Shifting Patterns in BPO pricing - Accenture
SOURCE: MoneyControl
DATE: July 20th, 2008
Mohit Soapbox:
Accenture has continued to leverage their global footprint, consulting expertise to continue to grow during a time when the pure Indian vendors are facing an uphill battle and scrambling to find alternatives to current growth pattern.
Accenture’s BPO witnesses change in pricing pattern
ARTICLE
With the slowdown in the US economy on the one hand and changing business needs on the other, management consulting and IT services provider Accenture’s BPO business is seeing newer trends in pricing pattern as well as in the nature of deals.
The company said because of the slowdown, there is pricing pressure for some kinds of deals, especially for the low-end transactional work. But for more complex or large-scale projects, or projects done out of multiple geographies, there is no significant pricing pressure.
However, there is a change in the pricing pattern, said Mr G. Raghuraman, Lead Executive, Accenture India Delivery Centre Network, BPO. There is a shift from fixed-fee contracts to contracts that are a mix of fixed-fee and variable-fee.
This is because the clients are looking for more business benefits, he added.
Multi-location advantage
The clients are also looking for more multi-geography contracts and there would be fewer single geography contracts, said Mr Raghuraman. They want to use a wider network of global delivery centres and global opportunities. They want managed distribution of work, he said.
The larger BPOs with global network and multi-geography manpower would benefit because of this trend, he said. Business might shift to the larger companies, he added.
On being asked if the multi-geography contracts would dampen the growth of the Indian BPO business, Mr Raghuraman said the competitiveness of India continues.
Many of Accenture’s clients choose to go to other locations because they have a large footprint in India. The other locations are an add-on to their India presence. Accenture’s clients are considering other geographies in addition to India and not substituting it, he said.
Mr Raghuraman said Accenture is looking to grow its footprint in Brazil, Mexico and India. Philippines is emerging as a preferred destination for customer support, he said. But not much work related to human resource outsourcing or finance and accounting is done there, he said. Mexico and Latin America are other emerging geographies, he added.
At present 20 per cent to 25 per cent of Accenture’s BPO business is high-end KPO work. The focus is on value - added services, which includes a lot of strategic analysis. Mr Raghuraman said they see good business in the pharma sector.
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