Chapter 460 Outsourcing
The concept of globalization is becoming more and more popular, and all walks of life in India are exploring this new path.
Among them, the IT industry has done the most thorough and bold thing, and it has subverted many people's business concepts.
For example, the outsourcing companies in Sunshine City’s office building were the first to try something new.
Ron was not originally involved in the outsourcing business. He only provided properties and collected some rent, with no risk.
Until someone came to him, Raman Roy.
"You want me to invest in an outsourcing company?" Ron was very surprised.
"Sir, we usually call it a logistics service management company." Raman made a slight correction.
"Okay, whatever it's called, what made you want to start this business, or why are you so confident you can make a profit?"
“Because I’m the founder of the outsourcing business.”
"What?" Ron couldn't help but sit up straight.
"Let me introduce myself again, Mr. Sur. I'm Raman Roy, former Senior Director of GE Capital India."
"General Electric?"
“GECIS moved into Gurgaon in 1996.” Raman nodded.
"I seem to have some impression of this," Ron said, tapping his fingers lightly on the table. "Let's talk about this matter. I mean, the founder of the outsourcing business."
Raman had no objection. He wore small round glasses and a casual plaid shirt. He was in his early forties and had extraordinary self-confidence. He treated others with an extremely equal attitude.
He said that when they first started this business and were recruiting externally, no one accepted their invitation.
Because the interviewers thought they must be crazy to dream of working for an international company in a foreign country, and everyone thought Indian standards were too low.
Many people did not believe that Raman could achieve that quality.
Those were the superior foreigners, and they simply could not imagine that Indians could do the jobs of white people.
Raman hated the sheepdogs. He felt that there was something fundamentally wrong with them and that these people were prejudiced against him and the entire country.
As it turns out, the opposite is true.
If there is one business venture that has become the new symbol of India's globalization, it is "business process outsourcing."
The idea behind it is that, thanks to modern communications, a company's different functions don't all need to be performed in one place.
These functions can be distributed around the world and operate smoothly without any impact.
This allows the company to move non-core businesses to locations with lower salaries, saving significant costs.
In the early 1990s, Raman worked at American Express, a company that had been in India since colonial times, and he persuaded executives to gradually increase their investments there.
He had intended to transfer the headquarters' logistics operations to India a few years ago, and this trend became increasingly obvious over time.
Raman realized that there was a hitherto untapped value in this.
In those years, many large and small companies had been trying this, and some of them, such as Infosys, rose rapidly.
Infosys' earliest business was to help Silicon Valley companies with software outsourcing, and they seized the opportunity.
India's outsourcing advantage isn't just that it can deliver software systems to multinational corporations at half the price of its American counterparts.
Equally important, time can be compressed.
Indian consultants work with American clients during the day in the United States and then send briefs to India.
The Indian software team works during their own daytime hours (evening hours in the US) so that US clients can see the results the next morning when they get to work.
So, one working day became two.
Seamless connection, the favorite of capital.
Indians are very good at this kind of thing and they are used to this decentralized approach.
This inspiration may come from their hometown, where trading families have dispersed family members to different places for centuries to build their own business world.
When you talk to a member of this family, even if that person is very narrow-minded in his or her habits, you will find that they are often surprisingly indifferent to place and distance.
All they care about is cost and revenue, and if the latter exceeds the former, it's a good deal, no matter how geographically strange it may seem.
This way of thinking fits perfectly with the concept of globalization.
European and American capital was interested, and Indians were accustomed to it, so they hit it off.
As for the protests of native Western workers, who cares?
Gurgaon provided another element for the rise of outsourcing in India: a vast high-tech real estate park.
As early as the 1980s, DLF Group began to slowly acquire farmland here.
After it was completely liberalized in 1991, this area released astonishing value.
Gurgaon provides essential infrastructure for major global businesses in India and is not far from Delhi Airport.
In the past ten years, many embassies of various countries were located here, and various companies also moved in one after another, some of which moved from the commercial capital of Mumbai.
GE also announced around that time that it would set up a new company, GE Financial Services, in Gurugram.
This new company specialized in providing support for the logistics operations of the General Motors Group, and Raman received a call from them in 1996.
He was asked if he was interested in further developing his American Express experiment at GM.
He went to the Oberoi Hotel in New Delhi to discuss the matter with GM CEO Gary.
