Sustaining India's Competitive Edge

VOICE&DATA organized the BPO Summit in five cities aimed at identifying

the new challenges of an industry that has evolved from dealing with the issues

of survival and growth.

The event was organized in the backdrop of the fact that the IT-ITeS

industry's growth is markedly different from that experienced by the pioneers.

There is increasing traction in package implementation, software deployment as

well as new areas like remote infrastructure management, IT consulting, software

testing, engineering, R&D services and software products. With new

opportunities, there are new challenges. They affect the industry's ability to

maintain its competitive edge, globally. Challenges of manpower remain on top of

the agenda. However, while challenges are aplenty the industry has continued its

growth.  The main theme of this

year's summit was “New Agenda: Sustaining India's Competitive Edge.” 

Session I



Going Beyond Attrition: Manpower creation in the secondary cities

Salil Agrawal, head, IT, Telecom

& BPO, ECS



India with its billion people has the resources.Â

But is this talent pool employable or not? This resource pool lies in the

metros as well as smaller towns. Now, the larger towns have reached saturation.Â

So, the answer lies in either relocating to smaller towns or transporting

the workforce from smaller towns to the metros.Â

Now, both of those situations I think pose the challenge of how do you

really attract and bring the people from the smaller towns. So, attraction here

means attracting them to join the industry not the exodus toward metros but

attracting them to the industry. 

But are the people really ready for the industry?Â

What is it that is going to make them employable, what additional inputs

are required? Do they need some training? One can easily find the answers to

these questions if he meets these people for recruitment and share some of their

experiences. Also, one can know about the key changes that are required.Â

Second, is to change the image of the industry.Â

Do people really want to join the industry, what does the peer group

think about it, what do their parents think about it? Are they really keen to

join this or is this the last resort for them ? And if the people who do think

about it, why do they join?

Delhi May 9, 2006: KEYNOTE When we talk of sustaining the competitive edge that assumes we had a competitive edge. This thought in itself is debatable whether this industry happened by accident, and a person was responsible behind driving its growth. At times one tends to question whether the business came to us because of competitive edge or something else.  RAMAN ROY, chairman, Quattro But, we will take that as given, we had an edge and we are to find a way to sustain it. But the debate should start with one basic question, what are the needs of the customer that are undergoing change? We tend to forget that it is the customer who pays for the services. Look at yourself as a customer! You demand more and you wish to pay less for that. And at times we want those services for free like the way we pay from our credit cards. The boards today asks corporates to focus on core operations, to cut on cost, to look at the skill shortages that they have to meet this changing demands of the customer, and to top it all when they implement the technology changes. Therefore, the corporate world is looking for solutions that can be found anywhere inside or outside the company, or the country. But they do not want to lose the ability to manage the quality either. So the outsourcing industry was created on the fact that the need was to be fulfilled not that we had a competitive edge. Also, we had the capability of fulfilling those needs. This need gave us a burgeoning industry.  Facts prove this. By the year 2007 end, the industry would be $173 bn worth. This growth is at a compounded annual growth rate of 10%. There are very few industries in the world that are of this size and ever growing. The US continues to be the biggest chunk. However, some very interesting facts come out from these figures. That $173 bn comprises merely 1% of the companies that are outsourcing. 99% of the companies are thinking about outsourcing in the next 24 months, 80% have no plans.  Now, when one looks at an industry of this size that is represented by 1% of the corporates, he can realize, what will happen if that 1% becomes 2% or 3%.  The industry itself is large enough for everybody to fulfill their needs. What do we offer as a proposition?  The reason we succeeded and what we offered as a proposition was three-pronged involving cost, productivity, and quality. We provide better service at a relatively cheaper cost compared to other parts of the worlds.

Rashmi Sharma, director, HR,

Convergys



Among all this discussion, we miss out talking about the potential of

growth in the industry.  We often

hear about the phasing out of the industry.  Are call centers going to shut down?  But I think Raman Roy made a fabulous point about the huge

potential of this industry. But the biggest impediment in the growth cycle is

lack of skilled and trained people. So, to continue with the growth of the

industry we need to find new resources. 

