‘Third-party BPOs are more efficient than captive ones’

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: Cost cutting no longer lures BPO firms. Their ability to provide value to customers is the new mantra, says Mohammad Ketabchi, chairman of Savvion, Inc. A leading provider of business process management (BPM) solution, Savvion offers software that automates corporate functions including procurement, design specification, supply chain management, service provisioning, benefits administration, and maintenance.

A Ph D in computer and information sciences from the University of Minnesota, USA, Ketabchi was a professor at the Santa Clara University, California, when he began Savvion in 1994. He was also the director of the object and multimedia technology research laboratory at the university and has done some pioneering work in the area. On a recent visit to India, he spoke to Viveat Susan Pinto about trends in the BPO segment and benefits the company’s software offerings could provide them with. Excerpts:

You sell to several industries globally. Don’t you feel that interest from the BPO companies in your software is high in India?

That’s true. Over 50% of our pipeline in India consists of BPO companies alone.

Which are the prominent Indian clients in the BPO segment?

We have Genpact, Intelenet and Patni as our BPO clients here. The BPO vertical is one among many others that we cater to. The list of names in those areas is pretty long. For instance, in manufacturing, telecommunications, banking and financial services, electronics or IT, there are quite a number of names on our list across the world.

What kind of automation products click better with BPOs?

Ease with which they can use our software is the key. This applies to companies from other sectors too.

We basically enable them to define their business processes with the help of an easy-to-use graphic tool. Anybody who knows Microsoft Excel or Powerpoint can use the tool. With its help, and particularly in this phase, the user can articulate the process clearly.

The next part of our product allows the user to convert the process into an application—to make it executable. The third part of the product deals with the monitoring of the process. Whether the task on hand has been performed according to the expected standard or metric? How long did it take? Who was involved?

In short, the ability to define the process, make it executable, monitoring the task on hand is possible with the help of our product, which is why it is clicking with BPOs. Also, no high-level skills are required for using the software. Even the time involved for the tool to play out across different levels is not considerable, which makes it very convenient for users.

How crucial is technology to BPO companies’ value equation?

The overriding trend I see among BPOs is to provide value to their customers. Cost cutting is no longer the objective. To be able to provide value, BPOs need technology. And our experience with them tells us that the software we provide in the area of business process management can help them create a competitive advantage for themselves. This way, providing value to customers becomes easy.

Do you feel that technology can replace people? Some BPOs are attempting to do this.

Product processes do not require people. It can be automated so that the intervention of people is not needed. But there are tasks that require people. There’s no question of ruling them out in such case. In my opinion, it’s not possible for people participation to be eliminated altogether. I think it would be erroneous to think so.

Typically, what are the challenges that BPO companies face today?

For the Indian BPOs, appreciation of the rupee against the dollar is a cause for concern. Another big challenge has to do with people.

Finding the right people with the right skill sets is not easy. Technology can play a crucial role here. For instance, with a tool like ours, the information and functionalities required to perform a task is delivered to the user.

This brings down the need for training beyond a point. Secondly, the tool can identify what task requires what kind of skill set and who is capable of doing it. In other words, it automates the delivery of the right task to the right individual with the right information.

What are your views on the ongoing debate with respect to the efficiency of captive BPOs versus third-party BPOs?

I tend to agree with the point that third-party BPOs are efficient than captive units. But if captive units can become as good as third-party BPOs then I don’t see why their operations cannot extend beyond the internal tasks they undertake. Take Genpact, for instance. It was a captive unit.

But it was so good that it was able to attract work from others and thereby convert its operation into a third-party unit. In my opinion, a captive unit that is good, will, at some stage, expand beyond its current set of operations. It will become third-party in other words.

What are your growth plans in India?

The immediate plan is to expand the footprint of our product. We have a number of ideas in place and hope to incorporate them in the next release, which will be out by April next year.

Where do you see growth coming for your products?

The US is a large market for us. We have been focused on the US and have a strong customer base there. Japan is another market, with a good customer base .