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Tuesday, May 16, 2006

Dell On India Support : Came For Quality & Stayed There For Innovation

Noshir Kaka of Mckinsey India’s IT practice is a well known name in the in IT circle and here he interviews Dell India head operations Romi Malhotra on its support facilities in the country – how they are performing and what makes them different. Dell’s support facilities always get extreme ratings – best to bad depending on whom you speak to - but few would dispute Dell’s pioneering status in online selling and in setting up global support. He believes that in India, the company can leverage a pool of extremely gifted workers and managers, in numbers far greater than would be possible anywhere else and that cost was the least of the consideration in setting up the support center(s).
Romi shares some perspective here :
Excerpts from the interview that appeared in the Mckinsey quarterly.

The Quarterly: Dell outsources some of its customer service work, but you also have some captive centers—ones that you own and run. Can you tell us why that works for you?
Romi Malhotra :
- One reason we outsource some work is that we have seasonality in the business, so outsourcing gives us the ability to ramp up or down without having to change our employee count.
- The second reason is that outsourcing helps us benchmark our service quality and costs. You know exactly how much you are paying a third-party vendor, and that gives you a good standard to compare your own costs against.
- A third thing is that these vendors work for multiple clients, so working with them gives us an opportunity to learn what could be done better.
- Perhaps a fourth reason is risk mitigation. By spreading our centers out, we may gain a bit of control over something like a natural disaster that impacts one area.
- Finally, working with partners lets us tap into new labor markets without setting up our own centers in those locations.

The Quarterly: What was it about these Indian centers that enabled you to do new things that Dell traditionally did not do in its home base?
Romi Malhotra: The people we hire in India are often overqualified for the job, so we asked ourselves how we could leverage that. And one answer is that we can create deep domain knowledge, which allows for reengineering skills. In addition, just to survive in India, I think we need to innovate every day. It's a way to channel inherent cultural qualities and to keep employees focused and interested. And innovation encourages us to move away from a cost center mentality and toward a revenue mentality.

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