Thursday, March 29, 2012
Indian business process outsourcing firms
Larger information technologys services firms wasn't enough, Indian business process outsourcing firms are now aping the management structure tried and tested by information technologys firms. Large Indian business process outsourcing firms such as EXLservice and Genpact are organising their operations into specific industry-based verticals, with domain experts heading each vertical both at the developer-facing back-end as well as client facing front-end. Logic for such re-organisation is that sales heads for specific verticals - usually domain experts - would be in a better position to chase deals from clients within that industry, as opposed to the earlier structure where geography heads - usually generalists - used to have the primary responsibility of business development. "In our industry, domain knowledge is the number one factor and this structure allows us to gravitate towards that. The information technologys guys have done it. All BPOs are more likely to follow the same structure," said EXLservice Services chief executive and president, Rohit Kapoor. EXLservice is now split into insurance, BFS (Banking and Financial Services), utilities, travel and transportation as the major verticals. The $ 360 - million Indian business process outsourcing has, however, kept one horizontal function - finance and accounting -- that spans multiple verticals. Each vertical has a separate sales team, which operates out of US and Europe, which coordinates with delivery teams based in India or other offshore location.
The back-end teams at EXLservice report into the chief operating officer PavanBagai, while the sales teams report into Bill Bloom, executive vice president, global client services, who is based in US, the single largest market for EXLservice. The new structures are coming into force as global clients look for domain knowledge, especially at a time when the Indian business process out sourcing companies are facing tough competition from information technologys companies for business. Most large information technologys firm also has a Indian business process outsourcing arm and typically large corporations give out the Indian business process outsourcing business as a part of larger I T deals thus giving the integrated players such as Tata Consultancy Services or Infosys an advantage over pure-play Indian business process outsourcing firms such as EXLservice. "It's the sign of a maturing industry. Clients need domain specialists who can understand their business. EXLservice and WNS have introduced it now. But Accenture and IBM have had it for years. To compete with them, Indian business process outsourcing must have sales people who sound more credible with underlying knowledge of systems, especially when lines between information technologys and Indian business process outsourcing are blurring," said Amneet Singh, vice president, global sourcing at outsourcing advisory Everest Group.
Genpact, India's largest third party Indian business process outsourcing has a much complex structure having heads of different geographies such as Europe, Asia designated as chief executives for those geographies. But it has introduced heads for different verticals who are also responsible for business development. Gen pact has appointed geo heads such as Charles Hunting, as CEO Asia Business, HarpreetDuggal as head of India business. Patrick Cogny, serves as CEO of Europe besides being President for Manufacturing and Services. Genpact is one of the largest India-based Indian business process outsourcing with revenues of around $1.6 billion in 2011. Recently, Gen pact acquired information technologys services firm Headstrong for about $ 500 - million. WNS, with revenues of about $369 million, has also gone in for a vertical re-alignment in the past 8 months for its sales and back office. "WNS is the first company to have created an end-to-end Vertical strategy while competition has at the most created a vertical sales team with the rest delivered as a process," said Keshav RMurugesh, group chief executive at WNS. Like EXLservice, WNS has also business unit heads for different verticals such as utilities, BFS, insurance, analytics, retail and consumer goods. However, it still retains some of the geography-based structure.
Source: The Economic Times