November 2009 News

  • November 2009
    • HCL eyes $100 million deals from Infrastructure outsourcing
      HCL Technologies, which won over $350-million contract from Reader’s Digest earlier this year for managing the publisher’s desktops and servers, sees several $100-million infrastructure outsourcing deals in the pipeline, as more customers seek to send their infrastructure management work offshore.

      The global IT infrastructure market has been growing exponentially over past few years. The top 15 vendors analysed by Forrester in a recent report provided remote and onsite services for about 16.7 million desktops, 1.7 million servers and 23.4 million users globally. These vendors, including IBM, HP-EDS , CSC and some Indian tech firms including HCL delivered $83.9 billion worth of infrastructure services last year.

    • LPO industry to suffer from economic downturn for short term
      Facing the heat of recessionary pressure, India’s legal process outsourcing (LPO) industry is likely to see a decline in revenue and is expected to reach $440 million dollars (around Rs 2,000 crore) by 2010 end, a report said.

      According to a report by business intelligence & research firm ValueNotes, global economic downturn has slowed down LPO industry and is changing the service provider’s landscape.

    • HCL Technologies bags $200-m deal from UK firm
      HCL Technologies said it has bagged a long-term deal worth about $200 million from UK-based insurance firm Equitable Life Assurance Society.

      “The contract is ‘evergreen,’ it is for a period of 30 years. The revenue from the deal will come (mostly) in the first five to six years and decline gradually as policies decline,” HCL Technologies’ senior vice-president Stuart Drew said on Monday.

    • US banks set to begin offshoring
      As America’s top banks emerge from the Troubled Asset Relief Program (TARP) and the economy shows signs of recovery, Indian outsourcing vendors Tata Consultancy Services, Infosys and Wipro are set to gain new offshoring projects worth around $1 billion over the next 1-2 years.

      Among the firms seeking operational efficiencies by outsourcing non-core IT and back office projects to India are JP Morgan, Goldman Sachs and Morgan Stanley—which received approval to buy back government stake worth $68 billion earlier this year, as well as American Express, Bank of New York Mellon Corp and Capital One—which have started repaying government debt. Many of these banks had deferred new offshoring decisions as they attempted to cope with TARP funding requirements and internal restructuring processes.

    • Infosys BPO’s CEO Amitabh Chaudhry quits
      Amitabh Chaudhry, chief executive of Infosys BPO Ltd, the business process outsourcing arm of India’s second largest software services exporter Infosys Technologies Ltd, resigned on Monday.
    • Intelenet likely to buy US firm in $30 million deal
      Back-office services provider Intelenet Global Solutions is in talks to acquire a US-based firm with capabilities in healthcare records processing and IT, in order to address the lucrative healthcare records conversion industry. Intelenet, which is controlled by private equity firm Blackstone, won a $300-million contract from one of Blackstone’s portfolio firms in the healthcare business in the US earlier this year.

      The acquisition is likely to be $25-$30 million, and will be its fourth if it goes through. Its earlier acquisitions of Travelport and Upstream BPO helped it diversify into the travel domain, while its acquisition of Sparsh BPO helped it diversify into domestic outsourcing. The latest acquisition it is pursuing will boost its efforts to diversify into the US healthcare market. Intelenet, which was a joint venture between Barclays and HDFC till the management-led buyout by Blackstone, predominantly earned revenues from financial services clients.

    • India to get $1 bn in IT outsourcing contracts
      IT outsourcing vendors, TCS, Infosys and Wipro, are set to gain contracts worth about $1 billion as US banks emerge from the Troubled Asset Relief Program (TARP), a media report said.
    • India’s BPO market to grow to $6.82 bn by 2013
      India’s domestic BPO market, with nearly 500 players, is set to grow at a CAGR of 33.3 per cent to touch revenues of $6.82 billion by 2013, up from $1.62 billion recorded in 2008.
    • Cost-Saving Secrets of the Outsourcing Insiders
      Ten tips from outsourcing experts and practitioners on how to save money on external consultants with do-it-yourself outsourcing.
    • What Matters Most in Outsourcing: Outcomes vs. Tasks
      No one who outsources IT really cares about servers or switches or man-hours. They want business results. Outcome-based outsourcing promises to deliver those results, but moving from input-based pricing to outcome-based contracts is easier said than done.
    • Firstsource’s Ananda Mukerji: In BPO, ‘There Is a Strong Need to Specialize’
      Firstsource Solutions, India’s third-largest pure-play business process outsourcing (BPO) company, has always been slightly ahead of the curve. When every BPO outfit in the country was selling on the basis of cost arbitrage, Firstsource was busy buying or setting up centers abroad. When others were tapping the apparently evergreen banking, financial services and insurance segment, Firstsource foresaw the pitfalls of relying on a single vertical, and diversified into health care. And today it has a first-mover’s advantage in the domestic BPO business.
    • Tax BPO services at 11-13% over cost, says Deloitte
      Foreign software and BPO services companies should be allowed to pay tax on a presumed rate of profit on inter-company transactions. The tax constancy firm Deloitte has suggested a 11-13% rate over costs for both software and BPO services in a white paper released on Tuesday.

      Introduction of the safe harbour rules is expected to improve the foreign investment climate in the information technology and IT enabled services sector such as BPOs by providing clarity on tax liability and simplicity in tax administration.

