BPO March 2009 News

  • March 2009
    • IT firms hiring pharma guys for life sciences bizGone are the days when doctors, nurses, pharmacologists and other professionals in the medical field were found just in hospitals or labs. IT companies are hiring them for their life sciences businesses, which involves research and development in the discovery/pre-clinical and clinical phase of drugs, manufacturing, analytics for sales and marketing and regulatory compliance.
    • IBM to withdraw its patent for offshore outsourcingThe world’s biggest IT company IBM will withdraw its patent application for offshore outsourcing, second time in past few years, after the US Patent & Trademark Office published the company’s latest filing seeking rights to a new ‘Method and system for strategic global resource sourcing’ last week.

      The patent was aimed at helping companies make their offshore outsourcing decisions with the help of a new mathematical model developed by five IBM engineers including two Indians–Mayank Sharma and Karthik Sourirajan. Other inventors included Ching-Hua Chen-Ritzo, Daniel Patrick Connors and Markus Ettl.

    • Patent Filing Describes IBM’s New Offshoring MathIBM last week filed a patent application for an offshore outsourcing methodology that’s intended to help companies minimize the financial risks associated with sending work overseas.

      The patent application describes a computer-driven approach for putting values on both the quantitative and qualitative attributes of a “global resource sourcing strategy.” For instance, the methodology takes into account the language skills and morale of offshore workers, as well as a list of the hard numbers involved in setting up an offshore operation, including labor rates and currency valuations.

    • 4 Tips for Better Outsourcing DealsNothing says “cost cutting” like a big outsourcing deal. Some firms will either panic or simply be forced to pull the trigger on outsourcing deals without laying the foundation for success with effective internal preparation. Some of these deals will work based on brute force and luck, but luck is not a good business strategy, and many deals will not meet expectations. For firms that must execute or renegotiate an outsourcing deal, there are some steps that improve the chances of success.
    • Nokia Siemens Opens Network Management Center in IndiaNokia Siemens Networks has set up a network management center in India, its second in the country, to meet the growing trend for operators to outsource network management and maintenance.

      The center in Noida near Delhi is a Global Network Solutions Center (GNSC), and is in addition to GNSCs that the company already operates in Chennai in south India, and in Lisbon, Nokia Siemens said on Monday.

    • India’s outsourcers fight to block trade barriersAmeet Nivsarkar, the Indian technology industry lobbyist, has had a lot of time on flights between New Delhi and Washington lately.

      Mr Nivsarkar, who handles international affairs for India’s outsourcing industry group, the National Association of Software Services Companies, is running a campaign to try to head off protectionism in the US as the recession there bites.

    • Offshoring curbs to hurt US badlyWith anti-outsourcing sentiments on the rise in markets such as the US, companies looking to take the offshoring route to reduce costs will have a difficult task on their hands. It could also mean a serious challenge for Indian outsourcing firms that are already battling the slowdown.

      Financial services firm JP Morgan Chase, which received $25 billion from the US government’s Troubled Assets Relief Programme (TARP), was recently asked by 43 members of the Congress to explain its outsourcing plans to India. The Senate had earlier cleared a bill restricting hiring of H-1B workers, or foreign workers on a specialty work visa, by companies receiving bailout from the government.

    • Five Trends That Challenge Technology OffshoringHaving your job get shipped overseas sucks and having it shipped away in a cruddy economy is a double whammy, but tech vendors will put jobs where they can get an acceptable (note, not necessarily the best) work done at the lowest cost.
    • Firstsource recasts operations; goes in for decentralisationBPO Firstsource Solutions has joined other firms such as Avesthagen and Bharti which have already announced or are set to announce a rejig of their organisational structures. The BPO firm has reorganised its business into four strategic business units, each of which will function as an independent profit centre. The reorganisation has already been communicated to its major clients.
    • Indian offshoring companies to hit a wallWith anti-outsourcing sentiments on the rise in markets such as the US, companies looking to take the offshoring route to reduce costs will have a difficult task on their hands. It could also mean a serious challenge for Indian outsourcing firms that are already battling the slowdown.

      Financial services firm JP Morgan Chase, which received $25 billion from the US government’s Troubled Assets Relief Program (TARP), was recently asked by 43 members of the Congress to explain its outsourcing plans to India. The Senate had earlier cleared a bill restricting hiring of H1-B workers, or foreign workers on a specialty work visa, by companies receiving bailout from the government. At the root cause in the US of the growing resistance against outsourcing is the rising unemployment. About 3.8 million Americans were rendered jobless in the past 12 months.

