Sustaining India's Competitive Edge

Mumbai

Session I

Going Beyond Attrition: Manpower creation in the secondary cities

Ruvina Singh, senior VP, HR Training and Administration, CFC International

Attrition in itself we can discuss till the cows come home, but one of the
things that we do need to focus on is that people come to this country for cost
advantage, but they stay for quality. However, this cost advantage is fast
reducing, we are reducing the dollar differential by our inflation, our wage
inflation. Now one of the things that we are all focusing on and we make a
mention of, is that attrition is not great. It is all within the industry, we
are moving from one company to the other, nobody is leaving the industry itself.

Mumbai, May 11, 2006: KEYNOTE

Richard Scotdale, CEO, Lloyds TSB Global Services Attrition destroys two things, which are vital to the continuing growth-cost advantage and quality. It takes away quality, service and delivery. You can't do that if you continue changing people. So there you have the price ramping up, it's becoming expensive, and the quality ramping down. And so with attrition, you have a very major challenge that you have to cope with. And I know that you have been talking about that here. The second is data protection. Let's forget the attrition in KPO, let's focus massively on data protection in KPO because that is where the real focus has to be, as KPO will carry major amounts of intellectual property.

Sunil Bellara, associate director, Capgemini

The challenges we face in India are common to all industries, and not
necessarily restricted to ITeS. The second thing is that when you move people
away from their hometowns and you bring them into cities, or the places where
you have chose to be, you need good infrastructure which is developing right
now. So you have connectivity, you have roads, you have flights which are
cheaper than trains. I think we are nearly there as a country, as an economy, we
are nearly there so that piece we are able to overcome now. But the cultural
point how do you move people away from their hometowns, how do you convince them
to come there and come there for a sustainable period of time, not just to look
at an opportunity that is here today and then go back.

Pradeep Phatke, chief business development officer, I-bridge
Solutions

If I look at people leaving, less than 15% of them actually go out of this
industry. Most others simply join other BPO, so as far as the ITeS sector is
concerned, there is no loss of manpower. The real problem is not that attrition
per se from the industry to other industry but within industry, from one company
to another, and that's totally an internal problem for each company to solve.
But if I look at it from the perspective of ITeS as a business sector, then what
is the real problem. The real problem is that the demand is growing at a
particular speed-60-70% y-o-y-and to that extent people are not coming into
this industry, to feed that demand. So my personal feeling is that India has a
huge talent, industry and people to be flexible.

Kishore Velankar, head, HR, Integreon

We need to look at it a little more closely, more seriously. Typically, the
people we recruit are either just graduates or finishing graduation and they
leave us for further studies. That's another reason why there is attrition.
And of course the stress, the whole body cycle goes for a toss, somebody who
gets up in the morning at six o'clock now goes to sleep at six o'clock, and
it takes time for everybody to get used to it. So the biological reason could be
one of the reasons that leads to attrition. The equation between demand and
supply is absolutely messed up.

Panelists (L-R): Sunil Bellara, associate director, Capgemini; Pradeep Phatke, chief business development officer, I-bridge solutions; Ruvina Singh, senior VP, HR, Training and Admin, CFC International; Kishore Velankar, head, HR, Integreon; Monica Doshi, VP, IT Enabled Services, Karrox Technology

Monica Doshi, VP, IT Enabled Services, Karrox Technology

When we are recruiting people for a BPO, what happens is that through the
various sources that you select for recruiting people, which could be agencies,
or advertisement in the paper, you get hundreds of CVs, and then you shortlist
about 10 CVs, and you call these people for an interview. How many turn up,
about five and then you put them through various tests and you probably select
two or make two offers. When you make two offers you are still not sure that
these people are actually going to turn up on the day that you mentioned. Why is
this happening? This is happening because of the demand supply gap. The
candidate knows that if he doesn't get a job here, he will definitely get a
job somewhere and he has a lot of options available to him.

