BPO costs likely to go down soon

BPO costs likely to go down soon
JOJI THOMAS PHILIP
TIMES NEWS NETWORK[ FRIDAY, JUNE 30, 2006 12:00:00 AM]

NEW DELHI: Software exporters, BPO units and IT enabled industries may soon see their operating costs reduce significantly as bandwidth rates are likely to see a significant reduction soon.

This is because, the government is ‘actively considering’ and is likely to accept the Telecom Regulatory Authority of India’s (Trai) recommendation to fix and regulate cost-based access charges to submarine landing stations, which carry international bandwidth to India.

International bandwidth, called IPLC (international private leased circuit), is a point-to-point private line used by an organisation to communicate between offices that are geographically dispersed throughout the world. It can be used for internet access, business data exchange, video conferencing, and any other form of telecommunication, and is the key and basic requirement for IT and ITES industries.

At present, six international cables carry bandwidth to India — these can be accessed from seven locations, which are called the landing stations. These cables are owned by VSNL, Bharti and Reliance. This number will go up to eight as landing stations of two new cables of Reliance and BSNL are currently under construction. Industry analysts are of the view that equal access to these landing stations on a non-discriminatory basis and fixing of access charges can lead to an over 40% reduction in bandwidth. Trai has also said that bandwidth rates in India continue to be high on account of denial of access to the existing international capacity of a submarine cable and denial of landing facilities at the station to new privately-owned cables. It has also pointed out that many countries have brought in regulation to ensure that access to these facilities are fair, transparent and non-discriminatory. Trai therefore had recommended that India too adopt a similar system and the government is in favour of this, said a ministry source.

Aussie cos look to India

NT Bureau
Chennai, June 23:

Reeling under acute skill shortage, Australian companies are increa-singly looking to India for outsourcing a host of financial operations.

In the past year, over 12 Aussie firms have set up outsourcing centres in India � Optus has moved 150 jobs to Bangalore; Sales Force, Australia's largest call centre, has tied up with Hero group's call centre, Hero ITeS in Gurgaon; IPP Technol-ogies Pty Ltd, a Sydney-based consultants has a contract with Logica CMG for processing electoral data for New South Wales government.

A number of SMEs in Australia are also in the fray. Robertson & Marks in New South Wales is now in the process of setting up a facility in Chennai for CAD related work.

With over 4,000 call centres and 2 lakh employees, Australia has the largest call centres in the world. But today, battered by inadequate staff and cost escalation, many of them are not able to function effectively and are looking towards India as outsourcing destination for profitable operations.

Indo-Australian Chamber of Commerce (IACC), the apex body for nurturing trade between the two countries, in association with the Victorian Emplo-yers' Chamber of Comm-erce and Industry (VECCI) and the Employer's Feder-ation in Melbourne, is drawing up plans to attract a number of call centres and BPO operations in India. 'Our objective is to bring in at least 1 per cent of Australia's call centres, that is, 40 of them to India this year. That is an achievable goal,' says C Sarat Chandran, director, IACC.

With a view to create awareness on these oppo-rtunities among Indian call centres and BPO vendors, the IACC is organising a one-day event - Workshop on Outsourcing Opportu-nities from Australia - today. The workshop would have presentations by several Australian and Indian companies on outsourcing operations.

Sanjeev Aggarwal quits IBM for Helion

NEW DELHI: Sanjeev Aggarwal, one of the three promoters who set up and then quickly sold the famous BPO Daksh to IBM for $160 million a couple of years ago, has decided to quit as CEO of the outsourcing businesses.

Aggarwal is now going to set up a $140 million technology fund Helion, with couple of partners to invest in areas like BPOs, IT, mobiles and gaming.

Other partners in Helion will be Kanwaljit Singh (of HLL, Intel and Carlyle experience) and Ashish Gupta, one the US-based promoters of Junglee that was sold to Amazon. Gupta has been associated with another start-up in Bangalore for past few years, but is believed to be moving back to India.

"We have had a very good growth," Aggarwal told ToI, confirming his decision to quit IBM. "We were around 6,000 people at the time we sold Daksh to IBM and now it has grown to over 20,000 people in just about two years.

