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Executive Interviews: Interview with Sreenivasan Ramakrishnan on Knowledge Process Outsourcing
May 2006
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By Dr. Nagendra V Chowdary
As per a NASSCOM survey, the
Knowledge Process Outsourcing (KPO)
industry will grow 45% by 2010. The global
KPO pie in 2010 will be around $17 bn, of
which $12 bn (70%) will be outsourced to
India.What are the factors behind this sudden
interest in KPOs in India?
KPO is a very broad term. Hence, before I
answer this question, let me quickly explain
what Marketics does. Marketics is amarketing
analytics company that works with global
marketers and converts their "under-utilized
data into actionable insight". In a lot of cases,
this is not even done in-house by clients and
it is a case of an entirely new solution. Hence,
there is no "outsourcing" i.e., replacing jobs in
what we do.
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Marketics helps the best global marketers
increase their marketing effectiveness and
ROI. It's about driving top-line revenue growth
through identifying opportunities via analytics.
It's not about 'cost-cutting' at all This is a very
critical parameter in a KPO. The factors that have contributed to the growth
of KPO is domain expertise that is available
in India in plenty. These refer to business
domains likemarketing, finance, supply chain,
etc., as well as in specific, industries like CPG,
telecom, financial services, retail, etc. The growth of domain expertise can be
attributed to two reasons:
- Well trained Indian managers
coming out of topMNCswho have set-up shop
in India
- Managers who have gained
experience in servicing American and
European firms in the IT/BPO context. These
managers "speak the same language" as their
clients, thereby driving comfort. We are not
talking bout cheap labor alone.
Take the case ofMarketics.Marketics has over
50 MBAs from India's top business schools
and marketing firms. When these
professionals interact with their clients (who
are leading global marketers) they "speak the
same language" this drives comfort leading
to better solutioning. Our managers have had relevant experience as line managers
managing a P&L and that experience is
valuable when we offer business solutions to
our clients. -
As a value proposition, what's the difference
between KPO and BPO? Does the difference
in any way indicate low-end and high-end
nature of the jobs outsourced?
KPO is not a sequel to BPO but a radical
discontinuity. The success of BusinessProcessOutsourcing
(BPO) has been largely driven by cheaper
costs offshore. In some cases, to give due
credit, BPO has also resulted in process
efficiencies leading to benefits across the
enterprise. However,moving jobs to a cheaper
offshore location and its immediate bottomline
impact is the prime benefit for a global
corporation to embrace BPO. KPO, on the other hand, involves offshoring
of knowledge-intensive business process that
require significant domain expertise in addition
to process and quality expertise. This is not
necessarily outsourcing as a lot of this would
fall in the 'opportunity maximization' land vs.
'cost-cutting'. The KPO revolution is fast catching up and is
on its way to cross the BPO in India as well as
globally.Moreover, with countries like Ukraine,
Hungary, Belgium, the Czech Republic and
the Philippines offering BPO services at a
lower rate, it'll be in KPO that Indians will be
leading the world. Compared to BPO, KPOdelivers higher-value
to organizations, thereby enhancing BPO's
traditional cost-quality paradigm. The core of
KPO is to create value for the clients by
providing relevant business expertise in
addition to process expertise. Also, KPO
companies work with the business leaders in
their client organizations not IT or
outsourcing managers. Domain is key. The softer benefits for a KPOservice provider
like Marketics are many:
- Professionals get to do great work for
great clients.Work is challenging and domain
based unlike the repetitive process/
transaction-based BPO work.
- Based on nature of work, such firms can
attract and retain top talent. Marketics
consistently attracts and retainsmarketing and
analytical talent in the country from the best
business schools, marketing firms and
statistical institutes.
- Highly satisfied employees.As KPOdoes
not transpire into a "factory" situation
employers can be far more creative with the
workplace and the work culture:
> Lack of shifts > Flexi-timing > Flatter organization structures - Negligible attrition and healthy work-life
balance.
1.
New Outsourcing Model Case Study
2. ICMR
Case Collection
3.
Case Study Volumes
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