India BPO Services: Enablers Of Operational Excellence

India is in contention for becoming a global leader in the BPO sector. It has the potential to do so. This industry can create 1.1 million jobs by 2008. It can generate US$ 1 7 billion in revenues by 2008. Sounds familiar? And why not! We are a country with great potential.

But it is now time to focus on giving this potential some kinetic energy and making the sector perform.

What does it take to succeed?

There are basically three enablers - people, processes and technology.

Technology can be treated as a given. A company can create the best technology infrastructure in no time. Moreover, technology in the BPO sector's context cannot be a differentiator.

Hence, the challenge boils down to the two key factors of processes and people.

The process challenge

To start with, let us dispel a few myths. Processes are not about documentation and rulebooks. Processes are meant to be means and ways to facilitate performance. Processes don't consume more time; they reduce time to carry out activities. Processes are meant for the doers and for the planners.

The process issues lie in:

a) Effectiveness - having processes that meet customer and business requirements
b) Consistency - running and managing processes and metrics in a reliable and repeatable manner
c) Efficiency - at lower cost.

The foundation of processes needs to be robust. The key stakeholders should know 'what and how' of their responsibilities. BPOs need to have a robust process management system that defines processes, identifies process owners, and assigns roles and responsibilities.

Peter Drucker said, "If you can't measure it you can't manage it". This is all the more true in BPO organizations where the sheer magnitude of transactions is too large to be able to have a non-data based 'feel' of the operations. Metrics need to be defined for measuring the health of the processes. Measurement, analysis and reporting systems need to be in place to track performance on an ongoing basis.

What aggravates the problem is that companies are expected to deliver high levels of performance from the word go - they don't have the luxury of a long learning curve. They have leapfrog to process maturity.

While the top tier companies have put in place reasonably strong process management systems, majority still struggle with it on a day-to-day basis.

There are a large number of BPOs that are not meeting performance targets. They have to use the right process improvement methodologies to move towards the target or have a dissatisfied client.

Thanks to competition, even the select few that are meeting targets can't afford to rest on their laurels. They have to keep raising the bar for them to stay ahead of competition. In short, every organizations needs a structured approach to process improvements on an ongoing basis.

Process improvement is not an idea generation exercise alone but has to be a scientific and rigorous project based approach that moves towards a pre set goal. Many organizations are using methodologies like Six Sigma, Kaizen, Zero Defects, Quality Circles or various adaptations of them to drive process improvements. However, these initiatives are at best piecemeal in organizations and they lack the rigor and discipline.

The solution lies in:

What organizations need to do is have a process management system that maps the work flows - from the customer to supplier and back to the customer and defines who does what and reports what to whom at what frequency.

Several organizations are using models and standards to facilitate the establishment of process management.

The options that customers have are COPC, ESCM and ISO. Going by the number of seats nearly 50% of the centres are using the COPC framework, a good 12% or so are using ISO and ESCM from the Carnegie Mellon University is now seeing some initial implementations.

While these standard provide the base foundation for the process management system - a large number of Indian organizations are using Six Sigma as the engine for driving process improvement.

Some organizations try to develop a process management system of their own which will suite their business best. In our experience, it is better if a best in class process management system is adopted and some best practices brought in for speedy interpretation and implementation.

The use of standard framework does the following:

• It saves resources and organizational bandwidth for more important issue of implementation
• An established framework provides best practices and benchmarks to help the organization set targets and goals for itself
• It helps shorten the learning curve
• The use of and certification on a widely accepted standard gives an impetus to the business development efforts of the organization
• There are experts available who can facilitate implementation

The criteria for the selection of the framework should be based on

• The framework / certification your customer respects the most
• The implementations already done and hence benchmarks and best practices available
• Availability of experts who know the standard and know the industry sector well

The processes need a strong metrics framework to measure the health of processes. Some process management systems do provide the metrics framework while others don't.

The BPO industry generates loads of data. There is a high 'span of control' at the middle management levels. This makes it imperative to have a methodology that can:

• Make the management style data-driven and not gut-based
• Analyse data, infer trends and devise improvements based on the same
• Keep all this aligned with the customer requirements

In our experience we have found that Six Sigma as a methodology very well fits the bill and is being used by a large majority of the BPO players - some are deploying it enterprise-wide while some are using it in a piece meal way.

It is also important that any efforts made for Six Sigma deployment - training or implementation are done with a very strong industry context to help it have the maximum impact.

