As it disrupts every single economic activity, AI and Generative AI are disrupting the BPM (business process management) sector. The sector, which has clocked revenues of about $50 billion in 2023-24, faces certain challenges such as technology transformation, economic fluctuations, and customer expectations for more strategic value-added services.

The sector, which already reports far higher attrition rates than the IT services industry, is facing a severe shortage of manpower with additional skills. That about 50 per cent of the BPM organisations cite lack of adequately skilled candidates as a key challenge faced by them reflects the gravity of the problem, according to Nasscom, citing the outcome of a new report.

The Nasscom has said that the churn would result in several new job roles, and would require people handling low-end jobs to acquire newer skills. The new job roles include – AI Ethics Officer, AI Strategy Director, Digital HR Transformation Manager, and HR Automation Specialist. On the other hand, people in job roles like Data Entry Operator, Help Desk Support, and Customer Relationship Manager would have to acquire new skills.

Like in the IT services, India plays a key role in global BPM exports with a share of 42-45 per cent. India’s BPM revenues went up to $49 billion in 2023-24 from $47.4 billion in the previous year, showing a growth of 3 p.c. 

In a new report – BPM Shifting Gears: Shaping Tomorrow’s Skills and Careers, the Nasscom said that the sector is undergoing a huge transformation.

“BPM organisations have transitioned from process management to end-to-end transformation solutions. Technology integration led by Gen AI is increasing across all functions, with finance and accounting and customer service leading the adoption curve,” Sangeeta Gupta, Senior Vice-President, and Chief Strategy Officer of Nasscom, told businessline.

“The sector is transitioning beyond traditional pricing to an outcome-based pricing model. The BPM revenue share from outcome-based pricing models to increase two to three times over the next three years,” she said.

She said there was a growing trend towards vertical specialisation and micro-verticals such as loan processing, claims processing, and revenue cycle management, as well as an increased focus on platform-based services.

As the sector shifts its focus to AI and Generative AI solutions and outcome-based revenue generation, BPM organisations cite talent shortage as a key headwind.

“Almost four out of five BPM organisations believe the gap between the demand for skilled professionals and available talent is widening. Gen AI tools have impacted the entire value chain of a contact centre with transformational changes across its pre-call, during-call, and post-call processes,” the Nasscom report said.

What to do

In order to address the skill shortage issue, the Nasscom felt that the industry should work with educational institutions that are offering courses such as AI, and data analytics. “We need to create in-house learning platforms. We need to focus on analytical skills among fresh hires,” the report said.

Realising the immediate need for transformation of processes, several BPM companies have increased spending on technologies over the next three years.

 “About 45 per cent of organisations are planning to spend over 12 per cent of their BPM revenues on technology in the next 3 years. There is likely to be an eight-fold increase in the number of organisations spending more than 20 per cent of their BPM revenue on technology over the next three years,” the report said.

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