A Rural BPO

I was recently traveling in  Tanjore district, close to my ancestral village of Sedanipuram, when I had occasion to go to Manjakudi and visit the Veda Patashala ( Vedic School ) there and meet with the head of that institution, whom I know well.

The Veda Patashala is run by Swami Dayananda Saraswathi, a forward looking religious leader. At Manjakudi, which is his birthplace he has set up many educational institutions to cater to various academic disciplines.

During my visit, I came to know that they have tied up with WIPRO to set up  a rural BPO. I seized the opportunity to visit the place since such developments are of keen interest to me.

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The US crisis SnP downgrading AAA+

The US is headed for a crisis, that no one can deny.  There is nothing like a free lunch and unpaid bills do have a habit of catching up sometime or the other. It may be 2 months from now or 2 years from now.

No one is sure how this will pan out. How will it affect us at a business level? How will it affect us at a personal level.

Here are Vital Link Outsourcing, we are searching for answers and I am sure that we are scratching our heads as much as you are probably scratching yours.

One thing we know for sure from a BPO perspective. Some of our clients will have an imperative to outsource more, in order to cut costs further and survive. Many others may see their own business volumes shrink and thus the aggregate number of transactions to outsource may fall. Some may see both.

It would be an interesting study to see which factors influence either of the above two scenarios.

Any ideas?

NZ seems to be picking up

When it came to outsourcing, NZ always seemed to be quite laid back in its approach. Not much traction was seen in NZ companies trying to outsource to India. Vital Link Outsourcing had formed a subsidiary quite a few years back there but things went cold due to lack of interest.

Suddenly things seem to be picking up on the NZ front.  First we heard back from our old contact seeking to revive the relationship. And then this article in the news.

http://tvnz.co.nz/business-news/fairfax-outsource-kiwi-jobs-india-union-4256353

P. Venkatraman
CEO
Vital Link Outsourcing - A India based BPO catering to the SME segment in Internet Research, Content Aggregation, UK Accounting and Dcoument management. In two engagement models. Shared Business Services and Delivery based.
www.vitallinkcorp.com

Hello,

Continuing with my list of reasons as to why costs in Pune are coming on par with that of Bangalore and Chennai..

3. You sow and I will reap:

Most of the BPOs always want to staff in a hurry. In Tamil there is a saying that goes something like..If I see the dog I do not have the stone to throw at it..and when I have the stone..the dog is not to be seen. Lest my US readers who love their dogs more than we do here, take umbrage, the saying refers to a street mongrel with rabid tendencies and not that darling you dote upon at home. But I digress.

Coming back…when a BPO is set up, it is a chicken and egg story. Which comes first? Customers or employees. You should have one to have the other. In case my US readers are still bristling, this is where the dog and stone analogy kicks in. If you have customers…and you know their needs…you know whom to hire. But if you hire ahead of the sales then you add to the monthly burn. And you can never be sure of the length of the sales cycle and the customer commitment. So Sales, being the magicians that they are, indulge in some poetic license when it comes to stating delivery capabilities.

But once the sale is closed and the initial pilot has gone through successfully, customers get greedy. The clients’ manager who has P & L responsibility wants to cut costs by sending more work to India. He has tasted success and wants to reap it all in. A quarter coming to an end adds a tremendous sense of urgency to stone that dog. The term ’scaling up’ gets bandied about a lot in the late night / early morning conference calls.

Sales has till then, knowing how to do its job well, given an impression that in Pune / Bangalore / Chennai you can get the required skill-sets freely roaming on the streets in numbers greater than the snakes and tigers combined. In case some of my Indian readers take umbrage at using ‘tigers’ and ‘poaching’ in the same mail please excuse me. But I tigress.

The clients’ manager, taking huge gulps of his Kool-aid, wants to see head count go up starting yesterday. Sales starts telling Head of Delivery to now start delivering. They have got the customer and their job is now over. The Delivery Head sees prospects of egg ( or chicken, or whatever ) all over his face. He yanks the HR guy who in turn spoils the sleep of the head hunters. The word is out on the streets…300 new hires in one week. Bonuses if targets are met.

