial word and will enter our workplaces and significantly change the way work is done and the way people work. We’re not talking about some esoteric, abstract trends that might become reality in a distant, improbable future. These are changes that are entering our workplaces as we speak.
This article is about these technologies, their potential impact on the off-shore business services industry and how we could respond to the changes they will bring about. We will just touch on each of them.
The disruptive technologies:
Artificial Intelligence, Automation and Robotics or autonomics as it is being referred to of late is where machines are taking over jobs that were till now being done by people. The jobs that are prime candidates are those that are either rules driven or are very dangerous but not necessarily repetitive. At one end machines are now able to transfer data from any one place to another more effectively than people and then move that data along any rules based pathway. Self-managing software, the robotic librarian, the robotic form-filler and even help-desk are all already around. At the other end, we already know how robotic mine-sweepers, bomb disposers and UAV’s are transforming the battlefields of the world.
Cloud Computing is here to stay. Billions are being invested in mainstreaming the technology and already we are seeing more data and transactions in the cloud than out of it. This is particularly true of business computing. We must all be prepared for the Cloud Effect which will greatly reduce the time, effort and resources companies deploy in managing their data and information.
Virtualisation of hardware and applications is another area clearly taking hold across the business world. This will greatly transform the way infrastructure is held and managed within companies.
Telepresence is no longer about fuzzy pictures with lagging voice on a crackly line over the internet. It now enables people to effectively communicate and collaborate seamlessly in large numbers over dedicated infrastructure. Even without holographic projections or animated dummies in the meeting room, telepresence technologies are bringing people together from different locations. This will slowly replace the need for physical scale with virtual scale.
Embedded IT and going vertical is a constant challenge to every CIO. More sophisticated IT components are now leaving the enterprise, snugly housed in the company’s products or moving to the edge of the enterprise and being procured and managed directly by their respective functions. This is having an impact on the very structure and definition of the CIO’s mandate and therefore on how IT Services are procured and managed.
The Impacts:
All these new technologies finding the commercial mainstream will mean a few but very powerful impacts on the global outsourcing industry.
Lower reliance on massive human resources to perform ‘low-end back-office’ and many transaction processing tasks
Declining relevance of physical and locational scale
On-going reduction in off-shore labour arbitrage
Seismic shift in the new skills required to deliver services from remote locations
These impacts will drive how off-shore business services are bought and delivered. They will demand new ways of skilling and structuring delivery organisations. They will shift markets and the ways of serving them.
The off-shore outsourcing industry is headed for significant change in the very near future. India being a dominant player in this space will feel the impacts sooner and for longer. These changes will reward the prepared and punish those who are taken by surprise. Being prepared is anticipating the areas of impact, understanding the changes that need to be made and seeding those changes in your organisations across various dimensions of operating models, people, process, systems and tools. As a buyer of off-shore services or as a company that operates them in any capacity, these are the things you should already be thinking about.