The Virtual Office: BPO industry and beyond

Concepts like virtual office are changing the way we operate today. Industries like BPO has peddled the growth in this sphere and today lot of companies depend on out sourcing models to improve productivity and reduce costs.

Dr Tariq Marikar

The Small and Medium Enterprises (SME) stands a unique opportunity to extrapolate themselves by the use of technology and out source technology available today. Dr Tariq Marikar, Suntel's Solution Delivery Director and CIO talks about the important techno trends which benefits Sri Lankan Businesses. Excerpts of the interview.

Q: How do you see the transformation of the BPO industry in the future and how can Sri Lanka benefit from this?

BPO industry offered huge opportunities for countries like India where recorded earnings are around $12.5 billion in 2005 and double digit growth rates predicted.

By end 2010, the size of the Knowledge Processing Industry (KPO) industry would be worth $17 billion globally, out of which India earns almost $12 billion. These are few key statistics which would amaze us at the outset.

In late 90's and early 2000's offered high growth prospects for the BPO industry. This also made possible for BPO's to climb the ladder and venture into KPO industry.

This opened perfect opportunities for countries like India and us.

With less costly human capital compared to the developed world it was the perfect match for companies who looked at improving bottom line. In Sri Lanka you find quite a few companies who are progressing well in this line.

But with the economic meltdown specially US based companies looked at pulling back BPO operations in house. This was due to financial incentives offered back home. However the growth era has not receded. On the other hand concepts like crowd sourcing are becoming popular.

Crowd sourcing is where you source people over the net to meet peaks in your work requests.

For an example if you intend to run a promotion, to meet unprecedented number of people may call to your in house call centre will not be able to cope. Essentially, there will be a lot of dissatisfaction.

On the other hand hiring a BPO for this specific project would be costly. The easiest is to hire man hours from the internet. Of course you are talking about having good IT infrastructure and people who are capable. But this is a concept to look out for.

With the talented work force in Sri Lanka BPO's are here to stay. However, increasingly, the industry should move up the ladder to KPO based applications and add value for better margins.

Internet has played a key role in how we do business. Concepts like Hosted applications, crowd sourcing has enabled virtual offices through the cloud. Can you explain?

The market is very competitive. Every company is on the look out to reduce costs. Research has found out that, 30 percent of costs can be outsourced without interruptions to the core business.

Hosted applications, crowd sourcing will lead us to 'future office' or 'virtual office' where specialized partners will do infrastructures management. Most of the hardware elements and most certainly software applications will be managed by infrastructure providers. Lot of automation would set into a business.

This is the world trend. Countries like us should be geared to take advantage of the situation by developing the infrastructure, harnessing talented of people.

In a country like Sri Lanka, where a large base of SME (Small and Medium size entrepreneurs) are present, it would be prudent to use as many automated applications, which could be wanted usage basis, which would not tie up the limited resources. Technology today allows this. As a telecom provider specializing in the business sector, we have many applications, which are geared to the SME sector. These allow companies to keep costs down without affecting public perception of their business and their brand. Virtual Offices have also allowed small start-ups to appear as competitive, as big business houses and use the same technology at lesser costs.

Q: In Virtual Office, what is the role of a telco service provider?

The telecom partner has a major role to play in a virtual office environment. Telco's specialize on setting up infrastructure relating to voice data and video services. Also many investments are brought into facilitate communication which individual companies would not be able to invest in.

In the case of our company we have set up a world class IDC facility with accreditation of ISO 27001:2005 for managed services. We host applications such as automated answering services which we call Auto Receptionist, Unified Threat Management Systems (UTM) such as firewall, SPAM filtering, Virus guards, Intrusion prevention systems, intrusion detection systems built into one solution.

Apart from this disaster recovery mechanism's are in place where clients do not need to invest on hardware.

Call centre solutions with ready made infrastructure for running hotlines or DR set ups, are available with us.

The key differentiate for the business is whether you want to be the master of all your none core activities such as managing your communications, IT applications or simply concentrate on the core business and out task day to day operational matters.

Q: How this will benefit to business community?

The key benefit is that you have minimal start up costs. The cost of hardware alone would be very high. Having employees in the permanent cadre at the start up requires fixed commitments.

Maintenance on hardware related assets is another. Constant upgrades and scalability of services is also a concern. However by investing on shared hardware in an IDC environment saves lot of start up costs. Software services available on a rental model would also bring the costs down.

The ability for capital expenditure to be made operating expenditure is a key advantage for the business.

On the other hand software companies can also provide software on a rental model by hosting in a secure environment such as an IDC. This may result in a company to break even sooner.

For example at Suntel, we have hosted automated answering services, IP PABX services, call centre applications, Unified Threat Management (UTM) services.

We intend to display these solutions at the Infotel 2010 exhibition. So in essence it is all about improving the bottom line. Given the current economic woes there is no better time to adopt this.