February 2009 News

  • February 2009
    • The 25 Most Dangerous Cities for Offshore Outsourcing
      If you have an outsourcing contract for work in Bogota, Columbia, Bangkok, Thailand, or Johannesburg, South Africa, you should be aware that they rank as the riskiest offshore outsourcing destinations in the world. Locations in India and Brazil also made this inauspicious list. Where do you outsource?
    • Tax refunds for BPOs
      Call centres, investment advisory and medical transcription services providers, marketing agents and money transfer companies, among others, can breathe easy. The government has spelt out that the services rendered by these entities can be considered as exports and can therefore be eligible for refund of tax paid on inputs to vendors.
    • Obama’s vow to affect IT cos; India against protectionism: FM
      As US President Barack Obama vowed to eliminate tax benefits for American firms shipping jobs to foreign countries, India has said it is against any protectionist move as it would affect its IT industry.”The IT industry will be affected due to the impact of financial meltdown…substantial number of Indian workers are there..we will have to address this issue…we are opposing protectionism, not only here but at every forum,” Finance Minister Pranab Mukherjee told Karan Thapar in an interview for Devil’s Advocate to be telecast on CNN-IBN.
    • Outsourcing cannot be stopped, says Anand Mahindra
      The outsourcing industry in India should not worry about the economic downturn or any protectionist move by the US as India provides quality products at lower cost, which foreign companies generally seek for, M&M group Managing Director Anand Mahindra said on Saturday.During the inauguration of group’s Light Engineering & handicrafts SEZs at Mahindra World City here, Mahindra told reporters that India and China are the emerging outsourcing hubs for foreign companies and the professionals here should be optimistic.
    • Egypt: Land of Pyramids, the Sphinx…and Outsourcing?
      India’s tech boom has inspired other developing nations to promote themselves as outsourcing destinations. The latest to try to cash in: Egypt.Egypt seems like an unlikely place for Western companies to send tech work and open call centers, but Tarek El-Sadany, a government official in charge of helping to grow the country’s information-technology industry, says that the country is well positioned to do these tasks—literally. Egypt is only two hours off of Greenwich Mean Time, so daytime there corresponds nicely with the European workday. For U.S. companies committed to outsourcing, Egypt can be a hop between the U.S. and India.
    • No outsourcing to hit Indian & US Cos alike
      India Inc expressed its disappointment at the US decision of no ‘tax breaks’ to outsourcing American companies and said the new measure proposed by the United States President Barack Obama reeked of protectionism.Obama declared the measure during his maiden address of the Joint Session of the US Congress on Tuesday, Feb 26. Experts are of the opinion that this trend of ‘no outsourcing’ may result in lead to lack of efficient workforce in the industry. They also accused US of ‘protectionism’ which is against ‘globalisation.’ Rajeev Chandrashekar, former FICCI President said that this move will effect both Indian and US companies.
    • No tax cut for outsourcing US companies: Obama
      Giving a jolt to the Indian IT and BPO industry, Obama made it clear that there will no tax concession for the US companies that outsource their jobs. This in-turn will reduce the prospect of Indian and other South Asian outsourcing sector.
    • UK looks to Indian offshore firms for reviving its government it systems
      At a time when the world’s biggest IT market US is evaluating protectionist measures against offshoring of IT jobs, Indian companies such as TCS, Infosys and Wipro are preparing to bid for around $2-3 billion worth of outsourcing contracts being fleshed out by Department of Work and Pensions (DWP), HM Revenue and Customs (HMRC) and the Ministry of Justice in the UK.
    • BPOs eye new geographies, buyouts, innovative strategies to stay afloat
      Employees of Headstrong India, a Noida based outsourcing company were a bit confused, till sometime ago. Even as the company communicated its measures to cut costs like curbs on business class travel, it went about doing costly buyouts.Last month, it bought US-based Lydian mortgage Business Process Outsourcing (BPO) firm for an estimated $30 million. But a clear message by its CEO clears all the confusion.
    • Wal-Mart Considers BPO Outsourcing
      Wal-Mart executives and ISD leaders are considering the once unthinkable: Wal-Mart is evaluating a business process outsourcing (BPO) contract worth approximately $300 million to $500 million in India, as it evaluates whether “to outsource non-core processes of procurement, merchandising, finance, accounting and payroll,”
    • Outsourcers Must Rethink Business Strategies
      The full impact of the economic slowdown will be felt by the outsourcing industry in the coming year or two. And outsourcers must be quick enough to react to developing conditions and rethink business strategies if they are to maintain growth in the face of a slowing global economy. This is the observation of Frost & Sullivan in its “Contact Center Outsourcing Trends in the Asia Pacific Market, 2008 — 20011” study.
    • Top 10 Outsourcing Vendors Score Big in Indian IT Services Market
      The top ten leading vendors cornered a 39 percent share in the US$4.8 billion Indian IT services market in 2008.The data has been unearthed by IT market research firm, Springboard Research. The top three players, IBM (10.8 percent of market share), Wipro (8.7 percent) and TCS (6.1 percent), took up a quarter share of the market, while the top ten ranking had many players with near 1 percent market share, the company revealed in its latest research report titled ‘India IT Services—Competing for Tomorrow’s Market’.
