Outsourcing: PV Kannan, CEO Of 24/7 (Part 1)

Sramana Mitra: Hi PV, welcome to the Outsourcing series. Would you start by introducing the company?

PV Kannan: Sure. I will start by describing how the company was founded and what led to the creation of it, would that be helpful?

SM: That would be perfect.

PVK: The company is 11 years old. Essentially, before starting 24/7, I ran a software company, which was one of the first companies to introduce the concept of email and chat as service mechanisms for online [use]. Most of our customers in that company, which was called Business Evolution, were based on the East Coast where all the top e-commerce retailers were. There were only a handful when we started the company in 1995. It became an area of focus as the e-commerce revolution began. So, I had been thinking about why consumers need help; when they need help; and what makes a terrific service experience? The software, [when] we launched it, we had all the top tier e-commerce brands. I used to go to their call centers where the software was implemented just to watch how the agencies used the products.

What I found were a couple of things. One, clearly in the U.S., contact center jobs were not held in high esteem. It is not a hot job category people rush to even in a time of high unemployment. Call centers still had 80% to 95% attrition.

Two, what we found was as the technology was morphing, I saw a need for deciding how to take the human experience and then tie it back to the technology? That is what I was thinking about. In 1999, we merged with our competitor, and then the company went public. In 2000, I came out with the idea of taking on two concepts, which are leverage existing platforms in the software but pushing it more into, How do we leverage the data that comes out of it? How do we leverage the human interaction that comes out of that, and can we create a technology-inspired services platform? That was the original thesis. And the second thing we introduced was given that this is all virtual, does it really matter that the context has to be really in the States. When we started with the first handful of e-commerce companies, we set up a center in Bangalore and started servicing these companies. It was a phenomenal start. Later on, a lot of larger clients came to us and said, “Look the website is an excellent window into what is going on, but we still get a lot of phone calls in the traditional 1-800 number. Could you help us with that?” We started offering wire services as well.

In 2005 we started to realize there was a disconnect when large companies look at their consumers. If we take a large bank in typically they have 30 million or 40 million consumer accounts, or a large telco, like AT&T or Verizon, they tend to have 80 million to 90 million consumers. On one hand, you have consumers wanting to use the Web as the entry point to get service or to buy a product. It is a moot point to even question that assumption today. It is a given, but in 2005,  when we started socializing people would challenge us and say if that is the case, then why are they calling us? But given that and the paradox, why are people still calling 1-800 numbers?  If you look at any large bank or teleco company in a year, they handle at least 300 million to 400 million phone calls.

SM: Yes.

PVK: If you take any of the top 10 banks or the top four telecos, they handle at least 50 million to 100 million IVR calls. So, that has been one thing that intrigued us. Over the past five years, we have been focused on taking data from different elements, whether it is the Web, CRM, IVR. We try to understand why do people do that, and then we try to determine how we help consumers find answers on the Web when they need them in what we call a predictive version?

Let me give an example. Most websites you can personalize a bit, but they have the strategy of, I don’t know who you are. I don’t care who you are and now we are here. Now, on a better-run site like Amazon there will be a “welcome back” and product recommendations and so on. All the personalization is typically toward selling something. What is missing is saying, when I come in what could I be thinking, given that I have history with you? Amazon as an example. When I come back in, it would be great to know if the product shipped right there on the homepage instead of my going to track my order status or something like that.

That is what we call a predictive experience. It is me going and searching for stuff, me looking for stuff. Can you use the data and experience of working with me as a consumer, start predicting what I am going to ask and do? If the website doesn’t work, can you lend a human hand just help me out, because otherwise I am going to jump off the phone and call you. Essentially, that is what we do in a completely outsourced model.  The technology elements, the data signs behind it, the people, all that comes as an integrated offering from 24/7. We have about 9,000 employees worldwide, and our centers are spread out, including our R&D labs, between India and the Philippines. We have close to a couple of thousand employees in Latin America to handle Spanish and bilingual needs.

This segment is part 1 in the series : Outsourcing: PV Kannan, CEO Of 24/7
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