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Call it an irony or call it yet another example of innovation increasingly shifting to the East. When the West is worried over failing outsourcing deals, an Indian company is trying out a new, path-breaking experiment in customer service outsourcing, apparently based on all the learning from others, as well as from its own experience. For a change, the company is not a vendor of outsourcing, but a buyer of the services.

Bharti Televentures, India's No 1 private telecom service provider, recently announced a deal with four global BPO vendors, for outsourcing a large chunk of its customer service call centers. The four vendors-Hinduja TMT, MphasiS, IBM Daksh, and Teletech India-are all global service providers. While the first three feature among the top 15 India-based BPO service providers, Teletech India is a joint venture of Bharti itself with the US-based call center major, Teletech Services.

But in a country, which has of late been dubbed as the call center of the world (read English speaking world), why are there so many hullabaloos about this one deal?

It is not so much for the size of the deal as much as for the way it was planned and executed. Not so much for path-breaking features as much as for the simple learning that the company has incorporated in structuring the deal. Not so much for high profile participants as much as for demonstrating a studied approach to outsourcing, its intent and purpose.

Outsourcing is something that Bharti CEO, Sunil Mittal, has followed as a core business strategy-difficult to believe in a market like India-where the domestic outsourcing market is yet to pick up. The call center outsourcing deal followed Bharti's far bigger outsourcing deals; one announced last year in which it outsourced its entire telecom network maintenance and expansion to Ericsson, followed by another high profile IT deal in which it outsourced its entire IT operations to IBM. Ever an innovator, Bharti structured the IBM deal in such a way that IBM was made a partner in success by making it agree to receive a profit share as fee, in contrast to fixed fee or time and material based fee that is in vogue worldwide.

Need for Outsourcing
Bharti is India's largest mobile service provider both in terms of revenues as well as subscribers with total revenues of over $1.8 bn and a total telecom subscriber base of 12.7 mn. In the past three months (ended May 31, 2005), Bharti captured 30% of all new mobile subscriber additions in the country. It was also the first telecom company to complete an all India footprint, covering all 23 telecom circles in India.

Bharti's uninterrupted growth was precisely its problem. With over 60% y-o-y growth in its subscriber base, the company found that managing its growth required it to remain clued onto its core function, which was customer delight. It had to live up to its vision of being "globally admired for telecom services that delight customers" at all costs.

Meanwhile, the company was having a tough time in managing its customer-care centers, which it had outsourced to several small players. These players were not able to scale as rapidly as Bharti would have liked. The exponential growth that the
company was faced with only added to its worries.

Says Anurag Prashar, chief service delivery officer, Mobility Group at AirTel, Bharti's brand for mobile services, "We found that we were spending more time in managing our customer care centers. Call centers are very manpower intensive. We were spending more time and energies on recruitment and fighting attrition. This was really not a core area for us. Our core area was customer delight and we had to synergize all our energies towards that if we are to retain the number one slot."

Prashar explains that customer delight is a moving target. What was once a novelty and could excite the customer could become routine in a matter of months. His core role was therefore to focus on constant innovation that can get more customers hooked to its services.

Interestingly Prashar, who spearheaded the project, comes from a non-telecom background. His last assignment before Bharti was as director of customer support at Xerox. His background of customer service in his previous assignment helped him identify the problem quickly.

Bharti was also unhappy with its current set of partners for the lack of global best practices in their operations. Ironically, the company was based in a country which has been acclaimed world wide for providing world-class customer care service to global clients. A determined Bharti decided to overhaul its customer management strategy.

The company was very clear on its goal: it wanted to work with global players who could scale along with the company and bring in global best practices.

Once the objective was clear, it was easy to draft its RFP. The company sent out clear-cut RFPs but was astonished to find no takers. The Indian market still did not beckon global players who were drunk on their dollar dreams. Bharti had to coax players to respond to its RFPs to get them interested but once the ball started moving the suppliers were extremely excited at the prospect. And the rest as they say is history.

Globally Best
Bharti has been running call centers-both in-house and outsourced-for last ten years. Based on it's learning, it was not difficult for Bharti to know what it needs. But effectively communicating it to the vendors in a simple manner is what is often considered the Waterloo for many outsourcing buyers.