Session II

New Opportunities: Tapping the less explored business opportunities

Shyamanuja Das, executive editor, Global Services

Opportunity could be both a very vague and a very exciting word. We will,
however, stick to a definition that is somewhere in the middle. We will limit
our discussion on one significant stakeholder that is the customer. I would just
like to start with a quote, which is from a silicon valley investor, the way he
had defined opportunity, 'if a phrase has been coined for something then I don't
look at that as an opportunity'. So anything for which a definite phrase has
not yet been coined is an opportunity for me.

Safir Adeni, CEO, Sitel India

What we are most excited about is something we are calling customer insights,
some people also call it business intelligence, small piece of this is data
analytics, market research and so on. Of all the different opportunities that we
are pursuing, this we feel for companies like us provides a huge leap in how we
can add more value to our clients by providing them insights into their
customers, using customer feedbacks, using tools that some of the technology
providers are providing., This can help us in understanding the emotions of the
customers, which we then convert through research and analysis and provide a
proper reports to add value to our clients, by helping them increase their
market share, increase their wallet share, increase their market penetration.

Panelists (L-R): Mihir Kittur, co-founder and COO, Ugam Solutions; Safir Adeni, CEO, Sitel India; Shyamanuja Das, executive editor, Global Services; Deepankar Khiwani, head of BPO Practice, Capgemini; Prashant Chawla, COO and CFO, Integreon; Gans Subramaniam, GM, Transworks

Mihir Kittur, co-founder and COO, Ugam Solutions

We decided that our market was every dollar in consumer insight and that's
when we felt it's important to also look at this transactional piece. Of
course not something that was internal but we saw that change happening at the
client side that clients were constantly demanding a more comprehensive view of
the customer. On the research side, over these few years, we are seeing
opportunities in end-to-end management. As we have been able to penetrate more
and more research management operations at our clients side. In addition to that
we are seeing opportunities in training.

Deepankar Khiwani,head of BPO Practice, Capgemini

Our strategies at Capgemini are built around what we call 'right shore'
rather than offshore or near shore, so it really involves delivery typically
from a spilt center perspective. So we look at what's best for that client,
for that process, for that skill set, which might then be distributed across
different centers. In order to do that, we also, specifically in BPO deploy a
tool called 'BPO Open'. That tool helps us manage standardized delivery
across locations to our customers.

Prashant Chawla, COO and CFO, Integreon

We are focused on three verticals and broadly call them as professional services
vertical and publishing industry. We were one of the first movers in the space
of providing services to the professional services industry e.g. investment
banking, consulting firms and law firms, primarily in the western market. So
when it came to services like legal process outsourcing, the kind of work that
law firms were outsourcing in the US or UK, were something like scanning,
indexing, creating large databases or archiving of legal content.

Gans Subramaniam, GM, Transworks

I think specialization is good, we talk about KPO nowadays. F&A is a great
process to have, but you know when you look as a large organization, the revenue
realization for specialization is far out in the future than today. Your ability
to scale up with a very specific function or a specific activity is very
limited. I know of players in the Indian market, 50 people teams, they are
serving the mutual funds industry in India so specifically that no one is able
to eat into the market. But their growth is limited to a specific area.

Session III

Technology: Using Technology for business continuity

Prasanto K Roy, chief editor, VOICE&DATA

Technology was not the sole determinant of the BCP process, it is people,
system, technology, process or PST whichever way you sequence it. Technology is
a key enabler, so we are going to be focusing on certain things beyond just the
technology aspect of it, but we will kind of keep it centered to the technology
in various ways. How many companies have DR documented or DR policy? So the
question is whose baby is DR, who is responsible for DR? Is it the CIO,
administration or somebody else responsible for security, but in the
organization, who is that one person responsible in the finality, e.g. finance
is responsibility of the CFO.

