Monday, April 25, 2005

How to scale up your business and cut costs

CHITRA PADMANABHAN VIJAY Posted online: Monday, April 25, 2005 at 0000 hours IST
MUMBAI: The telecom sector has been affected by constant price wars. In a market where players are looking at roping in customers by offering value-added services, the cost of acquiring a customer is constantly moving southwards. For instance, players are required to design various products and devise various schemes to counter competition. This was one of the typical problems faced by one of the clients of ICICI Onesource. In order to reduce costs on customer related activity, the telecom client with a customer base of two million, decided to outsource this service to a third party BPO player in India.
However, moving the processes to India was a major challenge for ICICI Onesource as it carried out activities like inbound and outbound sales and order provisioning out of the US and UK. “We had the responsibility of moving these processes to India in phases without disturbing the ongoing activity that was happening in various other centres,” said ICICI Onesource vice president for operations Ravi Pandit.
Transfer of processes:
The telco player did not want to retain its centre in the UK, the transition of the processes to India had to ensure that the India site was the mirror site of the other. As per the RFP (request for proposal) that was floated, ICICI Onesource was selected as the outsourcing partner. The fag end of 2003 was spent in mapping the transition of the dual sites such that each service component was never duplicated. This ensured that the costs of outsourcing were kept at a bare minimum and there was absolutely no compromise in service delivery during the transition period. The first migration was completed in Jan 2004 and the first outsourcing activity began with 11 seats and 28 executives. Today, the total BPO agents working in this system is about 600.
Addressing security concerns:
Security was the topmost concern for the client, but being India’s first BPO organisation to attain BS7799 helped ICICI win this deal. In case of ICICI Onesource, personalised data pertaining to customer never actually passes through the system. Instead, it remains on the client’s own database servers and ICICI Onesource uses the thin client technology to remotely access relevant data. “The computer keys we press in India are treated as input by out client’s system and the output from that application can be viewed on our computer screens in India,” said Mr Pandit. Also, as a measure of safety, personalised information is split into separate databases. The linking of both databases can only happen through a specialised software program.
Beating sales targets and keeping costs down:
In the present day, the system has been up and running for almost a year as a result of which the client has experienced significant cost savings. The client had plans to bring down costs in six different areas of the business activity, namely inbound and outbound sales, order provisioning, customer service, inbound and outbound collections, technical support activities and customer retention. “The client had set definite targets like that of conversion of customers which was set at 29% but the systems beefed up the conversion rate by 54%,” said Mr Pandit. The system currently handles about 20,000 calls a day and the client claims to save anywhere between 20-40% of the cost of servicing the customer.
Not only did the client scale up business in terms of number of processes offshored, but the sheer cost and productivity gains experienced by the client has given them healthy operating margins too.