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Xchanging to set up 1,000-seat BPO near Bangalore

By Priyanka Joshi in Mumbai
June 22, 2009 11:25 IST
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UK-based Xchanging, a Rs 460-crore (Rs 4.6 billion) business process outsourcing unit, is set to open a 1,000-seat high-performance processing centre in the Tier-3 town of Shimoga near Bangalore.

The upcoming centre will be spread over 37 acres and is expected to be operational by the first quarter of next year, said David Andrews, CEO of Xchanging.

"A centre, similar to Shimoga, will be operational sometime in 2010 in Cleveland, Ohio (US). The twin centres will handle complex financial processing modules for global companies," he added.

Xchanging is also in talks with at least three top Indian corporate houses to enter the domestic outsourcing market. The company is looking at domestic majors from verticals like the telecom, manufacturing, hospitality and financial services among others.

"We are looking to build inroads in the domestic outsourcing markets through our enterprise partnerships model. In fact, a major Indian company has expressed an interest in doing business with us," explained Andrews.

Under Enterprise Partnerships, Xchanging forms joint ventures with organisations addressing the shortfalls of traditional 'fee-for-service' outsourcing models. With the Cambridge acquisition, Xchanging got a wider domestic market presence and customers in the US and Australia.

The company is also not ruling out possibilities of acquiring another Indian outsourcing outfits that could give it an edge over the domestic BPO players.

"We think that the present economic condition has brought the valuations of companies down to affordable prices. We may think of acquiring an Indian BPO player to strengthen our foothold in the India market and also to maintain our cost advantages for the global markets," Andrews said.

The British company had acquired India's outsourcing and IT group Cambridge Solutions for around Rs 690 crore in cash and shares earlier this year. It has grown its India headcount from 600 employees in Gurgaon to around 3,000 employees, with offices in Bangalore and Chennai too and is set to double its headcount in India in the next two years.

With over 9,000 employees worldwide servicing customers in 42 countries, Xchanging boasts of having one-third of its headcount in India. The company also recently acquired Germany's DAB bank's investment funds administration business.

Xchanging gets about 70 per cent of its turnover from Britain.

Incidentally, many large and small IT-BPO companies have successfully set up BPOs in Tier-2 cities and small towns too. For instance, Infosys has a BPO in Chandigarh; Wipro in Nagpur; Mindtree Consulting in Bhubaneswar; Bhilwara Scribe in Bhopal; and the Jindal group in Bellary.

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Priyanka Joshi in Mumbai
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