February 17, 2012: Many of the leading Information Technology service providers in India including HCL were behind developing a model that they believed would be the future. The model that they believed would work wonders was the IT-BPO combine. This was three years ago. Leading global IT service provider Accenture was already working on the model. The idea behind such a model was that it the Information Technology that develops certain kind of business process solutions, and if they are able to provide both the services, then it would put them in a better position amongst the clients.
For instance HCL was already developing payroll application for a client. What if HCL assumes responsibility of the payroll administration of the bank’s employees? This would be beneficial for both HCL and the client. By taking up the task of payroll administration, HCL will have a clear understanding of what the client wants and thus it can develop the software accordingly.
So if better software is thus developed, then it might become an advantage for the BPO business. This was the idea. But even after three years, then idea still remains an idea and there is no development in terms of putting the idea to practice. A study conducted by Everest has found that out of the 1929 contract signed in the year 2011, only 3 per cent of the clients entrusted both their Information Technology and Business Process Outsourcing work to the same client. This has declined from 4 per cent during 2009.
Partha Iyengar from Gartner says that the BPO is a step child of the Information Technology services and the idea that it can be combined to produce a multiplier effect is not yet proved. More over the recent performance of BPO centres set up by leading IT service providers is on the decline in the case of HCL and not encouraging in the case of Wipro and Infosys. But there are cases where the performance is better and it includes Tata Consultancy Services and Cognizant. Some of the experts from the IT industry say that the benefits from such a combination were over looked by the IT companies.
The IT service providers have realized the mistakes and have undertaken corrective measures. In the case of HCL, they are not abandoning the model, but will take measures to improve the performance.
The BPO services can be broadly divided into three categories such call centres, horizontal services and vertical services. Out of these services, horizontal services have some amount of connection with the IT and the vertical services are the area which was intended for the IT-BPO combine.