Opening remarks at 1st meeting of NASSCOM NCR Captives Forum (October 28, 2010)
Captives are a very important part of the BPO/IT services industry in India. While the big providers tend to generate more visibility, contribution of the Captives are no less significant. Captives are integral to their parent companies and in most cases add significant value – as delivery hubs, source of efficiency and in some cases as innovation hubs. In addition, Captives are how the industry started in India especially in the BPO segments. Captives have also been at the forefront of the movement up the value chain in the BPO industry.
However, Captives in India also face some challenges. These include diminishing growth in core processes, retention of employees, cost pressures, driving innovation and competition from other locations. In some cases, this has led to questions on the viability of the Captive model. Mostly such questions have come from the providers, consultants and investment bankers!! However, if anything Captives have shown positive momentum over the past 2-3 years. This reminds of the famous Mark Twain quotation “reports of my death are greatly exaggerated”!!
What might be fair to say is that Captives are perhaps at a crossroads – one road that leads to being a source of competitive advantage for the parent company, and other that leads to diminishing relevance. Captives cannot just sit on their past successes. They have to introspect and consciously chart a positive path forward. Given this, it will be helpful for leaders in the industry to get together as a forum and collaborate. Challenges and opportunities that most Captives face are quite similar. Working together would likely help increase their chances of success. In addition, Captives are much better placed than the Providers to collaborate with each other. Unlike the Providers they do not compete with each other. Therefore, they should be able to share with each other with high level of trust and openness.
Given the above, we proposed to set up a Captives forum with the following four objectives:
- Sharing best practices and learning from each other so we can get ideas for taking our respective Captives to the next level
- Identifying areas for collective action so we can raise the competitiveness of India as a location for this industry
- Developing vision for the industry that takes Captives to a next stage of relevance and value for their organizations
- Building a more positive collective brand for the Captives