Panelists (L-R): Anand Rangachary, deputy director, Frost and Sullivan; Rajeev Garela, GM, Technology, Wipro; Rajnish Sarna, senior VP and head, Customer Interaction Management, Spanco Telesystem; Prasanto K Roy, chief editor, VOICE&DATA Anwer Bagdadi, CTO and senior VP, CRC International India Services; Sunil Kankal, director, IT, Silgate Solutions; Rajendra Deshpande, CTO, Intelenet

Rajeev Garela, GM, Technology, Wipro

I think the most critical issue that I see is business. Business has to
continue, where, how and how much, has to be decided by somebody. How to go
about doing it or what investments have to be made should always be a secondary
concern. We always try and put those things first, which are secondary. First of
all it has to be known whether we need it, and that is the basic question that
nobody wishes to answer. If that question is answered somehow at some point of
time either by business or by a client if you are a third party processor, all
by finance if they are taking an impact, then that is going to determine how
much BPC you want to plan for, what are the investment that will go into it and
where do you begin.

Anand Rangachary, deputy director, Frost and Sullivan

Probably 80-85% of the companies actually have a system and process in place
but in terms of BCP, hardly 60-65% of the large enterprises actually had some
kind of business continuity process in place and within that it was hardly
30-35% who had it completely documented and tested. Lot of companies still focus
their BCP efforts on technology on the software and hardware redundancy, but
there is a lot more associated with it, which actually comes out only during the
crisis time.

Rajendra Deshpande, CTO, Intelenet

I would like to emphasize that there may not be a standard around BCP. We
have seen the different kind of clients, who would come in and say, if we
declare the disaster, we would like to have the service level agreement to be
signed with a 25% of the people to be on within four hours of the disaster. And
in terms of service level agreement, we have most of time seen, the accuracy of
information or the ability to process the information within four hours time and
the percentage of people we need to actually relocate to the BCP site. These are
the kinds of SLAs we typically have.

Rajnish Sarna, senior VP and head, Customer Interaction Management, Spanco
Telesystem.

There is a need to set up a DR center and have a BCP in place. How do you set
up a BCP? You need to go back to the processes you are running in your
organization. One would classify the process one runs in the organization in a
BPO setup as mission critical application-something that cannot be down even
for a minute; you look semi-critical application-which you don't want it to
be down for a while but you wouldn't really mind and there would not be high
penalties if it was down for say half-an-hour, and then absolutely non-critical
application, which I think most Indian BPOs run on, which contributes to about
75-80% of the business we currently do.

Anwer Bagdadi,CTO & senior VP, CFC International-India
Services

The responsibility for DR is not with the CEO. There has to be a champion among
them. You can call him by any designation or call him by an incident commander,
but there has to be a champion who must have at his disposal an incident command
team when such an incident or event occurs. Whenever that happens however small
or large the incident be, there has to be a very clear line of communication
that has to be taken care of. Now whenever a disaster happens, things are very
clearly spelt out, say for a particular disaster what has to be done. Whether it
requires an internal communication, whether requires a certain time window
within which you have to act, does it require external communication and
external meeting point, do you require this to be conveyed across the globe and
so on and so forth.

Sunil Kankal, director, IT, Silgate Solutions

It is very tough to handle the SLA with the telecom players like BSNL, but
we need to strongly ensure that at each and every point their accounts manager
is taken into consideration and they try to meet some kind of our business
requirement. It needs to be very closely monitored because its like the
pre-cells and the post-cells, when you want to have an IPLC or VoIP or any
bandwidth, they will talk a lot lucrative things like they will say that they
are offering so many things, but if you make sure that it is closely observed,
and they are cast into the hole and so many time these things do get into
control.

Chennai May 17, 2006: Keynote

Joseph Sigelman, president, Office Tiger Keynote Joseph Sigelman, president, Office Tiger In some sense, India today is facing the human capital irony, of having 1.2 bn people in this country. The whole BPO sector has about a million people in it. By sector, I probably define it to be the people who are in the IT software devolvement side, those doing call center operations, who are doing low end data transaction, finally this judgment dependent type work, that's 0.08% of the population. We all have in our respective companies, dozens and dozens of people applying for each single position; we have 40 people applying for every position in our company. Yet, at the same time as an industry, we have attrition, wage inflation of 15% a year. So how do you reconcile these seemingly contradictory facts, of wage inflations and 40 people applying for each position? And the answer is that 39 of those 40 people are just simply and wholly not qualified to take these jobs. The IQ is there but they are coming in qualified whether because of accents, because they do not have the presence of mind to take these jobs. India's single biggest constraints today is education. We all talk about infrastructure; we talk about lousy airports, but you can throw money at those problems, you can buy your way out of those problems, you can't buy your way out of under education. The idea is that in many ways, this is something that will take 10-20 or even 30 years to get away from.