So the key to success is to build this industry as an employer of choice. But

do these people know about the growth potential they have in this industry and

how enjoyable this job can be. Example of IT industry is infront of us. We need

to focus on mining and refining the talent. The talent exists. We have been

looking for right talent from various places. But we need to train them for

work.

Panelists (L-R):Rashmi Sharma, Ajay Batra, Salil Agrawal, Deepak Dhawan, Debashish Das

Debashish Das, VP, HR, Genpact



We have around 32 potential cities. We can remove the top eight,

because of saturation in metros and possibly even cities like Pune, etc. We are

left with 24 cities and the population there would be around 3.5 crore.Â

If I look at the graduate-undergraduate numbers, all-inclusive would be

around 50 lakh with 3% addition every year. That means we are adding 1.5 lakh of

graduates and undergraduates every year.  So,

if companies like Genpact or possibly Convergys are looking at freshers, then

that's the pool.

So, we have 1.5 lakh of labor pool to target.Â

However, 10-15% of such people are employable or employed after proper

training.  This means we just have

15,000 or may be 20,000 people out of whom we can select, we can use them in our

processes.  And, here I am including

all kinds of processes, voice, non-voice, KPO, APO, CPO. 

 

Ajay Batra, head, Human Capital

Management Practice, QAI



Talent engine encompasses all kinds of people processes that we talk

about, from recruitment to performance management to career development to

competency analysis.  I would

comment from BPO and IT perspectives. I think we have done a lot in this area.Â

But this is an area that also requires everyday innovation. As Raman Roy

said, client needs the change.  The

industry is changing, the culture is changing, the needs and demands of our

customers and our key stakeholders, and employees are also changing.Â

So, we will keep up with that pace as well.Â

So, continuous investment to improve our people processes is the need of

the hour.

Deepak Dhawan, VP, HR & Training,

EXL BPO



Recruitment function has emerged from behind the shadows of HR into

the forefront. It is now a strategic function, which has a huge impact on the

business and growth of the organization.  Today, if one has to map out and say where should he be

setting up in a new location, probably the first thing he needs is the

recruitment person. The recruitment person can tell how many voice people he can

hire from the location. By his experience he can tell how many vendors are

there, how many training partners are there. I think it is phenomenal and I

really celebrate that whole movement. Because I think, part of what we are

talking about here is one of the challenges that these people today face.

In the last 12 or 16 months we would have recruited between 1,800 to 2,100

associates at the entry level, not from NCR, not from Pune, not from Chennai,

not from Bangalore, but from what you call A and B category cities.

Session II



New Opportunities: Tapping the less explored business opportunities

Panelists (L-R):Mohit Thukral,Harsh Vinayak, Manoj Malhotra, Shyamanuja Das, Deepak Malik, Lalit Wangikar, Ashish Taneja

Shyamanuja Das, executive editor,

Global Services



Opportunity has so far being treated in English language as something

that you don't create. But in business, how often do you hear the phrase

creating opportunities. That is what business does to English but that is

different topic altogether.

One successful Indian investor had once told me about opportunity. He said

opportunity in Silicon Valley is something for which a phrase has not yet being

coined. He was of course into seed funding and other kind of funding. He says if

there is definite phrase to describe an opportunity I don't consider that as

an opportunity.

So, a lot of things that we are going to discuss here could be very new.

These probably will encourage people to ask a lot of question, which I am sure I

love. I guess and so does most of the panelist. To clarify a little we will

discuss opportunities in distinct spaces like aerospace design that's

something new to us, in terms of offering newer service to same set of customers

in terms of combining some of your existing offerings in such a way that the

combined value is far more than the sum of the parts. We have a panel, which is

in this industry, which of course everyone in the BPO or KPO or XPO. But

everyone is from a very different kind of company.

