Introduction:Business Process Outsourcing industry has grown leaps and bounds in today's global market. Industry experts estimate the ITES/BPO pie to grow to USD 260-billion by 2009. A study sponsored by the ITsqc center of Carnegie Mellon University found that:?More than half of customers reported having renegotiated a contract and

nearly in quarter of these renegotiations the original service provider lost the account

?25% of all outsourcing relationships fail in any two-year period?50% of the relationships will fail within five years?70% of the respondents in a survey said that the service provider did not

adequately understand what they were supposed to do and that the cost was too high and they provided poor service

The reasons for failures in outsourcing were because of:?The lack of adequate understanding of customer requirements?Lack of agreement on criteria for success, up front?Not fully articulating the trade-offs between providing better service, faster

service or cheaper service?Inability to meet service level agreements?Inability to build effective relationships?Mismanaged service transitions?High employee turnover?Ineffective threat management

Mahindra Satyam BPO is a specialty business process outsourcing service provider in existence since 2002. It realized that this demanded the adoption of a framework that would not only provide guidance to service providers to improve their capability across the sourcing life-cycle but also provide customers an objective means to evaluate the capability of the service providers.

eSCM - Overview and adoption of Mahindra Satyam BPOTo meet the demands of outsourcing, eSourcing Capability Model for Service Providers (eSCM-SP) standard was developed by a by Carnegie Mellon University's IT Services Qualification center (ITsqc) along with a consortium of companies that included Mahindra Satyam, IBM, Accenture and others.

eSourcing Capability Model – Transformation of Mahindra Satyam BPO

About the AuthorKishore Rao leads the corporate

quality function at Mahindra Satyam BPO. Kishore has been instrumental in

implementing the eSCM framework. Under his leadership, the organization

has achieved the distinction of being the world's first company to be

certified at eSCM-SP Level 4 and 5 (eSourcing Capability Model for

Service Providers Level 4 and 5).

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High level QMS process map of Mahindra Satyam

BPO depicts the 10-Capability areas and their

inter-relationships.

It is a “best practices” model that addresses critical capabilities needed by IT-enabled sourcing service providers. The current version of the model eSCM-SP v2.0 consists of 84 best practices which are arranged along 3-dimensions:?Sourcing Life-Cycle: Initiation, Delivery, Completion & Ongoing?Capability Areas?Capability Levels

Sourcing Life-Cycle?Ongoing practices represent the management functions that need to be

performed during the entire sourcing life-cycle. This includes practices related to management of people, technology, relationships, performance, knowledge and threats

?Initiation practices are focused on gathering requirements, negotiating, contracting, designing and deploying the services that include transfer of the necessary resources

?Practices in Delivery focus on service delivery capabilities, including the ongoing management of service delivery, finance and verification such that the service commitments are being met

?Practices in Completion focus on capabilities needed to effectively close down an engagement at the end of the sourcing life-cycle

Capability AreasSix of the capability areas are ongoing viz. Performance Management, Technology Management, Threat Management, People Management, Knowledge Management and Financial Management. Four capability areas that fall under the life-cycle are Contracting, Service Design and Deployment, Service Delivery and Reverse Transfer.

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Capability Levels?Level 1– Service providers at capability level 1 have not fully implemented the

industry best practices?Level 2 – Service providers at capability level 2 are able to systematically

capture and understand client requirements and deploy services to meet them consistently

?Level 3 – Service providers at capability level 3 have established a measurement system and are able to manage performance across the organization effectively

?Level 4– Service providers at capability level 4 are able to continuously innovate and proactively add value to the services they provide to their clients

?Level 5– Those service providers who have effectively implemented all of the level 2, 3 and 4 practices for two consecutive certification evaluations get certified to this level

Focus areas of these Capability Levels at Mahindra Satyam BPO are depicted as below:

Organizations get certified at Level 4 only when all

the 84-practices are complied with. Level 4 is the highest level that can be achieved by a service

provider in the first attempt. Level 5 is termed

as sustaining excellence.

Excellence driven through eSCMMahindra Satyam BPO, in its early days of operation realized that excellence in BPO can only be achieved by perfect marriage between the customer context and its own business context. For sustainable relationships, organization should be process-driven and consistent on the measured results in the areas like delivering what customer demands, optimization of all resources and value addition to clients' business and innovation.

These thoughts were translated into action by deploying eSCM best practices for the benefit of our organization and customers. Mentioned below are the methods/practices we adopted to deal with the industry challenges in the BPO sector.

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A. Leadership and VisionUnderstanding from the Gartner's Magic Quadrant of Vision Vs Implementation, Mahindra Satyam BPO's vision of becoming a USD 250million organization by 2010 is driven by the core values around delighting customers, investors and Associates and shouldering societal obligations. Culture imbibed at Mahindra Satyam BPO can succinctly be framed as EFD – Energy, Focus and Discipline viz. Energy in demonstrating vigor and enthusiasm in all pursuits, Focus on the end-stakeholder priority and Discipline to take ownership and accountability to delivery our promise.

