I had a very enjoyable chat yesterday with Vandana Saxena Poria, OBE, the CEO of GetThroughGuides.com (GTG) (you can listen to the podcast of this interview here). Vandana’s organisation recently conducted a study into the BPO space in association with the ACCA, looking at providers in Ireland, C/E Europe and India. We discussed the burden felt by BPO providers when recruiting from what often seems to be a relatively under-prepared and under-qualified talent pool – a burden then exacerbated by sky-high attrition rates. This is obviously a huge issue for even (especially?) the biggest players, and the findings of the GTG/ACCA study chimed with comments made to me earlier in the year by, among others, Genpact’s Pramod Bhasin and Amitabh Chaudhry of Infosys BPO, and Vandana was nothing if not forthright:

“It’s a major major problem, not just in India but around the world. Because attrition levels are so high; firms spend all this money training up these people in getting the right accents, giving them the right skills to deal with the IT or A/P or whatever function it is – and then within six months or a year that person’s left and gone on to the next center.”

There doesn’t seem to be any easy solution to this conundrum since even the most advanced state-sponsored education program wouldn’t pay immediate dividends, and the jobs in question themselves don’t exactly compete with those of Hollywood Star, Sporting Hero or Shared Services & Outsourcing Network Online Editor in the glamour stakes. However, in one of the few silver linings so far glinting out from the economic stormclouds, worries about the strength of the job market in India in particular are expected to put the brakes on the attrition rate as job-hoppers realise it might not be the most auspicious time to walk out on a job. Presumably the same will apply in Ireland, one of the other foci of the study, as that country’s economy enters what I’m pretty certain will be an Celtic economic Gotterdammerung. Or maybe Ragnarok. It’s hard to work out which it is when one’s so busy trying to dodge these tumbling heavens.

Less exciting and important an event than Vandana’s podcast it may be, but I suppose it’s worth pointing a weekend-y spotlight on the G20 summit about to take place in the US. UK Prime Minister Gordon Brown (remember him? The man who abolished boom-and-bust?) spoke today in advance of the summit proper on the need to resist the temptation to assume protectionist policies: protectionism is apparently the “road to ruin” (although apparently there’s a shortcut involving alcoholism, gambling and infidelity which, let’s face it, sounds a lot more fun). This is all very well – but I’d love to be a fly on the wall for his next chat with President-elect Obama…

Brown: Protectionism is the road to ruin.
Obama: Who is this man? And what’s wrong with his jaw?

The BBC quoted Brown as saying “I think what we need is a route-map to bring the economy back, so that people feel more secure about their jobs, about their homes, about the prospects for the future” (prompting an immediate and passionate endorsement from the Committee for the Closing of the Stable Door after the Horse has Bolted). Forgive my temerity but what we actually need, Gordon, as well as a map, is a vehicle, some fuel and a navigator who wasn’t even a teensy-weensy bit responsible for getting us lost in the first place.

Have a good weekend people. It officially starts here.

Jamie

Hallowe’en today*, and appropriately enough the spectre of recession continues to haunt the global economy (NB: that will be the last attempt at topical humour in this paragraph. Bet yer ghoulies on it.) while the markets continue to display an inordinate degree of volatility (anyone reading this who invested in VW six months ago can buy a round of drinks for the SSON community) matched only by John McCain when his follicular integrity is called into question, and by the almost psychotically unstable reaction of a portion of the British public to one of the most pathetic showbiz scandals of our time.

The issue of how long the crisis-induced uncertainty is going to affect the outsourcing space in particular was one of the issues debated in a roundtable debate I hosted on Wednesday looking at “Sourcing in the Face of a Financial Crisis”. The panel – comprising some of the sharpest tools in the sourcing box – was split on the question, with some seeing a clarification emerging in a month or so and others predicting a much longer period of instability. Of course there are plenty of factors in play here and the fog is definitely still impenetrably dense: however, the lively discussion threw up a great many ideas as to the eventual repercussions of the crisis, and one thing was agreed by all: sourcing will never be the same again.

One issue in particular which seized my imagination was the roundtable’s thoughts on the impact on captives. In the eyes of a number of participants, the captive model will become increasingly unjustifiable now as service providers up their game and cost-savings become even more paramount (if that’s possible: semantically minded pedants can email me to their hearts’ content here). Phil Fersht in particular sees captives as being in a very precarious position going forwards:

“I think unless you’re a big-brand, well-resourced organization where you want to invest in having high-quality processes running offshore – and a lot of the captives now are very high-quality, they do very good work, they’re just expensive – in a down-market or volatile market it goes against the model of being predictive and being nimble. I think we’ll always have specialist areas remaining within certain captive operations, but I think it’s going to be more in areas like engineering than in back-office, data-analytics, areas like that where we’re getting a proven model. Offshore companies are very good at doing this stuff: it doesn’t make sense to keep it all in-house.”

I’d like your thoughts on this: please do drop me a line if you’d like to comment.

Away from the crisis – although especially pertinent right now when every penny counts (though when doesn’t it?) – yesterday I recorded a podcast with Catherine Escarcha of Siemens Shared Services and Jim Arnold of Apex Analytix on “Continuous monitoring and fraud prevention in financial shared services”. Fraud costs firms a mind-melting sum each year and Catherine and Jim gave me some good tips on how companies can minimise their exposure to such bottom-line-busting crimes. I did learn also that in order to avoid the risk of liability for slander, Siemens Shared Services eschews the term “fraud” in favour of “Questionable Vendor Activity” – very diplomatic, if slightly less convenient to type when blogging.

I’m off to change into my scary costume. Have a great weekend and remember:

BE AFRAID. BE VERY AFRAID.

(I was going to paraphrase Alien with “in the shared services and outsourcing space no-one can hear you scream” but I thought better of it…)

Jamie

* Or not, depending on when you’re reading this. It might be next Hallowe’en I suppose. Spooky