Infosys BPO, the $500-million outsourcing arm of Infosys, is looking at expanding its base in new emerging markets including Latin America, APAC, and eastern Europe. Anantha Radhakrishnan, vice-president and member executive council, Infosys BPO, tells FE?s Debojyoti Ghosh that there is a major focus into building value propositions and growing business for local clients headquartered in these geographies. Edited excerpts:
Despite the uncertain macro environment, Infosys BPO has projected an encouraging outlook and a strong deal pipeline for FY13. What kind of growth the BPO business is looking at this fiscal?
Infosys BPO has grown organically much faster than the Indian BPO industry over the last three years. Our growth rate is nearly 75-100% higher than the industry. It will continue this year too. The growth is fuelled by increased presence through new service lines and in new geographies. During the quarter ended June, we posted a growth of 21.7%.
With slowdown in the mature markets, what is the nature of current deals?
There is increased focus on efficiency and effectiveness and, hence, an emphasis on quicker business value delivered. The nature of the current deals are focused on output or outcome and transaction-based pricing with leveraging technology. Some of the traditional priced deals (FTE pricing) involve a mixture of hub (India offshore), spoke (regional location) and edge (client site) delivery involving outsourcing or client contractor employees in emerging geographies. This along with higher efficiency delivery through leveraging technology forms the core value proposition of the current deals.
As the industry is under a fair bit of pricing pressure, how are you maintaining the margins?
There is a sustained emphasis by clients on delivering efficiency, cost savings and focus on reduced total contract value. By a mixture of innovation in operating and business models, technology lead differentiation and delivery of higher business value, we have been able to meet these client demands and sustain our margins.
How are you giving more thrust into newer emerging markets?
While sustaining focus on traditional markets and service lines with our global clients, we are looking at business in new emerging geographies (Latam, APAC, eastern Europe and India) like never before. There is a focused organisation structure and support going into building value propositions and winning deals for local clients headquartered in these geographies.
Last year you spoke about opening new centres in Europe and Latin America. What?s your plan for this year? Which geographies and what kind of capacities are you looking at?
Our focus on building global centers and growing in emerging economies is a thrust that continues to be driven and accelerated by our client needs. We will continue to build scale in Latin America (Mexico, Brazil and Costa Rica) and Eastern Europe (Poland, Prague, Brno), while investing in local employee presence in north America, Europe and Africa. After the Portland acquisition in December 2011, we have opened four new centres in Australia and one new centre in Prague. In total, Infosys BPO has 12 overseas delivery locations and six in India.
How is the Indian BPO industry responding to the challenges?
Indian BPO industry will need to rapidly innovate through collaboration, leverage technology in new areas like cloud, big data, mobility and social media to create new service lines delivered by newer operating models. There has to be increased emphasis on growing in emerging markets.
Any thoughts on Infosys BPO differentiating itself in the current environment?
We have been investing in a few key areas to differentiate and stay ahead of competition. Four key areas are technology lead differentiation both in-house and with partners, transformational services through enhanced domain capability, innovation in delivering services through new models leveraging cloud, big data, mobility and social media with outcome or transaction based pricing. We are also supporting clients in expanding their base in emerging markets through new centers in newer geographies.