Genpact eyes a bigger domestic pie

Written by Diksha Dutta | Diksha Dutta | Updated: Dec 26 2011, 08:51am hrs
If you thought Indias $1.2-billion domestic business process outsourcing (BPO) market figured low on the priority list for the countrys largest BPO, Genpactthink again. The $1.5-billion, 53,600 employee-strong back-office services provider might derive less than 3% of its revenues from India operations, but of late is focusing aggressively on the fast-growing market a fact amply reflected in the passion and enthusiasm of Harpreet Duggal, who is spearheading the India-to-India (domestic) business for the NYSE-listed BPO. His vision is cleara different portfolio to offer to the Indian customers which focuses on infrastructure, technology, analytics, procurement supply chain, process re-engineering and re-design, along with customer service and collection.

Interestingly, the telecom vertical is not top priority as the market is already commoditised. Duggal claims to be competing with multinationals like IBM and Accenture in the space rather than other players who are concentrating on the voice-based telecom vertical market.

The Indian domestic BPO market is at a nascent stage and started picking up five years back only. The deals in this market are smaller than the global deal size, average ranging between $5-8 million. The business is dominated by voice-based telecom services followed by banking, financial services and insurance (BFSI). Instead of chasing low-end services, tech biggies such as IBM, Accenture, Genpact are concentrating on selling strategies, smart solutions and niche services to Indian companies, opine industry analysts.

After growing at a rate of 80-90% in the initial years, Genpact is now expecting a 40-50% growth in the domestic segment for the next two to three years. Duggal recalls how Genpact has grown in the domestic market: We have added 10-12 clients every year and grown 80-90% year-on-year. Our headcount too has increased by 60% each year. We are focusing on value rather than volume. Our focus areas are collection, source to pay, high-end analytics, reengineering and redesign, and customer retention cycle.

At present, Genpact employs 4,000 people for its domestic business spread across Hyderabad, Jaipur, Dehradun and Gurgaon. Not contented, Duggal has ambitious plans for growth. We are planning to expand our locations and are in constant evaluation of centres. Sikkim and Manipur are interesting options in the east. Today, 7% of our global headcount serves the domestic business, he adds.

Genpact is clearly not focusing too much on the voice services game. By being early entrants, industry players like Hinduja Global, Spanco, Aegis, among others have already tapped the voice-based domestic space. Amneet Singh, vice-president, Everest Group says, As a margin perspective, it makes more sense for big brands in the BPO space to concentrate on niche services. But unfortunately there is not much volume in the space. However, the potential is high as Indian companies too aspire to compete on a global level and hence want to enhance their back office functions. They reach out to BPOs also to enhance their business strategy and develop new products.

Apart from helping Indian companies, Duggal informs that Genpact is also helping multinationals in entering the India business. We help multinationals who want to come and set up business in India. Be it financial services, automotive or retail, India is an interesting market to invest and companies need support for this. In the recent past, big retailers like Walmart and other companies have entered the Indian market to tap the business opportunity here.

Genpact is eying business from small and medium businesses too in India, which includes all companies with revenues less than R500 crore. As the domestic BPO market gains traction, it will be interesting to see how this segment contributes higher revenues to Genpacts global business.