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Behind a warm welcome and a cheerful face, BPO journeyman Raman Roy just about manages to hide his bitterness and frustration over a newspaper report that speculated the end of a $10 million contract between his BPO company, Wipro Spectramind and Microsoft. Held back by NDAs, Roy could do little more than to point out another newspaper report that claims that the relationship between the two companies was growing even stronger.

Roy feels his company is being targeted by a section of the press. He may be right, considering that Wipro Spectramind has been in the news in the recent past for all the wrong reasons. Reams have been dedicated to the twin instances of a major client pulling out-the announcement from Lehman Brothers in December 2003 was followed by the even more embarrassing Capital One incident a few months later. Dell too pulled out from an Indian third-party BPO, unfortunately attributed to Wipro, just one of the few BPOs handling that account.

Clearly, the company is paying the price for being the industry bellweather as well as being the country's largest third-party outfit-all such negative instances have received a higher-than-usual media attention and, in the process, managed to paint a rather dismal picture about its well-being.

But has it really been a rocky journey for the company? Wipro Spectramind's financials do not seem to agree. The company continues to grow at a healthy rate-revenues grew from $21 mn to $27 mn in Q4 2003, and to $30 mn in Q1 2004. Its employee strength saw similar growth from 8,000 employees in September 2003 to 9,300 in March 2004. In performance terms, the average realization per seat continues to hover around $14 an hour, and the shift utilization rate, at 1.6, is the best across the industry.

There are positive signs beyond the figures too-a new center is coming up at Kolkata in a couple of months, and another one in Philippines. Moreover, the company is said to be seriously exploring China for another subsidiary to service the Japanese outsourcing market. A recent report by Forrester Research has also rated Wipro as one of the best bets for outsourcing BPO work to India.

Even the rivals seem to applaud the company. Says Sujit Baksi, president (India) and head of global operations for vCustomer, "I think Wipro Spectramind is a great company with a lot of strength. They are fortunate to have a first mover advantage and seem to be carrying on the good work."

However, this spectacular growth is precisely what is perceived as causing problems for Wipro Spectramind, particularly in ensuring the quality of service delivery to customers. And the cases of Lehman Brothers and CapOne certainly don't help its cause at all.

Telling Blows
"We did not lose any client of ours," counters Roy defensively, when questioned about the loss of Lehmann Brothers and Capital One. When asked for details about status of relationships, he says "There have been no changes in the terms and conditions of any of these contracts (from the very beginning). Theyremain our customers."

But the first case that made big news late last year was when Lehman Brothers announced pulling out of its contract with Wipro, citing quality issues. Combined with Dell's pullout, the incident began to raise doubts about the efficacy of India's outsourcing model. However, Wipro claimed (and Lehman endorsed) that there had been some gross mistakes in understanding the training requirements for service delivery. A company source claims that the pullout affected a mere 20 employees for the $30 million account.

When Capital One terminated a telemarketing contract with it made headlines, adding more fuel to the fire. A Financial Times report said that Wipro's own employees had misled and cheated Capital One's customers for credit card deals. The FT reported that Wipro employees apparently made offers that went outside the terms of the contract-extending the terms of special deals beyond their expiration date and inflating credit terms available to customers. Even as all the reports said that Wipro Spectramind first discovered the malpractices at its Navi Mumbai center-and informed Capital One who chose to withdraw the contract-a company insider reveals that there are no routine random audits in place at Wipro, as claimed by the company. It was only on CapOne's request that Wipro first conducted an audit and reported the findings.

Several employees were using customer credit card numbers for their personal online shopping, and that everyone in the team either knew it or was party to it, the source claimed. Wipro, of course, went on to fire 27 of its employees, but was still unable to hold on to the CapOne contract.

Breaching the Quality Code
These incidents did raise concerns about quality of service delivered by Indian BPO industry in general and Wipro Spectramind in particular. Reports in foreign media claimed Indian call agents spoke a language incomprehensible to the foreigners, and that the customers felt the quality of service had gone down since the companies moved their processes to India.

Roy quashes all these claims. "We have a total of 78 processes for which there are multiple parameters that our customers monitor, and a third out of these exceed global guidelines or specifications in terms of quality of service delivery," he says. Adds Baksi of vCustomer, "I don't think this (the two incidents) signifies a trend."

Says Ravindra Datar, principal analyst for BPO at Gartner, "A complete pull back (out of a contract) by clients would certainly indicate a major quality issue but if it is only a partial pullback, it is likely that it was more of an expectation management issue. A partial pull back also indicates that they still have faith in the service providers' ability to deliver good quality services for other processes."

Life After Capital One
So, how has the Capital One controversy affected the company and what has his company done to prevent repeat of an incident like Capital One? Roy claims the incident was merely an employee integrity issue. "We have put in processes to monitor compliance, however, when an employee is motivated to misuse for deliberate personal gain, you cannot prevent this but you can only discover and make an example of it," he says. However, S Varadarajan, VP, talent engagement & development at Wipro Spectramind, is more forthcoming, if only a bit, "We have fine-tuned and tweaked our existing systems and put (new) systems and processes in place (to prevent future such occurances)."

Putting the incident behind, Roy is bullish about the future. Reacting to the recent rumors of him quitting the organization soon, he says he is not on any contract, and that he is a full time employee of the organization. "My full energies and loyalties remain with Wipro Spectramind," he says. He now talks about taking the company to its rightful place-'a partner of choice for any large company looking to offshore work to India'. He adds, "Our margins are among the highest in the world. We are not the lowest priced service providers." He is already reaping rewards of being part of a IT-services major.

Wipro recently put into practice the much-hyped integrated services approach in landing a deal with a Fortune 25 energy and utilities company. This saw Wipro's energy and utilities consulting arm doing the consulting and redesign of the client's processes, the application development and maintenance arm doing the implementation along with the package implementation arm of what the consulting arm identified as the technology required for the process, and now the BPO arm doing the fulfillment on the process from India.

Datar too holds a positive outlook for the company. "Brand support from Wipro would also prove to be a valuable asset in expanding to countries where Wipro is firmly entrenched."

For now, the turbulence seems to have passed the high-flying Wipro. If anything, the backing of its parent, should be enough to tide over future storms, should they ever come.

Rishi Seth in New Delhi

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