One more BPO unit, 1000 more jobs

Pune, November 26: US-based business process outsourcing (BPO) firm vCustomer Corporation has launched a 1,000-seat centre in Pune. This is the third major BPO to open shop in the city in the last two months, the others being EXL Services and Convergys.

The Pune centre will be vCustomer’s fourth centre in the country. It will handle the same mix of technology support and customer care processes like the vCustomer centres in Delhi, Noida and Gurgaon.

‘‘This is in line with our expansion plans for the next 12 months when we will double our headcount to 6,000 and workstations to 3,000,’’ says Sujit Baksi, vCustomer’s president, India and head of global operations.

Customer is a BPO, contact centre and technology support service provider operating in India through its 100 per cent subsidiary, vCustomer Services India Pvt Ltd. A four-year old company, vCustomer has 2000 workstations with 3,000 employees on roll handling 2.5 million calls and emails per month.

Sushil Gupta, chief of Pune-based Software Technology Park of India, the nodal agency facilitating BPO operations, says things are looking up for the call centre business in the city with several major software firms making a foray into this segment by setting up their own operations.

‘‘As of today, close to 10 call centres operate from Pune and together they employ more than an estimated 6,000 professionals,’’ says Gupta. Big companies like EXL Services and Convergys are already employing nearly 2,000 personnel while Progion and Spectra Mind, subsidiaries of infotech giants Infosys and Wipro respectively, too have bigger plans in the days to come, he adds.

Firms like MSource are already an established name while relatively smaller units like Ocean Connect and Offshore Development Centre too were adding to the scene, says Gupta.

Indian BPO employees play agony aunts

Bangalore: For the graduates working in India's call centre industry, the phone calls they receive from thousands of kilometres away range from the lucid, to the sad, to the ridiculous.
Shahana Sayeed, 26, was on a night shift recently when a middle-aged man from Britain called her up after his wife had divorced him.

"He started crying," said Sayeed, who is working at ICICI Onsource, an outsourcing firm which has 20 global clients including customers from Britain and the United States.

"I didn't know what to say. I had to reassure him first. "He said his wife had left him and he had nothing to do with her accounts. He did not want to go down as a bad customer in front of creditors ... and he started howling and crying and I did not know how to handle that. I finally managed to pacify him," she said.

Sayeed, who joined the firm after being laid off twice in the dotcom crash two years ago, earns Rs 15,000 a month.

Graduates such as her are among the more than two million youngsters that pass out of India's universities every year and fuel the country's high outsourcing growth.

Last year the business process outsourcing sector accounted for about one-fourth of India's total software export revenues of 9.5 billion dollars. Call centre employees like Sayeed are picked up by sports utility vehicles from their homes and dropped back after shifts.

BPO profits need time to show

The Nineties belonged to the software services companies. The first decade of the 21st century will surely go to the business process outsourcing (BPO) companies. If one were to follow the evolutionary theory in the strictest sense of the term, it should have been the other way around. After all, software services requires higher skill sets than BPO.

But in India, nothing ever works to a pattern or formula. The software revolution happened almost surreptitiously. By the time the light dawned, it was too big and too entrenched and a source of major chest thumping for Indians collectively for anyone to disturb its momentum. BPO, in contrast, has been a structured entry decision by most players with fresh investment in the industry touching $800 million by the end of 2002.

A culmination of factors -- dramatic improvement in connectivity from India, huge investments in telecom infrastructure, and an economic slump in the US which forced companies to look at every cost cutting option -- has today resulted in the BPO sector growing at a faster pace than software services, albeit on a smaller base. ( Does smaller Indian metros have enough infrastructure to support smooth functioning of BPO firms? )

Though software services and BPO are spoken in almost the same breath, they are fundamentally different businesses. Though a lot of software services companies are quickly ramping up their BPO operations, success in the former is no guarantee of a repeat performance in the latter. Sales cycles, for example, are much longer. Sanjay Joshi, vice chairman, sales, marketing & business development of Wipro Spectramind (WSM), likens the BPO business to “agricultural business.” “You sow the seed but see the fruits only nine to 12 months down the line when you close the deal. It takes another three months to actually start work. There is a huge delay in booking and yield,” he says.

But that hasn’t stopped anybody. WSM already employs 8500 people and very soon might equal Wipro Technologies which has 16,000 people on its rolls.

BPO to India a big fad on US campuses

MUMBAI: Outsourcing isn’t just making waves in India, it seems the flavour in US universities too. For Patrick T Harker, dean of Wharton School, outsourcing appears to be the biggest fad. But he adds in the same breath that India is so “hot” because of this fad on US campuses, that almost every faculty member wants to come to India. “We carried out a research on outsourcing and India, and the demand among business, students and academia was so great that we are doing a programme on it,” he says.

“I try to dissuade the faculty from following fads as it does not lead to long-term credibility. I remember when I was starting out, Japanese manufacturing was a rage and everyone was making a pilgrimage to Japan to learn about it. The same seems to be happening in outsourcing these days,” he says.

He said that India is hot and everyone wants to understand the country, its companies and economy. In conversation with ET, Harker also spoke about ethics in management and the challenges of globalising a B-school. ( Can there be a reverse brain drain from the US to India? )

US companies across industries has been hit by scandals, graft and abuses of power in the past few years. The uproar has been huge and the American style of management has been questioned. But, amidst the evil, Harker revels in the speed with which action has been taken against offending companies, and the swiftness with which they are either going away or recovering. “It’s very hard to hide anything these days,” he says. “As a corporate leader you have to understand that you live in a very transparent, open environment”. Wharton has been teaching ethics since 1970’s, he adds.