    • Satyam rural BPO arm scouts for funds
      GramIT, rural business process outsourcing initiative of the Byrraju Foundation, is in talks with various funding agencies ‘to expand the scope and presence of its rural BPO services,’ said foundation’s lead partner Verghese Jacob.
    • Economic Recession Fuels IT Outsourcing, Offshoring
      Companies flocked to IT outsourcing vendors as the recession unfolded last year and industry watchers expect more of the same as companies seek to slash fixed costs and deliver services with smaller staffs.
    • KPO will grow despite recession
      Knowledge Processing Outsourcing (KPO) sector in which India leads is set to grow upto $17 bn by 2010 of which $12 bn will be outsourced to India . Experts predict that despite recession India could maintain its leadership in the KPO sector with stable government policies.President and Director of Scope e-Knowledge Center, Chandu Nair said, “India has competitive people costs which is sustainable at least for the next 7 to 10 years. There is an established ITES (Information Technology Enabled Services) sector with good management, plus a reasonable sized talent-pool of human expertise in many areas. All this coupled with fairly stable government policies could help India in its quest to maintain leadership in the KPO sector by a wide margin.”
    • Global drug majors slow R&D offshoring to India
      New drug discovery and contract research have taken a back seat as global drug majors have slowed down their research and development offshoring to India.The domestic players could only manage three small deals in January since September last year. These three are between Intas Biopharma and Canadian generic major Apotex, Biocon subsidiary Syngene International and US biotech firm Sapient Discovery, and Jubilant Biosys’ drug discovery partnership with US-based BioLeap.
    • Outsourcing cos betting on India
      The scions of India’s outsourcing industry gathered in Mumbai to kick off a subdued version of their annual conference, hosted by industry group Nasscom.If the conference was any indicator, financial turmoil in the US and shifting patterns of global growth are making the market for offshore services more decentralised. With budgets shrinking and decision making frozen in the developed world, India has become a particular focus of hope.
    • India’s 1st rural BPO, Fostera, set to hire 500 more youth
      He was selling puppies till a year ago in the backward Krishnagiri district of Tamil Nadu. But when India’s first rural BPO, Fostera, set up shop on a narrow lane at Sanasandiram village in his district, R Muraliraj turned into a confident ‘call centre guy.'”I am a higher secondary graduate but could not speak English at all when I came here,” he smiles, putting on his headphones to talk to ICICI customers in Guntur in Andhra Pradesh in fluent English.
    • TCS plays safe on outsourcing deals
      Tata Consultancy Services (TCS), the country’s largest software services firm, will conduct a greater scrutiny of outsourcing deals in the market to evaluate the prospective clients’ ability to make payments, its CEO said. TCS had recently seen one of its clients, Nortel Networks, file for bankruptcy.“We will qualify the deal pipeline much more to see the clients’ ability to pay back,” TCS chief executive S Ramadorai said. He added the outsourcing market continues to see a healthy dealflow. Telecom equipment maker Nortel filed for bankruptcy protection in the US and Canada last month. Apart from TCS, other Indian IT firms such as Wipro and Infosys counted the Toronto-based firm among their clients.
    • Outsourcing firms look to India for growth
      With Western companies slashing budgets and putting decisions on hold, outsourcing companies in India and abroad are turning to the Indian market _ long ignored because of its small size _ as a source of future growth.“The IT industry has looked outwards. Now it is time to look inwards,” Commerce Minister Kamal Nath told delegates gathered Wednesday for an annual conference hosted by industry group Nasscom.
    • Indian companies may be let down on US bank M&A front
      ndian IT firms, which were banking on big integration projects from the mergers and acquisitions of banks in the US, may be disappointed.The acquiring banks are opting not to integrate these systems and instead simply, scale up their own systems and scrap the systems of the target banks, said Gartner’s VP-research, Peter Redshaw, who’s focused exclusively on financial services outsourcing. “These are typically migration projects and much smaller,” he said in an interview with ET.
    • Syntel reports 38% increase in Net Income for year ended December 2008
      Syntel’s total revenue for the fourth quarter increased 11 percent to $104.7 million (Rs.516 crore), compared to $94.0 million (Rs.463 crore) in the prior-year period. The Company’s gross margin was 48.3 percent in the fourth quarter, compared to 39.4 percent in the prior-year period (890 bps increase).
    • Teleopti launches world-class workforce management tool for free
      The forecasting function of Teleopti’s award winning workforce management solution Teleopti CCC is now available for free download. With today’s launch of Teleopti CCC Forecasts, Teleopti has developed a unique offering. It is the first advanced forecaster on the market that is completely free of charge, previously unheard of! This is no limited-time gimmick but a tool which will always be available free-of-charge.
