UK-based outsourcer Xansa Plc is merging its IT services and business process outsourcing divisions in the latest part of its ongoing restructuring to reach profitability and attain revenue growth.
Xansa’s BPO operations, based offshore in New Delhi, India, will no longer be run separately, and accountability for both BPO and IT will be consolidated. Fraser Winterbottom will take charge of sales and marketing for both divisions, while Allan Wood, the managing director for BPO, has resigned to pursue other career opportunities.
Steve Stratton, investor relations director for Xansa, told ComputerWire that the company merged the two divisions to provide clients with a single interface for both IT and BPO.
Xansa was one of the first Western companies to acquire an Indian offshore provider in 1998 when it bought ISS Infotech. Since then the business has been the focus for the company’s growing BPO operations, with clients including UK utility company Thames Water, for which it is providing back-end processes around metered billing exceptions, and UK mobile operator O2, with which it has a 21m pound ($38.2m) five-year contract to design, build, implement and operate a new accounting and finance business process service.
BPO now represents 15% of the company’s business, generating 34.1m pounds ($62m) revenue for the six months ended 31 October, 2003, up 86% from the previous year’s period. This is in comparison to IT services revenue which fell 10% to 174.8m pounds ($318.5m) over the same six months. Total revenue for the business including Xansa’s recruitment business, fell almost 3% to 225.7m pounds ($411.2m) over the period.
Xansa has been reorganizing its business over the past year to better target growth in the UK BPO sector. In January 2004 the company decided to pull out of North America, having already announced in the previous December that it was withdrawing from continental Europe to focus on its core UK operations.
Its Houston, Texas-based business, which broke even on revenue that declined 38% to 11.9m pounds ($21.9m) in the six months ending October 31, 2003, had represented just 5% of total sales. Xansa expects its withdrawal from the US, which will affect 140 employees, to be completed by the end of May 2004. The announcement also comes four months after the company announced that it would close its offices in Singapore and Malaysia, and scale back in France.
Xansa has said that it would consider returning to continental Europe when market acceptance improves for the large-scale outsourcing of IT and business processes to offshore locations.
This article is based on material originally published by ComputerWire