Face to Face with P.V.Kannan founder and CEO of 24/7 Customer

"True BPO growth comes when ITES firms 'outsource' instead of just 'out-tasking.'" -- 247Customer

In a market that is becoming very competitive, and where an ITES company is being born every minute, how does 24/7 Customer differentiate itself?

The market is indeed becoming competitive but the expectations from vendors are increasing significantly as well. Outsourced vendors today that are unable to show experience in servicing 5 or more Fortune 500 clients, COPC certification, ISO certification, redundant US-based points of presence, and redundant Indian contact centers are not even considered by potential clients. Only those "top tier" outsourcing vendors can win new business in this environment.

By way of 24/7 Customer having demonstrated three years of growth with nine Fortune 500 clients while also become the first Indian contact center to achieve full COPC certification and ISO certification, we have been able to differentiate ourselves and win new business in this increasingly competitive environment.

All existing studies point to an enlarging ITES/BPO market. What is the growth you are expecting in 2003 and how do you plan to achieve it?

We are seeing a tremendous increase in demand for outsourced BPO projects especially amongst Fortune 500 clients. This is partly due to the fact that offshore outsourcing has been proven over the past three years. We are currently seeing 150 percent annualized growth in business as compared to last year. All signs point to 2003 growth ending up even more significant than this current projection.

Despite its sunny outlook, the ITES/BPO business is not for everyone. What are the key criteria according to you that will make a successful ITES venture?

Successful ITES/BPO vendors must be able to demonstrate the following to their potential clients:

- Quality of service as demonstrated by certifications (e.g. COPC, ISO, etc.)
- Proven ITES/BPO outsourcing track record with multiple Fortune 500 firms
- Proven ability to scale up successfully. This includes scaling up of an existing client and scaling up to multiple service locations
- Top-notch sales, marketing, and account management teams with a presence in the US and Europe.
- A management team with prior experience abroad especially in technology and operational capacities.

ITES/BPO firms exhibiting these traits will see tremendous success.

What is the business model within this segment that is likely to achieve the maximum success and why?

Business models built on profitable long term outsourcing contracts with Fortune 500 firms will lead to maximum success. Many ITES firms today are just " buying" business to stay operational in the short term. Taking business at a loss will not lead to a lasting viability. In addition, many ITES firms are taking small short term contracts that show no prospect of scaling. These firms also will have difficulty in growing long term.

Not all companies in the market are being able to transition from ITES to higher levels of BPO activity. 24/7 customer claims to be active in both the segments. What is your strategy for scaling into the BPO arena?

True BPO growth comes when ITES firms "outsource" instead of just "out-tasking". Outsourcing involves taking over a complete business process including redesign responsibilities. Out-tasking involves just replicating simple mundane tasks like data entry or collections work over and over again. Only "outsourcers"; are able to build their worth with their clients to the point where they become difficult to replace. Accordingly, it is these types of "outsourcers" that will convince their clients to transition higher levels of BPO activity.

24/7 Customer has been fortunate enough to have existing Fortune 500 clients outsource more and more higher level BPO work to the firm. The experience from providing this BPO work to existing clients has allowed 24/7 Customer to develop expertise and market these services to new clients as well.

What are some of the projects the company is currently involved in? What are the verticals you are specializing in?

24/7 Customer maintains 4 business units: Customer Service, Sales, Technical Support, and BPO units. Each unit is managed by a top executive ensuring ultimate specialization and high quality service. Accordingly, 24/7 Customer supports projects ranging from email/phone customer support, outbound telemarketing, technical support, loan processing, data verification, to transaction processing. We specialize in providing service to Fortune 500 firms in the financial services, technology, telecommunications, healthcare, and travel/hospitality verticals.

What are going to be some future trends in this market? How well are Indian companies positioned to take care of these opportunities?

In the future, clients will expect more and more specialized outsourcing services from vendors that have a global reach. This will mean that successful ITES firms will need very specialized offerings being provided from centers spanning across international borders. Indian firms are well positioned in the future as they are definitely leading this market today. In the future you will see Indian firms operating from multiple locations within India and abroad. They will also branch out into more specialized outsourcing services.

What is the relevance of the certifications and quality?

Service quality and quality certifications are of utmost importance. Every offshore outsourcer will provide cost savings but the true differentiator is the quality which accompanies the low cost service alternative. Most Fortune 500 firms use quality certifications as an important vendor differentiator. In the future, ITES vendors without international quality certifications will have a tough time competing just as non SEI-CMM level 5 software services vendors face difficulty today.