How Cognizant is rewriting the rules of outsourcing

For many years, outsourcing was centred on people and location – the lift and shift model used by the enterprise to obtain labour arbitrage and achieve cheaper cost.

In the world of business process outsourcing (BPO), this was version 1.0. But despite the promise of modernisation embedded into contracts, third-party intent didn’t always translate into improved outcomes.

That, in a nutshell, has been the standard of outsourcing.

“The ask from our clients today has moved away from labour arbitrage to modern operations that are fast, cost-efficient and human-centric,” outlined Jane Livesey, CEO of Asia Pacific and Japan (APJ) at Cognizant.

Modern operations that use technologies such as Generative AI (Gen AI) and automation to achieve BPO outcomes that would have traditionally been performed by people and processes. This approach still searches for benefits such as cost improvement but the focus has shifted more to supporting growth and innovation requirements.

“In other words, making those organisations function better and allowing them to focus on what their core strategy and business is,” Livesey explained.

For example, this could mean freeing up precious central resources in order to invest and acquire new businesses, leveraging a model based on velocity and agility.

“This becomes a competitive advantage and allows for quicker returns on shareholder value – all because the BPO function created a lean and efficient core function in operations,” Livesey said.

As leader of a global system integrator (GSI) with strong reach across APJ, Livesey – who recently expanded her remit to include Japan and joined Cognizant’s Executive Committee – is well-placed to assess the evolving nature of outsourcing in the region.

The pursuit of digitalisation is showing no signs of slowing down – whether in Ahmedabad or Auckland, Seoul or Sydney – but that does not detract from the need to enable the right value proposition for organisations seeking BPO services.

This is BPO 2.0.

“We must continue to deliver a superior customer experience – and BPO 2.0 will make or break this experience for our customers – as we deploy modernised technology stacks and new capabilities like data and analytics,” Livesey said.

Simply put, BPO is transitioning away from managing repetitive tasks into delivering high value experiences such as maximising emerging technologies entering the market to achieve increased levels of return on investment (ROI).

“Clients do not want to repeat the problems of the past and will work with you to ensure operations have been optimised, before undertaking a BPO journey,” Livesey cautioned.

Moving forward with modern operations

Accelerated digital adoption – super-charged by a shift in mindset and lifestyle created by the pandemic – are combining to change the rules of engagement for businesses, irrespective of location.

The domino effect of such change is that operations are now emerging as an area of increased innovation, a strategic growth driver capable of delivering speed, efficiency and human-centric experiences.

“Digital disruptors most clearly represent this change,” Livesey said. “They are all about speed – they want to prove their valuations and capture as much market opportunity as possible before others do. And with a few exceptions, they see themselves as technology companies first, industry innovators second.”

With speed and simplification key, the enterprise is opting to keep pace by focusing on their strengths and engaging with ecosystem partners on different terms.

Organisations now want outcomes regardless of the processes followed, providing business, security and ethics considerations are met. In response, Cognizant is using simple language requests and converting these into code to deliver an automated outcome.

“This is very different to people stepping through processes and manually entering data to achieve an outcome,” Livesey added.

The outcome is what is important.

Building on this, consideration is also taking place for industry-based processes to serve as a utility for multiple businesses within the same Industry. Key benefits include the sharing of costs and faster outcomes across the board.

“People are still very much in the mix with modern operations,” Livesey confirmed. “This ensures the quality of service is maintained.”

Shifting away from executing repetitive tasks to high value work requires the Cognizant workforce to embrace intuitive operations such as AI, data and analytics and automation.

The motivation is to not only learn at a far greater rate but understand how to orchestrate the technologies available to stand up services and solve abstract customer requests without delay. Gen AI will be fundamental to achieving these objectives providing control limits are in place to mitigate any risk.

“Our approach to modern operations has its roots in deep industry-specific business process knowledge,” Livesey shared. “This will continue and be strengthened by industry specific capabilities as we help traditional companies transform to modern operations.”

Amid a challenging macro-economic climate, Cognizant is using this model to differentiate in large-deal opportunities by scaling capabilities for cost takeout and optimisation and focusing more on managed services. This is supported by a commitment to operational discipline.

“We are working to fortify our own day-to-day business execution and optimise cost of delivery by driving higher productivity powered by advances in tooling, platforms and automation technologies,” Livesey detailed.

Gears are shifting, cost and optimisation matters

The uncertain economic climate is no secret with budgets tight and many organisations focused on taking stock of current technology environments in the search for a competitive edge on cost effective terms.

A ‘doing more with less’ mentality is flowing through industries and regions with a preference to optimise existing solution stacks. Decision making timeframes have also been protracted as the enterprise reassess core priorities.

For Cognizant, that means helping businesses understand ways to become more efficient and ensure that any investment generated returns value in not just the short-term but the long-term.

“Digital transformation remains an underlying imperative but the gears are shifting – clients want to know how to continue the journey with an eye to cost and optimising what they already have,” Livesey observed.

“Clients and prospects are rightly taking more time to invest in transformative projects as every dollar spent matters right now.”

As a result, the enterprise is turning to AI, data and automation to support efficiency goals while enhancing the delivery of products and services. Investment will primarily skew towards these solutions during the next 6-12 months, as well as cloud optimisation projects.

“Why? Because at the board level discussions are focused on cost, sustainability and workforce strategy,” Livesey said. “Data and analytics and AI are the technologies best poised to address these pain points.

“It’s our job to show clients how technology can keep them competitive and ride out these turbulent times, so that when things improve, they can capitalise on investments made and gain an advantage.”

Given the groundswell of interest in Gen AI and increased projects requiring cognitive solutions, Cognizant is expected to invest approximately $1 billion in building out capabilities globally during the next three years. The GSI will also train over 25,000 associates in the field of AI and expand key vendor alliances such as Amazon Web Services (AWS), Microsoft, Google Cloud and ServiceNow.

“This is also an opportunity to develop specialised roles with AI making way for new roles within our business,” Livesey added. “Our teams are innovating all the time and at Cognizant we are focused on generating grassroots innovation.”

To put that statement into context, teams within Cognizant have already generated over 32,000 ideas on how to solve problems, address unmet or latent customer needs, challenge the status quo or imagine a better future.

The business will continue to recruit new associates as needed and remains open to acquisitions that complement or expand offerings, the most recent regionally being the buyout of Sydney-based data and analytics specialist, Servian, in early 2021.

“We want to become an employer of choice in our industry,” Livesey said. “We are focused on making Cognizant a place where graduates choose to begin their careers, where experienced hires want to join and where our associates want to grow their careers.”