The Hindu : Quintant hits upon a novel model to dip into BPO cake

Online edition of India's National Newspaper
Saturday, May 03, 2003

Business

Business

Quintant hits upon a novel model to dip into BPO cake

By K. T. Jagannathan

CHENNAI MAY 2. As competition takes ugly turns, service outfits like banks and insurance companies especially in the U.S. are experiencing severe pressure on their margins. Committed to create shareholder value, these are, not surprisingly, under intense stress to overhaul the cost-to-income ratio. This is, however, easier said than done.

These companies have a peculiar problem. While their structures, systems and process are set to the developed markets, they find growth opportunities only in developing markets. Getting into these developing markets with a model tailor-made for developed markets is sure to upset the cost-to-income economics of these companies. How to address this issue? ``It is simple,'' says Phaneesh Murthy, Strategic Advisor to the newly- come up Bangalore-based company Quintant, claimed to be the country's first pure play business services provisioning outfit founded by the GMR Group. "The solution requires a developing market base with a developing market process, developing market technology and overall cost structures to succeed in these developing markets," Mr. Murthy told The Hindu during his recent visit to Chennai a few days ago. With boundaries disappearing across the globe, services can be delivered from almost anywhere in the world. Quintant is essentially seeking to cash in on this opportunity and help banks and insurance firms alike in the U.S. to stay afloat in the competitive world. And, Quintant has conceived a brand new `Virtual Enterprise Model' to get its share of cake in the burgeoning BPO (business process outsourcing), which is set to outgrow the IT (information technology) market in India by 2010.

The Virtual Enterprise Model, according to K. Balasubramaniam, Executive Director of the company, seeks to benchmark the current practices of a customer to those of the industry and then start spotting the centres to strategically locate the services over the next few years in such a way that will help the company get optimal cost advantage and competitive edge.

Typically, Quintant will provide strategic consultancy and analysis and advise clients on what activities can be done and where and how. Essentially, it involves database buying by Quintant from the market and supplying banks/insurance firms the profile of an ideal customer. This will facilitate them to access the customer with a right product offering. Mr. Murthy said Quintant would also work on cross-selling opportunities (like auto finance, life insurance and the like) with the customer. "Quintant will eventually do the fulfilment function as well (like documentation and credit check et al)," Mr. Murthy said. The DSAs (direct selling agents) were expensive resources in the U.S. Hence, he was convinced that companies like Quintant with its profiling capability would stand to gain. Besides the high quality of work at the front end, the quality of work offered at the back-end in India, Mr. Murthy felt, could prove a big boon for these banks/insurance firms, which had come under cost pressure in the U.S.

Quintant is now working with a top bank in the U.S. on the Virtual Enterprise Model. "The bank will basically do the sales function. Quintant would do the rest — from procuring database to identifying a customer and helping the bank design the product. It will also do the fulfilment function," he said. Mr. Murthy anticipated nearly 65-70 per cent of the entire process in the chain to be outsourced to Quintant in India. Since it would get a transaction fee linked to the top line, he was confident that the interest of Quintant and the bank would be aligned. The cost saving to the bank would be 35-40 per cent, he said.

Quintant's operations are headed by Tiger Ramesh, the co-founder of Bangalore Lab.

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