|OI Interviews HGS Executive B N Narasimha Murthy|
|Written by Amrita T Joshi|
|Tuesday, 16 August 2011|
Industry Leader Q&A
HGS Executive Sheds Light on Outcomes-Based Relationships, the new buyer’s perspective and Commonalities Between Economics and BPO
Written By: Amrita T Joshi
Interview with B N Narasimha Murthy, President of HGS Outsourcing, North America, by Frank Casale, Founder/CEO of The Outsourcing Institute and Amrita Joshi, President of Ahilia Consulting
B N Narasimha Murthy
President Hinduja Global – North America
Frank Casale: To start the interview, please give us a little background on Hinduja Global SolutionsB N Narasimha Murthy: We are a US company with headquarters in India with an interesting history. We actually started out as an IT services company in 1995 until about 2001. After that there was a strategic decision to focus on BPO as we wanted to be more involved with core processes of the business. We moved because we got perspective on what we wanted to do for our clients. Initially we started off as a single location, offshoring enterprise because that delivered huge “bang for the buck”. We then spread our weight into multiple geographies not just to offer multiple geographies, but to offer a comprehensive plan for our clients in terms of redundancy and disaster recovery. Today, we are a global outsourcing company, and we deliver, from onshore to nearshore to offshore, depending on which delivers a superior proposition to our clients. Our entire edifice has been built around being customer centric, because that what business is all about. We take care of our clients as we take care of our people.
Frank: How would you describe your role within the organization?Murthy: I look after all parts of the organization in the American context. This includes business acquisition, delivery, support and growth of our company.
Frank: What about your background? How would you describe yourself: are you a technology person, finance, marketing…?Murthy:
Frank: What do you see at some of the hot trends in outsourcing these days?Murthy: A couple of trends that we have seen for some time are the growth in terms of number of deals opening up. There is a lot more traction in the outsourcing space. Second, people are still trying to figure out a mechanism to explain the input of the pricing format. People want more outcome based pricing and want to see outsourcing companies better align themselves with the actual work that the client is doing.
Frank: I think that is very interesting, the evolution from a very tactical relationship to a more outcomes based. Any follow up, Amrita?
Amrita Joshi: Would you say on new deals everyone is asking for outcomes? Or renewing deals? What percentage of your engagements have either a performance based component or non-transactional component?Murthy: I think that the percentage is very low. It is not a question of management or risk, people are trying to figure out if there is equality in the system, because there are some controllable and some uncontrollable elements. Although the percentage is not large, people go some great lengths in trying to figure this out. This does and will continue to percolate into pricing and how we engage on the revenue and reward side with our end clients.
Frank: And that is what we are seeing; it is still small and growing. But the majority of people are looking for the cheapest guy in town.Murthy: Typically we have seen reward incentives attached to any kind of PRE, SLE, KPRE. They see it as the pure reward such as “I’ll give you some money just for having some effort.” That has gone away. At the minimum, people are looking at reward and penalties. People are still debating the equilibrium of rewards and penalties. But you rightly pointed out that people are moving towards the outcome. We are working with our clients to see how positive impact and outcomes work for us too.
Frank: What do you see as different from the Buyer’s perspective, especially now versus the early 2000s when your company got into the BPO space? Let me be more specific: who is at the table? When you go to meet with the buyers, who were they in 2001 versus 2011?Murthy: It is a whole lot different – I think the difference comes from the perspective you get when you sit across the table and talk. About 10 years back, there was a clear case of “can you do the job?” and “Is this something you have been doing for 10-20 years?” Now the question is not about the ability or the skill set, now it is “will I wait for my benefits to flow into the organization or will I get the benefits today and now?” People today are not looking at the long term the way they used to. Instead they are saying, “your window is small and closing, and you need to align yourself with my strategy.” Ten years ago we had a long window and a long rope. Today, the rope has shortened. Instead of long term adjustments, we have to make micro adjustments nearly on a daily basis in response to the client’s needs and the kind of outcomes they want to see.
