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Theres a marked change visible within the Indian market as it has become lot more mature over the years. The Indian CIOs are becoming far more receptive to the idea of outsourcing, more than in any other emerging market in the world. However, for many of them, it is not just a West-like cost reduction in legacy infrastructure that they are looking at. Many of them want to access new technology, but in a derisked manner. That has made the on-demand model an increasingly favorite model among them.

The two-city Dataquest Domestic Outsourcing Summit 2009: Opportunities & Challenges in Customer Service & IT Outsourcing, presented by Tata Communications, tried to look at the various challenges and opportunities that are associated with the hosted/on-demand model in IT, with special focus on infrastructure management, CRM, and contact centers. In the first of the two part series, we present here the major points that emanated from the discussion organized on June 5, 2009 at the Hyatt Regency, New Delhi.

The forum, one of the rare platforms that dealt on the subject so thoroughly, saw participation from about twenty stakeholders including fifteen heads of technologies/CIOs.

The forum provided CIOs with a platform to discuss opportunities and challenges in the on-demand model

The discussion was preceded by presentation from all Tata Communications represetatives.

With the boom in Indian economy, domestic businesses have been growing in size as well as geographical spread. This has given rise to the need for various outsourced services in order to get an optimized business process solution and client servicing. Theres huge transformation that has happened in the domestic market as its growing rapidly, and two key growth drivers are the Telecom and BFSI verticals; its basically the services vertical that is driving the outsourcing business, said Yazad Boga, head hosted contact center services, Global Enterprise Solutions, Tata Communications, Although costing will remain a challenge for the players offering hosted solutions in the domestic market, yet the growing maturity of Indian businesses have now started to understand the advantage of hosted services and the demand for such service is going to leapfrog in the near future, he added.

As the service providers today are offering various pay-as-you-use model with scalability options, the Indian CIOs can start evaluating the benefits associated with on-demand model, especially in a challenging economic scenario since it definitely helps businesses to save plenty of cost. For any new IT investment the CIOs can either look for managed hosting services, or for any additional requirement they can seek individual component hosting options from the service providers that are available today as well, said Simon Robin of Tata Communications.

(1) & (2) Panelists engrossed in some serious discussion about the challenges and opportunities in the on-demand model

One of the key reasons behind the transformation is of course the success of the concept of software as a service (SaaS) model. The customers are not only using it as a platform for ready services but also looking to use this as a platform to build their own services and offer them to their clients. The customers now have become more articulate about cost effectiveness rather than costing, and they are now willing to outsource their business and looking for an end-to-end solution. One of the key reasons is the maturity that has come into managed services and solutions offered by various service providers; its not just limited to managing the contact center, but the capability has now been built to provide advance services like managing the bandwidth (managed MPLS) as well, observed Sunil Gujral, executive vice president, Quatrro BPO.

As domestic businesses are growing and spreading out to multiple locations, need for hosted contact centers is growing. It is important therefore, for the service providers to offer seamless and effective solutions to their customers that are both cost effective as well as flexible. Our customers are outsourcing their business processes and in turn we are outsourcing our processes to a third-party in order to deliver seamless services to our customers. Therefore, we need to get a full-proof solution in order to offer our customers the same. Since hosting allows contact centers like us to access technology without the need to build or purchase the required infrastructure, the hosted model works well as it means plenty of cost saving and flexibility too. Therefore, more and more companies are now looking for hosted contact centers, explained SV Ramana , CTO, Genpact.

Explaining further the need for a wholesome and flexible hosted solution Gopalakrishnan S, VP-technology, IBM Daksh said, Customers in the domestic market are today very clear of their requirements and what they want to outsource. The service providers therefore, have to come out with more effective and flexible solutions based on the on-demand model to cater to the diverse needs of the domestic market, which is evolving and growing at a very rapid pace.

Most CIOs agreed that going forward, the on-demand model that provides a convenient way to scale up IT would pick up rapidly.

Piyali Guha
piyalig@cybermedia.co.in

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