Last week I had the pleasure of presenting at the Aspire conference in Krakow Poland. Aspire’s mission is to be the leading network of shared services, outsourcing and IT companies and practitioners within Central and Eastern Europe. I must say, they put on a wonderful show and I truly enjoyed myself.
I wanted to share some thoughts from my presentation, as it spoke to a changing set of dynamics I see in the business services market that will impact service providers and service job markets alike.
Krakow, where it all began
It bears mentioning, I’m no stranger to Krakow. In fact, my history with Krakow goes back over 17 years. So, it was my great pleasure to be back in Krakow last week, among so many friends and colleagues (now the old guys) that I have worked with over that time – back to usher in the next generation of Polish excellence in services.
The Current Business Services Market
There is no doubt that BPO and SSC have created a significant number of jobs and opportunities within Poland. There are over 140,000 jobs in the business services sector, which has seen a 20% CAGR over the last six years. Of those jobs, approximately 34% are in Shared Services Centers and another 26% are in BPO. And the trend is anticipated to only continue that much further and faster.
But, I would assert, there are some big and inevitable changes coming that will impact Poland and all other ‘service delivery locations’ around the world, and the changes have to do with technology. I’m specifically referring to types of Robotics and Artificial Intelligence. There is a very good chance that job growth in CEE countries may be seriously impacted as a result. We are already seeing flat to declining growth of the Indian players (as I forecasted), and bold statements about the shedding of large percentages of their staff at the hands of automation. Gartner predicts a 25% reduction in offshore headcount as a results of tools and automation. My friends in CEE, whilst enjoying the success and prosperity, you need to be taking action now.
Automation Spectrum and The Role of RPA
In my speech, I spent a couple of minutes talking about “sexy robots” and the future of AI technology to spice up the content and also to illustrate just how far we have come with these technologies. What caught the attention of the crowd, however, was when I then showed a software program that appeared like a complex moving process map on one side of the screen and on the other side, a form being magically completed at lighting speed without human touch. This was robotic process automation; software transacting common processes at a fraction of the time and cost that a person would take to perform the same routine tasks. If you can teach it to a human and it does not require vision or perception, you can teach it to RPA software.
The Shift to No Shoring
The back-office agent of the future won’t be Polish, or Indian, or Chinese or human at all. The next agent will be digital. For all those in CEE countries, like it or not, change is coming that needs to be embraced. Most threatened and challenged by these changes are the Indian BPO powerhouses who are frankly planning on shedding more service jobs at the hand of automation than exist today in the entire Central European region. The European economies dependent on jobs created by business services must not be complacent or too comfortable following recent growth and success. They must own the change before it owns them.
The Pendulum Swinging Back
The audience at Aspire was no stranger to work migration and ‘World is Flat’ dynamics. The march from onshore to nearshore to far shore and multishore is well documented and driven by the imperative of reducing cost whilst maintaining quality and customer experience.
Poland and the rest of the CEE locations have been successful at retaining high value added activities and complex language requirements. European and US clients take comfort in the relative proximity and cultural affinity of these locations, albeit not at low cost.
India became hugely successful and with an almost infinite supply of graduates is capable of delivering virtually any process at low cost. Whilst there is friction from retention, inflation and cultural differences, to date the economic argument for India has been overwhelming. But now these low cost locations find themselves a waystation on the road to even cheaper delivery alternatives – digital labor.
So what do you think happens when robotic solutions become cheaper than offshore BPO?
I assert that the pendulum will swing back closer to the client’s location. Economics makes the shift to RPA inevitable. But the fact that robotics projects are new and not fully understood but at the same time are considered high value adding means that they are likely to be brought in-house or to the nearest supply of talent. With this shift, I assert that there is a chance for a Polish renaissance in shared services and outsourcing through driving the automation agenda. The proliferation of skills in process migration and transition are a great foundation for designing and training robotic solutions. On the one hand the Polish are process minded but they are also creative and truly understand customer experience. In fact, at Symphony, we believe this so strongly, we’ve opened our ‘artist’s studio’ in downtown Krakow to create the next master of the BPO trade – the automation expert.
The Call to Action
And now, the call to action. Like all significant change, this one will require new skills. Skills that can only be developed by doing. Akin to riding a bike; the only way to learn to ride a bike is to ride a bike. The only way to convert former leading economies in business services into the hubs of digital labor innovation, is to get on with developing digital labor.
What to do NOW
At Symphony, our mission is clear. Build a world-class team of Business Analyst and Automation Configuration experts, so we can ‘digitize tasks’ and “Orchestrate the World’s work”. For our part, we’ve chosen to do this with a team in Krakow that we are rapidly building to serve client demand.
For those in my audience last week, and for all those in offshore Enterprise delivery operations, we believe the path is clear as well.
- First, focus on what your team is good at (process, customer care, insight)
- Second, re-evaluate the ‘old normal’ – how much of the work your teams do today is repetitive and rules-based? That work will be going soon. It’s inevitable
- Third, upskill process experts – in my past, we did a lot of work on a global process model from Poland. Continue to focus on process knowledge and excellence
- Fourth, train hybrids – it is less important to find transactional staff, and now much more important to find graduates who are interested (and capable) at both Business Analyst and IT Analyst type functions
- Fifth, rebrand yourselves as hubs of ‘future of work’ excellence – with the skills and mentality to not only automate routine tasks, but to drive excellence through data science that is now possible thanks to the ‘big’ amounts of data that is unleashed thanks to digital labor.
I want to again thank the Aspire organization for a great event last week. I enjoyed being a part of it, and was thrilled to be back in Poland, ushering in the next wave in the ‘Future of Work’. We at Symphony look forward to doing many impactful and game changing things from our new home in downtown Krakow.