Up in the air with Ritesh Idnani… Part II

Ritesh Idnani is Chief Operating Officer for Infosys Airways

When last we left Infosys BPO COO, Ritesh Idnani, in Part I, we were discussing the priorities of businesses in today’s sluggish economy.

In Part II, Ritesh explains the changes in the BPO industry from his perspective – with particular emphasis on the advantages providers can gain by investing in industry-specific nuances to their BPO offerings.

Between parts I and II, he actually purchased an airline with his airmiles account…

Phil Fersht: Some people have joked, in the past, that Infosys is the Indian Accenture. But for our readers, how do you view Infosys as differentiated from your prime competitors? If you have to really put a nail on it in a couple of simple point forms, how do you do that?

Ritesh Idnani: We certainly have a lot of respect for Accenture, we hold them in very high regard. Having said that, we do believe there are three or four things that differentiate us from the rest of the pack. We have a broad array of solutions that we believe will allow us to enable client outcomes that extend far beyond cost reduction and business efficiencies. Our ability to address all ends of the spectrum be it  impacting client revenues, gross margin or net margins –  these are critical differentiators because a lot of our competitors don’t necessarily claim that state. There aren’t too many companies out there who have been able to effectively converge operations and technology, and demonstrate a business benefit that is tangible. We have more than 90+ proven case studies in the system that quantify the business value that we have been able to drive in the client ecosystem I don’t think our competitors have nearly the same kind of capability that we have in terms of demonstrating this across different ends of the spectrum whether it is technology solutions and process that can address a specific area within a process toPlatform & Cloud-led BPO that addresses an end to end spectrum in the client process matrix.

Our ability to maintain a high degree of nimbleness and responsiveness to the market place despite a rapid growth in size and scale is another key differentiator . I think that’s something that allows us to differentiate ourselves very rapidly because we are able to be much more adaptable to clients needs and yet, at the same time, call a spade a spade if you will. I think that is something that is different from a lot of our competition.

In  some sense the first battle was on global delivery and I think that was something that we won on our terms. The question is how do you extend the full suite of offerings that we have and ensure that you can scale the business at a much more rapid pace. So today, in some cases, it’s really up for the incumbents to defend and protect their turf. Can they demonstrate to their clients that business benefits that never materialized in the past can now happen just because there is an Infosys knocking on the doors making it a difficult conversation for them? I think these are some of the things that have helped us.

I think the last piece of it is a very high degree of customer centricity in our interactions and also the very easy access to the leadership of the company.. We are a very flat organization. People are empowered. I think those are some of the things that have helped us as we have grown extremely rapidly. I think these are some of the elements that people saw of our culture that are helping us in our journey to grow at a pace which is faster than the rest of the industry.

Phil: With clients increasingly wanting you to expand your services that require real domain specialization in their industry, how do you plan on accommodating their needs as far as staffing in acquiring the expertise that you need within Infosys?

Ritesh: Actually, one of the things that we were probably first off the block to do as an organization more than five years back was to actually verticalize our BPO. Back then, the industry was predominantly focused on G&A (general and administrative) process – and a large part of our competitors still operate predominantly on the G&A side of the P&L, offering F&A, HR, procurement , offerings primarily on the horizontal side.

I think we ended up doing a couple of things. One is verticalizing our offerings. Our ability to contextualize the G&A offerings from a vertical standpoint holds us in good stead Let me give you a few examples of that and how we manage it in our day to day practices. If you take the media and publishing space as an example, royalty accounting is a big pain point for the industry today, specific only  to the media industry. You are not going to run into it in another industry. In the insurance sector as an example, regulatory reporting, whether its yellow book reporting or blue book reporting etc., is going to be extremely critical and those are very industry specific conversations on the G&A side.

Second is the ability to impact the cost of goods sold side and the revenue side of the equation.. We built out a wide variety of offerings –  as an example, we have close to about 35 vertical led offerings for different industries that we operate in. Let me give you few examples of that. I gave one example a little earlier in response to a question, the media side. In that industry, for example, we are talking about the long tail monetization that you have in that sector, but not so much in others. On the manufacturing stage, we are talking about how we can assist in the warranty administration side. On the consumer package goods stage, we are assisting companies to improve their field force effectiveness? These are very specific to those particular sectors and because we had the orientation right from the last five years, I think that is something that has helped us stay ahead in the game

The impact of verticalization for instance has a huge import on our ability to leverage domain and build relevant industry skills in our people,.We have also consciously made it mandatory, from a promotion and progression standpoint, for all of our associates, to obtain different industry certifications. For instance in the insurance industry, we look at the types of industry certifications that are there(We have five levels of mandatory training that are specific to each  vertical that we operate in so that people get oriented and familiar with the specifics for that industry.  So when they walk into a mortgage environment, they are not going out there and asking, “What is origination?”, “What is default management?”,  “What are the different rules and regulations that are there?”, “What are the latest norms that are coming in the form a regulatory standards?” These are things that people are already familiar with before they go because of the training that we are providing. It is also a combination of internal and external orientation.

