| | OCTOBER 20199had put a break in their growth trajectory. While the sector grew at 37 percent CAGR between 2004 and 2007, the growth was just 4.4 percent CAGR between 2012 and 2016. Started as a labor arbitrage model, the core offering from BPO sector was low-end manual op-erations such as call center, back office data processing and compli-ance activities. As few other coun-tries replicated the cost arbitrage model, Indian firms adopted new strategies to differentiate over oth-er those countries. They developed the expertise in lean and six sigma methodologies and automation for continuous process improvement and enhancing the operational effi-ciency. More value-added offerings such as knowledge management, different commercial models were augmented with the existing mod-els to stay competitive.A series of political events in last four years has put the fu-ture of globalization at risk. Rise in popularization in major world economies has forced the world towards deglobalized economy. All the countries, who were earlier rode the globalized wave, are now challenged for growth. Automa-tion has taken away the traditional BPO jobs. Trade restrictions have forced firms to prefer the domes-tic workforce over outsourcing. Bots have taken over the data entry and call center jobs from humans. All these factors have put pressure on BPO sectors to reinvent their business models.The BPO business model was developed primarily on the follow-ing four factors: globalization, la-bour arbitrage, manual tasks and information technologies. While future of globalization is uncer-tain, digitalization has helped in building a connected social eco system. Prior to digitalization, the IT applications were monolithic. Manual efforts were needed to complete a business process that went through multiple applica-tions. Because of digitalization, these monolithic applications were replaced by integrated plat-forms that reduced the manual intervention. Hence, old BPO jobs are needed to be upgraded to new jobs that are relevant to digitalized world. As the old jobs becoming irrelevant, BPO sector needs to focus on high-end strategic pro-cesses created by the digitalized economy. They need to start build-ing a business model which can commoditize the new tasks and still leverage on the existing BPO success factors.As the recent trend suggests, off-shoring is moving from the manual data entry for backoffice to front office activities. The client and product research activities are done by the people at offshore. The entire sales support is provided from offshore. Product companies have started outsourcing end to end quality control and risk anal-ysis processes. The diversification of globalized workforce is helping to bring faster innovation in their products and services. Instead of call center, staffs at BPO are listen-ing to customers' voice on social network and are providing the in-put to product development team. In place of data entry operators, data scientists are helping to train AI-based models and solving algo-rithmic biases. Also, instead of just focusing on single task, the new-ly designed job is responsible for the overall client experience. Few big financial services firms have already started leveraging on this new model and started moving their high value activities to India.India churns out millions of graduates every year. Most of them are engineering and MBA graduates. India has the potential to generate new jobs faster to meet the need of digitalization. BPO sectors already have the proven discipline that help in success of these jobs. So, by developing these talents to participate actively on digitalized economy will help BPO sector to come back on growth trajectory. This will also make India as a hub of service innovators to cater future digital world.
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