Ibm Seema Ajwani


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  • Customer Support : Technical support and monitoring, queries regarding products and services, order status, accounts and services support etc.` HR : Benefits administration, education and training, recruiting and staffing, payroll services, hiring administration and records management. Finance Services : Billing, accounting transactions, general accounting, tax consulting and compliance, risk management, financial reporting and analysis, financial management. Content Development : Engineering and design services, digitization (including GIS), animation, network management, biotech research. Payment Services : Credit/debit card services, cheque processing, EDI (Electronic data exchange) etc. Administration Services : Billing, shareholder services, tax processing, claims processing, asset management, document management, transcription and translation
  • Building Profitable & Enduring business: Small players marginalized, captives converting
  • Ibm Seema Ajwani

    1. 1. “ Knowledge Workforce: A Roadmap ” HR CHALLENGES HR Roundtable “ Globalising People Skills” Friday, 2 September 2005
    2. 2. Index <ul><li>India Inc. </li></ul><ul><li>Indian BPO Industry Update </li></ul><ul><li>HR Challenges </li></ul>
    3. 3. deeper India’s outsourcing changing the world India: land of global sourcing
    4. 4. India Inc is shining …
    5. 5. … is at an inflection point… <ul><li>3 rd …Has third largest investor base in the world </li></ul><ul><li>1 Mn …Is adding one million mobile connections every month </li></ul><ul><li>2 nd …Second largest reservoir of knowledge resource </li></ul><ul><li>300 …300 million are middle class consumers </li></ul><ul><li>6 th …Sixth largest foreign exchange holder in the world </li></ul><ul><li>Highest …There are 70,000 bank branches in India </li></ul><ul><li>5 th …Fifth largest telephone network (including mobile) in the world </li></ul><ul><li>2nd …largest among emerging economies, only after China </li></ul><ul><li>100 …Over 100 MNCs who have set up R&D centers in India </li></ul><ul><li>10X …FII investment increased by almost ten times in 2003 to $7.59 bn </li></ul><ul><li>#1 …and India remains as the leading global hub for BPO </li></ul>India is now the 10th largest economy in the world (from #12 in 2003)…. ...India’s GDP is $ 692 Billion and growth rate of 6% annually
    6. 6. … is an emerging economic superpower… India would become the third largest economy after USA and China by 2050. <ul><li>India's GDP will reach </li></ul><ul><ul><li>$ 1 trillion by 2011 </li></ul></ul><ul><ul><li>$ 2 trillion by 2020 </li></ul></ul><ul><ul><li>$ 3 trillion by 2025 </li></ul></ul><ul><ul><li>$ 6 trillion by 2032 </li></ul></ul><ul><ul><li>$ 10 trillion by 2038, and </li></ul></ul><ul><ul><li>$ 27 trillion by 2050 </li></ul></ul><ul><li>In terms of GDP, India will overtake </li></ul><ul><ul><li>Italy by the year 2016 </li></ul></ul><ul><ul><li>France by 2019 </li></ul></ul><ul><ul><li>UK by 2022 </li></ul></ul><ul><ul><li>Germany by 2023, and </li></ul></ul><ul><ul><li>Japan by 2032 </li></ul></ul>Among the BRIC group India alone has the potential to show the highest growth (over 5 percent) over the next 50 years. China Overtakes the G3; India is Close Behind India Shows Most Rapid Growth Potential of the BRICS The Largest Economies in 2050 China US India Japan Germany India Brazil China Russia
