As BPO industry transitions from pure labor arbitrage to knowledge driven solutions, so does the talent base and ways of managing the new workforce. Raman Roy, Chairman and Managing Director, Quatrro BPO Solutions, talks to People Matters about this new face of the BPO industry

What is driving the changes in the BPO industry?
If you trace the historic links of the BPO industry or even the IT industry, we actually came into being because of labor arbitrage; as one of my colleagues put it: “your mess for less”. “Whatever way you are doing it, we can do it with the same number of people, the same efficiency, and the same way as you do it, but instead of costing you 100 dollars, it will cost you 60 dollars maybe even 55. We could save clients half the investment, because the cost of people in India was about 1/6th or 1/7th of the cost in the west. I think now, the industries have gone beyond labor arbitrage and today there are several other options that are available and perhaps at a higher level as we have already skimmed the part that could have been covered by labor arbitrage.
The next level of industry evolution is very different. It requires a different set of people. Today the “knowledge worker” has domain capability, has domain knowledge, has problem solving and decision making capabilities as against the traditional BPO employee, who had a rule based definition for every problem. In this new model, the structure of business is also different, the profitability is different and so is the talent base and ways of managing the new workforce.
Managing this talent is very different from anything we have done before; today in Quatrro, we have engineers, masters, doctors and post graduates and they are not doing low-end work but also high-end work that is aligned to their domain capabilities and their knowledge. It is a totally different game managing them.

How is managing these groups different?
To start with, their aspirations are different; what they want to do, what they want to learn, what they want to evolve to, the value that they are looking at in the company and what their families want, is vastly different. The employee today participates in how he or she wants to be managed; it is not a decision of somebody sitting in a boardroom and applying their wisdom, it has become a two way process.
So, “learning to listen” is the key to moving ahead. This is easier said than done. Learning how to listen is incredibly difficult in an organization, as this needs to happen at all levels. Daily interactions between the team manager and the team should happen as he/she has to be the eyes, ears and the mouth piece of the organization. This cannot be a one way communication, because that can be lethal if managers do not take ownership of the discussions and do not represent the organization properly in the eyes of the employees.
This change is easy to talk about but very tough to implement, because it requires a different “manager” profile. It is what I call the ‘old model’ and ‘new model’ ways of managing. In the old model, promoting people to be team leaders was far easier, because in this model one is executing the directions of a group of “wise men” who are guiding, coaching and they are only getting their decisions implemented. In the new model, yes, one is implementing what some “wise men” decide, but they also influence what the “wise men” think and help them to modify or better their decisions. This requires an understanding of what the game plan is. The process is far more evolved now and many people do not reach there, as one cannot promote everybody based on just tenure or performance. The person needs to have the right “participative leadership” abilities to make it.

Tell us more about this ‘world of tomorrow’. What are the traits of the manager/leader in this new work environment?
The ‘world of tomorrow’ is a place where the managers are listening, are participative and connect with their teams. It is not an easy task, where you have to listen and at the same time, learn to respect and appreciate the one you are listening to. Culturally, there is a set of people who think it is a denigration of their position, if their approach to leadership comes from an autocratic school. They think that a leader’s job is a one way road and when you make it two ways, then their position is jeopardized.
To my mind, the world of tomorrow is a team play. As a cricket crazy country, I very frequently take cricket team examples as an analogy to what the new world-at-work looks like. For example, our captain is a wicket keeper and a batsman but he is never going to bowl as he has others in his team who can bowl; the leader doesn’t necessarily have to do everything.

What are your future growth plans and how is your talent strategy changing to adapt to them?
One of the big aspects that we identified was that outsourcing has been successfully leveraged by large corporations but it is not within the reach of smaller corporations, the mid-market, and that is where we went down the park and said we will offer our services to the mid-market. Today, we are very delighted to say that we have over 9,000 customers on an annuity basis. The challenge is that their needs are totally different from what a fortune 500 company would need. The mid-market needs a multi-skilled team, so we need a different breed altogether. That is where you need a knowledge worker to be able to work for the mid-market; because you are replacing a knowledge worker.
We are the only BPO today that offers solutions to the mid-market on an offshore basis and we are the only company that offers technology and services coupled together where the customer pays “by the drink”. It is a fundamental shift, so a large part of the revenue of Quatrro today is on a transaction basis and not on a per hour basis. We see a huge market sitting there, where we can see the offshore capabilities for that market.

For this strategy, you need a different set of competencies in-house. Are you looking at ‘building’ or ‘buying’ these competencies, or do you seek a combination of the two?
It should be a combination, you know; it is not one or the other in the world of tomorrow. Nothing is so simple. You copy, you duplicate, you learn, you talk to people and you find out what worked, you allow people to innovate, you make mistakes and you get something right. Today, it is a combination of make, buy, steal, copy, duplicate and all of the above.

What is the role of M&As in your strategy?
M&As are a core part of our strategy. What we have to first see, when we are looking at a M&A activity, is what our strategic intent is: Is it to expand the market, is it to get into a new domain area, new expertise or is it to do more of what we do, scale?
Secondly, what is the DNA and the culture of the organization? For me, if the DNA will not work, I know that the transaction will not happen. I will give you an example; we were looking at a company in the U.S. and we were meeting with the CEO for a lunch meeting. The CEO of that company travelled the previous night, he took first class and he stayed at the Four Seasons where the cost of his room was 4 times the cost of the room I was staying in. A meeting, for which he would have normally spent $500, he spent $3,000. It is not that I do not enjoy good things in life but our company ethos and culture were just too different and it would have never worked out.

Is DNA a deal breaker?
If the DNA is different, it is not right or wrong, it is just that the way he does business and the way I do business is different and if it is that different, we will spend too much time arguing over those differences rather than doing business; so it is better not to proceed.

What if the DNA fits?
If it makes business sense, then there is always a hypothesis that one plus one is greater than two; if it is greater than two then we progress with it. We have done nine transactions till now that have some form of a M&A. We have bought, we have sold, we have divested, we have invested and we have acquired. So, it is a part of our day to day business.