CIO: Do you think India needs to re-brand its BPO business
Partha De Sarkar:
India's BPM sector needs to be in line with what's happening in the world--be it from the perspective of competition, technology, or trends. Other countries are now making a pitch here and we need to continuously re-engineer our capabilities to stay ahead. This way, we can build on our tag as the top destination for BPM services.
At the same time, there is an immediate need for rebranding BPM as a 'career of choice' for our youth. Making them aware that this industry is a 'place to stay and grow' is critical to India retaining its competitive talent edge. NASSCOM is working with the government to establish BPM as a part of the curriculum at academic level, which I think is a great way of creating awareness.
CIO: So in your decade long experience, is retention a bigger challenge than acquiring skills
Partha De Sarkar:
We are one of the biggest employers for college graduates. A lot of fresh graduates get into call center thinking that this is easy money. But it's far more difficult than that because it involves night shifts, acquiring deep domain for sectors such as insurance and telecom. The reality dawns in the first 90 days. For us, attrition is highest around this time. Post that, our retention numbers improve dramatically and that's the nature of the beast, and it hasn't changed.
CIO: What is HGS' unique proposition over other BPO businesses
Partha De Sarkar:
Our client retention story is unparalleled in this business. Our oldest client is forty years old. There are very few people who can claim that kind of heritage in terms of customer service in this highly competitive market place. More than technology and processes, it's the people who work with clients, and I can say that we have a good set of employees who drive good results for our clients and businesses. That I believe, is our USP.
Secondly, if you look at this industry, the churn is very high. However in our senior leadership, the churn is the lowest that you will see in this industry. That leverages business continuity. We also have a great mix of people which makes us truly multinational. There are people in our leadership from all over the world which makes us culturally very diverse.
We have spread our footprints in many parts of the world but trusted local leadership to run our businesses. We believe that it gives us an edge in terms of nurturing familiarity with the market and different cultures.
CIO: Off-shoring from the Philippines and India has posted a good growth for HGS this year. So has on-shoring from Canada. How have you been able to maintain the right on-shoring vs. off-shoring balance What's the strategy and how has it helped you maintain the growth year-on- year
Partha De Sarkar:
HGS offers a 'Right Shore' model as a solution to clients. They can choose whether they want to be serviced from domestic locations in their geography, near shore or offshore locations. HGS did start off as an offshore player but over the years, we have built capabilities and expertise across geographies including critical client markets. This has given us a big advantage when we approach clients for new business opportunities. Secondly, our global presence has also helped grow local economies and generate jobs.
CIO: Where does IT feature in your growth plans
Partha De Sarkar:
We develop platforms in-house for internal consumption. For instance, our employee portal is one such platform that has undergone a lot of customization in the last few years. It allows employees connect, collaborate, and bring cultures together. We have also digitized our employee records for ease of use and increased productivity.
The truth is that BPM is no longer just about someone taking a call or sending an email. Today, the model blends people and technology to offer high-end services to clients. While we don't build the technology, we have formed alliances with IT vendors to leverage their platforms for BPM service offerings. This requires us to be current on technology trends, build strong alliances with IT partners and know how to leverage these partnerships for our requirements.
All the noise that you hear about how pure play BPOs will become irrelevant because IT companies have got into the game couldn't be further away from the truth. We have been in this business for a very long time and the only difference is that we know how to leverage technology, but we don't develop it ourselves. For us, it's a make or buy decision and we decided to buy it.
CIO: You also have an aggressive acquisition strategy in place.
Partha De Sarkar:
All our acquisitions have been to gain footprints in foreign geographies. We needed to have operations that we could showcase from day one. In some of the geographies, we were the first players to enter the BPO market. Although we could have done it organically, it would have taken us five years, and we would have lost the opportunity. The same is true for acquiring capabilities. We could build them internally, or make it possible via acquisitions. We chose the latter.
For instance, the year 2003 marked our entry into international markets, with the establishment of our center in Manila. We were the pioneers in acquiring a call center company in the Philippines. None of the players had thought of entering a new market such as Philippines, and we had a five-year head start. We were also one of the few companies to enter Canada, when in 2011 we acquired Online Support, a Canada-based CRM Company.
Our choice of acquiring has come from the approach--that the fastest way to acquire new suite of offerings and offer speed-to-market is by entering new geographies.
Today we have a global footprint of 58 delivery centers in India, US, the United Kingdom, Canada, Mauritius, France, Germany, Italy, Jamaica, the Netherlands, and Philippines.
CIO: At HGS, decision making at the top level is decentralized How is that a huge differentiator
Partha De Sarkar:
Though HGS is a global company, all our geographies have independent CEOs who are empowered to take decisions locally. They are experienced local leaders who understand the business needs and culture in their countries better. This decentralized set-up helps HGS in speed-to-market, faster responsiveness to business opportunities, and focused execution on delivery.
CIO: Your oldest client is forty years old. Given the dynamic nature of businesses, how have you managed to keep your customer relationships so intact
Partha De Sarkar:
Paying attention to the client is an integral part of how HGS operates as a company. We do this by listening to them, identifying their challenges and proactively offering them solutions to do business better. This is a part of our mission statement and we live by it. Recently, a client in the US faced a challenge related to product recall and wanted HGS' immediate support in dealing with customer queries. We set up a process for them in just 24 hours of notification. Our endeavor is to be a true partner to clients by consistently exceeding the SLAs. That's the secret to our client stickiness.
CIO: You have set yourself a target of $1 billion (Rs 6,200 crore) in revenue in the next three years. How do you plan to achieve it
Partha De Sarkar:
There is more importance given to that statement. For me, size is of secondary importance. I think the revenue figure of Rs 6,200 crore is just a milestone in our journey. A year back, we were less than Rs 2000 crore. Today we are at Rs 2500 crore. My bigger ambition is to become the best in business; numbers and revenues will be just a measure to determine that.
So yes, it's a tough target, but my answer is that size is not important in our game. If you look at the market size, the BPO industry is a 160 billion dollar (about Rs 9,60,000 crore) market, and that's predicted to grow at a rate of 5-6 percent in the next five years. If you combine the topline and the top ten players, you will find that very few companies have top line growth of more than a billion, and their combined aggregate doesn't even total to 25 percent of the market share.
It's a fairly fragmented market where there are a lot of niche players like us at play, and the reason we get business from top players such as IBM and Accenture, is because we are smaller, we are more flexible, hungry, and ready to walk the extra mile. That's how we must continue to remain relevant in this industry as consumer behavior change, demographics change, and younger consumers embark on. This is when the demands become bigger as customer experience gets transformed. Thanks to mobile and the self-service generation, because that's where the larger volume of transactions will come from in the future.