July 2007 News

  • July 2007
    • Outsourcing key ‘enabler’ for India’s growth
      With rapid and sustained growth in sectors such as telecom, organised retail, insurance, healthcare, hospitality and airlines, a study suggests increased level of outsourcing to enhance the growth.According to a study by Everest Group, outsourcing can act as a key ‘enabler’ and catalyst for sectors such as telecom, organised retail, insurance, healthcare, hospitality and airlines, in multiple ways, ranging from release of scarce capital, providing quality talent, innovative practices and management bandwidth.
    • WNS Global and ExlService look at inorganic growth in LPO
      The country’s nascent legal process outsourcing (LPO) space is headed for more activity and consolidation as bigger BPOs eye a share of the pie. WNS Global Services, the country’s second-largest BPO, and ExlService Holdings are both learnt to be looking at inorganic and organic routes of growth in the LPO space.
    • BPOs hire NGO-trained rural youth
      Sanvi Aanwar, a resident of Veeratpur village in Punjab, was able to earn Rs 6,000 a month with incentives, after she was employed by Tata group’s E2E SerWiz Solutions Limited in Mohali.Enrolling in NGO Tarahaat’s, training programme enabled the young girl along with two friends from her village to gain employment to sustain their families. NGOs such as Tarahaat are now taking up initiatives to provide training programmes in rural areas to provide rural youth with a better chance to be employable in call centres.
    • Genpact, two others in race for Citi BPO subsidiary
      Citigroup has shortlisted three bidders for its business process outsourcing unit after the first round of bidding.The sale of the BPO business, run by Citigroup Global Services (formerly e-Serve), is expected to fetch around Rs 3,200 crore for the group. At this price, it will be the largest deal in the domestic BPO space.
    • Secova expects $100 mn turnover by ’10
      Secova eServices, global player in Human Resources Outsourcing services, expects to touch $100 million turnover by 2010, according to the company’s top official.
    • EcoTimes Consilience 2007 on Aug 10
      Over the last decade the outsourcing industry has been one of the fastest growing industries in India. Today, the entire industry is worth over $6 billion and employs close to half a million people.The industry has come a long way from its call centre roots and is fast becoming the hub for high-end deliverables commonly referred to as KPO or knowledge process outsourcing. KPOs are expected to be one of the next big growth engines both for the industry as well as for the economy. Given the rapidly evolving landscape it is imperative for those who work in the industry to understand the various challenges and opportunities that lie ahead if the Indian BPO industry is to retain its edge in this space.
    • Innovation to add another $50 bn to India’s IT
      The revenue pools of Indian IT and ITES industry may boost by 2012, as Innovation can add an additional $50 billion, a new study released on Wednesday said.Report recommended that industry Nasscom should scale its existing initiatives and promote an ‘Indi Innovation Framework’ involving certification of innovation promising funding initiatives.
    • Infy looks at more acquisitions: CFO
      Despite sitting on a cash pile of over $1.6 billion, Infosys Technologies has been conservative as far as acquisitions are concerned. In contrast, its peers TCS and Wipro were happy doling out cash to buy firms across the world. On Wednesday, the IT behemoth somewhat broke out of that image. It acquired three captive BPO units of Netherlands-based Royal Philips Electronics, which other firms such as Genpact, Capgemini and Atos Origin were also reportedly eyeing. The buyout was a much-needed one for Infosys BPO. Once considered as one of India~Rs model BPO with 80% non-voice processes and margins of over 25.7% (September 2005), of late it has fallen from grace, with margins down to 17% (for June 2007).
    • Infosys announces $250 mn BPO deal with Philips
      In one of the largest ever Indian outsourcing deals, IT bellwether Infosys Technologies Ltd today announced inking of a 250 million US Dollar contract with the Royal Philips Electronics of the Netherlands.In a release here, Infosys said as part of the agreement, Philips would enter into a seven-year contract with the Infosys BPO for providing Finance and Accounting (F&A) services and processing of purchasing orders.
    • US anti-outsourcing moves not to hit firms
      Political opposition in the US to outsourcing has had many IT service providers in India on tenterhooks for the last three years fearing a policy level decision against it.However, it seems the political opposition from some US sectors will not result in a policy level decision against outsourcing. It is likely that the opposition will subside and take the same course as China.
