(The National Association of Software and Services Companies (NASSCOM)?serves as a chamber of commerce for India's booming IT and services industry - "representing and setting the tone for public policy for the Indian software industry". Formed in 1988 and headquartered in New Delhi, the organization now has over 1200 members - making up over 95 per cent of the industry in India by revenue. President Som Mittal has held his role since January 2008, having previously served as chairman in 2003-4; formerly with Hewlett-Packard, Digital-Compaq and Wipro, Mittal has spent nearly two decades in the IT industry as well as having worked with numerous public bodies to improve Indian educational and infrastructural standards. In an exclusive interview with SSON, Mittal outlines?the major challenges?facing?his?organization and India's BPO industry in general, as well as looking forward at his ambitions for the remainder of his term Boston Bruins Patrice jersey in office.)
SSON: Boston Bruins Patrice jersey Som Mittal, you’ve got one of the highest-profile jobs in one of the most dynamic industries on the planet. What are the biggest challenges you face on a day-to-day basis? And what are the most satisfying aspects of your role?
Som Mittal: For us the expectations the industry has of NASSCOM are pretty high. We have a very wide range of members from the very small to the extremely large; from Indian to multinational; people in products and people in services; and we all work under one umbrella, so the biggest challenge is how we can add value to them, with the industry being as diverse as it is. That also in some regard answers the second part of your question: working with these challenges makes it very interesting. Even more so, because you have the chance to work with governments across the world and, as I said, with a very wide range of customers as well as member companies.
SSON: The growth of the BPO sector in India has been astonishing. What do you think have been the biggest contributing factors to this boom, and do you think such growth is sustainable?
SM: If you look at BPO these were essentially business services which were very much embedded in organizations, and the BPO industry in India - riding on our experience with what we have done in IT - actually globalized these services. And with that companies could not only shift processes to a country like India - where of course there were some cost advantages - but I think we could transform them; so in most cases when people have outsourced their work transformation has been an integral part of what has been done.
To the point of what is contributing further, and the future, I think it is being driven really by the changing demographics of the world. Two things are happening: we’re seeing that in the developed world the population is an inverted pyramid, and every study shows there are going to be fewer people available to do jobs the way they are currently done. So most companies are saying they will focus upon their core competencies and business services - which were an integral part of their operations but more ancillary in nature - are something which they can have somebody else do, who has shared services and more expertise.
While many companies have outsourced their supply chain and accounting and transaction processing, we keep seeing they are getting more end to end, and more and more services keep getting added to the same customer every year. So, I would think that it is sustainable. Of course there are other questions about where India still needs to work hard: I’m talking about infrastructure and growth and concentration in a single country ? issues and concerns that a customer would have.
SSON: What would you say are the biggest challenges the Indian BPO and IT industries face over the next, say, five years?
SM: I think for us it’ll be harder to get employable resources coming into our industry. We have a huge talent pool in the country, people who get a light level of education, but the current education system in the country has produced employees we have to work on making employable; this means the industry puts an enormous amount of effort getting this so-called raw material from colleges and making them people who can deliver to customers. And while they’ve done it at this level it’s an enormous challenge scaling it up. We need to find remedial action, organizations like finishing schools. We can share this responsibility with them.
So that’s one. The other challenge is that today almost 90 per cent of the work is done out of seven cities, and that happened because international clients wanted access to airports and these are by and large near the large metros we have. If you overlay the footprint of colleges and where people come from, our growth will get stunted if we only limit our growth to these seven
The third that we have spoken about is that the aspirations of many other countries have also gone up as India has boomed with this outsourcing model, and we need to keep ahead of the curve with more and more value-add for our customers, and ensure there is more stickiness because of the way, and what, we serve.
SSON: Many in the industry see the next decades as being a grand tussle for economic supremacy ? at least in the outsourcing and IT sectors ? between India and China. Do you go along with this, and what advantages does India possess over its neighbour?
SM: You know, China I believe is already placing pressure on the competitiveness of its manufacturing, and with their large population and their own education system clearly see IT BPO as a growth engine, and they are building a suitable infrastructure. Currently the focus of their IT BPO is to service themselves - and China itself is a large market.
Second, because of their natural affinity the Chinese are working more with Japan (as you may know China has about 60-70,000 students in Japan today, studying in Japanese universities. We had that benefit in the US and the UK at one stage); China has that natural advantage and they are growing that business. We also see many of the multinationals that have set up operations in China wanting IT support; the market has started opening up for even Indian companies, saying “you’ve already done work for us in the US and Europe, now you can service us in China”, so Indian companies are setting up those operations ? and as we set up our operations we also transfer some of the know-how. So we would believe that over time China could become a scalable model.
However there certain areas in which India would always have a lead. One, I think that as a result of the last 15 years of handling delivery - and that, too, mission-critical delivery - I think Indian companies and Indian service delivery is far more mature, and that maturity will only continue to increase. And that maturity is not only the quality of delivery which is supposed to be given, but issues relating to data-security, data-privacy, IT-management, things that are getting of greater and greater importance to our customers.
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