Outsourcing: Tata Communications Interview (Part 7)

By guest author Tony Scott

Human Capital Challenges and the Future

Tony: So if you look at this in terms of your the core challenges for the future and what’s going to keep you differentiated and keep you on the top, there are going to be technology challenges that we are going to assume you can figure out how to meet. And then there are going to be human capital challenges. What do you think are the biggest human capital challenges that you are going to face from the top of the organization, the bottom, or anywhere in between, and how are you going to address those challenges?

David: My opinion is that it will be growing the talent internally. You can always look in the market to see if you compensate people adequately and if you have focused on the right skill sets. Growing from the bottom up is always a challenge for almost any company in terms of developing skills in existing employees and hiring and targeting the right employees, but equally important is keeping whatever we call the pyramid at the right level, making sure that you are not top heavy. It’s important to keep a pyramid-type approach, particularly in a BPO offering, which is what Sridhar was describing with his approach and strategy with TCTS. TCTS as an organization is far ahead of what any other company that’s in the BPO space has to do. They have implemented an aggressive HR strategy in trying to retain the right focus and not being disappointed. There is always some natural turnover in the market, so the real thing to do that is to take that bottom level and grow it, making sure that you have identified the high-potential performers through that entire process.

Tony: That’s a traditional way of growing companies. The IBM and HP way, and of course at a certain level you have to be able to hire enough people. But doing it that way can be very expensive and time consuming.

David: Exactly. With the speed and uptake of a traditional HR approach, it takes six months before an employee, a new employee like me, is contributing to the organization versus being a drain on the organization. So you are always looking at the interviewing focus when you are considering hiring new employees, and evaluating how quickly can you get the candidate up the speed.

Tony: Let me change the topic and ask you if you see differences across the BPO outsourcing market in different geographies, and more specifically between China and India today?

David: India has a clear advantage in terms of being in BPO off-shoring for a longer period of time. So it will maintain its market leadership for a very long time. I think China has some unique advantages. It has a disadvantage in terms of language and thus the ability to really interact with colleagues, but there is a pretty big population there so over time there will be more people able to work in an English-language environment. The real challenge will be the aggressiveness of the Indian companies in growing. I believe that there is probably a bigger domestic market in China than in India at this point because of measures that the Chinese government sponsors to stimulate demand domestically, but from a broader global view India is still going to be the leader and the nation that all others are compared to for outsourcing.

Tony: It’s going to be interesting seeing to see how it evolves.

David: Absolutely. When we started to look at how companies could mitigate risk, it was clear that large companies wanted diversity in terms of where they placed their workload.  They will start in one location, and over a period of time owing to issues with disaster recovery and the data center, you probably have to have multiple locations.  You have to consider diversity from a geographical perspective as well the right way to serve your customers, and so that goes back to the India versus China question you were asking. They can really be compatible even though they compete in certain areas. I think that in some instances it’s not one versus the other, it’s how from a customer perspective do you use one or the other as an advantage.   And I think that is where you have to take any organization over time.

Tony: Ultimately, if you have a globally disbursed client base and the clients themselves  have globally disbursed operations, you have to be able to follow them and deliver wherever they are.

David: Absolutely, and that is one of things that we believe we can do based on our footprint today.

This segment is part 7 in the series : Outsourcing: Tata Communications Interview
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