As a former business head at Deutsche Bank, Rohit Kapoor led a marketing team that serviced clients in Europe, the Middle East and the Indian Sub-continent. He also managed the venture capital and private equity investments of several Ultra High Net Worth clients in start-up companies both in the U.S. and Indian TMT sectors. Having successfully raised several rounds of venture capital funding for various companies, Rohit has also been involved in the structuring of their investments. Prior to Deutsche Bank, he worked for eight years with Bank of America, five of which were in Private Banking in New York and three in Corporate Banking in India. Rohit holds a B.Tech from IIT Delhi and an MBA from Indian Institute of Management, Ahmedabad, India.

VN: EXL has been successfully handling outsourcing relationships. What were the initial challenges? What are the new challenges? (in terms of marketing and operations)  
 
Rohit: EXL has been successfully managing outsourcing relationships by keeping its focus on execution of its strategies. EXL has also kept expanding its breadth of services within its chosen vertical to sustain its leadership. Our ability to continuously add value has also enabled us be a chosen partner for our clients. We have achieved this through our transformation services that focus on helping clients increase operational efficiency, enable effective decision making and enhance risk and control environments.

Initially, we used to face a lot of resource issues in terms of efficiency. Now we are much better in terms of utilization and efficiency of resources.

VN: How has the buyer-vendor relationship changed over the last five years? How have you been handling the change? Any specific initiatives that you have taken.
 
Rohit: We now have established relationships and are managing end-to-end processes. It displays a high level of confidence our clients have in us. The buyer-vendor relationships are now moving from being just tactical to more strategic in nature. We have certain relationships where we are managing 100% of their offshore business operations.

More and more clients are looking towards Transformation services to make a positive impact on their business. We have broadened and strengthened our transformation services to meet such demands of our customers.

Another important trend that is emerging is that clients are now increasingly entering outcome based deals. This is an indication of gain sharing models gaining acceptance and clients’ expectation from providers to share more risk. Clients are also requesting for transaction-based pricing versus FTE pricing for greater transparency of costs and ease in comparing pricing of bidders.

VN: What according to you are the key success factors for pure play BPO vendors?
 
Rohit: The key success factors for a pure play BPO service provider are domain expertise, process expertise in the chosen verticals, ability to innovate, and ability to apply best practices.

VN: Going forward, how do you see the offshoring business model evolve over the next five years?
 
Rohit: The evolution of offshoring business model in the next five years will lead to an increased demand for specialized service providers. These specializations could be either industry specific or function specific or a combination of both.

We will also witness increasing adoption of a global approach, rather than an India centric one, by service providers as well as clients. This would mean that while service providers would set up delivery centers in those emerging geographies that are a strategic fit to their industry and functional expertise, clients would also adopt strategies to spread their processes across these emerging geographies to minimize their geographical & political risk and maximize their business gains.

In addition to managing clients’ process, service providers will be involved in clients’ business strategies. This would require the providers to have a deep knowledge of the clients’ business and industry.

Clients are also shifting their focus from cost management to revenues and ability to be more competitive in their markets.

VN: What are the key trends in offshoring? (in terms of contracts, SLAs, services offshorability)
 
Rohit: In terms of contracts, the contact sizes would be larger and would be for a longer duration.

Some of the economic risks are now being shared by both the clients and service providers. New clauses are being incorporated in the contracts for price revisions, both upwards and downwards, to accommodate foreign exchange fluctuations and change in taxation policies.

The SLAs are now being structured to support gain sharing models. Hence, metrics now are outcome based rather that service level based. SLAs are now not rigid and have the flexibility to incorporate value additions resulting from transformation services.

SLAs are now being structured with built in clauses for penalties and incentives to reflect a positive or a negative outcome.

VN: What are the key trends in the insurance industry? Which factors will affect the growth of insurance industry?
 
Rohit: The insurance industry is the most interesting industry in terms of offshoring trends. Not only will it see increased traction in the in-force and claims administration services, there will be an increased demand for analytics services to increase the effectiveness of their decisions. TPA licensed companies would also increase their focus on offshoring their processes.

VN: Do you think the election results in the US will impact the industry and offshoring? How & why?
 
Rohit: The results of the US presidential election would not have any significant impact on the industry. Offshoring is now established as a business strategy to enhance business competencies. Given the economic situation, outsourcing is only going to grow because companies would need to strategically manage their costs which can be achieved best by increased offshoring.

VN: What kind of an impact is the current slowdown in the US likely to have on offshoring? Why?
 
Rohit: The current economic slowdown would compel companies to focus on cost reduction. Except for the banking industry, where offshoring would be impacted because of delay in offshoring decisions, all the other industries are increasingly looking towards outsourcing as an important tool in their cost reduction strategies.