'A mild US recession is good for BPO'

Those who see him the father of the Indian BPO industry are many, and not without reason. Raman Roy was the adult male who started outsourcing trading operations of American Express, germanium and Spectramind. Now the president and manager of Quatrro BPO Solutions, Roy spoke with Vivek Sealing Wax from his Gurgaon business office last week. Excerpts from the interaction:

How did it all begin… the BPO industry in India, your experience at the American Express…

It was not like one mulct twenty-four hours visible light went on and you got this bright thought of offshoring. I maintain on saying that BPO industry happened by an accident.

We just launched the American Express card for North American Indian customers, and there were some studies that we used to direct to New House Of York on some comparatives. They never used to concentrate on our studies because they looked too good and they thought those Indians make not cognize their work.

But as a portion of my preparation in launching the card in India, I had come up back with a strong belief that we could make better than them. I started this political campaign of talking to people, telling them that they must make something international out of India, even though cipher at that clip was doing it.

There was a phase when I used to travel to those meetings where people used to say, "Oh no this cat is here again, and he volition begin rattling on why we are not doing something out of India."

The first undertaking they gave me was in 1985,more to acquire quit of me, their thought was to give me something that will not work and eventually I will close up. (Roy was then the caput of trading operations and main fiscal military officer for the Indian concern of American Express).

I think I did a good occupation in persuading them because they asked me to put up their BPO trading operations in India. I got the honor of leading it because I was the greatest racket-maker.

After American Express, you moved to GE. Why and how was the progression?

I was not that smart to see offshoring as a immense business, but person else was. Gary Wendt, who was the president and chief executive officer of germanium Capital, saw this as a immense opportunity. He motivated me to go a portion of his squad in germanium (in the mid-1990s).

Gary asked me what is the investing needed for this —- at that clip I had spent around $5 million to $6 million for American Express BPO —- and it was a large problem getting blessing from American Stock Exchange to set in more than money.

So I started thinking what will I lose if this doesn't work… At that point, I had spent around $5-6 million for Amex, and it was large problem getting blessing from them to set in more than money. About 500-600 employees were working on this. I told Gary $10 million bucks. We were sitting in Belevedere at the Oberoi. "Oh, loose change," Gary said, and I got damn pissed off. I said that's $10 million not Rs Ten million.

He said, "Yeah, that's loose alteration for us." And here I was making such as a song and dance before American Stock Exchange in New House Of York for more than money. Wendt was very speedy to calculate out what it will take to be able to make this. He said there will be no 1 to trouble oneself me for approvals. He told me the money I need, will be set up in the bank.

"Whatever American Stock Exchange is paying you we will better that," Gary said. I told him that I am not looking for a job, but Gary said he will do an offering I can't refuse.

The greatest portion of the offering was to take attention of all the issues that I was having trying to make growing for Amex. Gary also gave me a challenge to take the employee size to 1000 people in three old age or so by the mid-90s.

Now, looking back, I retrieve I only went to ran into Wendt for a free repast —- and it was a nice meal. only went to him for a free meal, and it was a nice meal.

We were in negotiation for 9 months, I told them you already cognize what is to be done, you acquire person else to make it, they said we have got checked the market, there is only one cat in the marketplace who can make this and that is you. It was not about the money.

Till that clip there was a thought that you can make it with 500-700 people but not with 3000 people. In the five old age that I pass at GE, which today is called Genpact, we grew it to about 9,000 people.

What led you to begin Spectramind?

There was an aspiration to run a true net income centre. American Stock Exchange and GE, at the end of the day, were captives.

We made a proposal to germanium to make what they are doing now, we said we should begin service 3rd political parties but they were not keen. My direction and me decided that it was too good an chance to pass, so my direction squad from American Stock Exchange and germanium discontinue to do Spectramind on March 30, 2000. We made an investing of around $7 million to begin with.

I think we were right about the possible because in less than 5 years, we grew it into 16,500 people, became the biggest BPO supplier from the country.

Tell us how Quattro, your 4th venture, happened.

We were venture-funded and Wipro wanted to come in the BPO human race through the inorganic route. They made an offering to Chrysalis Capital, our venture capitalist, which they could not refuse. I told Chrysalis that you are selling out too soon, there is more than money to be made, but he went ahead.

I sincerely believed that there were only two BPOs put up for an initial public offering at that clip —- one was Spectramind and the other was Daksh, which was later on acquired by IBM.

Then we wanted to make something different and Quatrro happened to us. Smaller clients were one of our focusing countries to distribute the hazards and other focusing was to diversify to different geographics like the Philippines, Colombo, Dubai and Shanghai.

The ability of large companies to come up by and renegociate rates was huge. My biggest client during my Spectramind years had 4,500 employees —- just one customer.