    • Indian ESO to touch $50 bn by 2020
      Consulting firm Booz & Company on Tuesday said the Indian engineering services outsourcing (ESO) industry will achieve $50 billion in revenues by 2020, and generate employment for 25-30 million professionals for delivering these services.

      Currently, India exports engineering services worth $7-9 billion annually, Booz & Company said at the Nasscom global engineering summit in Mumbai.

    • Infosys BPO acquiring US-based McCamish Systems
      The business process outsourcing (BPO) arm of Infosys Technologies has inked a deal to acquire US-based McCamish Systems.

      The company made the announcement on Thursday, Nov 12 informing that the acquisition will be made with an upfront payment of 38 million dollars, along with an additional 20 million dollars based on targets.

    • Outsourcing arm of Dr Reddy’s unit revenue to grow 10-15% in FY10
      Dr Reddy’s Laboratories expects revenue at its pharmaceutical ingredients and outsourcing services unit to rise 10-15% in this fiscal year, helped by stability in global economy, an official said.

      Dr Reddy’s, India’s No. 2 drug maker by sales, is seeing a pickup in business in the second half of the year to March 2010 versus the first half when the recession crimped demand for active pharmaceutical ingredients by global generic players.

    • RPO market soars on rise in deal signings: Study
      A new industry study by the Everest Group on the changing trends in the Recruitment Processing Outsourcing (RPO) indicates that the RPO market has shown sustained growth in terms of deals from past two years.

      However, the study found that the nature of the deals in 2009 has changed on decreased hiring volume, which is leading to a more selective and small-sized deals.

    • Infosys BPO to hire 2000 people in coming months
      Infosys BPO has announced that it will be hiring as many as 1,500 to 2,000 people in the coming months.

      “We plan to hire 2000 people in the next four-five months or by the end of this fiscal. Currently, we are 16,000 people in India,” Infosys BPO CEO Amitabh Chaudhry said while talking to reporters on the sidelines of the World Economic Forum.

    • Infosys BPO eyeing acquisitions in Europe, US
      The back-office arm of Infosys Technologies, India’s No. 2 software services provider, is looking at acquiring firms in Europe and in the United States of $50 million to $100 million, a top official said on Monday.
    • EXL acquires AmEx’s travel services captive in India for $30 mn
      Nasdaq-listed BPO firm EXL Service Holdings on Friday announced acquisition of American Express’ travel services captive in India for $30 million, and reported a 13.7% rise in revenues at $48.2 million during the third quarter ended September 30, 2009.

      The company’s net profit during quarter also improved to $4 million, as against a loss of $1.1 million in the same period last year.

    • TCS, Infosys, WNS redraw strategy with exposure to pound, euro & peso
      As it exporters look to expand beyond US markets, their currency management is getting more complex and challenging. Until a few quarters ago, most of them focused only on hedging the rupee against the dollar. But with the recent volatility of the pound, euro and other currencies against the dollar, coupled with their growing exposure of the companies to these currencies, they now need to hedge against these inflows as well.

      For instance, top exporter Tata Consultancy Services (TCS), now takes dollar-rupee , pounddollar and euro-dollar hedges. Similarly, IT bellwether Infosys Technologies hedges against movement in Australian dollar, pound and euro. Earlier, a firm could assume a near constant rate of pound to dollar and stick to taking only dollar-rupee hedges.

    • Outsourcing gets a boost as global banks expand captives
      Top multinationals banks continue to set up new back-office units or expand their existing captive operations in India even as the model is under criticism for being high cost and less efficient than third-party vendor operations. Wells Fargo, Ingersoll Rand and Standard Chartered are some of the banks and companies that are setting up or expanding their back-office centres in India.
    • Thomson to expand Bangalore operations
      Global information services provider Thomson Reuters will be looking at expanding the operations at its captive technology centre in Bangalore as it considers this unit strategic for its world-wide IT requirements. Without getting into specifics of the expansion plan, James Powell, CTO, Thomson Reuters said, “We will grow over time and we see this (Bangalore) as strategic centre….There is going to be a positive momentum.”
    • TCS, Wipro eye $400 mn Target outsourcing deal
      India’s top tech firms Tata Consultancy Services (TCS), Wipro and several others are pursuing Target’s captive technology centre for a potential acquisition, in what could be a transaction bundled with a long-term outsourcing contract worth $300-400 million. America’s second-biggest discount retailer Target has around 1,500 staff employed at its Bangalore centre, currently doing software development and maintenance work.
    • Satyam to announce $300-mn SaaB outsourcing contract today
      Swedish manufacturing giant SaaB and Mahindra Satyam are set to announce $300 million outsourcing contract for engineering services and technology maintenance later on Tuesday.
    • Firstsource figures in FinTech’s 100 ranking of global tech
      Global provider of business process outsourcing (BPO) services, Firstsource Solutions, has become the only Indian pure-play BPO to have figured in the annual FinTech 100 ranking of global technology for this year.

      Firstsource ranked 53rd on this year’s list, an increase of one position from the previous year, a company press release said here today.

    • China planning to build ‘Little India’ to attract outsourcing industry
      Wuxi, a picturesque city that lies along the Taihu Lake resort of the Jiangsu province, is planning to build a “little India” in years to come in order to become a major service outsourcing center.

      Wuxi is traditionally a manufacturing city, but with a focus on environmental protection, and especially after a serious blue-green algae outbreak in Taihu Lake, city leaders started to study how to transform the city’s development.

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