June 2009 News

  • June 2009
    • UK’s Lloyds banks on Wipro, TCS staff
      Even as protectionism gains ground among political hardliners in the UK and US, UK-based Lloyds Bank has initiated the process of replacing most its British IT workers with Indian nationals. Many of the Indian recruits will be from top-rung Indian IT majors like Wipro and TCS, who are also the bank’s vendors, said two industry officials familiar with the development.The bank, which has over 400 employees in its IT department, is learnt to be considering replacing over 80% of its IT workforce with those from India. “We continue to outsource areas of IT work to companies based overseas. At any one time, some of the staff from these companies will be based in the UK to deliver aspects of our IT projects which is standard industry practice, “ said a Lloyds spokeswoman over email. She added that the number of staff from overseas companies working with Lloyds in the UK varied depending on the projects underway and the skills required. TCS declined to comment since it was in the midst of its silent period while Wipro refrained from comemnting on “market speculation.”
    • Africa a call center alternative to India?
      ome US lawmakers and think tanks believe that Africa can be a much cheaper alternative to call centers in India.The issue came up for discussion during a Congressional hearing on US-Africa Trade relations. “Is there any possibility of having call centers in Africa, in your opinion?” asked Congressman Donald Payne, at the joint hearing convened by Subcommittee on Africa and Global Health of the House Foreign Affairs Committee and the Subcommittee on Commerce, Trade and Consumer Protection of the House Committee on Energy and Commerce.
    • WNS warns anti-outsourcing sentiments may hit business
      Indian BPO firm WNS Holdings has cautioned that negative public reaction to outsourcing activities in Western nations could adversely affect its business.Noting that the trend to outsource business processes could reverse, the entity has said that outsourcing is a “politically sensitive topic” in countries like the US and the UK.
    • Small BPOs: Showcasing Resilience in 2009
      You could be forgiven for thinking that the global economic downturn would have crippled most small and mid-size business process outsourcing (BPO) companies, but you would be wide off the mark. In reality, small and mid-size BPOs, while fighting a grim battle to survive, have fought admirably well. And they have done it not by doing anything spectacularly different, but by following the strategies of their bigger cousins, who have also been equally hit by the slowdown.As per estimates of IT Nasscom, India’s overall IT-BPO industry grew 11.77 per cent in 2008-09 compared to 33.9 per cent in 2007-08. BPO, at 18.22 per cent, showed the highest growth, albeit that was also a big drop from the previous year’s 31.55 per cent.
    • Sequoia Capital Exits Firstsource Solutions
      WestBridge Capital Partners, the earlier avtar of Sequoia Capital India, has sold a 3.26% stake in BPO services provider Firstsource Solutions Ltd. The stake has been sold for a little more then Rs 34.5 crore on both NSE and BSE in different transactions on Wednesday. The stake has been sold by Westbridge Ventures I Investment Holdings at a price between Rs 24.8-24.98 a share. WestBridge Capital Partners merged with Sequoia Capital to form Sequoia Capital India in 2006.
    • Birlasoft among 10 best outsourcing service providers in Australia, New Zealand
      Birlasoft has been named among the top 10 best outsourcing service providers in Australia and New Zealand region, by the International Association of Outsourcing Professionals (IAOP), in their list 2009 Global Outsourcing 100.Birlasoft has been chosen by an independent panel of industry-recognized experts from business and academic institutions. Birlasoft’s selection is based on a set of measurable parameters like excellence in service delivery, customer experience, technical competencies, management capabilities and growth.
    • UBS mulls outsourcing 5,000 jobs in two years
      Switzerland-based banking and wealth management firm UBS is considering outsourcing about 5,000 jobs over the next two years, a majority of which may come to India, according to people familiar with bank’s plans. This signifies an opportunity to win new business for Indian IT vendors such as Wipro and Infosys Technologies that already work with the Swiss bank.UBS recently appointed consulting firm McKinsey to advise it on the outsourcing process. The decision to outsource thousands of jobs is in line with the ailing bank’s cost-cutting strategy. UBS chief exec Oswald Grübel has already announced 7,500 job cuts across the firm till 2010. Switzerland’s largest bank by assets has accumulated more than $53 billion in writedowns in the global financial crisis and had to receive financial aid from the Swiss government.
