The Nasscom BPO Strategy Summit was held last week in Bangalore. This was the first time ValueNotes was present at the conference, but one could tell that the mood was upbeat if not ecstatic, compared to the previous year. Last year, the industry growth was only 6%, down from the high double digit growth rates seen previously. Nasscom is optimistic about the growth of the industry and expects it to be around 15 to 18% this year. The economic crisis in Europe is still looming large and hence the cautious outlook.

The good news is that this conference heralded the emergence of the ‘BPO 3.0’. In the opening remarks, the Chairman of Nasscom’s BPO Forum, Vikram Talwar and the President, Som Mittal commented on the evolution of the industry. Organizations of the 3.0 era are moving away from being mere back office, transaction based support outfits to being business partners to their clients. Clients want these organizations to share their risk, partner with them through the downturn and thereby reap the rewards with them as well. Business transformation is the new mantra of the industry. But this comes with some challenges. The most critical one is still finding the right talent. While the work being outsourced is now highly complex and needs a deeper understanding of client needs, and accordingly, the workforce needs to be highly skilled and competent as well.

Inclusivity was another buzzword at this conference. The BPO industry reflects the national demographic break up where 50% of the employees are below 25 years of age, reported Harsh Manglik of Accenture. 60% of the BPO industry comes from Tier 2 and 3 towns; 50% of all new entrants are women and 63% companies have programs for physically challenged people. A session revolved around alternatives in BPO. One that stood out was on rural BPOs. Started as a corporate social responsibility initiative by many companies, rural BPO now appears to be a viable option to find the talent in the smaller towns in India and still keeping costs down.

Other sessions reflected the BPO 3.0 strategy quite clearly. ‘Outcome based engagement’ rather than just pricing or using the risk and reward method was another new term heard at the conference. Engagement models along with pricing models are now beginning to be outcome driven, thereby sharing the risk with the client. The added advantage is that this could lend to opportunities for higher pricing, as well.

The impact of social media could not be ignored. Social media is now so all pervasive that it not only makes an impact on the branding but the decision making process of clients but also the clients’ customers. The discussion in one of the sessions revolved around how product lifecycle theory is now passé and customer lifetime value is the new concept to live by.

Lastly, the valedictory address by Chetan Bhagat was entertaining, to say the least. He too talked about how young the country is now and what are the priorities and imperatives of the new India – i.e. its youth.

The BPO industry is considered to be a reflection of the changing face of India and its young population – a dynamic population participating in the global economy. BPO 3.0 heralds the emergence of the industry beyond just being the back office to the world.