When they said leap I said how high, when they said we desire to renegociate terms I said state us what make you want.

We are around 2,000 people today, the norm gross is very high, profitableness is pretty decent, we are ache by the dollar-rupee equation, but our borders are higher compared with others and that have shielded us to an extent.

From those earlier years to now, what have changed in BPO?

Lot of things are different now, some are good different and some are bad different. When I went to take bandwidth for American Express and I asked for 1 megabyte line, the upper limit anybody have taken at that clip was 512 kbps by Tata Consultancy Services.

We wanted redundancy for the last statute mile and people couldn't understand the conception of redundancy at that clip on why we desire to pass money on another cable.

When I applied for a phone phone call Centre licence for Spectramind in the twelvemonth 2000, there was no word form to fill, we wrote the licence application on our letterhead to run the call Centre trading operations for Spectramind.

So we waited, and waited, clients were asking when can you start. It was two months, before I went to the functionaries to enquire what happened.

When the functionary took out our file, he said we can give you an blessing for a phone call Centre but cannot let incoming and outgoing calls.

I told him that phone call Centre makes only incoming and outgoing calls.

We spent hours on printing out the definitions of a phone call centre, we made "one-inch thick book" on it and showed him the data file next day, which led to the approval.

Do you believe the perceptual experience of a phone call Centre have changed?

I retrieve one female parent complaining to me that "Kya jadoo kar diya hai meri kudi pe (what enchantment have got you project on my girl), she only desires to work with you and you are saying she have to come up in the night."

Her female parent was very afraid of the society owed to the disconnected timings of her work. So I told her "here is clump of applications, give this to her friends in the vicinity and we will engage everyone". She was very happy with the idea, and she got us five more than people to hold to join.

The societal stigma with the phone call Centre have gone away with time.

We created an industry out of nothing, 10 old age ago when I used to travel to presentations, one of my pages was titled "This is India", I used to state them we are not all serpent smoothies and elephant riders, Republic Of Republic Of India is a robust industry. Today that page is not required, if anything, they are scared of India.

The staff outlooks today are huge, the BPO industry pays 50% to 60% More than any other industry, I was not scared of abrasion degrees earlier, but now it is a immense pain.

Will the United States recession ache the outsourcers?

A mild recession would be good for our industry. Recession is two living quarters of negative of gross domestic product growth. It will necessitate the corporate human race of the developed economic systems to take out costs. They cannot have got high fixed costs when their grosses are depleting, for that impacts their bottomline. So they will have got to do their costs variable, which is keeping with the lessening in the revenue. Thus offshoring and outsourcing are among the top three picks they have. Of course, they have got the 3rd —- of shutting down the business.

We are seeing an impact of the United States slowdown, a immense positive impact. Our mortgage concern is doing very well. Unfortunately, the mortgage industry is in turmoil, we are doing foreclosures; we are doing programs that are funded by the United States authorities to acquire out of the recession.

Companies are thinking now, what else can I offshore? We can leverage that advantage.

Quattro's focusing is not big companies, and if the giants confront a lag of orders by 20%, they necessitate their work force to be reduced and the first option is to acquire quit of the 3rd party. People who may acquire ache are those with that mark audience.

If the IT sellers are growing at 20 percentage instead of 30 percentage it still is a growing and not a de-growth, no 1 is showing a de-growth.

Last twelvemonth Wipro, Infosys and technetiums hired 200,000 people, they are not showing de-growth, they are still going to engage many more than people.

Our mentality is such as that if there is a Ag lining, there have to be a cloud attached.

At a industry degree and the company degree it's a different ball game . The pricing is becoming challenging. Earlier clients wanted a rupee-based pricing, but now they desire a dollar-based 1 because the bill is weakening. They desire some lower limit fixed guarantee, but that is a mark of the adulthood of the industry.

There is a immense demand and supply mismatch in Republic Of India today. We can turn to a $50 billion industry by 2012, but our aspiration as a state is to be just santusht (satisfied) with what we have.

What about the government's role?

The finance curate makes not travel out to the market, the industry does, I vie with the Philippines, where they acquire a 10-year tax holiday, so they are able to cite a very different price.

I desire to inquire the FM, "Why did you take my taxation vacation away?"

The frequency modulation states IT is a mature industry, Sir, I make not cognize about IT, but what about BPO? The frequency modulation believes we are IT, which in fact, we are not.

How we are going to compete, the dollar-rupee is out of whack, the Republic Of The Philippines back ups the industry with their Uruguayan peso grasp and dollar depreciation.

We are so good at generating educated, unemployable people! So to do them employable, we develop them for three months. The top 5 companies in Republic Of India have got a new-hire budget for over $1 billion. The authorities is leaving everything to the entrepreneurial accomplishments of the people, rather than giving them assist and support to compete. In short, the authorities makes nothing

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