FACT FILE CEO Bhaskar Menon POSITIONING A customer service company diversifying to other areas, especially collections STARTED IN Aug-99 OWNERSHIP Mphasis BFL (66.45), Barings India (19.54), Options Pool & Management (rest) REVENUE (2002-03) $19.4 million NO OF PEOPLE 3200+ CORPORATE ADDRESS 444 Park Avenue South Suite 503 New York NY 10016 WEBSITE www.msource.net NO OF CLIENTS 19 QUALITY ISO 9001:2000 achieved Six Sigma used Deploying Kaizen LOCATION FACILITIES: 3 (Pune–1, Bangalore–1, Tijuana, Mexico–1) SALES & MARKETING: New York, US; Hampshire, UK

Among all the BPO companies promoted by IT services companies, Msource occupies a unique place, in more ways than one. Its contribution to the parent company’s revenue stands at close to 30 percent by the end of the quarter ending 30 September 2003, as compared to between 4–11 percent that BPO subsidiaries of other IT services companies contribute. Msource is also the only Indian company to run a full-fledged facility to serve non-English speaking customers. Last but not the least, Msource can take some credit since it was the first major third-party BPO to take the pioneering step of setting up a center in Pune, a destination that has suddenly become fashionable in the BPO community.

The company became profitable in the second quarter of 2003-04. To a large extent, Msource owes this fast rise into the top notch BPO bracket to its alliance with Accenture’s BPO arm. Not only did Accenture’s domain expertise and contacts complement Msource’s execution capabilities, the alliance also opened up Accenture’s customers to Msource and allowed both of them to approach companies together.

However, all its top five clients, who contribute 60 percent of its total revenue, were bagged prior to the Accenture alliance. The dependence on financial services was a staggering 90 percent of the revenue in 2002–03. That is likely to drop marginally only to 87 percent in 2003-04—a reflection of market reality that the BFSI segment has taken the lead in outsourcing to India.

However, what is striking about Msource’s service offering is that it is the only broad-based BPO company with such a high volume of collections work. In fact, the company ranks next only to the three specialized collection companies in India. This area has a very high growth potential and Msource is likely to benefit from it.

An operational masterstroke could be Msource’s decision to introduce a third shift during the day at its call centers. With India likely to face increasing competition in inbound voice-based customer services in call centers, this new shift could act as a de-risking strategy as it would provide non-voice services, where queries would be answered via e-mails.

This would enable Msource to substantially bring down its operational costs. Msource set up a 100-seater third center in Tijuana, Mexico to serve the Spanish speaking population, thereby becoming the first—and so far the only—Indian BPO company to do so. It also increased its manpower at Pune and Bangalore by about 500.

Msource is one company that has kept a comparatively lower profile in media and yet has performed. Msource’s success is likely to be a benchmark for most other IT companies targeting the high-growth BPO segment.