Outsourcing Increase Creates 41,000 New Jobs in Philippines

According to the Commission on Information and Communications Technology (CICT), ICT-related services have created around 41,000 new jobs in the Philippines in the first nine months of 2005. The figure is around 95 percent of the total employment opportunities generated in the ICT sector in 2005.



The Philippine ICT industry has witnessed significant growth on the back of increasing outsourcing and BPO opportunities. The country’s outsourcing industry offers services in the field of BPO, medical transcription, and animation and software development.

HSBC Opens New $31M Service Center in Sri Lanka

HSBC, the London headquartered financial services provider, has launched a new USD 31 million service center in Colombo, Sri Lanka. HSBC has, reportedly, selected Sri Lanka for its sound infrastructure and quality of local work force.

The new service center is the latest addition to 11 service centers that HSBC has set-up across five countries. The new unit will provide CRM services for HSBC operations in the UK and the US and will commence operations with 1,326 staff, but may expand to employ 3,000 employees. Presently, Sri Lanka has around 30 CRM service operators and the total BPO revenues of the country is estimated to be worth USD 100 million.

Wachovia Corp. (NYSE: WB) and Genpact today jointly announced that the companies have signed an agreement for Genpact to establish an offshore operation to support Wachovia's business process outsourcing efforts.
The seven-year arrangement will provide Wachovia access to Genpact's global operations and initially will be located in India. Terms of the agreement were not disclosed.

"We're pleased to partner with Genpact, which has a proven track record in business process improvement," said Peter Sidebottom, director of corporate development and strategic initiatives at Wachovia Corporation. "Over the past year, Wachovia has made several decisions to outsource work to domestic and global partners who share our commitment to high quality and customer service excellence. We believe that establishing a presence in India with Genpact will improve productivity for our company and enable us to explore overseas growth opportunities. This relationship with Genpact will allow us to work with a company that has extensive experience in global operations and tap into expertise that will drive process improvement at our company."

"This agreement, which marks a major milestone in our growth andevolution, is a testimony to our process excellence and operating depth,especially in financial services. We look forward to working with Wachovia tohelp drive continuous improvement and productivity for the bank," said PramodBhasin, Genpact president and chief executive officer.

For more Info Check www.genpact.com and www.Wachovia.com

BBC Finance to Outsource Support Operations

BBC Finance, the financial arm of the British broadcasting group, has announced a series of cost reduction measures including outsourcing of specific services, in order to plough back the savings into programming.

The move, expected to begin in 2006-2007, includes a number of steps including the creation of a Finance Center at the BBC headquarters, adoption of simpler business procedures, reduction in terminal trading along with the outsourcing of about 40 positions to a third party service provider.

The division is aiming at reducing the number of posts in the division from the current 650 to 310 in 2006-20007, and to about 260 by 2007-2008. The move, as per official, estimates is expected to contribute about GBP 20 million in savings to BBC Finance.
BBC officials said that the cost savings from the series of measures would be invested back to improve the content of broadcasts.

Lloyds TSB Awards 5 Yr BPO Svcs Contract to Xansa

Lloyds TSB, the UK-based banking conglomerate, has selected Xansa, a UK-based BPO services firm, to provide customized back office services. The new contract, which will hold for five years, expands the portfolio of back-office services currently being provided by Xansa to Lloyds.

The contract service will help Lloyds to improve its customer services and better its competitiveness. The selection of Xansa is made as its services matched the quality standard, productivity requirements and cost efficiency.

EDS to Pay GBP 71.25M to HMRC for Faulty IT System

EDS, the UK-based IT services provider, has negotiated a settlement with Her Majesty’s Revenue & Customs (HMRC), the revenue department of the UK, regarding the compensation for certain irregularities in IT system developed by EDS for HMRC. The settlement will be concluded with payments totaling GBP 71.25 million.

EDS had developed an IT system for HMRC to support the 2003 launch and subsequent operation of Tax Credits. HMRC claimed that because of the faulty IT system it incurred substantial losses. The specific terms of the settlement agreement are confidential and the settlement does not impact previously stated EDS’ estimates for 4Q 2005.

India and China Most Lucrative Outsourcing Destinations: AT Kearney

AT Kearney, a US-based management consultancy, has released an Annual Global Services Location Index, assessing 40 outsourcing locations across the world. The index places India and China followed by South-East Asian countries as the top outsourcing destinations.

India and China lead the index. India’s lead over China is still very large but has slightly reduced as compared to 2004. The wage inflation in India and increased competition are cited as the reasons for the reduction of the lead. China, with its improved infrastructure is well placed to target IT and back-office support market for East Asian countries namely Japan, Korea, Taiwan, Hong Kong and Singapore. The Southeast Asian countries continued to be lucrative destinations. Malaysia, Philippines, Singapore and Thailand are placed between third and sixth positions successively. Thailand grossed a considerable leap from thirteenth position in 2004 to sixth in 2005. Indonesia entered the index at thirteenth.

For the first time, the annual AT Kearney index has also assessed low-cost cities in four developed countries as probable outsourcing locations. The US city of San Antonio was ranked at eleventh whereas Belfast in the UK was ranked twenty-eighth in a list of 40 destinations. Leipzig and Marseille representing Germany and France respectively were placed at thirty-first and thirty-fifth position.

The status of traditional Central and East European outsourcing destinations namely, the Czech Republic, Hungary and Poland witnessed slight decline, according to the index. The new entrants, belonging to the region, are Bulgaria, Slovakia and Romania. Russia remained the least attractive destination placed at the bottom of the Index.

In Latin America, Chile improved its ranking slightly whereas Brazil, Mexico, Costa Rica and Argentina have fallen. The main reason for this fall is attraction of South Eastern countries. Mexico and Costa Rica have improved their standing by two index positions each.
Finally, the index also reflected a strong performance by several countries of the Middle East and Africa. Egypt is ranked twelfth, Jordan at fourteenth and the United Arab Emirates at twentieth. Tunisia, Morocco and Egypt have emerged with their stress on their Spanish and French language skills combined technical proficiency as a unique selling point. Turkey and South Africa have not performed as well as the rest of the region because of the relatively high costs.

OPI Opens New Service Center in India

Outsource Partners International (OPI), a US-based financial services BPO firm, has opened a new service center in the Southern Indian city of Cochin (Kochi).
The center is the company’s second service center in the country.
Currently, OPI’s facility in Bangalore, India, employs about 600 associates. The new facility can accommodate 2,000 associates. According to OPI, the expansion will help the company to support its rapid growth. The company estimates that its current backlog of orders is likely to command about half of the new capacity.

BBC Shortlists Three Bidders for HRO Services

The BBC has selected three bidders in its final shortlist for a potential HR outsourcing partner. Accenture, the US-based outsourcing services provider, Capita, the UK-based outsourcing firm and Xchanging, another UK-based BPO services provider, are the three bidders.

According to BBC, the three firms are selected because of their strategic and service delivery capability. Over the next few months, the BBC will work with the selected bidders and announce the winning bid early next year.
The final HR outsourcing partner will be required to undertake the responsibility for recruitment, remuneration, development, HR administration services, relocation, and occupational health and disability access services. The broadcaster has further clarified that they would prefer one contract partner for all of the services. However, subject to the BBC commercial advantages and service quality concerns, they may award more than one contract.

TCS : Awake and Hungry

DTCC Partners with TCS to Revamp its Financial Processing Systems

The US Depository Trust & Clearing Corporation (DTCC) has partnered with TCS, an Indian IT consultancy and services firm, to transform its securities underwriting and corporate actions processing systems for the US financial services industry.