Chennai

Session I

Going Beyond Attrition: Manpower creation in the secondary cities

S Varadarajan (Raja), chief human resources officer, Access
Intellect BPO Solutions

I think a lot has been said about the importance of manpower, of people for the
BPO industry. I think one of the biggest pillars for the BPO industry to survive
is the people resources, actually they are resources. People have been the
pillars for this industry and India is strategically placed, thanks to the
intellectual capital, which is available in this country. However, there is also
the other side of it where we find that not sufficient manpower is employed in
this industry. Our demand far outpaces the supply. And as a result, attrition is
the buzzword for the BPO industry.

V Viswanathan, VP & Chennai Head, I-Gate

It was not the cost factor because of which I was outsourcing. Yes everyone has
a budget, but within that budget it's the value, which is offered by the
organization, which is going to take over the job, which is more critical. Now
you can have an attrition, you can have manpower resources, unless these things
tied together, whether it's a marriage hall or your financial services, or
your hotel industry or your health industry, I think these factors do play a
role and I think personally, attention has to be paid to these things in firming
up your strategy in creating an environment where we can grow as a BPO industry.

Murli Swaminathan, chief people officer, 24/7 Customer

The fact is that as far as attrition is concerned, one may say that it is a
problem that needs to be controlled at our end. It is also a reality that we
need to actually come to terms with. So the only way that one can increase the
talent already available and bring it to the standard that we want, is to
partner with the government and look at not just the short-term but the medium
and long term also. A year from now, two years, how do we enhance and increase
the funnel that's available. We have been working with the Karnataka
government and have covered almost four to five districts wherein we have
directly designed the curriculum and have told the government that we would
sponsor the English teachers, and now many of the colleges in four districts of
Karnataka and have actually taken on to the idea that we have proposed. And that
particular process has started rolling now.

B. Sathaya Seelan, VP, Allsec Technologies

I personally feel that attrition has two aspects: one I would call pull
attrition and the other is the push attrition. The pull attrition is something
that you define as employees get an offer that's so fantastic either in terms
of compensation or grade, both the company and the employees feel that there's
no choice for the person but to take up the attractive opportunity. That's
market dictated and I don't think there is much that we can do there. The
other aspect is the push attrition, which is that you have some workplace
issues, certain cultural issues, which create an unfriendly environment, work
ambiance, which compels the person to look outside the organization. So I think
as HR managers, as critical role holders in this industry, the challenge for us
is to manage the push attrition.

Panelists (L-R): V Viswanathan, VP and Chennai head, I-Gate; Murali Swaminathan, chief people officer, 24/7 Customer; B Sathya Seelan, VP, Allsec Technologies; S.Varadarajan (Raja), chief HR officer, Access Intellect BPO Solutions; Srinivas Rao, CFO, chief of Shared Services and HR, head, Perot Systems; Sundar Raman, associate VP, HR, Sutherland Global Services

Srinivas Rao, CFO, chief of Shared Services and HR head, Perot
Systems

So if you would look at moving into secondary cities, I feel that it is a
vicious circle of attrition. So we have learnt that in the secondary cities, the
conversion probably are much lower that what it could be in metros, because of
language, exposure to the industry and various other reasons. If that would be
still a constraint what would be the reason that companies would want to explore
secondary cities. I think the primary lead movers a) low cost, b) there is an
immediate availability of that 3-4% layer as a first mover to get into these
secondary cities and I think that is where most of us are leaning into.

