Outsourcing, the organic way

Knowledge service like credit analysis, equity analysis and economics research are some areas in which Infosys BPO (formerly Progeon) has built a major presence. The company’s knowledge process outsourcing (KPO) division currently accounts for 9 per cent of overall revenues.

Amitabh Chaudhry, CEO, Infosys BPO, expects to take that up to 25 per cent in a couple of years. He will do so by entering new areas like legal services, and learning services. “We are foraying into learning services as many of our clients have approached us for such services. These companies spend a lot of money in training and development and we already have some expertise in this area,” reveals Chaudhry.

Whilst there are quite a few KPO firms in India that could make acquisition targets, Chaudhry says there are just too many who do grassroots BPO work rather than high-end work. “Look at the costs.

The annual cost per KPO agent in the US is $45,000. How many KPO companies in India touch even $25,000?” he asks. “We prefer to grow this business on our own,” he says. While names of several captive BPOs as potential buyout targets, including those of Dell, the UK-based Sage and Prudential BPO, have been doing the rounds, Chaudhry insists valuations are too high. But then Infosys has always been known for its reluctance to shop around.

Clearly, organic growth is the buzzword at Infosys BPO, which has seen significant growth of over 70 per cent in revenues and an increase in the client base of over a third in the first half of the current year (compared to the previous year’s corresponding period).