HCL Technologies, India’s fourth largest software exporter, is pursuing a non-linear growth strategy for its business process outsourcing arm and a business model to hedge against currency fluctuations.

Set up seven years ago with 30 people, HCL BPO today is 13,000-people strong, contributing about 12 per cent to the parent’s revenues. It closed FY08 with $225 million in revenues. Over the last five years, revenues have grown by compounded annual growth rate (CAGR) of 50 per cent while net profit has risen by 130 per cent CAGR. At 26 per cent, it has amongst the best operating margins in the industry.

“If we are to become a billion-dollar organisation, then a linear model would mean having 60,000 people on rolls. At that level, only to keep our headcount constant, we would have to add 3,000 people and interview 36,000 per month. This is clearly not sustainable. Hence we have decided to pursue a non-linear model which would also protect us from currency fluctuations,” Ranjit Narasimhan, President and Chief Operating Officer - BPO Services, HCL Technologies. Source