Mahindra Satyam BPO has established an extended arm of management 'Foresight' that helps in establishing and maintaining a robust governance structure guiding the organization towards its goals. Taking cue from its parent company's philosophy of “developing leaders faster than competition”, Mahindra Satyam BPO has an organization-wide leadership development program called Real Time Leadership Center (RTLC), similar to the balanced score card approach, which helps translate our vision and strategy into action.

To empower our Associates, we have divided the company into many logical parts and allowed the leaders of these divisions to operate them much like CEOs of independent businesses. We call these units 'Full Life Cycle Businesses' or FLCBs. A Full Life Cycle Leader (FLCL) runs each FLCB. The leaders who are responsible for multiple FLCBs are called Integrators. We have instituted a common language of metrics and the most important metric is the 'North Star' – the goal of the company and that of each FLCB.

B. Learning and InnovationAbundant Learning opportunities are provided to the Associates enhancing their competencies and skills to perform at the workplace. Mahindra Satyam Learning World (MSLW) not only runs the in-house learning center but also organizes executive development programs from external sources.

Learning needs to be backed-up by adequate knowledge-sharing across organization and is achieved through establishment of a Knowledge Management System (KMS). Through KMS, process assets are defined for the organization that are web-enabled like eQUIP (QMS-eSCM based Quality Information Portal), K-Window (Knowledge Management Portal) and Six Sigma portal. Associates who contribute to and make use of knowledge on K-Window are recognized and rewarded. Associates at various levels in the organization are provided with secure access controls to knowledge repositories required to perform their work effectively.

Associates at all levels are provided with numerous opportunities to participate in decision-making, thus encouraging Innovation. 'Mind-Speak' is an organization-wide initiative to gather innovative ideas from Associates. Through a web-enabled portal, an Associate submits ideas for improving the work/production environment which get assessed and implemented after feasibility study.

RTLC framework provides feedback on the business

processes and their outcomes in order to continuously

improve strategic performance and results.

Innovative and productive ideas are suitably rewarded

through S2R (Special Recognition and Rewards)

program.

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C. Operational Excellence through eSCM-based Delivery ModelRealizing the key challenges of Service Delivery in the areas of Service Level Agreements (SLAs) and security/compliance requirements, Mahindra Satyam BPO has established a delivery framework targeted to deliver 2X value to the customers. Mahindra Satyam BPO delivery model focuses on end-customer impact with strong foundations laid based on eSCM, Six Sigma & Lean and RTLC frameworks.

Delivery Plan, a process bible, is a key integrating document

of service delivery that helps processes meet service

commitments satisfactorily, effectively, consistently, and

according to plan.

Delivery Governance is shared between Work Force Management, Operations Quality and Delivery PMO teams. Corporate Quality team drives the institutionalization of QMS and Continuous Improvements through deployment of Six Sigma and Lean methodologies. Service Delivery team works closely with the Account Managers to establish and maintain relationship with the client.

Service Delivery team is involved right from the proposal stage helping the pre-sales team in arriving at winning proposal. Key activities during Transition and Service Delivery Stages are represented below highlighting the progressive value proposition made to the Client:

Mahindra Satyam BPO is the world's first BPO to

achieve eSCM-SP Level 4 and Level 5 certifications

IT Services Qualification Center, Carnegie Mellon University

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Efficiency and effectiveness of delivery is monitored through mechanisms such as self inspections, Internal Quality System Audits, Compliance Audits and structured Review Mechanisms (Startrac-RTLC and Management Reviews). Digital Dashboard of Metrics followed by Early Warning Systems (EWS) deployment in the processes help in identifying potential risks and proactively plan for their mitigation. Governance model also incorporates the best practices identified from the requirements pertinent to ISO 27001, SAS and SOX.

D. Employee SatisfactionBPO Industry in India faces the huge challenge of not being perceived as a career building option by the workforce. Talent crunch for the required competencies and cut-throat competition bloat the employee turnover and operational cost numbers to unmanageable proportions.

Mahindra Satyam BPO took to innovative recruitment methods such as 100-hour non-stop marathon, competency development through establishment of a strategic business unit called Academy. Career progression is given prime importance for high performing Associates through 'Fast Track Career Progression plans building the next level of leaders.

Organization objective of ensuring Associate satisfaction of 4+ across board is a North-Star goal for the Human Resources team and accordingly annual satisfaction surveys are rolled out. Gaps are identified and promptly addressed through organization-wide action plans. R&R (Rewards and Recognition) program cuts across all levels of Associates leaving no achievement (small or big) unnoticed.

