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Build-Operate-Transfer Plan Brings Outsourced Jobs In
May 2007Patrick Snowball, executive director of Aviva UK, flew down to Mumbai, India in February to accept an award from the Indian software industry. But India's National Association of Software and Service Companies (NASSCOM) wasn't lauding the insurance giant for the jobs it was moving to outsourcing firms on the subcontinent. Instead, Aviva was recognized for taking jobs back.
The previous month, Aviva transferred 1,600 employees in Bangalore from an outsourcing vendor, 24/7 Customer, to Aviva Global Services. It was the first move of its kind and size in the Indian business processing outsourcing industry, NASSCOM said.
When a vendor creates a call center for a company, runs it for a certain period of time, then hands the operation over to the company, it's called the build-operate-transfer (BOT) model. Typically, a company moving operations to India would build the operation from scratch, or subcontract the operation to an outsourcing vendor, or some combination of the two.
The BOT approach lets a company get going in India faster, Aviva executives said at the ceremony in Mumbai.
That helps Aviva, and its Norwich Union insurance subsidiary, adapt to change, Snowball said when he accepted the award.
"Our excellent operations in India are critical for us to ensure we maintain a competitive advantage," he said. Aviva has worked with three vendors under the BOT model: EXL, WNS and 24/7 Customer. Over the course of the year, 5,000 employees will be transferred from those vendors to Aviva's own offshore division. The Bangalore facility was just the first to be transferred. Later this year, the company will transfer facilities in Sri Lanka to its control, and in Pune.
"Several other players have been waiting and watching to see how the BOT model works," said NASSCOM president Kiran Karnik.
Aviva's outsourcing provider, Los Gatos, Calif.-based 24/7 Customer, is a BPO company with offices in the United States and the United Kingdom and outsourcing facilities in India, the Philippines and Guatemala. The company employs 8,500 BPO personnel.
Aviva plc is the world's fifth-largest insurance group and the U.K.'s largest insurance service provider. It provides life and pension products to Europe, with substantial positions in other markets around the world. Its subsidiary, Norwich Union, is the U.K.'s largest general insurer with a market share of around 14% and a focus on insurance for individuals and small businesses.
Aviva has been working with 24/7 Customer since 2003, but the dedicated Bangalore facility, with 1,600 seats, was opened in December 2005.
A dedicated facility in Chennai followed shortly after, with 1,800 seats launched in March 2006. John Hodgson, executive director of Aviva's Norwich Union insurance subsidiary, originated the project.
"We are strongly committed to our core values and to having our own staff," Hodgson says. However, to derive the most benefit from being in India, the company had to ramp up staff quickly, he said. Building a new facility from scratch, even with the help of experts, would have created more difficulties, he said.
"We could have gone out and recruited our own management staff," Hodgson says, "but we wanted to be certain that we would go into a working environment, rather than a theoretical environment designed by a consultant."
So he looked for a partner that had established facilities and shared Aviva's cultural values, he says, adding that Aviva got more than just a ready-to-go call center.
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