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Home > Business > Business Headline > Report

Aviva BOTs three BPO units

Freny Patel & Parvathy Ullatil in Mumbai | April 23, 2004 08:50 IST

Aviva Plc became the first financial entity in the Indian business process outsourcing space to marry not one but three BPO outfits -- the Mumbai-based WNS Global Services, the Delhi-based EXL and the Bangalore-based 24x7.

The United Kingdom-headquartered insurer, testing the waters in the Indian market, has decided to opt for the build, operate and transfer (BOT) model. This follows Aviva's announcement last year to create 3,700 jobs in India by the end of calendar year 2004.

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Aviva has opted for the BOT model as it prefers to "work with experienced suppliers who will set up the operation for us, using their local knowledge and expertise to establish the operation and get it running efficiently," said Sue Winston, head of group media relations, Aviva Plc. The operations will be transferred to Aviva at a later stage.

The BOT model is essentially a case of outsourcing one's BPO functions to a BPO centre. The latter acts like a consultant. The BOT model has evolved in the Indian BPO industry over the last one year as multinational companies (MNCs), testing domestic waters, prefer a tie up with an Indian BPO centre, which will take care of all the works.

"By using experienced suppliers we minimise our risk by removing the elements of 'trial and error' that tend to be involved in setting up any new operation," said Winston.

The BPO centres will take care of recruitment of personnel, their training, look after the facility and run the entire operations for a defined period before the entire set-up is transferred to Aviva.

Usually this agreement runs for three to four years as it takes a year to set up the operations, said a senior BPO official.

Aviva's decision to service the group's UK and Canadian businesses by tying up with three Indian BPO centres is judged to be taking the best of all worlds.

By not deciding upon a single BPO centre, Aviva is ensuring that should one BPO centre not perform to the mark, its outsourcing operations will not be affected.

"In the same way that our call centres in the UK are not in any one location, our offshoring operations will not be reliant on any one location for any one function. We believe it is good business practice to have a degree of geographical diversity," added Winston.

MNCs get a headstart using the domain expertise of the alliance partner and can at the same time retain full control of the centre without having to set up a captive unit. The Indian BPO centre at the same time stands to gain. It gets paid management fees for its expertise and knowledge, while the sizable investment is made by Aviva.

There is a wide spectrum of jobs being outsourced by Aviva to India, thereby making the BOT model with three BPO centres possible.

The jobs created in India will comprise around 2,350 jobs to service the UK general insurance and life insurance businesses, including approximately 350 call centre roles, 2,000 back office, administration, processing and IT roles, as well as 150 administration roles to support the general insurance business in Canada.

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