It looks like retrospection time at IBM Daksh, as Daksh completes five years in ?IBM family?. Co-founder Pavan Vaish, who led the integration with IBM in 2004, seems to be ?excited that I am still around? to see the employment opportunities the merger created. Both the company and the competitive landscape have changed in a big way in these five years. While Daksh has tapped into IBM?s global resources hugely, it is also getting aggressive in the Indian market. In a conversation with Pragati Verma, Vaish narrates the transformation journey of Daksh moulding into the IBM fold as he dwells on what helped the merger click and his plans to steer IBM?s BPO subsidiary through a tough economic environment. Excerpts:
You have just completed five years in the IBM fold. What made the merger work?
Every integration has its own challenges and these are much more complicated in a people-intensive business like BPO. Also, this was IBM?s first acquisition in India. So it was very easy to make mistakes. But IBM broke every rule of the conventional integration rulebook.
Initially, no one was supposed to touch Daksh. Only finance was integrated as it was a compliance obligation and everything else was left alone. They studied our strengths and gradually integrated the two companies and developed a plan which gave us best of both worlds.
Five years is a landmark point for us. We have been part of the IBM family for five years. We are fully integrated with IBM now. And considering the global economy, I think we are doing pretty well. I am excited that I am still around.
We were about 6,000-odd people at the time of acquisition and had a small company mindset. While we were used to a direct channel of communications, you have to learn to work in a matrix in a large company like IBM. We struggled for about two years to work with virtual teams and multiple bosses. Though we were serving global markets, IBM exposed us to work with teams spread across continents. We are now part of the globally integrated enterprise model of IBM. This allows IBM Daksh to offer delivery excellence at a truly global level. Combining deep industry and process expertise with innovative solutions, technologies, research and development capabilities, and a talented global workforce, we deliver measurable benefits to clients across multiple industries including utilities, financial services, travel, telecom, and online services IBM made sure that they left everything best of breed in Daksh intact and in fact absorbed some of it into other parts of IBM gradually.
Do you sometimes envy companies that have made it big independently?
When we started about ten years back, we were one of the pioneer independent companies along with Spectramind. Most other BPO companies were captive units of bigger firms like Amex or GE. While Spectramind was acquired by Wipro, we moved into the IBM fold in June 2004.
When we decided to merge with IBM, we were close to doing an IPO and had already started talking to investment bankers. After five years, we obviously sit back and reflect on what we have been able to build in these years. We are proud that the middle class values that we started the company still continue to drive us. Secondly, we are proud of the impact we have had on people. It is good to see the kind of employment we have created.
The merger has offered several Daksh employees a global career and many have also been able to make a successful transition from BPO to IT. Our chief technology officer, for instance, has moved to IBM; our chief quality officer has moved to IBM Research and our CFO has come from IBM. Also, IBM was a little ahead of the curve as market started moving beyond pure labour arbitrage. With IBM, we get deeper tech capability and a global delivery.
I personally think that we made the right decision and have absolutely no regret. I think IBM brought a phenomenal value to the table. I do not believe that we would have scaled to our current capability and global footprint had we not taken that decision.
How do you plan to steer IBM Daksh through the tough economy?
The current meltdown could be a threat in the short-term but an opportunity in the long-term. Companies need to position themselves to leverage the opportunity. As we pass through the downturn, it is probably the right time to prepare for an upswing. At IBM, more than half of our revenue comes from outside the US. We are seeing trends of upswing and remain positive about the future.
You were among the first big players to venture into domestic market. Has the entry of Indian companies changed the competitive landscape?
IBM has put India among the top growth economies of the future and started here early. As the market grows, competition is also growing and we can expect some consolidation. Indian customer is very sensitive and demanding. Today, you have to deliver a transformation story and superior business outcome. Take Union Bank of India?s advanced call centre, for instance. It is envisaged as a one-stop shop for various banking needs, be they transaction-oriented or enquiry-related. The change initiative involving technology, people and processes integrates IT operations delivery as well as business process transformation. For Airtel, we will provide a suite of services covering both voice and back office in areas such as customer service, collections, customer retention and the like to Airtel Platinum customers from its centers. Indian companies seem serious about the Indian market today, but it will take a couple of years to figure out if their business model works here or not. Many of them have extensive global experience, but the market has its own set of challenges, where telcos are adding subscribers at a fast pace. Point of sales required for a farmer in a rural area might not be the same as in a mature market.