April 2008 News

  • April 2008
    • IT, BPO revenue to touch $132 bn by 2012
      The Indian software and BPO segment will grow at a rate of more than 16 per cent to become a 132 billion-dollar industry by 2012, global infotech analyst International Data Corporation said on Wednesday.”The India domestic IT and ITeS market is expected to cross the Rs 2,00,000-crore (50 billion dollar) mark in 2012. This translates into a CAGR of 18.4 per cent in the five-year period. It was Rs 90,014 crore in 2007,” IDC said.
    • And now, BPOs are outsourcing their HR operations
      Talent crunch, attrition, high growth in multiple sectors is forcing companies to focus on their core businesses; read on to see how they manage people and payroll activities in this changed scenario
    • Software, BPO industry revenue to touch USD 132bn by 2012
      The Indian software and BPO segment will grow at a rate of more than 16 per cent to become a 132 billion-dollar industry by 2012, global infotech analyst International Data Corporation said today.”The India domestic IT and ITeS market is expected to cross the Rs 2,00,000-crore (50 billion dollar) mark in 2012. This translates into a CAGR of 18.4 per cent in the five-year period. It was Rs 90,014 crore in 2007,” IDC said.
    • Govt extends tax concessions on STPI by a year
      In a much-awaited relief for the IT industry, software companies can now enjoy benefits of the Software Technology Parks of India (STPI) scheme for another year. The government has extended the tax concessions under Section 10A of the Income Tax Act to March 2010. The scheme was to expire in March 2009 under the sunset clause provided in the scheme. On an average, IT companies would get a revenue benefit of at least 5-7% — on the effective tax rate — because of this extension. Normally, companies have about 50% business located in technology parks, export revenue from which is fully tax-exempt.
    • Talent crunch forces BPOs to dilute tasks
      The Indian BPO job may be getting onto a factorylike assembly line chore.Similar to automobile shop floors, where jobs are broken down into miniscule tasks and processes demarcated step by step, BPO companies in India are experimenting of breaking a complex activity into numerous simple chores, to be easily performed by even school passouts.
    • Wipro logs on to LPO services
      India’s third-largest software exporter, Wipro, has started offering legal process outsourcing (LPO) services as part of the knowledge process outsourcing (KPO) services business headed by former banker and Wipro BPO senior VP Ramit Sethi.The focus of the LPO will be to offer services such as patents and contract management rather than paralegal services and litigation support, where the clientele are mostly law firms.
    • RPO: Big outsourcing opportunity
      Aping the success of business process outsourcing industry, companies are keen on transferring all or part of their recruitment activities to external service providers, cutting down their human resource expenses significantly, say experts.”Recruitment Process Outsourcing (RPO) analyses client and candidates in the best possible way. Besides, it saves time and cost for corporates as well,” global recruitment firm Manpower’s official spokesperson told PTI.
    • BPO sector a bane or boon for youth?
      Is the BPO industry that has generated a whopping 700,000 direct jobs, earning the country US $ 11 billion in exports, a boon or a bane for the youth of India?This question was the topic of discussion at the Rotary House of Friendship here on Monday as Krishnakumar Natarajan, CEO of Mindtree presented the pros and cons of the industry that has seen 35 percent growth during the last three years.
    • IT-ITeS sees 23 M&As at $287 m in Jan-March
      The IT-ITeS sector wait-and-watch mode to ascertain the impact of the US subprime crisis has had a dampening effect on cross-border deals involving Indian companies in the January-March quarter this year. The sector witnessed cross-border deals worth over $287 million in the quarter, less than half of $596 million in the same quarter in 2007, according to data by Grant Thornton.
    • US slowdown puts BPO buyouts on fast track
      The BPO deal space for acquisitions is looking hot again after a lull for over the last six months. The US slowdown is pushing more third-party outsourcing firms and captive operations to sell out, according to industry players and investment bankers.Compared to the last quarter when both potential targets and buyers were in a wait-and-watch mode, large third-party BPO firms and integrated IT and BPO players are now keen on using their cash reserves to gain scale and new service lines, while potential targets that were holding out hoping for a recovery in their valuations are now interested in exiting before further value erosion happens
    • Satyam goes shopping for smaller KPOs abroad
      India’s fourth-largest software exporter Satyam Computer Services is scouting for a sub-$50-million overseas acquisition in the knowledge process outsourcing space to deepen its own BPO offering. Satyam recently integrated its BPO operations (formerly Nipuna) with itself for capturing greater synergies and also expand its service offerings.“BPO is one of the areas where we have not done any acquisitions so far. We are targeting small boutique BPO and knowledge process outsourcing (KPO) firms, where the deal size would be about $40-$50 million. We are scanning the markets in Europe, the US and the Asia Pacific region for the buyout as part of our inorganic growth strategy,” said a senior company official.
    • RSM McGladrey Sells BPO Unit to Quattro
      McGladrey’s some $18 million in billings and its 600 or so staffers, including 200 in the U.S., are joining buyer Quattro BPO Solutions, bringing Quattro’s headcount to about 2,000, according to the Economic Times in New Delhi.The Indian BPO company will also get McGladrey’s accounting technology platform and top leadership. Cesar Soranio, head of the finance process outsourcing unit of RSM McGladery, will now head Quatrro’s “finance and accounts” practice. This acquisition gives Quatrro the distinct advantage of offering accounting services to the mid-market segment. The only other player globally in the space, Savista, was earlier acquired by Accenture, according to the Economic Times report posted on the Quattro site.
