A background on Outsourcing – Amit Somaiya interview with Steve – Part 2
Amit Somaiya is co-founder and CEO of IMS People, a part of the highly regarded Empresaria Group plc UK. Amit discusses the Do’s and Don’ts of outsourcing, what it’s like to build up businesses including dealing with failure, and personal attitudes and philosophies that got him where he is today.
This second part asks: 1. Tell me about the changes you’ve seen in India in the last 20 years? 2. Define knowledge process outsourcing? 3. Should IMS outsourcing be better described as a partnership with their clients? 4. If companies want to use you as an outsourced partner, what questions would you suggest they ask? Part 3 will focus on tough outsource supplier questions!
Steve: Let’s look a little bit at the background of outsourced processes. Could you tell me about the changes you have seen in India in the last 20 years? Because certainly there have been plenty.
Amit: You know the outsourcing industry is not new in the Indian context. It started of way back in the mid ’80s. The earlier days mainly focused on IT. We had a large number of graduates coming out of engineering colleges with computer degrees and we naturally became an environment to supply computer outsourcing. Over a period of time that evolved into business process outsourcing.
We set up IMS way back in 2006 so early 2000 was the advent of knowledge process outsourcing. What we do at IMS is knowledge process outsourcing.
Steve: Can you define knowledge process outsourcing?
Amit: Business process outsourcing or business process management, you take elements of a business and you have them outsourced. You can be working across different areas, let’s say for example credit control whether for an insurance company, banking company, or airlines company – what you are doing functionally is taking the credit control piece which is a business process, re-engineering it in an outsourced format. That’s business process outsourcing.
Whereas IMS is in the knowledge domain. We work only for recruitment and staffing firms. Our expertise from the last 10 years which we inherently have in terms of how recruitment business can be made successful and more efficient – that’s in the realm of knowledge process outsourcing. While you work on the same business processes which might required to be outsourced, you approach that entire outsourcing assignment from a knowledge perspective rather than a simple business process which needs to be outsourced. Therefore, we are different from pure BPO or BPM as it is called back in India.
Steve: As a consequence of that, there’s quite a bit of on-boarding aspects to your service because you need to invest in understanding what you client really want before you can provide the service?
Amit: We don’t have ready-made solutions, the solutions which we deliver are tailor-made. When we enter a recruitment company we have a sense of what can be offered – sourcing activity, 360 degree solutions, or a solution on the VMS or MSP space. But the delivery of that solution is very customised – we need to understand the strategic intent of the recruitment and staffing firm. What do they really intend to accomplish by actually outsourcing? How do we sit inside the organizational culture? How do we ensure there is camaraderie between the onshore and offshore teams, and how do we plug and play inside the business. And for all of this, we gain knowledge from the company. We need to understand what their processes might be, what their steps are so that each time the solution that we deliver is very unique.
Steve: Do you think that you should be referring to “partnering” more than “outsourcing” because certainly at idibu, we find that to have a successful partnership is very easy to agree in principle, but the hard work is really the investment and what you do after you agree the partnership?
Amit: I completely agree. As distinguished from an “offshore vendor”, we tend to use the term “offshore partner”, and we tell our clients, when you actually select an offshore entity, you really need to partner with them. You need to invest long term. This is not a solution to deliver miracles over night. We do not have a magic wand. We do not claim that we can make your business anymore successful. Your business is going be successful as a consequence of your business strategy. We cannot change that strategy. We can influence it using the knowledge we have – but eventually that strategy is led by you.
An example of a client and business partner (healthcare). Their entire recruitment team sits with us back in India. We also do their accounting. But they have a very contended business strategy. They are not aggressive. The velocity of growth which is possible, or the velocity of differential change we can bring inside their business is restricted to the extent of their aggressiveness as to how they want to take for their business, their vision of it. We cannot influence any change in this case. Our business strategy is just ensuring that we are in matched phase with them, nothing more. Compared to other organizations with high vision, we are constantly challenged to ensure we keep on supporting them as they grow their businesses.
Steve: If a company wants to use you as a outsourced partner, what questions would you suggest they ask?
Amit: I think the questions they need to ask is to themselves is: “Why do I really need to outsource?”, “What are the three things which will actually make them fail inside the business when they outsourced it to any outsourced department?” They need to get these two questions really answered. The first one is the intent and the second one is their internal challenges.
They need to be clear about both of these before they can come across to us. Because when we start a dialogue, unless we can understand their intent, we will not be able to justify or suggest any solution which answers it – and the second is, if we are privy to the challenges which they have, then we can share with them insights or measures which they can start implementing in order to ensure that when those challenges come, that bridge is also crossed and they are able to address it. These are the two questions they need to ask themselves.