The BPO India Party psyche – 3/?

About two weeks back S a lady of about 40 years of age, wife of a friend of mine, mother of two girls including one appearing for her 10th standard exams was returning home from a party at Madh Island in Mumbai, India. The party went on till about the wee hours and it was about 6 am when she was riding on a two wheeler of one of her colleagues.

S was a process trainer in one of the leading call center BPOs. And it was the norm to throw a party by the BPO every quarter and all employees were expected to attend and ‘bond’ with each other.
While coming back…after probably one too many by the youngster who was ferrying her home, they had a fall and she injured her skull with a deep fracture. Bottom line is that she is in coma for the last 3 weeks. And no one know when she will come out of it.

Her daughter appearing for her 10th had to do so under such trying circumstances. The lack of medical facilities has left the family facing financial difficulties. When she will come out of coma is anybody’s guess.

Sorry for the sad part.

But the issue really is….what is the employer’s responsibility? If this were the US the employer would be sued for organizing a party and serving alcohol till the wee hours, to probably youngster who did not have the official permit to drink, and sending them home in two wheelers without helmets.
But it is Party time folks in BPO land. And such small incidences be damned.

The BPO India Party psyche – 2/?

In any situation when there is money to be made quickly, all kinds of folks rush in. VCs and other financial folks are the first to zoom in. They come in with OPM ( Other People’s Money , pronounced as opium ) and it can be as heady as the real thing and make folks do and think weirdly.

OPM props up new entrants who can indulge in the right rhetoric with little execution savvy and experience in the industry get into the business. Top level executives join them hoping to get a career break together with stock options piled in. They see financial freedom. Employees join in based on the antecedents of the top team. OPM makes the folks all around have a ball all the time. HR policies go out of sync with industry practices.

Clients get to them for want of a better due diligence process. VCs once invested are all interested in making their investments look good and bring work to their door. But ultimately, IMHO lack of experience shows. It separates the men from the boys.

Customers come for the sell speil but stay for the execution and delivery execellence.

Slowly a kind of burndown starts occurring. Bad news starts hitting the press. Folks say, ‘Oh…the BPO was another fad and died away’. What happened was that bad investments started showing their true colors. The good ones pick the remains, if desirable, consolidate and grow.

What remains for the folks who were part of the OPM group are the fond memories of the parties that they enjoyed in the ‘good old days’.

Venkat

The BPO India Party psyche – 1/?

Part of the Hype cycle of the BPO industry is the what I call the Party psyche that prevails today in most of this sector. The Party psyche implies that there is a crowd that strongly believes that life is an ongoing party. And there are certain folks who think that their objective is to skate to where the next party is happening.

It started in India from the advertising boom post liberalization when demand for advertising folks shot up and employees were wooed like hell. Then I have seen the financial services party when anyone and everyone who knew how to spell hire purchase, lease or amortization was given a car and a flat in a tony neighborhood.

At an international level we have all seen the excesses of the dot com party. While the US stories of this era are legion and well documented in India also we saw a Tsunami wave of this event hitting our shores.

After the IT burndown post dot com and Y2K both IT and BPO are the next happening parties in town. And naturally it attracts all the usual party goers as well as a few gatecrashers to boot.

Unfortunately very few believe that wealth is created by hardwork and sheer dint of effort. Luck, in my school of life, I was taught is the crossroads of hard work and opportunity.

How many in the current BPO sector are willing to roll up their sleeves and put in the 12+ hour days that it takes day in and day out to get somewhere in life? How many will skate to the next event in town?

Which kind of vendor will you choose?

Venkat

The looming labor shortage

Hello,

It looks like India’s BPO boom would have to face reality rather sooner than expected.

The labor shortage, which I have been talking about earlier is now catching the attention of mainstream media.

This article in the CIO Today magazine carries highlights from the Nasscom McKinsey study about the pitfalls of the scenario going forward.

The study carries some strong messages if India needs to keep the momentum going.

Meanwhile the fight for scarce resources is on amongst the players who have already landed here.

This results in shortage even to the domestic industry and other sectors. For example, a NY based law firm setting up operations here in Mumbai has taken about 300 Lawyers and para legals at salaries that are double what the market pays for such skill sets. This no doubt results in a shortage of lawyer for law firms who were themselves otherwise overburdened by the growing economic activity.

