The country?s fourth largest information technology (IT) services and software exporter HCL Technologies is boosting its business process outsourcing (BPO) arm and expects the business to be on track by the January-March quarter next year. The business had not been doing well for a few quarters with both revenue and headcount constantly declining. The BPO arm was last year rechristened BSERV and the strategy seems to be working for the IT major. Of the 11 deals it won this quarter, three are in the BPO segment and range from $20 million to $100 million (R 90-450 crore).
The three deals in BPO have been inked in the logistics, media and banking verticals and one of them is worth $100 million while the other two range between $20-50 million.
?With a BPO coming up in every single corner of the country, it is obvious that the contact centre business had become commoditised and the differentiation was becoming necessary. We had to differentiate and thought we can we combine BPO plus application and create a new division called business services?? said Vineet Nayar, vice-chairman and CEO, HCL Technologies. As another positive indicator, the firm expected losses of $7 million per quarter in BPO because of investment in platform business and some disinvestment in clients with a motive to move from voice to non-voice service lines. However, the loss in this quarter ended March 31, 2011, was $5 million which Nayar termed as ?BPO being on track for verge of profitability.?
Moreover, HCL Tech is also looking at significant investment in sales expenditure, department platforms and creation in markets which is estimated around $35-40 million. ?We thought this would be on track by early next year. It will start making profit or break even next year,? Nayar added. BPO currently contributes 5.4% to HCL’s total revenues while its own revenues fell 5.5% to R225.6 crore compared with R237.6 crore in the year ago quarter.
