ITES Companies Need To Improve Capital Efficiencies

Hyderabad: | Updated: Jan 23 2003, 05:30am hrs
The need of the hour for the IT-Enabled Services (ITES) sector in the country is to consolidate its core competencies and focus on value-added non-voice business, according to Manish Kejriwal of McKinsey and Company.

The ITES/BPO space is getting crowded and to become competitive, the players have to improve capital efficiencies and also expand operations outside India to have proper risk-mitigation requirements, Mr Kejriwal said while speaking at the Indian IT Forum 2003 jointly organised by CII and the Andhra Pradesh government.

Mr Kejriwal is attached to AP Chief Ministers Office offering consultancy services in the area of developing ITES in the state. He was also associated with preparing the Vision 2020 document for the state government.

According to him, a majority of small and medium companies engaged in offering ITES/BPO services need to reduce the marketing and selling expenditure and expand the business with the existing customers offering non-voice services such as back-office facilities etc, to sustain in the business. It is true that there is vast potential in the BPO space but the providers must have proven track-record and gain the confidence of the customers, which is the basis for obtaining business, he points out. Thus it would be wise on the part of the small and medium companies to stick to the existing customers, he added.

According to a study by McKinsey and Company, by 2008 the ITES business in India is expected to zoom to $65 billion, which is inclusive of voice and non-voice business, he said.

Chief operating officer of MsourcE Alok Sethi said that the voice business will continue as a major source of income to the ITES business. However, the call centres have to answer value-added calls for their clients such as: registering insurance claims or converting the enquiry into sale etc.

To take up these kinds of value-added calls, the call centre must appoint high proficient workforce, which will provide career growth prospect to the employees also. We have good number of post-graduates engaged in the call centers, which is a welcome sign, he said.