Febuary 2010 News

  • Budget fails to address IT industry’s demand: Surjeet Singh
    Here is what Mr Surjeet Singh, Chief Financial Officer of Patni, has to say regarding Union Budget 2010:“Increase in MAT from 15% to 18% on book profits would result in higher outgo of cash in the short term and would affect Indian corporates adversely.
  • Outsourcing to India: Europe plays strictly by the rules
    European outsourcing customers prefer contract staff and local delivery, as per a latest Forrester study. Western Europe, which accounts for nearly $6.8-billion worth of India’s software exports, follows strict local labour rules and plans to avoid any move that could be viewed as anti-social, according to research firm Forrester. After interviewing more than 30 vendor and user companies including Accenture, Capgemini, HP, IBM, Infosys, Tata Consultancy Services (TCS) and Wipro, Forrester reported that while global players such as ABN Amro leverage Indian providers for their global IT development and support requirements, Continental European companies send very little or even no work to India.
  • Small, midsize BPO firms seek buyers as margins begin to shrink
    At least a dozen small and midsize outsourcing firms grappling with thinning margins, tight working capital and lack of opportunities for scaling up, have mandated banks to scout for buyers, said five investment bankers familiar with the development.The bankers said the number of business process outsourcing (BPO) firms approaching them has increased by two-four times in the past four months. They declined to name the firms, citing confidentiality clauses.
  • Boeing Prepares to Cut Nearly 800 IT Workers
    The Boeing Co. (BA) late last week issued 1,000 layoff notices to employees, many of them working in IT.The company sent 60-day layoff notices to the workers, who are at risk of being laid off on April 23. Of those notices, about 800 went to employees of Boeing’s Engineering, Operations & Technology unit; most of the people in that unit are in IT, according to Tim Healy, a company spokesman.
  • Human resources outsourcing sees huge growth
    Human resources outsourcing has grown 70% during the past six years, a trend that is expected to continue as more companies look for ways to contain costs, according to a report from CPEhr. Employers also are turning to HROs for help in keeping in compliance with various laws and finding new ways to motivate employees as workloads increase.“We are pursuing acquisitions for geographic location and capability. For geographic location, we are primarily interested in onshore. There are several deals in the pipeline — some in the initial stages, some in the due diligence stage and others, where we are vetting the term sheet,” Mr Kapoor told ET.
  • $1 bn deals may come to India
    Large outsourcing contracts worth up to $1 billion look set for a comeback this year, as companies from segments like retail, banking, t elecom and utilities, apart from government bodies, seek to cope with renewed demand for their services and also lower their operational expenses.Outsourcing experts and industry officials said last week that auto customers too are looking to award large contracts for managing their business and IT systems this year. British Petroleum’s IT contract worth $1.5 billion awarded to Indian vendors TCS, Infosys and Wipro early this year was one such mega deal.
  • EXL Services scouts for buyouts in US
    India-based back office services firm EXL Services, which competes with bigger rivals like Genpact and WNS Global Services, plans to establish a delivery footprint in its top export market of the US through an acquisition. The firm is currently evaluating several deals, said the company’s president and CEO Rohit Kapoor.“We are pursuing acquisitions for geographic location and capability. For geographic location, we are primarily interested in onshore. There are several deals in the pipeline — some in the initial stages, some in the due diligence stage and others, where we are vetting the term sheet,” Mr Kapoor told ET.
  • US wants Indian businesses to create jobs in US
    As the debate on outsourcing rages, the United States is of the view that India [ Images ] can create jobs in America taking advantage of its ‘fair tax policy’.US Ambassador to India Timothy J Roemer also sought to downplay concerns that President Barack Obama [ Images ] was targeting American companies having operations in India ever since he called such businesses tax evaders.
  • Actis Invests $50M In Integreon
    Integreon will use the funds to invest in new services, technologies and acquisitions.Actis, an emerging markets-focussed private equity firm, is investing $50 million in Integreon, a Mumbai-based back office outsourcing firm backed by Ayala Corporation of Philippines, for a substantial minority stake.Integreon will use the funds to invest in new services, technologies and acquisitions.
  • IT, BPO companies bond over Valentine’s Day
    February 14, which is celebrated as Valentine’s Day, is one of those very few dates in a year when the 24X7 information technology and business process outsourcing firms allow their employees to let their hair down.This year, the date falls on a Sunday, which is a holiday for most companies. But it has not deterred BPO firms from celebrating in advance.
  • Indian companies free from Obama’s ire: Infy chief
    Clearing the air about Obama’s outburst against the companies outsourcing to India, Infosys Technologies said that the statement was not directed towards Indian companies.Stating that Obama’s anger was only aimed at US companies operating in multiple countries, Kris Gopalakrishnan, CEO and MD of Infosys said that Indian companies were not the target of Obama’s stern words.
  • Outsourcing to India unfair practice: Obama
    In line with the US president Barack Obama’s anti-outsourcing stance, the US president has lashed out on US companies outsourcing business to India for unfair business practices, media reports said.”If you are a business here, entirely located in the United States, and investing in the United States, and hiring workers in the United States, you are paying a 35 percent rate. If you are a multinational and you are investing in India, and your workforce is in India, and your plants and equipment are in India, but your headquarters are here, you are taking deductions on all the expenses in India, but you are keeping your profits outside the United States, that just doesn’t seem entirely fair,” Obama said.
