The dark storm clouds of uncertainty are hovering over key markets of the US and Europe and the global technology industry seems to be heading for slower growth next year. But the $17-billion Indian BPO industry, dubbed the back office to the world, is confident that “non-discretionary” client spending will continue uninterrupted, unless a full-blown recession strikes. eWorld caught up with Abid Ali Neemuchwala, Vice-President, Global Head, BPO services at TCS, on the sidelines of the Nasscom BPO Strategy summit, for his take on the weak global macro indicators, India's offshore edge, and the challenges ahead. Excerpts:

Which is a bigger concern, — the US or Europe?

We are carefully watching both the markets. Definitely, in the US, we do not see an immediate impact. In Europe, today, more of the BPO business is from the UK, and we do not see much of an impact over there, either. Continental Europe, again, where we are focused, is not necessarily the countries that are being discussed now, such as Greece or Portugal. We do not have a huge presence over there.

The BPO industry says it is relatively more insulated from economic headwinds, than IT. Your view.

The good part of the BPO business is that when there is an economic downturn and trouble, BPO enables customers to become more efficient. When there is growth, BPO enables customers to scale up. So, that way, there is an opportunity in challenge either way. That is the way I would put it for the US market as well.

India versus rival offshore locations such as the Philippines. How do you respond to such debates ?

I will not call it a danger but we should always be on our toes, as a country. We cannot take business for granted. We need to do the right things. Build talent. We need large numbers of people to be hired. Hence we need to focus on investment in education, investment in the right curriculum in Universities so they are productive as they come into the industry; investment in infrastructure — airport, roads, power. Also, have the right economic structure around taxation so we do not become uncompetitive.

But are we losing our edge as an offshore location?

The labour inflation is putting pressure but we are also moving up the value chain. The question is, just how long can we only be a low-cost player? That is not sustainable. Because there are other countries — today it is the Philippines and China, tomorrow it could be some other countries in Africa — that will be lower-cost location. To continuously maintain competitive advantage, not only do we have to work on the cost structures but also on the amount of the value that we can deliver. So, take the example of voice, traditionally a commodity play. You will soon see more of that being under threat of moving away from India to, say, a destination such as the Philippines, which could be a lower-cost destination for voice.

But the moment you move up the value chain, to transaction processing or analytics, the amount of talent available here and the deep domain expertise that is required for it, is not available in any other country whether it is the Philippines or China. So India definitely has an edge. Continuous investment in that talent is very important so we move up the value chain, as the lower part of the value chain may get more commoditised.

Santander recently moved retail banking-related call centre services from India to the UK, citing customer complaints. As an industry how do you react to such developments?

I cannot comment on specific cases. Overall, continuous investment in quality is very important. For instance, TCS is the first BPO in the world to be at CMM Level 5 for services.

As an industry we should not lose focus on continuously investing on process and delivery excellence. And at TCS one of our brand promises is ‘experience certainty', and we are known in the market for delivering results and delivering to the commitment that we make to our customers. So we have not lost a client because of quality issues and we continue to be careful about it. There will be cases, of course, it is a large industry now…but I do not see this as an industry-wide issue.

One big myth in the BPO industry…

One big myth is being a low-cost player. Today India has everything. And the BPO industry has everything to be a significant value-added player in the market.

And one big challenge for India-centric BPO players…

India-centric BPO players will have to be able to own end-to-end processes. For that, they will need new skill-sets, to be knowledge-based organisations, and they will need very strong knowledge management capabilities.

They will have to hire different skill-sets, subject matter expertise in individual verticals. They will need to have strong IT complementing the BPO, to provide real value to customers.

Customers today are not looking for just 3-5 per cent year-on-year productivity (gains) which can come from labour. They are looking at 20-30 per cent productivity (gains), which will come only from platform-based offerings. That investment needs to be in place.

>moumita@thehindu.co.in

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