{"id":1437,"date":"2011-11-20T20:31:00","date_gmt":"2011-11-20T20:31:00","guid":{"rendered":"http:\/\/localhost\/projects\/horsesforsources\/infosysbpo-500m-111811\/"},"modified":"2011-11-20T20:31:00","modified_gmt":"2011-11-20T20:31:00","slug":"infosysbpo-500m-111811","status":"publish","type":"post","link":"https:\/\/www.horsesforsources.com\/infosysbpo-500m-111811\/","title":{"rendered":"As InfosysBPO reaches the $500m mark, is it ready for the big-time?"},"content":{"rendered":"

One thing’s for sure – we’ve heard a lot of noise from the Indian IT services mammoths over the last five years that they are going to grapple with the likes of Accenture and IBM to become billion-dollar BPO giants. \u00a0<\/strong>And while Cognizant, Infosys, TCS and Wipro have all made progress developing sizeable BPO businesses, none of them have yet come close to surpassing the size and scale of pureplay Indian BPO leader, Genpact’s $1.5bn turnover. \u00a0Why is this?<\/p>\n

\"\"The Indian ITOs have built their companies by occupying “real-estate” in the CIO offices of the Global 2000.<\/strong> \u00a0They’ve done a phenomenal job piling in the people resources to support application testing, maintenance, help desk and development projects. \u00a0They’ve developed institutional knowledge of their clients’ IT processes to support the business, which has proven cost-effective<\/a> for the vast majority of leading global enterprises. \u00a0Our recent state of outsourcing survey<\/a> found 97% of $1bn enterprises outsourcing some component of their operations in today’s environment, with most of these organizations involving Indian ITO service providers within their supplier portfolio. However…<\/p>\n

Developing BPO footprints requires cementing\u00a0relationships\u00a0beyond the walls of the CIO’s office.\u00a0<\/strong>One of the reason’s for HfS’ success, is our ability to communicate with business function leaders, in addition to IT leaders. \u00a0This involves understanding and lending value to supporting the business function issues and processes that impact finance, procurement, supply chain, HR and other operational areas. \u00a0Most of our research competitors are firmly rooted in IT-land and have not invested in personnel that can open communication channels to support the business\u00a0functions\u00a0– and most never will.<\/p>\n

It’s similar for the Indian IT services firms, as they seek to push business-process led solutions, often enabled by IT, into their clients. \u00a0While many initially began their forays into BPO by\u00a0attempting\u00a0to reach business\u00a0function\u00a0leaders through their IT relationship, most have realized that they need a more direct line into the business\u00a0function\u00a0than tenuous\u00a0introductions\u00a0from the VP of CRM apps. \u00a0They’ve realized they need to make\u00a0significant\u00a0investments in domain-specific personnel (with real process experience) both onshore and offshore, to create awareness and open communication channels, in addition to the scale they need to take on business. They’re also realizing they need patience to convert clients and often start with much smaller engagements and make margin sacrifices.<\/p>\n

So let’s take a closer look at one of the up-and-coming Indian firms that’s made a concerted effort to build a top-tier BPO business over recent years: InfosysBPO, who recently invited us, and several other industry influencers, to partake in their anual BPO client event, named “Colloquium 2011<\/a>“.<\/p>\n

Is InfosysBPO ready to challenge for industry leadership? \u00a0Here is our thinking…<\/strong><\/span><\/p>\n

InfosysBPO is now a major BPO contender in the global marketplace.<\/strong> \u00a0Infosys has quietly gone about building its BPO business streams since its inception via the buyout of FAO provider Progeon, exactly five years’ ago and expects to reach the landmark of $500m in revenues this year. \u00a0HfS has always been encouraged by the firm’s approach to developing both<\/em> horizontal and vertical BPO services, and its focus on leveraging its IT heritage to augment its value proposition. \u00a0Infy is by no means the biggest player in the BPO business nor does it want to be, but it has been able to establish itself as a smart and very respected player in the BPO business.<\/p>\n

Overall, it has shown the rest of the industry how to grow profitably and maintain above-industry growth performance. Last fiscal, it grew its business from $352m to $427m, while maintaining operating margins in excess of 20% – the best growth performance than the rest of the BPO market. We believe it has also established strong positions in the retail and consumer products, banking, insurance and manufacturing industry verticals, in addition to the horizontal BPO areas of analytics, sourcing and procurement and finance and accounting.<\/p>\n

Consequently, today’s business takes on the following estimated revenue-breakdown:<\/em><\/p>\n

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HfS’ opinion of InfosysBPO’s strengths<\/strong><\/span><\/em><\/p>\n

Its open culture creates greater customer loyalty.<\/strong> \u00a0Infosys has consistently been one of the most open BPO firms for\u00a0introducing\u00a0its customers to each other and instigating open and transparent dialog with industry influencers. Attend any of its BPO customer events and you’ll be surprised by the\u00a0refreshing\u00a0openness of the dialog where customers air their operational issues in an open forum and have practical discussion with their peers to share their best (and worst) practices. \u00a0Too many of their competitors’ events make you feel like all the content is\u00a0stringently\u00a0policed and controlled with constant “rah rah” cheerleading of the provider’s performance. With BPO, we are dealing with real people, real business issues and real processes; clients today are too smart to be brainwashed and want to have the open, honest debate regarding how to get better at managing a BPO engagement.<\/p>\n

Its organic growth performance has been exemplary.<\/strong> InfosysBPO has done a fabulous job growing its business organically – the best among its peer group of traditional IT offshore competitors. \u00a0All its major offshore IT competitors have inherited more than 50% of their business from acquisitions:<\/p>\n