Shared-service organizations have matured over the years to increase the value of the services delivered to the business. Whilst, cost arbitrage seems to be an evident edge, accruement of processes provides a unique viewpoint to shared services facilitating transition from a service provider to a value proponent.

The 3rd party BPO industry within the Overseas-to-India (O2I) segmenthas come a long way since its inception in the ‘90s.While there have been significant changes in the market, both from the buyers’ and suppliers’ perspective,lift-and-shift deals continue to represent the lion’s share of outsourcing opportunities. No doubt, there have been several levels of challenges in transitioning back office/ transaction-basedprocesses, offshoring a foreign language based back office transition adds to the set of issues, especially around available opportunities, cost of governance and change management:

1. Opportunities: In a country like India, there are limited opportunities for foreign language-based process transitions as language proficiency is extremely important for assimilation and to influence a number of off-process outcomes such as integration and engagement with the client’s team. Owing to lack of familiarity with foreign languages impacts the knowledge transfer and learning curve adversely. Eventually the struggle to perform efficiently in an unfamiliar language comes through, especially if the employees are not significantly proficient. Dealing with extreme situations, tough conversations and creation of effective back-ups become roadblocks very often. At times these even lead to reverse migrations back to the native country.
2. Cost of Governance: Because of the uniqueness of the process, very often, the service centers are forced to increase their costs of supervision and governance. Such costs also increase owing to expansion of scope to other foreign languages and multiple processes. Such inflated pricing may not allow the cost arbitrage to remain as effective.
3. Change Management: This is a critical aspect of language transition which includes
   • Making the client and employees adaptable towards language dynamics– a lengthy and complex process;
   • Continuous communication and sharing of learnings with staff and employees; and
   • Understand stakeholder landscape and manage internal relations carefully.

During the course of change management, the functional SMEs play a crucial role to collaborate amongst the concerned people.

Why India?

I had the good fortune to work fora fortune 500 company, serving customers globally inStrategy, Finance and Accounting operations. The organization hasitsfootprint across the globe with centres for dedicated services in the field of F&A operations. I had an opportunity to lead the transition ofaset of multi-language processes fromthe client’s (A global logistics and supply chain company) centre in Europe to our remote working unit in India. As a strategic partner to the client, transition of these process was planned with the obvious expectation that there would be no disruption intheir existing services levelsduring or after transition. This was very critical for the client since the processes covered all ofthe F&A processes included Accounts Payable, Accounts Receivable, Inter-company and Record-to-Report – in French, German and Polish.

In order to expand its global presenceand service in the business process industry and at the same time, leverage on its global presence in APAC and EMEA, my company decided to develop India as Finance and Accounting hub for APAC. With collaboration between our Indian and European centers, language specific Finance and Accounting solutions couldbe provided.

The Working of it

The financial documents such as suppliers’ invoice copy, customer remittances, bank statement and other documents were all in the native language, hence it was difficult to understand and take training from client’s retained team in the short time window we had.

We decided to break the problem into two distinct parts – the understanding of the functional process(es) and overcoming the language issue. We applied our proprietary Enabling Transformation Alignment (ETA) migration framework to conduct a current-state assessment, define the Optimal Target Operating model (TOM) and spot process related problems. To tackle the language related issues, we decided to:

• implementcheat sheets to understand native languages on vendor invoices, customer remittances, bank statements and other documents; and

• set up a small, dedicated team in Europe to address language specific real-time query resolution,i.e.a kind of first level customer contact center.

• hire a language expert to support team in understanding critical and typical terminology used on the invoices

For standard terms used in the native languagesin the F&A processes the cheat sheet was used – specially to convert the content of financial documents into English language. Further, the customer contact centre in Europe with the language specialists helped in looping the communication channel with external clients, vendors and internal stakeholders. These steps tremendously helped in addressing the language barrier in knowledge transfers and greatly facilitated communication withthe local country finance team.

Initially it was tough to use the cheat sheet, especially to applyappropriate context to the content, though literal translation was easy. This was further accentuated by the fact that:

• transactions volumewere high, e.g. each bank statementhad ~2000-5000 transactions every month, which was quite time consuming for the person preparing bank reconciliations;
• the cheat sheets did notcover all the terms owing to operation dynamics and unique terms used in transactions by customers;
• inconsistent formats/terms were routinely used by vendors;
• pace of knowledge transfers was slow during the initial period. It was later managed by redesigning subsequent knowledge transfers sessions;
• employees adaptability too was low, owing to a natural resistance to a foreign language; and
• revision to the cheat sheet was frequent and a complicated process.

