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Cover Story
 
INDIAN BPO INDUSTRY
“The big players pose a challenge”
Sanjiv Kapur, Sr VP & Head, iGate Patni BPO
Issue Date - 01/03/2012
 
B&E: How has the Indian BPO industry been evolving over these years. What are the important phases in the last decade for Indian outsourcing?
Sanjiv Kapur (SK): The Indian BPO industry has come a long a long way from call centres. From there, we moved to deliver commoditised sort of work by handling back office operations and doing processing jobs. I think that the next generation in this industry will focus on providing more end-to-end services. Now the clients except three major things – they want end-to-end services and they expect significant cost data, which can only come through high level platform-based BPOs; for that you require certain skills and technology. And thirdly, they want to pay only for the final business output, so we have to ensure that we do this. Today, the client expects you to turn from a vendor to a strategic partner. And this is happening globally because our customers are global. So, you can term this phase as ‘transformational BPO’.

B&E: What according to you are the major challenges for the future growth of the industry in India?
SK: I think the biggest challenge is the execution of the model. I talked about the ‘transformational model’. How do you execute on it? Today, if you were to manage a client from IT or infrastructure, you have to have specific skills and technology expertise. The old lift and shift thing has changed. With old skills and model,s it’s not possible to deliver the need of the clients today any more. For Indian BPOs, adapting to this ‘global delivery model’ is a challenge.

B&E: What is the current hiring model in the industry? How have you tweaked it to your advantage?
SK: The hiring model has also changed in sync with the growth in the BPO industry. We are not just hiring graduates, as the requirement of the clients have changes. I would put it in this way today that we are doing more with less. We work on a non-linear platform based model, where I have 300 head counts who generate a business of $30 million. It you look at the people model, it would have taken some 1,200-1,300 people for this. So, the number has reduced and this has happened using automation and technological advancement. Today, we hire professionals like nurses, doctors, chartered accountants & post-graduates, because there is a scope for a lot of growth in terms of building a lucrative career. The industry has gone through a phase of consolidation, with major IT companies like Infosys, TCS, et al, making strong inroads into the space. Has it made the growth of independent BPO companies tougher? Certainly the big players in the market pose a challenge for the stand-alone BPOs, simply because the latter do not have the large IT skills and the consulting skills to be able to handle client demands. According to me, they are certainly going to struggle to survive, because most independent BPOs still run on the traditional model, which is inefficient when it comes to delivering on end-to-end processes. I would say that they will either struggle or will adapt themselves to this shift.

 
B&E: How has slowdown affected the BPO industry’s operations in India? What will be iGate Patni’s strategy in the coming years?
SK: The slowdown has not really affected the market, because expectations of your client in such times increases from you. Definitely, the growth had slowed down and the income had reduced, but you see that there was a constant positive upside maintained. Clients over the time have changed their investment pattern in the BPO market. As I have discussed, they have become more specific. Our focus here at iGate Patni is ‘iTops’, which is Integrated IT and Operations. We integrate IT technology and operations and focus on how we can reduce cost of operations, processes et al for our clients. So, we are neither purely a IT-based model nor a BPO with iTop.

B&E: What are the changes, in term of the way industry works and cooperates over these years? Do you see the sector still delivering on the bullish growth projections that we were used to hearing a few years back?
SK: The nature of the business has changed, I do not know whether the whole buzz around BPOs has waned out or not, but I would say that the industry has matured a lot in the last couple of years. We are hiring not just graduates, but also professionals from various fields. Earlier, masses use to flood in. These days, we are doing more of the KPO kind of work and doing analytics. We are providing more business solutions-oriented jobs as compared to the old commoditised kind of businesses and employment opportunities. Since, the global economy has undergone a churn, expectation from BPOs have also increased. In response, companies have also moulded themselves. Globalisation of the business has happened lately.
          

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