Having recently read Mike Brewster and Frederick Dalzell’s book Driving Change: The UPS Approach to Business, one cannot help but think about the lessons it offers for the young Indian BPO industry which too is going through its pangs of globalization.
I am sure there are a number of company case studies to draw from, but the UPS story stands out simply because of the way that the authors have brought out the trials and tribulations of building what is one of America’s most respected brands. It is not a book that indulges in self-promotion – far from it, it narrates several instances where the company faltered and how it recovered from its mistakes.
According to the 2008 Nasscom Everest India BPO study, the Indian BPO industry, which until recently was largely India-centric, has now grown to operate in 25 countries. This is just the beginning – the search for talent and more importantly, cost-effective talent, will drive the industry to deliver from an even wider set of countries. Countries such as Vietnam, and Egypt, which till a few years back did not figure on the radar of many outsourcers, are now emerging as possible outsourcing destinations. But in this rush to globalize operations, BPO companies must take some lessons from companies that have gone down this path beforehand to ensure that their mistakes are not repeated.
Here are some lessons which I believe UPS learnt that can serve as a reference for the globalization of BPO services:
1) Be very sensitive to local culture – West Germany was UPS’s first foray internationally. After much ground research, UPS entered West Germany in the mid-70s. Within a few weeks, they were confronted with a cultural clash. In the US, UPS drivers were recognized in their communities as objects of respect and affection but in West Germany they were seen simply as “truckers.” Therefore, attracting high quality talent was a serious concern. Take another example – UPS had a philosophy of “promotion from within” which backfired in West Germany as employees refused promotions because they didn’t feel comfortable managing their friends or taking on more responsibility. And, in the 1980s, when UPS entered Asia, it again experienced a cultural clash. The Americans in the Singapore office would show up for work every day sweltering in their dark suits, insisting that the local staff do the same in a country eighty miles from the Equator! Similarly, when BPO companies expand into The Philippines, they must be aware that people there are extremely social. So unlike the West, where you do not discuss personal issues early on in an engagement, in The Philippines it is ok, and in fact, helps bond with employees.
2) Emphasis on local leadership – The number of American expatriates at UPS is minimal. UPS’s “talent tenet” is focused on identifying and nurturing local leadership. This is extremely relevant for the BPO industry as it expands into countries outside India. There is no substitute. You need a native to guide the company through the new environment. Having the ability to converse in the native language, understanding cultural nuances, and living the ethos of the country will significantly add to success in that location. Also, on a more practical note, the ability to engage with the local employees (who are your biggest assets) is best done in the local language.
3) Invest in customer delight – During the 1986 holiday season, Lufthansa, which was UPS’s main common carrier for international deliveries, couldn’t provide a plane because it was needed to ship its own cargo. UPS immediately dispatched a DC-8 from its US domestic network and flew it to Cologne on December 23, 1986, in time for Christmas deliveries. Even though the plane’s hold was barely half-full, UPS felt it was important to indicate that its customer service was better. “We did whatever it took to show our European customers that we take our commitments seriously, ” said Wolfgang Flick, the president of UPS Europe. Similarly, Indian BPO companies should invest in creating customer delight. Recognize what’s important for the customer. Ask him “what are you evaluated on?” Then go out and deliver beyond his expectations – make him look good before his colleagues. Do not count pennies all the time thinking about “how much will this cost me.” The customer is smart enough to realize that you have gone out of your way to help him. They will reciprocate.
4) One solution does not fit all – When UPS decided to grow its operational footprint from three countries to 180 it was well aware that it would be able to do so only through a combination of organic and inorganic means. So it grew organically in countries like West Germany, acquired companies in parts of Europe, entered into joint ventures in countries like China, Japan and Korea and forged agent relationships in countries like Turkey. Indian BPO companies need to explore all possible models – build and buy – to ensure success.
5) Don’t underestimate integration challenges –Many of the acquired companies that UPS acquired had vastly different IT systems that couldn’t “talk” to one another, so the company had trouble tracking packages from one European country to another. Customs would often hold packages for days and neither the sender nor the consignee would know where the delivery was – and sometimes UPS wouldn’t either. Post acquisition integration is by far the most important thing that management teams should focus on – but unfortunately once the acquisition is signed, the management teams often move on to their next big fix, leaving the integration to “happen on its own.” Many Indian BPO companies have made acquisitions abroad; they will be well-advised to ensure that the management team focuses on integration otherwise the integration “mess” will lead to value erosion.
6) On big strategic decisions, keep the accountants out – When UPS decided to enter the international business arena, it was a significant strategic decision. In 1986, given the amount of money UPS was pumping into its international operations with limited returns, there was a lot of talk of abandoning international expansion altogether. But the management team remained committed to the decision to go international. In 2008, international operations contributed 25% of its $51 billion revenues but, more importantly, according to its annual report, “the international package delivery market has been growing at a faster rate than that of the U.S.” The boards of directors of Indian BPO companies should encourage their management teams to take bold, big strategic decisions.
