Staying nimble during short-term challenges

Keshav Murugesh, who has been Chief Executive Officer of WNS Global Services for about eighteen months now, is a man on a mission. Since coming on board the country's third largest pure-play BPO, Murugesh has unveiled a slew of initiatives as part of the strategy to regain ground lost to competition in the last few years.

The NYSE listed-company, which once used to be India's top back-office player, has now re-organised itself into six verticals while concentrating solely on organic growth for the time being. It has also signalled a change in mindset by tapping into the domestic BPO space, from which it had stayed away.

While these changes have taken place internally, the external environment for doing business has been rather challenging, largely due to the European debt crisis and now fears of a double-dip recession. Moreover, offshoring companies are facing backlash in countries such as the US and the UK for not creating enough jobs for locals.

In a chat with eWorld, Murugesh dwells on some of these challenges while articulating the way forward for the company. Edited excerpts.

What are the kinds of feelers you are getting from clients following S&P's downgrade of the US economy…Do you think this could cloud the business environment, going forward?

From a client's point of view, frankly, these things (read, US downgrade) do not make a difference. The questions that interest both our clients and the company are — Is flight travel increasing? Are people able to afford insurance and premiums?

On the other hand, banks and financial institutions have become more conservative, post the meltdown of 2008. And hence all the talk about a double-dip recession may actually spur them to resort to outsourcing (but not necessarily offshoring) as a means to control costs.

I am happy to report that we are now interacting with a large number of prospects and that the qualities of discussions are very pleasing. In our case, we are seeing clients to be more proactive when it comes to taking decisions. While this may not be representative of the entire industry, it tells us that clients are taking interest in some of the new initiatives that we have launched.

You recently said that WNS is keen to set up a near-shore centre in the US.

While such initiatives help back-office companies to quell the anti-outsourcing rhetoric in addition to garnering a larger pie of the addressable market, this may have a telling affect on the company's margins, going forward…

We need to look at our business in a blended way. Given that we are a global company, there is no point in looking at margins geography-wise.

While some businesses have lower margins than others, there are areas such as analytics and finance & accounting where margins tend to be on the higher side. As long as we are able to maintain the blended margins, I am not too concerned.

Time and again, we keep hearing comments about client companies recalling some of the positions that were outsourced to Indian back-office vendors.

Recently, there were media reports that the London-based insurance major Aviva is shifting some work from WNS' Bangalore centre to its own back-office operations in Norwich…

I think this is a highly exaggerated point of view. These recalls should not be seen as a mega trend.

We had this issue with one client where about 20 jobs went back. In a situation where we are getting 600 positions, 20 or 30 going back should not make a difference. And this happens because you, as vendor, feel it does not make any strategic sense to do this chunk of work from India.

This is actually an example of being more partner-like with your customer and giving him the right kind of advice.

By moving some jobs back onsite, clients are able to get local staffers to service their platinum customers, especially in the very high premium voice segment. It helps them to deploy people with a perfect local accent in the same time zone.

However, even that part will get addressed once we have some of these onsite centres up and running.

What, according to you, could emerge as mega trends that would revolutionalise the BPO space in the next few years?

One of the next big things to happen will be the public sector becoming more open to outsourcing work that was traditionally done in-house.

Secondly, we will see this entire shift from providing traditional back-office outsourcing to technology-enabled BPO. Thanks to the challenging times we live in, clients will see back-office companies as long-term business partners as opposed to just a vendor that reduces costs.

Thirdly, we will need to focus more on the BRIC economies (Brazil, Russia, India and China) as that is where the growth is happening for our customers. Here in India, we keep debating about whether the growth will be 7 or 8 per cent.

Let's not forget that the word growth is not there in the dictionary of many countries currently. In the short term, one should not worry about things like money being pulled out of the Indian system or the stock markets crashing.

In the long term, where will all the money go? It will come back to India, China and Brazil. The challenge now is to be nimble enough to convert some of these opportunities into deal wins.

>adith@thehindu.co.in

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