Almost a year after Serco acquired Indian BPO firm Intelenet Global Services, the UK-based company has merged all its BPO services to create a new entity that is expected to clock in revenue of over $1 billion by the end of this year. Susir Kumar, executive chairman designate, Global Services, Serco, tells FE?s Debojyoti Ghosh that the new firm has the potential to be among the top 10 global BPO players and is eyeing a leading position in the domestic BPO space. Excerpts:
What was the need for creating this new entity?
When Serco acquired Intelenet last year, the key rationale for Serco was to get access to attractive markets and broaden its customer and geographic reach. Having done so, we have been looking at our strategy for the BPO business and realised that there were some imperatives to be achieved for us to be a credible player. We started integrating all the BPO business within Serco to a new division called the Global Services. In doing so, we attempted to enhance our market position and transition from being an India-based BPO with revenues of $300 million to a global service provider that is expected to end the year with revenues in excess of $1 billion and over 50,000 employees delivering service across 10 countries.
With this, we would potentially be amongst the top 10 BPO players globally and would be the largest supplier of services in the domestic BPO space. The BPO capability would be an important facet of the entire Serco Group and one of the four business divisions within the company.
After leading Intelenet as the CEO, how are you now handling the integration? What happens to the current management team?
Intelenet has been a strategic fit giving Serco access to the private BPO sector. Serco has also acquired a stronger play in the fast-growing domestic Indian market. This has been possible given the depth and expertise of the management team at Intelenet, that has stayed since the acquisition. Tom Riall, who was leading the $2-billion business at Serco, will take charge of the day-to-day affairs of the Global Services division. I will assume the role of executive chairman effective June.
We have undertaken an organisational realignment and have created four business regions comprising the Americas, UK-Europe, AMEAA and offshore delivery. Steve Sieke will lead the Americas region, David Poole will lead the UK-Europe business, Bhupender Singh, who was the strategy head at Intelenet, will handle AAMEA and Chandramouli, chief operating officer at Intelenet, will lead the offshore delivery from India, Philippines and China.
What are your expansion plans for India? How do you see the domestic market in the current revenue mix of Serco?
Despite all the demand emerging from traditional and developing markets, India remains a focus area for us. The domestic Indian BPO market is expected to grow by around 20% per annum to $2.5 billion by 2014, according to Gartner.
India has seen a demand from customers for services and consequently a growing use of third parties to deliver them. In addition to this growth, there is an emerging demand for process outsourcing within the Indian public services market. India is a central location for other important markets that could define new opportunities for Serco, such as West Asia and China. For the domestic Indian market, we have recently launched facilities in cities like Patna, Lucknow, Dehradun and Ajmer, and we continue to strengthen our position for telecom and government initiatives like BSNL and I-T department.
Any plans to enter new markets?
We will be looking at some new markets, including Latin and South America, Africa and China, and intend increasing our presence in Europe. We will do this at an appropriate time, once we have identified the capability or market in keeping with our overall business objective.
According to Gartner, worldwide BPO growth continues despite mixed fortunes in developed countries with an anticipated growth of 5% in 2012 against last year?s 6.3%. While growth remains strong in developing economies, markets like Canada, Western Europe, Mauritius, Philippines are offering opportunities to companies who are willing to partner with vendors for not just reducing costs, but for growth.
What will drive the business to record revenue of $1 billion? What will be the new entity?s focus?
We recently won our first big deal. We acquired the assets of UK-based Anglia Support Partnership (ASP), which is owned by the UK government. ASP is an organisation that provides services to about 48 hospitals and community centres in UK. As a part of the deal, Serco has also won a ?120-million contract with national health service (NHS) Foundation. NHS is a four-year deal.
With the consolidation of the Global Services division, we will have about 40% of our business from the public sector and 60% from the private sector. We surely are in a position to bid for bigger opportunities and deals above $500 million. Serco?s Global Services division will service clients across five verticals, namely banking, financial services and insurance; travel, hospitality and transportation; healthcare, utility, retail and manufacturing; telecom, technology and online services; and media, education and government.