Currently, there are 60 separate underwriting and corporate actions legacy systems followed by DTCC. The partnership aims to integrate all the systems on one platform to streamline processing, improve efficiency, reduce costs and induce flexibility.

The revamp program will be conducted in several phases. Preliminary testing phase for the underwriting component is scheduled for the end of 2006. The corporate action component is planned for launch in 2009. The new platform will uphold ISO 15022 messaging formats. In 2004, DTCC processed underwriting distributions worth USD 3.1 trillion in and corporate actions worth USD 2.3 trillion.

TCS, SBI Team to Provide Financial Services

TCS, the Indian IT consultancy and services provider, has announced the formation of a joint venture with the State Bank of India (SBI), a state owned banking and financial services company. The joint venture, to be known as C-Edge Technologies, aims to provide technology solutions and domain consulting to the banking and financial services sector.

While the equity participation from TCS and SBI will be in the ratio of 51:49, the entity will have an authorized capital of INR 400 million. The joint venture will leverage domain and technology capabilities of the two parent companies.
The announcement marks new step in TCS’ strategy to develop specialized banking and financial BPO services. Recently, TCS has acquired Comicrom, a Chilean BPO with major interests in pensions and banking sector, and FNS, an Australian banking products company. Also, in October 2005, TCS had entered into exclusive discussions with UK’s Pearl Group to takeover its pension business segment.

EquaTerra to Merge with TPI

EquaTerra, a US-based outsourcing advisory firm, and TPI, a US-based sourcing lifecycle advisory firm, have entered an agreement to merge. The merger may be viewed as a collaboration of expertise to provide services across all geographies and all business support functions. The merger is expected to close by January 2006.

According to the two companies, the deal will position them well to respond to increasing demand for strategic, cross-enterprise outsourcing and shared services advice. The new firm will have 550 employees in the Americas, Europe, and Asia-Pacific.
EquaTerra singularly concentrates on providing outsourcing and insourcing advisory and research services. TPI provides for sourcing lifecycle advisory services, including strategy design, implementation and sourcing management.

Morocco to be French & Spanish BPO Destination - McKinsey

McKinsey, in one of its latest reports, has assessed Morocco to fast emerge as an outsourcing destination of choice for European companies looking at servicing French and Spanish clients.

The study claims that, between 2003 and 2018, outsourcing business could add 0.3 percent annually to the country’s GDP growth, reduce its international trade deficit by around 35 percent, and create a total of around 100,000 new jobs.

The consulting firm also claims that the BPO industry can offer large scale investment and employment opportunities to help offset the downturn in its traditional sectors like textiles and food processing. McKinsey considered a number of factors including the impact of globalization on the value chain and also benchmarked the country against 11 others before concluding on the opportunities offered by the BPO sector.

The prime factor making the country appealing is the availability of low cost and abundant labor resource. Other factors include its geographic proximity to France, and better telecommunications infrastructure. The report asks Morocco to capitalize on its strong position against competitors such as Mauritius, Senegal, and Tunisia.

Currently, the country's outsourcing market, with an estimated turnover of EUR 85 million, includes 50 mostly small providers that are expected to employ a total of about 10,000 people by the end of 2005. Morocco has already captured almost half of the call centers market servicing predominantly French-speaking companies. Recently, Telefónica, a Spanish telecom operator, had established a captive call center in northern Morocco, where Spanish is the second language.

Further, the report has stated that for further progress, the country should focus its efforts on 10 to 12 niches within selected BPO and IT functions.

Hewitt Reveals Rohm and Haas as HR Outsourcing Client

Hewitt, the US-based HR services firm, has announced that it has been delivering HR outsourcing services to Rohm and Haas, a US-based special materials manufacturer. Rohm and Haas was signed as an anonymous client of Hewitt HR outsourcing services in July 2005. Financial terms of the deal were not disclosed.

Hewitt began with the transition of payroll, HR service center, leave administration and tuition reimbursement from Rohm and Haas. The move was required to start the delivery of outsourced HR services to more than 12,000 Rohm and Haas employees in the US and Canada. The contract is an extension to the benefits outsourcing services that Hewitt has been providing to Rohm and Haas since 1993.

Motorola Selects General Physics to Provide Outsourced Training and Vendor Management Services

Global performance improvement solutions provider General Physics Corporation (GP), a subsidiary of GP Strategies Corporation (NYSE:GPX), today announced that Motorola (NYSE:MOT) has selected GP to provide outsourced training and vendor management services. Under the terms of this major agreement, GP will select and manage training suppliers for Motorola to meet its workforce development needs in North America. When and where applicable, GP will also provide its own training expertise, web-based tools and automated processes to Motorola employees.

As part of this performance-based contract, GP is provided with incentives to procure and deliver training at reduced costs and is charged with leveraging its expertise to improve upon the significant returns already achieved by Motorola through its historic training investments.

"Our relationship with Motorola is a reflection of our strategy to help clients optimize the value of their training investment," said Scott Greenberg, GP's Chief Executive Officer. "We are proud to be affiliated with such a leader in corporate training, and we look forward to sharing in the benefits we expect to deliver to Motorola and its employees as we leverage our expertise to improve upon an already world-class training program."

Mr. Greenberg concluded, "This agreement continues to validate GP's position in the expanding area of Training Business Process Outsourcing. Through solid execution and delivery of value, we believe our relationship with Motorola will serve as a model for future BPO opportunities with our customers."


About GP

GP is the principal operating subsidiary of GP Strategies Corporation (NYSE:GPX). GP is a global performance solutions provider of training and e-Learning solutions, management consulting and engineering services. GP's solutions improve the effectiveness of organizations by delivering innovative and superior training, consulting and business improvement services, customized to meet the specific needs of its clients. Clients include Fortune 500 companies, manufacturing, process and energy industries, and other commercial and government customers.


Additional information may be found at www.gpworldwide.com

BPO Creativity Vs Cost !

According to a study by the Information Technology Association of America (ITAA), offshore outsourcing has a positive affect on the US economy by lowering production costs for IT vendors which in turn has a positive effect on product costs for consumers. The net result is a lower rate of inflation. The study finds offshore outsourcing as a 'net positive for American workers and the US economy.' The study, conducted by Global Insight, further adds that the economic benefits derived from offshore outsourcing will create as many as 337,000 jobs by 2010. The new jobs will be over and above the number of jobs lost as a result of offshoring. The study also concludes that offshore outsourcing not only results in local wage raise but also contributes positively to the GDP. Offshore outsourcing, as per the study, will contribute to a USD 0.06 increase in US hourly wages in 2005 and about USD 0.12 by 2010.

However, the Institute of Electrical and Electronics Engineers-USA (IEEE-USA) has contested the study pointing that it has failed to take into consideration a number of sensitive factors like national security and that of the country's leadership in the field of innovation. According to IEEE-USA, the continued dependence on offshoring would result in the US losing its edge in developing new weapon systems and IT products. IEEE officials further added that the assumption that displaced workers are absorbed back into the working population was misplaced. As per a US Bureau of Labor Statistics survey, released in July 2004, out of 5.3 million workers who lost their jobs between January 2001 and December 2003, only 65 percent were re-employed by January 2004. The body also finds the increase in the number of H1B visas to have a detrimental affect on the local workers.

