As predicted, the most important topic of discussion was ‘Recession’. Lately, this term has found its way into the psyche of perhaps every business entity in India and abroad. Mr. Shashi Tharoor, in one of his speeches, has rightly said that there is an immediate impact of any development, positive or negative, taking place in the US, in India.

In context with the Leadership Forum, the same thought was clearly reflected in coffee table discussions as well as sessions at the Forum. The ‘concern’ of most senior executives was the current volatile situation, particularly that in the Indian IT Industry. All of them unanimously agreed that the downturn was quite unprecedented, and that the same would have a long-lasting effect.

It was quite interesting to listen to the different ‘solutions’ proposed by the business think-tank for the common problem doing rounds in the Indian IT Industry- Downturn. C.K. Prahalad emphasized on the importance of ‘unique personal experience’ with regards to future services. His views hinted at the fact that the economy would gradually shift towards the Pay-as-you-go model. And solutions would also need to be closer to businesses as compared to rigid ‘boxed’ systems.

I was all ears to Sharad Sharma (CEO, Yahoo! R&D) and Ashish Gupta (Managing Director-Investment Advisor, Helion VC) delivering their respective speeches on- How Niche companies can make the most of the crisis. Their speeches conveyed that specialization is the order of the day. The seminar on “Hard Times, Slow Economy, Sales Slump – will it get worse? Will you survive?” addressed by Nandan Nilekani (Infosys), S Ramadorai (TCS), Vineet Nayar (HCL) and Denny McGuire (TPI) surely motivated me to sit and introspect.

The gloomy picture of recession that’s etched in our minds was transformed into that of optimism when eminent speakers shared their ‘solutions’ for dealing with downturn. Among many others, cost effectiveness, increasing operational efficiency, infrastructure consolidation, exploiting existing assets to the fullest, and the most important- customer experience were some of the important solutions that impressed me. I couldn’t help but wonder that it’s extremely close to what I advise my clients to look out for, and felt more confident that Drishti is on the right track.

Mr. Kamal Nath, Hon’ble Union Minister for Commerce and Industry, said while addressing the inaugural session of the NASSCOM India Leadership Forum 2009 “The Indian information technology (IT) industry has flown the India flag high but we have for long looked outward. It is now time to look inward and maybe the current global crisis will trigger some inward looking”. His views instilled the much needed ‘hope’ we Indians badly need at trying times like this. Moreover, his tagline ‘Next practices as opposed to Best practices’ is indeed something to ponder upon.

I was particularly fascinated by the statement of C.K. Prahalad that it’s important to support small enterprises, as it’s quite difficult for large companies to thrive without them in the business ecosystem.

One of the interesting discussions during Mergers and Acquisition session and Cloud computing session was about Software as a Service (SaaS). There were different views on whether the Enterprise will adopt SaaS first to deliver growth fast or would SME be early adopter due to pressure of being more automated and efficient but keeping costs minimal. In the same session Mr. Sanjeev Agarwal (Helion) mentioned that non-Indian products that can first cater to India, then emerging economies and then developed economies would do well. It’s time we looked ‘inwards’. It’s time we do some brainstorming, not only to ward off recession, but also to emerge as organizations that can shape the global business scenario.

Predictive Dialer (Dynamic Pacing Dialer)

The predictive dialer is the smartest of them all. Managed either in-premise or hosted (SaaS), the dialer uses internal algorithms and methods to make more calls than the number of agents, and connect only the live calls to agents. The system “learns” intelligently how many calls to make at any moment, depending on various parameters such as agent availability, average talk time, average wrap-up time, and “paces” the call-making mechanism accordingly. For instance, out of 100 calls made any moment, about 60 calls are answered by Answering Machines or are busy/unreachable. Out of the rest 40, another 10 could be FAX or SIT tones (maybe just incomplete numbers too). That leaves us with 30 calls, which are connected to the agents. The pacing varies depending on the connection and response rates. For example, in 1:3 pacing, the system can make about 90 calls for 30 agents any moment. The ratio varies as system becomes more sensitive to fluctuations in the parameters and minimizes idle time as well as call drops.

