Service Begins at Home

A

'Hollywood theme' night on the Indian Navy's aircraft carrier Vikrant?

Yes, a finale to Nasscom's annual conference. Both reflected the services

story: a global success story centered on India, which powers much of the

world's tech and business.

Back home, the story is

modest, though. IT outsourcing has just about begun to ramp up in India. Driven

by the largest enterprises (telcos, banks), and supplied by a couple of MNC

players, Indian services giants like Infosys don't even bid for local tenders.

BPO's domestic story

is even more modest. I can't even name a 'major' third-party services

company.

Yes, the US and EU

markets and their dollar rates make more sense for Indian services companies

growing at 40%. While India's market matters to global MNCs who need to go

everywhere, to get some growth.

A few are making money.

For others, it's a strategic presence. DQ expects domestic services to clock

$6...7 bn for 2006-07. That's without 'addressable' markets such as the

BPO business that's not being outsourced because of the good old chicken-egg

issue: where's the suppliers?

Ask business heads of

companies of all sizes: Do they really want to do a lot of non-core stuff

in-house?

No. Outsourcing is no

longer about wage arbitrage (and at a domestic level, it never has been). It's

not about IT or tech. It's about the business. Finance. Scalability,

flexibility. Focus on core competence. Sourcing competence and acquiring best

practices. It could be about turning capex into opex and more. Service providers

who take over ATM or cellular tower networks can share the infrastructure, and

offer better SLAs at a third of the cost.

But where are the

suppliers, ask CXOs? Especially for BPO. (Oh, and BPO exporters do not do

business here....where can we draw on global experience and best practices?)

Who can supply a basket

of services, ask SMBs? The big guys don't talk to us. We can't go best of

breed...we we're a business, not an IT shop..

At a session I was

chairing at Nasscom '06, some suggested that we, the media, play a role in

bridging this gap. So here's a first step.

What will it take for

India's businesses to get excited about outsourcing? How to bridge the

horrific gap in quality between the Indian consumer's experience of services

here, and the global customer's experience of India's services? What can BPO

learn from IT outsourcing, which is at least past infancy? Do enterprises want

best of breed and silos or a one-stop-shop?

In 2006-07, enterprises will use it to scale up, save

costs, survive, compete, thrive. A few vendors will find the 'fortune at the

bottom of the pyramid', including some of the hundreds of regional services

players. I do believe the year will see a surge in services outsourcing in

India. Do you?