BPM companies see digital deal surge in UK

Business process management (BPM) firms such as HGS, WNS, Genpact and others are seeing increased demand for digital transformation deals from UK-based private and public sector companies, as Brexit forces them to cut costs and outsource more work.

HGS said there had been an uptick in demand from government authorities and growth in the region is being driven by a Covid-19 related project from the UK government.

“Our public sector business in the UK has done well. We are supporting the government in a particular project around track and trace. All of that has helped us stay ahead,” Partha De Sarkar, CEO, HGS, told ET.

The “adoption of digital has been accelerated by a decade,” he said.

“As in September, we expect the seasonal business will continue to come from sectors such healthcare, telecom,” De Sarkar said.

“We do not split our revenue by region, however, from a total revenue perspective, we continue to see strong global demand…During the second quarter, we signed several new deals, all virtually, in both intelligent operations and transformation services, including two new large relationships,” said a Genpact spokesperson .

According to analysts, the Covid-19 induced slowdown, coupled with “recessionary pressures of all the major European economies” is pushing more organisations in the region to outsource.

“The UK is currently suffering the worst recessionary pressures of all the major European economies, and the upcoming Brexit issues will drive pressure to outsource even higher to support British businesses trying to survive this difficult economic period,” said Phil Fersht, chief executive of HfS Research.

Fersht said that there had always been strong alignment between the needs of UK companies and the execution capabilities of Indian heritage BPM firms, due to common accounting practices, legal and compliance standards, and language.

“BPM has always lagged IT outsourcing in the UK and the recent financial pressure of the pandemic economy is accelerating the need for a ramp-up in process services to help British firms operate more effectively in this volatile environment and also keep better control over operational expenditure,” he added.

Even though the UK market is conservative, the pandemic has prompted many to consider outsourcing, said Vishwakumar Nandagopal, senior director and head of India operations, ISG.

“Because of Covid-19, many captive organizations faced challenges in terms of shortage of skills and have turned to outsourcing. Many are first-time outsourcers. Clients are also intrigued by the strong automation capabilities of the providers encouraging them to consider outsourcing,” said Nandagopal.

During the initial days of the pandemic, UK clients were reluctant to outsource as IT firms had asked their employees to work from home, but they changed their stance after the service providers showed resilience with higher adoption of Cloud and automation technologies. TechFinGuy