Accenture's Country MD Sanjay Jain : Tapping into the local outsourcing boom

Consider this scenario: You are a steel manufacturer with four million tonnes of annual production, 47 offices in 27 different locations, and 40,000 employees. Like any progressive corporation, you are an intensive user of it. You have 12,000 different pieces of it equipment, including desktops, laptops, servers, printers etc, with 12 data centres across the country that need to be managed round the clock through the year. Now, there are two ways in which you can deal with this overwhelming it challenge: a) put together a big team of it specialists that gets bigger and bigger as the organisation grows or b) outsource it to a top notch it services company that won't just operate the network for you, but take care of breakdowns, snafus, and even upgradation of software and hardware without your having to worry about it. What do you do?

If you are Tata Steel, which actually is the company used in the example, you would do the smart thing and rope in a vendor to manage your IT. In Tata Steel's case the vendor was IBM. Says Ashish Kumar, Country Manager, IBM Global Services: "Why should a company like Tata Steel focus on a non-core activity like IT? If a world-class vendor like IBM can take care of their IT infrastructure, it allows them to focus on their business."

Indeed. More and more companies are veering round to that point of view. Bank of India (BOI), a leading public sector bank, has more than 2,500 branches across the country, of which 700 bring bulk of the business and are spread over 200 cities. With over 29,000 desktop computers, several hundred servers, a few thousand printers and several local area networks among these branches, it was becoming increasingly complex to run, maintain and upgrade IT infrastructure. So its Chairman and Managing Director, M. Venugopalan, took the sensible way out. He handed out a 10-year contract worth $150 million (Rs 666.3 crore) to HP and Infosys, who teamed up to bid for the project. "Our idea is to remain highly focussed on the customer and align our IT strategy with our business strategies," says Venugopalan.

HP will thus be the partner for boi's IT initiatives, called Core Banking Solution (CBS), and build and manage the network. To start with, CBS will be implemented in 750 branches. The bank also has plans to integrate the other 1,800 branches for the purpose of consolidated MIS, risk management and supervision. The core banking solution of the bank, says Venugopalan, is futuristic as it is designed to be platform independent and fully scalable to take care of about 20 per cent year-on-year growth in volumes and satisfy future regulatory requirements like those under Basel II.

N.M. Sundaram, Country Manager (Marketing and Strategy), HP Services says that HP will implement and manage a data warehousing and document imaging solution, and provide integrated channel management including tele-banking, internet banking and ATM as a part of the contract. It also envisages building and managing a data centre, disaster recovery site, help-desk and call centre. Besides, HP will manage IT infrastructure and networks across 750 branches of the bank, supply and maintain technology products including servers, desktops and peripherals across the branches and upgrade the infrastructure as and when required. "Our aim is to ensure that customers reduce cost, access information for scientific decision making, reduce transaction cost, and overcome technology obsolescence to meet business flexibility."

According to Gartner Research India, the market for such outsourced IT services is estimated to be $ 1.45 billion (Rs 6,600 crore) and growing at more than 15 per cent per year. That means Indian IT services companies, which hitherto have largely focused on outsourcing deals outside the country, will turn their attention to the domestic market. Sanjay Jain, Country Managing Director of Accenture, which has won a 10-year outsourcing contract from Dabur recently, says that as customers increasingly look at removing pain points and focus just on their core business, these kind of deals will increase. "We do not just go in and advice customers to jettison their existing IT infrastructure. We wring more efficiency out of it and chart out a road map for our customers."

Domestic Indian IT companies like Wipro, Infosys and i-flex are also riding this new IT wave. Wipro Infotech, for instance, has bagged similar deals from Colgate-Palmolive and Indian School of Business. Wipro tied up with Infosys to offer outsourced solutions to Vijaya Bank for a contract worth Rs 90 crore. Infosys and i-flex seem to be riding piggyback on HP and IBM, respectively, to be part of such deals. T.D. Thanadav Murthy, Chief Executive (Professional Services Division) of Wipro Infotech believes that even in the domestic market, the kind of quality-cost-value equation that Indian players like Wipro have will allow them to triumph in the long run. Happily for him, more and more companies are waking up to the convenience of managed outsourcing.

Making Charity Pay
NGO ActionAid India is bringing in ideas from marketing to make charity lucrative for donors.

