The Hindu Business Line : What BPO players say about scope for cutting costs

Chennai, Feb. 9 Nasscom (National Association of Software and Service Companies) recently announced, as a key finding of a survey, that a 30 per cent reduction in BPO (business process outsourcing) costs is possible. How do industry players react to this?

Mr Pradeep Narayanan, Chief Delivery Officer, 24/7 Customer, concedes that achieving operational excellence is the core requirement of any industry, and crucial for a BPO company. However, the percentage of cost reduction is subjective and is not necessarily applicable to all types of operations, he says.

"Operational excellence is dependent on capacity utilisation, talent retention and management, absenteeism management, attrition and other key levers of operations," explains Mr Narayanan. "Achieving operational excellence in different levels of operations and delivery platforms brings in better cost efficiency."

Mr Mukul Agrawal, Managing Director, Unisys Global Services India, says that operational excellence has always been and will continue to be the overriding factor of successful outsourcing partnerships.

"From the very inception of the industry about six years ago, Indian BPO players (captive and third party vendors) had to invest in the right people, leverage the best technology and develop the best processes. To sustain the growth of this industry at viable costs, BPO players will have to continue investing in operational excellence to meet the changing demands of clients," insists Mr Agrawal.

Mr Bala Mahadevan, President and Managing Director, CSC India, is of the view that the Indian IT (information technology) industry has always focussed on delivery excellence, be it of service delivery, or delivery enablement. And that the industry will continue to evolve, innovate and mature in this direction.

"However, I believe that equally important, or even more important, will be the knowledge of the customer's business. This will separate the real winners from the rest," distinguishes Mr Mahadevan.

"One of the important findings of the study is the need and possibility of driving operational excellence as a means of cost reduction," points out Ms Padmaja Krishnan, Director, Marketing, Planning & Research, CSC India.

"It is encouraging to find that the report identifies measures such as institutionalisation of processes and best practices to drive operational excellence. In addition, there should be room for driving operational excellence through innovation, delivering value beyond SLA (service level agreement) and managing the customers' expectations effectively by establishing transparency and effective communication channels."

Most importantly, `results' are the key to operational excellence, says Ms Krishnan. "It is time, therefore, that we shift the focus towards work profile or outcome rather than resource profile."

Not a debate that would be over too soon.