24/7 Customer.com in a growth mode
-Subir Roy

Bangalore - Sep 17, 2002 -- 24/7 Customer, an IT-enabled services company in the country, is on a rapid path of growth and investment.

It has just set up a new network-operating centre for $4 million in Redwood City for its customers on the US west coast. "This is our second such centre in the US, the other being on the east coast. Between the two, our US lines circumnavigate the whole globe," says PV Kannan, founder and CEO of 24/7 Customer.

This investment is linked to the two new centers of the company, one coming up in Hyderabad by December and the other in Kochi by early next year. The former will have 500 seats in two phases (the first centre in Bangalore has 700) for offering technical support and the second will have 250 seats primarily for business process outsourcing (BPO). The two-and-a-half-year old company has annual revenue of $20 million, which is expected to more than double every year for a few years. It is both cash flow positive and profitable, maintaining a net margin of around 10 percent.

Margins are currently low because of the need for rapid expansion of capacity in anticipation of demand. Kannan expects margins to move up to 20-25 per cent next year.

The industry leaders should eventually consolidate at around 25 percent once the present leapfrogging phase of growth is over but that is not round the corner yet. The global financial services industry has moved very aggressively into India both in BPO and call centres. The Hyderabad centre is coming up largely in response to the need to add 550 people for a single customer, one of the largest credit card processing companies.

The expansion at another centre, instead of at the existing one in Bangalore, is to address American concerns for safeguarding business continuity. Kannan reveals customers have seriously plotted Indian locations for ITES and concluded that only Kochi is outside of the range of Pakistani Missiles.

"The political stability of the region holds the key. That's what I worry about more than anything else. When companies shut down their European operations and depend on us, Indo-Pak war talk terrifies them", says Kannan.

Bandhs, as the one that has just had, are also very bad for the industry." But we operated two shifts and did not miss a single call. Those (talk of war and bandhs) are things that can ruin the industry." Says Kannan. In ITES, more and more companies are trying to move out of commodity type of activities and have a unique advantage. "We have started by creating practice groups-customer service, technical support, outbound sales (telemarketing) and BPO. We are also developing location specialization - Hyderabad for tech support, Kochi for BPO by dividing into practices, every customer centres performance has been depended by a significant margin." Today some of our top customers ask our people to go there and help them out. Out whole focus is to beat the customer's centre not just do a good job.

When the industry started the simplest inbound customer enquiry jobs were given to India. Today it is more a measurement of results." One of our customers, one of the largest US telecom companies expects us to give them fixed number of new customers every month, we have to figure out how." Adds Kannan.