As BPO companies enter into more specialized segments, market research analytics is emerging as a good opportunity. With deal sizes in the range of $30 million to $50 million and market size estimated to be $17 billion, there is tremendous potential to be tapped. However, the focusing on a niche area like analytics might be a risky proposition. Ugam Solutions, a Mumbai-based market research BPO, decided to focus on this niche market from the start. CEO Sunil Mirani speaks to Shweta Verma of BPO Watch, on the risks involved and the strategies adopted by the company.

Excerpts:

1. What does it mean to have a specialized focus like data analytics? How do you differentiate from other BPOs?

As compared to other BPOs, which are into voice-based services like customer support, financial transactions or healthcare processes, we differentiate mainly by way of the nature of work we do. We provide services in the area of market research and analytics and our services include survey programming, data tabulation, report writing and so on. Such high-end processes require significant domain expertise, deep understanding of the domain in which the client operates and specialized skills, as the processes being outsourced are unique to the industry in which the client company operates. Our services help companies understand their consumers better and help them take better marketing decisions.

2. Isn't it too risky to restrict yourself to such a niche segment?

The market research industry offers a sizeable opportunity. The revenue generated by such high-end services is also much higher than basic voice-based or low-end transactional services because the nature of work involves specialized skills and domain expertise. The work is more focused on quality rather than quantity. So I don't agree that it is all that risky as overall revenue generated is comparatively higher and it is a more profitable segment.

3. But is it possible for you to sustain a 100% year-on-year growth in the long run?

We have seen a 100% year-on-year growth in the last four years and expect it to continue for the next five years. We are growing not just in terms of revenue but also employee strength. The market research industry has begun off shoring significantly only in the past 3-4 years. If we look at the big picture, companies worldwide spend $60 billion on research and information services including primary market research, competitive intelligence, financial and economic databases, syndicated research, reference material, news and trade information etc. All these involve high-end business processes, many of which can be easily outsourced. Seeing the huge potential and lower penetration in the industry we expect the growth to continue.

4. What are the challenges of operating in such a niche segment and how do you tackle them?

The job involves high-end data analytics and requires specific technical knowledge (such as use of statistical software platforms like Quantum, SPSS and client specific tools) and domain expertise (knowledge of the market research industry and methodologies). The local industry is 1% of the total market research industry and thus the existing pool of resources is short in supply. This demand-supply gap is a big challenge for us. As a long-term plan we would undertake different training and development program for our employees.

5. What educational qualification does one need to enter this segment? What training do you provide on the job?

We recruit candidates with qualifications such as B.Sc. - Maths/ Statistics, BCA, MCA, and B.Tech./M.Tech. As I mentioned earlier, there is a high degree of functional expertise and domain knowledge required. The candidate should possess good communications skills, should have an aptitude towards programming, and should be able to work in a team and under pressure.

We also conduct various training programs for our employees, where we provide general understanding of the market research industry and methodologies, technical training (use of Quantum and client specific tools) and soft skills training (communication, e-mail etiquette etc.). These programs run anywhere between 2 to 90 days.

6. Any other interesting HR initiatives taken by your company?

We have tried to create a working environment with a good balance of work and play. The remuneration is among the best in the industry along with rewards closely linked to performance. Besides the employee stock option scheme, we run various rewards and recognition initiatives from time to time. In order to keep our employees motivated, we organize picnics, regular sports events such as cricket and internal competitions. We have a monthly event called 'Spotlight' where we share client feedback with employees and celebrate anniversaries and personal milestones.

7. What is your opinion on rising maturity in the BPO industry? How has the approach of companies changed?

The BPO industry has shown progress towards providing value-added services and companies are providing more and more specialized services and moving up the value chain. However, such companies should bear in mind that it's not just about offering one more service it's all about the expertise in the area and will require significant domain expertise and focus in the chosen area.

8. Any new areas or services that you plan to explore as you expand?

With regards to exploring new areas and services we plan to offer higher-end analytics services such as data modelling, data mining and advanced statistical analysis. We want to help clients not just analyse survey data, but also transactional data. There is a growing confluence between market research (which analyses the consumer attitude) and data mining (which analyses consumer behaviour) and it is our goal to gradually add such advanced analytics capabilities to our portfolio.