January 2009 News

  • January 2009
    • Nokia outsources its desktop maintenance and support to HCL
      Handset maker Nokia has outsourced its desktop maintenance and support in 76 countries to IT services firm HCL Technologies in a multi-million dollar contract spread over five years, starting this April. The deal also involves transfer of employees from Nokia.The contract will be serviced from HCL’s centres in India, China, Po-land, Finland and US. It involves providing multi-lingual helpdesk services in 13 languages, creating and maintaining new user accounts, and workstation management and security. The value of the contract and the number of employees being transferred to HCL Technologies was not disclosed.
    • TCS leads race for Sony’s $100-million outsourcing deal
      India’s largest software exporter TCS is leading the race to win an outsourcing contract worth $60-100 million from Sony, the Japanese electronics giant struggling under huge losses and a high cost operating structure.“As part of its attempts to reduce cost of managing IT operations, Sony is discussing a contract to manage its desktops and servers over 3-5 years,” a person familiar with the discussions told ET on condition of anonymity.
    • India holds a huge opportunity for legal process outsourcing
      A partner at UK-based law firm Allen and Overy Llp., Jonathan Brayne was recently named chairman of the firm’s India practice. He was in the country earlier this month to meet his counterparts at Trilegal, a domestic firm with which Allen and Overy has a client referral agreement.In an interview, he spoke about the emerging trends and opportunities in corporate law practice in the backdrop of the economic downturn and about tie-ups between Indian and international law firms.
    • Nasscom team to visit US, lobby Obama govt
      Representatives of India’s software lobby group Nasscom will visit the US next month in the first of three planned visits to meet members of the Obama administration, at a time when business from the US is slowing on account of a recession in that country and any anti-outsourcing wave could seriously hurt software and back-office services companies here.Although the anti-outsourcing sentiment isn’t as pronounced as it was in the early 2000s, it did surface during the run-up to the presidential elections, with the new President Barack Obama referring to it.
    • Infosys to set up BPO unit for I-T dept
      Infosys Technologies Ltd has been selected by the income-tax (I-T) department to set up a business process outsourcing (BPO) unit to carry out its routine work and give tax officials more time to focus on nabbing tax evaders. Taxpayers, too, will benefit, with refunds issued within three months of a tax filing and a call centre established to handle taxpayer queries.
    • Zensar bets big on hi-end BPO biz
      RPG Group company and IT major, Zensar, is betting big on the business process outsourcing (BPO) business and plans to get into the hi-end of the business, a top group official said.”We plan to get into the hi-end of the BPO business,” RPG Group Chairman, Harsh Goenka, told media here.
    • Obama effect: Pharma outsourcing first victim?
      With Barack Obama taking over as the President of the United States, outsourcing of activities from the US to the Indian market might get adversely affected, hitting the pharmaceutical sector the most, a top industry official said.”President Obama has a conservative stance on outsourcing of services since he wants to create jobs and protect existing ones (in the US). As the Indian pharma industry is sustaining mainly on outsourcing, especially from the US, the future does not appear very smooth,” pharma major Promed Group’s President Deepak Bahri told PTI.
    • LPOs set to ramp up India headcount
      The global slowdown is keeping the legal process outsourcing (LPO) sector in India extra busy these days. With the sudden surge in business in the LPO space in the last one year, firms such as Pangea3, UnitedLex and Legal Circle are looking at ramping up headcount in the entry and mid-management levels over the next few months.The turmoil in the financial services sector globally is driving more legal outsourcing to India both in the corporate and litigation space.
    • Third party BPO vendors subject to scrutiny after Satyam fraud
      Here’s some more collateral damage of the fraud at Satyam Computer Services: it may turn the tide against third-party Business Process Outsourcing (BPO) vendors. Post-Satyam, third-party vendors are being subject to closer scrutiny with higher level of disclosures being sought by customers.Not surprisingly, the captive units (that is, a foreign company’s own backoffice) may find it more attractive to ramp up their services rather than offshore some of their work to third-party players. Analysts say that costs of due diligence of third party vendors are set to go up by 15% and captive BPO units might gain in the process.