The people advantage or the people mirage

We definitely have great 'raw material' and it is there in abundance. 1.1 billion people. Over 5 lakh graduates being produced every year. Good knowledge of English language across levels. Proven mettle as knowledge workers.

The raw material however needs to be processed. The talent needs to be honed to make them start delivering quality BPO services.

The people issues lie in:

a) Pre-job training
b) Job-personality fit in hiring
c) Process and on-job training
d) Performance management
e) Floor discipline
f) Attrition

Our education system is not geared to produce good 'raw material' for BPO. The projections of revenues are broken by sectors - accounting and financial services, telecom, HR processing and so on. While our current troop of Agents in the BPO are getting trained in Physics, Chemistry, Political Science and other subjects offered by universities! There aren't many institutions offering courses in vertical or functional specializations from a BPO perspective.

The rapid growth is somehow making the companies hire a lot of people that are either over qualified or temperamentally not well suited for the job. We have myriad cases of M. Tech and MCA doing rather low-end technical support work in call centres. We have M. Sc. Physics graduates and even doctors answering phone calls for credit card payment collections. Similarly we have upper and upper middle class youth who drive fancy cars and spend Rs. 10,000/pocket money are working as Agents drawing Rs. 8,000/- salaries.

The company invests anything from Rs. 50,000 to Rs. 75,000/- to get these people trained and they last 6 months in the organization on the job!

While most large BPO players have good induction training programs (part of which should actually be getting done through the education prior to joining the industry), when it comes to on-the- job training, re-training, training before redeployment, etc others the process is not very robust and often ad hoc.

Similarly there exists a big skill gap at the middle management level. The Team Leaders are personnel with very little experience as Agents and practically no experience of team management, metrics management, @data and business analysis and leadership skills. They in turn manage team of 15-20 people as Team Leaders!

One of the single largest problems that the sector is facing today is attrition. There are a plethora of reasons for the high attrition. But one of the important ones is that the personnel being employed as Agents are from an economic strata and ambition level which is higher than what the job can offer.

While most companies in the sector create salary structures which are based on incentives for better performance. It is important that 'better performance' gets defined better. There are several cases of companies giving incentives to personnel for higher efficiency (say for making or taking higher number of phone calls) but this often happens at the expense of a drop in quality scores and customer satisfaction scores!

In an industry that thrives of 'moments of truth' happening every second, sometimes just the lunch breaks, coffee breaks chat breaks happening at unscheduled times can impact service levels and responsiveness. Most organizations experience fluctuations in the service levels due to poor floor discipline and non-adherence to schedules.

The solution lies in:

• Break down the training requirements (at pre-job institutes) in the way we break business opportunity-viz. accounting and financial services, insurance, etc. and develop the training and education infrastructure that can feed in people with basic qualifications in each of these areas
• This needs to be coupled with training in soft skills like customer orientation, communication and accent, general orientation of BPO working etc. As things stand today we are doing reasonably well on the soft skills area but hardly anything worth mentioning in the process/ industry specializations
• Take the BPO jobs to those who need it and will stay. There is a case for providing the opportunity to youth from smaller cities who have fewer employment opportunities and who would probably look at the job as a long-term option
• Hire for a balance of job-personality fit and likelihood of staying on for a long tenure.
• Have more suited training design and qualification criteria to become Team Leaders - viz. management skills, team management skills, and understanding of metrics and data analysis
• Define what really is good performance at Agent and Team Lead levels and design performance appraisal systems in sync with it
• Confront and resolve the cultural and human issues that hamper schedule adherence. More often than not, the reason for bad schedule adherence lies in the lack of awareness about its importance. By carrot or by stick, the companies need to ensure higher floor discipline.

In summary

QAI's experience in helping BPO companies shows that the following are the key success factors for business excellence.

• Intense customer focus - clients and end-users
• Metrics based management.

Key metrics for BPO are as follows

• Customer Satisfaction through responsiveness, accuracy and pleasant experience
• Staff satisfaction through career development
• Cost control through efficiency (handling time), utilization, and alignment of recruitment and training with performance
• Strong operations involvement, particularly for floor management by Team leads and Supervisors
• Process control to reduce variation, e.g. speed of response distribution
• Continuous Process Improvement to meet targets and raise the bar
• Faster route to process maturity in a relatively immature industry

There will be many growth opportunities and many impediments. The laws will continue to pose a threat to outsourcing. But business will continue to grow, provided we keep managing our people and processes to make them best in class.

- Navyug Mohnot, CEO, QAI India

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