The acronym BPO (business process outsourcing) in India instantly conjures up images of millennials getting to work at unearthly hours and jostling for space in office cabs. IT hubs such as Noida in the National Capital Region or Sector V in Kolkata’s Salt Lake buzz well past midnight, with people barely out of their teens who have just entered the workforce.

Inside these steel-and-glass structures, also referred to as call centres, employees are neatly stacked in multiple rows, sitting behind a screen with a microphone-enabled earpiece—often connected to an Internet-based telephone—for company. They field calls in accented English from irate customers in places as far away as the U.S. or Australia, demanding to know why their computers aren’t working or the status of their delayed flight.

This may well have been an accurate picture of India’s BPO industry in the early part of the current millennium. Then, consumer-facing companies around the world woke up to the possibility of offshoring voice-based customer services to Indian metros like Noida, Kolkata or Bengaluru, where English is commonly spoken. The rationale: Unprecedented cost savings arising from a labour arbitrage compared to their home countries.

In 2009, speculation was rife that WNS was on the verge of being sold but the company wasn’t even attractive enough to find a prospective buyer.

But times are changing. Call centres have evolved, and a case in point is WNS (Holdings). The company began life as a captive customer care arm for British Airways in 1996, before it branched out into offering business process services to clients in industries outside aviation in 2003. But thereafter, its performance progressively slid.

In 2009, speculation was rife that WNS was on the verge of being sold but the company wasn’t even attractive enough to find a prospective buyer. The company, which began with customer service centres in Mumbai and Pune, listed on the New York Stock Exchange in 2006 and was trading at around $25 per share in June that year. By June 2009, the stock had lost most of its value and was trading at $9.

This was because the industry had transformed. The acronym it now prefers to use is BPS (business process services) or BPM (business process management). Though the difference between these acronyms is subtle, it seeks to reflect the evolution of the industry in India, which is more nuanced. While voice-based services are still around (though a lot of it has migrated to countries like the Philippines, where labour is even cheaper and English is catching on), the focus has shifted more towards managing end-to-end business processes for clients (finance and accounting for instance) using skilled workers with domain expertise, and cutting-edge technology such as artificial intelligence (AI), machine learning, and data analytics.

Those that couldn’t ride this rising digital wave have fallen by the wayside. A classic example is Daksh, a homegrown BPO which couldn’t withstand the increasingly commoditised nature of the business, characterised by low profit margins, and was sold to IBM in 2004. A decade later, IBM found Daksh’s operating margins unattractive and sold it to another global BPM company, Concentrix. On the other hand, companies that invested in new-age technology platforms like Genpact, Convergys, and the BPO arm of Infosys saw more business flow to them as global companies started seeing India more as a delivery centre and not just a land of telecallers.

Much of the transformation of WNS is attributable to its current chief executive officer, Keshav Murugesh, 55, who joined the company in 2010.

What saved WNS from an inglorious demise in 2009 was a timely pivot to a new business strategy driven by domain specialisation and use of technology, under the stewardship of a new leader. In fact, this has seen the company emerge as one of the hottest plays in the BPM sector a decade later. Its share price is hovering around $50 and the company has a market capitalisation of around $2.5 billion. In 2017-18, WNS posted net revenue of $741 million, a compounded annual growth rate (CAGR) of 11.19%; and a net profit of $118 million, with a five-year CAGR of 21.56%.

Much of the transformation of WNS is attributable to its current chief executive officer, Keshav Murugesh, 55, who joined the company—where institutional investors control close to 87%—in 2010, after the board felt the need to get in a new captain to steer a sinking ship. Murugesh, a chartered accountant by training, began his career at ITC and was instrumental in setting up ITC Infotech, the tobacco-to-hotels conglomerate’s IT arm. He then joined the U.S.-based IT firm Syntel in 2002 and became its CEO in 2009. At Syntel, he was responsible for driving a sea change in the company’s operating model by offshoring a large part of its operations to centres like India, thereby improving margin profile; as well as setting up a BPO arm.

It is this experience which the board of WNS and Murugesh himself felt would be relevant for the challenging task cut out for him at WNS. Murugesh, who is based at the WNS headquarters in Mumbai, implemented a blend of organisational restructuring and a new business model to put the company back on track, and the numbers bear testimony to how successful he has been.

“The industry rode the earlier BPO model for a long time and witnessed 40-50% growth in revenues. But there was clearly a change taking place,” says Murugesh. “This was probably where WNS lacked. At that time we were just focussed on building new centres and doing more of the same, when suddenly the business dried up.”

But right now, business is booming. WNS has a roster of over 350 clients spread across verticals including travel and leisure, insurance, healthcare, banking, manufacturing, consumer products, retail, telecom, shipping, and logistics. And it employs 36,450 people across 52 delivery centres in 11 countries including India, the U.S., the U.K., South Africa, and the Philippines.

