'OUTSOURCING
IS A BUSINESS REALITY'
India
is BT's one of top priorities in Asia Pacific
In reply to questions on outsourcing Mr. Ma says: "Outsourcing is not only a buzzword today: it’s a business reality, and the world has accepted it fully. Outsourcing is here to stay. It is helping global players manage cost and increase productivity, and allows them to focus on their core business... India is a major BPO destination." Branding this year as the year of consolidation in this industry he says "we have already seen some big companies buying out Indian BPOs to become more competitive. This is likely to continue."
AS:
This year BT is completing a decade of its presence in India. How would
like to assess this decade-old existence in one of the fast growing
and emerging ICT players in global perspective?
AM:
With market and industry conditions changing over time, BT has also
adjusted its focus on the India market.
India today is one of our top priorities in Asia Pacific, and
we remain fully committed to service in the market.
As an example, BT Retail has approximately 2,700 people supporting
its UK processes. We have entered into large contracts with local leaders,
such as HCL and Progeon, delivering this and we foresee this relationship
to increase further.
Indirectly,
around 7,000 people work for BT in India which is allowing us to take
the India growth very seriously.
As
we all know and recognize, India is in the world’s spotlight, and as
frontrunner, we also continue to develop our share in this market by
offering our ICT solutions. BT
goes where its leading MNC customers require service, and India is a
big market in this business domain.
From
the investment perspective in India, BT is well on its way to upgrading
its network and its focus on quality customer service.
A first for us this year has been the establishment of an Asia
Pacific regional Customer Management Centre in Pune.
This centre, operated in collaboration with Infosys, provides
front and back-office functionality, which includes a customer help
desk for the whole range of BT’s services, and is the focus for customer
service activities in Asia Pacific.
In
summary, BT is looking to significantly grow business YOY and build
a substantial Indian business.
AS:
Asia-Pacific perspective, where you would like to place India in ICT?
AM:
India is one of the top three priority countries in APAC for BT, along
with China and Japan.
AS:
In
Asia-Pacific region BT has been operating for over two decades now.
Despite being a developing country and comparably late entrant in the
global ICT arena, what are the advantages, you find, if any, that are/can
sharpen India’s edge compared with countries like China in Asia Pacific?
AM:
India, in truest sense, is becoming increasingly global and as the focus
from the world is converging on India, India is leveraging its advantages
in the global ICT arena very well.
India is leading the service industry market in APAC and, compared
with China, has developed distinct capabilities in this area owing to
certain natural advantages such as cost, people skills and infrastructure.
The strategies of China and India are, in many cases, different, with
China leading the manufacturing space and India the service industry.
Both are well-positioned in different ways for ICT growth.
Andy
Green, CEO of BT Global Services, has called China “the factory of the
world” and India “the office of the world”.
Ben
Verwaayen, CEO of BT Group, recently stated
in a lecture at the Judge Institute of Management (June 2005):
“Outsourcing
is a reality of modern times and the world should get used to the idea.”
He praised the development and innovation of key offshore locations
including China and India as "better and cheaper" than their
western counterparts, and warned the naysayers to accept the offshoring
trend and move on. "Globalisation
is a good thing, a very good thing and I would like to remind everyone
for a long time the West did a lot of talking about how aid should transfer
into trade. Now it's happening and we say 'oh my god, it's not what
we intended'". Further,
he said that outsourcing has forced western businesses to compete with
offshore workers on entirely new levels and that such competition can
only benefit the global economy. "That's not the outsourcing of
a call centre to India; that's the next step in the drive to productivity.
It's the next step in a global world where people will compete individually."
AS:
BT is recognized as one of dominant players in the global networking
services. Could you tell us about the infrastructure that you find in
the Asia-Pacific countries in general. Where you would like to place
India in this respect and what are the immediate tasks, you think, India
should address to keep pace with the front runners in the region?
AM:
Asia Pacific and Europe have some of the most highly regulated markets
in the world. BT supports
an opening of markets, and competitiveness since it is good for both
the local economies and for the customers/consumers.
BT
has a strong heritage and proven track record in international markets.
As the company continues to transform as a leader in global networked
IT services, we are rigidly pursuing our goal of being the partner of
choice in creating and delivering the promise of integrated communications
and IT.
As
part of the execution of this strategy, BT in Asia Pacific continues
to make substantial investments in key markets, taking the industry
closer to 21st century and next-generation networks.
Convergence
of communications and IT is finally happening. It’s driving a new digital
networked economy – a network-centric world, where the focus is about
getting the right information to the right people, at the right time.
In today’s digital networked economy, productivity and business
success depend increasingly on how well an organization networks itself
together and seamlessly integrates communications and technology on
a global scale. Boards,
CIOs, CTOs are looking to operate in new ways that make them flexible
and agile and help them gain competitive advantage.
We
believe an IP-based network is key to this flexibility.
IP infrastructure creates the “central nervous system” of large
organizations, helping people interact more effectively, ensuring the
information they need is always accessible.
This technology is becoming core to the success of many companies.
This
is what BT is bringing to the market as an industry leader.
There will, of course, be many benefits of this technology innovation
to the markets in which we operate.
The
networking services revenues in India has grown over 20% in the last
year, with a large presence of major MNCs. India is keeping pace in
its growth in this area as is evident from the large investments and
larger deals falling into the basket of these MNCs.
Enterprises
are becoming more and more aware of the networking technologies that
are available for deployment, and are, therefore, far more informed
about the products and services required, hence the increasing growth
rate that we see today.
Governments
need to continue to pursue liberal policies that make sense to each
individually in the telecom
area to keep India and other Asia Pacific markets attractive competitively.
