?De-risk? is the buzzword in the Indian BPO industry. Just as outsourcing players with dominance in the $50 billion US market rushed to the UK in search of diversification, it is time for the reverse now. Recent times have discovered top vendors in the $15 billion Europe including UK business process outsourcing market slowly expanding their footprint in North America. This was triggered further last year when the US was coming out of recession and the UK was entering into recession, but now the situation is stable.

Mid-sized BPOs like Firstsource Solutions, WNS Global Services and Intelenet Global Services which originated with a strong base to cater to the UK, are now on a diversification spree by focusing even more on the US market, being the largest market for outsourcing . Though some players have been successful in entering this geography at a fast pace, others are slowly catching up.

However, if one were to analyse the business that India gets from UK vis-a-vis US, the ratio has not changed much in the last three years. Reason being, active UK players shifting focus to America and vice versa. The ideal example of transition from the UK market to US is Firstsource. Acquisitions were the strategy for Firstsource to expand in America. The company had 48% revenues from the UK in 2007, which has now shrunk to 33%. On the brighter side, post strategic acquisitions in the US market, the region contributes 55% to the overall revenue of Firstsource, which was nearly 30% in 2004.

Firstsource MD & CEO Matthew

Vallance confesses, ?We have grown in the US predominantly through acquisitions. We are very strong in the healthcare vertical in the US market and are planning to take our telecom expertise from the UK to the US as well.? The company started its US operations with the acquisition of Account Solutions Group in 2004, an accounts recoverable operations in the BFSI space. ?It strengthened our healthcare operations by acquiring Business Process Management (BPM) and MedAssist in 2006 and 2007 respectively,? says Mathew.

In 2008 , Firstsource signed a 5-year contract with Barclaycard to manage and operate the Barclays operations centre in Colorado Springs, and provide customer care and collections support to Barclays US cardholders. ?These acquisition have given us a good footing in the healthcare market. We are also looking aggressively at the telecom and media sector in the US market which has tremendous potential for growth,? he adds.

The story for WNS Global Services is quite different. Initially, being a captive of British Airways and very active in the UK, WNS has been relatively slow in shifting focus from UK to the US. But, Keshav Murugesh, CEO of the company is ambitious for the future: ?What is very exciting for WNS is the fact that maybe we did not focus enough in North America earlier, which is the biggest market in the world and now we are focusing dramatically there. So we are actually putting a lot of leadership in terms of sales, hunting, farming, client management, we brought in a new head for the Americas, we are putting a lot of domain experts in. Over a period of time I expect to see North America also growing.?

The company currently gets 60% business from UK and Europe which has been constant in over the last couple of years.

Also at present US is 35%, but Murugesh believes that it will reach the 50% mark in the next couple of years with strategic moves which includes establishing onsite capability in the US.

Simultaneously, Intelenet Global Services which banked on the UK market for close to 60% revenues three years back? now has equal revenues from UK as well as the US, that is 45%. ?As an evolution, all the BPO vendors went to the low hanging fruits to grab a market share. But now we see the UK players shifting focus to the US and vice versa,? says Intelenet. Last year UK was getting into recession and the US was coming out of recession, this year both the regions are growing at the same pace. Thus the revenue shift from the UK to US will be easy. Analysts feel that Intelenet has been decently successful in entering the US market, even though it did not play aggressive on the acquisition front to deliver it higher revenues.

Explaining the granularity between the two markets, Gaurav Gupta, managing partner at Everest Research Group concludes, ?The cost arbitrage that exists between India and the UK, and India and the US is different. There is a possibility that the margins for UK would be higher.

The savings for Indian vendors from the UK market is higher than the US. But at the same time the scale in US is higher. Thus, I would say that both the markets are equally competitive at present and both would have different challenges for new entrant vendors.?