To counter the threat, analysts say BPOs must assume leadership in a niche segment such as technical support, retail operations or any other like TCS became the largest provider of financial services by acquiring Citigroup Global Services (CGSL). The process, it appears, has already begun. Genpact, for instance, already has a centre in Gautemala and is planning to expand its footprint in Africa by opening a 300-500-seat facility in Morocco in the next quarter. This can be used to derisk its business. “We will diversify geographically and are strategically looking at captives and non-captives in the market. Our target company should be a combination of solution and platform-based services,” explained Bhasin.

“BPOs can offer domain knowledge and expertise that the IT companies can’t,” reasons Rohit Kapoor, president and CEO of Nasdaq-listed EXL ServiceHoldings. For instance, one major client is said to have opted for EXL Service instead of one of the top six Indian IT service providers. Kapoor says that to increase their footprint in the US, EXL is eyeing looking to acquire companies with capabilities in the US.

“Outsourcing can’t be prevented completely (referring to the Obama factor). We are waiting for the valuations to come down and then we will acquire companies in the $50 million range and create jobs there.” EXL is working with insurance clients but also added clients in the utilities vertical this quarter. Legal process outsourcing is another area where the company plans to add four to six clients in the space by 2009. EXL has also hired a head for its LPO division.

Raman Roy, promoter of Quatrro, too, has taken up the challenge put up by the IT companies sportingly and said, “Competition is good for all players and it also offers variety to the clients. There is always a market for all players. All will get their share of clients because small customers are always scared to go to big companies.”

Aparup Sengupta, CEO, Aegis BPO, concurs that “this is a high-visibility business and for large deals, clients will always prefer the BPOs because we have the ability to sustain them and do then at a scale.” Aegis gets almost half a billion dollars in revenues from the US and had recently merged the Nasdaq-listed PeopleSupport with itself, taking the company’s headcount to 30,000 employees across 31 locations worldwide. The company will have presence in the US, Philippines, India and Costa Rica. Aegis has nine centres in the US, which are outsourcing centres catering to clients in the US. Around 67 per cent of Aegis BPO’s revenue comes from the US and the rest from India.

Source: Business Standard