    • Mid-sized IT/ITES Cos May Merge To Challenge Top Tier Firms: Raman RoyRoy believes that consolidation in outsourcing will happen first with market share and then with acquisitions. He believes the mid-sized IT players will come together and pose a challenge to tier-II and then tier-I IT companies in the longer run signalling a consolidation in the business. He also believes outsourcing is a long term story and the developed countries need India’s talent to get their house in order.
    • Can Offshore Outsourcing Vendors Innovate?For quite a while, every offshore outsourcing service provider has cited lower costs as a reason to outsource–the latest “news” is innovation as their key differentiators. But, what is their definition of “innovation”?
    • vCustomer India to open centre in Chennai by April“vCustomer has already designed this facility to ensure compliance with its ISO 9001:2000 certification standards. Our Chennai centre will be equipped with the latest data communication facilities and redundancy capabilities, a pre-requisite for today’s 24×7 call-centre requirements which is a considerable part of our investment,” Joshua said.

      The company would recruit around 600 employees for the chennai centre, which would be in addition to the existing 4,000 employees working at its various centres, he said.

    • Outsourcing Your DatacenterHow much is too much? It’s hard to say — especially with datacenters. It’s a subject that has troubled CIOs who have over-provisioned in the face of soaring business demands and need to cut costs at the same time.
    • Market Research Outsourcing – Executive Briefing by ValueNotesValueNotes conducted an executive briefing session, at Regus Business Center, Friday, March 6th, 2009 to present findings of their recently released report ‘Market Research Outsourcing ‘Buyer Survey’. The session was attended by senior executives from Ugam Solutions, Dexterity, Exevo, Annik Technology, Cross-Tab, TCS BPO, WNSGS, Integreon, IDC, and Datamatics, among others.
    • Diacritech buys US-based KPO firmKnowledge process outsourcing (KPO) company DiacriTech, which has a headcount of 700 and facilities in Chennai, Madurai and Kottayam, recently acquired US-based e-publishing outsourcing firm LaurelTech Integrated Publishing Solutions for an undisclosed sum.

      “The acquisition will help position the company to work in a hybrid onshore/offshore model, capable of delivering design, editorial and project management capabilities in the US,” DiacriTech vice-president Gopinath ARM told ET.

    • Obama’s anti-outsourcing may hurt global tradeHis anti-outsourcing views may have struck a chord with middle-class Americans during his successful presidential campaign, but Barack Obama is having a tough time selling these policies to some of the largest US corporations.

      Top US corporations such as IBM, HP and Sun Microsystems, which have large outsourcing operations in India, are giving the cold shoulder to the anti-outsourcing policies of the Obama administration.

    • Infosys BPO targets flab, growthThe business process outsourcing arm of Infosys Technologies, Infosys BPO, has taken steps to reduce variable costs and accelerate staff redeployment by terminating the services of over 600 contract workers in February, according to sources close to the development. The workers, who were on multi-year contracts, included temporary workers, whose exact numbers are not clear.

      Simultaneously, Infosys BPO is adding another 2,000 workers by the end of March, which will raise its headcount above the 20,000 mark from around 18,000 at present.

    • Infosys sets sights on BPO, KPO acquisitionsAfter losing out in the race to acquire UK-based SAP consulting firm Axon to HCL Technologies last year, Infosys, India’s second-largest IT firm, says it’s keen on acquisitions in the BPO and KPO spaces.

      We are looking at back office functions where the companies perform very unique services with their own platform or intellectual property, said Infosys MD S Gopalakrishnan. There are opportunities in traditional BPOs as well and we are not restricted to KPOs. Captives in banking and financial services, manufacturing, and telecom are still considered hot property.

    • ANZ to offshore Melbourne back-office ops to India by end-2009Australian ANZ Bank is reportedly offshoring its back-office operations in Melbourne to India by the end of the year.

      According to an ANZ spokesperson most of the jobs about to be scrapped were in Melbourne with around 500 jobs being slashed.

    • Perot Systems Expands in ChennaiPerot Systems is adding a new facility for business process outsourcing in Chennai in south India, citing strong business from the health-care segment.

      BPO business from the health-care segment has been relatively unaffected by the economic downturn, Manish Jain, head of corporate communications at Perot India, said on Wednesday.