    • Genpact sees pace in healthcare growth, eyes expansion
      Business process outsourcing company Genpact Ltd expects its healthcare services business to grow at “a good pace,” and is looking to expand the segment in the United States, India and the Europe, its chief executive said. “This is one (segment) that can grow at very large double digits mainly because it is a relatively untapped market,” Genpact Chief Executive Pramod Bhasin said in an interview.Genpact, which provides services in asset management, hospital administration, supply chain logistics and finance, gets about 7 percent to 8 percent of its revenue from healthcare outsourcing. The company, which draws majority of its revenue from banking, financial services and insurance, and manufacturing sectors, reported revenue of $1 billion in 2008.
    • Firstsource bags Rs 145-cr Idea Cellular deal
      BPO service provider Firstsource Solutions has bagged a five-year outsourcing deal worth Rs 145 crore from Idea Cellular. This will be for providing customer management and billing services in Idea’s Kerala and Tamil Nadu circles.“Firstsource will provide a suite of customer management interaction services, including billing, new product information, and plan detail-related interaction services to Idea from its centre in Coimbatore,” Mumbai-based Firstsource said in a statement on Tuesday that these services will be provided for the telco’s subscribers in English, Malayalam and Tamil. Firstsource is already a partner for Bharti Airtel, India’s largest telecom operator.
    • Indian BPOs to benefit from downturn: Premji
      The turmoil in the financial market is likely to spell good news for the Indian outsourcing companies, as the downturn will compel multinationals to seek further economies for sustenance in these tough times, Wipro Technologies founder Azim Premji has said.In an interview to the Sunday Times, Premji insisted that “the Indian outsourcing giants will benefit from this downturn, as all multinationals seek further economies.”
    • Xchanging to set up 1,000-seat BPO near Bangalore
      UK-based Xchanging, a Rs 460-crore (Rs 4.6 billion) business process outsourcing unit, is set to open a 1,000-seat high-performance processing centre in the Tier-3 town of Shimoga near Bangalore.The upcoming centre will be spread over 37 acres and is expected to be operational by the first quarter of next year, said David Andrews, CEO of Xchanging.
    • German, UK-based biotech companies eye India for outsourcing
      As part of the cost-cutting measures to combat global recession, German and UK-based biotech companies plan to outsource more work, transfer technology and tap India’s burgeoning biotechnology market.“We will see more collaborations in industrial enzyme technology, bio-food technology, renewable energies and regenerative medicine. Several companies plan to bring in over $100 million investments to India this year and set up production facilities here,” said Martin Pohle, consultant Bio Mitteldeutschland Gmbh, which works towards strengthening the BT industry in Anhalt, Central Germany.
    • Cost pressures push special effects outsourcing to India
      Outsourcing to India, long dominated by software engineering and back-office work, is expanding in new terrain: special effects for movies.India’s rise comes at a difficult time for US special effects outfits, some of which have buckled as the 2008 Los Angeles writers strike cut productions and the financial crisis curtailed financing. Executives in India say cost pressures are pushing studios to send more work to India, where special effects projects are up to 40% cheaper than in the US.
    • UBS puts BPO, KPO units on the block
      Switzerland-based bank UBS is believed to have put its business process outsourcing (BPO) and knowledge process outsourcing (KPO) units up for sale. The bank, which has centres in Poland and Hyderabad, is in talks with Indian IT companies such as Infosys and Wipro, said a person familiar with the possible transaction.The UBS India Service Centre (ISC), along with its Krakow (Poland) centre, is valued at around $200 million, according to another source.
    • TCS opens new outsourcing center in Mexico
      Tata Consultancy Services, India’s largest outsourcing firm, has opened a new center in Queretaro, Mexico, the company said on Thursday, a reflection of the growing move to diversify offshore locations.TCS said it would hire 500 people to work at the new center, its third in Mexico since entering the country in 2003.
    • Infosys bags $10 mn BPO deal from Microsoft
      US president Barack Obama’s anti-outsourcing policy has not affected Microsoft’s outsourcing plans. ET has learnt that the software giant has awarded a $10-million BPO deal to India’s second-largest IT company Infosys. This is a three-year contract for back-end support such as data processing, said a person familiar with the development.Microsoft, which has over 5,000 people on its payrolls in India, has outsourced most of its IT and development work to Bangalore-based Mindtree. It recently signed a five-year outsourcing deal with HCL Technologies.
    • PEs play white knights to BPO companies
      Private equity (PE) is undoing a part of US President Barack Obama’s drive against outsourcing by pushing companies to send their IT and back-office operations to cheaper destinations, which has helped Indian outsourcing companies close a number of deals with pharma, manufacturing, retail and energy utility companies.Since the start of the global downturn last year, a large number of private equity firms have been driving companies where they hold a significant stake to outsource systems and back-office activities that can bring down operational expenses by up to 20%, said people connected with the trend.
