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July 16, 2008

"IT-BPOs vs. pure plays"

Business Today has an article based on a round table discussion featuring Pramod Bhasin, President & CEO, Genpact; Ananda Mukerji, MD& CEO, Firstsource; Raman Roy, MD, Quatrro BPO Solutions; Akhil Gupta, Senior Managing Director & Chairman, Blackstone India; Michel E. de Zeeuw, Vice President, Europe & Africa, Infosys BPO; and Som Mittal, President, Nasscom
BT: Who is doing better—pure play BPOs or the so-called IT-BPOs?
Mukerji: It depends on who you ask… (laughs). I don’t think it’s a matter of pure play BPO companies versus third party IT services companies and whose model is better. I think BPO business is a different business and requires different dynamics, different success factors, and I think it’s good that there are companies that have come into this industry are those that have done some fantastic work in IT. If you look the world around you and see how many BPO companies are there, they are all growing, they are all doing well, there is enough demand out there.

Mittal: I don’t think integration of services has yet happened. It may happen in the next round.

Gupta: I would love to invest in a BPO company that is going to the next level. Just thinking aloud, there is the improvement in processes that will drive BPO companies to acquire IT resources. I haven’t seen that as yet, but to me that sounds like a logical progression.

Bhasin: There is no similarity between Java programming and Sarbanes Oxley, that is why the CIO and CFO roles have not been combined and are not likely to be combined. So, I think that should answer your question. The fact is client relationships can be used to cross sell—if there are capabilities in both. I am saying this in front of Infosys BPO, earlier we did not see them on the map, now they have made acquisitions and we see them on the map not because of IT but because of their true capabilities in BPO. There will be areas where they (IT and BPO) overlap, wherein application of technology along with the application of process allows you to drive efficiency to a greater level than you can do on a standalone basis. But broadly it’s about two separate dynamics being brought together to sell well into your customer and increase your penetration.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports.