Xchanging, and BPO, benefit from slowdown

Pretty stellar maiden results from BPO player Xchanging today. Indeed Xchanging says it will benefit from possible recession. 19% revenue growth last year and CEO David Andrews seems pretty happy with another 20% in the current year. Read my (ex) Ovum Holway colleague Samad Masood’s review Strong maiden performance from Xchanging.

BPO really is one of those markets which actually does better in a slowdown. As Xchanging concentrates on the financial services marketplace that is doubly true. Anyone who has studied Capita over the last two decades will know that.this is true for them too – they are a good place for comoanies to turn to educe costa and risks during a downturn. By amalgamating workloads, the BPO players can both make savings for the customer and profits for themselves. Win Win.

The ‘trick’ is of course to win enough work to allow that workload consolidation to happen How many aspiring BPO players win the first big BPO contract and then nothing more of any size This seems to be Logica’s problem with Edinfor in Portugal. BTW - The FT today reports that Logica is pushing for control of Portugal IT offshoot by buying the 40% of Edinfor it currently doesn't own. Last week Logica lost Edinfor's CEO Raul Mascarenhas after just 8 months in the job. He has left to join Deloitte. See Logica bosses on the not so merry-go-round from The Sunday Times 24th Feb 08.

Stop Press - EDP has just (9.30am 26th Feb 08) announced that it is exercising its put option on 40% of Edinfor requiring Logica to buy the stake for Euro55m in a deal expected to be concluded in March.

We wait to hear more at Logica's results announcement this Wednesday.