Bharti really served an ace there. "Bharti has come across as a very mature customer and knew exactly what it was looking for," says K Thiagarajan, managing director and CEO, Hinduja TMT, one of the four companies to be awarded the contract

Prashar proudly proclaims the compliment he received from one of the vendors for writing "the most strait-jacketed RFP" they have ever come across.

Second, Bharti demonstrated tremendous understanding in the way it has structured the pricing. Unlike most outsourcing contracts where pricing is Full Time Equivalent (FTE)-based, pricing will be based on call volume based on matrix to ensure that quality and efficiency of call resolution is maintained. Although tried and tested, there is no incentive to perform efficiently in FTE-based pricing while call volume will bring in efficiency provided quality of calls is ensured with appropriate matrix.

Third, despite its experience in outsourcing, there was a lot of planning before the final contract was signed. It was as early as last August when Bharti mooted the plan to consolidate its customer management centers to a handful of global players. Then Parashar visited call centers in the US including retailer Home Depots and Xerox, and spoke to many people in the industry. A core team comprising representatives from all departments was formed under Prashar who reported to Manoj Kohli, the Mobility head of the Bharti Group.

Prashar claims he had the complete backing of Kohli who in turn appraised the Bharti Board about the developments in their monthly meetings. This support, he claims, gave great boost to the initiative.

Another aspect of the Bharti experience worth pointing out is the proposed hand-holding of vendors through the migration. The early challenges would appear like child's play as compared to the challenges in migrating the processes to the four vendors slated to take place by this year-end. "It's like trying to tie your shoe lace while you are running," says Prashar.

One of the major pre-occupation is to ensure the permeation of the common Bharti culture across the four vendors. Prashar is very clear that signing up the contract does not mean the end of Bharti's responsibility. In fact, the challenge has only started now. The Bharti team is leaving no stone unturned to make sure the migration is seamless.

In order to maintain the essence of Bharti's culture, the team from Bharti will work with vendors at every step in setting up operations from recruiting, training and monitoring. In an attempt to provide the seeding to its partners' operations, Bharti has incentivized executives from its in-house call center to work with its partners. The Bharti team would train the partner's trainers as well as certify agents who are ready to hit the floor. In short, Bharti intends to keep total control of its outsourcing program.

This might lead the company to soon grapple with another problem: how much control is optimum. After all, the entire basis for its outsourcing initiative was to find the time to focus on core activities. Prashar insists that the hand-holding is only till processes fall into place.

Yet some questions continue to persist. Wouldn't it have been simpler to have one vendor instead of four? "Simply to spread the risk and to benchmark performance against each other. Since the outsourced task is customer facing, there is absolutely no room for downtime or poor performance," reasons Prashar.

That is why Bharti has opted for the hybrid model, yet another practice followed by the most seasoned outsourcers. Bharti has a three-tiered strategy in which in-bound calls will be handled by its in-house call center and by the four partners while outbound calls by another set of smaller partners. While the high-value customers will be handled by its in-house call center, the rest of the calls will be routed to its four vendors according to the language and region by the IVR which will be manned by Bharti.

Despite the initial hesitation, vendors have also seen value in working with Bharti because of the commitment to outsourcing. Vendors see a two-fold gain: the commitment from Bharti will ensure that more high-end processes are bound to follow and second, there is no doubt the Indian outsourcing market is waiting to explode and there could be no better partner to test the waters than Bharti.

These are interesting times in the industry and fence sitters on both sides would gain by keenly watching the experienced ones. A forthcoming Prashar does not hesitate in sharing his learning: "Outsourcing is about bringing in efficiencies. No one should undermine the work that needs to be done while outsourcing. One has to get involved at every stage."

Outsourcing is certainly not passing on your headache to somebody else. It is simply the beginning of another journey, but with a partner to bring in efficiencies. Indeed, one can't help recall the words of a top executive from a global outsourcing service provider company who had said, 'outsourcing does not mean your mess for less'.

Balaka Baruah Aggarwal

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