Automation eating into role-based activities: Susir Kumar

Interview with Executive Chairman, Intelenet Global Services

After Blackstone bought back Intelenet Global Services, a back office provider it had earlier sold to British firm Serco, its executive chairman Susir Kumar set the company a target of $1 billion revenue by 2020. Kumar tells Raghu Krishnan in an interview Intelenet wants to be a niche player with predictable revenue and profit. Edited excerpts:

What are the changes you are seeing in clients who deal with BPO firms?

Expectations are changing. Today clients want an outcome in terms of growth, profitability, brand or compliance. They are looking at returns. There is more outcome-based conversations than fixed-cost business.

They are also saying we have an inefficient technology platform, structure, infrastructure and an organisation that cannot change beyond a point. They expect us to build middleware and faster solutions despite their inefficiencies.  

Does that hurt your business?

They say if we try to fix our platform, it takes a lot of time and money. This will affect the large information technology services firms whose predominant revenue stream was building new ERP, legacy infrastructure, and consolidating data centres. We have been deploying automation tools to address domain-specific issues.

Are your clients ready to share infrastructure and resources?

Companies are saying you need to invest on our behalf. They are okay with the cloud environment and shared resources. They are ready to sign long-term contracts. My floor, my format, my telecom, my computer — all that is gone. These are trends for the industry, not just for us.

How much of your revenue is outcome based?

Our outcome-based revenue is 20 per cent. Earlier, we were at 100 per cent fixed revenue. Actually, it is good for us, we can make better margins on the outcome-based business. It also gives us freedom to decide on inputs.

There is talk of automation killing back-office work...

We are seeing lot of role-based activity evaporating due to automation. On the other side, processes are becoming complex. Everybody wants to make a complicated smartphone and banking product. Now it is taking more time to service a customer. New demand is coming from these complexities. New demand is also coming from companies like Flipkart, Snapdeal, Uber and Ola.

How are you planning to reach $1 billion in revenue?

We have reorganised ourselves. We will be leaders in two markets, India and the Middle East. We will be leaders in two verticals, financial services and transportation. We have set a target of $1 billion by 2020. Two-thirds of the revenue is international, one-third is domestic.

We are building international business capability in robotics, analytics and social media. We will look at increasing the wallet size of our existing customers. We have put up a strong client relationship team to identify this opportunity. We are partnering boutique consultants to acquire new clients. We have a 200-member consulting team to assist them and bid for contracts.

How is Blackstone helping you in generating business?

Amit Dixit (Blackstone's senior managing director) is on our board. Earlier, seven clients were from the Blackstone portfolio, generating 22 per cent of our revenue. Now they have a full-fledged Blackstone team to work on 50-60 big customers. We are targeting $200 million annual revenue from them. We have a relationship with IBS and once the deal with Mphasis is completed we will jointly go to market.  New demand is also coming from companies like Flipkart, Snapdeal, Uber.