A toddler facing mid-life crisis?

Priya Padmanabhan

BANGALORE: NASSCOM

chief Kiran Karnik made a seemingly quirky yet ironic statement at the NASSCOM

ITES-BPO India Strategy summit. “Though the Indian BPO industry is only a few

years old-a toddler, it is facing a mid-life crisis.” Karnik's remark seemed

the overall theme for the ninth edition of the summit held in Bangalore.

The industry has grown significantly over the last nine years, but it has

still has a lot of ground to cover. So this year, NASSCOM decided to focus on

the challenges in the way of better growth for BPOs. It also hoped that this

reconnaissance would help the industry exchange experiences and more importantly

grow its revenues from the current $6.3 billion to $10 billion by the end of the

decade.

Some of the identified areas include usual suspects like talent retention,

challenges of scaling up, global competition, best practices and the changing

business environment. Most of these concerns are not specific to India alone but

worldwide concerns.

NASSCOM is taking a proactive role to tackle some of these challenges. The

association announced during the conference, some of the steps it is taking to

address issues especially those related to increasing the talent pool required

by the industry. The roll-out of the NASSCOM Assessment of Competence tests (NAC),

a one-of-its-kind assessment initiative which would help the industry in getting

industry-ready candidates was announced at the summit. While the NAC pilot has

been completed, the tests will be introduced in November this year. The NAC

would test the skills of candidates wanting to get into the industry, in seven

areas including written and spoken English skills, quantitative skills,

analytical and logical skills among others.

Besides this, Karnik said that it is working closely with the Government and

academic institutions to see that changes are effected at the school level

especially in areas like language and computer skills.

Dayanidhi

Maran, union minister of communications and IT, who spoke at the summit,

demonstrated the government's support to the industry by supporting the IT and

BPO segment's demand to extend renewal of tax holiday given to STPI units.

Many of the panel discussions dwelled around the need for having new business

models, and increased technology investments by BPO companies. John McCarthy,

VP, Asia-Pacific, Forrester Inc, said that with the market getting more mature,

companies need to invest in technologies such as web services, Service Oriented

Architecture and the Internet to deliver services to customers

He contended that the so-called “mid-life crisis” was a global

phenomenon, which is the result of the market getting older and frustration

among BPO companies who are grappling to find the right strategy and business

model in the face of stiff competition and consolidation in the industry. He

also felt that it made sense for players to focus on specific processes and

verticals.

He suggested that companies would need to plough in investments in back-end

tech platforms and have a common delivery platform, which would make them viable

in terms of handling economies of scale, in the long-run.

However many of the industry veterans at the summit felt it was still early

days for the “transformational BPO” and that while BPOs may develop IP and

platforms around their offerings, it was difficult in some cases to convince the

customer to integrate their systems with the vendor platforms.

A highlight this year was the presence of participants from competing and

also emerging countries such as South Africa, Philippines, Sri Lanka and

Pakistan. This lends testimony to the phenomenon of globalization in the

services economy. A heartening fact at the summit was that various countries

acknowledged that there has to be co-operation and not competition among various

countries. Delegations from India's neighbors from across the borders-Sri

Lanka and Pakistan, were here to woo investment into their countries, which are

now rolling out incentives and setting up infrastructure.

There was a consensus that with the global delivery model becoming the de

facto standard, BPO companies are looking at various locations for seamless

delivery and also to leverage the efficiencies of various regions.

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