BPO vendors like Genpact, WNS, etc. have adopted the verticalization strategy in the past couple of years and according to Don Schulman GM for F&A and Supply Chain Global Process Services at IBM, verticalizing the horizontal will be the next thing and quickly accelerating and is the key to the future for all the BPO services providers. All along Indian BPOs have been horizontal focused with service offerings like customer interaction and support, finance and accounting, procurement and human resources that are applied across different industry verticals. Nasscom estimates that horizontal services account for more than 70% of the Indian BPO industry.
According to Technology Business Research (TBR) report, Genpact vertical strategy focuses on key verticals like manufacturing and BFSI accounting for 33.3% and 41.9% of top-line revenue and other’s increased to 24.8% in 3Q12 from 22.8% in 3Q11 driven by life sciences, consumer goods and retail. During Q3FY2012, the company exhibited commitment to its vertically-aligned go-to-market transformation, indicated by front end headcount additions to its newly targeted vertical industries beyond the core. Business development leads boasting over 20 years of experience within their respective industries were added to Genpact’s life sciences, consumer goods, and retail businesses. TBR expects Genpact to hire additional experienced employees, including management-level hires, across industries through 2013 to beef up its expertise and gain vertical-specific clout.
WNS has introduced a completely new strategic orientation, by verticalization of the company around six areas and the company expects the restructuring to boost its revenues in the near future. Its businesses will be divided into six key verticals; with travel and insurance being the major focus verticals. Other verticals include shipping, logistics, healthcare, banking & finance and retail. It is also planning to restructure its senior management strategically to handle the new verticals which will function as a Strategic Business Unit (SBU) in order to achieve distinctive as well as overall growth. The company has also realigned the Go-To-Market strategy for each vertical.
Aditya Birla Minacs focuses on banking, financial services and insurance (BFSI), manufacturing, and telecom, media and entertainment verticals. BPO verticalization is forced upon them by Industry-specific customer preferences and goals and a new orientation in the way BPOs offer services offerings. For vertical specific offerings, the BPO services providers have to invest significantly in domain specific human resources and technology which is a major strategic both at the enterprise level and also at the account level. Clients are looking for a higher level of domain knowledge and expertise in the Indian BPOs as clients want BPO service providers to partner with them and deliver work that will have direct impact on Client’s business. BPOs have to invest in building domain specific expertise and look to offer standardized product and platform based offerings along with customized offerings. Verticalization also helps the BPOs to effectively customize their offerings according to client needs.