Sundar Raman, associate VP, HR, Sutherland Global Services

Infact, we have done a lot of analyses on this and we have found that people don't
work for money. If you think that there is poaching, which is taking place, the
other companies are paying more, I think it is wrong. When we actually did a
survey of employees who have tenured within the system and asked them why they
were staying back, people don't look at salary as a major aspect, salary is
the sixth or the seventh consideration. The first is that the place I work I am
actually very happy doing the job that I am doing, I have been recognized, I am
very satisfied with the work I do. Second is my boss is good, my peers are good.
Third aspect I think there is a family environment here, we do a lot of things
together. These are aspects that people talk about when we actually do a
dipstick survey to most of the employees. If you can understand and probably
translate all this in terms of actions for retaining people, I think we will go
a long way than probably talking about attrition per se, when people keep moving
away from things.

Panelists (L-R): Sridhar Krishna, CEO, Imagine Technologies; DJ Dutta, VP, Sales and Marketing (APAC), PARSEC Technologies; Srinivas Rao, CFO, chief of shared services and head, HR, Perot Systems; Devendar Saharia, president International, Ajubanet Solutions

Session-II

New opportunities: Tapping the less explored business opportunities

Srinivas Rao, CFO, chief of shared services and head, HR, Perot
Systems

If you would summarize the opportunities that are emerging, they would typically
fall into three categories. One is you are exploring a completely new vertical.
I am today providing health care claims processing, and I am moving into finance
and accounting. There are completely different verticals unconnected. The second
one is providing the complete cycle of the service, which adds value to the
service. The third thing is that as the country is evolving, we are all seeing a
rise in the compensation structures in the country. Earlier on we had some of
our speakers talk about India loosing out its competitive advantage or edge, I
think what is going to happen in the market is not really India losing out on
competitive edge but India would have to focus on how they could deliver better.

Sridhar Krishna, CEO, Imagine Technologies

One of the areas is health-outsourcing space. It is significantly smaller when
compared to large contact center outsourcing. I am told that about $250 bn worth
outsourcing opportunities exist. I think all our companies in the health care
outsourcing space in India might together account for $150 mn in revenue, which
means that we are not even doing 0.1% of the potential opportunity in that area.
Another emerging area is legal process outsourcing, where a lot of law firms in
India are now tying up with law firms in the US, and a lot of research is being
done out of India and supporting the lawyers in the US. One more area,
potentially huge and largely untapped is engineering services; there are a large
number of engineering companies in India.

DJ Dutta, VP, Sales & Marketing (APAC), Parsec Technologies

Loan origination is a certified process where the person who actually
originates the loan needs to have an approval and certification as per the US
norms and has to fill up the loan process and ultimately process that loan. What
we call home loan here is called mortgage in US, and that market in US is close
to $6.8 tn. And in the last two or three years, people have seen phenomenal
growth in mortgage because of the constant fall in the federal rates.

The other opportunities, which are emerging, are the geography. So today the
opportunities are enormous which are coming out of the UK and Australia, so this
is another opportunity, which is coming up. The US obviously has shown the gate
of huge opportunity to India but nevertheless the UK and now Australia are
opening enormous opportunity to us and even off late, I know call centers that
are getting outsourced processes out of Malaysia.

Devendar Saharia, president, International, Ajubanet Solutions

Another trend that we are beginning to see which probably will happen is that
there will be a transfer of ownership and risk sharing. I think as we start
becoming more integrated with the customers in terms of doing their work, a very
natural byproduct is that you start taking more and more ownership of the
processes which means that you also need to take on more risk. For larger deals,
when the dependency on the BPO provider is a lot more than in the software for
instance where there could be one-off two or three-year projects, which you
could do and then you move on and they move on. Here essentially the kind of
processes you start doing for them, you are running their back office, so they
pretty much have gotten rid of that infrastructure over there.