WNS Acquires Trinity Partners

WNS, an Indian BPO firm, has acquired Trinity Partners, a US-based IT business solution provider to financial institutions. The acquisition will lead to formation of WNS Trinity Mortgage Services, a BPO firm specializing in mortgage outsourcing.

The deal also transfers all the contracts of Trinity, including a USD 60 million contract with First Magnus Financial, to WNS. WNS Trinity Mortgage Services will deliver lead qualification, loan setup and processing, risk management, post-closing, document indexing, quality control services. The company stated that the move will enable it to improve its market presence in the financial services vertical.

Outsourcing should be Core to Business Strategy - Study

According to a recent Gartner report, outsourcing has become an integral part of usual business practice. However, the report claims that many organizations employ outsourcing services without a clear and coordinated strategy. The report calls for a new approach of “Multisourcing” to maximize the benefit from outsourcing.
The research firm has highlighted several ways to transform the outsourcing strategy. Firstly, decisions pertaining to outsourcing should be a part of the core business strategy. In most organization outsourcing decisions are made separately and thus very often culminate into incompatible relationships. Secondly, all outsourced services should be coordinated with other in-house business practices to maximize the benefit. Lastly, the outsourcing relationships should not be considered static partnerships. Dynamism in the relationship with the provider will help in customizing the service to specific needs.
The study proposes that a new perspective in dealing with outsourcing will improve the utility of outsourcing as a tool. As an increasing number of companies are using outsourcing, its strategic handling becomes an important aspect of business.

for more visit www.Gartner .com

TCS Acquires Chile’s Comicrom for $23M

Tata Consultancy Services (TCS), the Indian IT services and consultancy provider, has acquired Comicrom, a Chilean banking and pensions BPO provider, for USD 23 million. TCS has also acquired the IT services subsidiary of Comicrom with which it has an ongoing joint-venture.

Comicrom has a workforce of 1,257 and reported revenues of USD 35.5 million for FY 2005. The company is a leading player in the local banking BPO business with a 57 percent market share in the check processing business. About 70 percent of the operating banks are its customers.

The acquisition is a part of TCS' strategy of developing vertically integrated, specialized BPO offerings. Recently, TCS had signed an agreement with UK-based Pearl Group to manage its pension business segment. Also, along the same strategy, TCS had acquired FNS, an Australian financial services provider, to strengthen its presence in banking support business domain.


for more check www.tcs.com

IBM to Acquire Indian NetSol

IBM has announced its decision to acquire NetSol, an Indian IT services firm. The deal is expected to be between USD 75 million to USD 100 million. After the closing of the deal, which is expected in a month, NetSol will function as a subsidiary of IBM.

NetSol has a 1,400 strong workforce in India and supplies both IT infrastructure hardware and IT management services. The company is expected to grow at around 30 percent in the current fiscal year.

The acquisition will enable IBM, which is increasingly outsourcing its mid-market infrastructure services operations to India, to better service its data center and on-demand services clientele. The acquisition will also help IBM to consolidate its position in the wake of increased Indian domestic demand for infrastructure services.

No Easy Road for Philippine BPO Business – Study

According to a study by McKinsey Global Institute, Philippines, an emerging outsourcing destination, has to take some crucial steps to improve its competitiveness against established destinations such as India.

The institute predicts the offshore services market to create an additional 2.6 million jobs at various offshore locations including the Philippines. As per the study, the country offered around USD 1.7 billion worth of offshore services in 2003 and currently employs close to 100,000 people. The cost-reduction along with a higher density of skilled labor pool are the two most important factors in favor of region.

However, the study cautions that the country has been able to tap only a fraction of the global outsourcing market despite these credentials because of several adverse reasons. Prime among them is the poor risk profile of the country along with other reasons like frequent natural disasters, security threats, and data theft incidents. The lack of third-party vendors is also seen as a major hindering factor.
The report highlights that a supporting government and facilitating legal framework may augur well for the Philippines outsourcing sector as these will the country to successfully tap the cost conscious global outsourcing market.

DuPont (NYSE: DD) and Convergys Corporation (NYSE: CVG), a global leader in providing customer care, human resources, and billing services, announced today they have signed a contract under which Convergys will provide comprehensive Human Resources (HR) transactional services to DuPont’s 60,000 employees and 102,000 retirees in 70 countries and 30 languages around the world.

Convergys expects this contract to generate revenues in excess of $1.1 billion over its thirteen-year duration. DuPont expects to realize a 20 percent productivity improvement as services transition to Convergys, increasing to 30 percent after 5 years.

Convergys is the leader in developing global HR business process outsourcing solutions. Convergys will provide DuPont with a comprehensive suite of HR transactional services such as Organization & Employee Development, Workforce Planning & Deployment, Compensation Management, Benefits Administration, Payroll, Integrated Health Services, Recruiting, Employee & Labor Relations, HR Process Support Administration, Work Environment Support, Performance Management, Employee Data Management, Vendor Management, and HR consultative services. Deloitte Consulting, LLP will team with Convergys to support the implementation. Convergys will implement, host, and maintain a state-of-the-art HR information system for DuPont allowing for greater efficiencies, better service, and lower costs. The implementation is expected to take about two years.

"We are extremely impressed by the breadth and scope of the HR services we will be receiving as part of this agreement with Convergys," said Jim Borel, DuPont senior vice president, global Human Resources. "Convergys brings best-in-class global services to its clients, and DuPont will benefit from increased business performance through improved efficiency, reduced administrative costs, and better utilization of strategic workforce information. DuPont will be able to utilize world-class employee and manager self-service tools as well as state-of-the-art service centers located around the globe."

Borel continued: "Convergys is the right partner to enable the transformation of our HR transactional services by standardizing, simplifying, leveraging, and automating a number of our HR processes."

"DuPont is a recognized global business leader and one of the world’s most innovative companies. Convergys looks forward to supporting DuPont’s global employee base by delivering real value through a comprehensive suite of HR services and local support," said Jim Orr, Chairman and CEO of Convergys. "We’re pleased to have won DuPont’s confidence and look forward to a strong partnership."

For over 20 years Convergys has provided HR solutions to the world’s leading organizations including Office Depot, Avaya, Textron, Bristol-Myers Squibb, and Fifth Third Bancorp. Convergys helps companies improve their HR management processes, operations, and service delivery models. Convergys is outthinking and outdoing [tm] on behalf of its clients every day.


for more check www.Convergys.com

Ericsson Opens R&D, Service Center in India

Swedish telecom equipment manufacturer, Ericsson, will open an R&D and regional services delivery center in the South-Indian city of Chennai (Madras).

According to Ericsson officials, the new center will work in the areas of GSM, value-added services and intelligent networks, and also focus on the domestic market.

The company has also set up a Global Services Delivery Center (GSDC) in Gurgaon near New Delhi. The Gurgaon center will provide service support to the Indian and Asia-Pacific markets and includes a network operating center, a product design and customization center, a systems integration competence centre, and also offers support to network operators.

In 2003, Ericsson had transferred 300 employees from its three R&D centers in India to Wipro, a Bangalore-headquartered IT services company, as part of its cost-cutting strategy. Wipro will continue to do product development for Ericsson’s global requirements. The company also has a manufacturing unit in the country.
The company currently has over 1,500 employees in 22 Indian locations, and engages over 3,000 employees from other companies for its development, network roll-out and other service needs.



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Labor Shortage to Hit Indian Call Center Industry – Gartner

According to Gartner, the existing shortage of skilled professionals faced by Indian BPO service providers may result in the country losing its competitive advantage.