 

Mohit Thukral, senior VP, Genpact



Organizations are getting disaggregated. If you look today these are

going to be the disaggregated organizations of the future. It is more about

companies going global, and doing things across the world. Some couple of years

back,  hard disks were made in

Thailand, motherboards in China. This suggested that a lot of things happened in

a disaggregated fashion. It still persists. Service companies worldwide today

will become disaggregated organizations. And, there we come into play; in an

industry, which is BPO. The future of such disaggregated organizations are

actually going to come down to countries like ours and other low cost countries

of Eastern Europe, China, Philipines, South Africa, and Russia.

Eyeing opportunities

Genpact is trying to to create opportunity, capacity, and costs. It will go

for the intellectual capital, which is available in countries like ours.

Companies will look at us for creating values, for value enhancement, they will

look at our help in increasing the size of their wallet. Times are going to

change. We are going to do transactional process work that gives cost arbitrage,

drives efficiency. But it will be knowledge based. The whole equation is

changing.  60% of Genpact's

revenue today comes from KPO. We have done an alliance with NDTV. We think

that's going to



be a big area, which will open up. It's over $200 bn market. It has huge
amount of opportunity for work in that space. One can do digitization, from

analog to digital format; one can do things like logging and meta tagging in

that space, pre-edit sort selection. The other areas are healthcare management

and claims and health processing.

 

Harsh Vinayak, VP, Business

Operations, Keane



BPO started affecting the companies' cost. Cost can be reduced to

zero. That's the best one can do, ideally. So when one takes an industry from

a cost perspective to the next stage that is increase its revenue,

transformation comes in. Some of such initiatives we are looking at. It is

something we call SEO — sales enablement outsourcing. And truly what is it,

what is SEO?

As an IT company we know how we do our sales. We have 150 people in our sales

team in the US. We have a client list of over 40 years comprising 10,000

clients. So we know what are the pains associated with sales. When one has such

a big sales force, he probably has a 500 people sales enablement force. All of

that is an end-to-end process, which we are clubbing together into what we call

the SEO. As an IT company we have realized. We do management consulting for a

lot of manufacturing companies. They are all ripe for something like this. It is

a space, which hasn't been touched or has been touched in parts. We have a lot

of graphic designers, but you don't have a graphic designer who works together

with a research person and actually generates a value prop which when you take

to your client, they just get dazzled with it.

So how do you do that? A lot of small to medium size companies don't have

that capability; even large size companies have the capability not to their

core. The sales people need to go out and sell not manage sales or manage the

small issues of sales. Now that's one spot we have been looking into. Now this

is not an integration of IT and BPO. However, the knowledge of being an IT

industry really plays into how do you sell. So we are bringing it together. So

that's one wide space we are looking at. The other issue is how you bring in

an IT platform together with service. How do you put them together and get to

the next generation, the best of breed?

Industry comes together

Manoj Malhotra, CEO, Salient BPO



The healthcare sector, as Mohit mentioned, has huge potential and it

is worth $3.5 tn dollar. If you look at the scenario in the US, it is grossly

inefficient in its use of technologies and processes. It's fragmented and

disorganized in nature when we look at health care. In the US itself you will

find that the outsourcing in very much limited. So for us it was an interesting

to see if it can make a dent into the health care space and most specifically in

the provider space. If you look at most of the outsourcing, which is being done

in India in the health care space, it has come in the insurance company relating

claim processing, adjudication. This is because that's easier and something

which lends itself easily to outsourcing. In the provider space one can find

that it is quite fragmented and disorganized in nature. So once the business

gets transferred to India and if that business is not sustainable in India and

outsourcing doesn't get done then they are in a tight spot.

 

Ashish Taneja, VP, Projects and

Business service-delivery, Vertex



I think there are opportunities everywhere. Everyone knows what

opportunities are we talking about. How one can tap into those markets, what are

the critical success factors? We are looking at global companies, big companies

with end-to-end and transformation capabilities. It's a global play but having

said that there are enough opportunities available for smaller players. So niche

specialization will always exist, whatever opportunity we pick up. It is not

necessary that a particular company will provide end-to-end but somebody who

will provide pure analytics capability, research capability or legal

outsourcing. That opportunity will always exist. Because there are lot of buyers

from our perspective, be it clients or be it the people we have spoken about,

there are times when the debate between should I go toward an end-to-end service

provider or should I go to a specialist agency continues.