Venkat

Two flooding

Whew…some of my regulars might be wondering why I am  not blogging more often.

Well, my inability to contribute regularly started off with my travel to the US. A week or two before the trip, I was busy getting all the things I needed for the trip in order. While on the 2 week trip itself, I did 8 cities in about 10 working days. Except on two occasions over weekends, I did not sleep on the same bed for two consecutive nights. After coming back, I got busy meeting the deliverables that I had promised during the trip.

But what is more of a co-incidence is the two flooding that occurred. While I was in the US, Mumbai  ( and to some extent Pune ) received unprecedented 110 year record rainfalls. While Mumbai was flooded and non operational for over a week, our own delivery center faced flooding issues and had to shut down for two days due to power outages that exceeded the capacity of the Generators to keep powering.

Now that I am back in India, I am witnessing the news of the Hurricane and the damage that it has left in its wake.

While most disasters are unforeseen there can still be some degree of planning. Multiple locations being made fully operational is one of them. Both from the clients side and the vendors side.

The lessons are clear. If you want to be able to quickly tide over disasters, Disaster Recovery Management is critical.

Venkat

Vital Link Outsourcing

Indian BPOs – 3 breeds – 1/?

Many general participants do not realize that there are 3 distinct breeds of BPOs.

Each one of them have their own origins, imperatives and other such characteristics.

What are they?

1. Pure Play Third Party BPOs

Owned independent of the customers. Some background in the industry vertical / processes. Serves many customers and mostly no single customer forms a large percentage of its turnover.

2. Captives

Owned and set up by the customer. A captive back office for a US / UK corporation. Processes are defined and move to India.

3. Software Backed BPOs

Owned or promoted by Indian software companies. May share many characteristics with Pure play third party BPOs but are different enough to be mentioned as a separate entity.

What are their characteristics? How do they differ? Why should I know more about them?

Venkat

The Sun Tabloid BPO fraud

There has been yet more fraud and this too is unraveling itself in its myriad ways.

 

Most the world knows the penchant of British tabloids for yellow journalism. And the free availability of all sorts of content whether copy protected / data secured or not in South Asian countries.

 

Combine both of them and you have something that hogs the headlines in our Industry for a few days. But digging deeper into the facts, it is becoming murkier by the day. In fact what are facts and what are not is itself becoming confusing.

 

But then this kind of sting could have worked anywhere in the world. Even back home in UK. Nuclear secrets have been sold for far lesser motives and even lesser pecuniary gains.

 

When it comes to Data Security even in the US systems have been hacked into and identities stolen.

 

But then business is going on as normal.

 

The Economic Times reports that Fortune 500 companies favor India.

 

Venkat

EX V/s Tally

About 10 -12 years back, at Vital Link Outsourcing, when we started BPO operations, we had to make a choice of choosing our accounting software. We had a choice of EX a accounting package from Tata Consultancy Services ( TCS ) from the House of Tata’s, India’s leading business house. The other alternative was Tally from a small no name business outfit in Calcutta.

The launch of EX was preceded by a slick advertising campaign, that many old timers from India will recollect. Naturally the strong ad campaign and the big house name behind the product made our decision veer in their favor.

Starting 1st April, 2009 we mark the end of our decade long tryst with a software that caused us more pain and anguish that we had bargained for. ( But aren’t all software like that you might ask  ) We made the decision and moved to Tally. If ever there was a most damning statement against the House of Tata’s this is one of them.

Why did we do that?

EX was never supported. Bug fixes were paid version releases. Usability issues were never fixed. User base of accountants / CAs was rather restricted and getting more limited by the day. Dealers were not interested in the product any longer and support was sporadic and patchy, at best.
TALLY on the other hand had acquired a large user base of folks who knew its intricacies. With the release of the VAT regime in India, Tally was all over the place with its VAT compliant upgrade. The folks at EX were sleeping on the job. In short Tally was the pre-dominant market leader in its category. And did we have a choice?

Why this had to happen? The simple fact is that for TCS, EX was a small division too miniscule to merit top management attention. For the Tally guys, it was their livelihood. It was Tally or bust for them. Naturally the Tally guys had the fire in their stomach, that the guys who ran the EX division of TCS sorely lacked, sitting on their fat behinds.

