In My Opinion: Sunny Gupta, Apptio

BUSINESS & TECHNOLOGY

siliconindiaVC Talk: Rajeev Srivastava, Basil Growth Fund BPO SpecialPUBLISHED SINCE 1997 IN THE U.S. & INDIA APRIL - 2011 SILICONINDIA.COM

Nimish Soni Managing Director

Contents April 2011Cover Story

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ENGINEERING PROCESSES TO TRANSFORM BUSINESSES

XchangingBy Vimali Swamy Nimish Soni

06 [In My Opinion] Transforming IT Through Technology Business Management 08 [Infocus]By Sunny Gupta, Apptio

25 [Business] Making Business Impact Via Managed Services 26 BPO Services & Solutions Be Indian, Buy Indian 28 Connect IndiaBy Rahul Kanodia, Datamatics Global Services By Aparna Challu, Infinite Computer Solutions (Inidia)

36 [Business] Entrepreneurial Lessons for Software Startups 38 [Technology] Companies are Still not Extracting the True Promise of Cloud 40 [Business] Investing in University Spin-Offs 42 [Technology] BPO on the CloudBy Saurabh Chandra, Neev Information Technologies By Hemant Elhence, Synerzip

11 [VC Chakra]

12 [CEO Spotlight]

RadiumOne raises $21 Million in Series B Funding Hubspot raises $32 Million in Series D Funding

15 [VC Talk] Emerging Trend Potential for IT Service Providers to Obtain PE / VC Funding 22 [Cover Feature] BPO Sector Is Doomsday Near?By Hari Anil

Web 2.0 is Changing Consumer Pattern! Transforming Outsourcing with Verticalized Solutions U.S. Still a Tough Turf for Mid sized Players

30 [Technology] Cloud Telephony is the New Tool Enabling Crowd Sourcing of Call CentersBy Murthy Chintalapati, Ozonetel Systems

By Milind Godbole, Aditya Birla Minacs

By Vinit Nijhawan, Boston University Office of Technology Development

32 Will Cloud Help You to Spend Smarter and Save Money? 34 [Business] The Changing Face of Indian BPO IndustryBy Suresh Yannamani, HOV Services By Ravi Thakur, Coupa Software

By Rajeev Srivastava, Basil Growth Fund

44 [ CEO Speak] Remain Small to be BIG Key trends in the IT Services Market 46 [SI 20 Profile]Prashant Ranade, Syntel

By Ezhil Arasan Babaraj, CSS Corp Labs

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April 2011

siliconindiaAPRIL - 2011Harvi SacharPublisher Managing Editor

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his time all Indian delegates were excited about worlds billionaire Warren Buffets visit to India and his move to invest in Indian market. This 80 year old $62 billion worth billionaires move to invest 99 percent of his wealth in India indicates a testimony to Indias promising booming economy. Moreover it calls for many of the Indians who have built global companies to take Indian market as a serious one. Well, but is India well versed to foresee its greener pastures? For instance, if you take any developed country, faster economic growth has been attained because the leaders could foresee the needs much ahead, be it heavy investments in infrastructure, massive funding for science and technology, exceptional connectivity, a public-education system that is the envy of the world and generous immigration policies. As a country which has been envied for many such factors, America until now was under the assumption that it is still No. 1. However, today it sees the position dwindling. Now, America is realizing its mistakes and cutting down on the spent as they have the largest amount of debt in the world incurred through wars and aids. As India is taking a similar growth trajectory to further achieve its global ranking, it can take tips from the U.S. about what to do and what not to. India is currently the second fastest growing economy of the world. India's growth potential may well be measured by the facts that India's current economy is worth $1.3 trillion , and is set to grow at an impressive rate of 9.25 percent in coming years. In 1991, when India opened its door to liberalization, we set our growth path open. We achieved in 10 years what we did not achieve in 35 years before liberalization. Today the world is waiting for a similar move interms of FDI investments. The bill to raise the foreign investment cap from the current 26 percent to 49 percent in private insurance has been tabled and is with a Standing Committee of Parliament. Instead of rejecting the bill, the committee should work on closing the loopholes on negative aspects. Now is the need to focus on infrastructure. Even a study by Goldman Sachs states, In the next 10 years, India needs to invest more than $1 trillion towards infrastructure. Recently Infrastructure mutual funds of India have shown great interest in roads, power and railways. One can judge the enormity of investment opportunities in Indias infrastructure by seeing that India is set to invest $500 billion by March12. In the coming years, lets hope to see best days of India much ahead than U.S. Lets see more Buffets docking in India in future. Please do share your thoughts with us. Christo Jacob Managing Editor editor@siliconindia.com

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Is Indias Best Days Ahead of U.S?

Editorial

by BPA International. siliconindia is available through mainstream retail outlets such as Barnes & Noble, Borders, and Tower Records. It is also available at ethnic Asian Indian stores in major Indian hot spots across the U.S.The magazine is also distributed at major trade shows and conferences, including Comdex, Internet World and PC Expo.

siliconindias circulation is audited and certified

By Sunny Gupta

The author is President, CEO and Chairman for Apptio

in my opinion

Transforming IT Through Technology Business Managementf you spend enough time with CIOs from large enterprise organizations, you will hear the word transformation thrown around quite a bit. Thats due largely to the fact that CIOs are under increasing pressure to evolve IT from a department that keeps the lights on to one that can transform the business itself. So what strategies and best practices are these transformative CIOs putting in place to evolve their organization to become more business focused? This is what we set to find out when we convened our most recent CIO Technology Business Management Council meeting. More than 65 enterprise CIOs and IT leaders gather twice per year to discuss how they are applying transformational strategies in their organization via the emerging discipline of Technology Business Management, also known as TBM. The vision of TBM is to bridge the widening gap that exists between IT and the business units it serves. For too long now, these CIOs have had to combat the perception that IT is too expensive and demonstrate the business value that IT provides to the business. And with clouds quickly gathering on the technology horizon, it has become even more important for IT leaders to be able to clearly articulate the value of IT to the business in a language the business understands: finance. One way to think about the New IT is in the context of a classic supply chain. To truly understand your cost of goods sold (COGS), you need to also understand the fully burdened costs of all the raw materials that comprise the finished product. In the supply chain of IT, these raw materials consist of everything from data center facilities and labor costs all the way up through the server and application tier. Takensiliconindia

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together, these components make up the IT services that the business units eventually consume. However, getting a handle on what these services actually cost to deliver and how they are being utilized has up until now been more dark art than science. Could you imagine a manufacturing floor running at 10 percent utilization? IT should be no different. In order for CIOs to effectively run IT like a business, they require a new set of purpose-built tools that can unify financial metrics (i.e., GL, payroll, and more) with key utilization metrics (i.e., server usage, ticketing, and more). Just as a modern manufacturing enterprise could never imagine running their business without an ERP system in place, todays CIOs are demanding new performance metrics that provide the same level of cost transparency and accountability from their organization. Among the three presenters at the last council was Rebecca Jacoby, CIO for Cisco who is currently in the midst of a multi-year services transformation initiative and Charlie McNerney, GM for Microsoft Global Foundation Services, which represents one of the worlds largest IT deployments. What follows are four best practices identified by our panelists: 1. CIOs require a Purpose-Built Management Suite - Whereas every other enterprise function relies on a business performance suite to run their operations (think CRM for sales or ERP for finance), IT is often reduced to spreadsheets and ad hoc tools to manage their own business. So when the CEO asks a seemingly simple question, such as how much money will we save if we virtualize 15 percent more of our data center? the CIO often gives estimates based on assumptions, not actual data. CIOs will not succeed in running the business of IT until they can employ the same scorecards and dashboards that their

C-level peers have been using for years now. 2. Do not wait for 100 percent Clean Data: Many IT leaders are reluctant to kick off their transformation initiatives until they feel confident that their data is thoroughly clean and accurate. The rationale being that if you start with bad data you will end up with a faulty output (i.e., Garbage-In-GarbageOut). However, as many companies

CIOs will not succeed in running the business of IT until they can employ the same scorecards and dashboards that their C-level peers have been using for years now.

4. IT Transformation Starts with Culture CIOs with IT transformation projects on their agenda must recognize that the cultural changes are just as important as the technology decisions that are ultimately made. Re-

to the business. As Charlie at Microsoft is fond of saying, if you make the facts available, eventually rational minds will prevail.

who have embarked on their own transformation journey will attest, you are actually better off jumping in and letting the data clean itself. Rebecca, When I worked in supply chain we had a similar issue. We were going with a new tool and had two plant managers. One said he wouldnt use it until the data was 100 percent complete while the other guys said, I get it, it is 90 percent accurate now. The one that was 90 percent accurate was actually 100 percent accurate within a month. The other one took a year. Its amazing how accurate the data becomes once you start using it.