    7. 7. … and the leading offshore destination Excludes US, UK and Australia Near-shore Generated BPO Revenues Source: “Offshore BPO Delivery,” Nelson Hall, Q1 2004 Proportion of Total Offshore-Generated BPO Revenues (2003) India is a leading BPO offshore locale with strengths setting it apart from comparable locations. Offshore Location Attractiveness : Rating the Top 25 Source: “Offshore Location Attractiveness Index 2004,” A.T. Kearney Management Consultants, 2004 5% Mexico 1% China 1% So. Africa 2% Other 16% Philippines 75% India India Canada Singapore Ireland Australia Spain New Zealand Czech Republic Israel Portugal Hungary Poland Chile So. Africa Malaysia Brazil China Costa Rica México Turkey Argentina Russia Thailand Vietnam Business Environment and People Skills & Availability Financial Score Philippines Low High High
    8. 8. … Young & Vibrant India BPO Industry deeper
    9. 9. India’s offshore value proposition remains the strongest Source : Nasscom India still ranks as the preferred destination for outsourcing… … and estimated to be 44% of the worldwide total outsourcing CAGR 42% <ul><li>India’s offshore value proposition </li></ul><ul><ul><li>Superior offshore process management and service delivery capabilities </li></ul></ul><ul><ul><li>Talent pool: size does matter –esp. when you need to scale-up </li></ul></ul><ul><li>Pricing trends in BPO likely to be susceptible to downward pressure </li></ul><ul><ul><li>Increasing the emphasis on operational excellence to sustain margins </li></ul></ul><ul><li>Indirect employment attributed to IT-BPO – 2.5 million in FY05 </li></ul>Growing at 7X the domestic GDP – highest growth in Industry in the country
    10. 10. Changing demographics driving growth <ul><li>Working population (19 – 60 years of age) will increase from 485 mn to 615 mn by 2010 </li></ul><ul><li>Educational base of 21 mn professionals and 90 mn graduates/post graduates by 2010 </li></ul>44 % of population less than 19 years (54% of population below 25 years of age)… … estimated literacy rate for this segment is over 75%.
    11. 11. Industry remains customer support centric today Source: NASSCOM Industry in early phases of Industry diversification… … new LOBs developing; HR & Finance services gaining momentum.
    12. 12. Emerging high-end Knowledge Process Outsourcing (KPO) Source : Evalueserve Significant latent potential in financial services and healthcare 43% 15.5 1.2 Total 40% 3.0 0.28 Biotech and pharmaceuticals 39% 1.0 0.1 R&D (other non-IT areas) NA 2.0 -- Remote education, publishing NA 0.3 -- Medical content and services 46% 1.4 0.1 Animation and simulation 29% 2.0 0.4 Engineering design NA 0.4 -- Equity research, actuarial analytics and data modeling 54% 0.4 0.02 Market research, competitive intelligence 50% 5.0 0.3 Basic data search, integration and management CAGR 2010 2003 Service Line (USD Billion)
    13. 13. Highlights of Indian ITES-BPO sector Source : Nasscom <ul><li>Emerging opportunity areas for the ITES-BPO sector: </li></ul><ul><li>LY witnessed a significant pickup in global interest for HR ITES-BPO: Global potential for HR outsourcing in 2004 estimated at $10.8 billion -- offshore-able potential over $5 billion. Value of HR BPO offshored to India in FY 2004-05 was $165 million, up 120 per cent from $75 million in the previous year. </li></ul><ul><li>F&A (Finance and Accounting) outsourcing emerging as one of the fastest growing BPO segments. From deals focused on transaction processing to now customers wanting to outsource entire business process. </li></ul><ul><li>Procurement outsourcing is an emerging area as more and more firms are seriously investigating this option. </li></ul><ul><li>ITES-BPO employee grow at CAGR 52.6%: 42,000 in 01-02 to 348,000 in 04-05. </li></ul><ul><li>410 ITES-BPO players in India in Mar05 - up from 285 in FY 2003-04. </li></ul><ul><li>Captive units continue to dominate – account for 65+% of work off-shored to India. </li></ul><ul><li>Domestic ITES market also witnessed a significant demand : from $300 million in FY 2003-04 to $600 million in FY 2004-05. </li></ul><ul><li>High degree of competition in the domestic telecom and