    • JKH picks up 44% stake in Quatrro F&A
      John Keells Holdings (JKH), the largest public conglomerate in Sri Lanka, has picked up 44% stake in Quatrro F&A. Quatrro, along with John Keells, has acquired US-based RSM McGladrey’s financial process outsourcing (FPO) unit.Quatrro F&A is the new entity formed after the merger of Quatrro’s finance & accounting unit with the newly-acquired FPO. As part of the deal, John Keells will shell out $5.72 million upfront and will bring in additional funds over a period of time for the FPO acquisition.
    • Indian IT-BPO industry heads for slowdown
      The Indian IT-BPO industry is headed for a slowdown in growth this year but is on track to achieve its target of exports worth $60-billion by 2010, industry association Nasscom said on Friday.“There will be some slowdown but growth will happen. The $60-billion target will be maintained and achieved,” said Nasscom president Som Mittal. Mr Mittal said that the Indian IT-BPO industry needs to grow at 22-23% in future to achieve the $60-billion export target, a rate which could be achieved and exceeded easily.
    • Chrysler drives into India with BPO
      It’s long been one of Detroit’s Big 3 (along with General Motors and Ford). Lee Iacocca became a business icon after he successfully helmed a major turnaround by the company. The brands owned by it include the legendary Plymouth, Dodge and the original Jeep. And now, it’s driving into the India’s ITeS (information technology-enabled services) sector.According to people close to the development, Chrysler is setting up an 80,000 sq ft ITeS operation in RMZ Millenia IT park in south Chennai. Once it is up and running, it will be the first operation of Chrysler in India. The exact nature of the proposed centre’s operations is still not clear, but it is expected to strengthen Chennai’s claim of being among the best locations for automobiles-related ITeS globally.
    • Outsourcing takes the pain out of visa processing
      Not so long ago, getting a visa from the Indian consulates across the country was a nightmare; now, applicants are all smiles thanks to the smooth functioning of the method of outsourcing such requests.Thomas Mathew went to the Travisa Outsourcing Center in New York expecting the same treatment as he had received at the consulate earlier. “But things have changed. There was no long queue especially outside of the building. Services were prompt and employees were more helpful,” he said.
    • IT, ITeS sector to generate $60 bln by 2010: Nasscom
      The country’s IT and BPO sector is poised to grow at 25 per cent to generate 60 billion dollars of revenue by 2010, NASSCOM chief Som Mittal said. The announced the appointment of its new office bearers with Zensar Deputy Chairman and Managing Director Ganesh Natarajan taking over as NASSCOM Chairman and Genpact President and CEO Pramod Bhasin as Nasscom Vice-Chairman. The apex for IT and ITeS will have enhanced focus on the BPO sector and expects the revenue to grow by 33 per cent in FY08, exports to cross 40 billion dollars and domestic market to cross 23 billion dollars.
    • SitaGita.com launches blogging platform for women working in BPOs
      SitaGita.com, a portal for women, has launched Sigi BPO Buzz, a blogging platform targeted at women working in the call centre and business process outsourcing industry. According to the company, Sigi BPO Buzz aims to create an online environment for women where they could meet, discuss, share and voice their views about the advantages, disadvantages, and issues they face.
    • WNS ropes in Malinga as brand ambassador
      WNS Global Services, India’s second largest business processes outsourcing company, has signed on Sri Lankan fast bowler Lasith Malinga as its brand ambassador.It has thus become the first Indian IT services firm to have a brand ambassador. Accenture, a multinational company, is another one that has ace golf player Tiger Woods as its mascot.
    • Hillary focuses on incentivising ‘insourcing’ of jobs
      Taking forward her campaign against outsourcing, Democratic presidential hopeful Hillary Rodham Clinton has unveiled a policy initiative, which seeks to incentivise ‘insourcing’ of jobs within US, while cutting tax benefits to companies shipping employment abroad.The ‘insourcing’ plan unveiled in Pittsburgh, billed by Hillary’s campaign as ‘groundbreaking’, provides $ 7 billion per year in new tax benefits and investments to help companies create high-paying, high-quality jobs in the US and to compete in the global economy.
    • The next Sino-Indian war!
      The first Sino-Indian war was fought in 1962 over border disputes in the Eastern Himalayan region. The next Sino-Indian war, it seems, will be fought over a dramatically different turf: information technology outsourcing.China, so far the world’s manufacturing superpower, is making a credible play for a share of the IT outsourcing pie, much to India’s chagrin. China’s well-oiled machine, once it makes up its mind about rolling out a policy, is capable of doing so more effectively than most other governments.
    • Aegis buys AOL call centre operations in India
      Continuing its acquisition spree, Essar group’s Aegis BPO Services entered into an agreement with AOL on Monday to acquire its call centre unit in Bangalore for an undisclosed amount. Following this acquisition, which is expected to close at the end of April 2008, Aegis will take over around 1,200 AOL people and enter into the tech support segment. AOL”s call centre operations include both voice and non-voice activity and it will now be serviced by Aegis.Aegis managing director and CEO Aparup Sengupta said the deal with AOL was value accretive and gives them competitive edge to manage their customers. Aegis, which has consistently taken the inorganic route to grow the business having made eight acquisitions since 2003, would continue to pursue this strategy. According to industry observers, Aegis is likely to have paid around $25-30 million for AOL”s call centre business in India. Aegis has a top line of over $200 million (Rs 800 crore).

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