Data theft, frauds: Indian BPOs in the spotlight

The last two scams at Mphasis and HSBC's Indian back office have turned the spotlight on how the Indian business process outsourcing (BPO) industry's biggest asset-its massive pool of cheap but high quality people-could turn into a big liability. "These scams have resulted in renewed interest in verification services," says Nobby Nazareth, CEO, Evaluationz India, a Bangalore-based background verification firm. It is estimated that 10-20 per cent of all applicants cite false educational qualifications and work experience. "There's a massive opportunity in verification services, given the sheer volume of recruitment taking place in the it, BPO, pharma and manufacturing sectors," says Nazareth. Firms such as his charge around Rs 6,000-8,000 per candidate and take a fortnight to complete a full set of background checks.

"There are only a dozen or less large companies in this space, but there are hundreds of smaller detective agencies or executive search practices that have entered this segment," says a senior executive at Quest Research, which claims to be Asia-Pacific's leading background screening specialist. BPO operators, for their part, are still not totally sold on the concept of mandatory verification. "We have random checks for our employees and we have had no problems so far," says S. Nagarajan, coo (Chief Operating Officer) of 247 Customer, adding that all recruits to the firm's financial services business unit go through a full check.

The potential is massive. "The top five to six it and BPO companies are hiring around 100,000 employees this year," says the Quest Research representative. That translates into a Rs 60-80 crore market from these companies alone. Not bad for an industry that hasn't yet been born.

-Rahul Sachitanand

Deuce
DTH war starts at love all.

Dish TV's fury: Who will bear the brunt of it?

Tata Sky, the DTH (direct-to-home) venture of the Tata Group and Star TV, is likely to launch its service in the next fortnight. The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) is expected to issue a final order on a petition filed by ASC Enterprises, the DTH (direct-to-home) arm of Zee Group, seeking to restrain star network from sharing its channels with Tata Sky, by then. And, in another development, the Ministry of Information and Broadcasting has told Tata Sky not to carry signals of MTV, Nickelodeon and all other channels that discriminated in sharing their signals with DTH operators.

Confused? Well, let us explain. When ASC Enterprises launched its DTH service, Dish TV, two years ago, star, and some other channels, refused to share their signals with it. "Our competitors thought that sharing their content with us would give us a decisive early mover advantage and mar the prospects of their DTH ventures when they were launched," says a top Dish TV executive. Dish TV did manage to reach an agreement with One Alliance, the distribution arm of Sony Entertainment and Discovery India recently (it also distributes MTV and Nickelodeon), but star still kept dilly-dallying. When ASC Enterprises went to TDSAT with a complaint, star TV reportedly, in an undertaking, said that it will not share its signals with any DTH operator.

These issues are likely to be resolved after Tata Sky launches its service. But, that won't change what appears to be unfair and discriminatory business tactics.

-Archna Shukla

Q&A
"Other Countries Should Follow India's Example"

Over the last three years, Joseph M. Tucci, Chairman of the Board of Directors, President and Chief Executive Officer, EMC, an information storage and management company, has spent nearly $5 billion (Rs 23,000 crore) in transforming the company from a plain vanilla vendor of storage boxes into a $9.6 billion (Rs 44,160 crore) provider of information management solutions. Tucci, 58 who was in Bangalore recently, tells BT's Rahul Sachitanand that global acquisitions will continue to be a cornerstone of the company's strategy and that India is among its most important locations worldwide. Excerpts:

How is EMC placed in the market?

Our strategy of Information Lifecycle Management has helped us reposition EMC as a broader provider of data management solutions (from a pure vendor of storage boxes). The lifeblood of a business is information and you need it to understand your customers better, and to manage relationships with employees better. Information stored on disk arrays has grown at 60 per cent CAGR (compounded annual growth rate) over the last nine years, so the amount of information being generated today is phenomenal. And in the hi-tech world we live in, companies that miss just one product cycle can be in trouble. So, our transformation will never be complete.

How is EMC's positioning different from that of competitors such as Veritas (which was acquired by Symantec in December 2004 for $13.5 billion or Rs 62,100 crore)? Will storage continue as a standalone industry or will it become integrated with security and networking?

Symantec is a competitor and Cisco is a partner; Symantec doesn't do physical storage, but it can manage the data. Information needs to be secured, so we offer things like encryption and digital rights management. But, markets are all changing and I do think networking and storage get close on the edges. (Cisco CEO) John Chambers views EMC as a critical and core partner and Symantec is in a business (anti-virus) that we are not in and don't intend to get into; so we're competitors more on the Veritas side (of the business). You must remember that you have to secure everything, so Cisco is going to make a big play in networking. But even if you put up the best firewall, someone will figure out how to break it. We partner with Microsoft, but they also compete against VMware, which we own, but that's fine.

Which are the trends to watch out for in the storage industry?

Storage virtualisation (the pooling of physical storage from multiple network storage devices into what appears to be a single storage device that is managed from a central console) is one of the more important trends, but there are others as well. Disk drives are not reliable, you want to use raid (Redundant Array of Independent Disks, a storage medium which offers increased performance and tolerance compared to conventional forms) protection, if its critical information; you need to decide how quickly you want to retrieve information. Another key is heterogeneous replication, where you can back up on different storage types. Companies want to make sure that their data is secure, so other technologies such as compression and virtualisation are all becoming important.

Where does India fit into your plans?

India is absolutely critical to our plans. There is no other country (apart from the us) where we do everything in; we work here on almost every product line that we have. We are planning to double our investment in India. Sixteen months ago, I talked of more than doubling our investment from $100 million (Rs 460 crore) to $250 million (Rs 1,150 crore). I am now increasing this to $500 million (Rs 2,300 crore) and I can tell you: this won't be the last time I am here for such an announcement.

Do you worry that innovation is leaving US shores and heading to places like India and China?

I don't think the US is losing its edge. It used to be perhaps the only place for innovation. Now, because of India's emphasis on education, it is turning out tremendous engineers. That is why India, and some other parts of the world, are beginning to catch up. As I go around the world, I go on preaching how other countries need to do what India is doing.