Shalini Kathuria Narang
California, June 20, 2005
India's niche as the industry leader in the BPO arena was once again lucidly visible in the attendee profile at a one-day seminar breastled Globalization of Services, sponsored by Stanford University's Asia-Pacific Research Center on June 17, 2005.
The presentations on offshore service activities including analytics-rich case studies and academic papers highlighting current practices and future trends in offshoring were presented by industry leaders from United States, India, China and Philippines, entrepreneurs and leading academicians.
Akshya Bhargava, chief executive officer and managing director of Infosys Progeon delivered the keynote of the presentation. He emphasized the need of maturation of the Business Process Outsourcing (BPO) industry in India via re engineering and process maturity.
He added, "India's BPO industry needs to broaden its scope from seamless end of well defined customer requirements to delivering holistic solutions geared at adding value to customer businesses. "Quality and end maturity has to be complemented with process maturity." Bhargava added.
Rafiq Dossani, senior research Scholar of Asia Pacific Research Center at Stanford and an author of numerous academic papers on outsourcing says: "Venture capital is relevant for India's outsourcing startups and is likely to bridge the innovation gap." The consequences of off shoring are long term and would be influencing the shores that it touches for at least the next 2 decades."
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Though cost benefits continue to be the primary driver for off shoring, perpetual improvement and re engineering capabilities by companies in the BPO ball game are the key determinants for future growth.
Better project and people management initiatives including customer relationship management, harnessing of local talent for middle and upper management, marketing and market development are some of the other pertinent prerequisites that the industry gurus enumerated as the principles to the pinnacle.
On a micro plane, the factors elaborated by panelists to shepherd future growth include initiatives in promoting technical (domain expertise etc) and softer (cultural) skill development in employees, global delivery ability and collaboration between vertical and horizontal industries. Best practices on and above cost reduction are expected to herald the next wave to BPO growth projected at 8% by 2009.
In the area of Human Resource Outsourcing, Mari Sako of Oxford University says, "half of HR Professionals of US are expected to work for outsourcers by 2007 and increasing scope and scale is the way to go."
Tiger Tyagrajan of Gecis Global concluded his presentation with a vehement rhetoric: "Retention of talent and attrition management by companies is increasingly going to be the single most important differentiator of success."
The softer cultural side of doing business in India was elucidated by Raj Shah of Ketera. He presented Ketera's India case study and spoke about the difficulties like unplanned time-offs by employees, language and cultural differences that the company had to encounter while setting shop in Bangalore.
The new wave and the benefits emanating from the development of 2nd tier cities like Jaipur, Coimbatore, Mysore, Chandigarh and Mohali in India for BPO operations was unanimously lauded. "Increasingly cost arbitrage would be playing a big role within cities in India.
The growing phenomenon of businesses moving to second tier cities within India is a positive sign of growth maturity in existing businesses and a great potential for new businesses" feels Kailash Joshi, a well known TiE mentor and veteran.
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China's growing hunger for its share in the software and information technology enabled services pie was brought forth by John Tai of IT United. He talked about the country wide emphasis on English language promotion in China.
The global manufacturing giant is pushing the national initiative to import English language teachers for instructing tens of thousands of eager and enthusiastic students in China. The famous example of English instructions in sport stadiums does not seem far fetched.
On a humbler side, Butch Meily of Philippine Long Distance Telephone Company says "We are not ready to compete with India but our emphasis is to partner with Indian companies."
Pavan Vaish of IBM Daksh Business Process Services says, "In the next 3-6 months, huge deals will be called between companies and mega contracts would be signed."
At the macro level, the trend in the BPO business in India is geared to move towards high value add activities. From QA-testing and low end repebreastive kind of software development work, the employees in the software hubs in India are now seeking cutting edge research and development work.
To prevent rapid employee turn over, the companies would not only need to offer better work but also growth initiatives, continuous domain and people skills training besides best of the line cutting edge compensation packets.
"The world will be very different for our children and given the current speed, even for us," write Rafiq Dossani and Martin Kenney, Professor, Department of Human and Community Development, University of California in a paper breastled India, China, the Philippines and Beyond: Understanding Service Globalization.
