Interview with Xansa CEO, Alistair Cox

Alistair Cox, the CEO of UK outsourcing and technology company Xansa, is in a bullish mood.

by Morice Mendoza, World Business

That is not surprising as the company has recently won an £85-million ten-year contract to deliver finance and accounting services to the BBC and has delivered healthy half-yearly financial results. In the bid for the BBC contract, Xansa was up against the incumbent, EDS, as well as Capita and Infosys, all impressive firms with strong credentials.

So why does Cox think Xansa picked up the work? The company, he says, has never tried to be all things to all people. It has built its record on supplying outsourced services targeted either to industry sectors such as banking and business services or to fulfil certain horizontal markets such as HR systems or finance and accounting. "Why did we win it? I think partly because we are experts at areas like HR and finance and everybody else would have to learn in some way," says Cox.

Xansa is focused on the UK market which has plenty of room to grow, says Cox. The company is marketing its services to large private companies and increasingly to government and local authorities. Government work now makes up 32% of Xansa's business in its figures for the first half of 2007, up from 18% in the equivalent period last year.

The company decided from the start to build its main off-shoring centre in India and does not plan to develop any centres anywhere else for the time being. "We have got a very compelling, unique integrated on-shore, off-shore delivery capability," says Cox. He thinks it is a unique capability which enables them to offer a consistently good service at a competitive price.

He disagrees with the model of developing more of the business in different countries around the world such as China, Indonesia and Vietnam. He prefers to keep things simple and argues it is more cost effective that way. He also says that Xansa has developed a unique "integrated" model of delivering its service. "I will contrast that with western multinationals that are seeking to build delivery centres off-shore and look at life as a sort of prime contractor and sub-contractor relationship. So something is won in the UK, parcelled up in the UK and discreet packages sent to India in a vacuum for the Indian team to deliver that particular piece of the project with no context. That's how the multinationals think about India in my view," he says.

Xansa used to think this way, he says, but has since "evolved our model to a much higher level of maturity". The Indian BPOs like Infosys, Wipro and TCS have the opposite model, he says. "They say: 'We'll deliver everything' from India and if we need to have some on-site expertise [in the UK] we'll fly folks in from Bangalore on a three-month business visa and we'll cycle them through."

Xansa, on the other hand, has a core of 'client-facing' staff who sit with the client in the UK for as long as necessary and a pool of talented staff in India who are involved at all levels of work. "Most of our UK work is done on site, we camp out with them," says Cox.

Xansa also offers clients flexibility, says Cox. If they want to outsource part and not all of a service, it will be managed in that way. But if they need to change suddenly in the other direction, Xansa will be able to respond.  "A client might then say, 'I've changed my mind. I want to go from 30% to 80% offshore and I want to do it really quickly' because maybe he's got a burning platform and needs to save a load of money fast. Fine. We can turn the dial and go off-shore very quickly."

The company employs around 5000 people in India. Whilst the talent market is becoming "hotter", Cox does not accept that it is hard to hang on to good people. However, he says you must know what motivates these "massively ambitious" people. Largely, it is the chance to do "interesting work" for the client and it is not a good idea, therefore, to throw only back-office work at them.

Xansa, says Cox, achieves economies of scale by such methods as getting its managers to lead bigger and bigger teams and that there is no difficulty in finding Indian managers willing to take on the challenge. "You don't often get people saying, 'I think I've reached my level of competence', they'll bite your hand off."

Cox believes it is perfectly feasible to forsee a time when one of the company's Indian employees would become CEO of the firm. Indians already lead big projects in the UK, says Cox, which shows them that there is a clear career path to the top.

UK competitors that fail to develop a good off-shoring model in India will be exposed, says Cox. "If you haven't got an Indian capability in a decent way into the UK marketplace today, then you're going to have your lunch eaten. You'll be dead before too long because companies like us and Wipro and Infosys will come along and eat your lunch."

Xansa seems to have got something very right as it has managed a 100% client retention rate; and 41% of its customers have been with the firm for more than ten years. Its latest half year results for the six months ending 31 October 2006 show a revenue growth of 7.4% on a total half-yearly revenue figure of £188.4 million. Cox seems confident that the UK market alone holds out plenty of opportunity for the company in the future. There may come a time when they will look to other markets but for now, the Xansa battle for contracts and other people's lunches will be UK-focused.



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