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June - 2007 - issue > Cover Story
Nipuna A Speciality BPO
Pradeep Shankar
Friday, June 1, 2007
This ain’t what a common man understands as BPO.

For a relatively young organization, Nipuna Services has a grand vision to emerge as a leader in a growing environment where customers are still on a journey of discovery as to what a BPO house can do. The fact that the market too is relatively undefined makes the game “intellectually challenging,” says its CEO Venkatesh Roddam.

Pharmaceutical giant GlaxoSmithKline is all set to introduce its new drug across multiple geographies. For a company with significant product line proliferation like GSK, the regulatory compliance aspect of packaging and labeling for specific geographies can become a significant cost as well as a potential liability. Even an insignificant artwork error could easily force a product recall. For the statistically minded, each recall typically costs between $1 million and $4 million, and it is said that in large pharmaceutical companies there may be 20,000 artwork changes per year on packages.

At Nipuna Services’ artwork facility in Hyderabad, a bunch of employees elaborate on dosage, schedule, composition and other information on GSK’s medicine packs. With an understanding of the dosage breakup of various drugs and FDA regulations relating to 25 different markets across the globe, this team has built an expertise around global medical pack management. Added to this, some of them even have multilingual skills to translate details on specific drug packages to languages such as Arabic, French, German, Hindi, Italian, Japanese, Portuguese, Russian, and Spanish to address different markets.

With this, Nipuna has busted the myth that artwork processes are restricted to creative fields like animation and advertising. The thinking among the company’s management is that if artwork and pack management is working for the pharma industry, there’s no reason it won’t in other verticals. Working along those lines, it is set to close a similar deal with a confectionary manufacturing firm soon.

Away from the pack
Pack Management is not something that comes to mind when you think of a BPO company. But that’s what constitutes Nipuna Services’ focus—along with similar high-end business processes across various verticals.

As you walk through its offices, you will see its 3000 employees keeping themselves busy serving clients across the U.K. and the U.S. The processes they work on are a tad removed from the day-to-day BPO activities: providing plethora of engineering support services, handling the entire life cycle of health insurance claim settlements, designing interiors of an aircraft and digitizing maps for GPS systems - which form the basis of Nipuna’s consciously redefined BPO landscape.

“As a BPO, we are in many ways a misunderstood company. The term BPO is a loose expression involving voice and non-voice activities, centered on services like credit card queries and bill payments. However the processes that we execute are not what the market understands as BPO. We are way beyond that, and I dare say that between 60 to 70 percent of our activities logically fit in the bracket of KPO,” says Venkatesh Roddam, CEO of Nipuna Services, the BPO subsidiary of Satyam Computer Services.

The strategy that Nipuna has adopted is to take horizontal offerings [see illustration] across verticals and then tap into core functional areas within the verticals. For instance, in the area of telecom, it is looking beyond providing volume-based customer support, something which it enjoyed in the last few years. Today, it is able to touch Telcos’ core operational systems; be it billing, revenue cycle management, fraud management or running some of their analytics.

Similarly, its relationship with a pharma client began with a horizontal offering, wherein it provided marketing services. In the two years of their engagement, Nipuna was able to expand the relationship to offer cutting-edge domain-based work in clinical trials and clinical data management. “Stepping into the core areas presents a phenomenal opportunity,” says Srinivas Koppolu, Global Head – Sales and Relationship Management.

One vertical where the company has gained good traction is the animation space. Early last year, it signed a $8 million deal with German animation company 4K Animation. Then, just a few months ago it won a $25 million “edutainment” deal to work on two ‘iconic’ European animation projects: the third season of Marvi Hammer Presents National Geographic World, an award-winning,

52-episode TV series, and a movie, also featuring Marvi Hammer. In the last several years, Nipuna has built significant VFX, CGI, and 3D animation skills by producing numerous global and domestic films. Among the more than 40 Indian films for which it has worked on animation projects are Sainikudu, Stalin, Pokhiri, and Belly Full of Dreams.

“We are not into the movie making business,” affirms Roddam. Traditionally, animation has been an extension of a production house; a bastion which lacks elements of corporate structure, discipline and processes. Nipuna picked a part between pre production and post production, wrapped metrics around it and employed experts to execute it. “Animation is one important area where we want to expand by providing visualization for scientific, engineering architecture and medical applications,” notes Roddam.

The ‘One Satyam’ punch
Koppolu believes that the vertical model will help Nipuna offer integrated life cycle services to clients. In other words vertical engagements on the IT side will see a natural progression to BPO engagements too.

It is already happening. The unconventional BPO was able to tap into parent company Satyam’s seven-year relationship with a manufacturing firm. Since two years, close to 300 of its employees work in serving this client on high end CAD/CAM designs. Nipuna further sensed a close link between direct procurement of raw materials and engineering support services. It was able to convince the client on the Manufacturing Process Outsourcing (MPO) concept, wherein 200 of its employees would provide engineering support services like managing the spare parts in the post-production and post-deployment scenario. This gave Nipuna an insight into customer’s shop floor production environment.