    • Rupee rise: No big pay hikes for IT, BPO staff
      The appreciation of the Indian rupee has probably hit the IT and BPO sector the hardest. IT pundits say that the days ahead will be hard as the need of the hour is more time and dedication.Apart from working extra hours, employees in the IT and BPO sector will now have to bear with cost-cutting, which would mean that their salary increments could be affected.
    • Rupee touches new nine-year high of 40.22
      Rupee gradually approached the crucial 40-mark today, touching new nine-year high of 40.22 against the US currency in early trade by drawing strong support from pouring down portfolio investments into Indian equity.The Foreign investments crossed USD 10 billion so far in the currency year after a record single month inflow of USD 5.8 billion in July.

      In active trade at the Interbank Foreign Exchange (forex) market, the local currency resumed strong at 40.22/23 per dollar from overnight close of 40.28/29 a dollar but later was quoted at 40.2450/2550 a dollar in late morning deals.

    • BPOs too outsource processes!
      Faced with rising operational costs and higher-than-the-industry attrition rates, captive centres in India are turning to third-party BPOs/vendors to manage their centres and take over the less strategic work, while retaining control over some of the key functions.Smaller captives, with up to 200-250 employees, are learnt to have approached third-party BPOs for a tie-up of this kind. Wipro is learnt to be looking at deals in this area. “We have been approached by captives, both for complete buy-outs and for taking over operations. We’re pursuing some captive deals currently, including some for takeover of operations,” said Wipro enterprise solutions business president Sudip Banerjee.
    • Bullish on India, XGS to double staff
      Xerox’s Global Services (XGS), a division of the $15.9-billion document management company, is all geared for an expansion overdrive in India. In line with the company’s improved focus on its services business in the country, the company hopes to double its workforce in India for XGS.
    • Soon Pune gonna overtake Bangalore
      The biggest work campus of tech giants Infosys and Wipro will soon be outside Bangalore, their home turf. Pune is set to overtake Bangalore as the largest single unit campus (SUC) for Infosys by 2008-end, while in the case of Wipro, it is Pune, Chennai or Hyderabad that may eclipse the headquarters in the next 2-3 years. Already, 70% Wipro~Rs employee billings are outside of Bangalore.The latest infrastructure data from Infosys shows that as of June 30, 2007, the company is looking at adding about 34,049 seats across a built-up area of 10.56 million sq ft in India and Mauritius in the near future. Out of this, 14,400 seats are based in Pune with a proposed built-up area of 2.7 million sq ft.
    • SC’s Morgan Stanley verdict’s still a maze
      The Supreme Court’s verdict in the case of investment banker Morgan Stanley has generated more confusion than before. The verdict was believed to have resolved a long-standing debate over the taxability of the MNC’s operations in the country, but many experts now think otherwise.The apex court said if the MNC paid the Indian agent (permanent establishment in tax parlance) at arm’s length price, it should not be subjected to further taxation. Now, the confusion is over an April 2007 verdict in a similar case of Sony Entertainment Television (SET) by the Income Tax Appellate Tribunal (ITAT), which stood for taxing such operations even if the parent company had paid its Indian agent (PE) at arm’s length price. A set of tax professionals think the two cases are similar in nature and hence, the decision of the Supreme Court overrules the order of ITAT, which is at best a quasi-judicial .
    • China eyes India’s slot as top outsourcing hub
      India, which has emerged as the back-office of the world in recent years, is expected to face stiff competition from countries like China, Malaysia and Singapore even as the global outsourcing industry is pegged to reach a market size of $1,430 billion by 2009-end.A survey conducted by global consultancy firm Frost and Sullivan has ranked India as the top destination for shared services and outsourcing (SSO) across various verticals. The country is followed by China, Ireland, Singapore, Malaysia, Mexico, Czech Republic, Poland, the Philippines and Canada.
    • Infosys BPO launches Project Genesis in Orissa
      Infosys BPO, the business process subsidiary of the Infosys Technologies, today launched ”Project Genesis” in Orissa to create a strong foundation for the emerging knowledge economy in the country.The first phase of the project known as ”Train the Trainer” was inaugurated by Chief Minister Naveen Patnaik at the Info city here to provide training on Global skills enhancement to nearly 300 lecturers drawn from 70 colleges and six universities.
    • Rising rupee: IT, BPO employees may have to work longer
      The appreciation of the Indian rupee against some currencies, especially the US dollar, has come as good news for many, but for those in the BPO and IT sector, it is means no more Saturday night partying.Several IT and BPO firms in Bangalore have decided that their employees will have to work on Saturdays too in order to counter the negative impact of the appreciating rupee.
