Question-and-Answer Session
Thank you. [Operator Instructions]. Our first question will come from the line of Joseph Foresi from Janney Montgomery. Please go ahead.
Joseph Foresi - Janney Montgomery Scott
Hi gentlemen. I was wondering if you could comment on the financial services spending environment in North America. Are the budget cycles complete and how did it look compared to last year?
Girish S. Paranjpe - President, Finance Solutions
Hi. This is Girish Paranjpe. When we talk to our clients in financial services, most clients are still holding budgets at same levels as 2007 with a few clients expecting a cut in their budgets for 2008. However, how that budget will be allocated among various elements from hardware to software to internal services to external service providers is still getting worked out. And we expect that to become clearer by the end of this quarter.
Joseph Foresi - Janney Montgomery Scott
Okay. So you are saying that spending is essentially flat with a slight downtick, correct?
Girish S. Paranjpe - President, Finance Solutions
I think there are two categories of people. One category of clients for whom it is flat, flattish in terms of the budget. There are certain few other clients for whom there is a budget cut. And... but irrespective of either situation, how that budget will get distributed across various elements is something that we will know by the end of this quarter.
Joseph Foresi - Janney Montgomery Scott
And has there been a hold up on any of the discretionary spending options and do you expect that you would see a flush of that in maybe the September quarter if the worries went away?
Girish S. Paranjpe - President, Finance Solutions
Yes, maybe that, but as I said, nothing... no project has been held off so far. And I think only when they decide the spends and the project gets kicked off, then we'll get a better picture of what's being held back and what's not being held back.
Joseph Foresi - Janney Montgomery Scott
Okay. And then just lastly here on the BPO side, I know that the headcount sort of pulled back a little bit. I was wondering if you could give us an update of the trajectory of that business and how are you seeing demand also in relation to North America. Thanks.
Unidentified Company Representative
Let me answer this. There are two parts to the question there. One I believe is in the headcount. So let me answer that. If you looked at our financials and if you looked at our headcount data starting from March of '07, you would notice that from March to December of '07, our headcount has probably gone up by 8%. Yet, on the other hand, if you look at our year-on-year growth, it's probably gone up by about 44%. So really, we have tried to break the linearity that headcount of... between headcount and revenue for the past two years. I wouldn't say we are completely successful at doing it, but I think we have made a beginning and... because, by any parameters that you look at, you could see that we have kind of today our revenue growth has kind of delineated from our headcount growth. There are three things that we have done for that, one is bundling more services. So really if you go back and look at it, today end-to-end services account for almost 41% of our total top line. The second thing is selling more high value services and the third is around our Platform BPO initiative, for which right now we have filed a few patents. We are in the process of filing a lot more. But that has still not completely kicked in. That's the third component. So that's why you really shouldn't bother too much about the headcount addition right now vis-à-vis revenue.
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