Paran Balakrishnan: Back-office pioneers look to grab high-end of action

The lifts haven't been installed yet in Raman Roy's glittering new multi-storey glass-and-concrete tower block. But a cloth banner over the reception boldly proclaims his company's Star Trek-style motto: Beyond the Existing.

It's not Mission Impossible for Roy who has called his newest company Quattro. Why Quattro? Because this is the fourth time round for Roy who has been called everything from the grand guru to the grandfather of the Indian business processing outsourcing (BPO) industry. Three times he has started companies or divisions and succeeded beyond his wildest dreams. Now, he's hoping for another winner.

A few miles down the road, Sanjeev Aggarwal is also making another new start to his corporate life. Three months ago he was the chief executive of IBM-Daksh, one of India's biggest outsourcing companies. His office is still being built so for the time being he's functioning out of a tiny room in a sparkling new business centre. In his latest incarnation he's a venture capitalist with US$140 million ($213.58 million) to spend and smart, young entrepreneurs are already lining up at his door.

Roy and Aggarwal are living out a Silicon Valley-style dream in New Delhi. They have caught the serial entrepreneur bug which has been known to hit techies when they've sold their shares and gaze at the awful possibility of never having to work again.

They have taken different routes for their return engagements. Roy is back in the outsourcing business but aiming this time for the high end of the market - knowledge process outsourcing - where smart professionals such as accountants and lawyers sitting in India perform complex tasks for companies in other parts of the globe.

He is also a venture capitalist with about US$200 million in the bank. His backers include US VCs like Olympus Capital which has put up US$100 million. Says Roy: "We want to take BPO to the next level."

Aggarwal, who says he doesn't want to return to the hurly-burly of running a company hands-on, is a venture capitalist who's focusing on "technology powered" companies. He is already meeting about five or six would-be entrepreneurs who turn up in his office every day armed with Powerpoint presentations and meticulously prepared arguments.

"I'm amazed at the quality of the talent that I'm seeing," says Aggarwal.

Roy is gearing for a more active role and he has put together a team of executives who will run Quattro businesses and advise entrepreneurs being backed by the company. Quattro's gleaming 4000 sq m office block has room for 2500 call centre executives. He is planning to lend cash to some companies and management support to others.

Roy has an extraordinary track record that might be tough to match even in Silicon Valley. He pioneered India's first call centre back in the early 1990s for American Express and then moved to GE where he kick-started the company's back office operations.

The next time around Roy turned entrepreneur and launched his own firm, Spectramind, with venture capital backing. Then the inevitable happened. Wipro chairman and India's richest man, Azim Premji, made Roy an offer he couldn't refuse. Roy stayed on after being bought out for three more whirlwind years and in that time the company grew from about 6000 to 20,000 people.

Roy has come a long way in the last decade. In the early nineties he was an executive in American Express but India was a tiny dot on the map for the US giant. As he puts it: "If our division had fallen off the globe nobody in Amex would have noticed."

It might have stayed that way if Amex's then financial controller, John Mcdonald, hadn't figured that his Indian executives were smarter than they were given credit for.

At that time, Amex's back-office work was done in 42 locations around the world and McDonald wanted to slash that down to three. Roy was summoned to New York, told to make a presentation and, amidst scepticism, Gurgaon, on the outskirts of Delhi was picked to be the third back-office centre with Brighton, England, and Phoenix, Arizona.

That move turned Amex into a pioneer in the subcontinent and accidentally laid the foundation for India's BPO industry which at last count employed about 471,000 people.

For Roy, the BPO saga was only beginning. Back in the early 90s India had a truly awful telephone network and the internet was at a nascent stage. Amex's fast-growing Indian operation just reconciled books and didn't talk to customers. But it wasn't long before GE's Gary Wendt turned up with a blank cheque. Roy moved to GE which had much greater ambitions for its Indian operations. The company currently employs 25,000 people at centres in India, China, Mexico, Hungary and Romania.

Between them, Amex and GE have helped to transform Gurgaon, the fast-growing suburb on the outskirts of Delhi. Gurgaon has become like Pudong in China where paddy fields have vanished under the weight of gleaming skyscrapers. What's more, India has a sizeable chunk of the world's BPO business and growth rates are sizzling. It is even predicted that BPO will grow bigger than the mammoth software services industry by 2010 and will employ about one million people. Says Roy: "There are all kinds of opportunities."

Aggarwal was also an early starter in the BPO game. He was an executive in Motorola when Ashish Gupta, a cousin working in the US, hit a high-tech jackpot. Gupta sold his company, Junglee, to Amazon. Gupta was in the thick of the high-tech action in the US and quickly saw the potential for call centres. That led to the formation of Daksh, which turned into one of the largest third-party call centres, unlike GE and Amex which are part of big corporations. In 2003 Daksh was swallowed up by IBM for a figure reported to be around US$70 million. Aggarwal and Gupta are partners in Helion Ventures.

Roy and Aggarwal are at the forefront of an industry that barely existed a decade ago. Roy has bought a stake in a market research firm and the BPO arm of software firm Flextronics. He hopes to do complex analytic work for smaller American banks to help them assess risk and grow their loan portfolios.

These are all ambitious goals. But as Aggarwal and Roy are aware - in the Indian high-tech industry the sky is still the limit.

* Paran Balakrishnan is the associate editor of The Telegraph, Kolkata. His column appears fortnightly in The Business Herald, alternating with Eye on China.