BFSI verticals with companies laying increased emphasis on customer fulfillment and other CRM activities. </li></ul><ul><li>Integration of IT-BPO contracts is becoming more common. </li></ul><ul><li>Indian vendors are developing multi-location delivery capabilities : firms also setting up facilities in China, Eastern Europe, Ireland, and Philippines. Within the country- expanding to tier-II cities - Mysore, Nasik, Vizag, Jaipur, Chandigarh and Trivandrum. </li></ul><ul><li>Wave of consolidation as several large M&A deals were scripted in the industry like GECIS-Oak Hill/General Atlantic Partners, Daksh-IBM, e-serve-Citigroup, etc. </li></ul>
    14. 14. Indian BPO/ BTO landscape Category Details Business Transformation Business Transformation Diversify Revenue stream Customer Retention Capture Labor Arbitrage Basic Theme <ul><li>Global Brand </li></ul><ul><li>Strong Balance Sheet </li></ul><ul><li>Transformation= Operations + Consulting + Technology </li></ul><ul><li>‘ Global+Local’ operations (Global platform – Local expertise) </li></ul><ul><li>Branding & retention </li></ul><ul><li>Business transformation capability </li></ul><ul><li>US-India corridor </li></ul><ul><li>Existing Client base </li></ul><ul><li>BPO focus & expertise </li></ul><ul><li>Existing Client base </li></ul><ul><li>Global Service Delivery </li></ul><ul><li>Core competency focused </li></ul>Advantage (s) <ul><li>Perceived as a Technology player </li></ul><ul><li>Limited knowledge of local market </li></ul><ul><li>Weak operations capability </li></ul><ul><li>Too broad an offering </li></ul><ul><li>BPO business dynamics vs IT </li></ul><ul><li>Low share of BPO Revenue as a % of IT Revenue </li></ul><ul><li>Career prospects viz Global Brands </li></ul><ul><li>Organizational pedigree </li></ul><ul><li>Limited knowledge of local market </li></ul><ul><li>Only Processing Capability </li></ul><ul><li>Center of gravity out of India </li></ul><ul><li>Weak Balance sheet </li></ul><ul><li>Brand in tight Labor market </li></ul><ul><li>Only Processing Capability </li></ul>Challenge (s) Independent Locally managed subsidiary working under Global “Framework” Move from labor arbitrage to strategic transformation Acquire local players / sharpen focus on BPO Operations Build local expertise and migrate existing clients Ally with larger, global player or operate in niche Key to Success “ Global+Local” Integrated Service Providers Integrated Service Providers Indian IT players Global BPO specialists Pure-play local, BPO companies
    15. 15. Industry Insights BPO <ul><li>Performance to process improvements </li></ul><ul><li>One-stop shop </li></ul><ul><li>Data Integrity and security requirements </li></ul>Customer <ul><li>High attrition levels due to night working </li></ul><ul><li>BPO Industry Maturing – Evolving Mid-management </li></ul><ul><li>9% increase in Satisfaction level of BPO staff </li></ul><ul><li>Third-party Training engine underdeveloped </li></ul>People <ul><li>Infinite demand </li></ul><ul><li>Weakening Dollar </li></ul><ul><li>SOX Compliance </li></ul><ul><li>M&A…Captive Converting </li></ul><ul><li>Vendor Polarization </li></ul>External Environment <ul><li>Scale with Quality </li></ul><ul><li>Real-time SLAs </li></ul><ul><li>Logistics Complexity </li></ul><ul><li>Ethical business practices </li></ul><ul><li>Building a Profitable & Enduring business </li></ul><ul><li>Different Cultural Context </li></ul><ul><li>Geographic Dispersion </li></ul>BPO Business Needs