  • Obama labels outsoucers as tax evaders
    American president Barack Obama has once again targeted American companies having their operations in India to save taxes back home and called such businesses tax evaders.”If you are a business here, entirely located in the US, and investing in the US, and hiring workers in the US, you are paying a 35 per cent rate,” Obama said in an interview to the business magazine Bloomberg Business Week.
  • It Takes a Village: The Rise of Rural BPO
    Over the last few years, India’s US$14 billion business process outsourcing (BPO) industry seemed to have been losing a battle with rising expenses. Urban real estate prices were spiraling out of control. Off-the-charts attrition meant increases not only in salaries but also in training and recruitment expenses. The solution: Set up centers in rural locations, where startup costs are low and employee loyalty is high. Yet, while some rural BPO outfits are showing promise, many obstacles stand in the way of India’s next BPO success story, including a lack of electrical and broadband infrastructure outside of urban areas, and lingering market skepticism that rural BPO centers can compete with their more traditional urban counterparts.
  • India’s IT-BPO mart may touch $285 bn in 2020
    India’s IT-BPO market (including exports) could touch $285 billion in 2020 growing at a CAGR of 15 per cent, according to a report.The IT-BPO industry in India has achieved impressive growth rates over the past decade and stood at $71.6 billion in 2009, said the report prepared by KPMG and Asian-Oceanian Computing Industry Organisation.
  • AB Minacs buys tech solutions firm Radifinity
    Aditya Birla Minacs, the BPO company and part of the AV Birla Group, has acquired the Bangalore-based technology solutions provider Radifinity.The two-year old company, incubated at the NS Raghavan Centre for Entrepreneurial Learning (NSRCEL ), IIM-Bangalore , provides technology solutions in areas such as radio frequency identification, smart cards, GPS and GPRS. The value of the acquisition could not be ascertained.
  • SIM: Indian outsourcing companies get a new competitor
    In 2004, at the height of the American presidential campaign dominated among other things by offshoring and a jobless recovery, HCL’s Vineet Nayar set off a firestorm with a comment that American graduates were not employable.As trade unions seethed and politicians fumed, two men looked at the reaction the comments had caused and wondered if there was a business opportunity.
  • Meet Indian IT’s new rival
    In 2004, at the height of the American presidential campaign dominated among other things by offshoring and a jobless recovery, HCL’s Vinee t Nayar set off a firestorm with a comment that American graduates were not employable.As trade unions seethed and politicians fumed, two men looked at the reaction the comments had caused and wondered if there was a business opportunity. Since offshoring was considered a purely Indian phenomenon and sensing a backlash to the process in the years ahead, Debashish Sinha and Neeraj Gupta two IT industry executives in the US began quietly working on an alternative that would appeal to many companies and the political establishment.
  • Genpact eyes 14% revenue growth in ’10
    India’s largest backoffice support provider Genpact on Friday said it sees strong deal pipeline and is confident of achieving 14-17% revenue growth in 2010 on the back of new client wins and recent acquisition of US-based Symphony Marketing Solutions (SMS). The company has set the operating margin guidance for the current year at 17-18%.Genpact’s performance in 2009 calendar was in line with the guidance. It registered 1.7% growth in net income to $127.3 million over the previous year owing to improved operating efficiencies.
  • Software, BPO exports to touch $50 bn; may grow 15%
    India’s software and business process outsourcing exports are expected to rise 5.5 per cent to touch $50 billion in the current fiscal (2009-10), industry Nasscom said on Thursday.The estimation is in line with an earlier forecast of 4-7 per cent given by National Association of Software and Service Companies. The industry was optimistic to reach the $50 billion milestone export target in the current fiscal.
  • Indian BPO companies create jobs in US, too
    In May last year, when President Barack Obama urged Americans to “Say no to Bangalore (read no to offsourcing to India) and yes to Buffalo”, little did he realise that a Mumbai-based business process outsourcing company was creating jobs even in Buffalo.Firstsource was perhaps the first BPO that set shop in the US city of Buffalo in 2004 with 287 employees. The number has risen to 600. And Firstsource has close to 4,000 employees in the whole of the US.
  • India’s Outsourcing Exports At $50 Billion
    India’s revenue from exports of IT and BPO (business process outsourcing) services is likely to grow 5.5 percent to US$49.7 billion in the Indian fiscal year to March 31, 2010, according to estimates released Thursday by the country’s National Association of Software and Service Companies (Nasscom).
  • Genpact in talks to acquire Intelenet Global Services
    Private equity investors in the country’s top back-office firm Genpact have initiated talks to explore a potential acquisition of Intelenet Global Services, at least two people familiar with the discussions told ET last week.The talks are being held between financial investors at Genpact and Blackstone, which holds a little under 80% in Intelenet, one of the persons who spoke with ET on condition of anonymity, added. Genpact is the country’s largest BPO firm and has investments from private equity player General Atlantic and other investors, which hold nearly half of the firm. Intelenet is the country’s 14th-largest BPO firm.

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