Interview: B. Chandramouli COO, Intelenet

Wednesday, 21 January 2009

Chandramouli is Chief Operating Officer at Intelenet. With over 25 years in the field of banking, he brings in the expertise of a professional banker. During his term in the banking industry, Chandramouli played a significant role in the implementation of operations, business processes and product development. His erstwhile assignments include Yes Bank, HDFC Bank and Bank of America. Mouli is a health freak and a keen cricketer. He does a lot of research on native and epic writers and their unpublished literary work.

ValueNotes: What do you think about the Indian economy and its growth potential?
Chandramouli: As an outsider (since I do not directly belong to the manufacturing or financial services sector), I am very positive about the Indian economy. Though in the last one year there have been extreme constraints and there has been a dip in industrial and agricultural production, the world looks at the Indian economy positively. Based on reports and feedback from other countries such as the US, UK, Europe and the Middle East, India is considered to have huge growth potential. Indians are known to plan and execute well.

There are certain other important things that come into play such as the unorganized transport strike, the Mumbai terrorist attacks and non-alignment in the public sector at different levels, which are of great concern. I think that there are lessons in each of these events and we should learn from them. Many feel that people will soon forget these incidents and move on to their normal lives, but I think that this time people have learned big lessons from these events and are standing strong. These past 18-24 months have been very challenging and they have changed the way people think. I have a very positive outlook about the Indian economy. I think that we will do far better than our Asia-Pac counterparts. Growth is slow, but there is tremendous scope to improve, and quickly.

ValueNotes: Could you comment on the government initiatives for BPOs?

Chandramouli: The government can take on more initiatives for the BPO segment. For example, they can extend the tax break for another 5 years considering the fact that the revenue streams will mature in the next 2-3 years. BPO companies are articulating their needs well. The government should establish corporate governance standards among BPO companies to showcase the “controlled-expansion”.

More support is required from the government to go to the world and talk about India as a destination for outsourcing. We also need more focused forums to share ideas and discuss relevant topics about the BPO industry in India. These should be in addition to the existing ones such as those organized by NASSCOM.

ValueNotes:Your view on the growth potential of BPO?

Chandramouli: I see a lot of potential in the BPO industry over the next ten years. Most developed nations face huge cost pressures and will therefore outsource jobs. Contrary to common belief that the BPO industry is tapering off and has reached a plateau, it will grow exponentially. Of course the growth is subject to the US outlook and how they want to protect their jobs and deal with the taxes levied on such services.

Overseas clients no longer come to India just for data entry work. They realize a lot more value-added services could be derived from India. The world is aware of India’s demographics and statistics in terms of the number of people who graduate from universities, professionals trained every year, etc. BPO companies have become a huge success story for India. This industry is here to stay.

ValueNotes: A lot of financial clients are in deep trouble. What different verticals are you looking at at present? What other business segments are you looking at? For the BPO industry in general, where will the growth come from?

Chandramouli: In the recent past, the financial sector has gone through a phase of consolidation. Most of them are now looking inwards to change and adapt to the new environment. Today, it is more relevant and important to run the business in the most optimum manner than ever before assuming that the window of opportunity to increase revenues is smaller and difficult. In a recessionary market there is always a need to lower operation costs to stay afloat. To reduce operational costs, businesses have to be streamlined, cut all non-value adds in the process chain, effective in deployment of people, technology and infrastructure. All businesses, therefore, need to look at centralizing, co-locating, outsourcing or offshoring their work to low cost, but efficient destinations. This is an opportunity for them to reduce costs by 20%-30%.

Globally, there is huge pressure to look at delivery models, technology, operations and risk framework. European markets have traditionally been conservative about outsourcing. This is coupled with the fact that several of their governments are not allowing the businesses to go out. Slowly the global recessionary trends are setting in across these continents and therefore even European countries are looking at cost reduction and trying to remain competitive with each other and globally. The Middle East, which is considered to be cash-rich, is also now looking at these business imperatives.

ValueNotes: BPO companies are also looking at other destinations to set up centers. Is it due to cost / cheap labor or merely risk mitigation?

Chandramouli: Clients seem to have a variety of compulsions to drive Indian BPOs to look at other destinations. For example, language specific jobs, domain intensive work, analytics involved outcomes, business continuity, disaster recovery and of course lower cost of operations, are some of the compelling reasons for our BPOs to look at other destinations. Since we seem to have multiple choices to select the destinations, we rank them by several parameters such as low cost, availability of quality resources, geo-political stability, etc. Clients too participate in choosing destinations so that they are sure that service providers pick the right one to suit their requirement of adequate knowledge, domain experience and ability to provide end-to-end customer services.

So low cost is just one of the parameters. Among people, technology, infrastructure and process, the first three may directly relate to cost, but the process is the key differentiator. If you do not put enough thought into the process or designing the operating model, you may even lose the client despite providing low cost operations.

There is also an element of risk in choosing the destination. The destination should be scalable in terms of increasing the number of people at short notice. BPOs are struggling with language barriers for voice and data. While most of them have overcome the language barrier for data through translation tools, voice continues to be a great challenge. This is one of the main reasons why European clients do not favorably consider service providers outside Europe.

ValueNotes: What are the lessons in client servicing that a BPO unit must realize?

Chandramouli: There are two kinds of clients - those who are mature in their outsourcing journey and those in the nascent stages who would like to outsource.
The second category has a very large set of requirements. They require the BPOs to hand-hold them. They want to know everything that can be achieved by technology, operational excellence to reduce operating loss, how to improve their customer service, how to enhance their opportunity to sell better and what it would take them to comply with regulatory requirements. This is an opportunity for the BPOs to provide a complete range of services.

The first category knows what is required. The mature clients expect BPOs to have domain expertise, complete the transition in a short while (30-45 days) and share the risk reward. They require value addition. BPOs in these cases actually help clients to beat competition through cost reduction and efficient processes to support their aggressive roll out of new products and services in the shortest time possible to gain a competitive edge in the market place.

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