    • HDFC acquires 26% in Bangalore rural BPO firm
      India’s $12-billion BPO industry has now reached Bagepalli, a rural pocket sitting on the margins of the arid Rayalseema belt in Karnataka’s Chickballapur district. And it’s off to Purnia in Bihar as the rapidly expanding telecom and insurance firms seek native language help desks and data processing in the hinterlands, closer to their markets.>p> In a possible affirmation of its belief in the rural BPO story, HDFC, the country’s largest home finance company, has picked up 26% stake in Bangalore-based RuralShores Business Services, a rural BPO firm floated by six technocrats last year.
    • Domestic BPO biz to earn $6 bn by 2012
      The domestic business process outsourcing market, with a growth rate of 50 per cent over five years, grew faster than the exports market to reach nearly $1.6 billion revenues in the financial year 2008.Though it is smaller than the $11 billion BPO exports market, it is expected to reach $6 billion by 2012, according to a new Ernst and Young study.
    • TCS, Wipro eye $200 mn BPO deal from UK’s RMG
      India’s top tech firms TCS and Wipro, apart from several multinational rivals, are preparing to bid for a $200-million outsourcing contract being considered by Britain’s public postal service Royal Mail Group (RMG).The contract is part of a $2-billion technology-led transformation being planned by RMG, even as Britain readies to part-privatise its premier postal service and help it compete better with private sector rivals.
    • MNCs stick with plan for captive BPO units here
      Global corporations, still smarting under the downturn, are stepping back gingerly into India with elaborate expansion plans, while some others are winding up operations here. Standard Chartered, SuperValu, JP Morgan and Deutsche Bank are going ahead with expansion of their IT/BPO centres in India, notwithstanding the fact that a few such units have been sold to third-party service-providers.There are an estimated over 300 IT/BPO captives in India which employ 100 to over 5,000 people. Global financial services major Standard Chartered will be looking at doubling its headcount at its captive BPO operation in India-Scope International. “For us (Scope), we will continue to grow our captives in three locations-China, Malaysia and India. Investments in captives can make the parent company stronger, bigger and more lean,” said Edwin Nevis, CEO of Scope and group head of Global Shared Services Centres (GSSC), Standard Chartered Group.
    • Indian BPOs cut frills, set cost benchmarks
      American Airlines saved $40,000 in 1987 by reducing one olive in its meal. Big deal! Indian outsourcing firms are now saving hundreds of crores of rupees by cutting down on frills and setting cost benchmarks on everything from power consumption to employee pick-up services to the optimum size of work area.India’s top software firm Tata Consultancy Services (TCS), for example, saved Rs 250-300 crore by reducing wasteful expenses in the previous financial year.
    • BPO aspirant? Try 6 months @ IGNOU
      If you are dreaming of a well-paying job in India’s big BPO industry, here’s something to give you a head start. Indira Gandhi Nation al Open University (IGNOU), a popular distance learning university, is offering a six-month online course to train you up.The Indira Gandhi National Open University (IGNOU) claims to have got a good response to the “Business Process Outsourcing-finance and accounts” course, and feel the BPO industry in India will welcome the trained lot.
    • The 2020 challenge before IT-BPO
      What does India need to do to realise the full potential that information technology and outsourced business services will offer in the next decade by building on the capabilities that it already has?The achievement so far – exports of $47 billion by 2008-09, giving it a 51 per cent share of the global outsourced market. The challenge – by innovating and acquiring new capabilities which will make it more competitive than now, achieve by 2020 an over six-times rise in exports to $310 billion and a global market share of around 57 per cent, according to a scenario outlined in the latest Nasscom-McKinsey report.
    • Process management – Back-office service firms’ new profile
      For years, they helped clients offshore their processes to locations such as India and then managed these processes at a significantly lower cost.Now, Indian back-office service firms such as Genpact Ltd and ExlService Holdings Inc. are helping clients re-engineer these processes—without moving them offshore. Irrespective of whether the process is as simple as preparing an invoice, or as complex as opening a bank branch, the back-office service firms promise to do this cheaper, better, and faster.
