Aditya Birla Minacs ranks 8th among the top 10 Indian ITeS companies with revenues of Rs. 1,692 Crore (USD 375 million) ending march 2011. The company offers Customer Lifecycle, Marketing, Finance and Accounting (FAO), Procurement and IT solutions and services. FAO contributes major part of revenues and it is a second tier FAO player and with intention to ramp up its offerings, UK-based F&A services provider, Compass BPO was acquired for an undisclosed sum in March 2010. The acquisition would give entry into sectors like foods &beverages and
government business where they
don’t have any footprint. Presently Manufacturing (54%) followed by TIME
(Telecom, Technology Infrastructure, Media and Entertainment) (33%), Banking
and Financial Services (12%) and Insurance and Healthcare (1%) contribute to
Aditya Birla Minacs has set a target of US$1 billion in revenue by 2013 and it plans to achieve this through both organic and inorganic routes. To achieve this target company is looking for further acquisitions in FAO space and it is also looking at acquisition in the cloud computing area and infrastructure management segment. Another area of focus is the IT enabled BPO services like the Sales and Marketing Support services which currently contribute 25% of revenues and plans to increase it to 50% of revenues in next three years. The margins in these services are 8-10% higher than traditional BPO services. The company is planning to provide end-to-end solutions by bundling people, process and technology. It also adopted Blue Ocean Strategy for the FAO segment growth.
Target Market Led - The market lies in the Mid-market & SMB players who are looking for cost reduction and profit maximization through process improvements, both in
North America and EMEA and this segment is expected to
grow until 2015. Asia Pacific market is the second target market as the FAO in
this region is gaining momentum and present good opportunities for growth. APAC
market presents challenges in terms of low tech adoption, manual and non
standard processes. SMBs are often neglected by large players and often left
out for medium players; hence it is a good opportunity. With North America and
Europe slowing down the company has no other option but to look at APAC and Middle East region for improving the revenues.
Process & Domain Led - FAO has become matured market and highly commoditized business. Analytics Services, Industry & Domain specific services, Spend Analysis, Procure to pay services and Financial Planning & Analysis services help the providers to differentiate from the others. Services that address the CFO and Finance department needs and have impact on the balance sheet of the clients generate higher billing and increase the revenues. Clients are looking for more value addition, innovation and transformation from vendors and thereby evolving from playing tactical vendor role to being of strategic benefit to clients.
Technology Led – Technologies like Oracle, SAP, Cognos, Crystal Reports, Qlik View, Deltek & Yardi are used to deliver various services to the clients and also develop end-to-end managed platform for Automation. BPO players are forging alliances with the technology players particularly F&A and Business Intelligence players to develop platforms and products for the clients. Automation of the processes will help in reducing costs to the clients and platforms and products help in. Customers also benefit from hosting and data service centers and optimize their costs by deploying Virtualization of hardware.
Aditya Birla Minacs is supplementing the
Ocean strategy with low cost
development centers, near shore centers and centers in North
America. It has 35
operations centers in Canada,
Germany, Hungary, India,
Jamaica, the Philippines, the United
Kingdom, and the . The United States contributed
71% of revenue while US Canada, Europe and contributed 15%, 6% and 8%
respectively. With Europe debt
crisis and US slowing down the company is focusing on improving its revenues
from APAC and India Middle East regions. The company
is building capabilities, expanding into new regions, planning to do further
acquisitions to improve the revenues and achieve the target of US$1
billion in revenue by 2013.
The company is expecting tight monetary and economic conditions will force the clients to look for cost reduction, process improvements and help in increasing the profitability. It is also focusing on providing high end services and moving up the value chain. It expects the outsourcing market to see positive growth in the future and is focusing on increasing global footprint, its capabilities and multiple industry verticals. But the target of reaching US$1 billion in revenue by 2013 is looking tough unless it acquires a large player or multiple small players. The company is still around US$ 400 million range and market rumors that the current management is planning to sell stake to Private equity players who can bring in money and clients or sell out completely.
- Will Blue Ocean Strategy help in achieving the Organization goals?
- In the highly commoditized FAO market will this Blue Ocean Strategy Work?