Outsourcing: Sandip Sen, President And CMO, Aegis (Part 5)

By Sramana Mitra and guest author Aditya Modi

Sramana Mitra: How big is your Argentina operation?

Sandip Sen: We have two centers in Buenos Aires. We have a center in Cordoba, a center in Tucumán, a center in Mar del Plata, and a center in Bahia Blanca, which means we have six centers and we have about 5,200 people in Argentina.

Sramana: Wow. So, that makes you one of the largest BPO operators in Argentina, yes?

Sandip: It does, it certainly does.

Sramana: What are the dynamics of the Argentinean market?

Sandip: Well, the dynamics of the Argentinean market are that on the positive side, it is a group market. It is a market which we think we can exploit and expand much further. The only downside of that market is that Argentina has, like a lot of Latin American countries, high inflation. We believe that that may be dumping a lot business from the U.S., for example, but overall we think it is a very good market. I think we are in a position, because of our global skills and because of some of these strengths that we get to grow that business much, much further. We believe this year we should be able to grow that business to about 35% from the time we bought it.

Sramana: The final trend that I want to discuss, which also seems as though it is part of your business, is the Indian domestic market

Sandip: Yes, yes.

Sramana: Would you speak to that?

Sandip: The Indian domestic market, we realized, was a market which was growing. India is the fastest-growing telecom market in the world, for example. Therefore, we forayed into the Indian market with a couple of acquisitions. The interesting part was that at that time, most of the people in the Indian domestic market were smaller players. The first time a large global player entered into the domestic market, we were able to do a lot of global skills in terms of not just people, not just Six Sigma practices but also in terms of technology, in terms of setting up top-end call centers.

We have been able to grow that business very well. The Indian domestic business is not a business in terms of as profitable as international business, but where it makes up for this is size and economy of scale. That makes that business very profitable. The point I am trying to make is if I am running a small business in the domestic market, it would not be as profitable. But because I run such a large business and I can use all the economies of scale, overall, the business is quite profitable. The other thing that the business does is protect me from any sudden downsize. If the U.S. market had a problem like it had in 2008 and 2009, the markets, and the other emerging markets especially, led by the India domestic market was growing. So, it helps us diversify risk and reduces the chances of our business stagnating.

Sramana: You said you had centers in a bunch of second tier cities in India such as Indore and Lucknow. How big are those centers, and what are you seeing in the trends in those markets, because the Bangalores and the Mumbais are very high attrition cities, right?

Sandip: You are absolutely right. They are high attrition cities. They are more expensive cities. Jamshedpur, Bhopal, and Lucknow put together have more than 6,000 people, and we find in these cities the attrition rate is lower and the costs are cheaper. As we get more business from customers who are not the top-end customers, who are not the cream of the crop, we will go more and more into tier two or even tier three markets. We will get into the hinterland, and that is what we are doing.

Sramana: Would you talk a bit about that strategy of going further into the hinterland?

Sramana: Shridhar Mita, you may know him, is really trying to push rural BPO – a small-town BPO rather not so much rural yet – he was saying that the large Indian outsources seem to have a resistance to going to the third and fourth tier cities.

This segment is part 5 in the series : Outsourcing: Sandip Sen, President And CMO, Aegis
1 2 3 4 5 6