AS:
In an ERM report assigned by BT few years back (2001), securing increased
private sector investment in mobile phone services in states that have
lower average incomes and / or large rural populations was cited as
one of key obstacles in spreading telecommunications in India. How would
you like to assess the development in this front today? As a global
networking giant what would be your suggestion to step up further the
mobile phone services in a country that has over a billion populations?
AM:
The mobile market is the fastest growing market in India. Mobile phones
have overtaken fixed lines last year and now stand close to 55 m. Teledensity
is around 9.5, which is higher than estimates. India is successfully
attracting the major mobile phone companies to set up their mobile phone
manufacturing units in India.
This will assist in further lowering the cost of handsets and,
as the drop in rates continue, we feel India is taking advantage of
the opportunities. This needs
to continue.
AS:
Economic conditions of people in rural areas that form bulk of India,
is stated as the limiting factor also to spread Internet facilities
and lack of education to use this tool. Though there has been significant
changes, if not substantial, since the ERM report, much more needs to
be done. In both these cases how BT could help both Indian government
as well as Indian private sectors?
Any suggestion?
AM:
BT hosts many government representatives from around the world on a
regular basis, sharing BT’s experiences.
That said, BT has no prescription for India
and we would not presume to tell the Government what it should do.
However,
we are actively sharing our experiences with the Department of Telecommunications
and are happy to continue to do this as long as the DoT finds this helpful.
For example, we held an experience sharing workshop in May this
year which was, in fact, attended by Union Minister for Telecommunications.
AS:
What would be your suggestion to those telecommunications and Internet
service providers/industries who are strongly focused on the middle
classes (who are the exclusive focus of their marketing strategies and
product offerings), though 65-70 percent of Indian population resides
in rural areas?
AM:
All commercial enterprises have to decide on the best strategies to
deliver shareholder value, and that includes choosing their target customer
segments.
Our
key customers are specifically Europe-based multisite corporates with
needs in other parts of the world, and Asia Pacific-based multisite
corporates with complex needs in Europe, within Asia Pacific and in
the Americas.
AS:
How would you like to see the role of the Indian government service
providers like BSNL and MTNL vis-à-vis the services being provided by
host private players? Do you think government should withdraw from this
service or should continue as a major support service provider?
AM:
We believe the role of the Government is to establish a fair and competitive
market and regulatory environment.
AS:
Industry talks about probabilities of India, China joining hands to
emerge as a super power in the IT, ITEs and telecommunication in the
South and South-East Asia? In the light of BT’s long two decades exposure in these markets,
do you think this can happen?
AM:
As viewed in the global market, India and China are definitely becoming
strong economies and a major portion of this growth can be credited
to IT, ITEs and telecommunication, and this is projected to grow.
The
important thing to note is the huge trend towards globalization by multinational
companies. Their strategies
are likely to include many, rather than one or two, markets for their
sourcing, production, delivery of services and/or sales, etc.
AS:
A major issue that is drawing the attention of countries in the world
is emergence of India as a major BPO destination. A National Outsourcing
Association, UK, report says: “Indian companies are currently going
through a “wheat and chaff” process – larger, specialist companies are
snapping up the smaller outfits in a bid to emerge head and shoulders
above the burgeoning competition in the global market.”
Your comment please.
AM:
Yes, India is a major BPO destination.
An AT Kearney report has called India the most preferred BPO
destination in the world. This year is seen as the year of consolidation
in this industry and we have already seen some big companies buying
out Indian BPOs to become more competitive.
This is likely to continue.
Please
also refer to Ben Verwaayen’s comments included above.
AS:
As BT Asia-Pacific chief, how would you like to see this outsourcing
issue and India as a major BPO destination? To what extent it can add
value to the customers/ end-users?
AM:
Outsourcing is not only a buzzword today:
it’s a business reality, and the world has accepted it fully.
Outsourcing is here to stay. It is helping global players manage cost and increase productivity,
and allows them to focus on their core business.
Customer service is the focus of every company today and outsourcing
is helping them achieve this, at the right cost-quality ratio.
AS:
Last but not the least, Indian IT industry’s national platform, NASSCOM
has set a target for India to raise its market share of the global BPO
business from the current 2 per cent to 4.8 per cent by 2008. Is India
doing all that it takes to convert targets and 'likely' projections
into achieved realities? How will the country have changed by the time
that goal is achieved?
AM:
India is working on taking its share in the global BPO space and Nasscom
is helping India set that platform. India has grown faster than the
projection since 2000 and the global research companies do not see any
reason for India to not be able to achieve the target share.
BT agrees with that assessment, and we remain committed to investment
and service in India.
Fluent in English, Cantonese and Putonghua, Allen Ma has over 20 years of experience in the telecommunications industry, with much of it based in the region. In his most recent role, he worked for Motorola Global Telecom Solution Sector as vice president and general manager of Asia where he coached a team to win many customer contracts worth hundreds of million dollars, riding on the growth in demand for cellular services in emerging South and Southeast Asia markets. Through a “Choose to be Chosen” strategy, an improved understanding of customer needs and an uncompromised dedication to customer satisfaction, his team trebled the amount of sales revenue in just 12 months and achieved leading market share in many countries. Prior
to that, Allen worked for C & W Hongkong Telecom in a number
of senior executive positions. These include: executive
director responsible for the multi-media arm rolling out city-wide
broadband internet services and e-commerce applications; managing
director for CSL mobile services, achieving market leadership
in Hong Kong through strong service differentiations and innovative
branding; and marketing director for fixed network services, successfully
defending Hongkong Telecom’s market share during the first phase
deregulation of the fixed line market. Allen
holds a Masters in Business Administration degree from the University
of Toronto and two U.K. professional accounting qualifications. |
June 6, 2005