BPO industry started with offshoring basic data capturing and quickly moved the value chain from Rule based processing to Customer contact to now Full process outsourcing. This move up the value chain has been a result of increasing competition that threatened margins of BPOs; challenging them to move higher up the value chain in order to protect their margins. Every movement was a paradigm shift that resulted in vastly more value for clients. Increasing value for clients meant that outsourcing became a rule for the west and business grew phenomenally in BPO destinations creating a new Industry by itself. Establishment of a large industry in a short time frame meant new challenges for BPOs such as talent crunch, anti-outsourcing sentiments in the west but the equation is still working for both clients and BPO resulting in continuation of outsourcing.
However a new paradigm shift is staring at the BPO industry. This is caused by volatility in the market and accelerating change; forcing clients need to be more agile to keep their value chain optimum over a wide range of operations. This has resulted in clients negotiating transaction pricing with BPO companies putting the onus of creating an agile operations on BPO. This will result in a new AVATAR of BPO. Watch out for my next blog on how this Avatar will bring sea change in what BPOs do and why this will help BPOs survive despite reducing labour arbitrage!