    16. 16. HR Challenges <ul><li>Shortage of manpower and a spiraling wage rate </li></ul><ul><ul><li>Manpower requirement at a whopping 1.03 million for FY 2005 leading to shortage of approx 0.26 million. </li></ul></ul><ul><ul><li>Spiraling wage rate d ue to manpower shortage, resulting in unprecedented growth in the average salaries. </li></ul></ul><ul><ul><li>Lack of availability of voice trained resources - Huge investment by organization on training the resources as third-party training engine underdeveloped. </li></ul></ul><ul><ul><li>Seasonality of availability - Availability of fresh pool (graduates) during April – June months. Then a dip till September, October. </li></ul></ul><ul><li>High Attrition Rates </li></ul><ul><ul><li>Wider opportunities - due to increasing competition & growing opportunities in other industry as well. </li></ul></ul><ul><ul><li>Higher Studies </li></ul></ul><ul><ul><li>Expectation of higher compensation. </li></ul></ul><ul><ul><li>Odd Working Hours combined with long Commuting hours </li></ul></ul>
    17. 17. HR Challenges <ul><li>Health & Stress Issues </li></ul><ul><ul><li>A survey indicates </li></ul></ul><ul><ul><ul><li>25% of the people in the industry face high stress, </li></ul></ul></ul><ul><ul><ul><li>32% face medium stress and </li></ul></ul></ul><ul><ul><ul><li>42% experience some stress . </li></ul></ul></ul><ul><ul><li>Four broad areas effecting mental and physical health are </li></ul></ul><ul><ul><ul><li>B ehavioral stress, </li></ul></ul></ul><ul><ul><ul><li>interpersonal stress </li></ul></ul></ul><ul><ul><ul><li>physical and </li></ul></ul></ul><ul><ul><ul><li>organizational stress . </li></ul></ul></ul><ul><ul><li>Reasons Cited:- </li></ul></ul><ul><ul><li>Pace of effort required ,Odd work hours,Repetition & Monotony of work,handling complaints and problems all day,Daily physical confinement (tied to their desk,Feeling of Over-regimentation or of being spied on </li></ul></ul><ul><li>Managing Employee Perception & Expectations </li></ul><ul><ul><li>Industry awareness is limited with the focus only on earning a “fast buck” </li></ul></ul><ul><ul><li>“ Glamour” to be replaced with “Performance metrics” </li></ul></ul><ul><ul><li>Reduce the comparison parameters by active engagement. </li></ul></ul><ul><ul><li>Difficulty in developing customer focus in young age group </li></ul></ul>
    18. 18. HR Challenges <ul><li>Changing Value System </li></ul><ul><ul><li>To build the organizational values by active engagement </li></ul></ul><ul><ul><li>Constant need for training and focus on the positive communication </li></ul></ul><ul><ul><li>To inculcate Ethics and code of conduct </li></ul></ul><ul><li>Career Development </li></ul><ul><ul><li>Expectations for fast growth avenues within the system - 6mths in considered as long time </li></ul></ul><ul><ul><li>shortage of people with adequate domain knowledge, leads to movement of people to the next level irrespective of level expertise / capabilities. </li></ul></ul><ul><ul><li>Leads to the low level of people management skills at the team leader/ operations manager level. </li></ul></ul><ul><ul><li>Span of Tenure:-Highest attrition faced during initial three months -short time span available to develop awareness of growth opportunity </li></ul></ul>
    19. 19. HR Challenges <ul><ul><li>Misconducts </li></ul></ul><ul><ul><li>Violation of customer norms </li></ul></ul><ul><ul><li>Non-adherence to schedules- frequent / lengthy breaks, high absenteeism, </li></ul></ul><ul><ul><li>People issues- Insubordination and incompatibility in dyad (boss-subordinate) relationships </li></ul></ul><ul><li>Integrity & confidentiality </li></ul><ul><ul><li>Concealing relevant information (previous employment , education, salary etc.) </li></ul></ul><ul><ul><li>Intentional deviation from prescribed standards of service levels to meet targets/ gain </li></ul></ul><ul><ul><li>Data falsification leading to financial implications. </li></ul></ul>