As per the firm, the current shortage of appropriately skilled workforce will have a major impact in terms of increased wage rates thereby increasing the costs. Quality and security concerns are also expected to emerge as a direct result of the shortage.

As per Government estimates, the industry requires close to one million trained professionals by 2009. However, the supply is expected to be short by at least 260,000 professionals.

Gartner further notes that the shortfall will hit the multi-national service providers the most, as many of them anticipated an almost unlimited supply of English speaking graduate workforce.

Amazon to Open SDC in India

Amazon.com, the US-headquartered online retailer, has announced its plans to open a Software Development Center (SDC) in Chennai (Madras), India. The center will focus on developing new web site features supporting the web retailers’ online customers.

The Chennai center will manage all technology aspects of the web site features developed at the SDC. The center will be the second Amazon.com international SDC in India after Bangalore and the fourth worldwide along with Edinburgh, Scotland and Cape Town, South Africa.

TCS has announced the opening of a remotely-managed infrastructure and BPO solution center in the Southern Indian city of Chennai. The center has been set up with an investment of INR 450 million and would provide end-to-end IT infrastructure services to clients. The center, which has a capacity of 2,500 people, would initially employ around 300 people. It will also complement similar centers at Bangalore and Budapest, Hungary. The company expects IT infrastructure services to contribute about 10 percent of the total revenue and other four areas to contribute about five percent each to the total revenue in the next five years.

TCS has announced the opening of a remotely-managed infrastructure and BPO solution center in the Southern Indian city of Chennai. The center has been set up with an investment of INR 450 million and would provide end-to-end IT infrastructure services to clients. The center, which has a capacity of 2,500 people, would initially employ around 300 people. It will also complement similar centers at Bangalore and Budapest, Hungary. The company expects IT infrastructure services to contribute about 10 percent of the total revenue and other four areas to contribute about five percent each to the total revenue in the next five years.

NEC and Unisys to Collaborate in Technology Research and Development, Manufacturing and Solutions Delivery Worldwide

Global partnership aims at better innovation at less cost through common server platform, shared software development, support services and solution integration

NEC Corporation (NASDAQ:NIPNY) (FTSE: 6701q.1) and Unisys Corporation (NYSE:UIS) today announced that they have signed a Memorandum of Understanding to negotiate a partnership to collaborate in technology research and development, manufacturing and solutions delivery. This alliance would cover a number of areas of joint development and solution delivery activities focusing on server technology, software, integrated solutions and support services.

Technology Alignment
NEC and Unisys plan to collaborate to design and develop a common high-end Intel-based server platform to provide customers of each company with increasingly powerful, scalable and cost-effective servers. The first of these next-generation common platforms is planned for release in 2007. The new servers are to be manufactured by NEC on behalf of both companies. Unisys will continue to supply its customers with ClearPath mainframes with the benefit, over time, of joint R&D by both companies and manufacturing provided by NEC.
The two companies plan to supply to each other their current Windows- and Linux-based middleware products, such as NEC's "VALUMOware" and Unisys Sentinel software. They also plan to jointly develop new middleware aimed at maximizing application and systems management efficiency.

Solutions Alignment
Together, NEC and Unisys plan to extend the customer value and effective geographic scope of their solutions business. Initial areas for the planned collaboration include:

-- Security Products and Solutions. Unisys and NEC both have a strong background in providing their respective offerings in the security market for some of the most demanding industries and government organizations. The companies are planning several new and expanded initiatives that combine NEC's sophisticated biometric devices - such as fingerprint, palm print, and facial recognition systems - with Unisys domain expertise in developing security solutions for financial services, airline transportation, federal government international border control and other industry segments.

-- Telecommunications Solutions. The companies have agreed to explore opportunities for network-based services for the telecommunications industry in order to leverage their respective core competencies. The parties may also collaborate to deliver an end-to-end solution for the emerging IP Multimedia Subsystem (IMS) sector that will help global carriers deliver new services through convergence between existing fixed and mobile networks.

-- 3D Visible Enterprise Solutions. Under the terms of the partnership, NEC will explore the use of Unisys 3D Visible Enterprise (3D-VE) methodology to improve the delivery of services to its clients. 3D-VE is Unisys foundational approach to marrying domain expertise with technical scenario modeling tools to provide customers with a rich, three-dimensional representation of the costs and impacts of IT decisions at all levels of their business organization.

-- Worldwide Opportunities. NEC and Unisys plan to collaborate to advance their intersecting interests in areas such as in consulting, systems integration, outsourcing, and leading-edge solutions as they engage a broad spectrum of customers in countries such as the United States and China, as well as other growth markets.

Support Alignment
-- Maintenance and Support. Under the proposed arrangements, Unisys would become the preferred partner to provide technology support and maintenance services, such as break-fix support, to NEC's customers in markets outside Japan. Additional areas for exploration include how NEC can leverage Unisys global footprint in other service areas.

While non-binding, the Memorandum of Understanding contemplates the negotiation of binding agreements that would give effect to the areas of collaboration mentioned in this release.

For more visit http://www.unisys.com/ and http://www.nec.com/

Learning Outsourcing ... HR Outsourcing's NEXT wave !

Convergy's study on Learning outsourcing is out now and its wonderful.Especially when Fortune 1000 companies spending more than $100 Million each for their training needs.

Today’s learning organization faces immense challenges in achieving this vision, stemming from the complexity of technology, the decentralization and disaggregation of the learning function itself, an escalatingburden of administrative responsibilities, and a lack of funding and resources to make the up-front investments required for learning transformation.

According to the report Learning outsourcing is being driven by four major trends:

1. Emergence of scalable, enterprise technologies for learning. These technologies enable more effective creation, delivery, and management of learning across the organization.
2. Application of shared service principles to the Learning & Education - L&E function. An increasing number of companies, following the lead of HR, are creating shared service functions for learning that provide infrastructure and administrative services across the enterprise.
3. Proliferating supply chain for learning services. Training is an immense procurement activity, and with the influx of technology and services providers, the supply chain for learning continues to multiply and presents the buyer with increasing complexities.
4. Escalating size of corporations’ investment in learning. It is not uncommon for a Fortune 1000 company to spend more than $100 million annually on training. Add learning opportunity costs—the productivity lost when employees are removed from their jobs to the classroom—and that figure can easily double.

Download the report from www.Outsourcing-Center.com or www.Convergys.com

Tata Consultancy Services (TCS) has acquired Financial Network Services (FNS), a Sydney, Australia-based banking solution provider for around USD 26 million. The deal is expected to strengthen the banking and financial services division of TCS along with increasing its global customer base. FNS' Core Banking Solution has been installed in over 115 banks spread over 35 countries and its clients include Tier I and Tier II banks in emerging markets in Europe, Asia, Australia and Africa.

Perot Systems has completed the acquisition of Technical Management and its subsidiary Transaction Applications Group (TAG), a US-based policy administration services company. Perot acquired a 100 percent stake in TAG for USD 65 million along with USD 18 million which is subject to certain performance targets. The move will not only strengthen the company's focus on the insurance industry but also help in achieving improved performance levels. The acquisition, which would also see the addition of around 850 TAG employees to its workforce, is also expected to help the company spread its BPO capabilities. The addition would take the worldwide Perot BPO strength to about 4,700 employees. The BPO operations currently contribute about 18 percent of the company's total revenue.

