Business process outsourcing major Hinduja Global Solutions (HGS) has decided to add to its headcount in Bangalore and in the Philippines with 1,300 seats, even as it steadies its course in North America which brings in 75 per cent of its revenues.

Its CEO Partha De Sarkar speaks to Business Line about how the customer relationship management and business process outsourcing company has consistently posted profits, despite the changes in business environment. Excerpts from the interview:

Given the worsening economic climate globally, is HGS strong on hiring across its BPO markets such as the US, the UK and Canada? How many people are you set to hire in the near term?

North America is firmly back on its feet. The stock markets are doing well and unemployment is falling. I agree with the assessment that the situation in UK, especially Europe and in India is difficult, but overall 75 per cent of our revenues come in from North America. The economic buoyancy is reflected in our Q2 numbers.

The US continues to perform well and we have added three new clients in the consumer vertical during the quarter. While one client is in the consumer electronic space and deals in white label consumer products, two are in the fast moving consumer goods (FMCG) space.

Canada received a new line of business from an existing telecom client. We were doing business-to-consumer work for them earlier, taking care of trouble shooting. Now, it is business-to-business (B2B), whereby we are servicing wholesale clients. We are currently ramping up and are expected to reach full capacity by fourth quarter of FY2014. Though we have not identified Winnipeg to host our new centre in Canada, we have identified Barrie near Toronto, which is a 460-seater. We are also looking at new sites in Canada.

Can you outline some India plans? How about hiring here?

We are adding to our capacity in Bangalore and in Manila, and should have 1,300 seats between the two countries. While Bangalore should have around 500 seats, which means we take on around 700 more people by fourth quarter, Manila would be over a longer period. By fourth quarter, we should have 500 seats in Manila and another 300 seats would be added on in the second quarter of next year.

Though we were reducing the amount of servicing for our Indian clients, we have around 12 sites operating in India and are hiring substantially in Bangalore. We do have two sites in Mumbai, but are a little skewed towards upping the seats in Bangalore. We are very confident of our performance for the remaining part of the year. Our optimism is supported by the strong sales pipeline that we have at the moment.

In the Philippines, we have added new lines of business such as pay data management for a healthcare client, and service centre back-office and social media management for a consumer electronics client.

Given that you have completed 40 years in the US, could you take us through the last few years?

We have been in the business and servicing clients for 40 years, though many of our clients have been with us for long. Like Japanese consumer electronic major Sharp, Delta Global Forces, Prestige Foods and AT&T, all have been with us for long. The key to this association is people. It is a people business we are running. Our people capability ensures longer tenure and longer relations with most of our clients. We have also got increased revenues from the same clients.

Earlier, we were almost a direct marketing company as we would disseminate information about products and services.

We moved to CRM relations and a combination of CRM transactions next and that is how we have grown.

Could you give us a breakdown about the many verticals that HGS manages? Which has the highest growth potential?

As a BPO, we cater to technology, healthcare and consumer, which comprises 88 per cent of our work.

All have their own nuances. Though there is scale in tech, there is profitability in healthcare. Consumer, on the other hand, has a longer tenure, since it caters to FMCG, consumer durables and electronics.

How has the company performed given the many reforms initiated by US President Barack Obama last year? How does the scene look for 2014?

The debate is over and the reforms are on course in the US. There was a challenge with the shutdown of the US Government, but the opposition has backed off.

In terms of healthcare, it is a big market. Nearly 50 million uninsured Americans are expected to buy health insurance over the next one year. As a result, insurance firms in the US are expected to outsource more work to us.

These new volumes and increased expenses on insurance companies will ensure that they need to offshore more. This is looking good for us.

You have opened a new delivery centre in Canada in July. How has HGS’ all-cash acquisition of Canada-based CRM company On-Line Support Inc at C$74.85 million worked out?

The acquisition has worked out extremely well and we have grown tremendously. We had $73 million in revenue when we acquired OLS in 2011. This year, we are close to $100 million. We have telecom, consumer durables and financial services clients here.

Some details about the asset purchase agreement with Deloitte to purchase their healthcare revenue cycle outsourcing business - how has the transaction paid out for you? Any more acquisitions in the offing?

Acquisitions have been part of the way we have grown. We are definitely looking at more acquisitions.

We acquired the Deloitte firm in October last year. We were very strong on pay rolls earlier. Now, we are looking at the provider side of the business. As for employee strength, attrition is part of our life. Just as we have clients that have been with us for 40 years, we also have some employees that have stayed on. We recently had a reward programme for them in the US.

amritanair.ghaswalla@thehindu.co.in

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