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3. Cost Accounting is the New IT Skill: Forget ITIL certifications. One of the most overlooked and essential skill for tomorrows IT manager is basic cost accounting. At Cisco, every single person in Rebeccas organization is going to be required to take a basic web-based class on cost accounting. Without this foundational skill, IT managers are unable to provide meaningful cost analysis back to the business. For instance, while calculating unit cost information at the server level might be of interest, understanding and communicating the variance in cost is much more valuable

becca at Cisco has implemented strategies that address the cultural aspect of their services transformation. To ensure cross-functional support for their own services transformation initiative, Rebecca established management cohorts which are small groups (12-15 people per group) each with their own designated leader. These cohorts meet eight times per year for two hours per session with a goal of sharing leadership strategies and best practices. According to Rebecca, these cohorts have been instrumental in terms of getting everyone to buy into the notion of transformation. The bottom line is that transformation is a journey, not a sprint. There is a tendency for people to confuse innovation and transformation because they both imply the same thing: change. However, there is a subtle and important difference between the two: whereas innovation implies changing what is, transformation suggests creating whats new. For todays business oriented CIO, this is exactly what is needed an entirely new methodology to quantify the cost, quality, and value of IT and be able to communicate it in a language the business understands. sisiliconindia

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April 2011

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Net Commerce in India to Reach $10.4 billion in 2011he Indian ecommerce industry is expected to grow by 47 percent and touch `46,520 crore ($10.4 billion) by end of 2011. This was indicated in a study by the Internet and Mobile Association of India (IAMAI). The report said that the market which was at `8,146 crores in 2007 came a long way from there and reached an estimated `31,598 crores by 2010. The report also points out that it is the online travel industry that is leading the market. The online travel industry was `6,250 crores in 2007 contributing about 77 percent of the industry then. In December 2010 this industry stood at `25,258 crores, about 80 percent of the total ecom-

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any Indians and IndoAmericans are included in the list of Young Global Leaders for 2011. The list by the World Economic Forum consists of 190 individuals from 65 countries. According to the forum, the people who received the Young Global Leaders award received it for their professional accomplishments, commitment to society and potential to contribute to shaping the future of the world. The list includes Indo-American personalities like Nikki Haley, South Carolina Governor; Vivek Kundra, U.S. Chief Information Officer; Gitasiliconindia

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Many Indians Gain Position in the Young Global Leaders ListGopinath, Harvard University economics Professor; Sandeep Chatterjee, SourceTrace Systems Co-Founder; and Saleem Ali, University of Vermont environmental studies Professor. Indians like, Members of Parliament Meenakshi Natarajan and Deepender Singh Hooda; Ocimum Biosolutions Founder and CEO Anuradha Acharya; Sanjay Chandra, Managing Director of real estate firm Unitech; Priya Hiranandani-Vandrevala, Hirco Group Founder and Co-Chairman; Manish Khera, Financial Inclusion Network and Operations CEO; Chetan Maini, Mahindra Reva Deputy Chairman and CTO;

merce market and is expected to grow to `37,890 crores by December 2011. As of 2009, second to online travel comes eTailing with 7.82 percent share which equals to `1,550 crores. In eTailing, computers and computer peripherals account for `560.52 crores while cameras, mobiles and MP3 play-

ers contribute `389 crores. Other major contributors to net commerce include online classifieds (jobs, online matrimonial, cars, real estate and others), buying movie tickets, food delivery and gaming subscription is estimated to be `1,210 crores. Financial service transactions over the Internet comprise nearly 7.8 percent of the market size, which is about `1,540 crores. According to the report Indian online users have exhibited willingness to make purchases over the Internet and this attributes to the growth in net commerce industry. Given the increasing awareness and acknowledgement, the overall industry is set to experience a high growth in the next couple of years.

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Shaffi Mather, Ambulance Access for All Co-Founder; Ramakarthikeyan Srikrishna, founding Partner and Head, global strategy, sales infrastructure, HCL Technologies; and Bhavin Turakhia, CEO at Web products marketing company Directi, are also part of the list. The 2011 honorees will now be part of a broader forum of 668 Young Global Leaders worldwide. They will participate in World Economic Forums events, including its annual meeting in Davos, Switzerland, the annual meeting of the New Champions in China, and the forum's regional meetings worldwide. si

India is 10th Among the G-20 Countries in Cleantech Investmentslobal clean energy finance and investment grew considerably in 2010 to $243 billion, a 30 percent increase from the previous year. China, Germany, Italy and India are among the nations that most successfully attracted private investments; points out a new research by The Pew Charitable Trusts. The report ranked India at the 10th position for its five year growth

niversity of Buffalos Provost Satish K. Tripathi is recommended by Chancellor Nancy L. Zimpher of the State University of New York as the next University of Buffalos President . It would make Dr. Tripathi, UB's 15th president and the first born outside the United States and leader of the largest public university in the state during what's considered a critical time in its history. Tripathi is an internationally recognized computer scientist who joined UB as Provost - the university's Chief Academic Officer on the 1st of July, 2004, after serving as Dean of the Bourns College of Engineering at the University of California, Riverside. This opportunity will make Patna born Tripathi, the first Indian American to head a Research University which is a part of the American Association of Universities. Chancellor Zimpher has re-

University of Buffalo Gets its First IndoAmerican Presidentquested the State University of New York Board of Trustees to convene a special meeting in April in Buffalo to formally consider Tripathi's appointment for the post. She also named Tripathi as UB's officer-incharge, effective immediately, with all of the responsibilities and authority of a campus president. Tripathi said, It would be my distinct privilege to lead our remarkable university, which is recognized for its tradition of excellence and has an extraordinary future ahead.

Speaking at the occasion, Chancellor Zimpher said, "It is my great pleasure to recommend Dr. Satish Tripathi as the next President of the University at Buffalo. Dr. Tripathi's international reputation as an accomplished researcher and transformative leader in higher education makes him ideally suited for this post. Public research UniSatish K. Tripathi versities like UB provide access to high quality, affordable education and engage in research that helps build vibrant communities at home and across the globe. Dr. Tripathi will provide outstanding leadership for UB as it carries out this important mission."

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rates in renewable energy capacity and seventh position worldwide in the amount of installed capacity. The list is dominated by China with its record $54.4 billion in investments in 2010 represents, a 39 percent increase from 2009. Germany came second in the G-20, up from third last year, after experiencing a 100 percent increase in investment to $41.2 billion. While U.S. lost its sec-

ond position and settled with a third. U.S. had maintained the top spot until 2008, till China displaced it. United Kingdom experienced the largest decline among the G-20, falling from fifth to 13th. According to the report, the uncertainty surrounding clean energy policies in countries like UK is causing investors to look elsewhere for opportunities. sisiliconindia

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April 2011

inMIT Honors Two Indian American Professorswo Indian-origin professors are among the four to have been named 2011 MacVicar Faculty Fellows for their outstanding undergraduate teaching, mentoring and educational innovation at Massachusetts Institute of Technology (MIT). Bishwapriya (Bish) Sanyal of the Department of Urban Studies and Planning; and George Verghese of the Department of Electrical Engineering and Computer Science were honored along with Christopher Schuh of the Department of Materials Science and Engineering; and Patrick Winston, of the Department of Electrical Engineering and Computer Science.