Perot Systems has completed the acquisition of Technical Management and its subsidiary Transaction Applications Group (TAG), a US-based policy administration services company. Perot acquired a 100 percent stake in TAG for USD 65 million along with USD 18 million which is subject to certain performance targets. The move will not only strengthen the company's focus on the insurance industry but also help in achieving improved performance levels. The acquisition, which would also see the addition of around 850 TAG employees to its workforce, is also expected to help the company spread its BPO capabilities. The addition would take the worldwide Perot BPO strength to about 4,700 employees. The BPO operations currently contribute about 18 percent of the company's total revenue.

Outsourcing Research :

According to a recent study by TPI, the total dollar value of the outsourcing contracts signed in 3Q 05, is expected to decrease by 10 to 15 percent to between USD 60 billion to USD 65 billion. The study also claims that the Total Contract Value (TCV) of the deals signed till 3Q 2005 was about USD 43.8 billion while the comparative global total for the same period last year was USD 52 billion. The main reason behind low TCV figures is the improvement in the efficiency of buy-side strategies, reduced capital intensity and increase in number of short term IT outsourcing contracts. It also claims that about 28 percent of contracts were restructured and set at new competitive rates. However, the total number of outsourcing contracts signed year-to-date increased from 172 to 191. In 3Q 2005, a total of 57 contracts valued at USD 13.5 billion were singed as compared to 54 contracts worth USD 15 billion in the preceding quarter. For 3Q 2004, 49 contracts worth USD 19 billion were recorded. As per TPI, the trend of decreasing value of individual transactions and increase in the number of overall transaction is going to persist in the coming period.

A recent study by InfoTrends/CAP Ventures predicts the US document outsourcing market to grow to USD 38.3 billion by 2009. The market is perceived to grow at a slow but steady state for the period between 2004 and 2009 at CAGR of 4 percent. The study foresees a relatively higher growth in the high value added segments involving process like digital color production printing and Document Process Outsourcing. For 2004, the US document outsourcing market was estimated to be around USD 31.5 billion with about 22 percent of the revenues coming from on-site services. Off-site contracted services accounted for 67.3 percent of the total document outsourcing market in 2004 and is expected to grow at a CAGR of 3.8 percent till 2009.

Prince William Health System Chooses Perot Systems for Revenue Cycle Outsourcing

Agreement Brings Efficient, Cost Effective Solutions To Growing Health System

Perot Systems Corporation (NYSE: PER) announced [ Oct 13 2005 ] that the company has entered into an agreement to provide revenue cycle outsourcing solutions to Manassas, Virginia-based Prince William Health System.

Under terms of the seven-year agreement, Perot Systems will assume day-to-day operational and administrative responsibility for the business office functions and staff of the 170-bed healthcare delivery system. Perot Systems will provide billing, accounts receivable management, and third-party and self-pay collections services for Prince William, and will assume responsibility for its Medicaid eligibility services. The company will also deliver technology resources to implement contract and denial management systems for Prince William.

Of the agreement, Robert Riley, chief financial officer of Prince William Health System said, “Perot Systems clearly understands revenue cycle management and has demonstrated its commitment to producing sustainable results for our health system. In addition to the company’s expertise, we are excited about the professional development and training opportunities that Perot Systems brings to Prince William’s business office staff. It is this combination of expertise and staff development capabilities that led us to choose Perot Systems as our revenue cycle management partner.”

“We are pleased that Prince William has chosen Perot Systems,” said Joe Hodge, leader of Revenue Cycle Solutions for Perot Systems’ healthcare group. “Leveraging Perot Systems’ dedication to operational excellence and best practices, we are confident that we can help Prince William achieve a new level of financial efficiency that will help fuel its vision and strategy for growth, patient satisfaction and community service.”

Perot Systems currently serves more than 350 hospitals with information technology and business processing solutions, and is known for its innovative approach to helping providers leverage improvements in the revenue cycle to fund strategic healthcare technology initiatives. Prince William joins Seattle, Washington-based Northwest Hospital and Medical Center, and Michael Reese Hospital in Chicago, Illinois as Perot Systems’ newest revenue cycle solutions customers.

Check www.perotsystems.com for more !

TPI Index Forecasts 10 to 15 Percent Decline in Global Outsourcing Total Dollar Value Awarded This Year

On October 17, 2005, TPI published its latest market observations in the TPI Index, a quarterly report on the state of the global outsourcing industry for financial analysts, media and sourcing industry participants.

The TPI Index, a quarterly report on the state of the global outsourcing industry for financial analysts, media and sourcing industry participants, says third-quarter results indicate an expected decrease of 10 to 15 percent in total dollar value for outsourcing contracts awarded in 2005, to US$60 to $65 billion from an average of US$72 billion awarded in recent years.

To date, the year's total contract value (TCV) is US$43.8 billion for transactions signed in the Americas (US$21.3B), Europe (US$20.3B) and Asia (US$2.2B), compared to a global total of US$52 billion this time a year ago.

Click here to download the report ...

EDS and Guthy-Renker Extend Long Term Relationship Through 2010

Relationship Includes BPO Services Supporting Guthy-Renker’s Global Expansion

EDS and Guthy-Renker, one of the world’s largest direct response marketers, today announced the extension and expansion of the companies’ long-term relationship for business process outsourcing (BPO) services through 2010. This new agreement is one of EDS’ largest BPO agreements to date, and continues EDS’ current customer relationship management (CRM) services for Guthy-Renker’s U.S. operations and add similar services for its Australia and New Zealand markets. Financial terms of the contract were not disclosed.

As a part of this contract extension, EDS will support Guthy-Renker’s global growth by providing CRM services to Guthy-Renker’s growing customer base in the southern Asia Pacific region. EDS will operate out of a new fulfillment facility in Australia and expand its existing New Zealand customer contact center to support Guthy-Renker’s consumer-direct business.

“Our success in the U.S. has carried over to a number of markets around the globe. Having a reputable and cost efficient service provider like EDS is vital to our continued success,” said Kevin Knee, Executive Vice President and COO for Guthy-Renker. “EDS has consistently proven its abilities to scale and to meet our growth demand. This new agreement is a natural extension of our long standing relationship.”

“Asia Pacific continues to be a growing region for EDS and we’re eager for the chance to support Guthy-Renker’s expanding business,” said Phil Pryke, EDS Asia Pacific vice president. “This new facility, along with the expanded use of our New Zealand contact center, will provide EDS with opportunities to fulfill additional CRM BPO demands in the Asia Pacific region.”

EDS will continue to process orders and payments, and manage assembly services, fulfillment, distribution and customer support of GRC's consumer sales of beauty and skin care lines and various other consumer products and categories in the United States, through 2010. Guthy-Renker shares these facilities and EDS’ global infrastructure, which helps it lower costs, streamline operations, improve customer service, increase revenues, and remain focused on product marketing.

“Guthy-Renker and EDS mirror each other’s focus on quality and outstanding customer service to successfully launch our brands around the globe,” said Joe Eazor, vice president and general manager, BPO Services for EDS. “The combined expertise of Guthy-Renker’s marketing and EDS’ technology and service delivery, creates a winning combination to boost revenue growth for multi-channel retailers like Guthy-Renker.”

Learn more at http://www.guthy-renker.com/

Kodak and IBM Sign Deal to Transform and Manage Key Business Functions

Eastman Kodak, a US-based photography solutions developer, has awarded a five-year contract to IBM to revamp its business support solution. Under the contract, IBM is expected to revamp and provide payroll services and credit and collections management services. The contract is part of Kodak’s initiative to reduce administrative costs and improve its service delivery mechanism.

