vitallinkcorp.com Blog

In any situation when there is money to be made quickly, all kinds of folks rush in. VCs and other financial folks are the first to zoom in. They come in with OPM ( Other People’s Money , pronounced as opium ) and it can be as heady as the real thing and make folks do and think weirdly.

OPM props up new entrants who can indulge in the right rhetoric with little execution savvy and experience in the industry get into the business. Top level executives join them hoping to get a career break together with stock options piled in. They see financial freedom. Employees join in based on the antecedents of the top team. OPM makes the folks all around have a ball all the time. HR policies go out of sync with industry practices.

Clients get to them for want of a better due diligence process. VCs once invested are all interested in making their investments look good and bring work to their door. But ultimately, IMHO lack of experience shows. It separates the men from the boys.

Customers come for the sell speil but stay for the execution and delivery execellence.

Slowly a kind of burndown starts occurring. Bad news starts hitting the press. Folks say, ‘Oh…the BPO was another fad and died away’. What happened was that bad investments started showing their true colors. The good ones pick the remains, if desirable, consolidate and grow.

What remains for the folks who were part of the OPM group are the fond memories of the parties that they enjoyed in the ‘good old days’.

Venkat

Part of the Hype cycle of the BPO industry is the what I call the Party psyche that prevails today in most of this sector. The Party psyche implies that there is a crowd that strongly believes that life is an ongoing party. And there are certain folks who think that their objective is to skate to where the next party is happening.

It started in India from the advertising boom post liberalization when demand for advertising folks shot up and employees were wooed like hell. Then I have seen the financial services party when anyone and everyone who knew how to spell hire purchase, lease or amortization was given a car and a flat in a tony neighborhood.

At an international level we have all seen the excesses of the dot com party. While the US stories of this era are legion and well documented in India also we saw a Tsunami wave of this event hitting our shores.

After the IT burndown post dot com and Y2K both IT and BPO are the next happening parties in town. And naturally it attracts all the usual party goers as well as a few gatecrashers to boot.

Unfortunately very few believe that wealth is created by hardwork and sheer dint of effort. Luck, in my school of life, I was taught is the crossroads of hard work and opportunity.

How many in the current BPO sector are willing to roll up their sleeves and put in the 12+ hour days that it takes day in and day out to get somewhere in life? How many will skate to the next event in town?

Which kind of vendor will you choose?

Venkat

Last week my friend M from Bangalore called up and told me that a certain UK investor was looking to invest and would I be interested in meeting with him. I said sure since it helps to meet external folks for industry level perspepctive. He replied that his friend A from Bombay would call me up. A called up and put his friend S in touch with me. S was all of 30 and had done two stints in two BPOs in Bombay. A considered him a BPO guru I was reminded of the Java Guru’s we saw some time back. S then talked about a Bombay Stock Exchange member and an Ambassador of a small country wanting to see our facilities etc.

At this point I lost my shirt. There was not clue of the UK investor and now some folks who had no previous background in the Industry thought they could just saunter into our floor. We deal with confidential client data and we therefore have strict data security norms and do not normally permit anyone who shows up at the door into the floor without a strong reason.

And here was someone whom I had hardly met suggesting that they be permitted to access our facilities.

Data Security concerns aside, when folks who know nothing about the business start getting interested, to my simple mind, it means we are in the thick of the Hype Cycle.

Venkat

As far as India is concerned the BPO industry is in the thick of the Hype cycle. From a US standpoint also it grabs media attention like hell.

For those of us with grey hair we have seen many such cycles. In India we know of the stock market booms of earlier era. The granite hype, the plantation hype and the last one…the dot com hype. American readers will easily understand the dot com hype since it affected both sides.

The BPO industry in India and the US has all the makings of being caught in the hype cycle.

My own opinion in all such situations is that there is a core business in any sector which is not hype. And built on all this possibility is a superstructure of expectations that can never be met. Granite for example is mined, excavated and used for various reasons. In my house as well as in many homes thorough out the world. Same with teak wood. Same goes for the dot com industry. I books my tickets and do all my hotel bookings for my travels using the Internet.

But the Investment bankers and other specie of the financial jungle soon start grabbing media attention from the actual players, create the hype, siphon off the cream and then skate over to where the next happening party is.

So here is a question to ask yourself, “Are you in the Hype segment of BPO or are you in the Real segment of the BPO industry.”

Venkat

Having covered a little of the early days of how I came to be the CEO of Vital Link Outsourcing, I have been personal witness to all the explosion going on around in this segment now called BPO.

With a historical background and with some modesty, terming myself as a pioneer, I felt that the perspective that I bring to this field should not go unshared for the common benefit of the newer entrants.

I have also personally seen quite a bit of things going wrong and am anguished that as in any emerging segment gold diggers have rushed in. I think of myself as a crusader and feel that some of the trends emerging need watching for the benefit of all concerned. I have in this time seen quite a few ‘hype’ cycles and know that most press coverage during this period is ‘sponsored’ and that the media in a rush to file stories has little time for due diligence. In this Blog I am hoping to counter some of this for the benefit of all those who care to read it J .

Again with traditional media there exists very little scope for insiders and veterans to share their perspective for the benefit of all. I am hoping that with this blog there would exist a platform for all like minded individuals to come together and share experiences.

Venkat

When the Internet started in India, circa 1996, we at Vital Link Outsourcing got our email id from VSNL on the giasbm01.vsnl.net.in server in India. This server was / is the first email server available to the public and we were there. As such we had one of the first 1000 or so email ids from India. We still maintain this email id though in a shorter form now. For those who came in late, this server is now renamed as bom1 server by VSNL. And oh… VSNL itself got renamed as Tata Indicom.

In my earlier avatar as a Chartered Accountant ( a.k.a. CPA ) I had run a practice of advising US based clients. When my father was posted in NY from 1972 to 1976 I had spent my teenage years in the US of A and knew all about labor cost arbitrage. These years gave me an exposure in the business cultures of both countries. From 1992 to 1996 we had created capacities to capture data from Share application forms and with the collapse of the IPO market we did not know what to do with this capability. My Ham Radio ( VU3PVN ) background propelled my continuing interest in emerging technologies such as the Internet.

The confluence of all these forces led Vital Link Outsourcing to take its strategic assets and leverage its capabilities in the offshore markets so as to capture the labor arbitrage opportunities. Simply put, we started writing emails and asking for work, promising we could do it cheap. Ahhhh thats easier now…

From those beginings we have come a long way now. We now service Fortune 100 clients with with their business critical data with strict quality and tight turn around times on a daily basis.

This blog is to share with you my musings on this industry from its early days as also current and future trends in the emerging BPO industry in India.

I promise to write atleast once a week and from a common point of view so as to interest readers on both sides of the border.

Thanks for taking the time to stick to the end and do feel free to comment.

Venkat