'We will now walk the inorganic path'

Q&A: Venkatesh Roddam

Venkatesh Roddam, chief executive officer of Nipuna Services Limited, is not surprised that working for a business process outsourcing (BPO) firm has become a career option for many rather than a stop-gap arrangement that it earlier was.

"Even I have moved from the financial sector to the BPO industry," he avers. Prior to joining Nipuna, Roddam was based in Frankfurt, Germany, where he worked with Deutsche Bank AG as its global head of trust and securities operations.

In an interview with Business Standard, Roddam steers away from rattling out numbers (it's the silent period) but puts forth his perspective on Nipuna and the industry in general.

Another financial year has come to an end. How has Nipuna evolved over the last 12 months?

As a company we have never focused on numbers. Our target is to be value-driven and not volume-driven. So our strategy is to continue focusing on evolving our key processes.

Considering that we have gained ground in terms of being able to recruit talent, manage the necessary logistics and complement voice and non-voice components of business based on our client demands, I believe that we have grown well over the last 12 months.

In the next few years, does the company see itself growing only via the organic route?

We have not walked the inorganic growth path as yet. But we are looking at it now. These can be via acquisitions or alliances. The market itself requires a company to look at inorganic growth options to scale its business. So we will be focusing on inorganic growth options too.

Nipuna has been making losses as per the earlier financial results though there have been reports that the company is likely to break even in 2005-06. Did the company face any problems in either securing business or recruiting people because of the fact that it was making losses?

Our parent company, Satyam, is financially strong. We are, therefore, well invested. So that has not really created obstacles for us. And to know whether we are likely to break even in 2005-06, we will have to wait till April 21, when we announce the results.

Nipuna today has operations based out of Hyderabad, Bangalore and Chennai. Any plans of entering new destinations?

We will continue to focus on these three cities for future growth. Tier II cities have not really emerged as attractive destinations for high-end BPO (Nipuna is involved in analytics and research work as well).

Internationally, however, we are looking at the Far East and Continental Europe as potential destinations for expansion.

What are the advantages that Nipuna foresees in expanding to the aforesaid international locations?

Clients today do not want to put all their eggs in one basket. Hence, setting up operations in international destinations reduces the 'country risk'. Besides, multi-lingual talent is the requirement of the market and it is difficult to find such skills in India.

Nipuna signed a Euro seven-million deal with German animation company, 4K Animation GmbH. Any other international deals on the cards?

We are working on 2-3 large international deals. We will be making an announcement in the next couple of weeks.

Does attrition continue to be the most challenging issue for the industry?

On the voice-side, attrition continue to be an issue. This apart, information security and business continuity planning are the other challenges that the industry is facing.

Have the billing rates improved for the industry over the last couple of years?

Clients' operating models have turned global. Offshoring has become a major component of their operations.

In such a scenario, companies have realised that if they do not make their offshoring partners profitable, it will be difficult for them to run their own businesses as well. So billing rates have improved over the last few years.