New 'Blue Oceans' out of current tsunami

BANGALORE: The storm may have come and still to be gone, but looks like the radars and masts of the CXO sailors have already changed. The word 'Blue Ocean' was not just another bandied about buzzword on the lips of some strategic thinkers but rather a word they pointed out as a recent example of the way they are anointing some key projects, and of course, their key direction.

Overall the BPO and IT Services industry has all the underpinnings of a new direction and untapped potential, as various sessions at Nasscom summit underlined.

In short, where the work comes from, and where it gets delivered from, won't be that big and impactful questions in the new order that is building up. The industry would get a truly globalized flavour in all areas.

That's what Pramod Bhasin, chairman, Nasscom, and CEO, Genpact stressed in particular.

"As companies we better stay flexible to responding to the new change. We have been on to labor arbitrage for quite long, and though, that reason will stay attractive, the industry would certainly move away from the onshore-offshore discussion to a very globalized format," he said.

India also has the danger of being complacent with salary arbitrage without realizing that the difference is getting slowly diluted in senior and mid-level resources.

The spotlight also shone upon the much-battered-with-debate area of 'captives'. To start with, not many are comfortable with the very choice of the word 'captive' for a shared services or internal services offshore center of an international enterprise.

"There's no mention of the word 'captives' in our organization," told Ganges Satyanarayanan, VP, Dell Global Consumer Services and MD, Dell, who very deftly dissected the diagnosis going about that 'captives are going the dead road'.

And by doing so, he separated two buckets of captive centers. "Captives are not in the dead category, it's just a question of when they know it's time to exit, which is an inevitable decision depending on a company's choice and stage of maturity."

As he explained further, "There are four clear stages to a captive's path. The first is about sending the jobs somewhere because it is cheaper. Second is when it reaches six sigma or process improvement stage. Third is to automate or make the work go away somewhere better.

“Every captive can either cover all the stages till it come to the fourth one, or alternatively, stop at stage one or two and start monetizing. The question has to come at some stage. It's not an inevitable 'deathbed' but rather a choice of the stage of 'when to exit'. At Dell, our job has been of adding value on P&L."

The opportunity is at an inflection point, according to V S Gopi Gopinath, chairperson and CEO, AT&T Global Network Services. As he viewed, this is a time when customers are thinking about optimum utilization of resources and adoption of appropriate technologies, and implementation of business processes on new technology.

He also talked about how unified communications and richness of real-time collaboration will impact an industry-like services, where telecom has been a large enabler since the onset.

Talking about the potential transformation of BPO IT area, specially in context to the advent of cloud, he said, "From dedicated set-ups where one application per server, and over-built but under-utilized infrastructure was the norm, industry is gradually moving to virtualization to utility and then to cloud-based set-ups.”

The speakers were debating current industry issues at a panel discussion on 'Efficiency, Transformation, and Growth: A 360 degree perspective of how BPO industry is reinventing itself', at the Nasscom BPO Summit 2009 here.