August 2008 News

  • August 2008
    • Attrition rate in BPOs falls by 20%
      The bugbear of the Indian BPO industry-attrition-seems to have stabilised at a broad level.From the highs of over 50% a couple of years back, attrition is hovering closer to 30% for most well-run BPO companies in India. Infosys BPO CEO Amitabh Chaudhry says, “It has stabilised or come down across the industry.” The Indian BPO industry employs around seven lakh people and accounts for revenue of $12.5 billion for FY08.
    • PO suppliers switch to end-to-end offerings: Everest
      The End-to-end offering segment is likely to get an upper hand with the mix of suppliers of Procurement Outsourcing (PO) services migrating towards the segment says an analysis of the PO supplier marketplace by the Everest Research Institute. Driving supplier migration and strategies is an evolving PO value proposition that more closely links procurement and finance processes thereby delivering new efficiencies and offering increased savings opportunities.
    • Infosys BPO invests Rs 171 cr in Phase-I
      Infosys BPO has invested Rs 171 crore for setting up the Phase-I of its second campus in Jaipur.Spread over 42 acres of land in the Mahindra World City special economic zone (SEZ), the campus will be built in phases, entailing a Rs 531 crore total investment. In the first phase, the company has created a built-up area of 3,69,100 square feet with a seating capacity of 3,200 people. ”Jaipur is becoming an exciting destination for the IT-ITeS industry. Our investment in the second campus firmly establishes Jaipur as a significant center for Infosys,” Infosys CEO & MD S Gopalakrishnan said.
    • Vijay Rangineni new CEO of Satyam BPO
      Satyam Computer Services Limited announced that Satyam Business Process Outsourcing (BPO), its business process outsourcing arm, has appointed Vijay Rangineni as its Chief Operating Officer (COO). Rangineni will primarily be responsible for driving business transformation across customer engagements, a critical component to stay ahead in the marketplace.
    • Wipro co-CEO sees tough times driving outsourcing
      Wipro Ltd is seeing strong demand from customers seeking to drive productivity and profits in tough economic times, co-Chief Executive Suresh Vaswani told reporters. Vaswani said Wipro aimed to beat its guidance for 2 percent sequential growth in IT services revenue this quarter — representing almost 37 percent year-on-year growth — and saw profit margins roughly stable this year.
    • Obama’s stance on outsourcing may not affect India: Nasscom
      Unfazed by US presidential candidate Barack Obama’s remarks on outsourcing, industry Nasscom on Friday said Indian software exports are unlikely to be affected by this as offshoring is a key economic decision for US companies.
    • Vertex cuts jobs as key clients call off deals
      UK-headquartered BPO firm Vertex, which was acquired by an Oak Hill-consortium last year, has laid off about 300 people in India this year. The BPO firm has suffered a series of setbacks, including the recent case of a key client, UK’s online train ticket retailer Trainline, moving back work from India.
    • No tax breaks if you outsource: Obama to US firms
      Making a strong anti-outsourcing pitch after getting the Democratic Presidential nomination, Barack Obama vowed to end tax breaks to companies that ship jobs overseas if he is elected to office.Playing to the gallery on the hot button issue of outsourcing in his acceptance speech, Obama kept up with the rhetoric on the subject that has been a staple of Democratic campaigning and went on to spell out what he would do as President on the front.
    • IT, BPO companies tap students to build brand image, find new hires
      In his final year at Jaihind College in Mumbai, Moin Danawala worked for Infosys BPO Ltd for a stipend that amounts to just a few movies and dinners out.But he didn’t do it for the money. The business process outsourcing, or BPO, arm of Infosys Technologies Ltd asked him to be a campus ambassador while he was in the college’s placement cell. He found ways to get final-year students to attend informational and myth-busting sessions on working in a BPO.
    • HDFC rural BPO employs weaker sections
      HDFC Bank has made an attempt in bringing employment opportunities closer to rural India by setting up of first ever commercial scale rural BPO at Tirupati in Andhra Pradesh. The Bank has robed in youths from weaker sections in nearby villages. With more than 500 employees at present, the bank has plans of ramping it over 1,500 by March 2009, making it as one of the largest rural BPOs.
    • Work from Home for BPO employees by Tata
      Work from Home for BPO employees?!?! Yes, you heard right! Now, the ghost-hourly work shifts may be the thing of the past as Tata Communications launches an innovative service which enables employees of BPOs to work from homeThe service, called Work From Home Solution, will help IT-enabled Services (ITeS) companies to give their employees an option to work from home, while maintaining the security and confidentiality necessary for the business, a press release issued said. It allows companies to empower their employees to tele-work in a secure and cost-effective manner. Tata Communications offers this facility as an overlay on its IP-VPN/MPLS network, the release said.