Over the past few years, Wharton has taken steps to extend this long tradition of excellence in education to other parts of the world. Today, the school has two campuses in the US along with alliances with the French B-school INSEAD (with campuses in Fontainebleau and Singapore) and the Indian School of Business (ISB). But, in a quickly globalising world that isn’t enough

BPO: An opportunity and challenge for India

A torrent of new business is coming to India in a way which could not have been conceived of earlier.

These are in three fields – software, which is old hat, BPO which is much newer but no longer a new story and thirdly R&D, in which the new elements are the volume and complexity of work envisaged.

General Motors opened their new research centre in Bangalore last week, SAP, the European software leader, inaugurated its new development centre in Bangalore yesterday, signaling a commitment to undertaking really high-tech work in India. Such news is reported everyday.

Clearly, there is global recognition of Indian competency in three of the five main areas in a business -- product design, outsourced services and software -- leaving out manufacturing and the corporate functions.

Large chunks of business will be shifting to India, particularly from the US, in the same way manufacturing shifted to China in the last decade, but with a difference.

The wave of R&D outsourcing to India will create an overall technological competency and have a tremendous impact on Indian manufacturing as well.

More and more forward looking Indian companies will become globally competitive in their respective fields with, and here lies the key difference with the earlier nature of Chinese growth, globally competitive technology developed by themselves.

The upshot of all this -- particularly the offshoring to India of software, BPO and R&D -- will have a huge impact on US public opinion.

There is likely to be an anti-Indian upsurge in the way there was against Japan in the late eighties and early nineties, symbolically captured in the 'voluntary' restrictions that the Japanese imposed on their car exports to the US.

The upsurge, currently known by the term 'backlash', is already there. Less than a year ago, Nasscom was telling us that it is the Indian media that first highlighted reports of the backlash, which were then played back by the US media to their own audience.

The implicit accusation was that the Indian media played a key role in blowing things out of proportion.

Today, the protest against offshoring -- in the US, Britain and Australia -- is mainstream. US politicians' willingness to listen to this is certainly dictated by the exigencies of election year politics but the protests go deeper.

Contrary to the situation prevailing even a year ago, those protesting today are white collar people -- engineers and MBAs -- who see even their jobs going away to India. And when such educated and articulate people protest, the media and the politicians sit up and take note.

K P Balaraj, a member of The Indus Entrepreneurs and managing director of the venture capital firm WestBridge Capital Partners, sees offshoring to India taking place at a qualitatively different level than earlier.

The expected part is that western companies will offshore more and more critical technology development to their captive units in India, and people of Indian origin with an equal presence in both India and the US will increasingly think of locating the high- tech work of their startups in India.

But the unexpected new trend will be western companies locating some of their high-tech startups in India -- non-Indians will leverage their Bangalore experience -- and all this will provide very good reasons for highly skilled Indian professionals to return.

The implication of all this is that at some point in the not too distant future, the offshoring to India will lead to a partial hollowing out of the Silicon Valley and an equal backlash.

The Indian government, industry leaders and business associations will have to develop an action plan to counter it. Balaraj says they must lobby the US media more rigorously, larger Indian companies will have to find a role in the overall scheme for themselves and high profile US government leaders who are pro-Indian will have to be roped in.

Clearly, Indians will have to do better than win over a Larry Pressler and try to grab the support of the likes of Hillary and Bill Clinton.

As the decade progresses, this will be a bigger external agenda for India than containing the menace of Pakistan or even the influence and impact of China.

There is of course the possibility that the potential for offshoring to India outlined above may not happen.

Somewhere down the line, the adequate supply of skills of different levels of sophistication may run out or people seeking to do business with India may feel they have had enough of Indian airports, roads and power supply.

Vivek Kulkarni, until recently Karnataka's IT secretary and now CEO of a BPO company B2K, feels that the infrastructure will respond to the challenge but it is in education that policy makers will have to be more proactive.

While still in government he helped launch B-SAT (BPO Skills Assessment Test) which can be taken by any entry level BPO aspirant and makes the recruitment job of BPO operations much easier.

At a higher level, there has to be much better imparting of analytical and communication skills, something that is now done only in the best engineering colleges.

Technology bigwigs have also spoken of the need to have more industry-academia cooperation, create chairs for example, so that academia does not entirely lose to industry the services of the best technology brains.

R A Mashelkar, head of CSIR, has led a task force to chalk out a road map for upgrading the regional engineering colleges.

Such carefully worked out strategies should be implemented rather than talking loosely, as the prime minister has done, of creating several new IITs.

When a historic opportunity knocks at the door, the least a nation should do is have a clear agenda for action, both domestic and global, to make good use of the opportunity.

Outsourcing Business to generate 30 million jobs in India by 2020

India has the potential to generate 30 million jobs on incremental basis in outsourcing business by 2020, Boston Consulting Group vice-president and director K James Abraham said in Kolkata on Tuesday.

"Right now less than one-third of Fortune companies were going for outsourcing and even less than one-twentyfourth of that was coming to India... So there is a huge potential for job creation from outsourcing in the country," Abraham told reporters while quoting a study conducted by the Planning Commission and the CEOs of leading companies.

However, Abraham cautioned that to achieve the target of 30 million jobs, India would have to reform its education system so that It has a pool of large number of engineers and other professionals

Reforms, he said were required to increase the number of seats not only at Indian Institutes of Technology and Indian Institutes of Management, but also at the regional engineering colleges.