IBM is going to provide the requisite services through its Business Transformation Outsourcing (BTO) division, which focuses on payroll calculation and delivery, benefits administration, expatriate and relocation services, enquiry management and CRM services, compensation planning, travel and expense processing. IBM has recently opened a new global delivery center in the Philippines to deliver such BTO services.

Tata Consultancy Services enters UK life and pensions industry

Initial Deal valued at £486m over 12 years; Commitment to maintain Centre of Excellence in Peterborough

Tata Consultancy Services, (TCS) announced its intention to move into the UK life and pensions industry after entering into exclusive discussions with Pearl Group Limited, the closed fund group, with the intention to transfer existing Pearl business processes to a new UK company, based in Peterborough, which will be a subsidiary of TCS.

This decision comes after a rigorous and extensive, year-long, selection process by Pearl Group Ltd, who examined tenders from a number of leading companies before they decided to choose TCS. The agreement will mean that a new company, a subsidiary of TCS, will be set up and will employ about 950 of Pearl Group’s current 1100 staff, with about 150 staying with Pearl.

The new subsidiary will specialise in BPO for life and pension businesses, starting with Pearl Group’s closed books portfolio. It will also focus on offering similar services to other life companies, presenting it with an opportunity for significant future growth as Business Process Outsourcing (BPO) is rolled out across the life assurance industry. This deal will generate revenues of over £486m ($847m) over the next 12 years as a result of creating a new platform beyond IT services.

Commenting on this strategic initiative, S. Ramadorai, CEO and Managing Director said, "This deal validates our strategy of pioneering the next generation of Business Process Outsourcing opportunities. Our extensive experience working in the insurance industry together with our excellence in technology will help us emerge as a significant player in life assurance and pensions administration services and help us continue our strong growth momentum."

Phiroz Vandrevala, executive vice president and global head of corporate affairs said: "TCS is delighted to be chosen by Pearl, a decision based on our long-standing work in the UK insurance industry, our track record of working for five of the top 10 UK insurance companies and the result of our 14 year relationship with Pearl. TCS will sign a long-term lease at the Peterborough site and our intention is to establish a BPO centre of excellence for the UK there."

A.S. Lakshminarayanan, VP and country manager, United Kingdom & Ireland said, "TCS has been recognised for its outstanding contribution to the United Kingdom's knowledge economy, and together with the strength and heritage of Pearl and its professionals, we will create a new force in life and pensions BPO in the UK."

For more info visit www.tcs.com/uk and http://www.pearl.co.uk/

Good Technology Launches Indian Operations

Good Technology, a US-based provider of wireless computing software and services, has formally opened its Indian support center at Hyderabad.

The Indian center is expected to provide a range services including engineering, Quality Assessment (QA), and sales support to a number of Good Technology products and services including enterprise software applications like GoodLink and GoodAccess. The company is looking at developing the center as a hub to support its global operations spread across the US, UK, France and Germany.

According to company officials, the availability of cost effective, high quality workforce prompted the company to spread its operations to India.

Reuters to Offshore Corporate Research to India

Reuters, the UK-headquartered news and information delivery conglomerate, will offshore corporate research and other allied valued added research actives to a New Delhi-based Knowledge Process Outsourcing (KPO) company. Reuters employs close to 15,500 people and reported sales of USD 5.5 billion for 2004.

Copal Partners, the Indian partner for the deal, would execute research initiatives supporting Reuters’ databases providing financial and other related information on companies. Copal Partners, according to company officials, will provide financial research and analytical services. To meet the requirements, the company will also increase its current staff strength by 40 percent.

Reuters already has a captive offshore unit at Bangalore, India, which employs close to 1,000 people in data analytics and a small group supporting the news and current affairs division.

Well thats business and money matters. But lets wait and watch how the Reuters UK employees going to react to this deal.
They wont call it " Cost cutting " - for sure,for them its "Axing"! When Reuters opened its first Offshore research center in Banglore India,the reaction from Reuters UK employees were tough.They went on strikes that affect the media giant very badly.Well lets see how smart the Reuters HR guys are .. .!

For more information check http://www.copalpartners.com/ and www.Reuters.com

OfficeTiger Reaches Agreement to Acquire MortgageRamp

to Expand Financial Management Services Offering...

Leading professional support services firm, OfficeTiger, today announced that it has reached an agreement to acquire MortgageRamp, a leading provider of business-process outsourcing and technology solutions for the global real estate finance industry with established offices throughout the United States for $48 Million.

The agreement will add 150 clients, including many top global financial institutions, to OfficeTiger’s client roster and greatly expand its existing Financial Management Services (FMS) capabilities by bringing a large number of seasoned real estate finance and technology experts to the table.

OfficeTiger provides integrated onsite-offshore services to professional services firms and Fortune 500 companies through its four service lines: Premedia, Financial Management Services, Research & Analytics and Transaction Processing.

Currently, OfficeTiger partners with the real estate industry to align back office processing with portfolio objectives to optimize property operating performance through its FMS division.

“The agreement solidifies OfficeTiger’s position as a global sourcing solutions provider offering integrated onsite-offshore services through a presence in expanded multiple geographies,” said Randolph Altschuler, co-CEO, OfficeTiger. “MortgageRamp’s veteran knowledge and existing talent pool of 300 associates and network of more than 2,000 experienced real estate finance professionals will expand our Financial Management Services division to include real estate finance support services.”

As part of the agreement, MortgageRamp will become the Global Real Estate Division of OfficeTiger. Ken Beyer, CEO of MortgageRamp, will continue as CEO of the new Division and will report to OfficeTiger co-CEOs, Randolph Altschuler and Joseph Sigelman.

The acquisition of MortgageRamp is again expected to lead to cash flow, and may even involve another round of funding. In terms of revenues, this is the largest acquisition done by an Indian BPO company overseas. The only other major acquisition of this nature has been ICICIOneSource’s acquisition of Accounting Solution Group. ASG was a 600 employee outfit which was acquired by ICICIOneSource in April and could have involved a cash outflow of more than $ 20-$ 25m.

OfficeTiger acquired Devonshire of UK, in October, ‘04. London-based Devonshire Group has revenues of $20m and around 200 clients in the financial, legal, consulting, design and pharmaceutical verticals. Devonshire had a team of 250 in London and 40 in its Frankfurt operation when it was acquired.

Before the Devonshire acquisition, OfficeTiger raised capital in June ‘04. The holding company of OfficeTiger in New York was recapitalised in a private equity transaction involving a $50 investment by Francisco Partners, of which $25m was a direct investment. The remaining funds were used to buyout the existing investors in OfficeTiger. Neil Garfinkel and David Golob, each a partner with Francisco Partners, joined the Board of Directors of OfficeTiger.

for more check www.MortgageRamp.com

Specialist Outsourcing Gaining Acceptance – Study

According to Datamonitor and Everest, the mid-level IT outsourcing service providers have bagged some prime services contracts for the period ending 3Q 2005, showing a marked increase in demand for utilizing specialist IT outsourcing providers to manage specific functions.

The quarter saw second-tier international vendors including US-headquartered Keane, and Pomeroy, along with Indian IT service providers like Tata Consultancy Services (TCS) and Infosys, signing their most voluminous contracts ever.