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Bishwapriya Sanyal, who received his PhD in urban and regional planning from the University of California at Los Angeles, joined the MIT as a faculty in 1984 and served as the head of the Department of Urban Studies and Planning from 1994 to 2002. He also chaired the MIT faculty from 2007 to 2009. Sanyal, currently the Ford International Professor of Urban Development and Planning, also directs the SPURS/Hubert Humphrey program at MIT for mid-career professionals. George Verghese is a Professor of electrical engineering and has been part of the MIT faculty since 1979. He received his B Tech from

the Indian Institute of Technology, Madras in 1974; his MS from the State University of New York, Stony Brook in 1975; and his PhD from Stanford University in 1979, all in electrical engineering. It is certainly in the spirit of Margaret MacVicar's commitment to students that we award these prestigious fellowships and recognise the creative efforts of MIT's outstanding teachers. This year's fellows are deeply committed advisors and mentors, they have led important curriculum changes and made significant contributions to programs in student life, says MIT Provost L Rafael Reif.

adiumOne, an online advertisement company that leverages social media for better advertising performance, closed a $21 million Series B funding. The funding was led by Crosslink Capital, other investors include DFJ Esprit, and previous investors Adams Street Partners and Trinity Ventures. The company is planning to use this funding for international expansion and acquisitions. It recently opened its UK office, and in the coming months will be launching in continental Europe and Asia Pacific. Our goal at RadiumOne is to use social data to change online advertising for the better, and make a positive measureable impact on advertisers and consumers, says Gurbaksh Chahal, Founder and CEO,

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RadiumOne raises $21 Million in Series B FundingRadiumOne. The social evolution of the Internet has given us an opportunity to do this, and we feel we are filling the void of socially-targeted advertising outside of Facebook. This latest round of funding will accelerate our growth, and allow us to make the moves that will truly establish RadiumOne as the pioneer in bringing social advertising to the open web, adds Chahal. Since its inception 18 months ago, RadiumOne has worked with over 200 Fortune 500 brands. When we look at potential portfolio companies, we try to identify who has the technology and vision to really disrupt an industry and make a global impact, says Jim McLean, partner at Crosslink Capital and new member of Radiu-

.S. President Barack Obama has nominated two Indian American women to key posts in his administration. Chicago based Deepa Gupta has been nominated as member of National Council on the Arts, while Nisha Desai Biswal has been named as member, Congressional-Executive Commission on the People's Republic of China. Apart from these two, seven others have been nominated to key administration posts. I am grateful these accomplished men and womensiliconindia

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Two Indian American Women Nominated into Obama Administrationhave agreed to join this Administration, and I'm confident they will serve ably in these important roles. I look forward to working with them in the coming months and years, said Obama. Gupta is a Program Officer for Media, Culture and Special Initiatives at the John D and Catherine T MacArthur Foundation in Chicago, where she manages the Foundation's grant making in arts and culture in Chicago and the MacArthur Award for Creative and Effective Institu-

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tions. She is also a board member of the National Kidney Foundation of Illinois and an advisory board member of the Cure JM Foundation. Nisha Desai Biswal currently serves as Assistant Administrator for Asia at the U.S. Agency for International Development (USAID), which she would continue to hold. In the past, she has also worked with the American Red Cross both in their Washington headquarters and overseas as an international delegate in Armenia, Georgia and Azerbaijan. si

ubSpot, vendor of an all-inone marketing software platform for small and medium sized businesses, raised $32 million in a Series D funding round. The company was founded by Brian Halligan and Dharmesh Shah in 2006. Sequoia Capital, Google Ventures and Salesforce.com, all participated in this round of funding, which made Hubspot the first company that got funded by all these three investors. Apart from them all of HubSpots existing venture capital investors General Catalyst, Matrix Partners, and Scale Venture Partners - also participated in this financing round. The companys all-in-one marketing software is used by over

Hubspot raises $32 Million in Series D Funding

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mOnes board. We have seen it firsthand with companies like Pandora, and we know that RadiumOne will be extending that same disruption into the display advertising ecosystem, says McLean. This round brings the total funding raised by the company to $33.5 million.

Gurbaksh Chahal

4,000 businesses. Dharmesh Shah, Co-founder and CTO of HubSpot commented, We founded the company based on a simple premise: Businesses want an easy-to-use, complete and integrated marketing

Brian Halligan and Dharmesh Shah

platform that helps them get more leads and customers. We plan to use this new capital to further invest in this ambitious vision and further our existing lead in the marketing software category. We back companies that are transforming their industries, says Jim Goetz, General Partner at Sequoia Capital. HubSpot is the emerging category leader in the SaaS marketing sector. Their customer base exceeds that of all the other relevant marketing software companies combined, including Eloqua, Marketo, Genius, and Manticore, he adds. Part of the $32 million will provide liquidity to some existing shareholders. It has so far raised a total of $65 million in funding. sisiliconindia

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April 2011

CEO SPOTLIGHT

CEO SPOTLIGHT

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Web 2.0 is Changing Consumer Pattern!Ankesh Kumar, CEO, Sharetivity

his is the era of Internet and there is a large movement towards consumer shopping. It is different from what we saw in Web 1.0 which was shaped by Amazon and eBay. Now, the same is undergoing a re-invention as consumer behavior like how people purchase, how they make decision, how companies cater to those purchases and more are making in-roads. Today the shopping is research based and mobiles have come to play a very important role. There are apps to help consumers get instant reviews on what is out there in the stores before they go out there to make a physical purchase. Similarly, Web 2.0 led by social networking is forcing the consumers to change their purchasing behavior. Facebook and Twitter has leveraged social interaction tremendously and this is having a direct impact on a consumers purchasing behavior. One can easily connect with their friends and ask for their opinion before making a purchase. For Startups today, it is important not only to build a cool product but also bring innovation into the business model so that it issiliconindia

monetizing. This is important in terms of funding as VCs are becoming more and more discriminating into what and where they invest. With globalization, the biggest challenge for an entrepreneur is to collaborate with his teams across the world. Ten years ago, when one started a company with 5 or 6 people in the office, one could walk to someones desk and ask how the UI is developing or how a mobile app coming along. But now with the emails and twitters and setting up a collaboration projects online with the teams virtually, is a challenge when quality comes into question. The next challenge is to find the right people to either join you or become partners with. With a lot of people out there doing similar work; to find the right partner can involve a lot of prescreening. In case of large companies the problem is that the right hand doesnt know what the left hand is d o i n g . Ankesh Kumar

They launch a project, there is another team doing a similar project and a lot of miscommunication tend to happen. Apart from these challenges, it is fairly exciting times to be an entrepreneur. si

he IT enabled services industry is projected to grow at 9-10 percent both in international and domestic market. There are several trends that are driving the industry today. Foremost is the emergence of new geographies as a potential near-shore center. Most BPO providers today, are identifying new geographies to set up centers that are in close proximity to their customers. For example, shore for U.S. near shore center would be in South America and for Europe it could be in the Asia Pacific region. Another thing that is being seen clearly is that factors like call cost arbitrage, availability of pool of English speaking professionals, IT educated professionals and more can no longer be called differentiators for India. Today, these have actually become the basic tools for operating within the BPO space. This is something you need to have on the table when you go bid for a contract. What we can call a differentiator now is what can we add. What value add can one bring to the client over and above these basic tools. The other trend could be providing end to end transformational outsourcing, where we are talking about

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Transforming Outsourcing with Verticalized SolutionsManoj Malhotra, CEO, Salient Business Solution not just going to the clients and telling them this is what we offer, but rather asking them what they need and then providing a customized technology enabled verticalized solution with services that are needed by the client. This is the kind of expectation a client has from a service provider today. Hence, one needs to develop niche and differentiator within a vertical. Apart from this, one also needs to have specific domain knowledge, understanding of the industry trends, knowing what works and does not work within the industry and more, if you are to operate in that vertical. Additionally, clients today want their service providers operate on an OPEX based model rather than a CAPEX based model. Another norm today is process engineering and innovation, where one is looking beyond the tried and tested ways of doing the work. How can we improve upon the entire experience of what is being done by using ones knowledge that has been gained through working for multiple clients in the same environment. This is the transformational business impact which the client is expecting the service provider to make. This is a growing trend that we see which transcends across various vertical

that any BPO is expected to operate in. My advice to entrepreneurs today is to pick your space and look at customizing and specializing in that. They need to focus on areas which are skill based, more vertically oriented, domain oriented and where technology enablement can also be used. This is because managing a manpower incentive or a capital incentive business with some of the more commoditized players will become very difficult for a new player to come in. sisiliconindia

Manoj Malhotra

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April 2011

CEO SPOTLIGHT

he IT services industry, as we all know, was badly hit by the recent financial recession and is currently in the recovery phase. It was the mid sized companies, who heavily depended on the U.S. market, suffered the maximum impact of the recession. Nonpayment, bankruptcy, inability of acquisition of new accounts is some of the prime issues that still continue to haunt the mid sized players. In order to attain a speedy recovery, we at Globsyn moved our focus towards the domestic market and have managed to outrun the recession. We also shifted our operations to Malaysia and have even opened up a new office in Singapore there is very good demand for IT services in these markets; from consulting practices to implementation of SAP and ERP. That is an area in which we are also offering our services and have grown a lot. Also focusing in new sectors and markets helped us stay balanced when the U.S. was in the grip of the recession. But I see the market turning around to normalcy in the U.S. by the first quarter of 2012. Earlier the approach towards off shoring was narrow, but now it has become more diversified and multilayered. Even people are comingsiliconindia