    • Why Sutherland Global Succeeds: An Interview With CEO Dilip Vellodi
      Sutherland Global Services was involved in business process outsourcing long before the term became widely known. Headquartered in Rochester, N.Y., Sutherland Global has 22,000 employees and operations in seven countries, including India, the Philippines, Canada, Mexico and Bulgaria.
    • India’s outsourcing sector faces bleak outlook: Analysts
      India’s software sector, reeling from a huge accounting fraud in one of its flagship companies, faces further problems as US firms scale back in a troubled global business environment, analysts said.Two of India’s top IT companies, Infosys Technologies and Wipro, have acknowledged that their revenues are under pressure.
    • Intelenet eyes assets worth Rs 100 crore
      The Blackstone-backed Intelenet Global Solutions is eyeing a buyout of five assets, collectively valued at around Rs 100 crore, in the domestic market. Each deal will be structured as an asset purchase, involving an upfront payment and committed business for 3-5 years, Intelenet executive vice-president Sandeep Aggarwal said.The cash savings expected to accrue from the contract will be paid upfront or some quarters later. “With sales (organic growth) slowing down, such inorganic growth strategies have come to the fore,” Mr Aggarwal said.
    • Allsec bets on domestic business to push growth
      BPO firm Allsec Technologies has reported a net profit of Rs 1.50 crore for the quarter ended 31 December 2008, compared to Rs 6.76 crore that it clocked a year back, as it copes with lower business from the US, where the company has maximum exposure.Allsec CEO and co-founder Jagadish Ramamoorthi said the firm’s numbers would improve steadliy as it has started focusssing more on the domestic market in the past year.
    • Reverse Swing: Genpatch BPO wants to buy IT major Satyam
      The NYSE-listed top BPO player, Genpact, is learnt to be exploring the possibility of acquiring Satyam’s business and is discussing the matter internally, sources familiar with the company told ET. Two persons independently confirmed that the top management of the BPO firm has been considering the matter for some time now.If Genpact’s move gains traction, it is bound to have significant implications for the entire BPO industry and is probably the first time that a BPO firm is considering the acquisition of mainstream IT capability. Genpact is the pioneer and market leader in the BPO industry.
    • BPO sector awaits the Obama call
      Over the past decade, the $800-bn global technology services sourcing business has found new destinations, India being the largest. Technology services companies here employ over 2 million people and do a whole spectrum of retail to research tasks, overwhelmingly for the US companies.Hit by slowing demand for their services, Indian outsourcing firms could also face new challenges dictated by policy directives from US President Barack Obama. The industry, however remains optimistic that it will find new opportunities as its business model is too compelling to be impacted by political moves.
    • Essar interested in buying Satyam BPO
      Essar group firm Aegis BPO has submitted an expression of interest for acquiring the BPO business of the beleaguered Satyam Computer Service Sources said Aegis submitted the EoI recently as the Essar group is trying to expand its BPO business.When contacted the company spokesperson declined to comment.
    • India to remain world’s back office
      India is likely to retain its tag as the back office of the world for the time being, but the country is expected to face competition from its neighbour China in the long run, a latest report says.India at present is in a comfortable position as the share of IT and IT-based services in China’s export revenues comes to only just above three per cent, compared to over 26 per cent in India, but China should not be underestimated in this sphere.
    • Service tax refund call rattles BPOs
      India’s business process outsourcing (BPO) industry is in a quandary with the service tax department asking leading companies including Convergys, Genpact and Vertex to return refunds paid to them on claims made before March 2007.The department argues that services provided by BPO units to clients located outside India don’t amount to export as these are “delivered in India”. The objection finds its origin in the amendments made to the export of service rules in 2006.
    • SCIOinspire to strengthen India ops
      SCIOinspire, a US-based KPO focused on the healthcare space, plans to expand its offshore operations in Chennai, as the city has a strong base of healthcare specialists, making sourcing of talent easier.Three Indian software engineers a couple of years back started SCIOinspire. Sequoia Capital India, Healthcare Enterprise Partners and SVB India Capital Partners funded the company.
