Infosys, a global leader in technology services & consulting, helps clients in more than 50 countries to create & execute digital transformation strategies.
Entry: Best Achievement of Organizational Business Improvement in Transactional Services
1. The strategic objectives and scope of the business improvement deployment
Infosys BPO Ltd., a $ 250 Mn provider of business process services worldwide is a six year old subsidiary of Infosys Technologies Limited. Its 16300+ employees are involved in providing end-to-end business process outsourcing services to clients worldwide in multiple industry segments (verticals) - Banking & Capital Markets, Hitech & Discrete Manufacturing, Insurance, Healthcare & Life Sciences, Communication Service Providers and in Emerging Markets.
More than 80% of ‘processes’ are related to transaction processing. With increasing levels of maturity of the BPO industry, clients are not satisfied with just efficient and cost effective provision of service delivery. Infosys BPO quickly realized that a key differentiating factor would be the ability of the company to be able to help change the way clients run their businesses. This would of course go beyond just small improvements that were being made to business processes that are run for its clients. Value addition has quickly become a differentiator from a delighter a few years ago. A constraining factor was this – the business model of the industry was against providing large benefits to clients. Productivity improvements, for example, could result in loss of revenues as lesser number of associates would be required for processing.
There is another organizational imperative. Along with employee attrition and high wage-inflation that are characteristic of the BPO industry, the weakening of the US Dollar against the Indian Rupee and other currencies threatened to affect the margins of the company. With no control over macro-economic factors, there was tremendous pressure to reduce costs – again, more than 40% of the costs were related to salaries that could never be within the scope of a change program.
A third driver was the relentless focus on Operations Excellence, a crucial ingredient to providing noise-free services and unique experiences to clients and retaining the business that could easily go elsewhere. Simplification and standardization were key to achieving this.
While a formal Six Sigma program had been in force since early 2005, to provide long term competitive advantage and short term cost reduction, Amitabh Chaudhry, the CEO of Infosys BPO set forth, among others, the following objectives in Feb 2007 during the annual Strategic Planning Exercise:
- Develop organizational capabilities to act as Trusted Transformation Partner for our clients
- Provide transformational benefits equaling at least 4% of revenues of the organization (as part of an initiative on Operations Excellence
- Improve margins by at least 1 percentage point by reducing costs
- Develop innovative delivery models to delink revenues from employee head count
The long term strategies and short term objectives were clear – there was to be demonstrable change in the culture of the organization with a strong focus on improvement as indicated by improvement projects implemented for clients and internally – even if it implies loss of revenue in the short term. To drive these intent, transformational benefits has been included into the score card of all Operations Heads and their managers.
2. The Business Improvement Implementation & Timelines