I think it’s evolva lot faster than many of us expected. In terms of what clients’ expectations are today versus six years ago, they’re very different – and they’re driven by value. Sourcing Superstars not at all by price. They’re also driven by the demand for expertise, capability, industry and domain expertise. So it’s changquite radically from “buying people” to really buying value and expertise.
And do you think Genpact itself has been a driver of those changes?
Yes. We were driven there, one, by GE and by our own DNA – that’s why we’ve investso hugely in Six Sigma, Lean and Reengineering because we recognise that if you’re going to work with a customer for ten years, in the second year they’re already past the labor arbitrage bit and saying “OK now show me how you can improve my processes”. And I think we’ve playa large role in helping shape customer demand as well as expectations.
Can you give a bit more detail in terms of customer expectations?
We have been able to take customers from the cost savings they expected earlier to showing them how we can improve their processes every year and show them that a very large proportion of the processes we do are an improvement on what they were when they were operating on our customers’ premises. We are able to do this not because we are rocket scientists but because this is what we do. And I think now customers are most interested in how this process affects their eventual business need, be it cash-flow or higher margins or lower cost. By aligning ourselves in that direction, I think we play a far greater role in the value we bring to a customer.
What do you think have been the biggest challenges
I think the biggest challenge remains in getting real domain expertise. When companies approach us they clearly say “this is my business: show me the people in your team who understand how my business works and can help improve productivity for my business, especially in today’s current economic environment.” So that will remain the biggest challenge. There are other operating challenges – which, by the way, all of us have gone through. People talk about how talent isn’t as easily employable as it should be, and I think most of us have figured out how to get around that, by building our own training capability.
I think the biggest challenge increased competition in this area. All the big guys are here. The IT industry had a free ride for years before the likes of IBM and Accenture arrived. Today they’re all here – running at different cost bases in order to compete – and I think that frankly is one of the biggest challenges to us.
It sounds like you’re referring Sourcing Superstars to the Indian BPO industry , am I right?
No, I’m talking about the overall industry. I think Accenture, for instance, faces similar challenges in finance and accounting, supply chain & other areas. You’ve got new challenges coming up as well as strong existing players. But the overall environment has become a lot more competitive. A lot more demanding because customers have seen that they can expect more. A lot more conceptual thought has gone into saying. “What is the real value I can deliver to my customers beyond labour arbitrage?”
Let’s talk about India specifically then Sourcing Superstars.
For a while, no, because of sheer size of population. There aren’t too many other countries – Philippines in voice for the US market is probably as good, if not better than India. In different language capabilities, other countries will compete because India can’t. But I think the challenge as you said, is that our education system doesn’t work. It’s completely hampere government regulation and bureaucracy. And our infrastructure sucks.
Going back to education, are you talking all the way through or are you talking at university level?
I’m talking all the way through, but specifically at college level. This notion of millions of college graduates being employable is incorrect. Because the fact is we can only hire six per cent of the people who apply to us. The rest are not employable. Their curricula are not relevant. What they’re taught is meaningless. And in many colleges, I suspect, they taught at all. So our teachers, our infrastructure for training and most of our colleges are in bad shape – but this does not include our top-notch colleges which are world-class. So being a graduate is not good enough unless one has attended a recognized institution.