Reinventing a New World for GBS and BPO Amid Covid-19

June 24, 2020

As with all industries, global business services (GBS) and business process outsourcing (BPO) have seen their fair share of challenges since March 2020, at the height of the COVID-19 pandemic. With the move to work from home and the emptying of business centres globally, there has been a marked consideration of the long-term impact to GBS including the ability to meet service level agreements, productivity, and conducive environments and technologies that facilitate work from home (WFH) requirements for GBS talents1.

At the beginning of the conditional MCO in May 2020, OM (previously Outsourcing Malaysia) and PIKOM hosted the Smart Sourcing Summit online, to discuss the realities of GBS in Malaysia. The conversation included leaders Anthony Raja Devadoss, Managing Director, PERSOLKELLY Consulting, Asia Pacific; Dato’ Munirah Looi, CEO, Brandt International; Hew Wee Choong, VP, Investment Development, MDEC; and Tan Lin Nah, CEO, INTI International University & Colleges and Deputy Chair, GBS Focus Group, OM, who shared the following perspectives of what a new world would look like for GBS / BPO. The panel session was moderated by Caroline Ong, Country General Manager of Leaderonomics.

Unlike global counterparts, GBS / BPO in Malaysia appeared to have been more resilient thanks to strong digital infrastructures and agile business continuity plans, Hew shared. He envisioned that this resilience and proven track record would serve in the long run to facilitate companies’ confidence in establishing or expanding GBS centres in Malaysia, and that with such expansion, opportunities could be created for service staff from struggling travel and tourism sectors who could be reskilled for GBS / BPO.

The long term opportunities for talent within GBS / BPO were also reaffirmed by Anthony. He emphasised that the agile and virtual shifts made by business in the “new normal” would need to be mirrored by talents in adopting new skillsets, especially transferable skill sets that could help them move easily from one role to the next.

Dato’ Munirah advised that the reasons why Malaysia’s GBS / BPO models had worked well during the crisis was the agility of moving teams to digital platforms and the availability of secure remote or online infrastructures. Sharing the challenges of India and the Philippines who were unable to mobilise their teams as quickly, she highlighted that the pandemic had really opened up opportunities to demonstrate Malaysia’s capabilities as a GBS leader.

Building on what GBS / BPO needed in order to be effective in pursuing these opportunities, Dato’ Munirah emphasised five key aspects, namely:

a) Decentralisation of operations and organisation structures which could facilitate long term agility through more manageably sized teams;
b) Implementation of technologically enabled operating models to ensure service continuity – this would be especially important with WFH becoming the new norm;
c) With enhanced technology, the need for better monitoring of data privacy and security;
d) Policies that would support a culture of flexi work teams, which include gig and contingent employees along with flexi work hours;
e) and the need for the industry to move to a robust business continuity plan that addressed all aspects of business operations.

These aspects speak to the long term reality of COVID-19, which in Anthony’s perspective, could last for as long as two to three years and redefines business processes. Taking a broader view, he looked at the evolution of laws, regulations and policies which would govern employees beyond physical workplace locations, including protection offered through existing SOCSO / safety protocols. The “new normal” is a test-bed of how individuals, organisations and ecosystems should prepare themselves for long term self-guarding and response to the potential of further crises.

Addressing how Industrial Revolution 4.0 (IR4.0) factored into the changes experienced and expected by COVID-19, Lin Nah shared a sense of relief that digital transformation had already been a part of INTI’s learning experience.

“With less than 20 hours to move into a fully online mode of teaching and the daunting task of turning 700 final examination subjects into alternative assessments, technology was the key enabler that kept INTI going. The institutions’ six-year expertise in blended learning and secure learning management systems – mirroring the platforms and digital agility within the GBS / BPO industry – enabled both faculty and students to continue learning with minimal disruptions,” she explained.

Bridging how the shift in global workplaces would impact the readiness of future talents, both Lin Nah and Dato’ Munirah spoke to the realities of increasing unemployment – estimated to be more than Bank Negara Malaysia’s April forecast of 4%2. Both leaders agreed that alignment and collaboration between government, industry and education would now be a game changer in ensuring students were better prepared for the “real” 21st century workplace. This alignment they agreed – similar to the need for change in workplace policy – would be critical to balance the protective approach administrators had taken in policy making, versus the speed of change taking place within industry, fuelled by the technologies of IR4.0.

Adding to the conversation about talents versus technology, Hew emphasised that technology should be seen as evolving jobs rather than replacing them. With artificial intelligence, automation and big data adoption, GBS would be in a better position to understand client needs and build a better store of information. This in the long run he anticipates could transform contact centres to analytical centres and even R&D centres that could offer insights on new products and policies, thus upping the value of such centres and creating even more jobs for specialised talent.

However, while COVID-19 may be creating growth opportunities for the industry, one of the long term concerns raised about young talent entering this new world of work was their ability to communicate and collaborate, especially in GBS / BPO settings where service levels span across multiple teams, and where communication of services and solutions is a primary requirement.

Speaking to this concern, Lin Nah shed light on the need to teach communication, collaboration and creative thinking in a way that did not involve direct lessons. Alternative assessments leveraging videos, Wikis and blogs, she explained, and the inclusion of industry as mentors and who set the bar on how work should be delivered, created the subliminal means to allow students to train in these areas without being criticised or preached to.

Also addressing a key query about financial constraints from participants, Lin Nah, who has more than 20 years of financial expertise, spoke to four considerations that all businesses needed to take into account during these trying times, namely:

a) protecting current earnings;
b) mitigating the loss of new business due to changing circumstances;
c) managing existing expenses, especially in view of long term sustainability
d) and the need for alignment and engagement between sectors and administrators.

“These four buckets need to be addressed in tandem and for businesses – whether GBS or any other sector – to survive, it’s not an option to simply cut back expenses and not manage the topline,” Lin Nah explained.

Asked if the financial stress could lead to M&As within GBS, both Dato’ Munirah and Anthony opined that the convergence of technologies, activities and organisations would in the long term lead to smart partnerships to enable competitiveness in the global stage. Adapting the business one phase at a time and planning for those phases, which would also include possible partnerships, would be part of the evolution of the industry in response to COVID-19, and prepare it for the “next normal.”

Managing stakeholders, including employees and shareholders would also be a necessary part of these phases.

Rounding up the conversation, Hew provided a cautiously optimistic view of the industry going forward, emphasising that how businesses and people responded would be a key part to the next stage of development. Reiterating Malaysian GBS’s strength and sustainability during the pandemic, he believed that the balance between cost and capacity in light of WFH being a longer term requirement, would position the country as an attractive option for investors looking at establishing GBS / BPO both regionally and globally.

Cheah Kok Hoong, OM Chairman concluded, “GBS, like all other industries, are now faced with what happens next. From the move to digital workforces, technological adoption, and sustainability from both a cost and process point of view, the best means for us to overcome this crisis lies in our people and in the humanity we are able to demonstrate at this time.

“With the easing of the MCO and the cautious re-opening of businesses, there is hope and even opportunities on the horizon. As we leverage technology to keep up communications, to keep up collaborations and to be the enabler of creative solutions at this time, it’s important to start taking those first steps that will empower us to emerge stronger and better from this crisis.”

1 Shared Services & Outsourcing Network 2020
2 The Edge 2020