PV Kannan's interview with Rediff

Rediff.com

Bangalore-based call center and business process outsourcing services provider, 24/7 Customer had a pleasant surprise waiting for it when the December 2003 issue of Fortune magazine hit the stands

In an article titled, Surprise! The Startups Are Back, Fortune had named 24/7 Customer as one of six startups globally that have mastered the mandate of delivering value to the demanding customers. 24/7 Customer is the only BPO company to make it to the list.

The three-year-old company today has over 2,500 professionals spread across its three call centers -- two in Bangalore and one in Hyderabad -- and recently raised $22 million in venture capital funding from Sequoia Capital, one of the biggest and most prestigious venture capital firms of the Silicon Valley.

Its sale revenue is estimated at about $30 million for 2003 and the company claims to be growing at over 100 per cent year-on-year.

P V Kannan, US-based co-founder and CEO of 24/7 Customer, talks about the impact of the recent decision of Dell and Lehmann to move some processes out of India on the BPO industry and the quality issues the industry faces today in an email interview with Priya Ganapati.

In the last few weeks, we have seen two incidents where companies have decided to move back part of their operations to the US from India. Do you think these incidents are one of a kind or are they symptomatic of the outsourcing backlash sweeping through the US?

We need to understand these may not be part of the backlash. In both the incidents there was no complete pullback.

One process that did not fit the offshoring programme was pulled back and replaced with another process. When we look at offshoring, there is outsourcing, which in itself has its own challenges.

But there is the entire offshore component of outsourcing too. And one has to remember that not necessarily all processes can be delivered effectively out of India.

So in summary we think these incidents are one of a kind rather than organised backlash.

A number of call centers have come up in India in the last two years. Do you think that in the bargain, quality has suffered in some places leading to such incidents?

In a free market, large opportunities attract a number of players. The quality players rise to the top by focusing on what the customer wants.

I do not see the smaller and less quality focused players having much of an impact because large customers do not go to them.

So the lack of quality does not really affect the industry other than the players themselves. Thankfully they go out of business quite fast.

Like the CCCP certification in the US and the UK, there is no independent third-party certification for call centers agents in India today. Do you think that key industry companies and organisations need to come together to help set up such a standard?

Yes, I think it is high time the industry does this. One very effective platform to focus on is to standardise the quality of English communication and accent coaching required to serve customers in North America and the United Kingdom.

But a standardised certification across India for agents would be a terrific win for the entire industry.

What kind of problems is the sector fighting today?

The main problems I see are:
.Limited understanding among graduates of career opportunities;
.Too much fear mongering in the press drives good talent away from the industry;
.Too much focus on backlash, instead of collectively figuring out how to serve our clients in North America, the UK, etc.

How mature is the business process outsourcing market in India today?

It is the equivalent of 1990 in the software industry. Of the top 10 players then, probably 2-3 still remain in the top 10. The industry will mature faster than it did for the IT services industry.

Where will future growth in the BPO business in India come from?

It will continue to come from the current markets like the US and the UK, primarily. There will be lot of growth in existing clients adding a number of new processes and newer clients continue to be interested from these regions.

What do you think is the cultural and social impact of the call centers in India?

It is a very interesting question. The big social impact software services did to India was this: increased professionalism in the industry due to exposure of software professionals to work practices, ethics and conduct of the very best of the global companies.

Now the impact will be more widespread and is a very healthy thing. Also, exposure to US level customer service standards will improve and bring innovation to customer service practices within India.

Other unique things we will see:
.Working the night is new for India (not for the US where many grocery stores are open 24 hours), so this will bring new challenges but eventually lead to availability of services 24/7.
.Given the taste of globalisation one gets from MTV, CNN, Coke, et al, this is one more step that will tie India closer to the rest of the world.

Much of the criticism against the call centers industry in India is that it can evaporate if the next lowest cost player like the Philippines or the Caribbean comes to the fore. To what extent do you think this is possible?

This will not happen.First of all, the supply of workforce in the Caribbean and the Philippines is very limited. For instance, the qualified workforce in the Caribbean is less than 1 million.Contrast that to India, where 2 million graduates come out every year! Plus they are more expensive than India to operate.I think these myths are part of what makes life in the industry quite interesting!

What key lessons would you say you have learnt in your journey as a BPO entrepreneur?

It starts with the right focus: delivering long-lasting value to our clients and taking a long-term partnering approach.

What I have learnt is the same lesson that I took to heart in my first successful venture starting a CRM (customer relationship management) company: persistence pays off; 24/7 was one of the first companies in the space, and it took time before offshoring was considered a no-brainer.

Jim Collins, author of Built To Last, talks of importance in getting the right people on the management bus and more important to get the wrong people off the bus.

Early focus on quality and superior delivery model were some of the key success factors and lessons learnt from this journey.