    • Wipro BPO to focus on non-linear growth
      Wipro BPO, the Rs 1,000 crore (Rs 10 billion) arm of the Wipro Technologies, will continue to focus on non-linear growth and not add mass. The division, which has been revamped over the past two years — slowly weaning away from being a voice-heavy BPO provider — has only added around 500 people while growing its top line by 50 per cent in this period.
    • Gateway to Asia’ is the theme of BangaloreIT.in
      Growing by stature every year, the 10th edition of the annual mega IT event ‘Bangalore IT.in’, to be held in the city from October 28 to November one, will have the theme ‘Gateway to Asia’ highlighting the dominant role India played in the ICT sector to emerge leader in the continent.Talking to newsmen here Karnataka Secretary for Information Technology and Biotechnology M N Vidyashankar said, “In keeping with the changing needs of the industry, this year’s theme will help leverage Asia’s unique ICT ecosystem”.
    • BPO companies scout for overseas buys
      The rising rupee, the need to penetrate new markets, acquire new skills and customers, is driving BPO companies to look at overseas buyouts. At least five BPO companies that ET spoke to Gurgaon-based Salient, Mumbai-based Zenta BPO and Integreon , Noida-based EXL and Bangalorebased Infosys BPO—are actively scouting for overseas buys.
    • Re rise may push small BPOs deep into the red
      The results of Infosys BPO in the June 2007 quarter are a warning that the steep rupee appreciation may not only dent the margins of many BPO companies but could even wipe out the net profits of many small firms operating at lower margins.Infosys BPO, one of the top 5 third-party BPOs in the country, saw its net margins fall from 21-22% to 16-17% during the quarter, according to the Infosys management.
    • IBM in talks with Vodafone for India outsourcing
      IBM aims to grab more outsourcing deals from Indian telecoms companies and is in talks with the Indian unit of Vodafone Plc, a senior official said on Friday. India is the world’s fastest growing mobile market, adding more than 6 million users a month, and telecoms companies are stepping up investment on technology.India had 130.6 million mobile subscribers on the popular GSM platform at end-May. “My feeling is that in the next 18 months, at least two more operators should be settling for outsourcing,” Vivek Gupta, director of communications sector at IBM India and South Asia, told media in an interview.
    • IBM Daksh not on the block: IBM
      Despite mounting speculation global IT services giant IBM has denied that it is looking at putting its BPO division IBM Daksh on the block: “It is IBM’s practice not to comment on rumors or speculation, but I will stress that IBM Daksh is a key part of IBM’s services portfolio.
    • India to be hub of $16.7 bn KPO industry
      It’s the sector that holds most promise in the outsourcing pie. And now a report predicts it’s poised for big times ahead. The report says the knowledge process outsourcing industry (KPO) will be worth $16.7 billion by 2010-11.With an annual growth rate of 39% for the next four years, it will grow even faster than the BPO sector globally. What’s more, while in 2006-07 KPOs employed 106,000 professionals worldwide, their numbers are expected to grow and touch 350,000 by 2010-11.
    • BPO boom moves to smaller Indian cities
      More and more domestic companies are setting up business process outsourcing units in district headquarters, tier-III cities and non-IT clusters to save on real estate costs and stem attrition rates.While Satyam Computer Services [Get Quote] and the Jindal Group have already started BPOs in small towns of Andhra Pradesh and Karnataka, respectively, new players are in the early stages of talks in this regard.
    • India taking away British jobs overstated
      As per a new report published by The Work Foundation, the fear of large numbers of good quality British jobs being outsourced to rapidly developing countries such as India may be overstated.Regardless of the rhetoric of an abundance of Indian knowledge workers hungry for British jobs, there is little direct evidence so far of significant job migration, the report finds, setting at rest fears that India is taking away a large number of British jobs.
    • Is advertising India’s next BPO opportunity?
      Indian advertising surely has what it takes to become the outsourcing hub of the world. When we are outsourcing for just about anything why should advertising be left behind? Can we become the outsourcing base for Asia-Pacific? Yes, we can. Can we be an outsourcing base for the world? Yes, we can. But it might take five to ten years for that to happen. The efforts have to be set now to make it a reality. Right now we have just taken baby steps. If we rather take giant leaps, it’s possible to become an outsourcing base in five to ten years. We have a long way to go to reach that pinnacle.
