March 2008 News

  • March 2008
    • AOL sells call centre biz to Essar group
      Time Warner-promoted AOL (America Online) is selling its 1,200-seater call centre business in India to Aegis Communications, the BPO arm of Essar Group in an all-cash deal pegged around $100 million.Wipro and other pure-play third party providers were also front runners for the deal. Aparup Sengupta, MD, & CEO, Aegis, said, “This is purely speculative at the moment and we do not comment on speculation.” However, sources close to the development said that AOL is expected to make a public announcement of the sale as early as the coming Friday.
    • HDFC Bank moves to rural India; to hire 2,000 people for BPO
      Country’s largest private sector lender in terms of branch network, HDFC Bank is moving its BPO activity to the semi-urban area by hiring about 2,000 people in next two months.The move is expected to bring down the operation by about 50-60 per cent primarily due to cheaper human resources and real estate cost.
    • MakeMyTrip set to outsource ops to IBM Daksh
      In a multi-million dollar contract, Travel portal is all set to outsource it’s entire contact centre operations to IBM Daksh. As part of the deal, which will be spread over five years, IBM Daksh will takeover about 400-500 employees from on its rolls, industry sources said. When contacted by ET, both IBM and MakeMyTrip declined to comment.The IBM Daksh employees will perform travel-related BPO work for such as offering airline tickets, hotel reservations, car rentals, travel packages and holidays in India as well as in the UK, US, and Australia. It’s a first such deal by a travel portal in India. Other major travel portal offering airline tickets and travel booking are Indiatimes Travel, Cleartrip and
    • BPO firm ExlService beats rival WNS in market cap
      Following its better-than-expected quarterly result, BPO firm ExlService Holdings has beaten twice-its-size rival WNS (Holdings) in terms of market cap. Nasdaq-listed EXL ended the trading session on Wednesday with a market cap of $688.5 million, just ahead of NYSE-listed WNS’ market cap of $684.03 million.For the quarter-ended December 2007, EXL reported revenues of $50.4 million while WNS closed the quarter with $115.6 million. “The stock price represents the fundamentals of the company—the quality of business and profitability,” said EXL president & COO Rohit Kapoor.
    • GE withdraws nominees from Genpact board, may hasten exit
      Corporate conglomerate GE has moved out of the board of Genpact, India’s largest BPO firm that started out as a GE back-office 10 years ago. It has also brought forward by nine months the period till which it is required to hold a minimum of Genpact shares.While these moves seem to point towards plans of an early exit from the NYSE-listed BPO firm, GE has extended its client relationship with Genpact. The BPO firm’s biggest client has extended its master services agreement (MSA), guaranteeing a minimum annual volume with it, till December 2014.
    • Genpact eyes domestic ITeS BPO market
      India’s largest BPO firm, Genpact, is all set to enter the domestic $1.60-billion ITeS-BPO market. It will also foray into the BPO market in China where it has 3,000 employees.“We have ignored these markets for far longer than we should have. The time is right for us to enter the India and China markets as our products are well-suited to the market requirements and local companies are also ready for these services. We would start with some of our high-end offerings like re-engineering services, customer service and finance & accounting work in these markets,” Genpact president & CEO Pramod Bhasin said.
    • WNS plans to up the ante in KPO business
      The niche segment of the Indian IT industry, knowledge process outsourcing (KPO), is getting more broad-based with companies looking at providing an integrated level of services. WNS, a BPO services provider in India, is upping the ante in KPO segment by getting into the shared-services model. Under this, WNS will be providing a complete array of its KPO services, be it business research, analytics or market research.WNS Knowledge Services CEO Anish Nanavaty says company has been able to aggregate different pieces of its KPO activity to bring it under a single umbrella of services. The KPO segment of WNS constitutes around 15% of its topline and has around 1,500 people. The shared-services model could actually see WNS driving a proposition which goes beyond mere saving of costs and act as a one-stop-shop.
    • Cambridge gets multi BPO contract from Australian company
      Cambridge Integrated Services, a leader in innovative claims and risk management services and subsidiary of Cambridge Solutions, has received a multi BPO contract to handle insurance claims transactions for the Victorian WorkCover Authority of Australia.The Victorian WorkCover Authority is an Australian State Government run Workers’ Compensation Scheme, with annual revenue $1.7 billion.
    • EXL eyes $210 million revenue by the end of 2008
      Business process outsourcing (BPO) firm EXLService Holdings on Wednesday said it expects a revenue of $205-210 million dollar by the end of this year.”We expect our revenues to touch 210 million dollar by the end of 2008,” EXLService Holdings President and Chief Operating Officer Rohit Kapoor said.
    • Nalanda India picks up 5.25% in WNS
      Former Warburg Pincus India honcho Pulak Prasad’s PE fund Nalanda India has picked up a 5.25% stake in US-listed BPO firm WNS (Holdings). The fund acquired 2.2 million shares of the BPO firm, which is listed on the New York Stock Exchange, according to an SEC filing by WNS. Though the transaction size was not disclosed, going by the scrip price on March 14-the day of the transaction- the deal value would be about $32-34 million.The BPO firm has a market cap of $667.6 million and is majority owned by Warburg Pincus. Institutional investment, including that by asset management firm Fidelity Management & Research and Tiger Management, in WNS totals 38.01%.