No one gets fired for buying IBM they say. So it would be, we thought, with TCS. But IBM just kind of closed the division, it looks like.
What does all this ranting of changing accounting packages, have to do with running a BPO unit in India, you might as well ask.

The question is whether your BPO vendor is solely focused on serving you or not. Or is he a current ‘must have’ BPO division of a large multi focused conglomerate?

At Vital Link Outsourcing we are seeing a lot of large names not satisfying their large name customers. Giving BPO a bad name in general on both sides.
All due to a strong lack of focus on the part of the service provider.

Venkat

BPO Hype Cycle – Gartner Report

The Gartner report released about 4 days back is all that a report should be. Alarming, shocking and meant to make folks sit up and take notice. Propel them enough to go out and buy the report. After all the primary business of all analysts is to first and foremost sell what they generate.
Having said this, is the prediction that about 60 -70 % of all call center BPOs will shut shop true or not?
In one word the answer is YES.
In one word your question may be WHY?

The answer will now have to be a little longer. Most of these BPOs have been started in the first flush of enthusiasm by every Tom, Dick and Hari in search of the pot of gold at the end of the BPO rainbow. Most of them lack a solid business model, are undercapitalised or lack sheer grit and execution capability that would separate the men from the boys. What ever the reasons for the weakness, there has to be some element of culling that nature has ordained.

Is this good? Not if you are one of the those going to be culled.
But if you are the one who is strong enough to survive then it is good.
Those who are going to close will throw up lot of trained talent and other resources which the strong can grab and emerge stronger.
I can already see this happening and it is good for the industry.

Venkat

Why a Blog on BPO Industry – 2/?

Having covered a little of the early days of how I came to be the CEO of Vital Link Outsourcing, I have been personal witness to all the explosion going on around in this segment now called BPO.
With a historical background and with some modesty, terming myself as a pioneer, I felt that the perspective that I bring to this field should not go unshared for the common benefit of the newer entrants.
I have also personally seen quite a bit of things going wrong and am anguished that as in any emerging segment gold diggers have rushed in. I think of myself as a crusader and feel that some of the trends emerging need watching for the benefit of all concerned. I have in this time seen quite a few ‘hype’ cycles and know that most press coverage during this period is ‘sponsored’ and that the media in a rush to file stories has little time for due diligence. In this Blog I am hoping to counter some of this for the benefit of all those who care to read it J .
Again with traditional media there exists very little scope for insiders and veterans to share their perspective for the benefit of all. I am hoping that with this blog there would exist a platform for all like minded individuals to come together and share experiences.

Venkat

Why a Blog on BPO Industry - 1/?

When the Internet started in India, circa 1996, we at Vital Link Outsourcing got our email id from VSNL on the giasbm01.vsnl.net.in server in India. This server was / is the first email server available to the public and we were there. As such we had one of the first 1000 or so email ids from India. We still maintain this email id though in a shorter form now. For those who came in late, this server is now renamed as bom1 server by VSNL. And oh… VSNL itself got renamed as Tata Indicom.
In my earlier avatar as a Chartered Accountant ( a.k.a. CPA ) I had run a practice of advising US based clients. When my father was posted in NY from 1972 to 1976 I had spent my teenage years in the US of A and knew all about labor cost arbitrage. These years gave me an exposure in the business cultures of both countries. From 1992 to 1996 we had created capacities to capture data from Share application forms and with the collapse of the IPO market we did not know what to do with this capability. My Ham Radio ( VU3PVN ) background propelled my continuing interest in emerging technologies such as the Internet.
The confluence of all these forces led Vital Link Outsourcing to take its strategic assets and leverage its capabilities in the offshore markets so as to capture the labor arbitrage opportunities. Simply put, we started writing emails and asking for work, promising we could do it cheap. Ahhhh thats easier now…
From those beginings we have come a long way now. We now service Fortune 100 clients with with their business critical data with strict quality and tight turn around times on a daily basis.
This blog is to share with you my musings on this industry from its early days as also current and future trends in the emerging BPO industry in India.
I promise to write atleast once a week and from a common point of view so as to interest readers on both sides of the border.
Thanks for taking the time to stick to the end and do feel free to comment.

Venkat