Our goal is to be a premier company in the F&A BPO market by building a brand that will attract the top talent available and enable us to deliver the most compelling value proposition to our customers and our stakeholders. A significant portion of our growth stems from the expansion of existing client relationships. These relationships and the resulting opportunities continue to grow in scale, complexity and profit potential. Over time, we believe that these relationships should transition from the operational delivery of services to the strategic development of long-term, goal-oriented partnerships where we share in the
To successfully execute our strategy and achieve our goal, management believes we must continue to be proactive by concentrating on the following factors:
Business process improvements: We continually develop and enhance our technology and infrastructure with initiatives to improve the efficiency of our operations and enhance client service. For example, the Company continually seeks ways to re- engineer business processes for its service offerings. This re-engineering, coupled with the introduction of redesigned proprietary software, seeks to improve sales and collections, as well as credit investigative and reporting services. We continue to drive improved performance and reduced cost through our on-going focus on business process improvements.
Leverage our Global Resources: We plan to provide our U.S. clients with cost-effective options for delivering service both from the U.S. and India. Our location in India with its large number of educated professionals in the available workforce provides us with a unique strategic advantage. Part of our business strategy is to develop business and locate processes in Pune to capitalize on this advantage. We have taken steps to position us strategically based on some recent successes by continuing our expansion plans in Pune and in the U.S.
We have grown our business in India by relocating captive processes that can be enhanced by delivery from India. For example, in our ARM segment, today we service approximately $2.25 billion of assets. This amount has grown substantially since we began performing ARM business in 2003, when we serviced approximately $800 million of assets. We have been intentional in our choice of customers and type of debt we service to leverage our locations in India and the U.S. and our diverse employee skills to our advantage. One example of the type of debt we choose to service is debt that may be collectible but requires both manpower and technology to discover current and accurate contact information for the debtor (referred to as “curing” the debt) at a cost which is prohibitive in the U.S. or will result in lower margins. We believe most of the debt portfolios assigned by our customers in third party collections to some extent need to be cured and we believe many of our competitors either do not attempt to cure their accounts or employ just a bare minimum of effort to cure them.
Historically, we have used processes enabled by technology located in our U.S. offices for curing uncollectible debtor accounts of this kind. However, this allowed us to cure only a small portion of accounts that had the potential to be cured and the remainder of the accounts required experienced staff to cure them. We concluded that this was financially viable only by deployment of the cure process in India. We have addressed this by relocating the cure process mainly to India. We are beginning to derive benefits, such as an increase in the number of accounts cured, from the addition of over 100 employees in Pune in the cure process. However, we have determined that we need to add over 300 new employees to meet our needs to fully service our current assigned portfolios. We believe we will recognize increased revenues and profits upon successful completion of this expansion and we will be positioned to win a larger amount of collections portfolios outsourced by our clients.
Success of our business strategy is dependent upon the expansion of facilities in both India and the U.S. to accommodate this type of captive growth and additional business from our existing customers. We have spent Rs. 73 million as of December 31, 2005 on this expansion and, as of April 30, 2006, have 455 employees in our Pune facilities. We plan to spend additional Rs. 210 million by March 31, 2007, to house an additional 1500 FTEs. For more information, see the section entitled “Objects of the Issue” in this Red Herring Prospectus.
Strengthening our financial position: We currently service, amongst other clients, some of the largest companies in the telecommunications, healthcare, insurance and banking industries. We believe we can garner substantially more business by cross sale opportunities that exist among our current customers. However, as we attempt to increase the size of our business with them, we will be evaluated among other things on past performance and financial strength. Our strengthening will be to enhance our balance sheet.
Maintain domain focus and expertise management: We are focused on monitoring client needs and historical results to design strategies to maximize collections while maintaining control on costs. Operational experience coupled with analytical strategy has strengthened our market position.
Pursue acquisitions: We have acquired each of our businesses currently providing a specific service in the finance and accounting industry. We have been able to successfully integrate the operations of the acquired businesses, maintain key
customers and management and increase profitability. We intend to continue to pursue strategic and synergistic acquisitions that have the best potential to complement our existing service offerings. We have earmarked a part of the proceeds of the Issue to support our acquisition plans. For more information, please see the section entitled “Objects of the Issue” in this Red Herring Prospectus.
Continue to foster talent development and retention: We focus the majority of our employee resources on recruitment, development and retention in an effort to improve morale, increase productivity and encourage professionalism. We educate employees about company and client culture, develop their emerging skills and align our training objectives with our business strategy. This investment in training will aid in employee retention and will also help the client recognize even greater value in conducting business with us.