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Technology consolidation has the capability to save expenses worth millions of dollars while improving operational efficiency at the same time, during normal times or post Mergers and Aquisitions (M&As). Following which a consolidated IT infrastructure is required for better management and control, apart from increasing the efficiency at reduced cost.

Technology consolidation has become all the more important in the present scenario of recession worldwide. As the cliché goes, when the US sneezes, the world catches a cold; when the US economy is in trouble, it has a negative impact on companies in countries like India. The recession is driving BPOs to go for big time technology consolidation. It plays a vital role in the BPO industry as it helps save cost in various areas of operation.

For some companies like 24/7 Customer, consolidation is an independent initiative to be a cost leader and provide better margins to the company and its customers. But for companies like WNS global services, it is an independent initiative forming a part of the M&A process.

Double Impact
As consolidation helps resource optimization and builds a framework to share resources optimally, it has become synonymous with reduced cost and increased efficiency. According to Sanjay Vig, CEO, Orange Business Services India, “Technology consolidation is indispensable for companies, especially for large corporates, as it helps them gain the required visibility and control on their costs, enjoy the merits of a consolidated IT infrastructure and have the agility required by the business.” Considering that most of the BPOs operate in a complex technology environment that involves multiple technology platforms mostly mandated by their clients, technology consolidation yields easy manageability, improved operational efficiency, and leads to reduced TCO for the business operations.

Improving service levels, functionality enhancement, rapid deployment of new business applications and function, and redefining organizational boundaries, are some other benefits.

Overall cost benefit Cost management is the essence of any technology investment in large enterprises. Better management of these expenses means improved control and may actually lead to significant savings on the overall bill.

Standardizing company infrastructure across the world One of the biggest areas where technology consolidation benefits organizations is that it enables the standardization of their global network processes, architecture, and service levels thereby ensuring more gains and efficiency improvements.

Besides, consolidation of IT infrastructure also entails functionality enhancement, and rapid and seamless deployment of new business applications.

Take the case of WNS BPO. Its diverse client base across Europe and Asia creates complexities of technology, compliance and regulatory requirements. In addition the clients need to deliver services on either WNS proprietary platforms and client owned platforms, further adding to technology challenges in delivering services successfully. The technology solutions implemented at WNS have to continually address challenges such as reducing the TCO, managing operational efficiency, meeting client SLAs, and managing uptime of shared and customer-centric technology infrastructure.

Sanjay Jain, CIO, WNS Global Services says, “Given this scenario, it was a challenging proposition to envisage an environment that maintained the highest security standards and yet was cost effective. WNS decided to adopt a centralized architecture, which initially based a few challenges around seamless migration between existing individual client domains to a centralized platform, data storage consolidation and centralization of backups, while maintaining zero-visibility between client environments.”

Consolidation on the Rise
Sanjay Kumar, CEO, vCustomer Corporation says, “In fact, technology consolidation will be driven by economic recession. Many companies will now try to understand how they can set a 2-3 year's path for lowering their infrastructure cost. And, in India, salaries have gone up significantly in the last 5-6 years. It means regardless of software or hardware costs people's cost has increased dramatically. So this is a clear opportunity for everybody to go for consolidation drives which saves a lot in many respects.”

And with increased M&As, technology consolidation also will go up. Quatrro is one of the companies to look for consolidation as it waits for attractive prices. Raman Roy, chairman and managing director, Quatrro BPO Solutions says, “It (M&A) is already happening. You will see very attractive prices, as people don't have enough money. It is a survival option. It will bring out some M&As.”

According to Sanjay Jain, CIO, WNS Global Services, “The macroeconomic conditions are acting as a catalyst for technology consolidation. With the ever decreasing availability of cash for capital expenditure and the need to reduce the TCO, managing operational efficiency and ensuring scalability of solutions for accommodating growth will force the technology organizations to invest in technology consolidation. Mohit Jain, CIO, 24/7 Customer says, “Technology consolidation is going to increase as the BPO industry matures. With the deployment of VM, bandwidth consolidation and new technology deployments, multiple choices are available to be utilized for better effect.”

Ketan Shah, head, contact center business, Avaya GlobalConnect says, “With challenging times continuing to daunt organizations, technology consolidation will increase further and organizations would be forced to sustain their business and competitiveness by investing on innovation, higher value business models, and consolidations to suit the changing market conditions.”

This situation ceases and limits business opportunities of BPOs with these large economies. Growing competition with more influx of global and local players in each of the segments, products and services that were key vendor USPs earlier are now getting commoditized due to desperate competition and aggressive customer acquisition strategies by vendors in the competitive markets.

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