Xchanging thrives in tier-III, -IV cities

By : Shivani Shinde
Last Updated: Sat, Feb 16, 2013 19:35 hrs

India’s business process outsourcing (BPO) industry sector has lost about 200,000 seats to Philippines in the past few years. Experts warn that the situation could get worse if the industry does not get its act together.

The reason behind this worry is duet to two things. One, locations such as the Philippines now want to grow up the value chain and also corner business in the non-voice segment. Two, the move to shift into tier III and IV cities by the Indian BPO players has not met with the desired impact. And that has resulted in continued rise in attrition and cost.

However, there are companies that have successfully converted the challenges into opportunities. For instance, Xchanging, a UK-based BPO services provider, seems to have got the right strategy of growing in tier III and IV cities in India. The company has been running a centre at Shimoga in Karnataka for the past six years and has managed to scale the centre to 800 people. And the firm expects this to go up to 1,000 to 1,200 in a few months from now.

"Our biggest achievement was to get clients to our Shimoga centre,” says Nimish Soni, executive director of Xchanging. “Today, we not only have a Japanese speaking staff at Shimoga, but we also do complex jobs like engineering design, aviation claims and healthcare processes.”

Notably, Xchanging has managed to send employees from its Bangalore centre to Shimoga and maintain the attrition in the 12-16 per cent range. Attrition at its Bangalore centre is around 22-28 per cent. Xchanging has around 4,000 employees in India.

Xchanging serves about 15 clients from its Shimoga centre, many of which directly went to the centre rather then the work being pushed from its other metro centres. The company is in talks with a German bank, which is looking at leasing two floors in the centre’s building. Soni, who has single-handedly managed to achieve this, says that the hub-and-spoke model that several companies tried to use to set up centres in smaller cities has low rate of success.

“Our strategy worked because of the commitment of the senior leadership. The centre head at Shimoga has a direct line of contact with me. We did have issues in the beginning. The senior management that were sent to Shimoga were hand-picked, coached and then sent. Besides, I visit Shimoga on a regular basis," he says.

Soni is confident that in the next 18 months, the centre will be capable to compete with Bangalore on several processes.

“We have sent team from Shimoga directly to pitch for business from clients to their centre,” he adds.

What has helped Xchanging to be successful is also the presence of a local university - the Kuvempu University. The university has changed its curriculum to suit the technology being used by Xchanging and other players in the industry. “The university was so quick to realise the potential to create job opportunities for its students that they bought the software that we use and made it part of the curriculum. So the time taken to make these college hires billable is very less," points out Soni.

He adds that the Shimoga centre did not face any challenges to hire women employees, barring some initial hiccups. “For the first three years we had a tough time. But then on a regular basis, we would put up charts and calendars that would allow parents to see who was on what shift and we also allowed them to come and sit in the office," says Soni.

The company is now setting up creches for children so that young mothers need not leave their jobs. Thanks to this strategy, the company has been that the company has been able to manage its cost better.

Xchanging has also set up a centre at Solan in Himachal Pradesh. At present, the centre has 200 employees. There are plans to increase the staff strength.

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