The latter has outstanding vision and great courage.
He asked Raman directly about the outsourcing: "How much will we lose if this doesn't work out?"
Raman added another three million to his mental estimate. "Maybe ten million dollars."
"Okay," Gary said, "it's just a little money. I'll put it in an account and no one will ask you what you do with it."
So Raman threw himself into his first outsourcing experiment. He had done similar things at American Express before, but had never set up a separate company for it.
He rented an office in Gurgaon, which was India's first international call center.
The employees were responsible for answering calls from credit card customers in the United States, and that was their job.
At that time, the board members of General Electric in India had explicitly forbidden him from conducting this experiment.
So Raman did it without telling them and invited Gary to come and see it.
He made the place look like an old-fashioned barber shop, and he put curtains between the employees to keep them separate.
There would be sensitive information on the screen, and if the General Motors board found out, Raman would definitely be fired.
And the whole thing was so shaky; he had no budget and only about twenty people to start with.
Gary came to his office and was stunned by the barber shop in front of him.
The CEO shook his head as he walked downstairs. "I don't think you have any idea what a life-or-death struggle you've embarked on."
After Gary left, he began to promote this experiment vigorously within General Electric.
Their unit cost was less than half of what it was then, and the quality was higher.
In the US they hire school dropouts as clients, whereas here in India they hire people with college degrees.
Soon they were serving not just GE Capital but the entire GE Group.
Raman's initial ambition was to eventually build a call center with about a thousand people, but the company's growth far exceeded this expectation and has grown to tens of thousands of people.
Soon, positions in the Gurgaon office became so popular that the company was forced to notify the police every time it held a job fair.
People came from far away with their entire families and would sit outside the office for days, so Raman had to ask the company to provide them with food and water.
That was in the mid-1990s, and a salary of nearly 10,000 rupees was enough to drive many young people crazy.
GE Finance here in Gurgaon provides a wide range of services to companies under the large group, and the customer service number is just a small part of it.
Over time, outsourced services have become more complex and specialized.
The systems and training have been developed to an efficient level, and Indian employees are not simply doing repetitive work.
Over the years, the outsourcing business became increasingly prosperous, but Raman felt that he was missing a bigger opportunity.
“Being in the corporate world was great—fancy cars, clubs, all sorts of other perks—but I saw an opportunity to do something big.”
"What do you mean?" Ron looked at him with interest.
"I told GE the real opportunity was in outsourcing services to other companies, but they wanted to keep that business to themselves," Raman said, throwing up his hands.
Ron understood that General Electric could no longer satisfy his ambitions.
As the person who built the outsourcing business, Raman was not willing to be just a senior director at GE.
"So what are your plans now?"
"I'm going to set up a separate company to provide this type of outsourcing service to all the companies out there, including Microsoft, Dell, HP, Cisco, AOL, American Express, and Citigroup."
"Wow, that's a big plan."
"Sir, this is not nonsense. I often travel to the United States on business, and I have contacted these companies. They are very interested in the outsourcing business I provide."
"Since you have so many channels, why do you still come to me?" This is what Ron was puzzled about.
"Well, I'm short of money. I'm still a little short of start-up capital, and I also need other help," Raman admitted.
"Tell me more specifically."
"I plan to move my office to Suncity, which is closer to New Delhi and the airport, and most importantly, offers first-class internet services."
"You want to rent an office space here?"
"Yes, a whole building, serving as Spec's headquarters. Oh, and that's the name of the new company."
"That's not a small number."
Sunshine Smart City rents office buildings to companies such as Satyam Computer, with the annual rent for a 20-story building being approximately 100 million rupees.
Given Raman's ambition, it is roughly on this scale.
"Spec Company not only outsources phone services, but also handles some computer business. This requires a significant investment, including equipment procurement, staff recruitment, and channel resource development and public relations.
I did have a good life at GE over the past few years, but I only had about $3 million left. After paying the rent for the office building, I couldn't do anything else.
"Do you know the price of office space in Sunshine Smart City?" Ron asked.
"Of course, this investment can be converted into shares."
"You mean I provide the space and you provide the manpower, and we work together to build this company?"
"Yes, the government also needs your help, sir."
"What's the trouble?" Ron raised his eyebrows.
(End of this chapter)
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