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U.S. Still a Tough Turf for Mid sized PlayersBikram Dasgupta, CEO, Globsyn technologies from a very vast set of specializations, while the requirement is getting much more narrow and focused. Fundamentally India is an off shore country where we need to do services from start to end, and when we do this, technology is not the whole part. There are methodologies, software engineering elements, project management elements, and several other elements that are getting refined and developed every three months, so for the last 18 months the main focuses of the companies are to keep up with this. This is a major trend in the industry now. Still, getting the right person for the right job remains the main challenge. This is a problem we are continuing to address. The most fundamental thing about being an entrepreneur is that you should be addressing an unaddressed problem or gap in the society. And if this identifies with your passion, your chance for success will multiply by many times. If that gap is not there then it will be a tough job as you will be fighting with too many people. On a more philosophical level I believe, You become an entrepreneur because you believe there is more to life. si

Bikram Dasgupta

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ccording to Gartner, global IT Service spending in 2010 was approximately $800 billion but there seem to be very few, if any, PE / VC firms that invest into IT Service providers. The focus of any PE / VC company is to ensure a huge upside for its investors and the only way to ensure the same is to invest into an IT product company that would become the next blockbuster product. The tremendous success of a winning product ensures that there is a huge non-linear / exponential growth to both the top-line and bottom-line, critical to driving huge valuations. IT Service providers are very dependent on strong hiring and training engine to drive the growth of the company, as the revenue growth is tightly coupled to the staff strength. Acquiring & retaining quality staff is a huge challenge that most of the IT majors have been trying to overcome. This lends unpredictability to the growth of the service provider - a major deterrent to obtaining investments from PE / VC firms. Other important factors that drive valuations are differentiated service line, offshore and onshore mix, growth model, and more. With global enterprises looking to reduce the Total Cost of Ownership of their IT assets, they are seeking alternatives to existing IT strategies. As a result, we are seeing an in-

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The author is Managing Partner, Basil Growth Fund

VC Talk: By Rajeev Srivastava

Emerging Trend Potential for IT Service Providers to Obtain PE / VC Fundingcreasing interest in adoption of SaaS, Cloud Computing and Open Source technologies that are likely to increase the role of the IT Service providers. Gartner, in their report, Gartner Predicts 2011, highlighted that by 2015, tools and automation will eliminate 25 percent of labour hours associated with IT services. Clearly, the successful IT Service providers of tomorrow would be the ones that provide value to their clients using a mix of pure play services with accelerators that reduce the time to adopt / deploy new solutions. Another challenge for small and mid-sized IT Service providers is the plateau effect. Very few IT Services companies have been able to cross the chasm to becoming a great big provider of niche services. The challenges faced by the promoters vary across: lack of professional management, constant worry on working capital, lack of access to a group of advisors who could be the sounding board with skin in the game geographical spread size of company to provide confidence to major enterprises to entrust key projects We, at Basil, see a tremendous potential in providing growth capital to IT Service providers that have a very focussed and niche offering with a proven business model that has a potential to scale. Our experience with this model has convinced us that gone are the days when one could create huge organisations providing generic IT Services (this would have been relevant in the 80s and 90s). The need of the hour for CIOs is a partner that is best fit and solves a very specific problem for them someone who they could trust completely to solve the problem at the earliest, as opposed to eventually. Open Source, Cloud & RIM, Identity & Access Management, Enterprise Mobility, Integrated Customer Interaction Management are some of the niche areas where we see tremendous opportunity for IT Service providers to compete on a level-playing field with the IT majors. Our advice to promoters seeking investment would be to ensure you have a differentiated, niche offering with accelerators to provide value to your clients. Prior to aligning with a PE / VC, ensure you interact with the partners in the fund and their past investments to understand their valueadd across Strategy, Sales & Marketing, Finance & Administration and HR & Recruitment. sisiliconindia

Rajeev Srivastava

April 2011

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Cover Story

stablished in 1999, Xchanging India, the Indian subsidiary of UK based Business Processing and Technology Services Company, Xchanging, is bent on more than transforming the core model of providing business processing services; it hopes to revolutionize it with a strong 3500 technologically competent teams across Gurgaon, Mumbai, Pune, Bangalore, Chennai and Shimoga, Xchanging India today is outperforming several of its competitors in delivering mission critical, high volume domain specific processing to its customers in a wide range of sectors banking and financial services, manufacturing and logistics, insurance, public sectors among others as well as horizontal offerings that cover areas such as procurement services, accounting, human resource and technology. When Xchanging, a leading Business Processor formed an enterprise partnership with Deustche Bank, one of the prominent banks in Europe, it had brought an all new meaning to the word business transformation that had been the buzz in the BPO industry for some time. According to this, instead of just taking outsourcing contracts on a simple fee-for-service basis, Xchanging would form joint ventures with the client to perform their back-office functions. Xchanging has operational control and the partner has boardroom representation. As processes are standardized, the EP can add third-party outsourcing contracts, benefit from scale advantages, and begin to generate revenues. We are not just a business process outsourcing unit. We are more oriented towards outcome based outsourcing. It is not about adopting back end jobs and taking responsibility of operations accomplished at a lower cost but to share the risk, responsibility and performance with our customers. says Nimish Soni, Managing Director for India. And has this worked? Definitely a yes, its success evidenced in the seven joint ventures that have been formed since then.

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ENGINEERING PROCESSES TO TRANSFORM BUSINESSESBy Vimali Swamy

Xchanging

Nimish Soni Managing Director

Carving a niche for itself / Building Core Competency Despite a myriad of service offerings, the companys core competency continues to be the BFSI segment. Xchanging is one of the largest provider of policy checking, production, issuance and premium collection services, with over 400 insurers, reinsurers, managing agents and syndicates as customers, the company handles millions of electronic transactions annually in a global business-tobusiness network with a throughput of over $124 billion and provides certainty of payment managing an efficient transfer of funds between trading partners. Today, it is one of the large providers of commercial insurance business processing and technology services with significant expertise in Commercial Property and Casualty services. Xchanging has a suite of offerings based on the integration of ITO and BPO for the Commercial Insurance and P&C Marketplaces. Its number of customers and over 1500 BPO and ITO staff make it one of the prevalent providers or Platform Based BPO to the Commercial Insurance Industry. Its commercial Insurance and P&C specific platform based BPO offerings include, new business and underwriting to improve underwriting profitability, reduce acquisition time for policies, improve time to market and profitability for products, improve profitability on policies and risk exposure; policy servicing to reduce the overall administration costs and errors as well as improve premium collections; claims optimization for reducsiliconindia

This is quiet a phenomenal achievement considering the recent upheaval the BPO industry witnessed in the last 2-3 years. So what makes it tick? Continuous innovation, a healthy work culture and thinking long term sustainability, Nimish is quick to respond.

ing the combined ratio, faster and more efficient processing, improved subrogation, and investigative services; brokerage services for rapid processing and placement of new business for Brokerages, account, and contract management. Business Transformation: Driving Success The BPO industry especially in India is a highly competitive one. Everyone is talking about value added services and providing outcome based services. If one takes into account the skill set and size, pricing models, there is hardly any difference gap in the top 56 BPO players in the country. So where does one set its uniqueness? In case of Xchanging it is not competence but rather execution, says Soni. Apart from this, the company has been making quite an impact amongst its customers by not only executing the

Xchanging India is slowly emerging as a strong solution provider in the subcontinent; this comes through the efforts of an able leadership team at the helm of affairs. Soni is supported by a dynamic team which has been together for almost a decade. Milind Joshi-Director for Production, Srikrishna M Chief Financial Officer, Srikantan Hosur Director Quality Assurance and Himanshu Bhardwaj as Head of Service and Sales.