Today, Satyam and Nipuna employ similar caliber people viz. mechanical engineers to do IT and BPO—the entire gamut from the design and application development to customer support. The integrated offering not only creates value for clients but the engagement also deepens Satyam-Nipuna’s understanding of the client’s business process.

“I think this industry will evolve into a truly integrated model. In order to truly leapfrog in this game, we have to provide comprehensive solutions to clients to take care of their IT applications and systems, network infrastructure and business processes. Having strengths in both IT and BPO edge should give us competitive lead against captives or the pure play BPOs. We would see more of integrated IT-BPO deals as vendor readiness gets demonstrated, and we are ahead in this curve,” says Koppolu.

Concurring to Koppolu’s views Indraneel Ganguli, Director, Global Marketing and Communi-cations says, “In all of the integrated initiatives that we undertake here, we always keep in mind that the target audience is not considering us as a stand-alone BPO company, but as part of a reputed global leader in the IT Services space; as part of a “One Satyam” experience. And that’s the integrated offering that we present to our stakeholders.”

While Nipuna gears up for the integrated IT-BPO play, it is keenly eyeing opportunities in high-end research analytics, which many analysts believe will constitute the new wave in BPO. This will enable the strategy groups in large corporations stay focused on business direction, and can get away from support roles like demographic analysis. For instance, one of Nipuna’s large clients in the energy utility area recently wanted to implement a security safety system across its operations around the world. Several doctorate holders along with domain experts in Nipuna ran simulation using analytical tools and presented a strategy report to the client. “We will see more of these high end research analytics,” says Koppolu.

The Customer Focus
Currently, Nipuna offers 64 business processes to 33 global customers, most of which are Satyam’s clients. To get a buy-in from the customers for high-end BPO services Nipuna has built Customer Experience Centers.

In the IT world, service offerings mature with the infusion of domain experts and through client experiences. While that holds good in the case of BPO as well, what’s more important there is the understanding of the business processes.

When he came on board as CEO around two years back, Roddam observed that almost every vendor in the marketplace spoke about “being innovative” and providing “value added offerings.” “There was no yardstick by which one could measure to what extent a vendor added value to the customers. Quite often the two terms were being used loosely,” recalls Roddam.

Nipuna bet on its quality initiatives to act as a differentiator. Having obtained eSCM Level 4 Service Provider certification, an eSourcing Capability Model developed by Carnegie Mellon University. This model gives Nipuna an edge as it is specifically aimed at the BPO space. “It is different from other quality and capability models since it addresses activities critical to successful outsourcing, not only in the contract execution phase but also in the pre-contract and post-contract aspects of an outsourcing engagement. As our processes are fine-tuned to match the standards of eSCM, we are in a better position than our competitors to deliver quality services consistently,” says Harish S N, Global Head - Delivery.

Through this certification, Nipuna has been able to add value or create value for customers across all engagements. Like its parent Satyam, Nipuna maintains a value register, which essentially captures the quantum of productivity and efficiency improvement on a quarter-on-quarter basis with every client. At the end of each quarter, there is a joint client and vendor sign-off indicating the level of value that the company was able to extract from this contract for its client, over and above what is defined in the SLA. “For the last two years, our productivity improvement and process efficiency are way ahead of what’s agreed at the SLA level. This has led to expanding relationship with client beyond the SLA level,” says Roddam.

Another of Nipuna’s deployments to measure the performance metrics is the Capability Maturity Plan model, where it rates every offering on a scale of 1 to 5. “This is an important step for Indian companies to gain confidence of end customers. This model is helping us fuel the growth,” notes Roddam.

Preparing for the Future
“Earlier, working in a BPO meant that you had nothing better to do. Today, people are beginning to view BPO as a viable career. While this shift is helping us hire people, it is an exciting challenge to build people’s careers in a fast paced growth environment,” says Roddam, who himself gave up a two-decade long banking career to run a BPO firm.
He knows that people are critical assets in the BPO game and investing time, money and effort to build thought leadership among people is important. “If I don’t dedicate resources on building teams, I might survive in the market for next 12 months. But what do you do for the next 24 or 36 months?” he questions.

At Nipuna, there is a dedicated team which focuses on building assets across the organization ranks. The team engages in dialogue with the company’s potential as well as existing customers to understand the strategic direction in which clients are thinking. These dialogues get synthesized into action; in the form of new products or service offerings that could cater to client needs. Asset building programs are then designed around these service offerings.

