Indian HQ’ed supplier Hexaware Technologies has acquired US-based SMC Squared, a specialist Global Capability Centre (GCC) services provider, with the IT services supplier seeking to capitalise on customer demand from enterprises who are increasingly looking to establish their own capability centres rather than relying solely on traditional outsourcing models.
Yesterday, I caught up with Amrinder Singh, President & Head – EMEA & APAC Operations, to understand more about the decisions behind the acquisition and what this means for Hexaware’s strategy and the UK business.
SMC Squared was founded by two former Target executives who successfully navigated the challenges of setting up the US retailer's GCC in India in 2005. Over the past two decades, the firm has replicated this success for 30+ other customers, including executing build-operate-transfer models where companies eventually take full control of their capability centres. Rather than following the traditional approach of hiring individual executives from major consulting firms or former GCC leaders, Hexaware opted to acquire a running entity with an established customer base and proven track record.
Commenting on what drove the decision to acquire SMC Squared, Singh said, "I saw in the last two years a massive market building up in India in creating, serving, optimising GCC’s”. Demand he said is being driven by the desire for greater control over operations that combine human workers with AI-powered digital agents.
"We took a slightly different approach," Singh explained. "We felt that acquiring a running entity with a set of customers, including some success stories where they've successfully transitioned... somebody who's done this for multiple clients rather than a single client, acquiring that sort of capability would be a step change (for Hexaware)." After some careful consideration, SMC Squared was chosen as the business who could best complement Hexaware’s existing business, as well as create new cross-sell and upsell opportunities.
Hexaware will be retaining the SMC Squared brand due to its market value, with the entire team reporting to Singh through Hexaware's corporate structure. The current SMC Squared CEO will become the natural head of Hexaware's new GCC service line, with dedicated account management and business development executives being trained as specialist consultants to push Hexaware’s new GCC 2.0 offering. Full integration is expected to take only a couple of quarters, with significant upsell opportunities anticipated in both directions between existing customers.
Whilst SMC Squared operates predominately in the US (as does Hexaware with c70% of its revenues generated in the region), the new GCC capability will be targeted for international expansion as well. The acquisition complements Hexaware’s expanded presence in the UK, with the firm unveiling a new UK headquarters in May, with plans to further consolidate its presence in the UK market and target public sector growth (See - Hexaware opens new UK HQ and targets public sector growth)
TechMarketView subscribers can carry on reading about the evolution of the GCC market and Hexaware’s strategy in UKHotViewsExtra: Hexaware acquires SMC Squared to strengthen Global Capability Centre offering
Posted by Simon Baxter at '10:02'
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