There is no getting away from CRM

26th June, 2007

Business Standard
26 June 2007

The integration will consolidate the BPO business under one brand and the merged entity will be called Aditya Birla Minacs

There's a lot of noise in the $9.5-billion Indian business process outsourcing (BPO) sector these days as companies shout out their achievements and acquisitions. In stark contrast, TransWorks, the $350-million BPO arm of the Aditya Birla Nuvo group, has retained a low profile, despite the $125-million acquisition of Canada-based Minacs Worldwide last May. Now, the 11,000 employee-strong BPO wants to rise above the din.

It has chalked an ambitious strategy that includes a major branding campaign to bring both its entities - TransWorks and Minacs - under a single brand. It also has plans to acquire companies in specific sectors and geographies. Dev Bhattacharya, group executive president, IT and BPO business, shared his strategy with Leslie D'Monte and Shivani Shinde. Excerpts:

In just four years, you've grown from $3 million to become a $350-million company. How?
It is a Group philosophy to be among the top three in every business where we are present. Hence the management is always geared up for the same. The decision to get into the information technology and related services industry was taken after a portfolio analysis in 2002. When you enter into a new business in the Group, it is very difficult to stay small.

We had to refocus and reposition ourselves and there was strong traction in the BPO industry. TransWorks was doing pretty good but we wanted to grow fast and get a global footprint. Which explains the Minacs deal as well.

How is the Minacs integration shaping up?
The integration should be completed by end-2007. We will also start a branding campaign soon. This will consolidate the BPO business under one brand. The merged entity will be called Aditya Birla Minacs. However, the services will be sold under the Minacs brandname.

TransWorks had to refocus and reposition itself and there was strong traction in the BPO industry
How has the acquisition of Minacs affected your portfolio?
Minacs has a very strong presence in North America. We are positioning this as an international company since customer demands are changing. The large-client segments are happier and more comfortable with companies that can give global-tiered solutions as opposed to a domestic company. Almost 80 per cent of our revenues are from outside India now: we have over 25 facilities internationally.

What lies ahead?
We want to focus on Europe. We also have plans to expand our operations in Central and South America and North Africa. The other area of focus will be to reduce voice-based work. Currently, the ratio of voice to non-voice (data services) is 75:25. Over the next two years, we want the ratio to become 60:40.

Of course, there is no getting away from customer relationship management (CRM). In North America we are a popular brand in CRM. There are challenges in doing this but it is our core strength. Besides, you can also get better margins from voice-based work.

Then, we employ close to 11,000 people: 6,000 in Canada, 1,000 in US, 300-400 in Europe and 1,000 in Asia. Obviously, we plan to increase these numbers.

In India, will you be hiring from tier II towns?
Not just that; we are even considering tier III and IV cities. We will be hiring through professional outfits that train people from rural areas to come into the mainstream.

Do you plan to integrate PSI Data Systems (the IT arm) into the BPO business? We are reasonably strong on the IT solutions side. We see many synergies in terms of offshore product development. In the past few years, PSI has become focused in financial services and has a number of customers in trade finance and corporate services. We are now looking at getting offshore development capabilities and working with Minacs to provide an IT-blended solutions for the banking, financial services and insurance segments. We signed one such deal just recently.

What about acquisitions and listing options?
Acquisitions are on the cards. Parts of the portfolio - especially in the non-voice segment - need to be strengthened. We would like to acquire skill sets and expertise from geographies and companies that promise growth. We are also looking at acquiring some delivery set-ups. But we are not considering listing as of now.