Automation as the Next Big Disruptor?

A Conversation with Cognizant on Cloud Computing Implications on BPO

I recently had the opportunity to chat with Cognizant’s Ramesh Gudalur, Head, Global BPO, and Paul Roehrig, Director of Strategy for Cloud Business Solutions, regarding the implications of Cloud Computing for BPO.

Bill Huber: Frame the big picture for our readers… How does Cognizant see the cloud impacting the way in which BPO services are delivered?

Paul Roehrig: Broadly speaking, multiple converging contextual forces such as the reset economy, intense businesses pressures, the increase of millennial workers, and the maturation of cloud-enabled technologies and collaboration have created a set of force vectors causing end users to search for new delivery models.

Most enterprise decision makers will not suddenly move all technology and process services to a cloud-based delivery model.

Our belief is that cloud based solutions are beginning to offer disruptive advantages when woven together with more traditional delivery models. Looking at services as “cloud” or “not cloud” might not be the best direction to take things. Very few enterprise decision-makers are ready to suddenly throw everything into a cloud delivery model. Smart concerns about security, the ROI of cloud services, legacy applications, etc., will continue to keep decision-makers cautious about widespread sudden leaps to cloud services. But in spite of concerns, cloud-enabled next-generation solutions can offer disruptive levels of productivity improvement and business enablement. We believe that our role as a service provider is to help customers appropriately deploy cloud-based solutions and to navigate around major issues and questions about security, ROI models and the true value of cloud-enabled solutions. Cognizant sees its role as an innovator/integrator/guide to help customers find the optimal balance of cloud enablement with traditional delivery methods.

Cloud enablement cuts across all lines of service from a horizontal and vertical business perspective. Increasingly, Cognizant sees itself integrating offerings such as Software as a Service (SaaS), Infrastructure as a Service (IAAS) and consulting and analytic services along with BPO to deliver an end-to-end solution for key processes. The real “over-the-horizon” take on this is that next-generation deals are just beginning to emerge at the enterprise level. These deals demonstrate a new class of solution weaving together infrastructure, applications, and business process services, and delivers business outputs back to customers via more of a consumption-based billing model. These cloud-enabled vertically aligned solutions require deep understanding of the business and leverage global service delivery and a robust alliances ecosystem to deliver disruptive levels of value to customers.

BH: What example can you use to illustrate how this happening?

PR: We have some examples of these solutions in clinical data management and analytics as a service in our Life Sciences business, and we’re actively pursuing more of these next-generation deals. Several other service providers also have examples of these solutions, and industry analysts and advisory firms are also indicating that these business process solutions are gaining traction. Based on a foundation of cloud services and traditional capabilities from providers, customers have a new opportunity to create differentiation based on innovation leveraged into more progressive service offerings. It’s early days, but these are real solutions delivering real value today—not just slideware.

BH: How is Cognizant incorporating this into its broader strategies?

Ramesh Gudalur: We don’t want this to be a flavor of the day and are using the cloud as a key infrastructure to drive thinking and improve capabilities to our customers in capital markets, life sciences, health care, finance and accounting, clinical data and other areas. The cloud is a component in our ability to create a very differential offering with a view toward client impact.

For example, envision a SAAS platform on which end users can do insurance processing or end user rights management. These solutions, as good as they are, are only an application and not an end-to-end solution. There are many pieces missing from a pure SaaS play that a service provider can and should add to the solution. Depending upon the solution, the client could still have complete access to that platform while achieving a much higher level of operational performance.

In vertical processes there is a need to change processes to drive the next level of value. For example, in health care claims, new processes have been implemented to put multiple types of claims together and analyze them concurrently rather than in a sequential manner, driving a whole new level of business intelligence. As industry wrappers are created that can change processes, you actually achieve changes in the process available on the cloud that will affect multiple companies. The result is the avoidance of significant reinvestment by clients. Buyers need to unbundle processes in a different way to drive increased value. For example, they now have the opportunity to think about “Claims in a Box” type solutions and to focus on the insights from analytics of the data rather than being a claims processor. This will help them to move from a claim-centered view of processing to an issue-based view of processing, driving higher fraud impact identification and mitigation, for example.

BH: What should clients do differently in going to market?

PR: There is an opportunity for advisors like TPI and others to help drive a new view of cloud-enabled business process services within their clients. Advisors can help their clients to understand the change to solution sets and offer clients new ways to better take advantage of these emerging technology and commercial models. IT decision-makers are starting to rightfully conclude that it is time to start thinking differently about how to utilize technology. Those advisors who keep everything entirely templatized may put their customers at greater risk because value could remain locked in the nostalgic inefficient process and technology. Cloud-enabled technology and commercial models can also provide benefits through business analytics and lowering run rates. Business and technology decision-makers should start doing several things now to take advantage of this emerging trend. First, build a vision—not just slides—for next-generation sourcing solutions. It’s a great time to clarify and refine what the true technology and business goals are and then wrap the sourcing strategy around those goals. Keep in mind that help is available. Service providers, advisory firms, etc., are all positioning to help navigate new service models and business implications. Also, get smart about next-generation solutions. Pick less-critical functionality—storage, email, platform-as-a-service (PaaS) and SaaS offerings seem to be the most common pilots—and get smarter about cloud services by trying them out. Then go search for true business solutions.