Saturday, December 27

BPOs Back In Demand... cos take to outsourcing in uncertain times

THE global economic slowdown is beginning to spell a windfall for some BPO firms. Companies such as WNS, EXL, Steria and Quatrro are finding new opportunities as clients aggressively pursue cost-cutting. “With reality dawning that these are going to be tough times, companies have become more aggressive on outsourcing,” said WNS (Holdings) CEO Neeraj Bhargava. The BPO firm recently renewed its contract with Centrica that includes a new, three-year transformational plan for streamlining the energy firm’s operations. WNS, which is witnessing traction in utilities, telecom and insurance, is in active discussions for 5-6 deals that it expects to close in the next quarter. BPO firm ExlService Holdings says the last few weeks have seen clients cut down on their decision-making time to four weeks from 12-18 weeks earlier. “There is a healthy business pipeline and there is a fair number of companies looking to cut costs,” president and CEO Rohit Kapoor said. Apart from insurance vertical, the firm is also seeing demand for finance and accounting work in retail and manufacturing. Clients are now looking towards their outsourcing vendors to suggest ways to cut costs, Genpact president and CEO Pramod Bhasin had said recently. “There are some project cancellations but there are new opportunities too.” As per a report by telecom and software consulting firm Ovum, BPO will overshadow the importance of IT in the outsourcing market in 2009. While there is lower level of offshoring in BPO at present, it is more non-discretionary in nature. “As companies cut back on resources, they will look at outsourcing more work,” Ovum’s Asia Pacific software and sourcing principal analyst Jens Butler said. For outsourcing services vendor Steria, its large exposure to public sector—about 36% of revenues come from the vertical—is an advantage. “We have seen orders go up in the public sector as governments try to revive the economy by spending more,” Steria CEO Mukesh Aghi said. The firm’s joint venture with UK’s Department of Health recently won outsourcing contracts worth £13.8 million to provide finance, accounting and payroll services to 12 national health service organisations. Quatrro BPO solutions has seen great demand for foreclosures and legal process outsourcing (LPO) work. MD Raman Roy says his top management is focusing on bringing out solutions related to government bailouts. Amid all this, banking and financial services is also showing some activity. While WNS is seeing some pick-up in demand from banking companies, EXL’s Mr Kapoor said financial services firms in the US are looking at outsourcing partners for regulatory compliance work.

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