    • Hillary Clinton changes tune on outsourcing
      Senator Hillary Clinton, front-runner for the Democratic presidential nomination, has apparently become a trifle defensive on the controversial issue of outsourcing, hardly a month after her rival Senator Barack Obama’s campaign mocked her for condoning outsourcing. In the campaign document she was described as ‘the Democrat from Punjab’.Clinton speaking to over 3,000 alumni of the Indian Institute of Technology, gathered in Santa Clara for their annual convention, via satellite from New Orleans, called on these IT specialists to help allay fears of American workers losing their jobs to overseas counterparts. Many of US’ IT majors outsource work to India. Hillary said if the concerns of the American workers were not alleviated, then it (outsourcing) could cause both a political and economic backlash.
    • Hinduja BPO may offer consultancy, keen on US acquisition
      HTMT Global Solutions, the ITES firm of the Hinduja Group, is looking at bringing in consultancy to its portfolio of services and this could preferably be done through an acquisition. The company would be looking at acquiring a mid-sized consulting firm in the US.The company, which provides both back office and voice services, will be able to move up the value chain with the new service, HTMT Global CEO Partha Sarkar said.
    • Morgan Stanley BPO can’t be taxed here: SC
      The uncertainty surrounding taxation of foreign companies setting up captive business process outsourcing units appears to have been resolved, at least to some extent. The Supreme Court, which delivered its eagerly awaited verdict in the Morgan Stanley case on Monday, has held that the income tax department cannot attempt to tax a part of the global income of a foreign company by attributing it to its India-based BPO.
    • HTMT Global to add consulting biz
      HTMT Global Solutions, the ITeS-BPO company of the Hinduja Group, is looking at bringing in consulting business to its portfolio of services and this could preferably be done through an acquisition. HTMT Global which provides both back office and voice services will be able to move up the value chain with the addition of consulting practice.
    • Global cos pump up BPO volume in India
      Domestic BPOs started as sweat shops — poor cousins to their international counterparts — almost living under their long shadows. Not any longer. Centres are now at par if not better than the international ones, complete with smart, wired cubicles, predictive dialers to call up the right customers and glass facade fronts. Employees are well paid, margins are at 18-20% and in some cases better than what companies get for international work.
    • Sundaram buys 74% in Chennai BPO
      Sundaram Business Services, a wholly owned subsidiary of Sundaram Finance, has picked up 74 per cent equity stake in the Chennai-based business process outsourcing firm Professional Management Consultants for an undisclosed amount.
    • Outsourcing: Now a people’s project
      The debate over offshoring has become a regular feature in high-wage countries that fear large-scale job losses. While informed observers argue that offshoring benefits corporations and the entire economies of the high-wage countries, others argue that while this may be true, it is nevertheless going to be detrimental to the large, white-collar middle-class working in the services sector.
    • China outsourcing sector no match for India
      China is promoting its information technology outsourcing sector as a rival to the market leader, India. The figures, however, paint a different story.In 2006, the Chinese IT services market reached $7.7 billion, a growth of 17.8 per cent compared with that of the previous year. On the other hand, software and services exports from India for 2006-07 grew by 33 per cent to mop up $31.4 billion and the domestic segment grew by 23 per cent to garner $8.2 billion, according to Nasscom’s figures.
    • Infosys ranked best outsourcing partner
      Software major Infosys today announced its selection as ‘Best Outsourcing Partner’ by the readers of Waters, the leading publication covering the needs of Chief Information Officers in global capital market firms.Waters Rankings recognised the outstanding achievements of solution providers that help financial institutions generate revenue and service their clients efficiently, Infosys said in a release here.
    • Dancing to beat the stress at BPO firms
      Sensing the high stress levels among employees that lead to lower productivity and higher attrition rates, Information Technology and business process outsourcing firms are resorting to unconventional methods, including teaching dancing and music, to tackle and beat the stress.India’s largest IT services firm Tata Consultancy Services [Get Quote], for instance, creates a balance and fun at work which is facilitated through different clubs like Theatre Club, Bibliophile Club, Adventure & Trekking Club, Fitness Club, Sanctuary Club, Music Club and Community Services Club, among others. Maitree, an initiative by TCSers and their spouses, organises several activities like treks, classes and workshops on creative arts besides picnics and other community initiatives.

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