The Hindu : Business : Next opportunity lies in home market, BPOs told

Online edition of India's National Newspaper
Wednesday, Jun 08, 2005

Business

Business

Next opportunity lies in home market, BPOs told

Anand Parthasarathy

Potential in e-governance, knowledge process outsourcing

— Photo: G. R. N. Somashekar

INDIA V THE REST: The Member Secretary, Planning Commission, Rajeeva Ratna Shah (right), with the President, Nasscom, Kiran Karnik, at the India ITES-BPO Strategy Summit 2005 in Bangalore on Tuesday.

BANGALORE: When you have half the global cake to yourself, with half a dozen others fighting over the rest, a little smug complacency is natural. But that's just the kind of mistake the Indian outsourced services industry shouldn't make, if it is to remain at the top-of-the-heap and multiply today's $5 billion business fourfold, by 2008. This was the message that sounded loud and clear at the two-day National Association of Software and Service Companies' annual ITES-BPO Strategy Summit which began here on Tuesday.

When outsourcing destinations were considered, India accounted for 55 per cent of the opportunity, while the share of competitors like China, Ireland, Singapore, Russia and the Philippines was in single digit percentages, said the Planning Commission Member Secretary, Rajeeva Ratna Shah, in his inaugural remarks. But if growth rates of 40 per cent or more were to be sustained, he suggested, BPO players might address the domestic opportunity, where the market had doubled in the last one year.

The `next wave' of the `desi' opportunity would come in e-governance, biotech and knowledge process outsourcing (KPO) — and government was kick-starting this with a Rs 3000 crore investment in State-Wide Area Networks (SWAN), as well as 25 mission-mode G2C or government-to-citizen projects, like the Unique Identification Number for individuals and businesses.

Nasscom initiatives

The mid-term appraisal of the Tenth Plan scheduled for end-June would take a hard-nosed look at all such initiatives, and for a change, planners would take an IT-enabled `bottom-up' approach, starting from grass roots projects such as rural connectivity, rather than the old `top-down' approach, Mr Shah added.

In his introductory remarks, the Nasscom President, Kiran Karnik, outlined the initiatives the association had taken, to unshackle the full potential of the Indian outsourced services sector.

These included: a certification programme for new entrants and training programmes for middle management; skill set improvement in association with the University Grants Commission and at least six industry-academia interfaces; a `trustworthy sourcing initiative' aimed at making India the "Fort Knox of the data world'' and an innovative employee data base ( where information was 'owned by the employee) which will obviate time-consuming background checks during hiring.

In the CEO panel discussion that followed, Vikram Talwar Founder-CEO of Exl Services, suggested that senior management be given a stake in the ownership to neutralise attrition in this sector. Rahul Singh, CEO of e-Serve International, suggested that for a six-year old industry, Indian ITES was a mature kid and the time had come to change the rules and embrace a new `mantra': "Specialise and scale-up.''

Management cost rising

Pramod Bhasin, President and CEO of Gecis Global (formerly a part of GE) suggested that over one-third of the 3.50 lakh Indians working in the BPO industry were into financial services — which was already a rung or two up the value chain. Neeraj Bhargava of WNS — India's number one BPO player according to the last Nasscom ratings — saw escalating management level costs, rising at 10 to 15 per cent annually as a threat to India's competitive advantage.

However, other speakers agreed, infrastructure was another key differentiator: Kristine Tully, Director CRM Solutions, for British Telecom Asia Pacific, re-iterated the "India versus the Rest'' scenario: Indian BPO is a factor that cannot be ignored as a global force, she felt, and India was clearly positioned to exploit her technology and talent pool for seamless multi-regional delivery.

But, she suggested, it was "time to choose your dance partner now'' — in other words, tie up with a world class telecom and infrastructure player and then make your customers an offer they can't refuse.

Eddy Segal, Sales Director Asia-Pacific for the Israel-based solutions provider, NICE showcased a dazzling array of technologies which can monitor entire call centre traffic, look for 'red flag' words like "not satisfied''; detect when emotions are raised; analyse the call queueing time and harness all this to retain customers, keeping them satisfied the next time around.

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