The name has a ring of alertness to it: 24/7 Customer. The Sequoia Capital-backed third-party services provider is into business process outsourcing (BPO), and is headquartered in the US. Like most other BPO firms, it uses offshore locations — like India and Philippines. At a time when the talks about another global economic downturn getting louder, Shanmugam Nagarajan, co-founder and chief people officer of the company, says the lessons learnt during the past recessions will help the industry overcome fresh challenges. In an interview to Pradeesh Chandran, he says the recessions will make the outsourcing industry stronger than before. Edited excerpts:
The last couple of months have seen more reports raising concerns about another global turmoil. Do you think these uncertainties will impact the BPO industry?
I don’t think this will impact our business. We have learnt a lot of lessons from the earlier recessions. The first turmoil after the dotcom burst in 2000 raised doubts about the business model of the IT companies. However, after that recession, Indian IT companies were the top gainers. With every recession, we are learning things like how to operate better. Earlier adversities have made the industry quite mature. I think it is capable of facing it in a mature way now.
The US job index shows the unemployment rate increasing. Is it not a cause of concern for the BPO industry?
We are an American company with global operations. During the last elections, there were lots of rhetorics. People were saying how jobs can go out when the majority of the citizen are jobless. I believe is that if we can go to the best places to buy products, be it Japan, China, Germany or America, why can’t we do that for services? The outsourcing industry started for cost, but stayed for quality.
With the presidential elections nearing in the US now, do you think there will be lot of political pressure on outsourcing of jobs?
I don’t think there will be political pressure. Last time when the governments were creating impediments, many corporates in the US opposed this, and even told the government of shifting their headquarters outside the US. During US presidential election, many candidates are funded by the businesses. I don’t think it will create an impact.
You are bigger in the Philippines than in India. How do you rate the Philippines as a BPO destination?
In any country, businesses will flourish only if there is a good environment for growth. The growth of the Philippines as a BPO hub for voice process is an example how policies will help in growth. We operate about four centers there; it’s where a majority of our employees are located. The main advantage of the Philippines is the English-speaking population. Most of our major accounts are handled out of Philippines.
Is there any reason why you have not entered the domestic BPO market in India?
The domestic BPO industry is growing. However, the entire dynamics of domestic business is different from what we do now. The domestic market has a different in cost-and-price structure. Had we focused on domestic BPO business, it could have increased our topline. At the same time, it would have hurt our bottomline. So we consciously decided to stay out of the domestic market.
Despite the maturity in the BPO business in India, attrition is still very high. Why is it that during all these years, BPO industry has not been able to create a recruitment brand of its own?
We have many employees who have been with us for more than five years. This itself is an example that people are considering BPO as a long-term career. In has enough talent who can fit to our kinds of requirements. This is the reason why we poach people from one another, and thus the high attrition. To control this, we have to develop an education system which can create people that can fit into our kinds of requirements.
24/7 is one of the few BPO firms who have got an R&D centre. How does it help?
We have a 100-member R&D team based in Bangalore. We have recently developed a predictive experience platform (Px platform). The platform has already received patents from the US PTO. This helps to predict the behavior of the caller before attending the call. We have 35 to 40 Fortune 100 who are using this platform.