    • Trouble for BPOs as American states mull no-outsourcing laws
      Technology companies, already buffeted by strong headwinds from a worsening economic outlook in key markets, could be in for more trouble as a new anti-outsourcing backlash gathers momentum in the US.
    • HCL signs agreement to buy US’ Control Point
      IT services major HCL Technologies on Monday announced that it has signed an agreement to acquire US-based Control Point Solutions. The US company has an enterprise value of $20.8 million. Control Point Solutions is a privately-held voice, data & wireless telecom expense management (TEM) service provider. Under the deal, HCL will acquire four delivery centres in US with over 200 professionals.Control Point Solutions provides end-to-end business processes for ordering and procuring telecom services, paying for such services at appropriate rates and data analytics to manage and control telecom costs. It owns platforms that cater to both enterprises and telecom operators.
    • Cybernet-SlashSupport opens facility in Chennai
      With an investment of $4 million, Cybernet-SlashSupport (CSS) engaged in Tech Support, Software Testing and Development and Remote Infrastructure Management (RIM) services today announced that it has opened a new IT Services facility in city.The new facility, located on a leased two acre land at Madras Export Processing Zone (MEPZ) near Tambaram, would become operational from September 2008, a company release said.
    • Trouble for BPOs as American states mull no-outsourcing laws
      Technology companies, already buffeted by strong headwinds from a worsening economic outlook in key markets, could be in for more trouble as a new anti-outsourcing backlash gathers momentum in the US.Several states in the US, which accounted for more than 60% of the $40.4 billion (Rs1.76 trillion) India earned in software and service exports in the last fiscal, are proposing legislation that would restrict market access for Indian information technology (IT) firms.
    • GlobalTech set to buy Belgium’s Perfectview
      Ahmedabad-based GlobalTech, an embedded IT solutions provider, is all set to acquire a majority stake in Belgium-based Perfectview Belgie, a CRM (customer relationship management) IT provider, at a deal price of nearly e 2 million.With this deal, GlobalTech will get a wide-reach in the entire European market and access strong 1,600 client-base of Perfectview. The due-diligence of the all-cash deal is over and the deal will be closed shortly, a company executive said.
    • With customers in mind, Airtel rejigs BPO tie-ups
      Bharti Airtel, India’s largest cellular operator, is restructuring the partnership contracts with six BPO partners to whom it outsourced call centre operations in the last three years. Airtel, which is the pioneer of outsourcing model in the Indian telecom industry, is moving away from the ‘revenue-on-per-minute-basis” model to an ‘outcome-oriented’ structure based on customer satisfaction in a bid to improve subscriber service quality.
    • Philippine BPOs get Indian voice
      BPO firms, which have so far been big job creators in India, are now shifting employees to emerging outsourcing destinations like the Philippines. Not only are domestic BPOs such as Genpact, Sitel and Intelenet hiring in droves from the country for their Philippines operations, MNCs such as Citibank and Accenture too are relying on Indian talent.“While at the associate level, Philippines have talent that is comparable or superior to their Indian counterparts, there is a complete void at the middle and senior management levels. It’s largely Indian executives who fill up this void at Indian, local and captive BPO firms in the Philippines,” said Quatrro BPO Solutions MD Raman Roy.
    • We learnt a lot from our vendors: Aviva
      Earlier this month, in one of the more complex transactions concluded in recent times, UK insurance major Aviva that was running some of its insurance and back-office processes through build-operate-transfer contracts with three vendors in India, sold the entire operations to WNS Global Services for a consideration of $228 million.In addition, WNS also received a commitment from Aviva that is expected to generate $1 billion in revenues over a 100-month period.
    • Office space demand from IT firms to decline in Gurgaon, Noida
      The demand for office space from IT and ITeS companies is likely to fall in Gurgaon and Noida during the second half of 2008 on account of economic slowdown in the US, a global realty consultant said in its report.In its latest report for second quarter 2008, Jones Lang LaSalle Meghraj said that though Indian office markets have continued to post growth over the past few years, the last few quarters have seen a polarisation in the office markets in terms of growth in demand across the country.
    • BPO industry will continue to grow
      Despite the global economic slowdown and bad publicity against the industry, India’s outsourcing sector would retain its high growth rate, says R Chandrasekaran, president of Cognizant India, a leading global and business process outsourcing (BPO) company.The number of foreign companies outsourcing jobs to India is increasing geometrically, the industry leader told IANS in an interview.
    • Domestic BPOs feeling threatened
      The $1.6-billion domestic BPO sector is up in arms against the recent Supreme Court directive to establish a do-call-registry, thereby nullifying the existing do-not-call-registry, which was started last year.