required functions perfectly but in a way completely transforming the way a process is managed. One such example of transformation is its work for London market associations. In 2005, when Xchanging embarked upon a program to move the London insurance market (the worlds largest) from a paper-based to an electronic environment for improved efficiency and lower costs. The key technology component that underpinned this initiative was a document management system called the Insurers Market Repository (IMR) IMR is a key piece of infrastructure for the London Insurance Market. It supports the electronic processing of premiums, policies and claims through the Accounting and Settlement (A&S) and Electronic Claim File (ECF) solutions. The IMR enables its users to create, maintain and submit premium, policy and claims documentation direct to Xchanging and share docuHimanshu Bhardwaj ments with their trading partners, Head of Service & Sales eliminating paper and increasing processing speeds. Xchanging Customer experience and building developed and delivered the IMR long term partnerships are at the over a period of years in partnerheart of our delivery approach, we inship with the Trade Associations. vest in deepening these relationships Today it remains an essential feaand in turn knowing our customers ture of the Market change probusiness goals and challenges better. gram championed by the Market " We are delighted to have all of Reform Group (MRG). our customers as referencable and have successfully expanded almost all Following the successful imof our partnerships " plementation of the IMR,

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Xchanging, last July, signed another contract with the leading London insurance market associations the International Underwriting Association of London (IUA) and the Lloyds Market Association (LMA) to build an eAccounts capability on the existing infrastructure. This capability now further enhances the electronic submission of accounting entries to Xchanging by brokers and insurers. As part of the contract, Xchanging will also provide a Carriers Accounting Entries service. As a result, the creation of premium accounting splits, which is currently done by brokers, will be managed by Xchanging. The e-Accounts capability will deliver a number of benefits to insurers as well as brokers. It will enable earlier settlement of cash items through faster, standardized processes, increasing the flow of business to the London market. It will allow brokers to submit premium closing data to Xchanging using industry standard ACORD messages and largely eliminate rekeying data by Xchanging. Additionally, it will reduce the work load for brokers in reconciliation of accounting entries and support a common accounting process for bureaux / nonbureaux premiums. Chief Executive of the LMA, David Gittings, adds, This is another key step in making the London market more attractive for brokers to deal with. The e-Accounts project illustrates the markets commitment to be the leader through technology powered processing. Xchanging designed, delivered and continues to operate the IMR for the London insurance market. The IMR is today the largest processor of ACORD messages the global industry standard for message exchange. An average of 20,000 ACORD messages is processed on the IMR every day. With over 6,500 registered users worldwide and 250 connected brokers, managing agents and

ITO service o eringsBanking and Financial Services Shipping Oil and Gas Logistics Real Estate Insurance Manufacturing Media and Entertainment Public Services

Shared Services and Hybrid Model Xchanging has one of the strongest Insurance practices in India with com-

insurance companies, the IMR has delivered a fully electronic environment for faster, more accurate and reliable service to end customers. It has removed capacity constraints and standardized process across the London market to allow for growth. The IMR is a central part of the ongoing London market transformation program. This is just one of the many successful engagements of business transformation by the company.

*To know more contact at Sales@asia.xchanging.com or Himanshu.Bhardwaj@asia.xchanging.com

petencies spanning across premiums, claims, technical accounting and underwriters-brokers back office services. Its footprint is spread across six major cities and nine processing centers supported by a strong team of 1500 dedicated insurance professionals engaged in business processing and technology services. But companies operating internationally require a consistent standard of service globally. Xchanging, today is one of only a handful of BPO providers able to able to meet these requirements through its global delivery capabilities through well balanced onshore, near shore and offshore presence. Hence, in times ofOutsourcing at Xchanging is about sustainable value delivery through aggregation, simplification, technology enablement, supported by spreading cost arbitrage beyond the Tier 1 locations globally.

Srikrishna M, CFO

any kind of natural disaster or regional disturbances any process can be transferred between the centers offering uninterrupted services to clients. The company also brings tremendous experience in setting up offshore shared services and hybrid captives,siliconindia

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most suited, for customers looking at achieving greater cost efficiencies while retaining operational control. It deploys its existing infrastructure in providing all back office and support services in achieving the lean offshore processing resulting in less management overhead for the customer. The companys BPO offerings also provide flexibility to respond to changing business needs and industry dynamics, allowing its customers to scale their businesses quickly. A customer can start modestly and scale rapidly given the scale of business need. At the same time, customers are Milind Joshi also seeking solutions offering more Director Production than fixed price and labor rates based traditional outsourcing and The technology empowered, young, off shoring. In short, a new outenergetic production colleagues come-based outsourcing value deliver world-class services that are on proposition. The company thus par with 'aircraft production precision. provides outcomes based outsourcing through its gain-share outsourcing, striving for maximum bust quality and HR practices provalue and share it transparently with vide distinct edge. Xchanging provides finance and accounting its customers. functions to a variety of industries Financial Shared Services Center such as banking, insurance, pharmaceutical, logistics, retail, hospitality Model Xchanging offers services to its cus- and real estate services. One such example is the service tomers in a Financial Shared Services Center (FSSC) model with over Xchanging provides to the worlds 10 service delivery centers across largest property management and U.S., UK, Asia Pacific and Australia real estate service firm with an emcatering to multiple language re- ployee base of 20,000 plus operating quirements FSSC provides a whole gamut of figo to market strategy nance and accounting functions such as procurement services, accounts payable, accounts receivable, fixed assets accounting, Bank & GL reconciliations, budgeting and reporting, statutory & tax reporting, payroll, pension and treasury operations to global clients. Global delivery locations, multiple language competencies, expertise in implementing technology enabling tools, access to global industry best practices, time tested implementation, operations, engagement models, rosiliconindia

from 58 countries. Managing over 55 client legacy systems; data processing, interfacing and consolidation through X-PRO (Xchangings enabling tool - an end to end Procure to Pay solution) proprietary system used for workflow management and interfacing between client legacy systems and GL system. More than 170 employees operating from multiple locations in India process 1.6 million invoices in six different accounting applications. 65000 vendor requests are processed annually in 5 different accounting softwares. 99.5 percent quality output has been maintained for the last three years since 2008. Also worth mentioning is the Process Service Level Agreement with Premium Consulting Services Company in UK with 7,000 professionals in 120 offices throughout the world, rated as top global Human Resources consulting firms with revenues of over $1.2 billion, at 100 percent turn around time and quality. Xchanging successfully handles payroll for 300,000 pensioners every month, eliminating paper work across all the functions. Audit trail automated using X-Pro thereby reducing the auditing efforts tremendously. Directly works with the customers service provider to source inputs for accounts finalization.

Soni along with his team knows that while it is important to have a long term vision while achieving the companys goals, it is equally important to give back to the society where it operates. Hence, Xchanging is quiet actively involved in its CSR initiatives where it adopts nearby schools and villages and help them in raising funds for improving infrastructure. The company recently adopted a primary school in the outskirts of Shimoga, an upcoming town in Karnataka providing computers and helping repair the existing school buildings. This is part of the companys global Charity Program where it also invites its partners and clients to come ahead and contribute to the cause. Currently a three year support program which is helping shape young lives.

Going beyond Corporate Work

strong is Xchangings focus for its people, a congenial work environment, value infused culture, regular management employee interactions, harnessing entrepreneurial spirit in employees, unleashing potential through workshops and trainings, addressing every one by their first name at work and backed by ample support from management in terms of coming up with innovative ideas, explains Soni. This friendly outlook coupled with technical competency is a winning combination, differentiating Xchanging from the others in the industry.

Srikanthan Hosur, Director Quality

Engineering Processes for Efficiency Operating in a mission critical sector like BFSI apart from competency also requires high levels accuracy. But when processing million transactions a day in several centers across multiple countries, it becomes quite a challenge to monitor and track every transaction. Though a margin of one percent may generally be acceptable, when processing claims of worth $80-90 billion, even this error can transcend to a large amount. To avoid this, in 2003 Xchanging developed an efficient metric system that tracks every transaction right down to the computer from which it was processed. This metric system has provided quite an edge to the company when it comes to providing monitoring processes and quickly responding to any customer query. Other than the in-house metric system, the company also conducts frequent internal and external audits to keep a check on quality as well as data security. And whats the focus Xchanging has for its employees? Equally

