Infosys Technologies has started a Business Process Outsourcing (BPO) unit catering to the growing Indian market. Focusing on the needs of the telecom industry, the company is optimistic about the opportunities for the new unit arising from India’s rapidly expanding telecom sector. Convergence Plus spoke to Mr. Gopal Devanahalli, Vice President, Infosys BPO about their domestic foray. CP: What are the factors that affected your decision to enter the Indian market at this particular point of time?

GD: We feel that the Indian market has now reached a stage of maturity where the companies no longer see outsourcing from a mere call center perspective. Companies are now more open to looking at BPOs as growth partners whose experience of handling back office support operations for global market leaders can be leveraged to their advantage.

From a telecom perspective, as Indian companies are increasingly showing global aspirations and a desire to match up to global standards, we feel that the competencies that we have gained by managing outsourcing relationships with some of the top names in global telecom markets, would be of value to the Indian telecom players.

CP: What are your projections for the outsourcing market in India? What are the growth drivers?

GD: We believe that the market is huge. As per the latest projections from McKinsey, it could grow up to $ 60 billion by 2020. Telecom being one of the major growth industries in India, will account for a large chunk of this figure. The need to have an efficient back office to support rapid growth of India companies and pressure on cost and control are the major drivers for the India story of BPOs.

CP: What percentage of your overall outsourcing business do you expect India to contribute?

GD: The India Business Unit is expected to grow to become one of the largest units of Infosys BPO within the next 5 years and we expect to have 5-10 % of the company’s revenues coming from this market.

CP: How are the market conditions in India different as opposed to other markets?

GD: The Indian telecom market is different from any other telecom market in the world in a number of significant ways

• All the dominant market players are less than a decade old (except for BSNL). This means that they are not tied down by legacy network/system considerations unlike their counterparts in other countries
  
• At close to a 400 million mobile subscriber base we have one of the largest telecom subscriber populations in the world, but we have reached nowhere near market saturation as compared to a saturated market like UK where there are more SIM cards than people (125% penetration)
  
• In India voice, broadband, mobile and TV are still separate markets where players within the same market compete against each other unlike other countries where the situation is being described as akin to a ‘ three dimensional chess game’ with satellite providers, cable providers and telcos all competing for the same subscriber base by offering similar services
  
• Huge scope for the launch of newer product offerings like 3G, 4G, IPTV, HDTV, FTTX and customized services like VAS as the Indian customer becomes more discerning
  
• With languages and demographics changing across states, telco offerings need a high degree of customization - negatively impacting geographic expansion costs

Most of the above factors are significant growth drivers for the Indian telecom market as a whole.

CP: What are the main challenges you expect to face?

GD: From a BPO point of view, the major challenges are

• Value of outsourcing is still not a proven concept, there is a lack of benchmark business cases within India demonstrating the benefits of outsourcing and the value add through such offerings
  
• Service offerings mapping across industry verticals and functions are still in a nascent stage and evolving with continuous and ongoing understanding of the business

However, we feel that these are areas where we have a significant advantage over other BPO players. Most BPOs tend to focus on generic and industry agnostic solutions addressed at reducing SG&A costs e.g. Customer Service, F&A, Procurement, etc. Infosys BPO has leveraged on its understanding of the telco industry drivers, deep domain expertise, and IT capabilities to offer customized solutions that positively impact telco margins by improving cost of revenues/ services (e.g. Network access cost management), enhance top-line revenues (e.g. churn analytics, revenue assurance) as well as lower SG&A costs. Hence we feel that, it will be relatively easier for us to be accepted as ‘growth partners’ by Indian telcos.

CP: What are the strategies and models Infosys BPO has planned to meet the specific needs of the Indian market?

GD: We have segmented the Indian telecom market into four major areas, each having its own focused market space.

• End-to-end system integration projects with comprehensive IT Implementation: Our strong ‘unified IT+BPO’ credentials makes us a strong contender in this space
  
• Shared service centers with 3rd party vendors providing outsourcing platform/ running the service delivery: We feel that this is a major untapped market - with a strong business case for the existence of vendors offering back office support to high growth clients having non standardized processes across BUs and locations. This is all the more critical in the Indian telecom scenario where all the dominant market players (except for BSNL) are less than a decade old. The rapid pace at which the Indian telecom players have grown in such a short span of time (in terms of customer base, geographies and service offerings) means that they will particularly value the experience and best practices that companies like Infosys have picked up by managing operations back office support for some of the biggest names in the telecom space globally, as it will enable them to streamline their back office operations to global standards.
  
• Pure play BPO offerings on an ad-hoc basis to diverse sectors: Industries are on route to outsourcing more back end operations across functional domains with F&A being the core focus. Telcos are no exception.
  
• Traditional call centre operations mainly in customer service: This obviously is a very large market segment but Infosys will be concentrating on value add business propositions where we offer added value to our clients by leveraging our industry experience, domain understanding and technology capabilities. For example, in the ‘Customer Service’ space we have introduced a tool to guide advisors through trouble shooting calls by making use of prebuilt scenarios – thereby reducing call handling time as well as chances of advisor error.

CP: What are your key points of focus in the Indian market?

GD: Currently we are focusing on the following value adds for the Indian telecom industry.

Shared Service Centre Setup (multi horizontal)

• Back office for companies with processes like order management, Knowledge Services, F&A, HR and Procurement - Companies with major expansion plans require process harmonization across locations. We see scope in acting as a 3rd party vendor helping to run captive facility or run it for the client in its own location

System Integration

• Government Deals - The Government is looking to integrate and improve processes to increase operational efficiencies. System integration has a major potential since the scope of work involves front office management over an integrated IT platform
  
• Industry Solutions - There are specific technology based solutions that are required in various industries e.g. Managed Services – Billing Solution. These solutions could be implemented to develop a new revenue stream or enhance the effectiveness of existing business models – VAS/ODP

Analytics Tools like Churn Analytics and Command Centre Management and Service Management Centre

• When CSPs are combating tremendous margin pressures, initiatives, which address the twin concern areas of ‘increasing revenues and reducing costs’, will be of significant value. Analytics, with its potential to deliver quick and tangible Return On Investment (ROI) against relatively minor investments, assume considerable significance in this regard, all the more so if it is offered as an end-to-end managed service BPO offering, where the onus of ROI realization is transferred to the BPO partner.
  
• The scope of analytics spans across the entire CSP customer life cycle as depicted in the adjacent graphic. An area where it offers standout value is customer churn management.