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Tunia Cherian George

This financial services player spells out its plans and why it is going ahead with them.

Mr R.K. Rangan, Managing Director, PPMS

A DELOITTE survey of 100 of the world's largest financial-services companies indicates that these companies expect to transfer an estimated $356 billion of their operations and two million jobs offshore over the next five years to reduce costs, and the most likely beneficiary of this move is India.

Falling in line with such a trend is Prudential Process Management Services (India) Pvt Ltd (PPMS), the fully-owned subsidiary of Prudential plc, UK. The company opened a $10-million centre in the suburb of Powai in Mumbai last May and is poised to boost its employee strength in three months to 850 from 628. It has been necessitated by a number of projects that the company has taken up for the parent company. In a chat with eWorld, R.K. Rangan, Managing Director, PPMS, talks of the company's present and future plans. Excerpts:

Rangan says Prudential's decision to outsource its back-office operations was opposed by the unions. However, despite protests, the company has set up business process outsourcing (BPO) operations in Ireland, Scotland and London, besides the Mumbai facility.

The Indian subsidiary was set up in an effort to cut costs and adopt customer-friendly solutions, as the financial services business transformed itself from one based on personal interaction to the online mode. Says Rangan: "We do not call it outsourcing to India. The unions have been kept in the picture from the start. There is a struggle, but we have assured our staff that they will be helped with jobs." He clarifies that not all the jobs have been lost, as staff are being redeployed wherever possible.

Besides, quite apart from the cost advantage, outsourcing was also necessitated by a real shortage of skilled workers in the UK and the US, he says. Prudential plc is just one of the global brands that is outsourcing operations. Other multinational corporations such as GE and American Express have also set up large service centres in the country. There are a number of reasons for the trend among MNCs to set up subsidiaries, the most important being the need to maintain confidentiality. A fully-owned subsidiary also allows for flexibility of operations. Further, companies setting up bases in the country train staff for their specific requirements.

Aviva, BT, Lloyds and Zurich, he says, are among the companies that decided to set up their own operations after experimenting with outsourcing to third-party players.

Processes at PPMS

According to Rangan, five processes have gone live at PPMS with parallel runs and all meet the demands of SLAs (service-level agreements) and in cases even better them. The processes are being judged for accuracy, productivity, and compliance, among other parameters. While a third of the operations at PPMS comprise call centre services, two-thirds are business-process related.

At Prudential, customers are being shifted to a solution called Direct Debit. As part of the effort, a team of 50 agents is interacting with customers, taking up their specific complaints. The project, which commenced on July 28, will go on for a year.

Another project under way at PPMS is from Scottish Amicable. Again, a team of 50 agents is writing to customers to ascertain their complaints and correct the perception or even compensate customers.

The current recruitment drive is targeting fresh graduates and post-graduates, with a preference for commerce graduates. According to Rangan, the company is also looking for strong analytical skills in candidates.

As for the problem of attrition associated with back-office processing operations, he said it is early days still at PPMS. Nonetheless, the company is investing a lot of time and effort in making the right recruitment decisions. Candidates selected at the end of a rigorous filtering process are being put through a training period to develop their skills. Some staffers are also being sent to the UK to give them exposure to financial services in that country, the idea being to give them adequate exposure and retain them for a longer period of time.

However, Rangan acknowledges that attrition will remain a challenge for the industry, which means companies must develop measures to retain staff. The HR initiatives undertaken at PPMS include engaging, on an everyday basis, with staff members, besides exposing them to the industry overseas, says Rangan.

As a measure of its commitment to employee growth, the company is also planning to give its top performers the chance to study further by encouraging them to enrol for MBA programmes at the company's expense. The Pune-based Symbiosis and the Bajaj Institute are among the names being considered for this.

The company's compensation and incentives package will also focus on furthering employee growth. "Once a person joins us, we aim to add value and thus retain the person."

As for the challenges faced by the sector, he feels undercutting by third-party players in a bid to get contracts is amongst the most dangerous as it compromises quality. Further, attempts by third-party players to attract trained staff from other organisations with larger compensation packages could negate the cost advantage that the Indian industry offered. According to him, compensation at the agent level has grown by 200 per cent over the past three years. Finally, economic and political stability could make or break crucial foreign investment decisions by countries looking at India as a possible BPO location.

anna@thehindu.co.in

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