The future of the Indian BPO industry is extremely bright and it is not long before India has its first truly multinational BPO company! Hopefully the lessons of other successful globalizers, such as UPS, will show the way.
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Tags: Business Process Outsourcing, BPO, Indian BPO, Globalization
Many of us woke up last week to yet another slug fight between two technology giants – Oracle and IBM. Oracle came out with a front page ad in The Mint newspaper talking about how it was spending more on Sun’s products than Sun ever did. The ads also quote Oracle CEO Larry Ellison as saying: “IBM, we’re looking forward to competing with you in the hardware business.”
The ads appeared after regulators for the European Union announced they are withholding approval of the $7.4 billion Sun purchase — the biggest tech merger announced this year — while they investigate potential antitrust concerns.
The ads are obviously aimed to reassure the clients and prospects of Sun’s products/services. No marks for guessing. But do such ads really work? Does Oracle actually believe that such an ad will ally any apprehensions that clients would have on the future of Sun products/services? The strategy seems more defensive despite its aggressive tone. The company would rather channelize their energies and communicate the same messages through 1-2-1 client engagements and through strategic PR.
It should be a given that the IBM sales and marketing teams will be in overdrive trying to capitalize on this opportunity much like SAP did a few years back.
In 2003-04, Oracle/PeopleSoft/JD Edwards were involved in acquisition imbroglio with PeopleSoft acquiring JD Edwards and Oracle in turn looking to acquire PeopleSoft.
SAP decided to cash in on this buyer behavior and came out with ads designed to woo J.D. Edwards and PeopleSoft customers grappling with uncertainty about those companies’ directions, given Oracle’s move. The ads are believed to have been “an excellent precursor” to a telesales campaign SAP undertook to try to get more prospects. About half of those calls apparently led to meetings with SAP account executives.
I would understand if IBM came out with ads that capitalized on the uncertainty of Sun’s products/services but I am not sure what Oracle would gain by releasing such an ad.
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Tags: Oracle, Sun, IBM, advertising, acquisition
Marketers have outsourced creative, right-brained activities since as early as seventeenth century. That was the genesis of advertising industry. Since then companies have evolved to a stage today, when marketers outsource a majority of their functions – be it direct marketing, advertising, events, media planning, and even analytics, which was hitherto closely held within the “ivory tower”. Some have outsourced more than others. But now, an even broader adoption of outsourcing is underway – that of entire marketing operations.
There are two basic reasons why this trend is gaining momentum. First – outsourcing can save money and improve quality. A large IT product company which outsourced its email marketing function was able to reduce its cost of email marketing by 30% while improving the conversion rate by 15%.
Second – outsourcing provides expertise that companies may lack, especially in the areas which involve new media like digital or are labour intensive like database management. When a large beverage company was looking to improve the quality of its website and dynamically create 100s of personalized sites for its clients, they adopted outsourcing whereby the service provider created a “website factory” which allowed the client to create brand-compliant, highly personalized websites in a matter of hours, which would otherwise have taken days to do.
So if all the functions in the marketing department can be outsourced, and it is only a matter of time that it will, what is left for marketers to do? The answer is what all marketers have been craving to do since they passed out of college but just haven’t had the time to do – “think strategically” by engaging more deeply with customers (internal and external) to build impactful marketing plans. As noted by Harvard Business School professors Gail J. McGovern and John Quelch in their article in the March 2005 issue of Harvard Business Review “They also need to play “ringmaster” by building an ecosystem of partners who deliver to the marketing plan.”
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Tags: analytics, email marketing, Harvard Business Review, marketing, marketing operations, outsourcing, outsourcing marketing
I have just been through a long exercise of trying to hire an agency to partner with us in our marketing & communications efforts. Its important that agencies understand what clients look for when they are evaluating them. Following are some of the things, i personally look for -
1) Passion: How passionate is the team that is presenting – credentials or strategy? Do you really believe and take pride in what you are presenting?
2) How much have you read about us before coming for the pitch? Some of the agencies i met had not even visited our website to understand who we are and what we do. Seems elementary, guess not!
3) Spend time listening to the client: At the end of the day, agencies have to realise that they are there because the client has a problem/issue. Spend more time understanding the client’s issue/challenge. Talk more about the client than about yourself.
4) Get the flashy execs out of the room: Most agencies will have their most senior people attend pitches but after the business has been won, its left to the foot soldiers to dig the trenches. Bring the team or atleast the lead member of the team to the discussion table and let that person talk.
5) Develop a solution/proposal that meets their requirements: Understand their requirements – some clients are very clear on their requirements and some are not. Ask the client their requirements and for those that articulate it well, develop a solution that addresses that requirement.