    • ‘Buy US’ clause seen in some IT outsourcing contractsAccording to the fine print of the final stimulus Bill, passed in the US, TARP recipients cannot outsource call centre work to foreign firms and can hire only a limited number of foreign workers on H-1B visas
    • ValueNotes named to the 2009 Black Book Top 10 Independent Research Advisor Firms ValueNotes, a leading provider of business intelligence and research, is named to the 2009 Black Book’s Top 10 Outsourcing/Sourcing Independent Research Firms ranking – honored for the 2nd consecutive year.
    • Tech-savvy India to be top outsourcing destinationIndia will remain a top outsourcing destination, said global financial firm Moody’s. This comes as a sigh of relief at a time when US President Barack Obama came heavily upon outsourcing.

      “India will remain a top outsourcing destination because of its tech-savvy and English-proficient urban workforce whose wages are much lower than their western counterparts,” Moody’s economy.com economist Sherman Chan said.

    • Worries grow about Obama’s outsourcing policiesAfter a decade of outsourcing helped transform India into much of the world’s back office, Indians are worried that President Obama’s new Administration – and the slowdown in the global economy – will cast a shadow over one of the fastest-growing sectors of their economy.

      Obama’s $787 billion stimulus plan will make it increasingly difficult for US companies receiving bailout money to hire foreigners on temporary work permits known as H-1B visas. The budget the President recently presented may also make it harder for US companies that send jobs overseas to receive tax benefits.

    • JPMorgan to up outsourcing to India by 25%The second-biggest bank of the US, JP Morgan Chase, which acquired Washington Mutual and Bear Stearns recently, will increase its outsourcing to India by 25% this year to nearly $400 million. It will also manage the integration of the acquired companies from India to bring down the cost of integrating different information technology (IT) systems.

      Right now, JP Morgan outsources $250-300 million worth of IT and back-office projects every year to Cognizant, TCS and Accenture, apart from to its own captive centre in Mumbai.

    • ITeS cos avoid 60,000 freshers by tapping ‘bench’India’s $50-billion IT services industry is tapping its staff on ‘bench’ – industry-speak for employees who are between projects or those sent for higher training – as they go beyond freezing variable pay, deferring hikes and increasing working hours to cut costs in the face of shrinking global demand.

      The impact: In the past few quarters, the industry has managed to avoid almost 60,000 fresh recruits, saving a substantial sum on salary and training.

    • Slump in IT-BPO biz spells trouble for cab ownersFollowing stringent cost-cutting measures by business process outsourcing units and IT firms across the country, the business of call centre cab owners has dwindled by anywhere between 5 and 40 per cent.

      Tarun Jain of Legend Transport Solutions,New Delhi, says his company used to transport seven employees in a single cab. Now they are forced to take nine. And, with more employees (especially those on the bench) being placed under the scanner and later retrenched on grounds of poor performance, the number of cabs required falls every month.

    • Offshore Outsourcing and Economic Recession: Impact on Global, Indian and European OutsourcersRecently, I decided to take a look at the impact of recession on offshore outsourcing: that the players will face pricing pressures, reduced profitability and less growth compared to the golden times, and that there will be an imperative to deliver tangible business value to customers. I looked for evidence in the quarterly results of outsourcers and, despite the absence of the predicted boom, I found that they had held on pretty well. And I decided to reexamine the results after another quarter passed.
    • Philippines Looks Beyond the Call Center for Future Outsourcing GrowthIndustry and government leaders want to move outside the voice-related tasks box to IT outsourcing to capture 10 percent of the global services market. But a dearth of management skills, the lack of a lucid marketing message to the world, and a global recession could hold the island nation back.
    • Layoffs & Outsourcing: Cutting the Wrong Employees Can Kill Your Business When the storm passed after the recession of 2001, some firms were in position to increase market share at the expense of those who had made unwise decisions during the downturn. In an effort to reduce costs, many companies implemented across the board cuts and wound up sacrificing their future.
    • US new threat to India in BPO sector?A downturn in worldwide economy, Satyam’s fraud case and the terrorist attacks in Mumbai and supply chain and shipping cost issues in China are causing US technology companies to pull back from the two traditional outsourcing locations.

      Citing these three global factors, an annual survey by BDO Seidman, LLP, one of America’s leading accounting and consulting organizations, suggested several technology firms would choose US as future outsourcing location over India and China.

    • Cost-cutting drives Japanese companies to IndiaWith Japanese companies leaving no stone unturned in their pursuit to pare costs as they try to cope with a deepening global recession, Indian IT outsourcing firms may finally be able to crack this $108-billion IT services market.

