Alliances: The Right Choice

'Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat' —Sun Tzu

Having interacted with a number of call centres in India and abroad, it has become clear to me that a strategic alliance is the most likely route to success for the third-party outsourcing call centers in India.

Most of the third-party call centers set up over the past few years were established by entrepreneurs who had been sold the dream by equipment/solution vendors—whose primary aim was to essentially sell their solution/equipment—that one had to just set up the call center and inbound business would come pouring in. There could be nothing farther from truth.

Why?

One, more than 90 percent of the business being done by third-party call centers is ‘outbound’ or ‘telemarketing’ and not ‘inbound’. Many of the call center entrepreneurs were not even aware that they would essentially become telemarketers, or else they would not have taken the plunge. Two, most of the entrants to this field were not from the services industry and opted for the route more as a diversification from their existing manufacturing activity where they were seeing a stagnation. By not being from a similar industry they did not appreciate the need to develop a customer acquisition strategy. So they faltered, soon after commencing their services. Their ‘delivery capability’ fell woefully short, mainly because they did not focus on this aspect of the business and took it for granted.

Dreams are now turning sour very fast and are seeing a major consolidation happening. The smaller players, who did not conceptualize the project well and did not take care of the working capital needs at the start, assuming that the business and cash inflows would start rolling from the first month, will either end up being taken over by larger players or just down their shutters. So what are the options?

At this juncture, it is important to understand that the adoption of a strategic perspective on outsourcing is today regarded as one of the most useful and important business methodologies, giving organizations world over the opportunity to liberate their full potential for profitability, efficiency and cost-effectiveness, and allowing them maximum flexibility in terms of retaining and broadening their customer base. Most of the organizations in the developed world have fully understood and adopted this approach towards business, resulting in a phenomenal growth in outsourcing (it’s a $600-billion segment), which is now increasingly leading to ‘offshore outsourcing’ primarily because of its enticing ‘value’ proposition (price/performance)—India’s delivery capabilities have now been validated over the years. To be cont .........