Once upon a time, the CEO of an outsourcing company decided to take an international tour to visit the company’s clients, prospects, investors and well wishers. Here are some excerpts from the CEO’s diary on his travels:
Breakfast with Client A
Client A: “We like your company because
you’re so focused.”
CEO: Our goal is to always remain focused and provide you ‘value
added’ services.
Client A: But, we feel your company is too small and we do not
want to be a big part of your business…
CEO: Our goal is to grow this company aggressively so that you
are one of ten large clients, not the only large client
Client A: But, we do not want you to grow that large, because we
may not continue to get such customized service
CEO: Our goal is neither to grow so large that we cannot provide
you with customized service nor to remain so small that you
become a large part of our business
Client A: What size are you looking at then?
CEO: A couple thousand people over a couple years
Client A: Our other vendor with a few thousand employees is not
able to provide us with the type of service you are providing,
so we do not want you to grow too large. But we don’t want you
to remain too small either…
CEO (sighs inwardly): You’ve had awful weather in the past few
days with all the rain, snow, wind…
Client A: How is the weather in India?
CEO: Hot. We do have rain spells that cause havoc…
Client A: Will that affect my operations?
CEO: Not once in the last 6 monsoons. We provide transportation
to all employees.
Client A: What if your transportation breaks down?
Lunch with Client B
Client B: We like your company because you are focused, and you provide value added services.
CEO: Our goal is to always remain focused and provide you ‘value added’ services.
Client B: But, we have other vendors in India who offer to do this job for much less.
CEO: Have you looked at their track record?
Client B: No
CEO: The outsourcing story is littered with failures of arrangements that went wrong because of people not having the right partner in India.
Client B: We too had a partner earlier, and we had to terminate that relationship because they had very poor quality, did not understand our requirements, had some billing problems, training problems, attrition problems, management problems…
CEO: I assume you do not see any of those problems with our company.
Client B: Not at all; your team is very dedicated, goes above and beyond to meet our volume spikes, and the quality and productivity are better than our in-house operations.
CEO: I am glad to hear that.
Client B: But, we have other vendors who offer to do this job for much less…
CEO: How can I help?
Client B: We want your quality and responsiveness at the price of those other vendors whose names I cannot recollect.
CEO: (sighs inwardly) You’ve had awful weather in the past few days with all the rain, snow, wind…
Dinner with Client C
Client C: We like your company because you are focused, and you provide ‘value added’ services.
CEO: Our goal is to always remain focused and provide you ‘value added’ services.
Client C: The recent migration of newer processes was extremely successful, and I am thankful to your team for going above and beyond in making it happen.
CEO: I am glad to hear that. Did you have a chance to review pricing internally, because it has been around 3 years since we discussed pricing?
Client C: Yes, we feel that you are definitely priced much better than our other operations in India.
CEO: I am glad to hear that.
Client C: I am happy to escalate the issue internally.
CEO: Thank you. You had mentioned you were to discuss internally last month.
Client C: Yes, I did. Everyone agrees that your price is very competitive compared to the excellent quality you provide.
CEO: Yes, this is why I am hoping for a review in the pricing
Client C: But our lawyers think that contracts cannot be amended mid-term
CEO: We just amended our contract last month to include the newer processes.
Client C: Yes, but that was the SOW (statement of work). Our lawyers say that pricing cannot be amended mid-term
CEO: Actually, it is just one line in Appendix C where we refer to pricing, so it is just one number that needs to change.
Client C: I agree. But, the lawyers say it cannot be done
CEO: (sighs inwardly) You’ve had awful weather in the past few days with all the rain, snow, wind…
Next Morning Board Meeting:
Board Member A: We’ve got some great feedback from some industry sources that our clients are very happy with your work
CEO: I am glad to hear that.
Board Member B: It seems you delivered your 6th year of profitable operations.
CEO: Yes, we always look at our bottom line.
Board Member A: Yes, but you need to look at the top line as well. We need to add a thousand people this year.
CEO: We are looking at acquisitions.
Board Member A: Think big, think large acquisitions. We need to add a thousand people this year…
CEO: That is our goal.
Board Member B: Most acquisitions fail.
CEO: We are building an experienced sales team as well.
Board Member B: Most sales teams fail and use up too much money.
CEO: We are building alliances with consultants and advisors who can recommend us
Board Member B: Most alliances fail.
CEO: We are on track to grow our current clients by at least 50% this year.
Board Member B: Yes, but you cannot be overly dependent on the few existing clients.
Board Member A: We need to add a thousand people this year…
CEO: We have figured out a way to add a thousand people this year without investing in a large sales team, alliances, acquisitions or growing our current clients too much.
Board Member B: Most ‘figured out’ ways fail
CEO: We are planning to hire a senior executive to run our operations so I can start selling more.
Board Member B: Yes, but that will increase costs, and most senior executives do not work as hard as you do.
Board Member A: We need to add a thousand people this year…We’re hearing great things from our clients.
CEO: (sighs inwardly) You’ve had awful weather in the past few days with all the rain, snow, wind…
And this is how the funny world of outsourcing plays out over and over again in boardrooms, client meetings and investor forums. And they all live happily ever after…
Kaushal Mehta
The author is the Founder and Chairman of Motif, Inc. a specialized BPO
(Business Process Outsourcing) company providing rules based and decision
intensive back office transaction processing services, customized email response
services and internet research, analytics & database generation to global
clients.
(www.motifinc.com)
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