    • Eastern Europe finds favour with Indian BPO companies
      Exploring new unploughed terrains, Indian BPO companies are now shifting their focus to Continental Europe for a change. Although Europe accounted for just 11% of India’s BPO revenue in 2008, Eastern Europe has gained favour with Indian companies which are looking to tap the specialised skills available there and address the growing outsourcing needs in Continental Europe.Rohit Kapoor, CEO, EXL Services, says, “We will be looking at expanding into Eastern Europe by this year-end primarily for language capability and doing work in finance and accounting areas.” Besides EXL, others like Patni and HTMT have also evinced interest in having their centres in Eastern Europe. Sanjiv Kapur, senior VP & Head – BPO, Patni Computer, said, “I think it is important to address Continental European and we are definitely evaluating the option of having a centre in Eastern Europe.”
    • Infosys, Wipro focus more on outsourcing in rural India
      Indian tech majors Infosys Technologies and Wipro are set to enter the booming domestic back-office service market, multiplying by more than one-third every year, and join a tech revolution happening in rural India.Infosys BPO, the $316-million back-office service arm of Infosys, plans to tie up with service providers with shops in rural areas and small towns for its domestic operations, company officials said. The revenue-share model will see Infosys getting the customers and the rural operators doing the service. The $395-million Wipro BPO too will enter the domestic market soon. It already provides technology and other supports to a few rural service providers and may also explore service delivery tieups with them, company officials said.
    • Jaipur may challenge Gurgaon as IT outsourcing hub
      Jaipur is fast becoming a rival for outsourcing hub Gurgaon, with large IT and BPO firms setting up offices in the pink city.More than 100 IT and ITES companies have set up operations in Jaipur in the past three years, growing the total exports from the city by 40%, to about $100 million in the current fiscal year, according to senior state officials.Although this is less than 1% of India’s total IT exports, the state government has been focusing on this sector mainly due to its potential. “The government’s attitude is very positive as it realises that this sector will contribute largely to the job market,” said Sanjay Tyagi, Software Technology Parks of India Rajasthan additional director and central head. Most of the IT companies are located in these parks and have seen an addition of 10,000 direct jobs.
    • Wipro BPO eyeing large IT deals with Fortune 500 majors
      Wipro BPO, the $395-million arm of Wipro Technologies, is eyeing four-five large outsourcing contracts in the $60-$150 million range with Fortune 500 majors in the telecom, healthcare, banking & financial services and retail space.These are some of the largest contracts that the company has chased in recent times. The company is also opening its second facility at Manila in Philippines in the next 8-12 weeks. This will be in addition to its centre at Subic Bay in the country.
    • Scotland: Desi companies new destination
      With over 400 BPO companies, Scotland is emerging as a credible nearshore-cum-onsite destination in mainland Europe for Indian firms, given its competitive costs and sizeable talent pool.However, the presence of Indian BPO firms has been very few in the region. Hero ITeS, part of the Munjal Group, had acquired Scotland’s biggest call centre Telecom Service Centre (TSC) for about $81 million in 2007 and others such as TCS provide contractor services here.
    • BPOs: Medium-to-long term outlook positive
      The slowdown-hit business process outsourcing industry is likely to face better times in the medium-to-long term and the downturn gives opportunities for Indian firms to acquire businesses abroad, industry officials said on Tuesday.IT and BPO industry Nasscom’s chairman Pramod Bhasin said the industry faced a ‘brutal year in many respects’ in the last financial year and the companies and customers were passing through ‘extraordinary pain’.
    • US firms protest Obama’s ‘No to Bangalore’ reforms
      Obama’s statement ‘Say No to Bangalore and yes to Buffalo’ which caused a raucous in Indian BPO sector is now seeing protests in US.American firms have launched a campaign against the new law that ends tax incentives to those firms which create jobs overseas.A Washington-based advocacy group comprising of American tech-companies, the Technology CEO Council on Tuesday, Jun 9 released a report which states that the tax reforms that were recommended by the president would result in job loss of about 2.2 mn Americans.
    • Is new US tax plan helping India?
      The global downturn has slowed the rapid growth in India’s outsourcing business, but only slowed it. In fact — because of the pressure on companies, and even governments, to reduce costs — many outsourcing businesses are booming.And a mood that was deeply uncertain just six months ago has turned much more optimistic. Unemployment has risen to 8.9% in the US, a 26-year high, increasing longstanding pressures to “keep jobs in America”. But managers of companies big and small, squeezed between political pressures and the necessity of slimming down to survive, are choosing the bottom line.
    • Infy sets up domestic BPO operation
      India’s second-largest IT services firm, Infosys Technologies, has set up a separate unit within its business process outsourcing arm (Infosys BPO) to concentrate solely on the domestic BPO market.The unit has already bagged a Rs 250 crore deal to set up a BPO for the income tax department and the company is soon going to sign a Letter of Intent for yet another government deal.
