The BPO Challenge: Sue, Sam and some issues at hand!

By Harish Bijoor

Four letter words are out of fashion. Three letter words are in. Three-letter words such as BPO and WTO attract a great degree of passion. Throw any of these words at consumers across the globe, and you have reaction that is passionately fizzy! Depending which side of the business you sit on, the fizz is negative or positive! At times both!

The BPO revolution that has hit the shores of India is throwing up its own set of challenges. Internal and external. The buzz in the metros of Delhi-Noida-Gurgaon (should we not fuse the three?), Bangalore, Mumbai, Hyderabad, Chennai, Pune and a Kolkata in that order, is palpable. It cuts through thick. These early adopter BPO towns are islands of early prosperity that stand out like sore thumbs in the Indian landscape. In an economy that has seen the services sector as the fastest growing of them all in recent times, the ITES segment contributes a brisk number. An interesting number of new jobs being created all the time and with it an interesting set of issues that stare back at us. Even as the hue and cry on Outsourcing is dying out in the US and UK, there are interesting challenges that stare back at the industry and the people it employs. I peek at a few of these challenges. Only a few!

This completely foreign and alien business of BPO

The BPO industry is completely extrinsic to country in its focus. Literally all of the business that is catered to out of the hubs of a Domlur or a Gurgaon or whatever, is all about businesses that seek the foreign accent at play. India is not a point of focus at all. ITES is all about servicing the outsider out of a cheaper-labour location. Enter any BPO outfit. The English is accented. The dress is getting more and more accented as well. The BPO outfit in the country might as well be territorial outposts of the foreign land being serviced.

Business is tough. A business that focuses completely on the export market is a business that is at the mercy of the volatile international environment in this commodity space of low-tech BPO! The barriers to entry in this business are going lower and lower and the success of the early settlers is creating a whole mass of salivating folks who are just wanting to do the same. BPO is commodity!


Price goes down and cost goes up

Right at the start of the first trickle-in of business in this segment, the early business development folk of the BPO start-ups procured business at prices that were exciting. As the days went by, and as competition within India itself increased, the price pressures started. Add to this the emerging competition from countries such as Vietnam, which wants to clone the Indian BPO experience, and China, Mauritius, Sri Lanka and Namibia, if you please! The price pressures are apparent. Businesses are flowing in at a lower unit price than what the early birds in the game were used to.

At the other end of servicing the business that has been procured, there are cost pressures at play as well. In the early days, the first sets of folk to wear the headset and sit in front of the monitor came in at salaries that were even as low as Rs.4,000 a month. Today, the same job goes at 12,000! There is a heady upswing in salaries in the segment. There is certainly margin pressure at play. Peek keenly at the financials of many an enterprise in the game, and there seems to be a yen to look at the volume of business and ignore the margin-trends at play. Many a player seems to be around waiting to be picked up by the big MNC interest at a valuation that will go higher and higher with the brand name at play and the number of seats that accommodate the tired butts of call center operators.

Is there a bust ahead? Sykes has just cut jobs 50 per cent Is this the beginning? Is this a bubble?

The social tumult

Now this is something business seldom cares about. Not in India for sure. Wealth must be created. Money must be made. Economic prosperity must be aimed at. And all this needs to be done keeping in mind the medium and long-term social good in mind. Watch BPO space. This is space of tumult on that score for sure. BPO space is completely western space. In India of yore, the son and daughter of an educated man aspired to study. Education has always occupied prime status in the Indian home for boy and girl alike in urban areas, and certainly for the boy child in semi-urban clusters. Saraswathi, the patron goddess of education is a point of worship. Today, things are a wee bit different. Young folk, all of 18-19 aspire to get a BPO job. Youngsters under the stress of hormonal pressures are keen to get going with the business of making their own money. Truncating education at the pre-university level is an option today. The BPO provides an option to earn good money at a young age, even without the degrees in hand. I believe young India is going to get less and less educated. We are going to clone the US model here. Urban young education is on a decline. When the opportunity to earn without the requisite degrees in hand were not there, by default, education happened. Today, it will not.

The BPO enterprise is a specialist skill of low value. India is building an army of inadequately educated telephone operators. Till the business flows in, this is fine. God forbid! If and when it stops, there will be tumult. What will we do with two million, single-skilled, highly accented and inadequately educated telephone operators in this country? And that too folk used to an aberrantly high monthly income!

Add to this dilemma of the years ahead, a dilemma of today itself. Young folk are following an exciting lifestyle at a very very young age. This is fast-tracked by money in the hands and the freedom of a working person. Add to it night-time work, the ennui of a boring job and the proximity of the two sexes in a happening fun environment! Sexual harassment at the workplace is old hat. Today no one is harassed. Today, everything is consensual. Sex is discovered earlier than before and promiscuity happens young! A Surya Ramamurthy is a Sue and a Sampath Krishnan from Adyar is an easy Sam!

The roads that lead to the BPO hubs of the day are a hell to traverse physically. The Toyota Qualis revolution is also here. Drivers are in big demand as well. Most drivers work 18 hour driving days and nights. And no one bothers. There is prosperity all around. People living outside of the BPO island smirk at the sector. BPO is today a sub-culture in itself! Spot a BPO-type, and you will recognize him and her instantly! The societal challenge remains as well!

Many more challenges ahead….but this time round, there is space for just this much! Till then, let prosperity prevail!

The author is a brand-domain specialist and CEO, Harish Bijoor Consults Inc, a private-label consulting outfit with a presence in the markets of Hong Kong, UK, and the Indian sub-continent. Email: harishbijoor@hotmail.com

[28 February 2005]