Progeon follows a Global Delivery Mode, pioneered by Infosys. It leverages cost-competitive development centers in different parts of the world to provide business process related services on time economically. The model has the following stages: break an activity into logical tasks and determine the best location to execute them and convert clients’ fixed costs to variable costs. The trend has been that most companies have started with voice – and now are attempting to move into “transaction processing”. With Progeon already doing the latter, it is moving towards Knowledge services. Progeon has decided to cap its voice based business to less than 30%. It currently remains at less than 20%.
Progeon believes that the customer thought process follows a certain sequence and hence, tries to manage the apprehensions and risks associated with Business Risk Management teams in various functional areas. Progeon believes that clients are looking for value addition to the usual advantage of cost arbitrage. Thus, it provides skill and technology arbitrage as well. Progeon also vies to increase productivity continuously through process re-engineering (through domain expertise) and technology enhancement (through Infosys’ strong skills). Progeon believes that by working on end-to-end processes, it will be able to come up with insights to the client’s system and recommend alternatives or improvements. The Progeon value curve can be understood with the following diagram.
Progeon follows the following operational approach to outsourcing to assess, analyze and arrive at the optimal outsourcing solution. In order to facilitate senior management commitment the following approach is adopted: Formally initiation of the Change Management Program with help from specialists (both within Infosys as well as employing and external agency) before moving processes offshore Establishment of a clear governance model around the outsourcing initiative Building credibility through developing an understanding of clients’ businesses and then proposing a solution which addresses all key concerns
Support System A department called Facilities and Administration looks after food, transport, work facilities (hygiene, environment etc), telephones, first aid, stationary etc. All activities that help support processes to ensure their people work in commendable conditions.
Leave management, attendance and appraisals are automated and are communicated and supported through campaigns, help desks and through direct touch of HR with business (business HR function caters directly to each business vertical/client account) These systems have aided in the effective implementation of formal policies by cutting across functional domains and providing a common network. These have also resulted in increased centralization as monitoring is now facilitated by state of the art information systems. This will be extremely beneficial to Progeon when it decides to expand to the next level.
CONCLUSION
Right through the analysis, one aspect of Progeon which keeps reappearing is its dependence on Infosys – right from its policies and systems to its goals. This works both ways for Progeon. At present, it is a minnow compared to other BPO companies. However, with Infosys’ contacts and support, it is experiencing tremendous amounts of growth.
In addition, its unique business model ensures that there is sufficient differentiation to counter any commoditization which might be present in the market. The organization has set the right goals for itself – it has skipped cost arbitrage and positioned itself in the less-commoditized technology and process management segment. The aim is to eventually graduate into an organization capable of technology and process development, a role which would include research and analysis. It is at this point that Progeon would consider itself truly differentiated.
However, this path has its associated set of challenges. Progeon, and the Indian BPO industry as a whole, is engaged in a constant fight against perceptions. If Progeon proposes to move up the value chain, it will have to improve the quality of its operating core input. However, the target segment views BPO only as a temporary step, not as a career. Also, it is perceived to be a “lower” job than, say, a software job. Consequently, there will have to be a change in pay structure, in addition to other measures taken. The other, more deep-seated, challenge that Progeon faces is the perception of India as an “unsafe” destination. IP issues and the sensitivity of information transmitted make this a very important issue to address. It is very difficult to change perceptions and biases. However, these will have to be overcome if Progeon plans to continue along its laid-out expansion path.