Datamonitor, for the study, tracked a total of 432 outsourcing deals, which was a percent less than the year-ago period. The value of deals also fell by 32 percent from USD 41.9 billion in 3Q 2004 to USD 28.5 billion in 3Q 2005, with the average contract size declining from USD 95.7 million in Q3 2004 to USD 66 million 3Q 2005. The main reason cited for the drop was that only about half the number of billion dollar deals tracked in 3Q 2004 were tracked in 3Q 2005.

Finance and Accounting Outsourcing (FAO) has been cited as the major upcoming segment. With deals such as the one signed between Accenture and National Australia Bank for servicing of the bank’s accounts payable functions from a center in Bangalore, India.

As per the Everest group, although the current FAO market is tapped only by major providers like Accenture and IBM, which hold 32 percent and 29 percent respectively, new entrants, such as Genpact (earlier known as GEICS) and WNS, another Indian BPO provider, are displaying impressive growth and posing tough competition to the market leaders.


reported by GlobalOutsourcingNow

Unilever Looking at Offshoring F&A, HR to India

According to press reports, Unilever, in an effort to lower its operating cost, is considering to offshore a portion of its Western European jobs.

According to a company spokesperson, the personal care conglomerate is in discussions with both US-headquartered Accenture and IBM before considering any such move.
Both Accenture and IBM have significant presence in India and are looking at developing the local operations as a support base for IT and BPO contracts.

Unilever is said to be considering the relocation of HR, finance and computer services positions. Although, the company spokesperson did not confirm the exact location or the number of jobs to be offshored, as per a Financial Times Deutschland report, the company might move around 2,500 jobs to India and some Eastern European countries.

The newspaper further added that the company might enact its offshore plans for the IT departments as early as 2006, while the remaining may be implemented between mid-2006 and 2007.

Infosys Reports 36% Rise in 2Q Net Profit

Infosys Technologies, the Indian IT services provider, has reported a 36 percent increase in its net profit for 2Q 2005, driven by the increased demand for technology outsourcing services by overseas companies.

The company’s net income rose from INR 4.47 billion a year earlier to INR 6.06 billion. According to Nandan Nilekani, CEO and Co-founder, Infosys, the company received a number of contracts from Europe, including part of a EUR 1.8 billion contract from ABN AMRO.

The company expects to report a 31 percent rise in sales in the quarter, bringing in INR 24.5 billion in revenues.

PwC to Start KPO Operations in India

PricewaterhouseCoopers (PwC) has announced its plans to open a Knowledge Process Outsourcing (KPO) center in the Eastern Indian metropolitan of Kolkata (Calcutta). The operations will mainly cater to PwC offices at various locations and would focus on servicing accounting and project management requirements.

PwC has also decided to open a training center to train professional accountants to cater to the offshored service requests. The company is looking at hiring around 1,000 accountants for the center. The center would initially begin by servicing insurance related requirements of PwC UK.

According to John Minards, Head - Assurance Services, PwC Midlands UK, the company decided to set up the operations in city not only because of the presence of qualified English speaking professionals, low cost of operations, infrastructure facilities but also because of the support extended by the local government to ITeS. The entire project is expected to cost around GBP 1.6 million.

Senator Questions Texas HHSC Outsourcing Contracts :


Senator Gonzalo Barrientos from the State of Texas has called for a review of all the proposed as well as previous Texas Health and Human Services Commission (HHSC) outsourcing contracts.

Senator Gonzalo Barrientos of Austin, Texas has raised questions over the outsourcing contract granted by HHSC to Convergys, a Cincinnati-based HR and payroll management outsourcing solutions provider, in order to save around USD 21.7 million to the state exchequer. In a letter to the State government, the Senator pointed to a report by state’s auditor, which claims that none of the stipulated savings were made through the deal in the first year contract.
The cited audit report further states that the Commission's decision to outsource its HR and payroll services was based on incorrect cost data.
Convergys undertook the HR and payroll management function of HHSC last year under a five-year USD 85 million contract deal. The deal services records of 46,000 Texan government employees. In a response an HHSC spokesperson stated that the contract was not expected to lead to any savings in its first year of service.
HHSC still upholds the original stipulated savings estimate.

According to a recent study by Frost & Sullivan, the increasing dominance of IP-based contact centers is expected to significantly increase the demand for Interaction CRM (ICRM) -based applications in the Asia Pacific region.
The study projects that the market for such solutions will increase from USD 617.4 million in 2004 to USD 1.418 billion by 2011, growing at a CAGR of 11.3 percent. One of the prime reasons for the increase in uptake of such solutions is the decline of enterprise product lifecycles in the local markets, prompting replacements.

IP telephony providers can expect easy uptake in the Asian telecom market. However, they will have to improve their reliability and adjust the pricing of their product to tap maximum benefit out of this growth.

According to a joint study of the Associated Chambers of Commerce and Industry of India (ASSOCHAM) and Evalueserve, a global business research and Knowledge Process Outsourcing (KPO) company, the Indian BPO and KPO sectors could witness 100 Mergers and Acquisitions (M&As) and IPOs over the next five years, with the deals being valued at USD 3 billion to USD 5 billion.
The study estimates that nearly 80 percent of the projected USD 3 billion to USD 5 billion worth of deals would be signed by the prominent companies in the industry. The smaller companies in the BPO and KPO industry, numbering about 400, would account for the remaining 20 percent of the transactions. The joint report also forecasts that most of the 20 major deals, involving M&As and IPOs, would be undertaken by a group of 10 large companies, which will explore options to diversify, while the smaller companies will see significant acquisition and funding activity in the short term.

ASSOCHAM also outlined the possibility that the companies may consider IPOs in order to raise funds for expansion, both organic and inorganic. The study goes on to predict that that the Indian BPO and KPO industries, driven by the increased level of M&A and IPO activities, would undergo consolidation, leading to the creation of few listed global companies. The report also emphasizes that the success of these deals depends on the effective integration of the two companies that have been merged or acquired.

EXL to Provide Back Office Support to British Gas

EXL, a US-headquartered third party (BPO) company, has won a contract to manage the back office operations for British Gas, the UK-based supplier of residential gas and electricity.

EXL will provide the services from its facilities in Noida and Pune, India. The service deliveries are expected to begin in January 2006. Although the company declined to disclose the value of the deal, it stated that the contract, which is of a medium to long-term duration, would require an additional 750 to 800 employees.
EXL has already started hiring and training the employees for the contract.

AIG Invests $30M in TRG

AIG Capital, the US-based private equity investor, has invested USD 30 million in The Resource Group (TRG), a US-based BPO solutions provider, through AIG Global Emerging Markets Fund.

TRG plans to utilize the investment in financing its expansion plan. The expansion plan is focused at augmenting the company’s current services portfolio, as well promoting movement in new outsourcing domains. A portion of the fund will also be used to support TRG's organic growth. TRG reported USD 170 million in revenues in the previous fiscal year and presently employs 4,000 people.

Karvy Diversifies into BPO and Research Services


Karvy Consultants, an Indian financial services company, has diversified into BPO and research and analytics services. Karvy Global Services, the company's outsourcing subsidiary in Hyderabad, India, will be officially launched in October 2005.

Karvy Global Services has invested in three facilities in Hyderabad, with 800 seats, and already has a staff of 250 people.

According to Arthur Flew, CEO, Karvy Consultants, the company will finish a third facility it is setting up in Delhi, and may also look at facilities in other locations in India. The company plans to get to 4,000 staff in next five years.

He added that the company expects that large investment in facilities and staff by Karvy will help attract customers. However, Flew did not disclose the size of company’s investment in its outsourcing subsidiary.

