Recent volatility in currency exchange rates accompanied with spiraling debt crises in Europe are instigating some fear and worry that a feeling of paranoia may overtake investors. Although the impact may be felt by some U.S.-based companies with outsource partners on the Indian subcontinent, those that spread costs throughout different exchanges such as Euros, British pounds and U.S. dollars may absorb any adverse activity.
Margins will be greatly affected in companies that do not deal with across-the-board costs based on diversified currencies. Accordingly, comments from executives of outsource companies such as WNS’s CEO, Keshav Murugesh, said he was worried Europe may follow what happened in the U.S. in 2009 where technology purchasing was dramatically delayed. He said people in the U.S. last year stopped making decisions about technology buying and he cautions WNS clients to make these decisions in 2010 to save money.
He told the Dow Jones in a recent interview that delaying technology spending has a far more severe impact on outsource companies like WNS. The company conducts back office operations in the financial and banking industry with approximately 60 percent of its business revenue coming from the UK.
Continued depreciation of the euro and sterling against the U.S. dollar has great impact on both UK- and US-based companies buying outsourced services from India. Obviously, ties to American firms help Indian companies prosper during this time where Europe is in financial upheaval.
Murugesh said WNS is seeking to add greater diversity to its client base through an actively aggressive foray into U.S. and India markets. WNS is seeking to expand its operations to smaller, rural towns throughout India taking advantage of the absence of any wage arbitrage that will allow them to offset the typically low billing rates afforded by their competitors.
