Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

Downturn hits WNS BPO

Samad Masood | May 25, 2009
Diversification into new industry verticals and service offerings is going to be key to WNS riding out the economic downturn.

This is a particular issue for the third of WNSs revenues that are based on transactional volume, in areas such as claims handling and ticketing. Volumes here have been affected by the economic downturn, and WNSs management is muted about expectations for volume growth in these markets in the year ahead.

Growth from diversity for WNS

WNS is faced with a classic BPO vendor conundrum. For a vendor of its size, it is too narrowly focused on too few verticals to enable sustainable growth. Successes in the travel and insurance sector have rapidly turned WNS into a global challenger. However, this over-reliance is now threatening to hold it back at a time when BPO rivals that are more diversified in horizontal services, such as Genpact and Capita, continue to post double-digit growth.

This is why WNS is increasingly emphasising its horizontal service propositions in finance and accounting, research and analytics, and customer services. WNSs acquisition last year of Bizaps, an F&A-focused SAP integrator and consultancy, is a particularly interesting new string to its bow, possibly opening up new doors in this horizontal market. Meanwhile, WNS is expanding the range of verticals it targets to increase the focus on media, pharmaceuticals, retail and manufacturing.

Ultimately, WNS needs to build a business that is not overly reliant on single verticals, but it also needs to focus more on developing revenues that are based on outcomes rather than volume inputs. That change will involve a significant realignment of WNSs client engagement model, and Bizaps and the research and analytics capabilities will be key here. WNS understands the challenge ahead, and knows that it needs to build its credibility in horizontal services. However, it will take time before this results in a significant return to top-line organic growth.

Samad Masood is an analyst in Ovum's UK software and IT services practice, and specialises in IT services, outsourcing and offshore services.  


Previous Page  1  2 

Sign up for CIO Asia eNewsletters.