‘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
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
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?