E. Stakeholder LeadershipeSCM practices slotted under Capability Level-4 focus on creating value for the customers proactively. Each of the businesses is prioritized as Triple Platinum, Platinum and Gold which helps in focusing on building partnerships with customers at all levels in their organization. Client relationship management team at Mahindra Satyam BPO includes account management team, presales and business solutions group that come up with value creating opportunities identified through the objectives and future strategies of the customers and industry needs.

Areas to be considered for value creation opportunities include process improvements, change in technology that could impact existing or potential service offerings etc and are monitored by the Account Manager. These value creation opportunities are mapped onto customer's business objectives and tracked through an Account Plan. Middle management in Transition and Delivery phases also identifies the value creation opportunities.

We develop key vendors and alliances by delivering “One

Satyam Experience” through Brand Ambassadors.

Mahindra Satyam BPO is the first BPO to win Rajiv Gandhi

National Quality Award (RGNQA), premier recognition

for Quality in India

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Real-Time Benefits of eSCM DeploymentSuccess Story of a Pharmaceutical Process: Mahindra Satyam BPO is one of the Regional Service Centers (RSC) to this renowned Pharmaceutical Company. The output of this process is an artwork. An artwork creation involves changes to contents or formats of printed text on Label, Foil, Carton, Leaflet or Tube of a pharmaceutical product.

The engagement was the first one of its kind in Mahindra Satyam BPO. The domain experience had to be built from scratch. Measurement system had not been established. With a stiff targets such as 75% Right First Time on artworks created had to be met. New sites were cutting over frequently because of which it was difficult to attain a steady state.

Taking the first steps, QMS training was imparted to the Associates and the Standard operating procedures were documented and disseminated. SPOCs were created for each of the roles and identified. CTQ metrics were tracked.During client visits, knowledge sharing sessions were held and best practices were sought from other Regional Service Centers.

These steps resulted in huge improvement in RFT percentage and productivity by 100% and 200% respectively. eSCM best practises ensured the sustenance of RFT % scores which reached 82% in Q1 '08. Continuous improvement on Productivity pulled the metric to 1.8 artworks/day/Associate in Q1 '08. Operational Audit carried out by the client on Mahindra Satyam BPO resulted in zero critical/major observations. Customer Satisfaction Score received from the client has ranged above 85% in last three roll-outs.

Success Story of a Life Insurance Process: Mahindra Satyam BPO Dental Claims Data Entry team supports backend Operations of Dental Claims Processing (Data Capture and Data entry from Claims Forms) for a Fortune 500 Life Insurance company involved in insurance coverage in various Life and Non-Life products, based out of USA. The data entry claims are received at the company's US office and scanned from there. All the claims scanned there are transmitted to Mahindra Satyam BPO office at Hyderabad where the data entry Associates key in the information into the company's mainframe accessed remotely.

Payment errors on processed claims were on the higher side. A detailed Process study was done to identify the gaps with respect to the QMS followed by planning activities through service delivery documentation. Gaps were fixed and delivery planning was tracked through a Project Plan. Escalation and communication mechanisms were streamlined. Further, a Six Sigma Project was initiated for improving accuracy. Workflows and process maps for routing and transfer of applications were developed and integrated in the version controlled SOP (standard operating procedures).

Every change in the SOP went through formal review, approval and dissemination of the information in the team. Knowledge Management within the team and with the client was made effective. It is consistently above the customer specified target for past 1 year. Development of Digital Cockpit was a huge value creation to process and customer.

The long and persistent efforts of the team brought about the

improvement in the accuracy levels to over 99%.

Six sigma approach was taken to improve the

business critical metics viz. Right First Time percentage

and Productivity.

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Outcomes (Internal and External)By deploying eSCM-SP, we have grown consistently since inception in terms of size and revenue. We have successfully demonstrated business and performance excellence?Revenue and organization strength recorded nearly 100% year-on-year growth

?Performance excellence is evident from the improving trends of performance against engagement metrics and the overall engagement effectiveness

?Our CSAT scores are above the industry benchmark?Associate delight index has been consistently improving

Success Journey

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For further information please write to Connect@mahindrasatyambpo.com and rfi@mahindrasatyam.net.

SummaryeSCM has helped Mahindra Satyam BPO win customer Confidence and industry accreditations in more ways than one:?Pharmaceutical Client - QMS Compliance Audit – The Global Pack Management

Regional Service Centre India (RSCI) exhibits a superior state of compliance with the QMS. The RSCI has an effective and efficient Risk Management program in place backed by a robust internal audit program. It was an excellent outcome with no Critical, Major or Minor observations. In the light of the very positive audit the RSC will now be audited every 24 months rather than annually.

?Digital Mapping Client - Supplier Quality Audit - Mahindra Satyam BPO obtained a score of 95.9%, which is a very good result, and is well within the acceptable with no conditions rating. There was no major nonconformance, 3 minor NCs and 5 observations.

?Life Insurance Client-SAS 70 Audit – No major exceptions were observed during the SAS 70 audit in process, conducted by Price Water House Coopers (PWC).

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