3 Trends Redefining Outsourcing: EXL's CEO Explains

Interview with Rohit Kapoor, CEO of EXL What trends are you seeing that affect how shared services and providers are restructuring their business operations? There are three main trends that are impacting service delivery today. In the past, outsourced work used to focus on defined service delivery. Today, there is increased recognition of the enormous value embedded in the client’s operational data, which means that we are able to deliver more value based on insightful references. This shift from service to insight, with analytics embedded into core business operations as a crucial enabler, is impacting outputs. A second trend is represented by the shift from the semi-fixed costs of the past to a more variable cost basis favored by clients today. New, emerging business models reflect this preference. Clients don't want to invest heavily into shared services frameworks and are showing more interest in paying per service received. A third trend involves customers relinquishing the "execution" mindset of shared services or BPO and recognizing the transformative element. This marks a fundamental step-change away from incremental improvement and is having enormous impact. How are you addressing these trends to meet clients’ expectations? We have responded with an evolved business delivery model called Business EXLerator, which integrates into business operations a combination of real-time analytic capabilities, technology, process automation, Lean Six Sigma, industry best practices and benchmarking. It is based on Business Process as a Service technology, thus offering the variable, "per use" cost that clients prefer, alongside more flexibility and control. To support insight-driven transformation, our EXLerator framework leverages the kind of precise skill sets that deliver the step-change shift in value-add our clients need today. How is the new EXLerator platform different to traditional BPO? By embedding real-time analytics, automation and the other tools and tactics I mentioned earlier, we are today delivering far more value and cost efficiency than was possible under the old model. For example, we are doubling or even tripling the value we deliver to clients, and are now able to drive efficiency gains of 20 to 25% in just 12 to 18 months – something that used to take five years to achieve. We can do this because we are taking an end-to-end approach to service delivery, and applying our skill sets where they can deliver the most value. Through simulations we are also able to drive quicker and shorter delivery cycles. For example, for a particular client we were able to reduce unbilled revenue by 70% (for which we received an Innovation Award from Alsbridge). We also helped an insurance carrier gain a 90% improvement in speed of new business acquisitions. How are you ramping up the skill sets required to deliver this differentiated service? The skills represented by our team are what differentiate our service today. We have identified five skill sets as crucial to leveraging valuable insights. These include analytics, Lean Six Sigma, business process automation, technology enablement, and transformation. Within our hiring and training process we are focusing on all five of these capabilities, aligning them to the domain and process of each client. This is seen in our hiring when we add deep subject matter experts from the industries and functions we support, such as in healthcare and analytics where we’ve added a Chief Medical Officer and a Chief Actuary. You can see this investment in our training process through the academies we’ve built to support very detailed domain learning in spaces like Healthcare, Insurance, and Finance and Accounting. Thousands of employees have graduated from these academies, earning industry and domain certifications in the process. This means that we are developing our industry-specific capabilities as well as horizontal process expertise. So whether it's healthcare, insurance, or financial services, we are focusing specifically on linking the vertical functions and horizontal processes. Instead of an either/or, for us it's a "both". How do embedded real-time analytics deliver a differentiated result for clients? If you think about how data analytics was delivered in the past, it was generally based on a centralized group of people working on discrete projects. That implies a delay in reporting and was a step removed from the actual process. Our new delivery model is based on embedding data analytics resources that understand the client’s domain and comprise the skillsets needed to deliver immediate valuable insights. This means clients can make adjustments or shift course on a month-by-month basis, depending on our analytics feedback. It also means we feed the results back into our process real-time for immediate improvement. Just as we have been embedding Lean Six Sigma resources into our service delivery teams in the past, we are now deliberately building data analytics into the delivery stream. [inlinead] How can Shared Services embed real-time analytics in their operations? The big challenge for most shared services is not analyzing the data but accessing it. The key steps are to define business objectives; establish the right governance and talent requirements; understand the underlying data strategy; and identify impediments to accessing data. The important thing is to know which data sets exist and who is responsible for them. At the same time, operations managers and process owners alike need to improve their own skill sets around analytics. That is the gap in the market at the moment. [Note: if you liked this article, please use the buttons on the left side of the screen to share it across your LinkedIn groups – and contribute to this discussion by posting your thoughts in the comment section, below. Thank you for being part of SSON's community - Barbara Hodge]

3 Trends Redefining Outsourcing: EXL's CEO Explains

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