    20. 20. Actions <ul><li>NASSCOM’s Assessment of Competence program(NAC) For ITES –BPO sector launched In August* </li></ul><ul><ul><li>An assessment and certification course to meet the industry standards, thereby ensure transformation of a trainable to an employable workforce and reduce the sourcing costs by 50% and also save on recruitment process time and reduced training hours. </li></ul></ul><ul><ul><li>Educational Institutions and Universities to align their curriculum to the changing industry trends based on NAC </li></ul></ul><ul><ul><li>NASSCOM is encouraging state Governments to commit to NAC so as to improve employment generation, attract serious investors for ITES-BPO sector and build a link between education and employability. </li></ul></ul><ul><li>Movement to smaller cities and towns Vizag, Jaipur, Chandigarh, Mangalore , Pune etc </li></ul><ul><ul><li>Abundance of talent </li></ul></ul><ul><ul><li>Fewer players </li></ul></ul><ul><ul><li>Less infrastructure cost and comparatively lower compensation. </li></ul></ul><ul><ul><li>Less attrition </li></ul></ul><ul><ul><li>* Source NASSCOM BPO newsline (August 2005 ) </li></ul></ul>
    21. 21. Actions <ul><li>A robust performance management system </li></ul><ul><ul><li>Aligning the level of pay with the level of performance. </li></ul></ul><ul><ul><li>Enables in identifying performers and thereby create differentiation in pay . </li></ul></ul><ul><li>Focus on Career Development </li></ul><ul><ul><li>Extend beyond the areas of V&A and Process Knowledge training. </li></ul></ul><ul><ul><li>Rotation into different processes within a predefined timeframe </li></ul></ul><ul><ul><li>Tie up with institutions for higher education and professional development opportunities while at work. </li></ul></ul><ul><ul><li>Develop and communicate career path and growth opportunity. </li></ul></ul><ul><ul><li>A strong “succession planning framework” will help organizations in creating adequate back up for those critical to business positions and to man them as and when required. </li></ul></ul>
    22. 22. Actions <ul><li>Employee Care </li></ul><ul><ul><li>Actively engage in stress relieving activities. </li></ul></ul><ul><ul><li>Ensure health-support system </li></ul></ul><ul><ul><li>Actively engage with families. </li></ul></ul><ul><ul><li>Better reward and recognition schemes, </li></ul></ul><ul><ul><li>Team bonding programs </li></ul></ul><ul><ul><li>Creating adequate support systems - employee counseling . </li></ul></ul><ul><ul><li>“ Fun at work” by celebrating fun events and cultural activities </li></ul></ul><ul><ul><li>Ensure a keen understanding of (and involvement in) values of the organization </li></ul></ul>
    23. 23. Suggestions <ul><li>Media Support </li></ul><ul><ul><li>Change the Society perception of the Industry ,from just being a non serious fun filled place to a build career </li></ul></ul><ul><li>Platform for Inter-Company HR Norms </li></ul><ul><ul><li>Develop platform - to define inter-company recruitment guidelines, and monitor compliance in a fair and transparent manner. </li></ul></ul><ul><li>Centralized Background Verification agency with common database </li></ul><ul><ul><li>Build a central database of detailed verification on educational and professional background of the potential aspirants to this industry ,with comprehensive feedback on relationship with prior employers, AOD status etc. </li></ul></ul><ul><li>Absconding and Negative Database </li></ul><ul><ul><li>Creation of an industry-wide database of employees for companies to cross-check during recruitment process at nominal cost </li></ul></ul><ul><ul><ul><li>Employees absconding without any information, </li></ul></ul></ul><ul><ul><ul><li>Committed actions which require them to be put on a negative list. </li></ul></ul></ul><ul><li>Tie up with Schools and Universities to include relevant training in their curriculum </li></ul>
    24. 24. Thank You!