Apart from these factors, competition has triggered price pressure and has reduced revenue realization on a given service delivery. This challenge is forcing organizations to re-engineer their current operations, business models, and supplier relationships further pushing them to innovate, optimize, and change the way they currently transact to reduce cost and stay competitive. And, there is a need to create increased value through delivering higher efficiency, improved SLAs, increased scope of deliverables, extended services, and new services to help customers improve their business operations with pressure on revenues.

TCO Companion
Technology consolidation primarily helps reduce TCO. Sanjay Kumar, of, vCustomer says “Firstly, to run a typical data center round the clock, you need at least 10 IT persons. Secondly, energy cost is very high because you are running round-the-clock air conditioning. Apart from this, your power backup and power redundancy adds to the cost.” He adds, “Costs, excluding people costs required to run a data center are about Rs 5-6 lakh a month. If you add people cost to it, the cost jumps to about Rs 35-40 lakh a month. These expenses can be saved if you eliminate data centers through consolidation based on virtualization and cloud. If you add virtualization on the cloud, it's almost nominal.”

In server virtualization there are dramatic savings. One can consolidate all the data centers because telecom facilities are more reliable. So with one data center, one can have 25 links instead vCustomer used to be connected to multiple centers from its clients. Its clients demanded that the company connect them through cloud computing, a concept that is suddenly becoming a significant factor in the way people treat data and data consolidation. Though there are some additional transactions in cloud computing, it does not have a significant impact on the bottom line. 24/7 Customer says the company has saved 10-20% of TCO through consolidation.

“Consolidation program in our BPO has yielded easy manageability, improved operational efficiency and has resulted in reduced TCO for business operations. These benefits were achieved by systematically reducing duplicate IT resources in our business environments which had a significant impact on lowering maintenance costs of this equipment and hence lower costs for support staff. Says Jian of WNS.”

Seizing Opportunity
The fear among a section of people that technology consolidation might pose business challenges to technology vendors is unfounded. For consolidation purpose, BPOs need to buy new licenses with better and high quality servers from vendors. The purchase might be less, but it is an opportunity to set a migration path over the next 3-5 years.

Consolidation has provided opportunity for technology companies like Avaya and Orange Business services. Avaya seized the opportunity and innovated to offer BPOs FCE strategy (Flatten, Consolidate and Extend), which has registered good success globally and in India in the past. With its strong lead in VoIP technology Avaya re-engineered its platform to move into more open industry standard servers (Intel based) and migrated the OS into Linux.

In similar vein, Orange Business Services India also innovated to offer enabling solutions like 'Business Everywhere, a business proposition that helps businesses to bring together all the services it needs to unify into one coherent and cost effective mobility strategy. Another enabling solution is Business VPN, a platform for providing a secure, global IP infrastructure to ensure that employees can easily collaborate, thereby ensuring that the customer's applications are performing optimally.

Toward Green
Last but not least, in the consolidation process, BPOs also inadvertently start a green strategy while reducing substantial overheads. Kumar of vCustomer, says, “The consolidation process is also bringing real opportunity toward green. If organizations don't run their data center on their own, instead rely on the cloud, they do not require ten different servers. It clearly saves energy for BPOs.”

And also you don't require an operating system like windows; you can use anything that can run a browser. So this will usher in an era of green PCs. In the process of consolidation, BPOs can look at a really low-end PC to be the end-point for the home agent in a bid to honor their commitment towards green initiatives.

Kannan K
kannan@cybermedia.co.in

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