Panelists (L-R): Baskar Subramanian, executive vice chairman, Servion Global Solutions; Sreeram Iyer, director and group head, Global Shared Service Centre, Scope International; T Jagannathan, CTO, Ajubanet Solutions; Prasanto K Roy, chief Editor, VOICE&DATA Ajay Krishnan, head, Business Solutions Group, Airtel Enterprise Services; Yogesh Purohit, general manager, Sales, Spanco Telesystems; Bobby Varghese, VP, IT&IS, SlashSupport

Session-III

Technologies: Using Technology for Business Continuity

Prasanto K Roy, chief editor, VOICE&DATA

In recent times, BCP or BPC whatever you want to call it, has been a critical
area of any business, which needs to run 24/7. Very clearly, if you are a BPO
you have end user SLA which is very stringent, its obvious, but within the
domestic industry if look at the kind of players who have enhanced or very
stringent you usually find certain verticals-banking financial services,
insurance, the BFSI vertical is one area where you have very strong SLAs. But in
general, the SLAs, the business process continuity area, most other areas for
example manufacturing by and large have not considered this a huge area, a
strong enough area to invest a great deal of money in. So everyone has been
considering BPC but to a different levels especially when the whole problem was
fairly distant.

Bobby Varghese, VP, IT and IS, SlashSupport

My submission is that technology has solutions today but in a lot of cases these
solutions couldn't be implemented, especially from the voice perspective,
there have been a lot of regulatory issues, which were hindering implementation
of some of the technology solutions possible for a BCP. The other factor that we
are facing is how to get the BCP plan known to all people who are working in the
company, which includes training, drill exercise and stuff like that, which I
feel is a bigger challenge to overcome.

Yogesh Purohit, general manager, Sales, Spanco Telesystems

After talking to different customers of BPO industry from across the country
what we have found is that everybody wants to have a BPC or a BCP, but then
deployment and cost is very important. The customer should be able to share the
cost or pay for it. Manpower is another issue that all BPOs are also facing at
the moment because of the attrition. Thirdly and most importantly, is the
downtime for the drills, because we have 24/7/365 across the industry, and then
getting the downtime from the customer for the drill is very major issue, which
we need to address properly.

Ajay Krishnan, head, Business Solutions Group, Airtel Enterprise
Services

With reference to the particular question, in terms of BCP the line that
strikes me most is 'well hope is not a strategy, preparedness is' and I
think that one line says everything. You have to be prepared. So the question is
of preparedness and once disaster strikes, two questions that arise are that of
risk mitigation and disaster mitigation. Where and when it will strike, we don't
know.

T Jagannathan, CTO, Ajubanet Solutions

When you say BCP, it's not just once in a year doing a recovery test and
then trying to move to another site. Trying to recreate all the process that's
one aspect of it, but at the same time, a periodic recovery test, say for
example in your organization dialer is a critical piece, if the dialer fails how
to move to, say for example manual process if it can to an extent satisfy
service level agreements, that's the continuity of the business and that's
an important part of the BCP. That should come and cover in the BCP and that's
what we try to focus, try to look at periodic recovery test, periodic diversity
test.

Sreeram Iyer, director & group head, Global Shared Service
Center, Scope International

I don't look at this as a technology issue at all. But an additional dimension
apart from people, for a company which is in multi-country locations, is how do
you provide capability for cross border business continuity and that for a bank
like ours having presence in 56 countries, which has a dependency on shared
service center in Chennai, is a big question for us. Theoretically, if you need
to replicate everything, you need another center with as many people and surely
you can't have that model.

Baskar Subramanian, executive vice chairman, Servion Global
Solutions

I have two points or observations to make, When we go out and help banks or
telcos who are represented right here in the panel, help set up customer
interaction centers, there is no discussion on DR that happens at all. They are
more interested in handling their first call and launching. Three years later,
the whole discussion on DR starts. So our primary request is to have customers
think of DR right from day one. The second point is that in our business i.e.
voice multi-channel contact center business, the whole subject of DR will become
irrelevant, the reason being the kind of advances in technology in the past few
years. I believe that just like Y2K we have a C2K, which is a convergence cross
over and if you look at the year 1999-2000, we had IP at the service provider
level, three years later IP happened at the enterprise level, now IP is there to
stay at the end user level. So combination of these technologies will eliminate
the need for DR discussion as far as voice multi-channel interaction is
concerned.

Gyana Ranjan Swain