Decoding BPM 3.0 at the intersection of agility, adaptability, and AI

India’s business process management (BPM) has had an impactful journey with its huge influence dating back to the 1990s, when global corporations first looked at India, they saw a cost-saving opportunity. Call centres answered customer queries. Back-office teams processed transactions. The youth and middle-class Indian parents were optimistic about the employment opportunity. It brought a new wave of social mobility and a fascinating new work culture for several. Yet, despite anchoring a new story signalling bright prospects, it somehow got stuck with an identity of being a strategic outsourcing destination for the world.

That story is changing now, where not only has BPM grown out of that identity, but it has also demonstrated resilience, adaptability, and agility, as it progresses with rapid advancements in artificial intelligence (AI). And that is what sits at the heart of BPM 3.0.

A recent Economic Times x Nasscom podcast brought together industry veterans who traced this metamorphosis of an industry from its IT Enabled Services (ITES) day to what they now call BPM 3.0 and unpacked what it means for India.

The metamorphosis of BPM into process transformation paradigm

The industry’s evolution reads like a lesson in adaptability. Srikanth Srinivasan, Vice President & Head - Membership & Outreach at Nasscom, traced this evolutionary arc through a historical perspective. He recalled that what was once called ITES started as an integral part of India’s larger technology industry, running for what he described as “three and a half plus decades or close to four decades now.”

The work began as outsourcing, driven by cost optimisation. Then it shifted to process optimisation, becoming a process management platform. But today, as Srinivasan put it, “it’s actually come to a point where it is now a process transformation platform.”

That phrase captures the essence of what industry leaders now call BPM 3.0. The shift is not merely semantic. Jasjit Singh Kang, Managing Partner & Global Head, Business Process Services, WIPRO , said, “We are moving from doing processes to owning outcomes.” He sees “a huge shift that is happening in the industry as a part of BPM 3.0,” one that redefines value creation itself.

Gaurav Iyer, Senior Vice President, Global Head of AI Solutions and Digital Engineering, EXL, added his perspective on how the industry evolved. He noted that they started with “process transformation, process reimagination,” but as they ran processes for clients, they realised “decisions driven by data was a big gap.” That realisation led the industry to invest heavily in data and analytics. Yet even then, they were “still dependent on technology and code, which we never did.”

The critical insight here is that India’s BPM sector has always been ahead of its perceived capabilities. It understood what needed to happen and now it has the tools to execute it in AI.

Shattering the legacy bottleneck

Under BPM 3.0, the scope of the industry has itself expanded. The industry is witnessing real-time transformation; if earlier, it had more of a strategy and planning outlook, the contemporary movement is seeing the transformation from planning and strategy consultation to executions by leveraging multiple agents and orchestrating different agentic workflows.

Hence, BPM 3.0 is also the story of how AI is reinventing the very essence of how BPM was perceived in the earlier era.

Iyer explained that “with the advent of AI, actually, that barrier has also been broken.” Now, the industry knows how to reimagine processes, make data-driven decisions, and execute on those decisions “because we have AI, which has broken the barrier of developing, deploying software.” He called this convergence “a really nice way” that gives the industry “a huge tailwind.”

The speed of AI integration has been astonishing. Kang noted that if one looks at the shift in the last 12 months, “I am not aware of any service where we don’t have AI integrated completely.” Every single deal being sold in the market now has “AI enmeshed in it,” he says, and it’s “quite fascinating to see the speed at which it has got integrated into our BPO or BPM offerings.”

How AI is making the industry itself more agile

The transformation is not just what BPM companies deliver to clients. It is how they operate internally. Iyer outlined five core operational areas where AI has been embedded: recruitment, training, performance management, process management, and compliance and audit.

When they hire and recruit, AI scans CVs and takes the first round of interviews. When they train people, the speed to competence dropped from four to six months to two to three months using AI trainers and simulations. Performance management now lets supervisors query data to identify top performers and automate coaching nudges. And compliance and audit have moved from sample-based checks to 100 per cent automated audits.

Kang explained that “our industry is uniquely positioned at the cross-section of data and domain.” The industry is “carrying out a large part of transformation programmes on the ground, reworking processes, embedding technology, and making change real at scale.” Enterprises are recognising this, which is why BPM leaders are now being invited into growth and transformation conversations also, not just cost discussions.

