Leila Chirayath Janah, Founder of Samasource, was in Pakistan a few weeks ago and stopped by the CIO Pakistan WebStudio to do an on-camera interview with Jehan Ara, President of PASHA. Samasource promotes socially responsible outsourcing and provides a platform and network for individual freelancers or small companies to pitch for piece-meal work in international projects. Here’s a fabulous interview you simply MUST tune into!
In The Line Of Wire: Ep 8 – Samasource
- Posted on 03.6.09
- Featured, In The Line of Wire
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[...] C. Janah is the founder of Samasource. We had featured Leila’s video interview with Jehan Ara, the President of P@SHA a few weeks ago, but here’s a more indepth podcast [...]
[...] us see what Leila had to say about Socially Responsible Outsourcing and how she sees it [...]
Some people speak in poetry. Others of us in ‘conference topics.’ The subject of national strategy (or more appropriately, strategies) for export-oriented IT/ITeS companies could be a conference held in KHI first, LHR and then ISB.
We already have some great success stories. In call centers, Touchstone shows that focusing on a specific domain (rather than providing general merchant services) can pay off in terms of building a good reputation and making marketing easier. Their attention on quality first, then quantity, provides a role model. So too does their training efforts and resistance to extreme cost-cutting. Google ‘offshore lessons’ for additional information.
In software, NetSol has done a lot of things right. A generous initial client, repeated product releases outside of more competitive Western markets, consolidation in discrete verticals and then US-UK acquisitions through stock swaps (generating capital internally). Google ‘NetSol case study’ for the TechNewsWorld article on NetSol.
Where Samasource opens new ground is in offering to manage small projects, which others shun because they cannot figure out pricing models. Software projects bill on a task or labor hour basis, whereas call center and BPO work usually bills on production time. 40-42 production minutes per labor hour is a common conversion rate for mature voice projects. If Samasource can figure how to incorporate their project management costs into their price systems, they could create a new market for fractional full-time-equivalent work.
Rather than look to industry associations to subsidize marketing for Samasource, government export-promotion and economic-development agencies would be more appropriate sources of sustained funding. If Samasource looks for standard voice projects of 20 FTEs or more, they face a sales cycle that commonly lasts 6-18 months AFTER A LEAD HAS BEEN IDENTIFIED and prequalification achieved.
In the U.S., the Indian majors Wipro and Infosys pay starting salaries of $81,000 per year for marketing people, with a 50% cash bonus expected on top of that salary. Benefits and overhead costs can bring the total annual cost per FTE to a quarter of a million dollars. If lead generation requires six months (an optimistic goal) and the sales cycle lasts three times that long (I’ve seen it go considerably longer) then two years could pass before any business is generated through organic means. Two people at $250k per year for two years (without spending anything on advertising or conferences) and a startup can spend a million dollars for sales and marketing, take two years and still not land any business.
If I were advising Samasource, I’d suggest using affiliate marketing through third-sector organizations, capitalizing on these NGOs’ client/membership pools. Pick emerging service sectors, move into those sectors before competitors realize those markets even exist. Use social media to its best advantage. Commoditize some services such as the fractional FTE and mechanical turk work. Hire a PR firm that knows how to open doors that competitors do not even know exist. Get on Oprah’s TV show. Advertise in Oprah’s magazine. Build a brand around the identity of the CEO.
Samasource’s winning strategy is not going to work for most other IT/ITeS companies in Pakistan, in part because other companies will need to build and maintain their own distinct brands and because of brand issues with Pakistan. Conference topic: building brands for IT/ITeS companies in Pakistan.
What other country finds their export-oriented companies actively hiding their locations? Some Indian IT/ITeS marketers have been know to tell lies to make it seem as if they are all in the U.S., whereas in Pakistan we see the phenomenon of companies staying silent about where they are located.
There are product and service verticals where it makes no difference where you are located. Collections and some LPO service lines, for example. Several verticals covered on CIO Pakistan could be addressed in Pakistan first and then exported globally. Mobile banking, for example.
