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Aviva is planning the single largest transfer of employees from its various third party vendor-contractors,across three locations. The move,following the build-operate-transfer (BOT) model will transfer 5,000 employees in Business Process Outsourcing (BPO) centres of multiple vendors-contractors,to its rolls. All this, in over a year's time, beginning from January 1, '07.
Rajnish Virmani, CEO, Aviva Global Services, says, "Yes, this is probably the single largest transfer of employees by any company anywhere. We believe it will lead to more players adopting this model of build-operate-transfer which Aviva has successfully implemented with three different vendor-contractors,"
24/7 Customer in Bangalore, with 1,500 people, will be the first to carry out the transfer. Over the next 12 months, the centre in Colombo, run by WNS,with 280 people, will transfer as will the two centres in Pune, each run by EXL Services and WNS.
Between them, they employ 2,100 people, being Aviva's largest centre. The Noida operation, run by EXL Services,has 1,000 people and 24/7 Customer's Chennai centre has 400.
Mr Virmani declined to spell out the exact road map of transferring the Colombo and Pune centres. He pointed to the complexities at the Pune centre, where two different contractors WNS and EXL Services, are involved.
There is no plan as yet for the BPO units run for Aviva by EXL Services in Noida and the more recent 24/7's centre in Chennai. So, Aviva Global Services will transfer 5,000 of its 7,500 associates, the number of associates it expects to have on its rolls by
December '07.
"We believe that with some company and some third vendor run centres, we can promote coopetition," Mr Virmani said. He was confident that the transfer of employees was being watched very carefully by companies waiting in the wings. They will seek to replicate Aviva's BOT model, which has so far been successfully executed by software companies transferring 300-500 people.
The successful transition of a BPO from a contracted centre to a wholly-owned centre strengthens the argument in favour of the former, analysts agreed.
For Aviva, the obvious benefits have been the initial speed to market through vendor-contractors and now that the business and processes have stabilised, it gets a matured and knowledgeable work force. Mr Virmani pointed out that with a proprietary centre they will be quicker and more flexible in work flows.
"With a vendor contractor, there are service level agreements (SLAs). If these have to be tweaked or modified, the process is lengthy and time consuming. Once it is a proprietary centre, we will not have to pay the premium to the vendor," he said.
The expectation is that from having to follow instructions, the centres in India, being company-owned, will be able to offer solutions.
Looking to widen its footprint outside the and, Mr Virmani said Aviva is in preliminary
talks to take on non-UK and Canada work. Mr Virmani clarified that they will address the taxation issue through a "two arm's length" relationship with the parent, the UK-based Aviva, which had global sales of 36bn Pounds and assets under management of 322bn Pounds at December 05.
"There are two service provider companies and one governing arm, which separates us from Aviva UK, for taxation purposes," Mr Virmani explained.
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