Why domain expertise still matters

The workforce transformation required is profound. The industry is pivoting from training people to follow processes to equipping them to own outcomes, and this requires a fundamental mindset shift.

Srinivasan argued that “the whole transformation of the talent also is happening from a process to an outcome-driven model.” The first piece is mindset: “I can’t get away by doing something just because I’m told to do, but how can I do it better? How am I using the power of technology that's given to me?” He emphasises that technology is now democratised, “no more the privy of a few people in the organisation. Today, it’s in the hands of everybody.”

Kang said that “AI is not going to take your job away. People who know how to use AI will take your jobs away.” His advice was clear: “Get used to using AI, get familiar with it. Domain is not going anywhere. Domain is extremely important, and will be relevant in the future. So learn the domain, be clear about what you want to do, and then learn how to use AI effectively.”

Iyer added that domain is critical. Someone who wants to make a career in insurance, banking, retail, or telecom, and really understand how these industries function, has “no better place than the BPM industry.” He calls BPM the most cross-functional team, with domain small and medium enterprises (SMEs), data engineers, AI engineers, business analysts, and project managers. “The quarterback of all this is still the domain SME,” he says. “So if you want to be the quarterback of how our industry or enterprise transforms, join us.”

The India story

India’s role in this story goes far beyond being a low-cost destination. The industry’s ability to deliver global-quality outcomes from Tier II and Tier III cities is reshaping the economic geography of the country.

Srinivasan was optimistic about the democratisation piece. Today, the industry “goes far and wide in the country,” impacting the economy whether you are in a metro city or a small city. “It really matters on how you’re able to deliver this,” he says. The ability to go to a “small town or a Tier II or a Tier III city and still make an impact on the global customer or the global enterprise is something that’s really exciting.”

Iyer saw the conversation shifting dramatically. Where banks once asked BPM companies to set up customer service teams for new products, they now ask for the full suite: technology to onboard customers, audit, regulation, compliance, and collection. “The full suite they give us the mandate to drive,” he said. “The conversation has shifted from doing this piece of work to solving this entire new product launch for me,” he added."

The target addressable market has expanded four to five times, according to Iyer. For India, this means more jobs, more investment in tier II and tier III cities, and a more equitable distribution of economic opportunity.

Challenges ahead: Engineering muscle, mindset shifts, and brand credibility

The opportunity is enormous, but so are the challenges. The industry needs to build stronger engineering capabilities, retrain operations teams to manage outcomes rather than processes, and establish brand credibility to lead end-to-end transformations.

Iyer acknowledged that “in this kind of a design, you do need very strong engineering muscle," and engineering is something the BPM industry has had to invest in. He also noted that “we need to retrain and repivot our operations team from people who manage a process to actually people who manage an outcome… That’s a very different mindset.” They have to change goals and retrain people, which is “ongoing, but it's something that I think only we can do.”

There is also a credibility gap to close. The BPM industry has historically been seen as a process executor, not a transformation leader. Iyer said that there’s “a brand and there is a certain kind of credibility to do this end-to-end transformation, which has always not always been with the BPM industry.”

Why the BPM 3.0 chapter is just beginning

The BPM industry has been “written off” multiple times over the past four decades. Each time, it has proven resilient. This time, the industry is taking a leadership leap.

Srinivasan was hopeful: “The write-off has been done many times and the very fact that it has been resilient to come back every time… I don’t think it needs to be written off anymore. I mean, it's now loud and clear that it will continue.”

From India’s back office to the world’s transformation engine, this is the story of how from being rooted in the outsourcing wave of the 1990s, BPM 3.0 is today rewriting what’s possible on the other side.

But the question remains: Can India close the talent gap fast enough? Can the education system adapt to produce people who understand both insurance and AI? Can the industry convince a generation of young Indians that this is not a dead-end job but a career path to becoming the quarterback of enterprise transformation?

The answer to these questions will determine not just the fate of the BPM industry. It will determine whether India can translate its demographic dividend into a sustainable competitive advantage in the AI era.