"You Have to Have a Good Reason Not to Outsource"

Vellayan Subbaiah recently joined 24x7 as vice-president. His job - to push the call center company's presence in the business process outsourcing space. Here, he speaks of the competition to pure play call center and BPO companies from entities like Wipro ("which have just jumped into the game"), the New Jersey bill, Nasscom's role in IteS and some more. Excerpts:

January 31, 2003 -- DATAQUEST

IT services companies like Wipro and Infosys which are getting into ITeS, believe they have a better proposition for the customer…

Yes we've been hearing a lot about that in the past few months. But remember that the top three ITeS companies-Convergys, West and Teletech stayed pure play call centers. There is enough and more growth in the call center business for pure play companies to do very well. Also remember that till a year and a half ago all IT Services companies were laughing at call centers. Now the tune has changed and it will be interesting to figure out why these companies have suddenly found a great value in the call center business.

Wipro believes that with Spectramind, it goes to the customer with a wider end-to-end solution…

Of course, Spectramind is a very serious competitor. They already dominate the market. But primarily IT services and call center companies sell to different people, They sell to CIOs. We sell to the operations force. Often these two groups of people in the same company don't even like each other - these are very different customers within one organization. Besides, our experience has been that customers don't like to put all eggs in one basket. They like to pick the best of breed and they like to spread work around.

The New Jersey Bill that seeks to prohibit the government from outsourcing work to overseas firms…

In one word, No. We've never had an interest in government business. The government business in the US is the same as government business in India - no one really wants to sell to them. And I don't think the US government will be able to affect private companies' choices on outsourcing which are driven by business sense and reason rather than emotion. And we offer them clear metrics to show it makes business sense to outsource to us. In Inbound calls we can measure everything from average handling time (AHT), average speed of answer (ASA) and customer satisfaction. In outbound calls we measure amount of sales generated per hour, whether a customer's problem was resolved in the first call, total talk-time, wrap-up time, transaction…Bottomline---we offer higher performance at a lower price. And if you are good manager---you have to have a good reason not to outsource.

In the coming year, where do you see the call center business heading?

There are two million call center seats in the United States. Rational behavior would require that at least one million of these seats should move to India next year. The biggest barriers however are emotional rather than economic. I believe though that when a critical mass is achieved things will change very rapidly. The Indian software industry took 10 years to get to where it is today. I think we will take not more than five to six years.

Nasscom has been pushing ITeS aggressively over the last year. Yet, there's a faction that believes ITeS has little to do with IT services…

We have nothing to do with IT services. Like I said.it's a totally different industry. Even the term "IT Enabled" is not used anywhere else in the world. But why should we crib if someone is campaigning on our behalf ? Besides, you know how the numbers work. The smart thing Nasscom has done though is not differentiated between captive and non-captive call centers. So if the projected numbers don't match up a smart cop-out could be -"Listen, you guys did not create enough of an image." So some of the Nasscom projections on HR and Financial and Accounting BPO will not happen. Some others will.