Every single other country in the world would love to have the advantages that Pakistan enjoys for IT/ITeS work. Whether Pakistan can draw on those advantages sufficiently depends, to a great extent, on the level of government support. If government waits, within three years, other emerging destinations will come on the scene and Pakistan will have lost a golden opportunity. Pakistan could still enjoy a good future for IT/ITeS outsourcing service delivery after that point, but most of the benefits of that work could accrue to foreign companies.
The clock is ticking.
My country’s government is preparing a huge aid package for Pakistan. There will be significant non-military aid included, which could be tapped for ‘capacity building in the private sector’ as it is termed in the language of foreign assistance. Do we have another conference topic here?
I’d be happy to contribute ideas on how capacity building for export-oriented companies in IT/ITeS could be conducted. In addition to the ones discussed in earlier posts on CIO Pakistan, a good use of funds would be to both invest in Samasource to provide it with the capital to conduct the marketing work described above. Contracts could also be let to Samasource for training service providers in Pakistan in how to perform ITeS work, how to communicate with clients, how QA/QC works, and in basic business skills such as HR and compensation management.
Samasource, with its multinational presence, has access to service infrastructure and skill sets that are often beyond the reach of both public and private sector organizations. As a private organization, Samasource can implement training and capacity building projects more efficiently and effectively than government agencies usually can. Capacity building will enhance Samasource’s brand in target markets and makes sales and upsells easier.
Everybody wins.
@Anthony – Thanks for this, and I’m sure Jehan Ara and Leila can better address this, but here’s my two anna bits:
Pakistan needs a lot of things, but perhaps at the onset, it needs some kind of strategy. Who are we and what kind of market are we positioning ourselves as? If it is an “outsourcing destination”, it isn’t very obvious. If it’s something else, we’ll that’s not obvious either.
I think there is a great deal of intrinsic value that Samasource and other platforms (not organizations) can bring to the bottom of the pyramid, but I’m afraid people are not going to spend money to get it done – this is probably money that they don’t have or at least they don’t know they have. Unless these “expertise” can be subsidized or supported/endorsed by an industry association, I don’t think you’ll see any transaction taking place. I agree it is needed, but companies alone will not be able to sustain the costs, nor bring about the mindset change, in isolation.
Samasource offers tremendous potential—but it will come up short unless that potential is properly recognized.
The bottleneck for outsourcing cannot be blamed on a lack of qualified and willing service providers. There are some issues with training and domain expertise, but these can be addressed successfully through a variety of training and QA approaches.
The bottleneck is to be found in the lack of clients. Changes in the last six months have rendered some of Samasource’s business assumptions obsolete although not invalid. Clients are increasingly moving away from second-tier providers and towards recognized brand names. Blame Satyam. Blame PwC. Blame whoever. Then get to work addressing the problem honestly.
Issues with the lack of clients are not the fault of Samasource. Policy makers in outsourcing destinations need to realize that there is ‘no free lunch.’ Organizations such as Samasource can publicize the benefits of Pakistan only to a limited extent under their own budgets. Entrepreneurs in Pakistan have not always been helpful because they have consistently under estimated the time and effort required to maintain successful marketing campaigns in Western markets.
Startups in the U.S. continue to be evaluated on the percentage funds allocated to marketing. If it is less than 50%, there are warning signs. The rules for new market entrants from emerging destinations tend towards a 1-3 split, with two to three time as much money spent on marketing than on all other expenses combined.
Want to see more outsourcing business going to Pakistan? Then front-load Samasource’s marketing budget. Have Samasource people provide formal and cohort training in Pakistan in how to conduct sales and marketing. Pay Samasource to conduct advertising and marketing campaigns.
Pakistan needs more friends in target markets to represent the advantages of the nation as an outsourcing destination. Pakistan needs Samasource.
@Jehanzeb run with it my friend
Super stuff. Its the kind of project that I need to get into.
Thanks Jehan Ara and Leila!