We focus to create value--creating value for us as a service provider, for

the clients we are servicing, and for client's customers. How one gets that

sweet spot not once but consistently? We need to make sure that we consistently

hit the mark, consistently deliver value to our customer and all that will come

by managing the services we offer.

Things have evolved, shaped out, and we have identified and coined a few

terms. Look forward, another 4-5 years what we define knowledge as today will

change. So something else will come into play. Some other services or innovation

will come into play and your service mix need to be determined. The key factor

is to make sure if it is 60% of the work that we are looking at from a knowledge

process and differentiate to innovate to maintain that service level.

Taking note of...

Be it via developing people, tying up with the right kind of capabilities, be

it a specialist player, be it via spending time around our own R&D etc and

making it happen, I think it is important for us to understand that we define

the definitions. We coin as to what this particular term means and we also need

to keep the long terms perspective in mind looking as to how things will change,

how opportunities will shape up. That's important.

 

Lalit Wangikar, VP India, Inductis



Customers today have an enormous amount of data. We work with a very

limited set of customers having limited set of problems. So we are talking about

a lot of information and I think one needs the expertise and the skill set that

everyone talked about. And I think it is not possible if one is trying to take a

'I want to do the whole thing for someone' perspective. We have approached

our own organization building with that kind of a mindset. We have invested very

heavily in building a world-class team of people who can do analytics that is

second to none. Also, we have won a couple of data mining related awards and

some of them are exotic, esoteric kind of problems but it just gives us the

confidence that we are doing the right thing.

Our view has been to provide opportunity for someone to specialize in this

area. Under such an opportunity one brings business solving problems as well as

infrastructure that he will need to handle the volume of data and the complexity

that comes with it. One has to be an expert and excellent in the kinds of

activities you are trying to do. And I think there is tremendous room for a lot

of players in this space to grow and become big.

Deepak Malik, senior VP, Infovision



I don't think opportunity is the challenge here. It's the time to

market development of your skill sets and the workforce. And that is going to be

the challenge for us. Let it be healthcare, legal logistics at the low-end low

hanging fruit, there are a lot of opportunities.

The opportunity as we see is more and more. In the US alone it's a $40

bn industry outsourcing in CRM. It's a B2B services loyalty programs, the

frequent guest programs, the frequent flier programs, the retail store programs,

the frequent dining card program, the whole spectrum of the backend. You can do

the call center business. But what is done we take the call, we take the booking

but what we do extra on that? The whole backend of statement making, membership

set up, the retro credits, credits the earning and burning of points goes on.

Those are the opportunities that we need to see.

It's the question of how soon, how fast can one move to take this

opportunity? Lets forget about this South East Asia, China, South Africa or

Mexico, there is immense opportunity for us. Lets not look at them, we have

enough at our hands, lets just focus on to those things.

Panelists (L-R):Sandeep Parikh, Sanjay Dayal, Rajnish Sarna, Prasanto K Roy, PV Ramdas,Sunil Gujral

Session III



Technologies: Using Technology for business continuity 

Prasanto K Roy, chief editor,

Voice&Data



Technology was not the sole determinant of the BPC process. It is

people, system, technology, process or PST whichever way you sequence it.

Technology is a key enabler, so we will focus on certain things beyond just the

technology aspect of it. But we will 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.

Clearly you don't have a single answer and you don't have an automatic

consensus. Like if I say IT is to CIO, finance is to CFO, if you go back and

look at some of the BPC incidents, which have happened in India, which have

engendered a lot of interest in this area. This is because earlier it was

believed that its largely IT failure which could happen and because of that one

needed to. For example if you were in Bangalore you were fine because you could

have two or three centers at different places, and you would have DR and backup,

you were not in a potential war zone like Delhi which could get bombed in the

event of a war, but we all saw last month that Bangalore was equally susceptible

and it was not floods or war, but riots owing to death of a movie icon.

