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Outsourcing: Manish Dugar, Senior VP And Global Head Of Wipro BPO (Part 7)

Posted on Thursday, Sep 29th 2011

Sramana Mitra: My question was somewhat different. For instance, a lot of the crisis in this round concerns sovereign debt and government debt, right? Whether it’s at a state, level, city, or municipality level, there is a debt crisis and deficit. So, there is a need to cut government spending. Do you expect that to translate into several, let’s say state governments? The government of California has a lot of problems with its budget. Is California likely to come and ask you, Manish, could you help us get employees off our hands, but you have to keep the jobs in California? Are these the kinds of discussions you are in the middle of?

Manish Dugar: I would assume that if the state of California were to ask us to do that, their expectation would be that while keeping jobs intact, we try and minimize the cost. To minimize costs, even if we were to assume that we don’t offshore, we would like to make processes more efficient and to automate.

What that means is we are not reducing costs by labor arbitrage, but that greater efficiency and automation will bring down the number of people needed for the labor force. To that extent, people will be laid off and let go, and that will create a business case for us to be able to give the efficiency gains to the government while making the profit we want to make. I think those kinds of discussions may start to happen. There is an openness already demonstrated by some of the government, especially in Europe, where they have started talking about outsourcing. Though we don’t see them still talking offshoring, I think the fact that we can bring value to the table without necessarily off shoring, the work is starting to gain appreciation.

SM: That could become a significant part of your BPO business?

MD: Government business has a little longer lead time. I don’t know if you have seen news reports that talked about how entrenched the local vendors and the local players are for somebody else to step in, but yes, even in areas where we would like to get in and create value for ourselves and help the local government.

SM: If you want to get into that business, now is the time because there is a real pressure on governments.

MD: And we are talking with them. We have an industry segment called government that focuses only on this. We have been investing in it for some time. We do see opportunities already, and we are in discussions for some of them. Given the longer lead time, it might take time for it to be reflected in the numbers, but I agree with you. It’s an area where there could be significant opportunity.

SM: Are there other trends that I have not discussed that I should be asking you about?

MD: You did touch upon the globalization. As we discussed, it is moving away from just being labor arbitrage, quality delivery, transformation to an outcome. We did touch upon being an end-to-end service provider including IT, consulting, infrastructure BPO. We talked about the trends in terms of vertical specific solutions and BPO not being limited to just horizontal processes. And we talked about the changing environment and landscape so far as the lay of the land of the economic situation, the macro and micro economic situation, in-country and at a global level. We also spoke about disruptive delivery models when it comes to rural BPOs. So, I think we covered almost everything.

SM: Very good. It’s great talking to you, Manish. Thank you for taking the time.

MD: Thank you.

This segment is part 7 in the series : Outsourcing: Manish Dugar, Senior VP And Global Head Of Wipro BPO
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