    • How to Make Offshore Outsourcing Deals Withstand Crisis Situations
      Globalization is suffering from economic, financial and political challenges. IT organizations can improve results and mitigate risks by revamping offshore strategies. Implementing globalization no longer creates automatic competitive cost advantage. While nearly all companies have globalization programs, most were created randomly and reactively without strategic consideration. To gain competitive advantage, companies must strategically engineer the integration and synergy from service providers.
    • Ex-Satyam BPO chief in contention for CEO post
      Even as the buzz around Vivel Paul’s candidature as CEO is still doing the rounds at Satyam Computer Services, insiders say the government is considering a person who was an integral part of the company till three months ago.The name of Venkatesh Roddam, former CEO of Satyam’s BPO subsidiary Nipuna, is being seriously considered, since Paul is not keen to return to India, according to highly-placed sources. The search for a CEO has been following founder Ramalinga Raju’s disclosures of financial fraud January 7 and his subsequent arrest.
    • Teleopti announces general availability of the next generation workforce management solution
      Teleopti CCC is already one of the most advanced and flexible workforce management solutions on the market. Yet the advancements of Teleopti CCC, version 7 mount to hundreds of improvements directly advised by Teleopti’s global customer base and then developed by our in-house team at headquarters in Stockholm, Sweden. The outcome is a versatile, interoperable, and user-friendly workforce and performance management solution that will provide customers with the ultimate user experience and return on investments.
    • Aegis may bid for Satyam BPO
      Essar Group’s outsourcing arm, Aegis BPO, is set to make a bid approach in the next couple of days to acquire the outsourcing arm of troubled Satyam Computer Services, Satyam BPO, according to people familiar with the situation.”Satyam BPO’s international clients and its presence in telecom, banking and financial services make it an attractive target,” said one person familiar with the matter. A top Aegis executive, who asked not to be identified, confirmed that the firm was interested in acquiring Satyam BPO. When contacted by ET, the company said in a statement: “As a group, we constantly keep looking at growth opportunities . We would not like to comment on any specific transaction.”
    • BPOs homing in on work-from-home
      In 2008, when a series of nine blasts rocked Bangalore, Rajiv Shetty, who is Cisco’s vice president, strategic accounts, picked up his daughter from school, stayed at home to pacify his family and completed his official assignments for the day.
    • ValueNotes.com inks deal with Reliance Money
      Online financial portal, ValueNotes.com has inked a deal to distribute Reliance Money’s new subscription based product – Live Market Analysis. Reliance Money is a part of the Reliance Anil Dhirubhai Ambani Group.The announcement was made by Arun Jethmalani, CEO, ValueNotes.com today, who said, “This initiative will help provide value added content to all users of ValueNotes.com”.
    • Tech biggies may bag $4 bn outsourcing deals this year
      Tech biggies such as TCS, Infosys, Wipro and HCL are all set to get new outsourcing contracts worth $4 billion from top customers including British Telecom, Citi, GE and Bank of America this year. In a bid to cope with their tightened budgets, these companies plan to send their information technology works to offshore locations such as India.
    • Indian Outsourcers Face Scrutiny After Satyam Debacle
      The revelation on Wednesday by Indian outsourcer Satyam Computer Services that it had fiddled with its accounts will likely have an impact on other Indian outsourcers, according to analysts.Customers are going to do rigorous due diligence and risk management analysis of their offshore suppliers, said John C. McCarthy, vice president and principal analyst at Forrester Research. Companies that are likely to come under the closest scrutiny are family-run and midsized suppliers, McCarthy added.
    • Offshore Outsourcing: The Near-Shore Advantage Begins with Business Hours
      In the current economic climate, one of the most important responsibilities for CIOs is to develop creative solutions to help their companies make it through tough business conditions. Most often those solutions involve cost reductions in the way business is done, and a common choice is to outsource IT functions or special projects.
    • What’s the No. 1 Enemy of Outsourcing? Not Economic Recession
      As the economy worsens, the prospects for outsourcing and offshoring improve. Throughout 2008, the key word for the economy was “uncertainty.” While facing uncertainty, CIOs avoided significant changes to internal organizations or operations, including evaluating or implementing outsourcing. Most outsourcing initiatives are driven by a strong need for change and “economic uncertainty” hindered that need.