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From Tier 1 to Tier 3 Cities: Spreading its Presence To achieve consistent and high QualIt is a matter of great feat for ity deliveries, high value productive Xchanging India that a majority environment and customer satisfaction of the companys customers are in our services we use robust quality methodology in all our Processes at those from reference and since Xchanging 2005 there have been no major decline in the clientele. But a common concern for many cus- The Road Ahead tomers is the rising cost of operations Now a decade old in Indian BPO inin major cities where the company dustry, the company has not only fooperates and it is effecting cost in its cused on international markets but SLAs. Thus, in order to ease the op- indentified potential in domestic erational cost pressure on its cus- markets as well. The company is a tomers, Xchanging India has cutting edge solution provider of identified a perfect solution in iden- technology services to BFSI sector tifying Tier 3 cities as centers of op- in India, Bangladesh, Sri Lanka and eration. The company recently set up Bhutan. With its expertise in SWIFT a 1000 seater facility in Shimoga, a payment gateway for banks, small town in the heart of Karnataka. Xchanging provides its services to This center currently handles seven over 160 banks in Indian subconticritical processes and employs local nent. Apart from BFSI new areas talent there by reducing OPEX. In like healthcare, retail and manufacthe similar lines it is indentifying turing also are holding promise. To other cities like Solan in Himachal tap this opportunity the company Pradesh among others. These places Soni has envisioned a three pronged will take anywhere between 10-15 strategy grow the existing platyears to develop into a fully fledged form, add new portfolios (like retail, city like Bangalore and thus help us banking and hedge funds) and conkeep costs in considerable control tinue to implement lean processing. Though the competition continalso providing employment to youth of these cities who would otherwise ues to rise high, for Xchanging this migrate to bigger cities like Banga- is just the beginning for many more lore or Chandigarh for employment, years of successful transformations to come. si explains Soni.siliconindia

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April 2011

Cover Feature: By Hari Anil

BPO Sector Is Doomsday Near?oomsday, Armageddon, end of the day, as we all know these words or phrases have negative connotations, and outside religion they can never have any positive aspects associated to them. For that matter, even the slightest doubt that something is heading for any of these cannot be good. According to a NASSCOM report the IT/BPO sector is estimated to aggregate revenues of $88.1 billion in FY2011 of which $12 billion is from the BPO sector. They are also estimating the domestic segment to grow and reach `127 billion by 2011 and are predicting a very bright future for the industry. It seems to be such a great time for the BPO segment, or is it really? There are many developments in the Indian BPO industry that might not have a very positive effect on the industry, which makes it doubtful on the prospects of the industry. To begin with, the STPI Act ending on the 31st of March, MAT to be levied on units operating in SEZ, a lack of availability of skilled labor, an increase in labor cost, and finally other countries like Philippines are gaining more prominence in the market. It is these factors in the segment that makes one wonder Is the future going to be a bright one for Indian BPO sector or is it nearing its doomsday?

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giants in the industry very badly it can be a knockout punch for the The Budget Woes For long, IT/ITeS companies had small and medium companies who been under the protective umbrella are still surviving from the recession. of the STPI Act. Launched by the SMBs will get hurt due to the withIndian Government back in 1991, the drawal of tax benefits here. On the STPI Act provides facilities to IT in- other hand several other competing dustry for undertaking software de- countries have these benefits and velopment and IT enabled services naturally business will start moving for 100 percent exports using data towards those countries, says Shancommunication links in the form of mugam Nagarajan, Co-founder & physical exports including export of Chief People Officer, 24/7 Customer. professional services. Individual But being small and medium in size units can also do business in the do- seems to have its own advantages, mestic market up to 50 percent of the The benefits of being small are that exports. With the act expiring on the you can be more nimble and more 31st of March and the government is agile; you can also be more responnot showing any signs of providing sive, faster and better to client need. an extension to this, spells trouble The SMB sector has to learn to exbrewing for the BPO players. Also ploit that more and more, as it looks companies in Special Economic to win larger contracts in the indusZones were safe from MAT till now, try, says Manoj Malhotra, CEO, but the recent budget made it clear Salient Business Solutions. Post recession many of the comthat this will no longer be so. The levying of MAT along with non-ex- panies are looking to outsource tension of STPI Act beyond FY11 everything other than their core will have a major negative impact processes and are no longer just the IT/BPO sector as profit margins looking at the cost advantage or of these companies(especially small labor arbitrage; rather they are lookand medium) who enjoyed tax ex- ing for service providers who are technologically advanced emptions under the above and are capable of promentioned schemes is viding niche end to end expected to come Being small, you solutions. The promidown. can be more nence that Business Though this nimble and agile. Transformation Outmight not affect the sourcing (BTO) gained in the recent times is due to this. BTOs help its clients in more ways than one; they help in cost and labor arbitrage, reduction in time required for product development, helps in reduction of complexity of major projects, and many more. So a migration to BTO models might just help our BPOs. Well, the migration to BTO model might not be an option anymore, The companies have no choice but to deliver more value as customers are expecting more value Manoj Malhotra added to the services being offered,

Pressure from the customers forces companies to move up the value chain and stay competitive

Unskilled Labor, Threat of New Geographies The rising wave of challenges Talented and skilled employees are the main reason behind any companys success. While talent retention has always been a challenge for BPOs, now they are staring down the barrel of a different kind of issue, lack of availability of skilled labor. As per a NASSCOM report, the outsourcing industry is expected to face a shortage of 262,000 professionals by 2012. The direct result of the lack of availability of skilled labor will be the inflation of pay roll cost. The major cost factor for a BPO is its pay roll cost, about 50 70 percent of the total operational cost, when this goes up the profit margin goes down. This will in turn force the BPO companiessiliconindia

says Rahul Kanodia, Vice Chairman and CEO of Datamatics. This is good as it forces the company to move up the value chain and stay more competitive. The companies can also charge a premium price for these value added services and make profit from it, Kanodia added.

Rahul Kanodia

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to increase their service costs, which will make their customers look for cheaper alternatives. Lack of the availability of skilled labor together with increase in labor cost can be a lethal combination not just for SMBs, but also for the giants of the industry. We need an excellent education system that train individuals for jobs in BPO industry as well. If academia introduces courses in spoken English and business communication at least for the last two years of school or college and make this compulsory, this will help in eradicating the scarcity in talent pool in the industry, says Nagarajan. Philippines have a large English speaking population created through change in their educational structure. So Philippines has two advantages over the Indian BPO sector, cost arbitrage and availability of skilled labor. A report by World Bank highlighted that last year Philippines outstripped India as the worlds call center capital in terms of manpower and growth in BPO receipts and the industry data showed that at the start of 2010, revenue generated by the BPO sector in the Philippines stood at $5.5. This is no longer a negligible threat. As of now Philippines BPOs are concentrating more on the voice processes, mainly of the U.S. clients, and they are not very strong in the non-voice area, whereas India is very strong in the non-voice processes. But one can see that it is only a matter of time before they gain strength in the non-voice areas as well. India has another huge advantage, which is its gigantic domestic market. This market is a huge opportunity for the Indian BPOs to leverage on. This is something the Philippines does not have, says Kanodia, pointing out an advantage India has over Philippines. Indian domestic BPO market is expected tosiliconindia

We need an education system that trains individuals for jobs in the BPO industry

Shanmugam Nagarajan

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What should we do to survive the Doomsday and stay afloat? It is given that there will be a cost arbitrage. But if you are going to win the contract you cannot rely solely on that, because you can be rest assured that there will be at least four others on the same table with you who would have the same cost arbitrage or even better. So cost arbitrage will remain an important factor, but not the sole defining or decision making criteria, and you have to provide more than that to win a contract or to swing a job in, says Malhotra. So low cost is no longer one of our strengths; we cannot compete with

grow by 16.9 percent in FY2011, to reach Rs 127 billion. This presents an enormous opportunity for the Indian BPO companies. The companies should not shy away from this and should leverage it to the utmost extent. This can enable them to go a long way.

