THE EDGE MALAYSIA

PP 8409/4/2003 MITA (P) No. 133/05/2002 BUSINESS & INVESTMENT WEEKLY THE WEEK OF DECEMBER 2 - DECEMBER 8,2002

Sigmax steps boldly into BPO arena
MARY ANNE TAN / THE EDGE

Srikrishna: We bring [BPO] experiences from India and the US,
and local knowledge to the table

BY MARY ANNE TAN

Challenging the likes of Indian software maker Satyam Computer Services in the business process outsourcing (BPO) arena is a daunting task especially if one is a start-up, possesses little financial resources and is entering a hostile investing market.

Satyam, India's fourth-biggest exporter of software, recently announced that it is moving into BPO and plans to throw its resources into capturing as big a global market as it can. To support this, it will set up a global solutions centre at Cyberjaya.

Despite the presence of such a formidable competitor, Malaysian start-up SigMax eServices Sdn Bhd is keen to carve a niche within the local BPO sector and reckons it has as good a chance as any company.

Helping SigMax eServices to achieve this is Malaysia Venture Capital Management Bhd (Mavcap), the Malaysian government's venture capital arm that pumped in RM500,000 in seed money last month. SigMax eServices is believed to be one of many information technology (IT) start-ups that Mavcap is believed to have seed-funded over the last couple of months.

So what is it about SigMax eServices that attracted Mavcap's attention? SigMax eServices' founder Srikrishna Vadrevu reckons that Mavcap is banking on SigMax eServices' domain knowledge in the BPO business, his inherent skills in BPO management and the fact that BPO is fast becoming an accepted business strategy for many multinational corporations (MNCs) in Malaysia and globally. BPO is where companies contract with another organisation to handle their business processes or functions, relieving them of the need for additional staff and cutting down on overall costs.

Srikrishna says Mavcap values his 360° exposure to the BPO process. This was cultivated during his time with General Electric (GE) of India (he was in charge of 700 employees), his experience with Brentwood Bank in Los Angeles and his intimate knowledge of the Malaysian BPO scene - especially within the banking and financial sector, since he was responsible for the setting up of Scope International (a BPO outfit) for Standard Chartered Bank in Malaysia.

Srikrishna, an Indian national, has also implemented the GE way of doing business in SigMax eServices and feels this is another point Mavcap likes about his company. He describes the GE way of doing business as unique, citing how GE interviews potential employees using a "three-E" model as an example.

"We interview someone not based so much on their resume but on three areas - their energy level, their ability to use the energy to energise someone else and the edge they offered to their previous employer. This model has been very successful in getting GE employees with the right calibre to help grow [the company]," he says.

SigMax eServices was incorporated only on June 18, with Srikrishna and two other friends - one of whom is a friend from his university days - as major shareholders. It received Multimedia Super Corridor status even before its incorporation was formalised.

Srikrishna's vision is to "migrate tens of thousands of blue-collar workers to white-collar careers and develop a strong pool of talent within the IT sector in Malaysia". He thinks the BPO market will be one of the most promising sectors in achieving this.

The going will be tough and yes, the competition from India looms ever larger, especially with the entry of more players in the BPO space and those with deeper pockets, like Satyam. However, Srikrishna is unfazed by the presence of such formidable rivals.

"Satyam is essentially a software company and it is relatively new in the Malaysian BPO market, so we have the advantage of domain knowledge of the local market and the BPO processes required by local companies," he says.

Asked what value proposition he brings to the table to a company considering the BPO route, Srikrishna says, "Our competence in the BPO process will be the key differentiator between our rivals and us. We are able to bring the GE [BPO] model, experiences from India and the US, and local knowledge to the table, which companies like Satyam may not have," Srikrishna says. Satyam, for instance, can only bring the technology, he says.

These three elements, plus the determination to succeed, are obviously factors Mavcap took into consideration when it agreed to fund SigMax eServices' business. Srikrishna is targeting companies involved in the retail, IT, financial and banking sectors for a start. His confident prediction of Malaysia becoming a big player in the BPO market is ironic because prior to coming here, he had no inkling of where Malaysia was, let alone how it stood in the global information and communications technology race.

"I didn't know much about Malaysia back then when Scope International invited me to set up its BPO outfit for Standard Chartered about two years ago. They had to fly me in for a familiarisation visit. That's when I decided that Malaysia is worth a much closer look than I first thought," he says. His experience with Standard Chartered also gave him insight into what makes local banks tick and he believes this will prove useful when approaching banks here.

Srikrishna cites various factors to justify his confidence in Malaysia's potential to be a major BPO global centre. He likens Malaysia to a Silicon Valley and a tax haven all rolled into one and believes that though India will continue to offer tough competition, Malaysian can hold its own because of its strong IT infrastructure, fixed currency and stable politics.

"Many Malaysians don't seem to appreciate this, but coming from India, I recognise Malaysia's strengths immediately and realise that Malaysia has the capability of giving India a run for its money," he says.

India, Srikrishna says, suffers from poor IT infrastructure that results in frequent downtimes. This can badly impact a company's business and is bad for the BPO business. He doesn't see that happening here because he plans on having shared services (renting back-office backup space) with big players like IBM and Hewlett-Packard, something akin to the holiday resort time-sharing concept. This way, he says, he can give a guaranteed uptime of 99.99 per cent, which India has been unable to do so far.

Despite being barely six months old, Sigmax eServices hasn't been idle. It has secured global channel partners in the US, Canada and the UK and is now holding discussions with various banks and MNCs, both locally and globally, about signing on as clients.

Armed with Mavcap's funds, SigMax eServices can now roll out the red carpet for its first customer. Srikrishna says his biggest challenge is to convince local and foreign companies that this start-up is worth a gamble. In fact, he's prepared to give a 20 per cent discount to the first company that agrees to appoint SigMax eServices as its BPO partner.

Comments : feedback@bizedge.com