If you are reading this, chances are pretty high that you are already witnessing one of the finest jewels of collaborative excellence. The most widely accepted internet browser of current times did not come from any single software behemoth. “Mozilla-Firefox” is the love child of a unique effort which harnessed the power of collaboration on scale and level unimagined before. As businesses become increasingly interdependent on each other and as new challenges arise everyday in the wake of dynamic business environments, industry alliances help all the players through collective means. The present analysis is aimed to achieve a better understanding of how alliances can lead to a win-win situation for all.

To some the idea of industry alliances might sound as antithetical to the ideals of free market competition and a definite contradiction to consumer’s interests. Many more may question the above example as too far fetched or even trivial for application in traditional industries. Yet, to a substantial many, it is a beacon of things to come. Technology, as we speak, is changing the rules of every possible game and there exists no market too sacred to stay unfazed. There is hardly any, if at all, industry more dynamic and proactive than technology and to stay ahead of the shakeout wave it’s important to stay prepared for the next thing, which may be an opportunity or, quite equally, a threat. To stay competitive organizations need to learn and act promptly.

Over the next few pages, we shall use insight on some of the latest trends in various industries and also review a classical economic construct to understand how alliances can help the LPO industry to flourish in the long run and how individual players can harness the benefits of constructive collaboration towards achieving a long term sustainable profitability.

Alliances and collaborations within an industry are important not only to fortify it against external changes but also to give shape to the industry and steer itself in a direction beneficial for all players.

Importance of Alliances

Alliances within an industry are always frowned upon by the proponents of free market competitiveness. However, it is the outcome of an extremely myopic view of reality and ignores the many benefits that alliances offer. These alliances may be either:

1. Industry wide – like NASSCOM for the software industry, or
2. Partner driven - chosen by partners according to individual needs

While industry alliances help organizations give a face to the industry as a whole, it also gives them immense weight as they can collectively voice their opinions for or against policy measures which may help or deter the growth of the industry. Industry wide alliances help to achieve a symbiotic relationship with all the stakeholders.

Partner driven alliances, on the other hand are more specific as they help organizations achieve strengths by bringing together complimenting skills, knowledge and allied resources and in the process eliminating wasteful duplications. Partner driven alliances help two or more players to come together to achieve synergies through collaborations and in which the sum total is always greater then what the individuals would be capable of. Partner driven alliances help companies to survive downturns and shakeouts which always follow an expansion.

Summarily, the above two forms of alliances in the LPO industry can help achieve the following:

1. Establish a brand equity for the LPO Industry as a whole
2. Partner with Government of India in formulating policies and legislation. As has been discussed in various forums, India lacks a comprehensive legal framework to deal with data protection and security, which needs to be addressed adequately
3. Partner with various stakeholders for promoting the industry in markets globally
4. Act towards creating a set of best practices
5. Continuous engagement with all members and stakeholders towards formulation of policies and implement them effectively
6. Act towards achieving a better equipped talent pool by initiating collaborations and establishing competency standards
7. Cost Savings
8. Access to newer markets
9. Reduced risks
10. Strengthened relationships with key suppliers or customers
11. Strategic agility
12. Ability to stay focused on core competence

Industries and the Rule of Three

Couple the above analysis with the classical Rule of Three in expanding competitive markets and the picture gets a lot clearer. Applying this hypothesis to the LPO sector helps us understand, amongst other things, the importance of alliances and the indispensable nature of markets to grow-expand-organize & consolidate, time after time without exceptions.

Over the years, almost all industries have witnessed such consolidation after witnessing a phase of expansion and subsequently a shakeout. Some very common and visible examples are as follow:

Global Accountancy:

1. PriceWaterHouse Coopers
2. Ernst & Young
3. Delloitte

Petroleum:

1. Exxon Mobil
2. Chevron
3. Texaco

PC:

1. Dell
2. HP
3. Lenovo

Software (India)

1. TCS
2. Infosys
3. Wipro

While, the Rule of Three may not have achieved clinical precision yet it can be safely seen that as markets expand a number of players enter the market. However, following the ways natural selection, the market reacts with a shakeout and ensures that eventually only a select few survive and flourish. This is where partner driven alliances again come into picture. To survive and sustain the shakeout organizations should be able to achieve mutual synergies by complimenting skills and resources.

About KPO Consultants

KPO Consultants is the pioneer consulting company which provides business solutions exclusively to the LPO industry. We work with the established and aspiring LPOs to set up their LPO ventures and overcome their complicated business problems and also help management make big decisions affecting top line growth of their company. KPO Consultants offers consulting in areas of strategy, operations, technology, marketing and sales, human resources, and strategic alliances. We also provide end-to-end support across entire business lifecycle; building business synergies from the scratch till realization of its benefits and ongoing developments. We have served several clients in the United States, the United Kingdom, Singapore, Philippines, Mauritius, India, Canada, Australia, and many more countries.

For more information, please visit our website www.kpoconsultants.com or write to us at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .