Converting Sri Lanka into a ‘green’ BPO destination

As the fifth largest export revenue earner in Sri Lanka, the BPO industry has recorded phenomenal growth over the last couple of years. Looking to differentiate itself in this rapidly expanding sector, Hayleys Business Solutions International (HBSI) recently became the first and only BPO in the country to obtain CarbonNeutral certification, reinforcing its commitment to sustainability and service differentiation.

HBSI Managing Director Dr. Arul Sivagananathan expressed his views on achieving this certification, how it will enhance their competitiveness and converting Sri Lanka into a green BPO destination in the near future.

Following are excerpts from the interview:

By Cassandra Mascarenhas

Hayleys Business Solutions International Managing Director Dr. Arul Sivagananathan – Pic by Upul Abayasekara

Q: What kind of impact will the CarbonNeutral certification have on your operations?

A: The carbon neutral differentiator is a huge thing. We are the only BPO in Sri Lanka to be CarbonNeutral certified today and we are probably the second in Asia to be certified in that sense. It provides a differentiator for us to go out to the global market and sell Sri Lanka; just like we sell tourism as eco-tourism, we should target to market BPOs similarly.

 Australia is introducing a ‘green tax’ this year, the first country to do so and that will give us a huge advantage when we go to Australia. We can ask them to send their work to us as Sri Lanka is already carbon neutral and we will be able to give them some credit back for the work sent rather than them undertaking the work in Australia itself and paying their government the green tax.

Q: What sort of process did you have to follow to receive this certification?

A: To get carbon neutral certified, we hired a consultant called the Carbon Consultant Company, a pioneer in such certifications that gives companies the certification once a company sets off the carbon tonnage used within the organisation. The CCC measured our organisation’s output for last year – it happened to be around 150 tonnes per annum – and we had to set that off by buying a project. We have to do this continuously every year and our idea was to make sure that we are carbon neutral for this year and we will obviously keep doing that.

Q: What project did you opt for and what is your plan for the long term in this regard?

A: We bought a project to plant trees in Africa but Hayleys as a company is getting into the other side of it – that is killing carbon credits. For example, we have two projects. Our textile factory used to burn fossil fuels but today we use old wood chips. We can sell that as a credit and in the future, we hope to buy our credits from Hayleys itself. Haycarb, our charcoal business, uses coconut shells to produce charcoal and eventually that project should get certified; we are aiming to get the carbon neutral certification to set that against our carbon tonnage.

Within Hayleys there are companies that can give carbon credits and as a company with a carbon output, eventually Hayleys should be able to set it off and this is an initial pilot project within Hayleys itself. Hayleys believes in sustainability and not just handouts, so we are looking at projects that will offer us sustainability in the long run as the company also always believes in green environment.

Q: As a pioneer in the industry, what other initiatives have Hayleys taken up?

A: One thing that Hayleys has started doing as pioneers is to go outside Colombo which is something Sri Lanka as a country should do. Primarily this industry has been growing in Colombo and post-war, Hayleys was the first BPO to open up in Jaffna. We are also the first to introduce a woman-only BPO, promoting a safe environment for women to work. Hayleys took an initiative not to compete in the general market but to differentiate itself and go to the global market with a different product.

Q: What challenges does the Sri Lankan BPO industry face at the moment?

A: Sri Lanka is one of the up and coming destinations by choice for outsourcing work but I believe that a lot needs to be done, having worked for an Indian BPO myself. Sri Lanka needs to make more investments and also market itself as a differentiator, as what we call a knowledge hub. My thought is that Sri Lanka should probably concentrate on something like knowledge or high-end work in the BPO sector rather than competing with countries like India, the Philippines and African countries where BPO is booming.

The challenges that Sri Lanka will always have are the supply of labour at required levels. Infrastructure is another – today, there are not many intelligent buildings in Sri Lanka which is what is required to ‘plug-and-play.’ The nearest you will get to an intelligent building here is the World Trade Centre and the HNB Towers which are kitted for this sort of industry. The final thing that Sri Lanka needs to do is to invest heavily in IT and telco structure and make it cheaper in order for this industry to grow further.

Q: What more would you say needs to be done to further the Sri Lankan BPO industry?

A: As newer countries emerge as outsourcing destinations, Sri Lanka needs to start thinking about how it is going to differentiate itself. The number one factor in outsourcing I believe is still based on cost arbitrage. Today, Sri Lanka is far cheaper than India so we should take advantage of that. At the same time we have certain challenges due to the lack of English educated workforce as well as infrastructure which the Government is doing a lot about to put it right for the future, but we shouldn’t miss the bus. We should be able to capture the industry as it grows.

In my view, the next generation of BPO will be the high value additions. Rather than competing for the sort of work that India or the Philippines is doing, we should leapfrog to the next level of high value adding work which should be things like management accounting, analytics and actuarial type of work. It is a huge challenge but we should start investing now to get to that stage and make it the differentiator in the BPO industry.

Q: How will being carbon neutral support this and do you see other companies hastening to follow in your footsteps?

A: I think we have set the trend and I definitely think that other companies will follow in our footsteps to acquire this carbon neutral certification. It will be a differentiator to sell to the global market but if all of us become carbon neutral, there will be no differentiator within the country itself. That’s fine though as Sri Lanka should then brand itself as a carbon neutral country and then the world will come here to get carbon neutral work done just like tourists now come here for eco-tourism.

Today, Sri Lanka is only known for tea and tourism but we need to differentiate ourselves from the traditional industries and take on the knowledge industries. What took the tea industry a 100 years and the garment industry 25 years, we are trying to do in 10 and we have the knowledge and people to do that but there is more that needs to be done by the Government and we are hoping that through SLASSCOM, the regulatory body, parties will get involved to promote this and give us the opportunity for us to compete in the same market with a different product.