Now the agents save up a lot of time this way (it takes about 20 secs to 1 min just to dial a number once or multiple times in case it’s busy/wrong/unreachable), and as a result, we get over 400% increase in call connects and about 50-100% increase in effective sales. Number of calls can range upto 500 calls per day with occupancy rates of above 80%!

This mode is ideal for huge call lists (usually B2C), where businesses can afford a few dropped calls too. Not recommended for small or expensive high-quality lists with high priority customers.

Good systems also take care of Do-Not-Call and regulatory compliances. Some systems integrate with external systems while others have inbuilt DNC modules.

Fixed Pacing Dialer

Now be wary on this one. Lots of vendors claim to offer Predictive Dialing, but instead provide what we call “Static Pacing”. The system will make a certain number of calls depending on the pacing limit (for instance maximum of 150 calls for 100 agents if the ratio is 1:1.5). The system does not intelligently change pace as per the various parameters, but has to be modified (rather intuitively) by the system admin, as the agent occupancy and dropped call rates fluctuate. This is a good mode if you are not very hung-up about the live connection rates, and if you have a dedicated guy running the show. Less  expensive than the predictive dialer.

Broadcast/IVR dialer (also Autodialer)

This dialer does not require any agents. The system simply takes a lead list, and starts calling prospects/customers. The customers are then made to listen to pre-recorded messages or take actions via an IVR menu. This is good for reminder & notification calls and political campaigns, but requires an IVR system that works in conjunction with it.

Preview Dialer

This is a better version of manual dialer, and is ideal for very high value and/or expensive lead-lists. In this case, the customers details pop-up on the agent screen and the agent can continue with the call if he/she so desires. The lead list (like in most cases) is uploaded in the system, but the agent has the control over accpeting/denying the call.

Progressive Dialer (Also forced-preview or precise dialer)

The same as preview dialer, with the difference that agent does not have control over accepting/denying the call. The agent has a few seconds to go over the customer details before the call is connected to him/her. Good when you’re dealing with high net worth clients, who don’t like to wait at all.

Power dialer

In this mode, the system ensures availability of the agent by connecting him/her first to the system, and then dials out the call to the customer. In case the agent hangs up before the customer is connected, the system will cancel the call, and initiate the next call(s) to the available agent(s). Useful in scenarios where the lead lists are of very high quality and there is zero tolerance for dropped/abandoned calls.

Interactive Voice Messaging

This has become prominent off-late and involves an IVR’s involvement too. The system plays a pre-recorded greeting for the customer in case the agents are engaged in other interactions, and connects him/her as soon as an agent becomes available. This is particulary useful in lowering the abandonment rates, and in boosting cross-selling and up-selling with minimal resources. Not very widely used, however.

So that’s the fodder on dialer terminology. It becomes important to know the requirements and criticality of the process before deciding on what kind of technology would be apt for your outbound process. For most B2C campaigns, predictive dialer would perhaps be the best option. Preview, power or progressive dialer would suffice on other cases where you’re not looking at dialing hundreds of numbers everyday. However, it becomes imperative to choose the right vendor with the right technology. It would be advisable to have a demo run (if your vendor can provide it), or check with a few clients about the productivity increase they’ve seen, before you zero in on the technology.

But good technology will not be cheap, and you may have to shell out a little more. Good premise based solutions require one to invest upfront in the infrastructure. There is another alternative however if cost is a deterrent - a “hosted dialer” offering for which you’ll need to pay a small one-time charge and a per-user-per-month recurring fee. More on these later.

However, as the saying goes “Success is not final, failure is not fatal: it is the courage to continue that counts”, we never stopped dreaming, and translating those dreams into substantial achievements through the not-so-easy way of ‘hard work’.

When one of our esteemed clients, MOSL (Motilal Oswal Securities Ltd.) won the coveted ‘NASSCOM CNBC TV-18 User IT Award’, we celebrated because we have immense faith in ‘our products’. However, when MOSL bagged this award, this thought did cross my mind that ‘what if we (Drishti) win the NASSCOM award’ (I agree I am being selfish, but after all, a little selfishness isn’t sin).

Since the start of this week I have been coming across this message written in the Bible ‘for everyone who asks receives, he who seeks finds; and to him who knocks, the door will be opened (Luke 11:10)”. And guess what; today I was informed that we have won the prestigious NASSCOM Innovations Award 2008. And what makes me beam with pride is the fact that we won this award after beating several giants of the IT Arena.