Amrita: As an offshoot from the trends, one of the complaints I hear is that you don’t necessarily own the complete process, or even the IT part of the process? Do you have any comments? Are companies more comfortable with you taking on whole processes? Do you get involved with those kinds of decisions?Murthy: About 2-2 ½ years back, we decided that this was important, so our alignment with IT is very strong. We have alliances with IT service companies that help us drive IT improvements into the processes we work on. I don’t think we will become a purely IT company, it is not our intent. The intent is to aggregate an offering in IT & BPO to deliver a superior value proposition to our clients. We have had tremendous success with the kind of approach we have had.
Frank: Do you see any particular challenges and/or opportunities in the marketplace in IT or BPO over others?Murthy: People are becoming more conscious about the data part of the process. People are using many devices such as mobile phones and other hand-held devices. There are about 20 gadgets in a household where previously it was just one. We are cognizant of this and we have aligned our services and processes to adjust to this new data such as social media and web chat.
Amrita: Are your clients asking for different geographies? Does it matter where services are being done? What do you see as the trends in terms of location selection?Murthy: One of the trends we are seeing is people wanting services they can touch and feel. This is why we, as a company, have a lot more centers than some others. We are going into Jamaica and we are going into a lot of other new areas.
Amrita: So, would you say there is a trend towards nearshore?Murthy: There is a strong desire for people to move nearshore. At the same time people also want significant savings. But in the end, people will see what we can bring to the client. The focus needs to be on the actual work benefit we can provide such as giving them customer data to help them manage the customer experience better.
Frank: Do you see customers asking if they can be in Latin America?Murthy: All the time. This is why we are opening a center in Jamaica. Customers want more delivery center options, so companies are moving to small centers closer to the customer’s location.
Amrita: Why did you pick Jamaica?Murthy: What happens sometimes is that the language comes between you and the customers. Because Jamaica is so close to the United States, the language barrier doesn’t exist. The training skill set is very high too.
Frank: And as you mentioned before, clients have to accept that trade off in cost savings.Murthy: Correct. For example, a lot of companies are going to the Philippines right now because the US and the Philippines have been connected for a long time. There is no language barrier. But, if you have to grade in terms of the average cost, there will always be places that will be superior in one facet, such as cost savings, but overall the Philippines is far better for us.
Frank: You’ve seen this industry evolve, but what do you see for BPO in the next 5-6 years?Murthy: That kind of visibility is very difficult. If you would’ve asked me if this is where we would be 10 years ago, I would have said absolutely not. I don’t think anything revolutionary or big will happen. Ten years from now, with the next generation of texting, data movement, or whatever is next there may be a revolutionary change. One change I see is that interaction will be more data driven. In addition, I think outcome-based models will mature.
Frank: Where will the marketplace see Hinduja?Murthy: What is important it how we grow our own people in terms of skill sets, competency, and maturity to address the market. The second part is what kind of engagement we have with our client and how deep we are in their processes. Our fervent hope is that, down the line, when they are making their business plan, we will be involved. We will help them, work with them, and be inspired by them. That will shape our company.
Frank: What do like up do when you’re not helping your clients?Murthy: Most of my time goes to working with the company in areas like growth and new geographies. When I am not working, I spent most of the time with my family. Outside of work, I am an amateur at everything. More often than not, I wind up doing a lot of reading on the economy and how it is doing.
Frank: I ask people to connect their personal interest with business interest, are there any parallels you can draw between economics and BPO? The concept of economics and BPO…do you have any connections?Murthy: As a student one of the easier things, it is to look at the history and how the evolution of something has happened. I think of us as a ship: we are comfortable at times steering the ship, working alone as a shining North Star for our clients. But we are happier making small corrections along the way. All the evolutionary steps will lead to a revolutionary change. Over time the changes will do a lot of good for people, and we have their best interests in mind.
Amrita T Joshi is the CEO at Ahilia. Ahilia is a Marketing Consulting Firm specializing in the IT & BPO markets. She can be reached at email@example.com
Frank J. Casale, a pioneer and visionary leader with more than 15 years of outsourcing expertise, is Founder and CEO of The Outsourcing Institute (OI), a global marketplace and community of 70,000+ executive members including leading practitioners, service providers, advisors, thought leaders, industry observers and analysts.
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|Last Updated ( Tuesday, 13 September 2011 )|