6) Be responsive: Its another way of showing that you are passionate about the client. Even if its a simple email like “got your email, will revert on your request by ____” makes the client feel that they are important to you.
7) Follow-through: Send a sms or call and check in with the client if they have received your proposal and if they have any clarifications.
Long back, when i had won a major pitch, the client said to me, “the high point of any client-agency relationship is on the day that the contract gets signed. After that its all downhill!” I remember that statement till this day as i have seen many agencies living up to that statement.
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Tags: Hiring an agency, what to look for in an agency
I recently visited a nearby mall and was kind of shocked to see some of the advertising there.
One billboard of a leading bank said “we guarantee the safety of your capital” – as i read this i am kind of thinking of kicking my financial advisor because in the last one year the value of my investments has dropped over 40%. If only i had put the money in this bank, my capital would be guaranteed. Or would it? How can this bank guarantee my capital when worldover banks are facing severe capital / credit crunch. Maybe this bank knows more about investments than the Wall Street blokes. But then why would this bank’s PAT be down more than 60%!!!
As i take a few steps, a catchy store signage shouts at me – “Sale 50% off”. I am hooked. I walk into the apparel store and check some shirts out. I pick a few that i have been eyeing for a while but the cost was just over the top for me – now was my chance to grab them at half the price – what a steal! But the joy was shortlived as I turn the price tag around and notice that the price has been reduced by only 15%. I check with the salesperson, “the price tag suggests 15% off but your signage outside says 50%”…prompt comes the reply “sir, its UPTO 50%”. Damn the asterik!!
As a customer i feel kind-of cheated because what was promised does not seem to have been delivered.
I remember reading a quote by John Mackey, CEO and Chair of Whole Foods Markets (one of the fastest growing companies is US) talk about the “irony of profit” – the idea that businesses that are more focused on their own profits won’t be as successful for the very reason that they have their own interests at heart more than their customers and prospects interests.
I am not a cynical person, and I am sure there are tons of examples of companies and brands that have adopted strict ethical marketing code of conduct, but somewhere the tough economic environment is leading us marketers to push the envelope of what is and what isnt ethical.
So how do you decide what is and what isnt ethical marketing – i use a simple test. I ask myself, can i, with a clear conscience, recommend that a close family member or friend buy, use or consume the product?
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Tags: ethical marketing
“They just dont get it” – this was the reaction of my colleague when he came out of a meeting last week with an agency. Noticing his animated gestures, i realised, rather quickly, that we needed to hit the cafeteria and fast. (Well we dont have a bar in office!)
As i think about the discussion, it reinforced my belief that the only way for agencies to truly add value to clients and in turn their own organisations is to spend a lot of time understanding their clients business.
The logic is quite simple really –>
1) if you understand the client’s business and you understand your domain, you will be in an enviable position to be able to integrate these two and consult the client much better.
2) Consulting better implies that you will be able to design and implement effective programs.
3) If you deliver effective programs, the likelihood of the client continuing with the relationship increases significantly. The barrier to switch has increased. There is enough data out there which proves the point that a loyal paying client is preferred over the heart-burn of trying to get a new client.
4) In addition, this loyal client is also likely to give you more work – this could be in your area of specialisation or related. Not to forget that the client will also refer you to many others. This in turn means revenue opportunity for you.
But all of it depends on whether you understand your domain AND the client’s business.
The challenge is accentuated in the business marketing space especially in industries like IT, BPO, and Technology. But if you want to service these industries you have to hire people who have a passion for it and therefore an urge to learn more and more. There is no getting around it.
My own hypothesis is that with growing demand for specialisation, clients will demand more out of their agencies and that “more” will only happen if there is an understanding of the client’s business. The differentiator for agencies will be domain expertise – not just your area of specialisation but also an understanding of your client.
PS: Some very strange questions that i came across -
1. Why is the third hand on the watch called the second hand?
2. Why does “fat chance” and “slim chance” mean the same thing?
3. Why are they called “stands” when they are made for sitting?
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I met her for the first time today and was amazed how beautiful she was. She was introduced to me as someone who could melt you by her singing. She sure did!
She sang some old hindi songs…and believe me she has a beautiful voice. As she sang, we even danced in front of so many people, without being embarassed. Her eyes had so much life. She is Maniben, one of the most beautiful persons i have ever met.
Maniben sings almost through the day. An avid Rajesh Khanna and Amitabh B fan, she can amaze you by her knowledge of hindi film songs. She narrated how she has tied rakhi to the filmstar Rajesh Khanna twice!! and has the Big B as her son!
As i got talking to her she told me she was “just 75″ and has a 50year old son. She cooks food and takes complete care of herself and her son. He ofcourse is mentally retarted. I asked her how she does it all? She just smiled and we went onto another song.