    • Strong long-term demand seen for outsourcing: Tholons
      The worldwide market downturn will impact the growth and margins of IT companies for the first two-three quarters of 2009 before picking up and ending the year on a stronger note as clients seek to cut costs and generate more revenues, indicates the latest report of Advisory and Research firm Tholons.
    • ITeS will see slow growth: IDC
      First the bad news: IT’s back to the future for the Indian domestic Information Technology and IT enabled Services (IT/ITeS) sector. 2009 will apparently see the slowest growth — 13.4 percent — since 2003, according to IDC India.
    • IT/ITES M&A Deals up 12% in 2008
      M&A deals for IT and ITES sectors were up by 12% in 2008 with Indian companies riding on the early fallouts of recession in the other economies. The recession provides an opportunity to the IT and ITES sector to consolidate by acquiring and buying-out companies across the globe. According to Grant Thornton India, the average deal size in 2008 increased to $32.86 million ($18.15 million).
    • Nasscom no authority to probe Satyam-WB episode
      Reacting to a request by an IT-BPO union UNITES to conduct inquiry into the Satyam-World Bank fiasco, IT industry Nasscom on Friday said that it has no authority to look into the matter.”It is a company-level issue and we do not have any authority to conduct an inquiry into the matter,” Nasscom President Som Mittal said, adding that he was yet to received a formal request in this regard.
    • IT-BPOs for probe into Satyam case to save industry image
      Fearing that the image of the Indian IT companies globally will take a beating following the Satyam fiasco,IT-BPO union UNITEStoday said that industry NASSCOM should institute an inquiry in association with World Bank on Satyam, which has been banned from doing business with the bank for eight years.”We want the inquiry to look into possibility that some vested interests, who want to tarnish the good name and reputation of the Indian IT companies and discredit Indian companies, may have played a roll in this episode,” UNITES Professionals India President Prithviraj Lekkad told.
    • Top 10 predictions for IT/ITeS market
      The domestic Indian IT/ITeS market will grow at 13.4% in 2009, the slowest since 2003, according to intelligence firm, IDC India. The forecast suggests that important structural changes, taking place on the back of a global economic meltdown, will propel a new ‘market order’ in the domestic Indian IT/ITeS industry.This new ‘market order’, termed as Growth Phase 2.0, will be quite different from the earlier phase, Growth Phase 1.0 (2003-08), during which the domestic market witnessed unprecedented growth, nearly tripling the market size from Rs. 34,000 crore in 2003 to Rs.1,01,031 crore in 2008, a CAGR of over 24%.
    • Infosys to integrate IT & BPO operations to cut costs, add value
      Infosys Technologies is looking at ways of increasing synergies with its BPO arm. In addition to easier movement of executives between Infosys the IT and BPO arms, the tech bellweather is also working on integration and business plans to maximise profits.The knowledge services business unit of Infosys BPO is headed by a former Infosys Technologies executive. So is the vice-president and head of sales of Infosys BPO. Communication, the second-largest revenue earning customer segment for the BPO, is also headed by an executive formerly with Infosys Technologies.
    • Tech companies to drive hard on corp governance
      This is strongly recommended reading for 2009: ‘Code Of Conduct and Ethics Policy.’ The carefully-crafted handbook often gathers dust as companies grow bigger. Just look at Satyam Computer Services.It grew from under $1 million to a multi-billion dollar enterprise in less than two decades, and was hauled over the coals for governance issues. The Satyam denouement is yet to unfold.
    • TCS to bag two BPO deals, post Citi arm acquisition
      Tata Consultancy Services (TCS) is in talks to win two large BPO contracts as a consequence of its acquisition of Citigroup’s BPO captive, Citigroup Global Services (CGSL), a company official said on Wednesday.India’s number one IT exporter also announced the completion of the CGSL transaction. The transaction is estimated at $ 512 million and includes a revenue commitment of $ 2.5 billion from Citigroup.

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