GartnerDataquestAlert24February20032003Gartner,Inc.and/oritsAffiliates.AllRightsReserved.1ExultLaunchesBPOCapabilitiesinIndia—OnItsOwnExult,apure-playU.S.-basedhumanresources(HR)outsourcingprovider,issettingupaprocessingcenterinMumbai.ThecenterisscheduledtogoliveinAprilandbefullyoperationalwith300agentsbythirdquarter2003.Thecenterwillhandledatacapture,dataentryinaccountspayableandpayroll,andsomecallcenteroverflowactivityforHRfunctions.Exultwillnotoffervoicecapabilityuntillateinthethirdquarterof2003,excepttosupportitsexistingrelationships.ExultalreadyoperatesBPOcentersinTexas,NorthCarolina,TennesseeandScotland,butthiswouldbeitsfirsttrueoffshorecenter.Exultwouldbeusingthenewfacilitiestoserviceitsexistingandnewcustomers(BP,BankofAmerica,InternationalPaper,Prudential,PactivandTenneco)—namelypayrollprocessing,benefitsadministration,educationandtrainingadministration,hiringadministrationandsoon.ExultchosetoestablishitscenterinMumbaibecauseithasthemostreliableinternationalanddomesticdatacommunicationsinfrastructureinIndiaandhasthelargestpotentialpoolofbusinessskills,beingthefinancialandcommercialcapitalofthecountry.AlargenumberoftheleadingIndianandmultinationalcorporationsareheadquarteredinMumbai,providingarichresourcebaseofhighlytalentedprocesssupportprofessionals.GartnerDataquestPerspective:Build,BuyorPartner—AQuestionofCoreCompetencyExult'sexperiencewiththeoffshoredeliverymodelstartedin2002viatwopartnershipsintheareaofapplicationdevelopment—HCLandHexaware.AfterconsideringanacquisitionoranallianceforHRprocessingandcallcenterfunctions,ExultdecidedtobuilditsowncenterinIndia,usingHexawareasitsimplementationpartner.Factorsbehindthisdecisionincludedintellectualpropertyprotection,confidentialityofHRdataandtheimmaturityoftheoffshorebusinessprocessoutsourcing(BPO)market.AsaHRoutsourcer,ExultisoneoffewcompaniesthatcanclaimthatHRprocessingisitscorecompetency.ThisdecisionissignificantfortheoffshoreBPOmarket.Overthepasttwoyears,IndianITservicesprovidersandcontactcenterspecialistshavebeenrampinguptheirtransactionprocessingcapabilitiesandaggressivelytargetingtheU.S.market.TheirprimarychallengeuntilnowhasbeentoeducatethemarketabouttheadvantagesofleveragingIndiaasanoffshoreresourcebaseandexpandtheirskillbasefromtechnologytobusinessskills.Nowtheyhavetocountwithanumberofnewcompetitors—theU.S.-basedBPOproviders—ontheirownground.Overthepastfewmonths,ConvergysandEDShavealsodevelopedsimilarIndiancenters,inadditiontoexistingpartnershipswithIndianserviceproviders(see"ConvergysSetsUpIndianContactCenter"[ITSV-WW-DA-0088]).ACS,AccentureandIBMalsohavetheirownin-houseoffshoreExultLaunchesBPOCapabilitiesinIndia--OnItsOwn24February20032003Gartner,Inc.and/oritsAffiliates.AllRightsReserved.2operationsinotherregions.OffshorevendorswithoutaU.S.presenceorreferenceableclientswhoarealreadyfindingithardtoconvinceU.S.enterprisesontwokeydecisioncriteriaforBPOcontractstoday(forexample,lossofcontrolandsecurity)willfinditincreasinglydifficulttocompetewithU.S.BPOvendorsthatwillusethistotheiradvantage.ThepathtosuccessforU.S.-basedBPOproviderswithoffshoreoperationswillnotbewithoutobstacles.Buildinginfrastructure,recruitment,accesstomiddlemanagement,communicationandsoonareallissuesthattheymustresolveandwillcostmorethanexpected.Theymustalsoconvincepotentiallyskepticalclientsthatthereisnoneedforthemtopassonadditionalcostreductionsresultingfromloweroperatingcosts.ByRebeccaScholl,SujayChohanandDebashishSinhaExultLaunchesBPOCapabilitiesinIndia--OnItsOwnThisdocumenthasbeenpublishedtothefollowingMarketplacecodes:ITSV-WW-DA-0186ForMoreInformation...InNorthAmericaandLatinAmerica:+1-203-316-1111InEurope,theMiddleEastandAfrica:+44-1784-268819InAsia/Pacific:+61-7-3405-2582InJapan:+81-3-3481-3670Worldwideviagartner.com:www.gartner.comThecontenthereinisoftenbasedonlate-breakingeventswhosesourcesarebelievedtobereliable.Gartnerdisclaimsallwarrantiesastotheaccuracy,completenessoradequacyoftheinformation.Gartnershallhavenoliabilityforerrors,omissionsorinadequaciesintheinformationcontainedhereinorforinterpretationsthereof.Theconclusions,projectionsandrecommendationsrepresentGartner'sinitialanalysis.Asaresult,ourpositionsaresubjecttorefinementsormajorchangesasGartneranalystsgathermoreinformationandperformfurtheranalysis.Entirecontents©2003Gartner,Inc.and/oritsAffiliates.Allrightsreserved.Reproductionofthispublicationinanyformwithoutpriorwrittenpermissionisforbidden.113329