PV Ramadas, VP, Technology, HCL BPO



The methodology that we follow generally is in the initial stages of

project transition. And we have extensive discussions with the customers. This

is the way we arrive at the architecture, that's how we define how much of SLA

we could meet. We start off by comparing our offering with the offerings of a

vendor, who has been given the task earlier by outsourcing. So there is

comparison with what is achievable and what is not achievable. So they have

definitive standards and they work toward that. That's how we start and we try

to chase that.

Recently we had a small outage and the service provider refused to accept

responsibility. It was actually a maintenance schedule for him and he could have

easily informed which he failed to do. We asked him why he didn't inform us.

He replied, he had informed us but we lost about two hours of business. In two

days we got a call from the customer asking us what it was and why it happened.

Interestingly, if there were a natural reason they would believe but if it's

maintenance they wouldn't believe.

Delegates register for the summit

Sandeep Parikh, CIO, Keane



When we look for a location, the most important aspect for us is

infrastructure. Right from ensuring our people can reach on time to actually

ensuring our organization really operates seamlessly, be it anywhere. I think it

is very important for us. The second bit in terms of the regulatory framework

existing in the local areas also plays a very important role. So both of these

are critical to us when we decide on the location. Having said that and as far

as outsourcing is concerned its not something new to us. Infact, we are getting

work outsourced from our clients to us and we are now talking about outsourcing

that work to another third party. That's feasible, that's workable but then

I think some customers are not comfortable with that idea. This is because they

are saying that the sheer fact of involving a third party makes it difficult and

complicated. But, there are other customers who are willing to look at it

because if it means better service at lower cost. They are willing to look at

it. For that again the location becomes very important. If we don't have the

right kind of infrastructure and the right kind of services available there it

is critical for us.

Rajnish Sarna, senior VP & head,

Customer Interaction Management, Spanco Telesystems



There are some companies, which may want to dedicate a small center.

This may be a 100 or 50 seater, to meet the eventuality if the disaster does

happen. There could be some companies that feel, they need not have a DR site.

So its very specific to the client its very specific to what processes they are

handling, are they mission critical applications, are they very basic in nature.

This means are you selling a credit card application, are you selling a

mortgage, you need not then have a DR setup. It really depends on the process

that the BPO company would have. That will determine whether they want to setup

a DR center, what's the magnitude of DR center, what's the kind of

investment you want to make there, what's the connectivity at that location.

So its very specific to what they need in terms of processes.

Sunil Gujral, CTO, Quattro  



What's happening now is you are making your front-end team. This is

making the customer more aware of this fact. So that when the SLAs are being

negotiated the customers themselves are very mindful about it. They work with

you to design the right kind of infrastructure. They understand the additional

investments one is making, and they are willing to pay for that. Some customers

look whether one can go through the managed services like MPLS.

So clearly, it's a two-pronged approach, one is investment, get your

CFO to agree somehow, take the cost, secondly educate your customers work with

them together. So it depends on the nature of relationship between you and your

customer.

Sanjay Dayal, head, Sales, BT Infonet



The BPOs have very stringent SLAs with there customers. There are

service providers who try to bridge the gap as far as possible. Basically BPOs

look for latency, packet loss, round trip delay through port and the uptime

related to that. The weakest point lies in the first mile not the last mile. If

the service provider can diversify on the last mile then I think one can bridge

the gap. In MPLS kind of connectivity your bandwidth can be restored in less

than 155 milliseconds. For example, if one can take a primary port in Delhi, he

can take up a backup port at 30% cost of primary port in Canada. Within less

than 155 milliseconds he is up and running if his manpower is ready.

Note: The coverage of the summit held in Mumbai, Chennai, Hyderabad

and Bangalore, would be published in the subsequent issues of VOICE&DATA.

Sudesh Prasad



sudeshp@cybermedia.co.in