BPO Hype Cycle – 2/?

Last week my friend M from Bangalore called up and told me that a certain UK investor was looking to invest and would I be interested in meeting with him. I said sure since it helps to meet external folks for industry level perspepctive. He replied that his friend A from Bombay would call me up. A called up and put his friend S in touch with me. S was all of 30 and had done two stints in two BPOs in Bombay. I considered him a BPO guru  I was reminded of the Java Guru’s we saw some time back. S then talked about a Bombay Stock Exchange member and an Ambassador of a small country wanting to see our facilities etc.

At this point I lost my shirt. There was not clue of the UK investor and now some folks who had no previous background in the Industry thought they could just saunter into our floor. We deal with confidential client data and we therefore have strict data security norms and do not normally permit anyone who shows up at the door into the floor without a strong reason.

And here was someone whom I had hardly met suggesting that they be permitted to access our facilities.

Data Security concerns aside, when folks who know nothing about the business start getting interested, to my simple mind, it means we are in the thick of the Hype Cycle.

BPO Hype Cycle – 1/?

As far as India is concerned the BPO industry is in the thick of the Hype cycle. From a US standpoint also it grabs media attention like hell.
For those of us with grey hair we have seen many such cycles. In India we know of the stock market booms of earlier era. The granite hype, the plantation hype and the last one…the dot com hype. American readers will easily understand the dot com hype since it affected both sides.
The BPO industry in India and the US has all the makings of being caught in the hype cycle.
My own opinion in all such situations is that there is a core business in any sector which is not hype. And built on all this possibility is a superstructure of expectations that can never be met. Granite for example is mined, excavated and used for various reasons. In my house as well as in many homes thorough out the world. Same with teak wood. Same goes for the dot com industry. I books my tickets and do all my hotel bookings for my travels using the Internet.
But the Investment bankers and other specie of the financial jungle soon start grabbing media attention from the actual players, create the hype, siphon off the cream and then skate over to where the next happening party is.
So here is a question to ask yourself, “Are you in the Hype segment of BPO or are you in the Real segment of the BPO industry.”

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

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