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BPO Overview: Lofty Ambitions, Matching Action

Continued from page: 1

Shyamanuja Das

Friday, August 17, 2007

The BPO Top 20
Rank 2006-07	Rank 2005-06	Company	Ownership	Revenue 2006-07	Revenue Growth	Manpower as on 31 March 2007	Manpower Growth
1	1	Genpact	Listed on NYSE	2,220	36.2	26,731	27.3
2	23	Transworks	Subsidiary of AV Birla Group	1,510	826.4	9,978	174.9
3	7	IBM Daksh	Subidiary of IBM	1,260	72.1	22,000	22.2
4	20	TCS BPO	Division of TCS	1,107	521.9	6,450	160.3
5	New	Cambridge Solutions	Listed on BSE, NSE	1,000	16.6	2,800	16.7
6	3	WNS Global Services	Listed on NYSE	990	51.8	14,600	39.9
7	4	Wipro BPO	Subsidiary of Wipro	935	21.9	17,464	8.6
8	2	Convergys India	Subsidiary of Convergys	890	27.1	12,000	20.0
9	9	Firstsource Solutions	Listed on BSE, NSE	809	50.7	14,396	72.4
10	8	HCL BPO	Subsidiary of HCL	746	38.4	12,354	42.1
11	5	Aegis BPO	Subsidiary of Essar Group	736	25.6	13,132	65.3
12	10	Infosys BPO	Subsidiary of Infosys	657	76.1	11,226	59.9
13	11	EXL Service	Listed on NASDAQ	631	84.0	8,966	45.1
14	13	Sutherland Global Services	Privately held	493	59.5	9,000	50.0
15	12	vCustomer	Privately held	443	25.5	3,600	20.0
16	17	HTMT Global	Listed on BSE, NSE	353	16.9	10,061	50.1
17	15	24/7 Customer	Privately held	347	14.1	5,240	-19.4
18	19	Aptara	Privately held	336	36.0	3,968	13.4
19	14	e4e	Privately held	330	22.2	3,516	20.8
20	16	MphasiS BPO	Subsidiary of EDS, Listed on NSE, BSE	301	17.6	9,485	13.5
		Total		16,094	59.4	216,967	36.3
The significant difference between manpower growth and revenue growth is not because of productivity gains, but manpower base tilting toward onshore, because of large onshore acquisitions. Two companies from last years listOffice Tiger and GTLdont feature in the list. While Office Tiger got acquired by RR Donelley and operates as its captive unit, GTL exited the BPO business

Or is it? Last year, Transworks was at #23. This year, it has vaulted to #2, with the help of a single acquisition. So has TCS BPO. What if any of these seven companies do such an acquisition? OneHinduja TMT has already done it. MphasiS, after the EDS acquisition, has already started growing its non-voice business. Then, just outside the list is Intelenet, which as virtually a captive of Barclay, had little incentive to grow this year, but which, with the backing of the Blackstone Group, can well do big acquisitions.

It brings us full circle: the industry is still evolving. Consolidation has happened and will continue to happen. But the jury is still out on the long-term winners, no matter what todays large companies have to say. One qualifier: it is difficult to believe entrepreneurial companies with a history of more than five years will move up drastically unless they themselves are not acquired by a large group. On the other hand, being listed, though it does mark the beginning of a new phase, does not necessarily mean that a company has moved into the big league.

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