Deep in the System

With growing business needs, enterprise communication has undergone a sea

change, and so has its priorities. In the present day scenario, it has become

very critical for enterprises to stay connected and for this they are ready to

spend a large share of their income to develop a more robust telecom

infrastructure. One vertical that largely depends on a robust communication

system is BPO and that has the largest spend on the telecom infrastructure.

A trend of site expansion and escalated need for better connectivity is

pushing the sector to invest in telecom. According to the V&D-IDC Enterprise

Communications Priorities Survey 2008, the BPO sector is the largest spender on

telecom. On average, BPOs spend 0.17% of their turnover on telecom, while other

verticals like BFSI spend about 0.14%. The focus of the BPO sector is to put in

place an infrastructure that allows enterprises to fulfill the industry

requirements to provide quality service. The survey shows average telecom spend

of a BPO employee to be Rs 8,000 against Rs 6,000 of BFSI enterprises.

BPOs spend a fair share of their earnings on IT and ICT as well. However,

this spend is relatively lower than that of the BFSI companies, which have ICT

and IT spend at 1% and 0.87%, respectively. In terms of average IT and ICT, BPOs

rank third after BFSI and IT companies. BFSI companies spend Rs 45,000 per

employee for ICT, whereas a BPOs spend only Rs 32,000 in this area.

Since BPO firms are moving toward unified communications, their emphasis is

on installing highly functional networks that are low on redundancy. Also, a

trend of multiple access technologies is emerging as a key business enabler.

Domestic leased line is the most widely used access technology used by the BPOs.

Like last year, this year as well, DSL has the highest penetration across all

verticals. It has outperformed cable connectivity to occupy one of the top spots

among the access technologies used by the BPO sector; DSL penetration is 52%.

And PSTN and IDSN are also fast catching up with the BPO sector, at present

about 42% are already using them. Currently, international leased line has a

penetration of 42%.

VSAT has very few takers in the BPO sector. Though it shows a higher

penetration in sectors like manufacturing and BFSI, its adoption is poor in BPO.

The rapid growth of the Internet, and its use, has led to better management

of complex applications at BPOs. Also, telecom and value added services like

audio-video conferencing and VoIP are gaining popularity. Audio-video

conferencing services have a high penetration of 76%, other applications such as

VoIP and Web-hosting recording penetration of 52% and 45%, respectively.

Enterprise mobility is the need of the hour, especially in the BPO sector,

where mobility and presence are the basic determinants for efficient services.

Penetration of mobile email and other related applications today touches 48% and

is expected to grow much higher in the next few years.

Wireless LAN penetration at present is 48% and is gradually increasing. VPN,

which is a preferred technology for remote connectivity is being used by many

BPOs.

Investment Plans



Resources are crucial for any enterprise. Cost reduction is the basic reason

why BPOs are moving toward unified communication. Top technologies where BPOs

want to invest their money are fundamentally those that will strengthen their

existing infrastructure and also provide for future need. Domestic leased line

and DSL, which form the backbone of the BPOs are the top two areas where

enterprises are looking to invest. IPLSC and domestic leased line (local) are

next on the priority list. VoIP is also poised to be the technology for BPOs in

the years to come.

Speed Breakers



Like any other vertical, the BPO sector also faces a series of challenges

that hamper its growth-the biggest challenge being scalability of technology.

BPOs are the biggest spenders in terms of telecom infrastructure and one of the

top three investors in ICT, but the ever-evolving technology makes it difficult

to control their expenditure. It is difficult for enterprises to replace the

entire infrastructure with every development in technology. Lack of after-sales

support has been identified as another difficulty.

While it is impossible for enterprises to be ignorant to the latest trends in

technology, which will not only help them with operational costs, but also

provide higher efficiency, the employees are resistant toward adoption of new

technologies. Once the employees become comfortable working on a particular

technology they do not want to move out of their comfort zones, in the process a

lot of time is wasted when the company chooses to employ a new technology. This

costs the company both time and money.

Human resource is like an asset to an organization, but untrained manpower

can instead turn out to be a burden for the company. Shortage of trained human

resource is one thing that the BPOs in India grapple with. It becomes all the

more difficult for them to tackle technology, which may be cost efficient but

not convenient to use. Thus, they have to choose a technology, which should be

simple for the employees to use.

Lack of awareness of exact communication requirements, difficulty in handling

voice and data traffic are some other issues that BPOs face. Only when they can

adopt measures to find solutions to these problems, can they achieve their

targets and register higher growth.

Heena Jhingan



heenaj@cybermedia.co.in