Prudential upbeat about Indian captive centre

Setting up a captive centre in India was a strategic decision for Prudential and the British insurance major now has big future plans for India, says Abhinav Singh

Prudential, which set up its wholly-owned captive centre, Prudential Process Management Services in Mumbai around a year back, is optimistic about its future growth and hopes to expand further in India. It is also planning to delegate more complex work to its Indian centre. Recently, the company outsourced a specific project to India, which involves switching policyholders from cash collection to a direct debit process to improve cash management. Prudential is also looking at a possibility of outsourcing higher-end jobs such as accounting and payroll, to its Indian centre. The captive centre, which had been set up with the assistance of ICICI Onesource, is the only offshore captive centre for Prudential outside the British Isles. It has two such centres in the UK and one in Ireland. However the need to have such a centre was a strategic decision on part of the company.

So why did Prudential set up a captive centre in India instead of taking the third-party route? There were many reasons.

Cutting costs and leveraging skill sets

According to Atul Sharma, Prudential avoided the third-party route because it didn’t want to outsource complex financial transactions

While setting up the centre the company had said that its Indian centre would be able to cut costs by at least 30-40 percent in comparison to a similar centre in UK and would save the company 16 million pounds on an annual basis. Till last year Prudential was spending close to 120 million pounds on customer service in UK. Besides, like any other company it has also been able to leverage the efficient skill sets of its Indian employees.

No outsourcing of complex transactions

Prudential didn’t want to outsource complex transactional work to any third-party player and felt more comfortable having its own captive centre to do transactional work for the company. Atul Sharma, director, human resources, Prudential PLC says, “It was a strategic decision as Prudential has complex financial transactions that it doesn’t want to outsource to any third-party BPO firm.” Security concerns with regard to handling of complex data by any third-party BPO always comes at a risk, which Prudential didn’t want to take.

Exercising an integrated policy

Prudential is a strict adherent to quality and standards and wants to keep the same standards and quality while outsourcing work offshore. The firm also wants to have an integrated policy of standards and quality all across the globe and by setting up captive outfits it have been able to maintain it. The company felt that it would also be easy for it to upgrade employee skill sets as per needs and requirements.

In better control

Prudential also felt that setting up its own centre would help it in having better control over operations and would also help in maintaining the legal parameters which go along with the work outsourced to the offshore centre. Sharma of Prudential says “By setting up our own captive centre we have been successful in having better control over our employees and have also been able to develop a career management system for them and have been able to offer a global career to them.”

Bright future in the offing

Prudential’s captive centre, which has around 700 employees today, is planning to ramp up further and hopes to make it to around 850 people by mid-2004. It is also eyeing bigger investments in India in the future. Sharma adds, “The fact that Prudential is planning to delegate more complex work to its Indian centre reconfirms the importance that it gives to its Indian operations.”

Other UK-based companies follow suit

Other UK-based companies are also sending work to India, saving about 40 percent on an annual basis. UK-based insurance firm Aviva already employs 1,200 employees in Delhi and Bangalore and its experience in India had been positive. Recent announcements have included plans by the UK-based National Rail Enquiry Service, while HSBC intends to outsource 4,000 jobs over two years. British Airways too has its captive centre in India.

abhinav@expresscomputeronline.com