It’s time to celebrate. It’s time to thank every member of the Drishti family for making this dream see the light of the day. Do I hear “hip hip hurray, hip hip hurray”!

2008 saw some great technological products and solutions. Global Recession and similar frustrating terms did impact the IT sector. But, we dealt with the situation, inevitably, with panache. What has the year ’09 in store for us? Do we continue harping on the old developments, or do we use our intelligence to innovate and deliver? The answer must not be difficult to comprehend, isn’t it?

Customer Experience and Customer Satisfaction seem to be the ‘mantra’ for success. As more and more Technology-based Giants continue to develop solutions and products to enhance customer experience, it’s but obvious that others will follow suit.

It’s time for introspection. It’s time to necessitate radical changes to create technology that can act as a medium to show the world a glimpse of the future. Of late, several new concepts in the field of customer service crept in, and all of a sudden, companies started banking on products and solutions that were more customer-centric rather than those which were merely exceptional, technologically-wise.

Customer Satisfaction should top the corporate priority list. Startups as well as biggies should break free from the conventional approach and focus on next generation solutions to provide highly advanced customer service. I must reiterate that compromising on quality to save a few bucks would do no good to businesses in the long run.

Planning the road ahead would help us innovate so that when the Christmas ’09 arrives we can swell with pride and proudly sing ‘Last Christmas…..’ (Yes, Wham again).

So all you folks who have been losing sleep over the mythical crash of the BPO industry, it’s time to relax and save your worries for other issues. Plainly speaking, the BPO industry is here to stay (I can hear the rumor-mongers shrieking).

The question that has been haunting the thoughts of BPO biggies and managers lately is undoubtedly- How to accelerate agent productivity? Isn’t it a little weird that despite the availability of high-end technology like VOIP (which by the way is also an effective cost-cutting solution), many established call centers fail to multiply agent productivity?

It’s been observed that a major chunk of investment goes into recruiting and training agents. It is therefore quite obvious that agent productivity and the overall productivity of call centers are directly proportional to each other. Blatant incentive packages do help in increasing productivity, but they are not a foolproof solution to ensure consistent growth of the organization.

Let’s list some of the myths associated to the BPO industry in general and contact centers in particular:

Myth1- Reduction in Call-Handle time translates to increase in agent productivity
Myth2- Expensive technologies can singlehandedly boost agent productivity
Myth3- Cutting down on training costs can significantly minimize losses

In a nutshell, the future of the BPO industry in India seems quite bright. Indian Call Centers need to address the aforementioned issues to pave way for the growth of the Indian BPO Industry.

Funding

Funding has become such a hot topic in the Indian technology diaspora, that no discussion can be complete without it. NASSCOM of course has recognized that it is a major challenge for the Indian product start-ups. Lot of interesting facts came up during the discussion on funding. Here are a few to ponder upon:
•    There are about 225,000 angel investors in U.S, as compared to approximately 225 in India.
•    A new form of funding, called debt financing has been initiated, started by banks such as the Silicon Valley Bank.
•    Since 2005, the VC investment in India has grown at a CAGR of 42% to reach $543 million in 2008
•    Funds in the software products segment have grown at a CAGR of 43% from $76 million to $156 million in 2007
•    Over the next four years, 1000+ companies are expected to get total funding of over $80 Billion.

Some good pointers were also shared during the session on VC, raising some important questions and concerns, like:
•    Addressing opportunity in terms of size and money correctly - not too less not too much!
•    What is the peak amount of money required? How shall the funds be disbersed (stage wise)?
•    Do you have a killer product demo? It really helps.
•    If you are not good at negotiations, get an investment banker involved.
•    Do not give out too much information too soon. Sign an NDA if you need to.
•    If there are multiple partners (and there are usually), do not assume that all are informed well about your product.

Most importantly, do not use PE only for money, use them as a valuable resource for strategy, access to new customers, and valuable information on execution.

Many funds are looking proactively at the Indian companies. One such fund is IDG, which is focused on product companies. IDG has already invested $50 Million in Indian companies, out of which $38 million is invested in product startups. NASSCOM has also started its own fund called Innovation Fund for early stage/pre-revenue startups.

Growth

A lot of insights were also shared with the audience which would undoubtedly be useful to software startups. For instance, it was advised that a company should partner with a VC/PE company run by an entrepreneur, who understands and empathizes with the mindset of an entrepreneur. Secondly, a product startup should be open to new emerging markets, and avoid keeping all its eggs in one basket. The number of product startups in India is pegged at 371 (since 2001, with 100 in the last one year) and this should only grow as the issues such as management, funding and processes are smoothened over time.
Moreover, the experts also concurred that the gestation period of a product startup is higher than a services company, and therefore patience is a virtue that entrepreneurs cannot afford to lose. Unlike services companies where the revenues pour in on a recurring basis, product companies need to start with a clean slate every month, and make more sales than those in preceding quarters to grow consistently.
Companies were also advised to focus on newer sectors like Defense, Automobiles, Power Distribution companies, Railways as the companies in these sectors are looking for more than ERPs, and offer a lot of potential.

Strategy

One of the points that came up during the discussion was a lack on inclination on the part of Indian startups to create official price lists. It was shared that presence of a well defined price list can often make a big difference in fostering credibility and trust. Moreover, it was also advised to create geography-specific price lists as the products can often command higher prices, upto two or three times, in certain countries, thereby boosting revenues.
The companies were advised to take into account diversity in processes, users and systems and make the products fairly generic while retaining the competitive edge with high flexibility and customizability quotient. Also, a long-term mindset has to be inculcated, and short-term gains have to be forsaken many times (a strategy adopted by the makers of highly successful Tally software in India). Many product startups go the service route for short term benefits when they should do the vice versa.
A very important point discussed in the meet was the skewed outlook of many entrepreneurs when looking at numbers. One of the most useful things I heard from one of the panelists was that indication that even a small percentage could represent a large consumer base (especially in a country like India where 1% represents millions of users – enough for a company to grow for decades). Therefore, a product targeted at merely 5% of any industry could become very successful whereas another targeting 50% could fail because of still competition.

Technology

The highlight of the session was the elaborate discussion on SaaS (Software as a Servie) and challenges revolving around this subject. Various pros and cons were discussed in this forum, mainly revolving around pricing flexibility, product bundling, cost advantage, and feature availability on the one hand, and security issues, bandwidth (connectivity) hassles, and lack of awareness on the other. The problems are apparently more concentrated in tier 2/tier 3 cities that have the cost advantage, but suffer with infrastructure issues.
Platform as a service was also thoroughly discussed, suggested by the experts to be ideal for companies with distributed computing and infrastructure and/or large storage requirements.

Product Management

Rightly pointed out by one of the speakers, product management remains a mystery as confounding as a rubik’s cube. While some label it an engineering activity, others believe it should be the burden of the RnD team, and even fewer who believe it should be marketing’s prerogative. One thing though, that everyone seemed to agree on, is that is a bridge between the product and the customers, and is a predominantly investigative processes where the feedback is used to improve the product itself.
Some other activities that are a part of product management are release planning, demo planning and organization, roadmap definition, and competition analysis. Understanding pain points of the customer via direct interaction, and addressing them is also a part of product management.

Go-to-Market Strategy

Various steps were outlined for the go-to-market strategy planning and implementation for product companies.
•    Assess the real market size, via reports (Forrester, DataMonitor, etc) and your own investigation of the market.
•    Evaluate the current environment (which stage is the industry in currently) and the competition in the space.
•    Assess the entry barriers
•    Future market trends – where will the industry head in the next 10-15 years.
•    Delivery model – SaaS/On-premise, Support, Costing
•    Macroeconomic factors – Government policy, regulation, compliance

Overall, the conclave was a good learning experience, and the discussed points were quite useful for budding entrepreneurs who dream of having a successful Google, or Digg out of India. A recommended event to network and learn!

No doubt, hosted model is an attractive proposition, especially if you are looking at reduced costs, flexibility, and accelerated implementation of customized applications. It is godsend for those who are looking at cutting back on investments on infrastructure and hardware, and yet providing comprehensive functionality for processes that are not yet “hardened”. What do I mean by that? Let’s take an example of a Call Center that gets a new Vodafone post-paid outbound campaign lasting three months. The margins are relatively thin, and fresh investment in infrastructure and technology may not be a good idea at this point of time. You can’t simply put all your eggs in one basket and expect that you will definitely get more business in the near future. So how do you go about it without burning a hole in your pocket?

Assuming you have the workforce and real estate all worked out, technology is the only consideration. Compromising on the quality of technology is definitely not a good idea, so you need the best technology to make sure you are profitable, or sustainable at the very least. So you talk to a good technology vendor (and there are plenty of good ones our there) and without spending a dime on expensive high-end servers, telephony cards, software licenses, databases, or applications (or tools), you get a good deal – a good hosted solution will cost you around $100/agent/month. You do need to have workstations, headsets, Analog/IP Phones (or Softphones), routers, etc, which can also be rented out. You are all set now…hook up, and get calling!

It’s all simple math if you think about it. And there is no doubt that hosted is a great idea in such cases.

However, all the industry experts concur on one thing – SaaS is going to catch on, but it is not overtaking the traditional premise-based model anytime soon, not be a far shot. And they have reasons to believe so. Plenty of reasons…

Hosted is a great proposition during the nascent stages of business. However, as you grow, your workforce grows and so the monthly payments increase. In case you started out with 20 agents, you are paying about $2000/month. Assuming you are in business for a year without increasing your workforce size, you have paid out 12x$2000 = $24000/year. Now, if I amortize the cost for a premise based system, and assume $600/agent as the cost, then it costs me half of that = $12000. Add support costs (at 20%) and the amount becomes $14400, excluding the hardware. If you extrapolate this to two years, and to five (that’s the shelf life of most technologies), you are more profitable going the premise route.

Other complexities include voice quality (not enviable in emerging countries), if I discount legal hassles around VoIP, and of course security. We have inherent and reasonable fears about trusting someone else, (who may also be serving a competitor), with our confidential data. Any data leak or security breach could break us.

However, there are as many merits of Hosted as well. In case I mentioned it already, I’ll mention it again – LOWER COSTS! The onus of updating the technology lies with the MSP or solution provider, and that means no management hassles for you and your business. Also, many MSPs incorporate redundancy which is crucial for your mission critical business.

As a call center owner, it is upto you to find out what’s best suited to your business. There are more options, but this is getting unbearably long, so I’ll talk about them in the next post.

Most of the times than not, these vendors lack in performance and productivity. Out of the multiple reasons, some are beyond control. But technology is a parameter which is very much controllable and can be used to increase the productivity. An advanced technology solution can overcome the most common issues in a call center related to customer service and satisfaction, agents’ skill and productivity, performance, resource optimization etc.

There are multiple options in the market to choose from. There are systems which suffice the basic needs and have limited functions. These systems just get the basic activity done and don’t provide any assistance in increasing the productivity. On the other hand there are high-end advanced systems which offer solutions for the end-to-end needs of a call center operation. These systems are technologically advanced and are designed to increase the performance bar and productivity levels. As a call center, one must be very prudent in choosing the right technology, to extract maximum benefits via higher process efficiencies, workforce productivity and automation.

Read the whitepaper to know “How to increase profitability in the domestic Call Center”

NASSCOM, one of the more proactive organizations in the country recently released a report “Locational Road man for IT-BPO growth: Assessment of 50 leading cities” which outlines a need to have more consistent and homogeneous growth across the country. It has categorized 50 cities across India under four major categories (a la Magic Quadrant) - Leaders, Challengers, Followers, and Aspirants - based on six key parameters including.

• Knowledge pool availability
• Skill-set assessment
• Infrastructure
• Social & Living environment

What they have essentially done is to inform those interested in setting up shop in India or planning to expand a key message - Think hard before you decide where to go next. As call centers have started to look beyond the tier 1 (Leaders/Challengers) cities owing to the spiraling salaries, real estate and infrastructure costs, increasing attrition rates, among many others. Employees often demand high packages, and have short employment cycles, as a career in BPO is not considered a mainstream one, and is often a stepping stone to the corporate world (or just a temporary way to make some quick bucks). These costs can be contained by as much as 30% in the tier 2 (or followers/aspirant) cities. Also, some cities have been identified to have better vertical, specialized skills than the generic ones. One such case is the deep knowledge base of financial industry in the Gujarati cities of Ahmedabad and Vadodara.