"...And, madam, with that you can get tickets to a movie, a holiday package, a discount coupon for a meal in a restaurant, or a Reliance Infocomm cellphone..."

Guess who's telling you that? A tele-marketer? Right. But guess what she is trying to sell you?

A time-share package? Wrong. A membership card? Wrong again. A home loan or a car loan? Nope. It's actually-believe it or not-a donation to ActionAid India, a Delhi-based NGO.

For the last eight months, ActionAid has been using direct sales agents to rope in donors for its causes, which include helping everybody from street children to sex workers and their children to dispossessed dalits. What led to the marketing brainwave? A man called Jeronimo "Jerry" Almeida, who joined ActionAid as its CEO in January 2002. Soon after Almeida took over, he commissioned a comprehensive research on the charity habits of Indians. The findings were startling. The universe of donors was a mere two-lakh big, and 79 per cent of the donations went to religious causes. For the rest of the money, there were some 20,000 registered NGOs in the fray. In other words, there had to be strong incentive for the millions of others who were not into charity, to join the cause. Says Almeida: "Daan, or donation, has always been a part of the Indian culture, but it has always been mindless."

So, instead of using poignant advertisements and mailers to solicit donations, Almeida decided to borrow a leaf from his previous stint at Indian Hotels, where he was Director, Entertainment and Media, and had initiated quite a few loyalty programmes. What he came up with at ActionAid was pretty unique. He launched a membership scheme called Karm Mitra, where the donors would be rewarded for contributing to ActionAid. And selling these memberships would not be ActionAid, but direct selling agents, or DSAs-some 32 of them. The idea is working. Over the last eight months, Karm Mitra has roped in 40,000 members with donations worth Rs 1 crore.

The Almeida way: DSAs and ActionAid employees go over a scheme

Dial a Donor

Deepak Suri, the owner of Delhi-based DataStar Software, is the top grosser for ActionAid. He and his team account for 250 memberships a month. The interesting bit, however, is that Suri is not a dedicated ActionAid dsa. His outbound call centre, which employs 50-odd people, does direct marketing for Reliance Infocomm and HSBC, among others. So, what it does is to co-sell ActionAid memberships when it calls a potential telecom or banking customer. The response to ActionAid has been so good that Suri, who gets to keep 20 per cent of each membership sold, now has 10 dedicated work stations for it.

There are five categories of membership-Gold, Silver, Bronze, Copper and Black-that a donor can choose from. The basic proposition is simple: donate and get greater benefits, which are sponsored by respective companies exclusively for ActionAid. A Gold member, who needs to donate at least Rs 24,000 to qualify as one, gets benefits worth Rs 60,000. The benefits include tax savings on half the donation, life insurance from OM Kotak Mahindra, a co-branded credit card from ICICI and ActionAid, tickets to movies, cassettes and CDs, and a copy of the Civil Society magazine (an NGO trade magazine), among others.

In April 2004, Almeida tied up with Hyderabad-based Smart Value, which already has got on board 40,000 donors for the education of street children. The UK government has promised to match in donations whatever amount Karm Mitra raises for the Commonwealth Education Fund, administered by ActionAid, Oxfam and Save The Children, UK. With ICICI Bank recently chipping in with Rs 3.5 crore, the kitty for dispossessed children has swollen to Rs 7 crore. What's also unique about Karm Mitra, says Almeida, is that it doesn't just give money to the unfortunate. Rather, it works like a venture capitalist, getting into a community, setting up a viable project, appoints a leader and then makes its exit. "It's the difference between giving somebody a fish and teaching them how to fish," says Almeida.

Karm Mitra apart, ActionAid runs its own version of multi-level marketing called multi-level giving (MLG), where ordinary folks such as housewives, students, retirees, even professionals network to raise funds for the NGO. At the same time, MLG is not unwieldy as the typical multi-level marketing scheme. It is three-tiered and it begins afresh after every set of three people to ensure transparency in the scheme. Almeida is exploring the possibility of replicating the Karm Mitra model by starting Karm Yuva for students and Karm Maitree, which will allow urban women to adopt female sex workers or impoverished women working in fisheries.

Bottomline: If you've got money for charity, Almeida can make it sweat for you.

-Amanpreet Singh