Sourcing Superstars – Amitabh Chaudhry, Infosys BPO

(Infosys BPO is one of India’s leading business process outsourcing providers. A subsidiary of Infosys – one of the great success stories of India’s IT boom – Infosys BPO started life in 2002 as Progeon, a 74/26 split between Infosys and Citibank, but was renamed upon Infosys’ acquisition of its catering service partner’s stake. The company now employs over 16,000 staff worldwide, with operations in India, China, the Czech Republic, Mexico, the Philippines, Poland and Thailand. We caught up with MD and CEO Amitabh Chaudhry to get the lowdown on one of the industry’s heavy hitters, and to find out his perspective on some of the biggest issues facing BPOs today.)

A: Quite a few, you know. One is that we started off as a company which was very India-focused, very India-centric, and I think what I’ve seen is the globalisation of the business model to a great extent. I think more companies can call themselves more global than before. Secondly, obviously one has seen the combination of IT and BPO and what impact that has made to the marketplace – and especially BPO. Thirdly, the intrusion of technology and what role technology can play to make BPO more relevant and more value-add for the organization.

Fourthly, people talk about cost arbitrage and then quality and innovation; another trend I have seen is that the adoption of best practices, and the benchmarking of best practices. Then people are realising that the very cost-driven model will only get you so far; globalisation, the movement of currency around the world, is forcing people to come up with models which require the ability to take a process globally, and deliver globally. So that’s another trend I see.

I think on the HR front when we started off people did not see it as a serious industry, a serious career. I think people can see that this is for the long term; they can make a serious career out of dealing with global companies, with global best practices, and actually doing serious business. So you see a clear change on the part of the employees, on the part of the stakeholders, and on the part of governments to actually attract more and more BPO companies to their countries: that’s another big change. How we’re being welcomed and how we’re being perceived by all the stakeholders has changed dramatically. I think from an Indian perspective I’ve seen what an impact the industry is having on the job opportunities for the typical graduate. The impact on the economy and on the people who are graduating has been immense. That’s another impact I’ve seen over the last five or six years.

I’m seeing an increased commoditisation of G&A-like processes and more and more being offered like a utility service – or technology taking huge chunks of it out as part of the process – and unless people are well prepared for it, it will become a problem for people to follow the typical time-and-material model. That change is happening now as we speak, and it’ll take another three or four years to pan out, but I see that as a big important change in the industry. I also see what has happened to the dollar: one year back it was in the dumps, and look at what has happened to it in the last 45 days. How do companies respond to those changes?

The last thing is that I think unlike the IT industry, in the BPO industry all the players have been required to mature much more rapidly than what happened in IT – again from an Indian BPO perspective. I think the global players didn’t pay attention to the Indian IT industry for a long long time; they never saw it as competition. But in BPO they saw it as competition very quickly, they came into India very quickly, they started competing on a very aggressive basis very quickly, so players like us who are only six years old have had to respond and mature much faster. We haven’t had as much time as the typical IT players had. Obviously we’ve benefited from what they’ve learnt.

And that brings me to the last point which is: obviously we are better placed than some of the players which are learning the hard way – but the expected levels of maturity are incredibly high in BPO compared with what’s expected in IT. Those are some of the changes I’m seeing now.

A: We are doing a couple of things. Firstly we have become global much faster than the others. In six years we have gone from zero centers to six globally, and we have a presence in every geographical region of the world, so firstly we attacked the global milieu very very fast – and obviously being part of Infosys helps. Secondly we attacked the platform and the technology – being part of a technology company we attacked that very quickly. So we had platforms more than 24 months back, we have launched two platforms – one on the procure-to-pay side, we’ve bundled our offerings for HR, we’re looking at order management, we’re coming up with solutions on industry processes, stuff like that.

So we’re attacking the platforms in the utility service space much much faster, and we’ve been working on it for some time. And we’re not doing small stuff: we’re looking at actually how we can offer an end-to-end offering to clients. And that’s why people like SAP and Oracle are very willing to work with us because they see us as an important channel for them in future; they can see the business gradually shifting in that direction.

We’ve done a lot of work in the HR area: the kind of awards we’ve won, the kind of practices we’ve institutionalised, the kind of new things we have done in the BPO industry, how we have tried to improve the supply base, how we have tried to run programs differently, how we have tried to hire people locally and train them in a central place. We’ve done a very diligent job in spotting opportunities in the marketplace and going after them with a vengeance; we see potentially for example the Asian marketplace opening up in the next 24 to 36 months. We’re already enlisting in Asia, in a bigger way than what I’ve seen in our history.

We saw the medium segment market opening up and we started investing in that space 24 months back and we are reaping the benefits today. We started investing in the procurement space almost three years back, and now the number of clients in the procurement space is increasing very rapidly. We have done very very detailed exercises in terms of what our broad streams are, how we are placed, how we can capitalise on IT and BPO together, and maybe occupy a market leadership position, and we do that very diligently. Obviously regarding our background it helps being part of Infosys. But you know the demand is there; the question is, which bets you place and how much you invest in those bets and how deliberate you are with those bets, and I think we have been fairly successful with that.