January 2011 | Sangeeta Menon

A diligent journey

Phiroz Vandrevala, chairman of Diligenta, shares the several game-changing milestones in its journey

Diligenta, the UK-based BPO arm of Tata Consultancy Services (TCS), was established just four years ago, and has already achieved several game-changing milestones and made a mark for itself as the second-largest player in the UK life and pension BPO space. Phiroz Vandrevala, shares the highlights of this journey with Tata Review.
TCS’s entry into the UK BPO segment
When we looked at the strategy for TCS in the UK, it was clear that BPO was a big emerging market. But we did not want to create a BPO business that was largely based on voice. We looked at it more strategically and zeroed in on platform-based BPO in areas such as insurance, HR and finance, where we could use our own intellectual property to actually conduct the BPO.
In the UK, insurance is a regulated business that comes under the purview of the Financial Services Authority (FSA). So Diligenta was set up as a TCS subsidiary which could be FSA regulated.
The Pearl success story
The Pearl Group, one of the leading insurance companies in the UK with whom we already had a relationship for 14 years, was looking at outsourcing the processing of their life and pensions closed book.
Pearl itself was a consolidation of four different insurance companies, with the result that they were running their life and pensions closed book business on 11 disparate platforms. We proposed to consolidate these disparate systems on one common platform. Pearl knew if anybody could do this successfully, it would have to be a company like TCS.
We embarked on the project with four million policies. In April 2010, we migrated two million of those onto a single BaNCS platform. The challenge for us was two-fold: one was to create the platform, which is a big IT challenge; the other was the transformation, where we have to take 10, 15, or 20-year old data from files and put it all together. This transformation process and building the master data is very complex.
We are now at the end of the first phase of the journey. Everybody who has witnessed what we have done is amazed. It is game changing as far as this industry is concerned.
Going global with the Diligenta model
There is an opportunity for TCS and Diligenta to leverage this platform and create a globally-viable business for the future. We can either adopt this model or licence our product (BaNCS) to local companies which will use it for insurance companies. While we will do the transformation, the companies in turn will use it to service their policies in their respective geographies.
The £250 million UISL takeover
About a year-and-a-half ago, Pearl acquired a company called Resolution, one of whose three suppliers was Unisys Insurance Services (UISL). UISL had committed to create a platform for Pearl, but failed to do so. In the meantime, our platform had started functioning. So Pearl selected Diligenta to take over the platform. We had six rounds of negotiations before taking over UISL, from whom we inherited about 1,000 people. The exercise was completed on September 1, 2010.
The way forward
We have the tools and the platform. Now we need to market it. We are reasonably positive of a high traction in the market. The UK has around 78 million policies of which about 30-40 million policies have not been outsourced and that’s the market we have to go after.