Hinduja Group is one of the largest diversified groups in the world spanning the globe. Their foray into the BPO business started in the year 2000 with one client and 25 employees. Today, Hinduja Global Solutions has 23 delivery centers with around 15,000 employees across the US, Canada, Mauritius, the Philippines and India all working towards creating leaders out of their clients. BPOVoice talked to Partha De Sarkar – CEO Hinduja Global Solutions limited (HGSL) on various important issues that the industry is facing in the midst of turbulent times. Below is the 1st part of the interview.
In your opinion, by how much did the downturn reduce attrition and increase business in the Indian outsourcing industry?
The Indian BPO industry successfully re-engineered itself to face the challenges of the global financial meltdown and emerged as a net hirer even during the worst phase of recession. It has reaffirmed the faith of the global community in the robust and cost-effective models of the Indian Outsourcing Industry. The global slow down has impacted the IT companies differently when compared to the ITES (BPO) companies. That is because, spends on IT projects represent capital expenditure for our clients, whereas spends on ITES projects represent savings in their operating expenditure.
In this downturn, client companies have gone slow on their capital expenditures. That has impacted the IT companies more than the ITES companies. The most diversified ITES companies have continued to show good results even in the current difficult circumstances. The players who have been affected in the ITES space are players with high sector concentration in the banking and financial sectors, especially the mortgages sector. Well diversified businesses like ours have in-fact benefited positively from the slow down, because it has increased the pressure from our clients to outsource/offshore. That is the reason why HGSL has shown consistent and strong financial performance for the last six quarters, even in the midst of the financial crisis. Though the problem of attrition hasn’t been arrested, the recession has definitely slowed it down. I would like to believe that the Indian BPO industry is slowly becoming an employer of choice, albeit not a compulsion.
You have recently opened a new center in manila? What turned the tide in favour of Philippines? Which other destinations you think could be the one to watch out for?
We have recently opened our second centre in Manila which has 1000 seats. We are already operating a 2000 seat centre in Manila since the last 5 years. HGSL has generated local employment and served fortune 500 clients through its presence in Philippines. This new centre has come up this year due to increased business from both the existing clients as well as the new clients. This incremental business flow from our existing clients is a testimony to the quality of our service offering. We are confident this new facility will further strengthen the first mover advantage that we have in Philippines. Other than the cost advantages, this country has cultural similarities to the US which simply means that the call centre employees can relate better to Americans.
Due to continued expansion of European Union, there is a growing demand for European call centers which will serve non-English languages. Vendors are exploring different methods such as setting up local centers, acquiring companies, hiring expatriates and foreign language professionals in India. There is no single perfect strategy for selecting an ideal destination – the appropriate method varies from region to region. The twin factors of scalability and quality are major influencers in this regard.
The temptation of rushing into regions based solely on cost advantages should be resisted. Our parameters for selecting an ideal location for outsourcing are: Knowledge Pool, Infrastructure, Social Environment, Business Environment and Government Support System. Our strategy at HGSL has never been a contest between quality and cost. We have always successfully provided best quality services at the most competitive prices. And this would remain our guiding mantra in all our future global forays.
Recent reports suggest that with over $110million cash chest you are eyeing acquisitions. Would you like to share some information on the same?
We are certainly exploring the inorganic route for increasing the accessibility of the European markets and further strengthening our presence in the North American region. At this moment, I wouldn’t want to comment on the status of our exploration. All I can promise is that we will evaluate all possible parameters before finalizing a target. With a proven history of successfully integrating the businesses of all our acquisitions with our core business, we believe we can take good care of the post acquisition stage. Let me also make it very clear that we have embarked on this exploration solely on a need basis and not just because we have a good amount of cash in hand!
What are your views on the Satyam’s buyout? Did you miss the bus somewhere?
We didn’t miss the bus. We let it go because it didn’t lead to our preferred destination! As I have said above, we always take informed decisions on prospective acquisitions. We explore the targets till there is no ambiguity.
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About Partha De Sarkar
Partha De Sarkar is the Chief Executive Officer of HGSL and leads the organization across all its geographies.
Partha is responsible for having built HGSL into a global organization by focusing on being the preferred business process transformation partner for our clients and creating value in all our customer relationships through innovative outsourcing solutions.
Partha has 20 years of experience in customer service and operations across industries like Banking, Financial Services, Healthcare and Insurance. Prior to joining HGSL, Partha has set up complex outsourcing projects in organizations like Deloitte Consulting, GE Capital International Services and Bank of America. With a deep industry domain knowledge in each market sector, he has successfully led teams which set up operations for large remote processing centers in India to service international clients in US, UK, Australia and the Asia-Pacific region.
Partha holds a postgraduate degree in Management from the Indian Institute of Management (IIM), Bangalore and a Masters degree in Technology from the Indian Institute of Technology (IIT), Chennai. He is a PhD in Strategic Management from IIT Delhi.