Sridhar K, EVP – Strategic Initiatives, HGS talks about
three new company acquisitions, and the complexities of the Indian versus
global BPO market (Inputs by Subramanya C, CTO, HGS)
Hinduja Global Solutions recently changed its corporate
identity, and has now acquired OLS and HCCA. What is your expansion strategy?
With a re-branding activity (where we changed to a new
logo and a new brand name ‘HGS’) and three acquisitions in the past 14 months
(Careline, OLS & HCCA), we are on a high growth trajectory. We now have
22,000 employees servicing a portfolio of multilingual offerings across our 46
Global Delivery Centers. Together with our subsidiaries, we are now a $300
million plus organization.
Through HCCA, we now have HRO capabilities which can be
cross sold to our existing clients. HCCA gives us an entry into the Middle East
while OLS gives us a privileged entry into the Canadian market. The re-branding
and the acquisitions are aimed at expanding our global footprint, and not just
limited to India.
We are entering new markets and acquiring new
competencies to diversify and de-risk our business model. OLS has added to our
telecom capabilities and we can now provide end-to-end services to our global
clientele. The India expansion strategy is firmly in process; we now have a new
Delivery Center in Delhi and expanded presence in East India. Our pipeline for
domestic business remains healthy and we have got business from new verticals
we have identified. There are significant offshoring opportunities being
What are some of the most popular telephony outsourcing
services you cater to in India, versus abroad?
Inbound customer calls remain the most popular telephony
services for us, in India. The volumes have increased significantly, more so
after the introduction of MNP and 3G. Because of higher average revenue per
user, emphasis is shifting towards data driven services. VAS has also started
picking up now.
In the US, technical support, inbound/outbound sales,
customer care and customer retention remain the popular services.
What is the latest, in terms of telecom infrastructure
that HGS has upgraded its systems with?
We have a mix of in-house and contracted platforms. We
provide solutions on premise based model to clients. However, we are gradually
moving away from the premise based model and migrating towards cloud based
solutions. The cost benefits are especially relevant to the BPO industry where
cost efficiency remains a big competitive advantage. It is particularly
important for us to be on the cloud because we are growing fast and looking at
becoming a billion dollar entity in the next few years. We are also studying
the possibility of using the Cloud based apps for business analytics and
performance dashboards. Creating innovative and cost efficient technology
strategies to address the existing and potential customer requirements remains
the key drive in all our upgrades.
What are some of the main challenges that you are facing
as a BPO in a dynamic market like India?
For us telecom remains the biggest contributor to
domestic BPO revenues. Though the growth is exponential, the competition in
this sector is cut-throat leading to pressures on margins. Having long term
relationships with a proper understanding of the clients’ business needs has
helped HGS retain a leadership position in telecom. The Indian telecom players
are getting increasingly global and therefore they need providers who have a
global reach. HGS, with its 46 Global Delivery Centers across 6 countries,
offers a global reach with a whole array of offerings to these players.
Our strategic entry into the domestic outsourcing market
in India has begun to yield results. This gives us a first mover advantage into
this growing market. Strong foundations have been laid to grow this business
line profitably in the coming years. To continue being cost-competitive, we
have opened Delivery Centers in Tier II and Tier III towns. This has also
helped us bring down attrition to a low level. In the domestic space, HGS is on
an accelerated learning curve, maturing from being a provider to being a ‘value
partner’ for its clients.
What are HGS’ investment plans and go-to market strategy
for the next 1-2 years? How will telecom play a role in this?
With three recent acquisitions in three different
geographies (UK, Canada, India), we plan to significantly up-sell and
cross-sell our services to the existing clients. At present, we are expanding
in Europe. We have just opened a site in Hamburg. In India, we have opened new
centers in Delhi and Siliguri. We are also looking at all geographies for
investment to further scale up our near-shore capabilities.
Telecom is an interesting and challenging vertical to be
in. It is one of the top contributors to our revenue. OLS provides us a
strategic access to the Canadian market and a near-shore option for North
America. Together with OLS, HGS can now provide end-to-end services in telecom which
has substantial potential for cross-selling across geographies.
By Beryl M