AI Innovations in the BPM Sector: Embracing Opportunities
The Business Process Management (BPM) sector stands at a crossroads, with the emergence of artificial intelligence (AI) presenting both challenges and significant opportunities. Keshav Murugesh, Group Chief Executive Officer of WNS, emphasizes the importance of focusing on these opportunities to stay competitive in an evolving landscape.
Investing in AI for Market Growth
During an interview with ET, Murugesh pointed out that organizations that neglect to invest in AI risk being overshadowed by their competitors. He asserted that AI is unlocking new market opportunities, particularly in the digital, technology, and operations domains of enterprises. For businesses, AI can potentially reduce the total cost of ownership (TCO) of operations by as much as 40%.
The Role of CEOs and CFOs in BPM
Murugesh elaborated that many core processes reside not in the hands of Chief Information Officers (CIOs) but rather with Chief Executive Officers (CEOs), Chief Financial Officers (CFOs), and Chief Operating Officers (COOs). While these executives may lack a specific budget for BPM initiatives, they are focused on delivering impactful results. As it stands, only 25% of these processes have been outsourced, indicating substantial room for growth.
Tapping the ‘White Space’
Enterprises are increasingly open to new operational models where BPMs manage internal processes leveraging AI technology. This shift allows companies to focus on external engagements, presenting a 75% “white space” opportunity for BPMs to explore.
Governance and Collaboration
Clients will maintain a pivotal role in governance while WNS handles essential tasks such as AI model licensing, resource allocation, and establishing technology partnerships. This collaborative approach is pivotal in maximizing operational efficiency.
The Future of Work in BPM
Looking ahead, Murugesh predicts a shift where organizations will require fewer personnel but more technology. “Agentic AI” will be capable of undertaking some tasks currently handled by employees. As the market continues to expand, businesses will not only acquire new clients but will also increase their workforce accordingly.
The Necessity of Domain Specialization
Murugesh cautions that generic contact center companies may find themselves at risk of disintermediation as advanced technologies take precedence. To thrive, BPMs must cultivate domain specialization, enabling them to deliver smart, AI-driven solutions that meet customer needs efficiently.
Financial Commitments to AI
The company anticipates that by 2025, AI and generative AI will contribute 5% of its overall revenues while planning to allocate approximately $60 million in capital expenditures (capex) towards technological advancements.
Partnerships in AI and Automation
WNS is actively investing in partnerships with leading AI and automation firms like Google Cloud, Microsoft, Automation Anywhere, and EvoluteIQ, enhancing their technological capabilities. Thirteen out of their 33 GenAI proofs of concept have already been deployed with clients, showcasing their commitment to innovation.
The Rapid Pace of Generative AI
Murugesh insists that the speed of change anticipated from generative AI will far surpass previous technological, economic, and situational transformations. This unprecedented acceleration raises both excitement and concern in the BPM sector.
Investment Perspective
While there may be short-term disappointments regarding returns on investment within the next three years, Murugesh cautions that companies failing to engage with this wave of innovation will likely feel threatened by the advancements achieved by competitors who do invest.
Final Thoughts
The BPM industry stands at a critical juncture where embracing AI is no longer an option but a necessity for survival and growth. Firms that harness innovative AI technologies will be well-positioned to thrive in the dynamic landscape ahead.
Questions and Answers
- What is the main focus for BPM companies according to Keshav Murugesh?
The main focus should be on leveraging AI for market opportunities rather than fearing the technology’s disruption. - How much can AI potentially reduce the total cost of ownership for companies?
AI can potentially lead to a 40% reduction in the total cost of ownership of running operations. - Who are the key decision-makers for BPM investments?
CEOs, CFOs, and COOs are the key decision-makers since they focus on delivering impactful results rather than following a specific budget. - What percentage of processes in organizations typically remain in-house?
Only about 25% of core processes have been outsourced, indicating significant opportunities for BPMs. - What should BPM companies invest in to stay competitive?
BPM companies should focus on investing in AI technologies and developing domain specialization to provide smart, AI-driven solutions.