    • BPOs come of age, attrition falls
      The bugbear of the Indian BPO industry–attrition–seems to have stabilised at a broad level.From the highs of over 50 per cent a couple of years back, attrition is hovering closer to 30 per cent for most well-run BPO companies in India.
    • High salaries troubling BPOs
      Amid growing economic concerns and high attrition rate, leading outsourcing firms such as WNS, ExlService and Genpact have warned that rising employee salaries could eat into their profit margins.The companies are also worried that fattening pay packets in India could prevent them from sustaining their competitive advantage since wage costs have been historically lower in the country as compared to the US and Europe.
    • Countrywide BPO unit to merge with BankAm arm
      The ripples of the subprime fiasco are being felt in many ways. The business process outsourcing (BPO) arm of Countrywide Financial in India, CFC India Services, is merging with Bank of America’s (BankAm) non-banking subsidiary, Continuum Solutions, as part of BankAm’s $2.5-billion global takeover of the loss-making Countrywide.While there will be no job cuts in India after the merger, all Countrywide staff will have to switch over to the BankAm salary structure, said a source familiar with the development. Some of the top management of Countrywide led by expatriate director Tom Jones may have to go. While BA Continuum MD Avtar Monga is expected to head the KPO segment of the merged entity, Countrywide’s head of operations in India, Gautam Bahai may be given the charge of mortgages, the source said.
    • TCS may beat IBM to buy Citigroup BPO
      Citigroup’s attempt to sell its captive BPO arm Citigroup Global Services (CGSL) is gathering momentum. Tata Consultancy Services (TCS) is close to acquiring CGSL (formerly e-Serve) racing past IBM, which was leading the race till recently. The deal size is expected to be pegged at $500-$550 million. An announcement to this effect is likely to be within three weeks.
    • Accenture bets big on pharma offshoring with end-to-end services
      Betting on the model of co-sourcing, outsourcing and offshoring of non-core activities, Accenture, a global management consulting, technology services and outsourcing company, is looking at expanding the scope and scale of its life science centre of excellence in India. With a change from a mere functional outsourcing to a transformational outsourcing, it is creating integrated capabilities from clinical trials to submission with a host of new services to help the pharma R&D industry.
    • Chandigarh, a ‘challenger’ location for IT, BPO
      With new software development hotspots such as Ahmedabad, Pune and Goa developing quickly, Chandigarh is a ‘challenger’ location for the information technology and business process outsourcing.’Location roadmap for IT-BPO growth: Assessment of 50 leading cities’, a study conducted by the global consultancy major A.T. Kearney and National Association of Software and Services Companies (NASSCOM), an Indian IT industry lobby, indicates that the BPO sector in the country has the potential to grow five-fold in the next five years.
    • BPOs responsible for security of women: Mah Govt
      Deputy Chief Minister of Maharashtra R R Patil, on Thursday Aug 14 said that the BPOs will be held responsible for the security of their women employees. “BPOs should provide adequate security for women employees,” Patil, who also holds the Home portfolio, told reporters, when asked about alleged gang-rape of a woman working with IBM BPO in Pune.
    • Industry-academia tie-up will help BPO sector: Som Mittal
      NASSCOM President Som Mittal today advocated launching of proactive programmes between the IT industry and academic world to meet the ever-growing talent needs of the BPO sector.Speaking after attending the signing of MoU between Indira Gandhi National Open University and Accenture India to launch a BPO-specific diploma programme here, he said a recent NASSCOM-Everest report indicated the potential for a five-fold growth in the Indian BPO sector from the present 11 billion dollars to 50 billion dollars by 2012.
    • Accenture, IGNOU launch diploma in BPO
      To help provide skilled manpower to the ever-growing demand from the BPO sector, Accenture and Indira Gandhi National Open University (IGNOU) will start a diploma programme in BPO Studies.Disclosing this at a press conference here, IGNOU Vice-Chancellor V N Rajasekharan Pillai said a ‘generic’ MoU was signed with Accenture today for a period of five years.
    • HTMT to buy two US firms by year-end
      The Hinduja Group-promoted business process outsourcing firm HTMT Global Solutions has set aside Rs 400 crore (Rs 4 billion) to close two acquisition deals in the US by the end of this year.Both US companies, with a headcount of 4,000 plus each, offer services in the finance and accounting and remote infrastructure management space in the US and Canada.
    • Accenture BPO to hire 13,000 people
      Global consulting and technology services major Accenture is planning to expand the company’s business process outsourcing footprint in India by increasing its headcount to 50,000 employees in the next five years and opening more centres in various cities.”We would be increasing our headcount from 37,000 to 50,000 in the next five years and set up more centres. Most of our business would be focused on the third party solutions and a little bit on the captive sector,” Accenture BPO Lead Executive P G Raghuraman told PTI.
    • Genpact eyeing at $50-400 mn acquisition
      Business process outsourcing company Genpact is looking at acquisition of companies in the US and India in the range of $50 million to $400 million, CEO Pramod Bhasin said on Tuesday, Aug 12.
    • US notice on patent outsourcing has caused a lot of confusion
      Is the US trying to discourage its companies from availing of cheap legal services from low-cost economies such as India? At the heart of the debate is a recent notice by the United States Patent & Trademark Office (USPTO) to persons and companies who send information regarding their inventions overseas in the course of patenting them. The notice clarifies that unless this ‘export’ of information is intended to facilitate the filing of a foreign (non-US) patent, it will need to be cleared by the Bureau of Industry and Security, or BIS, in the US Department of Commerce. The BIS is concerned with advancing US economic interests without compromising its security.
    • Publicis to set up outsourcing unit in India
      Publicis India, the country’s sixth largest advertising agency by revenue, said it is planning to set up an outsourcing division to cash in on the offshoring trend.With significantly higher margins in the business and a growing demand in the developed countries for Indian creative work, leading agencies such as Lowe, McCann Erickson, Ogilvy & Mather and Mudra, are mulling over outsourcing operations.
    • Europe job-losses not due to offshoring: Report
      Offshoring to low-cost places like India may have been perceived as the key reason for job losses in the Western world, but it is mostly internal restructuring that is behind the falling employment rate at European banks, a new report has said.”Less than 10 per cent of all publicly announced job cuts at European banks since 2002 are due to offshoring. Internal restructuring accounts for the lion’s share,” according to a latest research report by German banking giant Deutsche Bank.
    • Unified Communications: Lifeblood of the Contact Center
      Nearly one quarter of organizations polled in recent research have implemented unified communications in the contact center, writes Aberdeen’s Steve Lawrence. Unified communications — the convergence of technologies like instant messaging, e-mail, VoIP and e-commerce in or near real-time — has moved beyond the headquarters. What’s its impact in the contact center?
    • Govt allows BPO staff to work from home
      BPO agents can work and still enjoy their home ambience. The government has given its go-ahead to agents working at call centres — other service providers included — to work from home. The decision, thus, fulfils a long-standing industry demand to lower operating costs and bring in more people, including women and the physically-challenged, into the BPO workforce. According to a recent memorandum issued by the department of telecom (DoT), the concept of work-from-home agents has been introduced for companies registered under other service providers (OSPs) category which would have to pay a Rs 5-crore bank guarantee for this purpose. Services like call centres, network operation centres, tele-marketing, tele-education, tele-medicine and tele-trading come under OSPs.
    • Quatrro places $250 million bids for 3 US BPOs
      Raman Roy’s Quatrro BPO Solutions has lined up a $300-million war chest for acquisitions. The company has teamed up with two foreign private equity firms and has bid for three US-based BPOs. The cumulative value of these three bids is around $250 million.
    • India emerging as global hub for data hosting services
      Convergence of technologies, domain expertise and falling bandwidth tariffs are making India a hot data hosting and remote infrastructure management (RIM) site for global enterprises, says a top industry player.For the next wave of outsourcing in back office operations, top Indian players such as Reliance Infocomm, Tata Telecommunications, Sify and Netmagic Solutions are bracing up to provide a range of IT managed services, including data hosting, mission critical applications, networking and RIM to domestic and overseas enterprises.
    • Convergys shuts Mumbai centre
      Leading contact centre and billing solutions firm, Convergys Corp, is shutting down one of its eight centres in India. The company has asked most of its employees at its Malad centre to resign. The centre employs around 400 executives. The employees will be given a severance pay if they continue until the end of the month, according to statement issued by the NYSE-listed Convergys.Although there have been recession-related lay-offs in the past, this is the first such instance of an entire facility being shut down. Convergys has two centres in Mumbai in the suburbs of Thane and Malad. Sources said a few employees at the Thane centre have also been asked to leave.
    • Aegis buys Philippine BPO for $250 mn
      In its largest acquisition till date, the Essar Group-owned Aegis Communications has bought Philippines-based BPO PeopleSupport for $250 million. This is the BPO firm’s eleventh acquisition in the last three years.Aegis has signed a definitive agreement to buy the Nasdaq-listed firm, Aegis CEO and MD Aparup Sengupta said. Following the acquisition, PeopleSupport will delist and the Essar group will own 100% of the entity.

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