Once known as call centres or sweatshops that operated in the night, the Business Process Outsourcing (BPO) industry is now metamorphosing into the Business Process Management (BPM) sector with higher emphasis on artificial intelligence, robotics, technology and analytics to help old and new-age companies navigate through these troubled times. Keshav R Murugesh, Group CEO, WNS Global Services, a Mumbai-based business process firm , spoke to Lalatendu Mishra about the industry and the company’s plans. Edited excerpts:
How is the business environment?
Overall, the business cycle is quite strong. The demand for business processes is strong and I believe there is a huge potential to grow. We are still seeing lots of companies outsourcing for the first time. These are very large global companies such as the largest music player, the largest insurance player, larges healthcare companies and the large custodian banks. This augurs well for the industry. From WNS point of view, we are seeing very solid tailwinds based on this trend and due to our differentiated-market positioning. Our market position is very different from most other companies in BPM (Business Process Management) space so we are uniquely positioned.
But the global economy is slowing down…?
The macro-economic fundamentals are still suspect and countries are still going through various changes. But from BPM point of view, providers who have created a very strong differentiated model and who can focus on clients on how to best deliver to meet the disruptions they are facing are actually reaping the benefits very well. From the WNS point of view we have positioned ourselves very strongly around these differentiators. We are explaining to clients, in this age of disruption, how they can leverage WNS to increase their client base, deliver better bottom-lines and have better understanding of what their customers want. We are doing well because clients want to be led, want ideas from usas to how to position themselves better in the market. We help them through our strengths in social, the mobile, analytics, technology as well as artificial intelligence or the robotics process. That is working very well for us.
How have you grown in the past 5 years? What are your growth plans?
Five-six years ago, WNS was a turnaround story, that’s how I came in. We then positioned ourselves very differently. I invested very strongly in building a true global footprint. We now operate from 12 countries, 42 delivery centres and 34,000 employees globally. Our differentiated positioning means our messages are resonating well with our clients. In terms of growth rates, we are growing faster than in the previous years. This year, the guidance on a constant current currency basis is in excess of 10-11 per cent organically, without any acquisitions.
Do you have any plans for acquisitions? What is your budget?
We have a very solid balance sheet, very controlled lines of debt. Our focus for the past 5-6 years has been on delivering organic growth, something we have done well. But sometimes it makes sense to look at potential M&A to add new capability and save time.
At this point in time also we are looking at potentially one or two small acquisitions, not to build size and scale but to build more capability.
What could be these areas?
Potentially, it will be areas like insurance processing, procurement, actuarial services as well as finance and accounting areas. There, we may have some small gaps which we may want to fill.
Youngsters don’t prefer to join the outsourcing industry due to lack of career prospects…
No, that is no more the case. At WNS, we don’t offer business process careers. We are the only company that goes to the market end-to-end verticalised. So, the people we hire are looking for travel careers, or insurance, banking, healthcare or utilities careers. They are not looking for a business process career. Therefore, for the talent, we are competing with the banks, insurance companies and retailers. We have positioned ourselves as a premium player. Therefore, we are able to access talent very easily.
For specialised areas such as analytics, we have co-created an MBA course in business analytics, where we have created the curriculum, the course content and have tied up with a leading university in Neemrana. We are bringing in students who will spend one year in the campus, one year with us and then they will be absorbed by us at a 25 per cent premium to the market price, at about Rs.15 lakh salary (per annum). We are also focusing on the quality of roles inside the company. Some of the mundane commoditised tasks are now done by robots.
Which market contributes most to your revenue?
For us it is Europe, driven by the U.K. We are very different. Our original lineage came out of British Airways. So while most of the companies have a large U.S. component of revenue, we are more Europe. Last year, 44 per cent of our revenue came from the U.K. We believe by the end of this year it will be below 40 per cent. U.S. is growing at 30-35 per cent now. Australia, Asia-Pacific markets are also growing.
How will Brexit impact WNS?
The only effect that the Brexit can have on us and the industry is on currency, because we report in U.S. dollars, we are a U.S. listed company. But the bulk of our cost is in Indian rupees and the revenue is in Pound Sterling. So from 1.43 to a dollar, when the Pound Sterling fell to 1.3, the revenue impact will be there. There will be no impact on profit.
How do you meet competition from China and the Philippines?
One of the best things that India did was that it created a global BPM model, beyond India. So, I keep talking about BPM, not BPO. I coined that phrase. Because, now it’s management. Look at WNS, we have centres in India, Philippines, Costa Rica, South Africa, Romania, the U.K., the U.S. and Sri Lanka. We have extended beyond the shores of India and that is what the Indian BPM business has (also) done. The work done in Philippines is very different from what is done in India. Work done in South Africa is completely different from elsewhere. Because we have created a single Integrated model, customers are very comfortable. The reality is some of the voice work has started to go to other countries. Engineering service and operations in India have continued to grow. India will continue to be a leader in terms of growth.