In their performance management systems, people have to list out the trainings they will take for every six months. This is essential because the appraisal system is not complete unless they do it. We have tried to ensure that every employee has a certain amount of training which is vertical led with both internal and external certifications. This mandates the promotion and progress. Managing both of those steps is helping us to provide offerings that are largely differentiated in the market with a very strong vertical orientation.

Phil: So when we talk about verticals, many of your competitors have structured their businesses by very distinct industry segments, with several of them operating almost in vertical silos – there are a lot of differing voices in the industry on this issue. We wrote a report on this, recently, to show that a lot of clients are much more willing to innovate and collaborate with other clients who aren’t in their direct industry sector. How is Infosys tackling this, and what’s your own view here? What’s the best way to service clients across industries in the future, and how should providers really structure themselves to service them?

Ritesh: I think a lot of innovation that is out there can come from the business and operations mandate in one industry and how you reflect and imbibe that in another industry sector is something that’s a very important question. For instance, today you look at the marketplace; we are focused on basically a few strategic themes to an organization. We believe these seven strategic themes cut across industry sectors.

The first one is centered on what we call the power of one. Our belief is that our clients’ customer is increasingly getting micro segmented and therefore you need to have specific product offerings, which are geared towards that particular consumer. How you actually create offerings which are addressed to that particularly individual rather than treating everyone in a uniform way is something that is going to be extremely critical. I think that’s a common challenge that a lot of our clients across industry sectors are facing.

I think the second piece of it is the changing demographic of the work force. The fact that you have a lot more Gen Y people coming into the work force is creating a lot of challenges in how  people orient themselves to a new work environment and the fact that people are used to doing things in a different way. That’s a common challenge that we end up seeing across industries. The third one that we are seeing out there is centered around the impact of social media.

How do you monetize the impact of social media? I think it’s again a common challenge that a lot of our clients across industries are facing.  While technology is buildings various solutions to address this, our ability from a BPO standpoint to monetize information through the complex social media space helps  clients drive deeper industry understanding or analyse diverse stakeholder feedback. That knowledge  is critical to drive business impact enabling differentiation in the market place.

The fourth one is mobility. Again, if you look at the impact of mobile technologies today, you can do all kinds of transactions whether it is using the iPhone, the iPad, the Internet, any medium that allows access remotely. How do you create applications and solutions that are geared for that is something of a challenge that a lot of our clients are facing across industry sectors. (We may want to add seamless mobility into this. For instance our ability to load on applications that can impact business not only from our customer;s point of view but also enhance client;s brand experience )

The fifth one is that as organizations have grown, they have become more complex and not as smart as they ought to be. How do you actually simplify these organizations from an operations, process and technology standpoint? I think that’s a challenge that a lot of our clients are facing.

The sixth one is centered around what I would characterize as the potential of emerging markets and the ability of clients to penetrate and create relevant differentiation in these markets.. This is where a lot of our clients today are looking to operate given that the rates of growth are slowing down in the more mature markets The requirements in emerging markets BRIC countries  are widely different from the more mature markets. There are also industries in the BRIC countries that are growing not just at the GDP level at the seven to nine percent rate, but also every company that has its operations out there is growing at 30 to 40 percent. I was with a client recently in Sao Paulo and that client has grown in the last three years in the Brazilian market at 40 percent compounded and they expect their business to grow to being a ten billion dollar business from one billion dollars in the next ten years. That’s the kind of potential that’s there and providers need to be able to modify their solutions to build scale and account for locational business complexity  We have built solutions that allow them to tap into the specific needs of emerging markets

Last but not the least is the entire question on sustainability.  Every organization is trying to say “How do I do all of these themes, yet be environmentally conscious, in a manner which is sustainable in the longer term?” I think we have got solutions that are addressed to that.

These are the seven broad areas of focus that we believe will address the question on, “How can we take practices from one industry sector to another, and be able to apply them successfully to enhance the business value of the equation.

Phil: Are you getting more involved with your clients’ customers?

Ritesh: The nature of outsourcing has evolved to being very strategic especially in conversations that we have been having with clients where either the duration of the relationship has achieved considerable length or where there are large areas of business operations being outsourced . This I believe is the second level of innovation, in that that we find ourselves a lot of times at the center of the ecosystem. For instance, you may be working with a consumer goods package company, but that company has a bunch of retailers who are its customers. We end up finding ourselves supporting both the consumer package goods company as well as the retailer and, therefore, be at the center of the ecosystem. We can see supply chain inefficiencies on both the consumer package goods side as well as on the retailer side. How do we actually tie these together being at the center of the ecosystem and how do we get them to talk to each other? So we can be in a very unique position today from an industry standpoint because we are working with our customers and their customers at times, especially in a B2B context. We may have visibility having worked on applications and processes at both ends that a lot of our clients may not be able to directly see.

That, in turn, raises different states of innovation that might become visible. So those are some of the things that we are working on very well, very consciously with our clients. We believe that there may be opportunities out there for benefactors sharing across industries as well.

In the third and final part of our interview, Ritesh expands on communication, networking through social media, and career advice for those entering the industry. Don’t miss the conclusion.