The size and scale and structures have grown very big." Aggarwal said he was leaving IBM BPO because he "needed different excitement."

Pavan Vaish, another co-founder of Daksh in January 2000, who is COO at IBM, will continue with the company and take over the 'acting CEO' role.

The past couple of months have seen some high profile movements in the IT telecom space. Just last week Rajan Mehta, head of telecom division at Nortel decided to quit to set up his own business.

Last month Promod Saxena, a key director in the BPL buyout deal quit Essar to focus on his fast growing business Oxigen. Before that Sanjeev Sharma, head of Nokia India quit the company that has grown to corner over 75% mobile handset market share in India.

BPOs are waiting for another Y2K moment

BPOs are waiting for another Y2K moment

2006-06-20 15:33

Sanjeev Aggarwal and Neeraj Bhargava give a lot of leeway to their employees. Aggarwal allowed IBM Dakshs's cafetaria to be painted in eye-popping psychedelic shades of pink and yellow, when Aggarwal would have preferred a staid green.

While Bhargava had his moments of letting his hair down, at a company retreat, where he suggested everybody either do a salsa or a tango and then realised everyone didn't have the right footwear, so dinner jackets had to be rounded up in three sizes, to set just the right mood, for a night of dancing. Well, a disaster waiting to happen turned out just fine. It also proves that he and his team were not lacking in sheer ingenuity.

Neeraj Bhargava

So taking a chance and taking risks is something both of them know a lot about. Bhargava says, "I think it starts with a sense of opportunity. When with some good people, you put a plan together. One thing leads to another, so it�s not usually grand strategizing.

"It is about where you want to be, what you want to be, and what you wa to create." From being at a steady job with McKinsey & Company for 8-9 years, he felt like doing something of his own and started by running a venture fund and then got into WNS. Today, Neeraj Bhargava is the Group CEO of WNS.

He recalls, "The IT boom had just started. There were role models emerging in the form of Narayana Murthy and Azim Premji, you could see that coming and then other industries emerged, whether it was BPO or in commerce or media for that matter. The whole notion that you had to be blessed with being born in a certain family, or have access to capital, I think that just went away."

CEO of IBM Daksh, Sanjeev Aggarwal says, "The second big change is validation of India as a (BPO) destination, which I think is more relevant to export-led businesses like ourselves. But I think, you are absolutely right that the barriers to creating anything are pretty much limited by your own imagination."

Sanjeev Aggarwal

"So my belief is that, this story has just begun. It�s like a pilot phase. My belief is that it has even started because we just have around 1% marketshare and there isn�t any other country, which is as well resourced as we are."

Initially, there was disbelief that something like this could be done from India. There were question marks about security, data, reliability and whether we can actually move up the value-added chain etc.

Bhargava elaborates, "What�s interesting is that customers are far more relaxed about it, than the people and the media here because in many ways this has happened in other countries. In fact, at the time when they were exposed, there were many such situations in the US, of a much bigger magnitude."

"So I think it�s all a matter of are we more visible? You will see more of this happen here but at the same time, I think you got to take this in your stride because I think I can speak for everyone in the industry - it was doubly hard being in India - to make our premises and our operations much more secure."

The BPO industry has other challenges to deal with, like the ability to transform customer businesses as opposed to managing discreet processes. Now, India has moved on from phase 1, which is the cost arbitrage game. Aggarwal admits, "Arbitrage was a good entry point, like Y2K was a good entry strategy for the IT services industry."

However, India is also poised to offer more knowledge process outsourcing, KPO, as opposed to BPO but Bhargava feels that it is not an easy business to be in. He says, 'I think KPO is a part of an overall range of services you can offer from India and you will see a lot of that happen. I think like most buzzwords, it tends to generate more hype than what it is.'

WNS has consistently come out on top in Nasscom's ratings and Bhargava sees it as a privilege and a good morale booster. But he does have higher goals tacked up on some softboard somewhere. He explains, 'I think we are more married to the notion of numbers, we want to meet. So, we've got to grow 40% a year for five years, which is my personal goal and frankly, in this era of M&A, no one should take rankings seriously.'