She asked me what time it was and immediately remarked, “oh its getting late, my son will be getting anxious”. I couldnt help smile.
We soon finished our “Coffee with Granny” visit, handing out some blankets, food, and groceries to 50 such elderly.
As i reflect back, I went to this old age home as part of our CSR program. It was supposed to be a simple visit – go, visit the poor elderly and give them some groceries, possibly spend some time and get back to my book at home. But after meeting Maniben i feel energised, more alive than before.
As we were leaving they all said “thank you” to us, and i couldnt help thinking shouldnt it actually be the other way round – Maniben showed us how fortunate we were, and also how life can be lived – with a smile. Thank You Maniben.
PS: Maniben has invited me to her place next time and promised to serve Gujarati dal which is my all time favourite!
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Tags: corporate social responsibility, CSR, elderly
I had a very interesting conversation with a friend of mine who heads marketing at one of the FMCG companies in India. His marketing budgets had been slashed given the economic “downturn” and obviously he was not in the right spirits. It augurs a discussion on whether companies should spend more on marketing in tough times or not.
My personal view, as biased as it may seem, is that companies should. And here is why -
1) Marketers get more focused on ROI as we need to constantly reassure the value of our spends. There are a lot more questions in the management team meetings on marketing spends ROI in a downturn than otherwise. So the focus is tremendous.
2) Companies get better value for their spends. I have had companies offer 40-50% off rack rates as business is tough to come by.
3) Companies innovate a lot more - which goes back to the first point. The fact that the entire cosmetics industry was born in the depths of The Great Depression is proof that marketers and companies think a lot harder in tough times.
4) Risk taking appetite increases - Marketers are willing to try newer channels and shift budgets around to reach their target audience more effectively (ala social media marketing).
5) Companies listen better to their customers - To improve customer retention and to grow existing customer relationships.
Companies will have the vision to recognise the long term value of continuing to invest in marketing, the question really is whether the CMOs have the conviction to convince the management.
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Tags: chief marketing officers, increase marketing budgets, marketing, marketing communication, marketing in economic downturn, marketing spends, tough economic times
This weekend, we launched our new website (http://www.wns.com/). We had a website but it had run its time in terms of content, style, look and needed a serious dose of “Revital”.
It has been an extremely challenging exercise given that we were virtually building the site ground up – new architecture, new content, new design, re-energized customer focus etc. Some lessons we learnt along the way could serve as good for those seeking to launch or re-launch their websites
1) Decide on the audience you want to reach - Often companies create websites that try to cater to many stakeholders – clients + employees + investors + community etc etc. Its extremely difficult to do justice to anyone of them if you are not clear on which one you want to focus on.
2) Define the objective of the site - is it to increase traffic, is it to increase engagement on the site or is it to just provide basic information. This will help you define the structure of the content and the content itself. Before you take the new website live, make sure you do a baseline exercise so that you can measure the impact of the new website.
3) Decide on the basic structure - understand what your audience is seeking on your site and then structure the site to present that information in a simple manner.
4) Engage with your IT teams - they are critical to the success of your site. They will help define the basic IT platform that will support the functionalities you seek. Engage with this team as early in the site definition phase as possible. They are after-all going to manage your site once it goes live.
5) Design the site using an agency or an in-house team. In my experience its best to create the first design yourself and you are best positioned placed to understand your audience and their behaviour.
6) Have a strong project management process. You can even use basic excel also but make sure you note each and every element into the tool. Seemingly small things also!
7) Content is king on the web – so make sure you have a strong program that will help generate new content. Be it in the form of blogs or articles. Also, keep the navigation simple – if your audience cant find what they are looking for in 5seconds then you need to relook at the navigation.
Develop a plan for marketing the new site – no point in spending all that time and money if people dont know about it! So whether its SEO, SEM or plain and simple email to all your contacts – get the word out!
9) Launch pangs - Test! Test! and Test some more! Each and every page and link and workflow. On the day of the launch – Murphy’s law will come into play – so prepare for failures.
10) Celebrate the launch - Phew! once launched, go out and celebrate after the launch – your team needs it and so do you!
Its a great experience, and you have to go through it to realise the high you get when you see the site go live.
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Tags: marketing communications, redesign website, website
Recent Entries
- Globalizing operations: Indian BPOs can draw a page from UPS
- Does Oracle’s recent ad on its commitment to Sun’s products reassure clients?
- Outsourcing of marketing operations is a reality now and its good news for marketers
- What clients look for while hiring an agency?
- Is there such a thing as ethical marketing?
- Importance of understanding client’s business is imperative to agency success
- Its not for them, its for our ownself
- Should companies increase marketing spends in tough times?
- Revital for your website: 10 Tips to launching a new website
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