Nipuna aggressively looks out for opportunities to tap the best talent available. Naresh Jhangiani, Global Head- Human Resources has designed a unique recruitment drive aimed at attracting the best talent in a short duration. Called as ‘100-hour recruitment marathon,’ the philosophy behind this innovative approach is to facilitate the prospective candidate to walk into our office any time during the 100 hour window as per his/her convenience. “We are constantly exploring new and innovative ways for working professionals to come over and take part in our recruitment process. As Nipuna readies itself for the vigorous growth, we are looking to hire the best professionals to drive this growth," says Jhangiani.

Nipuna’s leadership philosophy, like its parent Satyam, has been that leaders spend equitable time in thinking, doing and communicating. While Roddam sticks to this philosophy, he has made sure that the culture that permeates the organization is that of ‘distributed leadership’. Nipuna’s business is split into multiple small units, each run by a CEO. As an independent CEO, individuals are aptly empowered and given the required bandwidth to be able to run the business.

“We are in the business of developing leaders. We believe everything else flows from there. Leadership at a group level is engrained into figuring out innovative ways to grow people and technology processes. Our goal is to multiply leaders in all corners of the organization with focus on middle and senior level management,” says Roddam.
In order to take the company to the next level of thought leadership, the Foresight group, which consists of 70 top in-house leaders, constantly brainstorms about the strategic direction. Having a visibility into the business pipeline for the next four or five years, it is this group which steers the firm into the future. While Roddam is happy that he has built an “extremely vibrant” and a “highly energized” organization, he notes, “It is the Energy, Focus and Discipline of every member of the Foresight group that is fueling organizational growth.”

Roddam has established an effective communication channel to reach out to his employees and to ensure every single employee understands his vision. “If we get this right, everyone will be driven towards that vision. It helps us take off our time to see to that people are engaged,” he says.

With all the ingredients in place—strategy, clients, employees—Nipuna is now gearing up for growth. The company posted $38 million in revenues for fiscal 2007, recording a growth of 91 percent. “The balance sheet strength that we have today is driving us [the management] to look out for inorganic growth,” says M Satyanarayana, Chief Financial Officer. The company has hired McKinsey Consulting to help out with the acquisition strategy.

As a precursor to these acquisitions, Nipuna has struck at least seven partnerships with other service providers over the past 12 months. “These partnerships are focused on creating greater value for customers, be it by offering end-to-end services in a particular space, or offering a greater depth of services,” says Seshadri (Sax) Krishna, Global Head - Strategy and Corporate Development. The partnerships have are also helping Nipuna to prepare to deal with issues like corporate integration and operations that may crop up following the takeover of other entities.

For a relatively young organization, Nipuna has a grand vision to emerge as a leader in a growing environment where customers are still on a journey of discovery as to what a BPO house can do. The fact that the market too is relatively undefined makes the game “intellectually challenging,” quips Roddam.

Having been on both sides
Venkatesh Roddam

Venkatesh Roddam came on board Nipuna as the CEO in August of 2005. Since then he has been focused on developing a long-term vision for the organization, in line with the philosophy of the parent organization, Satyam.

With nearly two decades of experience in commercial and investment banking, Roddam has had an even mix of sales and customer relationship management and operations, and technology-based roles. He has managed large teams and has held responsibilities across products and functions, in geographies including the Americas, Europe and Asia Pacific. As a result of having seen both sides of the table i.e. client world and the vendor world, when Roddam speaks about the BPO industry, his word come along with a certain authority.

Prior to Nipuna, Roddam was based in Frankfurt, Germany heading Securities and Custody Operations of Deutsche Bank. He was responsible for the Trusts and Securities operation, covering 31 markets across continental Europe, the Americas and Asia Pacific.
In the eight years he spent at Deutsche Bank, he had seen the bank relocating securities operations from various parts of the world to its captive in Bangalore—Deutsche Software. “In those days it was a big thing to move business processes out of the national territory,” recalls Roddam.

When Deutsche Software was acquired by HCL in 2004, he had seen migration of the (Deutsche) bank’s cash and security processes to the third-party unit. But it was soon moved back from them, into a newly formed captive called Deutsche Network. “Considering the risk appetite, we didn’t have the comfort to deal with a third party,” notes Roddam.

In the last few years, he has seen Deutsche Bank taking assistance of another Indian third-party vendor all over again, this time to run its investment banking back office engine. “Having gone through the journey, I see the emergence of assisted captive, wherein management control will remain with client but the third party vendor will take care of operations and scale,” he says, hinting that Nipuna is in talks with existing captives to take over their operations.

Roddam’s experience in the client world gives him the strength to steer Nipuna in the marketplace. As the CEO, he plays a key role in devising and realizing the company’s aggressive growth plans for the future.

A strong team player and builder, Roddam believes in a ‘hands on’ approach to leadership. An astute believer of result-oriented philosophy, he pursues growth by employing new ideas, concepts, and technology. He successfully works through situations that involve managing multiple and concurrent responsibilities. His interests include reading autobiographies and listening to music. He has a degree in Commerce and a Masters Degree in Business Administration.

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