Communication has turned omnichannel & we are upgrading our systems to serve it: Partha DeSarkar, HGS

Partha DeSarkar, Global CEO, Hinduja Global Solutions (HGS), spoke about the taxman notices to back-office service providers, opportunities in the BPO sector, expansion plans and Capex of HGS during an interview with Swati Khandelwal, Zee Business. Edited Excerpts: 

Q: Taxman, the indirect tax department, has issued preliminary notices to back office support service providers, like BPOs, on tax-related issues. What is your opinion on this?
A: I feel that it will have an impact on companies that are insourced but will not have any impact on us as we are working for a third party. The notices have been majorly issued for the shared services centres of international companies. 

Q: How has the BPO industry evolved and what is your outlook on the opportunities of the sector and the industry?
A: Am excited with the digital mode as it has changed the face of communication, which has turned up to be omnichannel. Millennials have moved to a different mode of communication like chat, WhatsApp, Facebook Messenger from previous modes like letters, calls and emails. And, we are upgrading our systems to serve the need on this omnichannel platform that throws a mixed-profile of the consumers. The emerging need can be serviced only by upgrading the skills as it will enable us to understand grievances on different channels. 

Q: Can you provide the detail on HGS’s performances in different geographies like Canada, the US and the UK? Also, provide the outlook on future performance?
A: Almost 75% of our revenues come mainly from North America including the US and Canada and it will continue to grow. 55% of our revenues are delivered onshore. We are increasing our headcounts in the US (added 400 more people) and Canada (doubled it from 1800 to 3600). Same goes with the UK facility where we have opened a new centre in Scotland and will hire 150-200 people for it. Our onshore growth is going to be a strong one at all these geographies. 

Q: The US acquisition of AxisPoint Health was not able to yield the desired results for HGS. What are your plans for this acquisition and strategy related to inorganic growth opportunities?
A: It, AxisPoint, is a different type of business and it belongs to core clinical care and care management segment. And, 80 cents of every dollar spent in India goes to this line and this is something that says that it has a great future. 

It was a loss-making company at the time when it came into our eyes, but we went ahead to buy it because it was available at a very reasonable price - generally, business of this line is very expensive -  even after knowing that it will remain a loss-making entity for us in the first year of its operations and it is visible at present. But, has come into control in the second half of the fiscal year and I think that it will perform well in this period. We are trying to restructure the business and exit from all unprofitable contracts. In fact, AxisPoint is going to be a cornerstone of our growth in medical care management space. 

Q: Can you let us know about the areas/geographies where you see opportunities for inorganic growth? Also, tell about the expansion plans as well as mergers and acquisitions?
A: You would have heard about two systems of BPO segment namely Offshore and Inshore, which were in demand in India and the Philippines. The two countries were operating in two different time-zones. 
But there are some clients who wish to have their operations within the same time-zone, like the Caribbean countries and we have a centre in Jamaica, and this demand has given birth to a new word, ‘Nearshore’. Now, we are looking forward to some other countries in South America like in Colombia, where we have some investments and we are also interested in expanding our business. 

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Q: What is your CapEx for expansion majorly in sales pipeline?
A: Generally, we have a CapEx of around Rs150-200 crore/year and it is going to be the same this year too. We have signed two more deals on sales growth in the recent past but can’t provide their details, but you will be known about it by next quarter.