    • Infosys BPO sees FY10 revenue up 10-15%
      The outsourcing unit of Infosys Technologies Ltd expects revenue to rise 10% to 15% in the current fiscal year to March, but pricing remains a concern.“Clients are under pressure anyway so they are putting pressure across the board,” Amitabh Chaudhry, chief executive of Infosys BPO Ltd, told Reuters in an interview on Tuesday.
    • Wipro BPO to open two centres overseas
      Wipro BPO, the business process outsourcing arm of soaps-to-IT services player Wipro Ltd, plans to expand its operations in China and the Philippines by opening two more centres in these countries by the end of this year.
    • Hinduja Global to add 1,000 seats to Manila centre, invest $2.5 mn
      Hinduja Global Solutions, an outsourcing solutions firm, said on Friday it plans to invest $2.5 million to add 1,000 seats at its Manila centre.”The company has received an LOI (Letter of Interest) from one of its clients for incremental business, which will require additional capacity of 300 seats. Based on this and visibility of incremental demand from other existing clients, HGSL will increase the number of seats in Manila by 1,000,” HGSL said in a filing to the Bombay Stock Exchange
    • Outsourcers go speed dating to sign deals
      Some of the big offshoring players are now relying on ‘speed dating’ — a quicker and cheaper channel for selecting the vendor for their back-office and IT outsourcing needs — in an economic climate that is forcing these firms to reduce their sourcing time and costs.Under traditional outsourcing procedures, a contract worth $30 million to $100 million and above, could take up to nine months to finalise a vendor. This long process includes inviting bids from several vendors, spending time in understanding each vendor’s competency, and preparing a final shortlist of suppliers to choose from.
    • Recession hits small IT, BPO firms
      In March 2005 Sampath Nathan, a Bangalore-based first-time entrepreneur, started a small back office processing firm with a corpus of Rs 1.5 crore (Rs 15 million) to make the most of the IT/BPO boom. A large chunk of the funds came from his savings, but he also borrowed Rs 60 lakh (Rs 600,000) from a bank.The initial response was good. The company, Steve Infotech Solutions, started offering back office support services to US marketing firms for online lead generation. It also secured orders for providing voice-based processing services to a few telecom network providers in the UK.
    • Aegis BPO to up workforce by 12,000
      At a time when the Bangalore versus Buffalo City debate spooks BPO employees in India, Essar Group’s backoffice unit Aegis Ltd will augment its workforce by 12,000, summing up the total headcount to 43,000 by end of this fiscal.The company plans to hire 1,000 people every month in India and across United States, Philippines, Costa Rica and Africa where it currently has operations.
    • India Feels Less Vulnerable as Outsourcing Presses On
      The global downturn has slowed the rapid growth in India’s outsourcing business, but only slowed it. In fact — because of the pressure on companies, and even governments, to reduce costs — many outsourcing businesses are booming. And a mood that was deeply uncertain just six months ago has turned much more optimistic.Unemployment has risen to 8.9 percent in the United States, a 26-year high, increasing longstanding pressures to “keep jobs in America.” But managers of companies big and small, squeezed between political pressures and the necessity of slimming down to survive, are choosing the bottom line.
    • Tatas defer Kalinganagar rural BPO plan by 2 years
      The Tata Group has decided to defer its plan of setting up a rural business process outsourcing unit near the proposed steel plant at Kalinganagar in Orissa by two years. The infrastructure required for the centre is not yet ready due to an agitation by the locals, who are protesting the development of the six-million-tonne greenfield steel project in the Jajpur district of Orissa.The company, instead, is now planning to start a rural BPO in Tata Group’s traditional bastion Jamshedpur and plans to replicate the model in Orissa and a couple other places, a senior official of the Tata Group told Business Standard.
    • Riskiest offshoring cities in India
      India may have been hailed for long as the world’s top outsourcing destination, but a new study has named as many as eight cities in the country among the world’s 25 riskiest places for offshoring, mainly on concerns like terrorism, pollution and geopolitical issues.
    • BPOs turn outsourcers to cut telecom infrastructure costs
      India’s $47-bn IT outsourcing industry , struggling to cut costs without compromising on seat capacity, is now reinventing the wheel. Some of them have tied up with telecom companies for outsourcing their own communications infrastructure, a model now known as “hosting services” .Typically, BPOs will have to incur a significant cost upfront in procuring technical requirements that would help connect its centre in Gurgaon or Mumbai to clients across the world. Among these include an automated call distribution system, dialers, dialer licence and customer relationship management software.

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