the likes of Philippines in terms of cost arbitrage. We have to look at our strength which is the experience we gained trough working with different companies in the field for several years and start providing more value added services to the clients. Secondly much attention should be given in developing the necessary work force. BPOs have already started working with universities for developing course models that equip the students with necessary skills to be a part of the industry. As Nagarajan mentioned, a focus on spoken English and business communication in the school or university level will go a long way. This will definitely help in increasing the availability of workforce in the industry. Government support plays a huge part. When we were working with China, the government was giving the company that we partnered with, 200,000 squre feet of fully furnished office space, free computers and software, no electricity charges, no water charges, no tax for five years, no employee tax for two years, and subsidized housing for employees. In China the operational cost is about half of that in India, plus all these support from the government, there is no way India can compete, says Kanodia. Governments in countries similar to ours around the world are providing more and more support to the industry understanding the real potential of it. Our Government has to do the same for the uninterrupted growth of Indian BPO industry. As a whole, with all the dark clouds of the immediate threats for the BPO industry, it definitely looks like the doomsday is near. Still one can slightly see a ray of hope emerging from all dark clouds, which suggests that this need not be the end. But the industry has to act now and act fast if it wants to escape and survive. si

uperstition, despite our age of science and technology, plays a prevalent role in our day to day life, and it can be seen everywhere from the big time to the backyard. It is a belief founded by someone, no matter how evident, it is irrational, and always relies on chance. No matter what meaning superstition may bring to people in general, to the players in the cricket field as in the world-cup this time, it is a sense of duty, a feeling of comfort they receive from a certain superstition. The propitiation of the right gods, ritual dances before the hunt, can all be viewed as efforts, no matter how faint or unavailing, to control destiny. Likewise Business Plan/Risks plays an important role on how you would like to control the destiny of your business or organization by not sitting on the lap of superstitious, but a firm Business plan. Be it from initiation of a new Line of Business (LOB) or expanding business in new regions or bringing innovations to existing customer and so on. Almost a decade ago, questions were, What business do I take to my customer, How do I do it and Who does what? Since the economic down-fall in mid 2007, the IT world today is calling this the year of operational excellence. How do we harness the creativity and brainpower of our entire unit to fine tune all facets of the sales machine? Are we focused in the right places? Are we putting our wood behind the right arrows? The goal in all of this, by the way, is to work smarter and not harder. In the managed services world it is about everything, We will do all for a price! While we do it all, we will also

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The author is Global Head-IMS, Infinite Computer Solutions (Inidia)

Business: By Aparna Challu

Making Business Impact Via Managed Services

work towards enabling growth to our customers, helping our customers to improve efficiency and margins and helping them to reduce costs. Now what drives the managed services to end customers? Why would any customer adopt Managed Services? Is it cost, efficiency or is it business impact! If I had to pick, I would say business impact. In the recent survey, most IT units spend as much as 80 percent of their budgets on routine maintenance and day-to-day operations, while only 20 percent is spending on new technology or business-process enhancements. Now the conventional wisdom is, with the total IT budget being constant, it is better to spend more on new initiatives and minimize spending on legacy systems. Most of you would probably argue that the distinction between maintenance costs and new initiatives should be guided by the business needs, within an IT services lifecycle framework through reversal of the standard 80/20 rule and to a considerable improvement over the way IT functions. I wont deny that either! Now how do we make a business impact by providing managed services to any customer? As per Forrester research group half of the IT operating and capital budget is being set aside for new IT initiatives and increasing capacity to support business expansion, which means that more dollars are going to be

allocated to services-based transactions. Budgeting, planning, execution, lead flow and more, these are some of the important aspects that can set an example for the roadmap from a basic environment to service based which is a more holistically managed services. If I have to quote an example, there are customers who have highly centralized operations vis-a-vis customers that have a server in every office, under every desk in a cubicle. According to Gartner, information and communication technology (ICT) spend is expected to reach $71.9 billion in 2011, a 10.3 percent increase from 2010 spending of $65.23 billion. We could possibly use the important aspects to make a business impact and thus making it a business enabler that is more matured with flexibility to adopt new change, with standardized SLA and matured problem management and consolidated environment. Today various customers of Infinite across the globe use our model where measurement can be done with huge reduction in operations and maintenance cost with ability to integrate and maintain inter-operability, providing maximum business realization and show IT return on investment. We at Infinite offer Infrastructure Managed Services Maturity model through people, Process and Technology which form the core structure in any business initiatives. sisiliconindia

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The author is Vice Chairman and CEO, Datamatics Global Services

Business: By Rahul Kanodia

The Indian enterprise market has matured enough for Indian BPO providers to start targeting the domestic market. What factors will drive this growing trend? Kitna deti hai?(whats the mileage?) the ubiquitous phrase aptly captured in a TV commercial for Indias best-selling cars was so true for Indian enterprises looking to buy IT or business process outsourcing (BPO) services. Considering recent trends, this psyche is changing, and Indian user enterprises are finally waking up to the tremendous advantages that BPO solutions bring to the strategic and operational aspects of their businesses. Benefits like 75 percent reduction in operational costs, a 50 percent reduction in turn-around time, optimizing cash flows, accelerating revenue cycles and improving your understanding of the customers cannot stay ignored for long. In the light of these tangible and immediate benefits, BPO services and solutions are no longer an option that enterprises can leverage to stay competitive. Rather, they are strategic imperatives in the hands of the enterprises leadership, business groups and business support functions. It is a sign of increasing maturity. So far, the Indian IT and BPO industry has been growing on the back of a cost advantage as compared to local resources available in developed economies. This advantage did not exist for local enterprises. A cost-conscious user community would have missed out on an opportunity to create a lean, highly profitable organization that is quick to respond to customer needs and preferences, and comply with regulations.siliconindia

BPO Services & Solutions Be Indian, Buy Indian

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There has been a paradigm shift though, with the recent economic downturn acting as a catalyst. With competition from larger, cash-rich corporates increasing, Indian enterprises too have begun implementing global best practices, building highly efficient and scalable business processes, increasing customer responsiveness and hastening time-to-market for a wider range of solutions and services. Cost is no longer the only, or even the most influential factor in an Indian enterprises decision to purchase an IT / BPO solution. Business process transformation and product innovation are turning out to be the topmost drivers of the local consumption of BPO services and solutions. Key drivers for growth in BPO service adoption in the coming years will be the need for greater control and real-time monitoring of enterprise assets, better analytics and intelligence for effective business decisions, customer-centricity, seamless integration of assets and systems gained through M&As, future proofing of business processes and lower operational costs. New buyers have emerged as they finally start seeing value in enhancing business processes through technology. Sectors like manufacturing, media & publishing, education, banking, insurance, utilities, retail, telecom and government have begun to increase their spends on technology and BPO solutions, and will continue to do so in the coming years.

All indicators point to the fact that the user community is building a layer of next-generation business solutions over the initial layers made of infrastructure, automation and core business components. More than ever before, the CIO conversations are beginning to revolve around how they can help their organizations become good corporate citizens and how they can enable compliance and risk management. The focus now is on how to use technologies, processes and frameworks to enable best practices and industry leadership. With the spate of frauds, stricter regulations and closer scrutiny by a vigilant investor community, the companies boards are holding CIOs responsible for building investorfriendly, corporate governance-compliant processes.

India: Opportunity for Indian BPO Providers Here lies the opportunity for the BPO sector in India, a potential $15-20 billion opportunity, according to the Nasscom-Everest India BPO Study. A recent Gartner study also picks out India (along with China and Australia) as key regional economies that will see most growth. The Nasscom-Everest India BPO study says that reliance on a cost-savingsdriven value proposition alone will not be in the best long-term interest of the Indian BPO industry. The reason being the continued appreciation of the Indian Rupee against the U.S. dollar, inflationary pressures and resource scarcity. The report further states that BPO providers need to innovate and build new, higher-value

propositions for buyers or seek to optimize the current environment to continue the cost-arbitrage-led proposition. Clearly, addressing the business challenges of enterprise users in India through innovative solutions combines the two approaches. Therefore, the future is bright for providers of technology and business solutions, with a focus on designing, developing and implementing building blocks of next-generation enterprises. The user community is bound to lap up solutions that power the enterprises focus on its core, while strengthening performance at the non-core edge of the ecosystem. These solutions combine the next-generation technologies and domain expertise. They would help enterprises overcome challenges that arise from changing customer mandates, new regulations, mergers & acquisitions, technology obsolescence and the emergence of new technologies like cloud computing and mobile devices. One such solution could be the paperto-ERP solution, which streamlines the entire lifecycle of document processing in any enterprise. This business need is driven by a suite of solutions that meets requirements of tax processing, KYC processing, invoice processing, insurance claims processing, account opening form processing for banks, application and examination sheet processing for educational institutions, etc. These are solutions that cut across the various departmental silos that exist in a user enterprise, and fuse business processes and technology. Another solution that considers the vast and diverse Indian demography is a mobile survey solution that meets the need of research firms to conduct surveys on mobile devices. A mobile survey solution can help the researcher, and government agencies for projects like the census survey and reach out to respondents in remote locations with limited access to computers and the Internet. Such a solution provides real-time reports, survey templates, simultaneous data collection, analytics, multiuser collaboration and offline data collection on simplified user interfaces. This is a major leap ahead in survey re-

search projects, and if they manage to meet the complex needs of survey research projects will turn into a killer app. This is an example of business process solutions that deliver business-critical information realtime in non-traditional formats for nextgeneration applications. A key technology trend that will provide a major impetus for the BPO services in India is the emergence of cloud computing. This has enabled a new delivery model that helps convert CAPEX into OPEX. It is non-disruptive and offers advantages of economies of scale, which is a win-win for both, the BPO service provider as well as the enterprise user. From a CFOs perspective, an invoice processing solution on the cloud for instance, will help reduce accounts payables, accounts receivables and Days Sales Outstanding rates, optimize cash flow and lead to more effective management of working capital, lower order-to-cash (OTC) processing time and costs, and roll capital efficiently, among other benefits. Finally, there is one key component of a BPO solution or service that will define its success and popularity in the Indian market. It is the ability of the solution to simplify complex business processes. Indian BPO providers have a clear advantage in this regard. Apart from technology expertise, what will stand in good stead for Indian BPOs is their understanding of the local environment, their experience in integrating and customizing technology, knowledge of the complex tax and accounting practices, and the invaluable advantage of being based here. The reason Maruti continues to produce the largest-selling cars here in spite of competition and higher costs is not just because it has an answer to kitna deti hai? but also because of its endearing Indianness. The government must now pitch in and incentivize local businesses that buy and implement solutions from Indian BPO providers. That will spur the next big wave in the Indian IT and BPO industry. sisiliconindia