This sector has attracted a lot of fresh young blood and that gives them a chance to learn. When Bhargava was holed up in his office due to the floods, he made use of the time to get to know his young staff members. He feels people are overly critical of young people. He feels with the right goals, they can get a lot done.

He adds, 'I basically like to have good people in my team and leave them alone to get the job done. I am a firm believer of, get good people around you, let them do their job and don�t try and second guess them. Be helpful and help them succeed.'

Going forward, this industry will see a lot of consolidation acitivity. Bhargava agrees, 'I think consolidation is a way of life in corporate India and it�s got to happen and I think it�s all a question of how good or bad an acquirer is. A good acquirer will know how to be sensitive to a company�s culture and find the right ways to integrate that.'

'I don�t think that�s the scary part at all. I think it's more a question of that one should still see a lot more entrepreneurial activity here. It�s been very healthy, it�s been good that companies come up. I don�t think that the entrepreneurial opportunity in the BPO industry is dead and one should keep on seeing as many companies come up as consolidation grows. We need to see more serial entrepreneurship, we need to see more initiative of that kind.'

Coincidentally for Aggarwal, his passion for building a business has now become true. As for Bhargava, he loves to work hard, play with his kids, watch movies, listen to music - he's learning to enjoy rap music. Bhargava says, 'I am fanatical about maintaining some balance with my family and I don�t do business dinners. I do miss out on racket sports, which I am very fond of and for which I don't get enough time.'

But he admits to hating losing to his kids at Monopoly! He hates losing at anything. In his own words, he's 'intensely competitive, I get really annoyed if we lose a sales deal and I am fairly paranoid and insecure guy, I don�t like losing.'

On the other hand, Aggarwal is more laidback. He claims to be driven by what he 'wants to achieve, which is probably not competitive, from a comparative stand point of view.'

Manali Rohinesh

State of fear

State of fear

By JANET FIFE-YEOMANS and JOE HILDEBRAND

June 21, 2006

NSW is the state of fear for everything from online shopping to terrorism, a survey of the nation's sense of security released yesterday shows.

People living here are also more worried than any other state about banking security and credit card fraud, while nine out of 10 Australians think banks should get their written permission before sending personal details overseas.

What scares you?

The Newspoll survey for internet company Unisys reveals that a third of the state's residents are extremely or very concerned about the security of online shopping or banking and half are worried about details of their credit or debits cards being stolen.

The results are matched by a nationwide McNair poll that shows 91 per cent of people believe banks should not store customer information offshore without their written permission.

Likewise, 85 per cent of respondents want the Federal Government to force financial institutions to tell their customers if their details will be sent overseas.

Experts have attributed the NSW findings to increased anxiety in the community and the Australian Consumers Association believes that when it comes to personal financial matters those fears may be well founded.

The Association believes credit card fraud and the abuse of personal information will increase with the move to outsource call centre and IT work to cheaper countries such as India.

"On the evidence already out there it's not as secure and there aren't as many protections," ACA financial policy officer Nick Coates said.

"I would imagine because of the amount of data that's stored in those offshore countries they're a prime target for credit card fraud on a more massive scale but most people won't know when they've been the victim.''

But in NSW fears extend well beyond credit card fraud.

The Unisys survey showed 44 per cent of NSW residents are extremely or very concerned about a terrorist attack - compared to just 34 per cent in South Australia - and 18 per cent are fearful for their personal security over the next six months.

Nearly a third are extremely or very concerned about meeting essential financial obligations and the same number are worried about a health epidemic.

Sydney University anthropologist Dr Stephen Juan said the findings showed growing anxiety in the community.

"People are worried about their future with petrol prices, housing and rents going through the roof and insecurity about their jobs," he said.

"And what is happening is that technology is overwhelming people and they are pessimistic about protecting their privacy which makes them more vulnerable."

He said people in NSW had higher levels of concern because of the increased cost of living and that Sydney was firmly on the international map, increasing the fears of terrorism.