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Partnerships are
fast emerging as
an attractive
and sustainable
BPO model
 
 

The offshore BPO industry has matured considerably and third party service providers have become increasingly resilient with the larger ones acquiring scale and stability. With the emergence of various alternate models, the captive model, originally motivated by lack of industry maturity, is looking somewhat unattractive owing to its inherent inefficiencies and higher cost structures. Even as third party players have augmented their process execution competence, there is still the issue of ensuring control given the apprehension about privacy issues, legislative compliance, pressures from governmental agencies and even customer concerns. It is in this context that the partnership model of BPO operation is gaining prominence to becoming the preferred offshore BPO model. By using this means, India, companies could access all the benefits of a third party model and at the same time ensure control by virtue of their stake. We feature the partnership between Client Logic and ITC Infotech who collaborated to form CLI3L, a joint venture company that imbibes the best practices from its parent companies.

Client Logic is a BPO provider in the contact center and fulfillment industry. It is among the top 5 global contact centers with over 140 million customer interactions in 2003. It is a subsidiary of Canadian company Onex Corporation and has over 19,000 employees. In 2003, Client Logic began exploring having an offshore presence, prompted by customer pressure and competitors who already had an offshore strategy. The company evaluated two destinations- India and Philippines- as candidate destinations. India , with its vast pool of English speaking professionals and lower costs, emerged as the preferred offshore destination.

Once the offshore destination was decided upon, the next decision was to decide upon the model of off shoring. Client Logic's business proposition had various elements favoring a captive strategy such as scale and high degree of control requirement. At the same time, the company lacked the critical India experience required for a captive model.

 

It was in this context that the company decided to go in for a partnership model with ITC. ITC Infotech and Client Logic brought in complementary strengths to the table. Client Logic was a proven player in the BPO business with global experience and understanding of the running of BPO operations and processes. ITC Infotech, on the other hand, was a newcomer to the BPO business, but had valuable experience in its understanding of India, financial muscle, best corporate governance practices and management expertise. Client Logic was looking for a partner who could help setup a BPO unit and scale up in a relatively short period of time.

According to the companies, the success of the ITC Infotech and ClientLogic partnership was largely due to the chemistry the two organizations shared. Representation on the board is split equally between I3L and Client Logic. In the day to day operations, the CEO, COO designates and operational managers were nominated by ClientLogic whereas the heads of Finance and Human Resources were nominated by ITC Infotech. This demonstrates that ClientLogic was the acknowledged expert in running of a BPO business and operations whereas ITC Infotech was the expert in finance and HR aspects, as these had to be relevant to an Indian context. The work ClientLogic offshored to India was predominantly high value inbound tech support. The venture adopted all the processes and best practices of ClientLogic. The transition management focused on developing clarity on the assignment and creating transparency. ClientLogic realized the importance of cultural compatibility and thus the company processes were customized in areas such as HR and Finance. ITC Infotech gained valuable experience on issues like project management, process development and accent training.

Overall, the choice of the business model for ClientLogic has borne out to be very satisfactory for both the parties concerned. The critical factors that contributed to this success as summed up by the companies are:

  • Partner selection process was detailed and comprehensive on both sides

  • The rules of engagement were clearly defined at the outset and transparent

  • Processes brought from ClientLogic were customized for Indian purposes

  • ClientLogic was flexible in making changes to accommodate to the Indian work culture and norms