The head hunters have until then also done a good job of their own Sales to the HR Manager. Led him to believe that required skill-sets in abundant numbers are all practically jostling for space in his rolodex and databases. Why..just last week he had to remove all the snakes, tigers, chicken, egg and dogs combined to create more space.

The Head Hunters have to now do what they have to do. Get the head count. But where to get ready made skilled trained staff from. Go up to the competition down the street and offer something more. Something more..like may be…double the salary.

But what about delivery costs, the CA ( CPA ) in me might ask. But the Head of Delivery and the HR Manager will themselves be offered double salary at some point of time before the bean counters roll in.

More in next…

India Outsourcing BPO Costs – 3/?

Pramod Haque has been going around the country side and spreading the same message.

Why is this happening? Why are costs in Pune coming to that of Bangalore or Chennai?

1. Lifestyle costs: I remember a time when salaries in different cities even for the same company was different for the same grade. It simply reflected a cost of living of that city as well as a lifestyle of that city. With media and mass advertising, lifestyle across all urban locations are the same. The Bangaloreans drink as much beer as the Punjab da munda and do not retire home for a meal of thair saddam ( curd rice ) any longer. How eager is the Pune youngster to stick to his sol kaddi? Not much I guess.

2. Demand outstripping supply: At the BPO forum of the MCCIA here in Pune we have been trying to do a study of the annual labor being supplied by various educational institutions. There is also an initiative to scope the existing pool of manpower. But such studies are easier conceptualized than actually carried out and delivered. In short no one knows what is the supply and the demand just keeps getting upped.

More in next….

India Outsourcing BPO Costs – 2/?

I was yesterday at the dinner of the CEO forum of the MCCIA, here at Pune. The speaker of the evening was Mr Pramod Haque, Managing Partner of the VC firm of Norwest Venture Partners. He talked of his two investee companies and why they had chosen Pune as the preferred location over many other cities which they had closely examined.

But hidden in his message was the topic which is the subject matter on hand. His coverage in the Pune Newsline carries the full story. But his warning note is ‘‘India (and Pune’s) biggest advantage is its cost advantage. But if salaries don’t settle down, it will become uncompetitive versus China and Eastern Europe.’’

To regular readers of my blog this should sound familiar.

I had wanted to ask him some questions during the Q and A, but held myself back.
1. If his investee companies needed talent ( and that was the main message of the evening ) would he hire them without offering more to employees with experience. Does he expect them to switch from existing employers without a good jump?

2. If his employees were being offered a 50% hike by the competition down the street what would he do? Match the offer and hold them back? Let them go?

I have said before in many forums and I am saying this again. Unless we take collective action as a joint forum we will not be able to achieve cost control. This is so because many factors of costs are influenced by the environment external to the enterprise.

India Outsourcing BPO Costs – 1/?

The key driver of why BPO is moving to India is costs. Get this right. It is cheaper to do things here than it is wherever it was getting done before. Labor cannot move but with IT, work can. So we have work coming to India.
Having got the basics down how are BPOs looking at costs? And that horrible thing called cost control?
IMHO very badly. Right now the spending pattern would put a drunken sailor on shore leave to shame. To get a glimpse of it…see my earlier posts on the Party psyche.
Think about it. How does an average office in Mumbai pay a telephone operator? What does the telephone operator in Hotel Taj, a five star hotel, get? Or Karsandas Khimji and Co, a typical trading firm in Masjid Bunder pay its telephone operator. Do they have free lunches? Or weekly parties?
So why should call center agents be any different?
” There is an acute scarcity and hence prices of agents and perks are much higher.” Logic accepted…but does the customer care about it. When you become too costly…guess what he will do? He will base his decision on exactly the same reasons that bought him here in the first place.