Source: www.kuenselonline.com

Low band wave and costly connectivity are still the source of major headaches for Bhutan’s call centre business hopefuls and perhaps that can explain, say observers, why the centres are not taking off as some of them said they would by now.

Out of three, only TST Systems Private Ltd. became operational in May this year in Paro. The other two - Business Solutions and Drukonnet in Thimphu - are yet to start their maiden venture.

Drukonnet declined to talk to Kuensel.

TST Systems is using 2 mbp broadband from Bhutan Telecom and pays Nu 300,000 as monthly fee, which experts say, in the context of call centres, is expensive for such low connectivity.

Karma Tshering and Chabilal Bastola of the department of information and technology (DIT) said that they were trying to bring in fibre optic links for greater bandwaves and that talks were underway with the Indian government. Bhutan’s steep terrain was one of the main difficulties in trying to instal a fibre optic network in the country.

“It would be very expensive to take these cables all the way from Bhutan to the sea to connect to submarine cables,” the two DIT officials said.

India has optic fibre cables upto Hashimara near Siliguri and Bhutan is still negotiating with India to use them. Bhutan Telecom is negotiating with Reliance and the government with VSNL in India.

Meanwhile, several employees of one of the yet-to-be established call centres in Thimphu want to look for other decent paying jobs in the market.

Recruited by the call centre with promises of about Nu 7,000 a month as salary, after the completion of a six-month training, in which they were paid Nu 3,000 a month, the company has extended the training period by another six months. This means they will continue to earn the Nu 3,000 stipend. Trainees grumble that the money is not enough to sustain themselves in Thimphu. The company has given its reason to the department of human resource as “the trainees being not yet ready” for production.

Kuensel was told by the trainees, that even if they wanted to leave, they couldn’t because their original documents have been retained by the company.

“Most of our friends, who left, had to come back because they didn’t have their original documents to look for another job,” said one of the trainees.

The trainees, some of them say, are stuck with the company because, according to Karma Lhazom, a department of human resource official, “the trainees have signed an agreement with the company, which states that the training period could be extended, and if one wishes to leave, the training costs should be repaid to the company.”

According to Karma Lhazom, Drukonnet had initially recruited 151 trainees.

In India, the BPO trend started primarily in the technology area - operating and manning remote technical helpdesk teams, application and network monitoring services among other offerings. There are 185 Fortune 500 companies that are currently outsourcing to India. TCS, Wipro Technologies and Infosys Technologies are among the top 15 outsourcing vendors in the world.

Source: www.thehindubusinessline.com

Hackett Group: Process improvement is the way to go

Even as large global corporations transition to the second wave of outsourcing, the technology sector is heading towards the Third Wave in the making, according to The Hackett Group.

The Third Wave, which would mean a transformation and scale-up much different from the labour arbitrage market, would come up much faster than one anticipates and has the potential to challenge labour and cost arbitrage model. Some of the services providers in India and Eastern Europe could potentially find the going tough.

The President of The Hackett Group, Mr Wayne M. Mincey, said: “As offshore market matures, transformation and process improvement are likely to play a key role in business process sourcing decisions. The ability to provide transformational services and support provides a significant opportunity, and possibly the greatest threat that offshore markets like India will face in the coming 5-10 years.”

Bigger savings

The findings of Hackett’s research shows that while the potential for companies to reduce costs by offshoring back-office operations is dramatic, companies can potentially increase these savings by over 50 per cent by selectively integrating process improvement capabilities into their globalisation initiatives.

Addressing a press conference here, the Chief Research Officer of The Hackett Group, Mr Michel Janssen, said as opposed to ‘Lift and Shift’ model where companies simply move current processes offshore, the emerging model seeks to transform the way services get delivered and has the potential to bring higher savings. These would be more so in the areas of finance functions, human resources and process related business.

Over the past five years, much of the first wave of offshoring has focussed on the low hanging fruit of basic transactional processes that could simply be moved offshore for labour arbitrage. But in the second wave, there is greater opportunity and the necessity to integrate transformation into offshore initiatives.

This is further complicated by rapidly increasing cost base after migration to the offshore market. Improvement of process, particularly related to transactions could bring about significant cost advantages, he explained.

The best way forward is to offer integrated transformation and process improvement. Offshore solutions would have to combine changes to the business process during and after offshore move to ensure higher value creation.

The Hackett Group is part of publicly traded company Answer Think, which provides enterprise technology implementation services.