However, tier 2 cities come with their own share of problems. For starters, the quality of skills (especially vertical specific ones) is a deterrent, especially for international call centers. The quality of education imparted in these cities is often inferior to the kind in tier 1 cities (and prohibitive for Outsourcers who are looking at complex problem-solving skills along with good communications). The key question in these cases is NOT the number of graduates, but the number of employable graduates. According to Everest, the number of employable graduates is as low as 5-6% (in Jaipur) to as high as 18% (in Chandigarh’s) of total graduates (which are in the range of 20,000 to 30000 approximately).

Other smaller, but important issues relate to accents, and management overheads for a relatively less skilled labor pool. Senior management executives are often hesitant to relocate to such cities and often demand higher packages, which affects the cost edge that smaller cities enjoy. Health benefits, better pay packages, availability of electricity, technology and training facilities is also identified as major concerns in these cities.

Committees such as NASSCOM are proactively looking at ways to reduce the gap to make the growth more consistent and make the country more appealing to the Outsourcers who are now looking at other emerging countries such as the Philippines, Egypt, Romania, and Vietnam. One such prerogative is the increased collaboration in the BPO fraternity in order to increase “employability” of graduates from tier 2 and tier 3 cities so that they can catch up with their brothers and sisters in the metros. This can be done by imparting relevant skills via training institutes, and outsourcing events. Moreover, establishment of BPO hubs will also boost the possibilities of more specialized processes pouring in such cities.

Even though it has been declared that the US economy is in recession (by none other than Ben “Fed” Berkanke himself), there has been a lot of concern about the impact of it outsourcing. However, Indians fears can be allayed with some good news. SMEs that are increasingly looking to widen profit margins by curbing costs are now making the best of it. According to the article, there is a huge opportunity to tap the SME outsourcing market looking at different options – customer service, telemarketing, R&D outsourcing, HR outsourcing, backoffice, legal – you name it. According to Adam Larkey at Wolet Capital Corporation, “This will substantially offset or minimize the impact of the US recession on Indian industry.”

Truly said, the outsourcing opportunity from the SME segment IS very promising (look at the table below)

By march 2010, SME outsourcing will form almost 20% of the $55 Billion dollar industry – a fact not surprising considering how many SMEs are actually present in US. Approximately 80% of US industry is constituted by SMEs in terms of volume. Here are some numbers:
• 20000 SMEs in the bracket of $2-$500 million
• 6000 companies in $500 million to $2Billion
• 3000 in $2 Billion to $5 Billion
• 2000 of $5 Billion
• 1400 in the $5 Billion to $10 Billion

Seeing these numbers, it is of no surprise that there is immense opportunity especially from SMEs. So how should we interpret it?
I see a lot of business coing up for our key clients – the SME call centers who will be able to grab a large share of this pie. Since this segment will be primarily cost conscious, it is imperative that the SME call centers make the most of this opportunity, as the big brethren – the large call centers, won’t be able to compete on the cost aspect.

Having said that, it is also imperative that they have the right communications technology as the key enabler in place, so that they can deliver on the quality that US organizations expect. Such call centers need to have a technology that is easy to own, operate and maintain, so that time and resources can be devoted to the operations and management perspectives. Choose a technology that fits your processes, not vice versa. Moreover, it is a better option to go for a single vendor for all your needs once you have outlined them. The more the vendors, the harder it becomes to manage them together. Also, let’s not forget the time and man-hours spent in trying to manage disparate technologies that are loosely integrated, and the blame game the vendors resort to. Lastly, compromise on the price if you have to, but never on the technology! The reason is simple – you will achieve quicker RoI and become profitable. A cheap and inferior (or unflexible) technology will make you pay through your nose in the long run.

I am sure most call center folks out there know this. However, some make the same mistakes and end up losing their peace of mind over technology. To make the best of an opportunity, (like the SME one we outlined in the first part of the post), one has to get all the homework done to be able to get the most out of it. Once you have everything in place – including people, processes and technology – you are in a much better position to outpace others in the rat race.