    • How to save the world’s back office
      Over the past few weeks I have received a tremendous amount of hate mail regarding my column The coming death of Indian outsourcing. It seems to have catalysed debate on the problems facing the Indian outsourcing sector, such as annual 15 per cent salary hikes and 20 per cent attrition.What India needs to do to survive as the world’s back office boils down to this: It must first adjust its value system, and then it must broaden and strengthen its education programs to increase the supply of trained professionals.
    • Domestic market shines for BPOs
      Indian export-oriented information technology (IT) and business process outsourcing (BPO) firms may be grappling with an appreciating rupee and clouds of doubt looming over the extension of tax sops for the sector beyond 2009.However, the business of BPO firms that cater to the domestic market appears to be booming. BPO demand in the domestic market has witnessed noticeable growth over the past few years.
    • South Africa to lure BPO, IT majors from India
      South Africa is all set to lure the BPO and IT industry from India to its backyard, as majority of the natives feel that “Europeans and Americans are more comfortable with the South African English accent”.A high-powered business delegation from South Africa on a visit to India to promote trade ties between the two countries said its looking not for making investments here but for Indians to make investments and provide expertise in setting up industries in South Africa.
    • BPOs feel realty pinch in smaller cities
      India Inc, especially the BPO (business process oursourcing) sector, looks at them as the ‘next destination cities’. With sky rocketing property prices, non-availability of good office spaces on rent, and high attrition rates, Tier I cities like Mumbai, Bangalore and Delhi are fast becoming too expensive for many BPO firms. A reason why Tier II-III cities like Pune, Ahmedabad, Nagpur, are coming up as alternative destinations.However, some BPOs say, the move to Tier II cities may not be a great idea after all, since property prices are not very cheap or not what they expected them to be. Real estate may be booming, but prices sky rocketing as well at times quite close to Delhi and Bangalore rates. What’s more, getting good middle management talent too is a problem in these cities.
    • India no longer top outsourcing destination?
      India’s dominance as a low-cost outsourcing destination seems to be on the decline, with countries like China, Morocco and Hungary fast emerging as the preferred choices by IT services providers, a recent study says.Focused on UK’s top IT service providers, a study by Pierre Audoin Consultants (PAC) showed that China, Morocco and Hungary are the new locations of choice to set up offshore sourcing centres.
    • The Building Blocks of Contact Center Consolidation
      Consolidation improves a corporation’s ability to manage its IT resources. Forty-five percent of Best-in-Class companies were able to improve the efficiency of their IT staffs and rapid application deployment as a result of consolidating resources. In support of this, Best-in-Class firms have also focused on standardizing their software applications.
    • IT, BPOs bought 94 firms worth $2 b in ’07: Nasscom
      The IT sector is having a party on deal street. Domestic IT and BPO companies were involved in as many as 94 deals, largely cross-border in 2007, involving investment of over $2 billion. The momentum is expected to gain strength in 2008, with consolidation expected in the domestic arena and Europe likely to emerge as a key destination for outbound deals.
    • Gaining acceptance: in the job market, retail is the new BPO
      At the opening of one Bangalore outlet of Shoppers’ Stop Ltd, an entire village turned up in two busloads. But it wasn’t really the store they were interested in.The small Tamil Nadu village had come out in full strength to see their boy make it as store manager, barely four years after he started out on the shop floor. Earlier, the same village boy had invited prospective in-laws to the shop to impress them with the environment in which he worked, says Sanjay Badhe, vice-president at Aditya Birla Retail Ltd, who then worked at Shoppers’ Stop and knew the store manager. Company policy bars store managers from speaking to the media.
    • China should learn from India in outsourcing: Expert
      A Chinese political advisor and senior corporate executive has strongly advised the government to draw upon the experience of IT giant India in developing outsourcing business to make the country shine in the sector.Indian firms garnered 65 per cent of the world’s IT industry outsourcing market and 47 per cent of office work outsourcing in 2006, Zhang Chunjiang, a member of China’s political advisory , the Chinese People’s Political Consultative Conference, said.
    • 3i opens knowledge, resource centre in Bangalore
      Private equity and venture capital firm 3i on Thursday the opening of a knowledge and resource centre in Bangalore in partnership with Infosys BPO.The new facility would have an initial staff of 20 and would be managed by Infosys BPO, a subsidiary of IT major Infosys Technologies, the companies said in a joint statement.
    • BPOs scan tier III towns to spread opportunities
      BPO companies are spreading their wings into tier III towns. Driven by the need to lower operating costs and expand their talent pool, several top BPOs are now setting up shops in places like Indore, Durgapur, Trichy and Salem.Most companies classify Bangalore, Mumbai and NCR as tier I locations and Pune, Kolkata and Hyderabad are tier II.

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