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She was delivering an address at Connect 2003 and added that "There is good competition from China and Malaysia, but India ranks higher in terms of cost savings both on the manpower and infrastructure fronts."
According to Pal, the cost of operations in India are 37 per cent lower than in China and 17 per cent lower than in Malaysia. Manpower costs were 61 per cent lower than China and 48 per cent lower than in Malaysia. Coming to rentals, costs in India were a third of China's while they were on par with Malaysia's. In particular she identified the potential of cost savings being very high in the region of activities related to the call center or loans processing or recovery - servicing and claims processing - and felt these areas could be outsourced rather than cash management. K K Srinivasan, Chief Credit Officer, Compu Credit Corporation, US, said, "It is significant that Indian ITES vendors stay away from unnecessary poaching amongst themselves." Discouraging attrition, he said that a client invested a lot of time and effort in vendors to train agents, quality leaders and management practices to optimise the processes. "If this manpower is poached, then this affects the savings that I would have otherwise had by outsourcing to India". He stressed that India had a large pool of trained manpower and that vendors would be better off taking them on afresh and training them rather than look at the short-term methods such as poaching. Compu Credit outsources a good lump of its telemarketing, data entry, customer service and collections operations to an Indian-based ITES provider, Allsec Technologies. Stressing the need for investment to move up the value chain in this industry, he mentioned that cost advantage was temporary. The need was to build skills in specific areas. With lessons to be learned from the IT sector, he went on to say how the client was the best resource one had and it was in the client's best interest that one did well. Rahul Singh, CEO, e-Serve International Ltd, a Citigroup affiliate, mentioned that the challenges in BFSI sector lay in improving profitability and grow in a converging, increasingly competitive marketplace. Improving customer service and increasing customer retention were key points to remember, he said. "We must employ technologies and services that reduce transaction costs and establish a more streamlined cost structure with capabilities that are both flexible and scalable".
Jamuna Baskhar. Manager, Bajaj Allianz General Insurance, felt that insurance companies were very reticent in outsourcing. There was every reason to believe her. Domain expertise is a very big area and outsourcing a little difficult because a lot of domain expertise was required to handle such situations. She said that "Most companies would rather do it themselves".
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Copyright
2008, Chennai Interactive
Business Services (P) Ltd. |
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At CII's first Round Table
Session on 'Enabling ITES in Banking, Financial Services and Insurance' Sanjukta
Pal, Principal Consultant, PricewaterhouseCoopers, said that India figured high
in the first choice list of corporations in the West, looking to outsource.
"Our estimates are that by
2008 to 2010, ITES opportunities in the BPO space (including export
opportunities) in India alone would be $ 7 billion to $ 8 billion. The banking
space in India is only $ 12 billion to $ 13 billion. This means that the BPO
industry would be between 60 and 70 per cent of the country's banking base.