      Troubled auto-makers Toyota and Nissan are putting out outsourcing deals worth around $100-200 million each, while Japanese electronics majors are augmenting their existing contracts as they look for more cost-effective ways to maintain and support their global IT systems.

    • Indian IT exports to touch $62 bn by FY 2011Indian IT and BPO export is likely to touch $60-62 billion by FY 2011 from $31.4 billion in FY07, according to industry Nasscom.

      In its Strategic Review 2009 report, Nasscom said that in the current fiscal, the exports could touch $47 billion, without giving estimates for 2010.

      “Despite the unprecedented economic downturn, the industry will witness sustainable growth. The global technology spending outlook for 2009 is affected by the recessionary environment but it is expected to grow from 2010,” Nasscom said.

    • UK legal firm L&G staffs rail against TCSOver 100 workers of UK-based insurance firm Legal & General (L&G) are up in arms against the TCS management alleging that the company is replacing them with Indian professionals at lower wages, after India’s biggest software exporter started executing a five year managed services agreement with the insurer, signed last year.

      “This outcry appears to be a justified fear that locally hired staff are more likely to suffer in forthcoming redundancies, compared to TCS staff that have been brought in from India,” Mark Kobayashi-Hillary, offshoring director of The National Outsourcing Association of UK told ET. “If the situation has been accurately reported then these staff seem to have a genuine complaint,” he added.

    • Mexico’s Burgeoning Outsourcing Industry Threatened by Brutal Border ViolencePublic beheadings. Deadly shootouts. Kidnappings for profit. Not exactly the keywords you want associated with your country when you’re trying to build it up as an IT outsourcing destination. The harrowing headlines dominating the news from south of the U.S. border, not surprisingly, have proven to be poor public relations tools for the emergent IT services industry in Mexico. And the timing couldn’t be worse. Although it’s not clear what effect the U.S. recession will have on its North American neighbors, the Mexican economy and its services industries are tightly tied to the American economy.

      At a time when Mexico could, as a country, make huge gains in outsourcing from those American businesses seeking a departure from India, the opportunity is diminished somewhat with the cloud of drug violence along the border.

    • IT-BPO firms step up training spendIndian IT-BPO firms have stepped up investments by around 30-70 per cent on training and education of employees despite the economic slowdown.

      BPO firm EXL Services increased its training spend by 75 per cent in 2008, compared with 2007.

    • Infosys BPO techie robbed, suffocated to death in BangaloreUmesh Krishnan, a 27-year techie employed with IT bellwether Infosys Technologies, was robbed and suffocated to death early Monday by a gang of four suspected dacoits at his house in the city’s eastern suburb, the police said.

      “The incident happened in the wee hours when Krishnan was attacked by the gang, which barged into his house and gagged his mouth and nose with cello tape,” city joint commissioner Alok Kumar told IANS.

    • Aegis BPO makes $130-mn cash offer to US co ICTGThe Essar-group promoted Aegis BPO has made an offer to acquire ICT Group (ICTG), a Nasdaq-listed firm based out of the US, for around $130 million in cash. The acquisition proposal has been forwarded to the board of ICTG and is for all the outstanding common stock of the company at $8 per share, a statement from Aegis said.

      The proposed offer price is at a 71% premium to the 30-day average closing price of ICTG shares on the Nasdaq and approximately at a 122% premium to its closing on Friday last.

    • US cos eye more offshoring, Indian firms tentative: GartnerRecession-hit US companies are tilting towards increasing IT offshoring work but few Indian software firms have been chasing these deals, Gartner’s India research head said.

      Indian firms need to focus on revamping their sales model to market an ability to help generate cost savings and add value to the client’s operations, Partha Iyengar, vice president and regional research director at Gartner India, said on Monday.

    • US may end deferred tax on foreign incomePresident Barack Obama’s proposed removal of tax incentives for American companies outsourcing jobs could mean that large outsourcing customers such as GE and Citibank might have to pay certain taxes on their income from international markets, making it less attractive for customers to send IT projects to cheaper offshore locations such as India.

      While there is still no clarity on how such proposals would be structured, experts such as Rosanne Altshuler, a Rutgers University economist specialising in international taxation, told ET in an interview that the president could make it more difficult for firms to avoid US tax on income earned abroad by keeping it abroad.

    • UK railway enquiries now to be handled in IndiaThe Obama administration in the United States may be taking steps to streamline the outsourcing process, but no such qualms, it seems, exist across the Atlantic in Britain.

      The National Rail Enquiries is shunting British call centre jobs to India to save cash, reports The Sun.

      Around 70 positions could be outsourced.

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