The new business model at WNS is probably best exemplified by the kind of work it does for clients. Sample this: It helps a leading insurance company in the U.S. assess rooftop damages caused due to hailstorms by collecting images of the property using drones and running these images past an algorithm. Using AI, the algorithm assesses whether a roof is indeed damaged or not with a prediction accuracy of 95%. This saves the insurance firm the hassle and cost associated with manual assessment of the properties, and helps it take an appropriate decision vis-à-vis claim settlement.

“Technology is a massive disruptor in most industries and CEOs of companies are confused about which way the market is headed and how their companies will look five years from now,” Murugesh tells Fortune India, describing the business opportunity that lies ahead. “They are seeing core processes like manufacturing change thanks to robotic process automation and—instead of implementing it themselves—they would rather work with a company like WNS, which specialises in these areas.”

For a firm to grow its market share in India, it has to grow at twice the sizeof the market, poised to grow at a CAGR of 5.1% in 2017-22.
Tervinderjit Singh, research vice president, business processes, Gartner,

IT industry body Nasscom pegs the BPO sector’s revenue in India at $28 billion annually. This is expected to rise to around $50 billion by 2025, with digital streams accounting for most of the incremental revenue. Tervinderjit Singh, research vice president, business processes, at Gartner, says that the period between 2015 and 2020 is one of inflection for the Indian BPM industry where pure-play companies like WNS stand a good chance to capitalise on new business based on analytics, automation, chatbots, mobile apps, and video-based services. “For any BPM company to grow its market share in India, it has to grow at twice the size of the market, which is estimated to grow at a CAGR of 5.1% between 2017 and 2022,” says Singh. WNS is already growing faster than this.

Tervinderjit Singh, Research VP with Gartner.<em></em>
Tervinderjit Singh, Research VP with Gartner.

Murugesh is clear that implementation of high technology needs to go hand in hand with a more optimal organisation structure. “You can have all the technology. But if you have an insurance company as a client, how will you leverage it if you don’t know what insurance is?” he asks. Consequently, WNS restructured its sales vertical, which was earlier based on specific service lines, by making it industry-focussed. This meant that sales executives got more leeway to cross-sell different product offerings to the same client and extract greater revenue per client. For instance, if WNS was running the finance and accounting process for an insurer, it could also pitch its claims management capabilities to the same company.

Between 2002 and 2008, WNS acquired five companies.

Due to deeper penetration in specific verticals, the company’s industry specific revenue (from services such as claims management for insurers) grew 52% year-on-year in 2017-18 and accounted for 35% of overall top line, compared with 29% in 2016-17. “We are encouraged by continued progress in both industry-specific work as well as higher value-added service lines such as research and analytics,” says analyst Frank Atkins of U.S.-based equity research firm SunTrust Robinson Humphrey in a report dated July 19, 2018. “In our view, this reflects the strength of client relationships and competitive positioning in key domains.”

The other change Murugesh brought about was a more cohesive integration of the smaller companies that WNS had acquired in the past. Between 2002 and 2008, WNS acquired five companies.

When he came on board, Murugesh found that each company was operating in silos with different power centres and not attuned to the common WNS vision. “I introduced a common system across the company and helped people who weren’t aligned with this cause realise that WNS may not be the best place for them,” Murugesh says. “Subsequently, all employees understood what their key responsibilities were.”

The central theme of our HR programmes is while these employees work for us, we give them the gift of staying relevant.
R. Swaminathan, chief people officer, WNS

Having secured the buy-in of employees to his vision of delivering customer experience through innovation, Murugesh also made it a point to focus on empowering and engaging with in-house talent. R. Swaminathan, the chief people officer at WNS, says that the company is in the process of “repurposing 50-60% of its current workforce” to make them future-ready. Through the WNS Learning Academy, which operates in partnership with some of the leading universities in the world, WNS is spending $1,500- 2,000 per employee to train them in digital business process management.

R. Swaminathan, Chief People Officer, WNS
R. Swaminathan, Chief People Officer, WNS

WNS is also working with the Indian Institute of Management Ahmedabad on something called Project Centurion, through which it seeks to elevate 100 women employees to senior management roles. “The central theme of these programmes is that while these employees work for us, we give them the gift of staying relevant,” Swaminathan says. “They are really important for the future of the company and lead to greater talent retention.”

Employees are important for Murugesh indeed. The jetsetter spends 70% of his time globetrotting to meet clients and expand the company’s business, and it is the collective responsibility of his employees to make the boss look good. With revenue of a billion dollars in striking distance and an aspiration to become a $2 billion enterprise soon, Murugesh never looked better.

(This story was originally published in the September - December 2018 special issue of the magazine)

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