April 2011

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April 2011

The author is President - Asia Pacific, Aditya Birla Minacs

Business: By Milind Godbole

Connect Indiahe Indian telecom industry, especially the mobile, is one of the fastest growing across the globe, with growth from a one million subscriber base in 1998 to 400 million plus in 2009! This unprecedented growth has been witnessed with ever changing market dynamics. This unprecedented growth has been with ever changing market dynamics. Consider the following key challenges in the industry: The next 100 million subscribers will come from tier 2/3/4 towns and rural India. Average Revenue Per User (ARPU) is already low, will come down further. The cost of servicing has to decline further too. Thus more pressure on the cost of service in tier 1 and 2 cities.siliconindia

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A robust customer service platform to power the next phase of Indian telecom growth

Service Delivery Model: Connect India is designed as a hub-and-spoke based service delivery model, the typical hub is a state of the art facility with 800 plus production seats located out of a major metro to cater to the urban mass with high Revenue Per User (RPU).

The conventional customer service set-up today just cannot scale up to meet the requirements as growth goes decidedly semi-rural/ ruralThe conventional customer service set-up today just cannot scale up to meet the requirements as growth goes decidedly semi-rural/ rural. This is why: Available spend budgets dropping consistently The cost of servicing from tier 1 and 2 cities exclusively is becoming more prohibitive year on year with the consistent drop in ARPU. Accent diversity management: the market shifting towards tier 2, 3 and 4 towns is inducing accent and dialect related difficulties in customer service! Disaster Recovery (DR)/ Business Continuity Planning (BCP) A pure-play metro or a purely rural delivery model hinging on one or two centers brings with it serious DR, BCP challenges.

Hub: Command Center: The hub is the command center supporting all spokes, and will also cater to 20-25 percent of the volumes. The remaining is smartly distributed to the spokes to ensure buffer rationalization. All critical delivery activities like Train the Trainer (TTT), Quality Monitoring, MIS, reviews and overall control will be located at the hub.

Strategy: Our location strategy is based on our research, on infrastructure availability (fiber, last

Ready to Implement: Minacs has done extensive research across Indian states and is fully ready with a detailed template and plans to implement and transition the operation quickly.

The Approach Aditya Birla Minacs has pioneered an innovative proactive response to this evolving business scenario. Based on our deep engagement with the telecom industry, the CRM insight and domestic experience we have created a solution which is Connect India - a robust customer service platform leveraging technology that will power Indian telecoms growth thrust in the coming years.

Spokes: Satellite Center The spokes or the satellite centre is a highly functional, but minimal infrastructure 100seat (approx.) operation, running a strictly two-shift operation, located at a 3-4 hour distance from the hub. More than a Call Center: A typical spoke facility is envisioned to transform into a contact center. But going further with the infrastructure, each spoke will house a full fledged retail center to enable the company to offer sales and other retail, showroom-centric activities.

Many social media efforts are failing, because some enterprises just don't understand how to employ social media to facilitate collective behaviors, says Gartner. The research indicates that pursuing collective intelligence to achieve operational effectiveness is one of the most successful social media adoption trends. Furthermore, collective intelligence is one of the earliest and most mature patterns, meaning that skills and tool capabilities are relatively widespread, and success in this pattern is proven.

Go-live: The hub will go operational first (within 60-90 days of LOI) with one spoke going live every 30 days thereafter. The Connect India model from Minacs is based on control panel framework, which is customizable for meeting specific telecom requirements. This framework comprises of critical delivery elements which are well researched and measurable under our Six Sigma approach. Minacs approach to deploying the Connect India model follows a well-knit flow integrating people, process and technology. Critical functions like hiring, training, quality, transition, on the job training (OJT), floor operations are customized to suit to suit the business needs of the customer. Each of these critical success factors are well thought-through with the help of our proprietary framework to factor in location based challenges. We come up with a best-fit solution for you, leveraging the optimal hub and spoke locations, based on the client requirements. In a nutshell, Connect India from Minacs ensures no major capex investment to the clients and a robust built-in DR and BCP framework. It is a blend of service functions to drive customer satisfaction across your metro and rural subscriber bases. The evolved pricing model featuring highly competitive per call pricing and our commitment to move to an effort plus output model in a pre-defined period is one of the key highlights. As part of the inclusive national and increasingly corporate agenda, together we would like to contribute to creating employment across semi-rural and rural India. sisiliconindia

mile, etc), political sensitivities, resource catchment areas and other such feasibility parameters.

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April 2011

Technology: By Murthy Chintalapati

Cloud Telephony is the New Tool Enabling Crowd Sourcing of Call Centers

Isiliconindia

n the age of LinkedIn, Facebook, Twitter and other social networking tools, it has become increasingly important to provide the best customer service available. Businesses are seeking ways to streamline customer support and reduce costs. Indian companies are in this context quickly adapting to Crowd sourcing of contact centers, thus enabling them reduce response time to customers. The trend of businesses employing more home based employees, using different methods of social networking to generate higher revenues are increasing in India today, more than ever before. Contact centers are faced with increasing pressure to upgrade their technology both hardware and software to equip themselves for crowd sourcing. Business heads and CTOs

need to realize that their contact center technology infrastructure must be nimble enough to respond to future trends and one of the biggest emerging weapons enabling crowd sourcing of call centers in India is customized Cloud Telephony solutions.

A hosted telephony network provide businesses the ability to operate with multiple telephone numbers and forward them to as many multiple locations as they wish or to a single telephone line.

sales presence across regions of the country whether it is Mumbai, Delhi or Bangalore as well as a national toll free for easy rental. It will also help businesses set up rural BPOs in smaller Tier II & III cities and towns; an important requirement to make domestic call cen-

A hosted telephony network provide businesses the ability to operate with multiple telephone numbers and forward them to as many multiple locations as they wish or to a single telephone line. So, a single line operated from anywhere, looks like it has local

ters a viable business opportunity. Companies have been unable to scale their domestic call centers due to lack of good broadband and internet services in smaller towns. Cloud Telephony is almost a necessity to develop Indias potential domestic call center market.

Ozonetels Cloud Agent solution brings the advantages of the distributed contact center to help businesses achieve more results out of less. Cloud Agent is an innovative approach towards providing professional UCI (unified customer interaction) services built on a Telcos PSTN/wireless Cloud. It offers required inbound, outbound and blended services including Skills based routing of the calls, Computer Telephony Integration with screen POP, IVR, Call Recording, Quality Monitoring, Call and Agent Reporting- both real time and historic, SMS, email, all on a hosted basis. It can be deployed as an anytime anywhere agent for your call center requirements, whether it is inbound or outbound. Cloud Agent is a Plug & Play solution with carrier grade voice quality thus overcoming the limitations associated with VOIP based Call center solutions. The Platform enables crowd sourcing wherein pre-qualified agents receive and process calls in the cloud resulting in significant cost savings by paying only on transaction basis as opposed to agent wise which is the norm.

A cloud telephony platform such as this also makes it possible for businesses to mobilize their contact centers and call agents and makes it possible for mobile workers to be maximally efficient, reachable and effective in their jobs. The contact center is no longer constrained to a single geographic site, with agents being able to work at multiple sites or even from home. Companies will be able to track down and