In Conversation: Healthcare will be in focus
Sep 30 2016
Partha DeSarkar spoke to FC on perceived threat of automation that is likely to impact the BPM industry the most
Is healthcare your focused vertical? Or there are others too?
Healthcare is our biggest vertical, with 44 per cent of our revenue coming in from this segment. We also have a large focus on telecom, media and technology (TMT), public/govt as well as the BFSI sector. In addition, we have something from FMCG, which we term as “consumer”. However, three verticals—Healthcare, TMT and BFSI—account for around 88 per cent of our revenue.
The growth potential for all the verticals we cater to is huge and we are witnessing traction across the board. We are seeing significant demand from healthcare, especially, as health insurance companies, health systems and hospitals look to become more efficient, add more customers and grow revenue even as they deal with regulatory requirements. It is one of the most rapidly changing verticals and HGS has a holistic lifecycle management expertise to engage, satisfy and retain our client’s members and patients. This business grew at over 30 per cent for HGS in Q1 FY 2017, and we will continue to focus on building capabilities to cater to this sector. At present, we have about 12,000 people across the US, Jamaica, India and the Philippines supporting healthcare clients.
How well has the company handled the integration of Mphasis BPO into itself?
It’s been a year now, since we did that. It has already happened in a successful way. It is now an integral part of our India business. The business has turned profitable, exiting March 2016, and continues to grow. The north Indian presence that we got through the acquisition is also helping us win new clients. For example, we started working with an e-commerce giant from our Indore centre last year and are now expanding this client programme to Mysore.
Will you continue to look for inorganic growth? If so, can you elaborate on the verticals on your radar?
Inorganic will continue to have some degree of our focus and within that, healthcare will be a focus area. It does not mean that we will not look for such opportunities in other verticals too. But, we will be picky and choosy, when it comes to our inorganic growth strategy.
In healthcare, HGS is looking for acquisitions that can bring us specific capabilities and healthcare product companies catering to payers & providers. We are looking at new strategic markets and innovative capabilities in digital, analytics, robotics and machine learning that are relevant to our core businesses.
The company’s profits were under pressure in the recent past, mainly attributed to the Canadian business. Have you managed to overcome and turn it around?
It was the case last year. But, if you look at our Q4 of last financial year and Q1 of this year, it is much better. We are back to making profits and the immediate future too looks better to sustain that.
The Philippines has virtually become the second home for most Indian BPM companies. How is it doing for Hinduja Global?
HGS was an early BPM entrant into the Philippines market in 2003. We are doing very well in the Philippines, where we have eight centres with around 7,000 employees, and fast expanding to cater demand from our clients.
The Philippines is today at the place where India was five years ago. Moreover, the availability of the right talent needed for the BPM industry, especially in segments where we are focused, is plenty over there. The BPM industry has become a career of choice for young Filipinos. Unfortunately, it is no longer the case here in India, where getting that kind of talent is a little challenging now due to rising competition. Also the retail industry has picked up in India that is putting pressure on the talent pool. Skill development is an area that needs to be invested in India.
Automation has become the buzzword now over the world and its impact is most felt in the BPM industry. How well did HGS prepare itself for this?
We were very well prepared for automation and had made sufficient investments in this area. In fact, according to the 2016 Everest Contact Centre Outsourcing Annual Report, HGS is one of the only outsourcers offering analytics, automation and interaction services. The implementation of these initiatives brought in a lot of excitement in our clients because they were also seeing it for the first time. RPA (robotics process automation) is a non-invasive technology solution that uses a client’s existing end-user interfaces and enterprise applications to effectively reduce agent effort. This particular technology is giving us entry into new areas and new capabilities for us to respond to clients’ looking at a faster return on investment (RoI). The capabilities that were developed in-house are giving us an opportunity to bring in new prospective clients into our fold. We are well-invested and well-prepared. Automation is process driven and our strength lies in managing it and unlike product companies, we have the domain experience to support it. It is precisely for this reason that lots of new prospects are speaking to us.
There is a perception that automation will lead to job losses. How true is this? If so, where do you see it impacting the most?
Automation leading to job losses is something people had talked about. I believe Internet of Things (IoT) will be a game changer for industry and will create lot more seats. We cannot see automation in isolation. In fact, because of automation, more transactions are happening today in industries like the travel and hospitality sectors. There are mundane and routine processes that were handled manually earlier, but have been replaced through automation. Those processes have become more efficient through man-machine interaction, and the people handling them earlier have moved on to more productive jobs. Hence, automation should not be seen in isolation and for it to completely impact us, it will take several more years.
When interactive voice response came in, too, the same thing happened. People were talking about job losses. When internet came in, again the same thing happened. Now so much is happening online. A vast segment of people, who earlier used to visit their banks in person to handle their transactions, are today doing it online. Has it reduced people in those banks? In fact, it has brought in a different set of people into the job markets. Every technology has its downside and upside. Hence, one thing we can clearly say is – automation and technology are going to add more jobs, while repetitive jobs will go away. We see companies moving up the value chain in processes. Another bigger fact is IoT and the opportunities it is going to throw up. It is going to add a massive number of seats in India and people will realise the potential when it happens. Hence, RPA is definitely going to create a new set of job opportunities.