Using the OCR/ IQ Bot Technology

The processes were complex and fragmented,that too in multiple languages. This was stifling the much-needed process transformation. The client demanded more efficient processes to enhance competitiveness. We worked closely with internal technology team to transform from within. We designed and deployed OCR technology and IQ bots to standardize invoices booking process, achieve efficiencies and accelerate transformation.

Transformation in invoices booking process (Account Payable)started with email injection of invoices. Earlier, these invoices were sent to different points of contacts at the client’s office through email and later printed, scanned and sent to India services center for processing. A centralized email ID was created and shared with vendors and client’s internal teamsto send invoices to, for payments. The invoices sent on those email IDs were directly received and stored on the server/ shared drive, which was accessed by both client’s team and us.

OCR implementation was the first significant stepping stone.This had an impact on two transactions relate processes- Account Payable (primarily external vendor invoices) and Inter-company invoice processing. The endeavor was to integrate the cheat sheets with OCR functionality.Hence the OCR was designed in a way to identify specific words from vendors’ invoices saved on the shared drive, apply a ‘look-up’ with cheat sheets, and populate data from invoices on aspecified excel file. This file would later be used for postings of transactions to the ERP system.

This improvement was primarily designed for vendors’ invoices, where monthly volume was around 8000-10000 invoicesacross EMEA entities of the client. The expectation was to bring inaround 20 % efficiency gains, as those invoices were not required to be checkedmanually anymore by users. The cumbersome process of referring to the cheat sheets was done away with, in the majority of the cases.

To further leverage the OCR technology and elevate the benefits by eliminating manual processing, anIQ Bot was created. This was integrated with the excel file, prepared by OCR tool and ERP system, used for invoices processing.With the help of the IQ Bot, the OCR file was directly uploaded into ERP system i.e. without any manual intervention. Theintent was to achieve further efficiencies of approx.50% and, at the same time, improve data accuracy and compliance.

Since we had in-house IT capabilities, the finance team collaborated with them and designed/developed the invoice posting IQ Bot. The benefits in terms of efficiency gains were passed on to client.The successful implementation of OCR technology andIQ Bot in the AP processwas further implementedinto the Inter-company invoices booking process, where the invoice volume was huge (c10,000 counts) and had combination of both internal billing system and external partner invoices.

Benefits & Challenges

Our step-by-step plan to transform the processes laid the foundation for our client – the logistic giant to run or consider industry-leading practices. It was not only cost benefits in terms of efficiency gains that were passed onto the client, but also other benefits, such as:

In our quest for a perfect implementation of our efficiency tools and bots, there were two principle challenges we faced -

First and foremost challenge was to obtain client’s agreement and readiness to manage and adopt the change as it had to impact their way of working and mindset toward processes. We maintained transparency and shared both direct and indirect value propositions with the client and our approach towards achieving that. This helped in gaining the client’s trust in us becomingtheirpartners in change management.

Availability of right skill sets and capability to make that happen was another critical aspect.Our organization had global presence in IT services domain, hence deploying theright skill sets was relatively simple. During the course of change management, the functional SMEs were able to coordinate perfectly with the Technology team and with right communication and collaboration, we were able to achieve success within time and budget.

Future readiness

The current trends suggest that the physical and virtual worlds of work will collide and coalesce more than ever before, accelerated by technology. This situation may lead to short-term challenges but will prove to be of significant advantage in the long-term for firms willing to transform and change.

Today the entire business worldis in a VUCA environment. To continue to stay future relevant is critical to survive. Today’s technology will not be relevant in just a few years. 20 years from now, as many as 90% of technologies in use have not even been conceptualized.So, it is important for companies to transform digitally and continue to upskill its employees with the latest technologies.

Digital transformation has become an absolute necessity for internal efficiency as well as for delivering value to customers.The Covid pandemic has pushed companies to adopt digitization more quickly than expected.However, this happens at very different levels of maturity within different organizations. Operationalizing digital initiatives is often harder than most companies imagine. Many barriers exist — skills are often lacking, policies and methodologies are often out of date, and work practices often cannot keep up. Companies that have not moved assertively in their digital agenda, have been struggling.

The readiness for successful implementation of futuristic technologies would largely be achieved through:

Companies need to re-strategize themselves to face an unknown future. With the current Covid situation, there is an increased focus towards automation and value optimization. There is a need to not only focus on reskilling of existing talent pool to drive strategy of digital transformation, but also to harness technology and innovation.

 

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