    • IBM seen controlling half of local offshoring market by 2010
      IBM, the world’s biggest software services provider, continues to gain more business in the domestic information technology market, and is set to control almost half of the domestic outsourcing market by 2010.At least two experts tracking India’s $5.6-billion market for software outsourcing said, requesting anonymity, that IBM currently has around 36% share, and is set to control almost half the domestic outsourcing market by 2010.
    • United Airlines shuts down call centre in India
      United Airlines confirmed that it was closing its call centre in India and transferring 165 jobs to the United States, which is reeling from layoffs amid recession.The move came about a month after UAL Corp, parent of the third biggest North American carrier, said it was cutting 1,000 more jobs, pushing the total to 9,000 by year’s end, to help stem losses.The jobs in India will be transferred to call centers in Chicago and Honolulu, Hawaii, and filled by workers who now handle reservations, the Chicago-based airline said.
    • Indian cities are emerging IT destinations: KPMG
      KPMG, one of the major global consultancy firm includes three Indian cities to the list of top 31 locations across the world as key emerging alternatives to the existing places for IT and ITes industry.KPMG in its report- ‘Exploring Global Frontiers- the new Emerging Destinations’ said, as the existing favourite locations for shared services and outsourcing have started to become saturated the newer cities are emerging, offering new and improved incentive packages and talent, that are better geared for the IT and ITeS industry.
    • HCL BPO arm partners Ketera for source-to-pay services
      HCL Technologies on wednesday said its BPO arm and Ketera Technologies have entered into a strategic alliance to provide source-to-pay services.Through this partnership with Ketera, HCL BPO will deliver full procurement outsourcing across industry verticals, HCL said in a statement.It added that the platform would help maximise efficiencies, reduce costs, and increase productivity for its clients.
    • HDFC to set up backoffice hub in eastern India
      HDFC will set up its first back office operations hub in eastern India at the satellite township of Rajrahat at an initial cost of Rs 6 crore, a top official said here on Tuesday.”We are initially taking 30,000 square feet of space in the IT hub of Rajarhat. We are taking a floor at Ecospace,” HDFC vice-president and regional head (eastern India) Madhusudan Hegde told mediapersons on the sidelines of a function.
    • Nationwide Outsources Check Processing to Unisys
      Nationwide has outsourced its cheque processing to Unisys, in a bid to cut costs and free staff time.The building society, which is the world’s largest with over 13 million customers, is making the move as part of a seven-year business process outsourcing deal it signed with Unisys in December 2007.
    • Politics and Economics of Offshore Outsourcing
      Offshore outsourcing is forcing major changes in terms of job content, location, wages and job security–it’s an economic reality and many are completely unprepared. Instead of debating its impact on the economy, experts suggest that the U.S. transform its social safety net (unemployment insurance, tax credit, health insurance, pensions etc.), prepare the workforce for the future, and climb up the comparative advantage ladder through innovation.
    • IBM local outsourcing pie to be 50% by 2010
      IBM, the world’s biggest software services provider, continues to gain more business in India’s domestic information technology market, and looks to control almost half the domestic outsourcing market by 2010.According to at least two experts tracking India’s $5.6-billion market for software outsourcing, IBM currently has around 36% share. “In terms of revenues, IBM’s share will be 50-60% already,” an expert who helps Indian enterprises plan their IT spend told ET on Monday. “In terms of the number of contracts, the company should be able to achieve 50% share in a year or two.”
    • Amtex Systems to expand Indian BPO operations
      Amtex Systems, a fast growing New York based IT consulting and service company has announced expansion of BPO division of its Indian subsidiary based in Chennai. It is said to be investing over Rs 6 crore in setting up a new 4000 sq ft facility here with a 150 seater capacity. This will be in addition to its existing facility.In a statement, Amtex said it will increase the headcount in the next six months and is looking to hire close to 200 people-both with experience and at the entry level. Amtex President,Sunny Polkala, who founded the company in 1997 said the BPO division is expected to contribute 50% of its overall revenue in the next financial year.
    • Pressure on outsourcing: Naascom
      India’s celebrated IT outsourcing industry, which contributes about 25 per cent of the country’s total exports, is feeling the pinch as it struggles to deal with the avalanche effects of the global financial crisis.The National Association of Software Services Companies (Nasscom), India’s software services lobby, this week added to the gloom by downgrading the sector’s export revenue growth to 17 per cent from 21 per cent for the year ending March 2009, as demand from developed markets fell.
    • India’s Outsourcing Revenue Will Grow Slowly
      India’s outsourcing revenue is likely to grow more slowly in the Indian fiscal year to March 31 as a result of the global economic downturn, according to a local trade .The country’s export revenue is expected to reach about US$47 billion, after showing growth of 16 to 17 percent, the National Association of Software and Service Companies (Nasscom) said on Wednesday.
    • IT-BPO revenue to touch $60 bn: Nasscom
      Nasscom, the premier trade of the Indian IT-BPO industry, on Wednesday said the aggregate revenues of the sector are expected to reach $60 billion by FY09.Export revenues for the Indian IT-BPO industry, excluding domestic market and hardware exports, are expected to record growth of 16-17 per cent and clock revenues of $47 billion in 2008-09.

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