International Business Machines Corp. (IBM), the world’s biggest computer services provider, recently changed the name of its outsourcing business in India to IBM Global Process Services from IBM Daksh. Pari Sadasivan, who was made India delivery leader of the business process outsourcing (BPO) arm three months ago, spoke to Mint about cloud computing and other issues. Edited excerpts:
What is your immediate focus for the firm?
According to a survey done by us, about 60% of the senior executives said they use BPO as part of their business model and they expect the spend to go up. We also talked to C-suite executives, and they are looking for innovation from BPO, which can help them differentiate and also have sustained performance.
So, in order to meet the expectations of our clients, it’s important to analyse what we have today and what is the next generation of BPO. If you take the case of IT services, initially it was all vanilla services and then they started adding the vertical expertise, (for) which clients are also ready to pay a premium now as they see more value attached to it. And we believe that’s what our clients want even in BPO.
We are also combining cloud computing and analytics to develop powerful tools. I think that’s where the next wave of BPO will be.
The other things on the agenda are to look at the talent development angle along with strengthening employee experience.
What is your take on the current demand situation in the industry?
The market has opened up. We are seeing a lot of growth coming from Latin America, Africa and West Asia. So far, we have not seen much of uncertainty in 2011. We expect emerging markets to invest a lot on infrastructure, which is good for us. Eastern Europe and Asia-Pacific are also growth markets for us.
There is a lot of talk about integrated IT and BPO deals in the industry. Which side are you on?
I think the whole bundling of IT and BPO is going to speed up. It’s not something which is new, but clients are starting to consolidate third-party service providers and there is a blurring of lines between hardware, software or services.
Does it ring the death knell for pure-play BPO firms?
I think there is going to be market for different types of players and there may be a niche market where clients only want BPO, or they may decide to create competition and let one vendor do the IT and other do the BPO so that they don’t become complacent. But we are seeing more of a shift towards integrated deals. And there are a lot of synergies that are taking place between IBM India and IBM Global Process Services.
India has been overtaken by destinations such as the Philippines in segments such as voice BPO. Where do you see this going?
We are seeing a trend that clients want to balance their portfolios, especially our global clients in terms of from where the work will be delivered out of.
There is a push for nearshore, onshore as well as the global delivery centres. Given that kind of drive, we are looking at how we can come up with a balanced shore strategy. Some of it is driven by risk diversification, some of it is data privacy-related.
Cairo is the most recent centre that we set up, and we are constantly evaluating others. For instance, in Cairo we have very good language skills, so there is no reason that some of the work that we were earlier sending to Europe can’t be done from Cairo.
Does it mean that work that could have come to India is now going elsewhere?
Till now, we haven’t seen any work being transitioned out of India. But what is happening is that when global clients come and say they want to diversify and not put all of their work into India, we find a solution by saying that 50% of it will be India, 50% of it will be other countries.
Do you see a long-term threat to India from destinations such as China or Africa?
From India’s perspective, we have so much of young talent and we have established ourselves as the hub for IT and ITeS (IT-enabled services). We are moving up the value chain... Our clients have a higher set of expectations, which means that we have to deliver more value. The key to success for India to continue to be the leader in the IT or the ITeS business depends upon us in terms of how we can grow the talent, and not get complacent. read more
What is your immediate focus for the firm?
According to a survey done by us, about 60% of the senior executives said they use BPO as part of their business model and they expect the spend to go up. We also talked to C-suite executives, and they are looking for innovation from BPO, which can help them differentiate and also have sustained performance.
So, in order to meet the expectations of our clients, it’s important to analyse what we have today and what is the next generation of BPO. If you take the case of IT services, initially it was all vanilla services and then they started adding the vertical expertise, (for) which clients are also ready to pay a premium now as they see more value attached to it. And we believe that’s what our clients want even in BPO.
We are also combining cloud computing and analytics to develop powerful tools. I think that’s where the next wave of BPO will be.
The other things on the agenda are to look at the talent development angle along with strengthening employee experience.
What is your take on the current demand situation in the industry?
The market has opened up. We are seeing a lot of growth coming from Latin America, Africa and West Asia. So far, we have not seen much of uncertainty in 2011. We expect emerging markets to invest a lot on infrastructure, which is good for us. Eastern Europe and Asia-Pacific are also growth markets for us.
There is a lot of talk about integrated IT and BPO deals in the industry. Which side are you on?
I think the whole bundling of IT and BPO is going to speed up. It’s not something which is new, but clients are starting to consolidate third-party service providers and there is a blurring of lines between hardware, software or services.
Does it ring the death knell for pure-play BPO firms?
I think there is going to be market for different types of players and there may be a niche market where clients only want BPO, or they may decide to create competition and let one vendor do the IT and other do the BPO so that they don’t become complacent. But we are seeing more of a shift towards integrated deals. And there are a lot of synergies that are taking place between IBM India and IBM Global Process Services.
India has been overtaken by destinations such as the Philippines in segments such as voice BPO. Where do you see this going?
We are seeing a trend that clients want to balance their portfolios, especially our global clients in terms of from where the work will be delivered out of.
There is a push for nearshore, onshore as well as the global delivery centres. Given that kind of drive, we are looking at how we can come up with a balanced shore strategy. Some of it is driven by risk diversification, some of it is data privacy-related.
Cairo is the most recent centre that we set up, and we are constantly evaluating others. For instance, in Cairo we have very good language skills, so there is no reason that some of the work that we were earlier sending to Europe can’t be done from Cairo.
Does it mean that work that could have come to India is now going elsewhere?
Till now, we haven’t seen any work being transitioned out of India. But what is happening is that when global clients come and say they want to diversify and not put all of their work into India, we find a solution by saying that 50% of it will be India, 50% of it will be other countries.
Do you see a long-term threat to India from destinations such as China or Africa?
From India’s perspective, we have so much of young talent and we have established ourselves as the hub for IT and ITeS (IT-enabled services). We are moving up the value chain... Our clients have a higher set of expectations, which means that we have to deliver more value. The key to success for India to continue to be the leader in the IT or the ITeS business depends upon us in terms of how we can grow the talent, and not get complacent. read more
