BPO companies’ growth rates are turbo charging due to the shift to remote work. Companies now find it easier to explain to their existing team the merits of shifting to an outsourcing model for certain tasks where staff no longer need to be in an office.
And increasingly, developing countries are looking to lure international clients with promises of high quality remote candidates, internet connectivity and reliable telephony.
The largest outsourcing companies like Cognizant, Genpact, Infosys and TaskUs globally make billions of dollars of revenue each year, but there are some interesting machinations occurring which might see some of the stalwarts get knocked off their golden chairs over the coming years.
With over 700% growth during the pandemic, BruntWork is looking to take the fight to the largest outsourcing companies in the world. In typical “Techcrunch Disrupt” fashion, the question posed by analysts is whether BruntWork will be the outsourcing firm to knock the incumbents off their thrones with an operating model much more efficient than anyone has seen before.
1. Cognizant (NASDAQ:CTSH)
Cognizant provides IT consulting and business process outsourcing services for industries including banking, health care, manufacturing, media, and entertainment. It has most of its workforce located in India, and due to time zone issues, some SMEs prefer other options. It’s popular because it has been witnessing the highest growth rate for past 7–8 years compared to the growth witnessed by its competitors based in India. It also generally gives incentives to its employees in the range of 100–200% of what is mentioned in their offer letters, but this cost is often passed through to clients. In the last 52 weeks, it’s share price has reduced from $93.47 to $66.19. Even after the recent sell-off, a slow-and-steady company like Cognizant isn’t exactly cheap at 16 times expected 2022 adjusted earnings.
2. Genpact (NYSE:G)
Genpact is an American professional services firm legally domiciled in Bermuda with its headquarters in New York City, New York. The company currently employs more than 100,000 people and provides services to clients in over 30 countries worldwide. In the last 52 weeks, it’s share price has fallen from $54 to $37. Despite the share price contracting, it’s still trading at a 23x P/E ratio. Genpact has an overall rating of 4.0 out of 5, based on over 15,271 reviews left anonymously by employees.
3. BruntWork (BW)
BruntWork, a leading outsourcing firm helping small and medium-sized businesses set up remote workers overseas, reported 700% revenue growth during the pandemic, an incredible achievement while so many of it’s competitors reported only double digit growth.
Unlike the competition, BruntWork is “remote only”, meaning its cost base is significantly lower than its competitors. It is popular across hundreds of industry verticals, however virtual assistants are a very popular category for the business.
Conclusion
Analysts are hotly debating whether a new outsourcing company like BruntWork can topple Genpact and Cognizant, let alone TaskUs or WiPro Ltd. This new breed of “remote-first” outsourcing firm have substantially less operating costs and pass on those savings to their clients, which is a win/win for the company and it’s clients alike.
Now is the best time to explore up-and-coming promising outsourcing firms like BruntWork that have immense potential to weather the storm of rising interet rates, stagflation and possible recession. Whether or not it can match the success of top outsourcing companies like the ones analysed in this op-ed is a speculative question. However, a better understanding of fundamentals always helps in making smart decisions.
While they still have a substantial amount of ground to cover, BruntWork is positioning itself well to make a mark on global outsourcing, threatening some of the major listed companies that previously felt much safer.