The company has also opened a subsidiary in New York, which will be staffed primarily with business development staff.

Karvy is currently offering Finance and Accounting (F&A) back-office services, and plans to also offer other services including transaction processing and HR services. The company is also focusing on research and analytics such as investment and economic research.

Reported by NETWORKWORLD

Nipuna to Set Up Center in Malaysia

Nipuna Services, the BPO subsidiary of Indian IT services provider Satyam Computers, is planning to set up a new overseas center in Malaysia to explore new market potential and to tap local talent. Besides, the company is also planning to locate a center in China.

According to Roddam Venkatesh, CEO, Nipuna, the company is also set to expand its role in Knowledge Process Outsourcing (KPO).

B Ramalinga Raju, Chairman, Satyam, revealed that the company has become the first BPO to achieve eSCM level 4 certification, with only four others in the world to have achieved eSCM level 3. eSCM refers to Sourcing Capability Model for service providers developed by the Carnegie Mellon University

GECIS Rebrands as Genpact, Targets $1Bn in Annual Revenues

GE Capital International Services (GECIS), the India-headquartered outsourcing company, has renamed itself as Genpact, at the same time setting an annual revenue target of USD 1 billion by 2007-2008. The company also plans to increase its global workforce to 30,000.

Pramod Bhasin, President and CEO, Genpact, expects the company to close the calendar year 2005 with USD 490 million in revenues and a little over USD 82 million in Earnings Before Interest and Taxes (EBIT). He added that since the sale of the 60 percent stake held by General Electric (GE) to General Atlantic and Oak Hill, two private equity firms, Genpact had received orders worth USD 160 million.

Over the next two to three years, the company expects its revenues to grow 25 percent annually, touching USD 1 billion sometime in 2007 or 2008.

Commenting on the proposed increase in Genpact’s headcount, Bhasin said that the company plans to hire around 10,000 people over the next two years with a focus on China and Eastern Europe. Genpact currently employs nearly 19,000 workers, most of them in India.

The company, based in Gurgaon, India, has recently set up a facility in North Delhi and another one is expected to come up in the Southern Indian city of Cochin. Bhasin also outlined the company’s plans to expand in some parts of Europe and Africa, and revealed plans to set up call centers in Latin America. He added that the company foresees revenue potential of more than USD 500 million from orders received this year.

for more info www.Genpact.com



Reported by Associated Press

Orange may Offshore 700 Jobs to India


Orange, the European mobile phone operator, is likely to outsource 700 jobs from its UK unit to India by the end of 2005. Orange officials disclosed that the decision follows successful call center trials held in Delhi, India, through BPO companies Vertex and Convergys.

The group stated that it was looking to expand the number of calls handled offshore by its third-party partners. However, the operator also stressed that the offshoring of calls to India, many of them Pay-as-You-Go inquiries, would not lead to reduced staffing levels in Britain, and that the company had recruited more than 900 workers in the country between May and July 2005.

Orange officials confirmed that the company’s British communication centers would still handle a majority of calls and it would continue to have a significant presence in the Northeast and Southwest.

Orange is recruiting a team of 20 to 30 volunteers, chosen from its British sites, to travel to India to help train staff in the call centers.

Reported by The Economics Times

According to a report by IDC, the US offshore IT services market is expected to nearly double in size to an estimated USD 14.7 billion by 2009, driven by growth in specific industries, such as discrete manufacturing and financial services.
Cost savings remains the leading driver for adoption for all types of offshore services. However, nearly half of the companies surveyed also leverage offshore capabilities to support new service and technology delivery models within their organizations. In addition, industry expertise is now a key factor in selecting offshore providers.

IDC expects the US offshore IT services market to increase at a five-year CAGR of 14.4 percent. Discrete manufacturers will continue to generate the largest percentage of overall revenue for offshore services providers, accounting for 17 percent of spending by 2009.

Retail, communications, banking, insurance, and other financial services companies are also expected to be prominent users of offshore IT services. In aggregate, the financial services industry is expected to account for 28.9 percent of the total expenditure by the end of the forecast period. In general, discrete manufacturers and healthcare respondents viewed offshore services as an important cost-cutting mechanism, with the majority of discrete manufacturers also citing offshore services as an increasingly strategic component of IT delivery.

A report by Forrester Research has ranked UK as the top European outsourcer during 2Q of 2005, accounting for 39 percent of the outsourcing deals. For the period between April and June, 2005, the British and German companies, particularly in the financial and public sectors, closed most of the EUR 5 billion in outsourcing deals.
The survey covered 67 outsourcing deals exceeding EUR 10 million in contract value involving 22 vendors.

Germany and The Netherlands shared the first outsourcing tier with the UK, while Italy entered the group for the first time, with seven major deals. Norway reported four deals brought in by IT services provider EDB. Telecom and network outsourcing witnessed a substantial growth, accounting for almost a third of the quarter's deals.

The study identified BT Global Services as heading the vendor table for deal value, winning a EUR 2.2 billion deal with the UK Ministry of Defense.



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India’s FDI Levels below Potential - IMF

According to the International Monetary Fund (IMF), although foreign investors are showing increasing interest in India, the country’s Foreign Direct Investment (FDI) flows are well below potential. IMF added that the Asian FDI levels, particularly in India, China, Indonesia, Malaysia and Vietnam, continued to rise, and the trend is expected to continue in the emerging markets in 2005.

The report indicates that India has received much attention after it emerged as a preferred outsourcing destination, and the sector is attracting substantial FDI inflows.

However, FDI has been hindered in India by a difficult investment climate, as well as by caps on FDI in certain sectors. Moreover, the growing inadequacy of India's infrastructure constitutes a major obstacle to private investment and export potential.

While China remains the predominant location for FDI inflows, there are some tentative signs of a reallocation of FDI inflows within Asia. Some investors are reassessing their investment plans in China and the authorities are slowing down approvals in several overheated sectors. There has also been a decline of interest in large new investments into Malaysia and Singapore, owing to higher local costs.

The report also noted that outward FDI from Asian emerging market countries is expanding rapidly. FDI flows from China, India, Korea, Malaysia, Singapore and Thailand have demonstrated a marked upswing.

IMF predicts that the higher level of FDI inflows to emerging market countries will continue in 2005 owing to favorable economic prospects, cross-border acquisitions activity and further privatization of state-owned companies. The investments are expected to concentrate in the oil and gas, telecoms and banking sectors.

The report forecasts that the Chinese and Indian companies will continue to want to secure natural resources, mostly from the developing countries, to fuel their own growth. In addition, many firms in emerging Asia see a number of competitive advantages in investing elsewhere in the region, including geographic proximity, cultural affinity, and the ability to operate in smaller niche markets.





Reported by India Daily

India a Leader in Global Sourcing – Gartner

According to a study by Gartner, India continues to lead as global sourcing destination. However, despite its dominance, the market research firm warns that organizations should carefully consider their offshore vendors while selecting an offshore partner.

As per the study, although more options for external service provision are becoming available worldwide, India remains the market leader with a majority of essential resources and sufficient technology infrastructure. Gartner also predicts the total global offshore spending on IT services to reach USD 50 billion by 2007.

According to Ian Marriott, Research VP, Gartner, while offshore External Service Providers (ESPs) have advantages in economies of scale and specific areas of expertise, they do not have an immediate solution for correcting flawed outsourcing processes. He added that the cost of labor will remain a major factor in the choice of country destination. However, Marriott advises businesses to also understand and evaluate the costs-versus-risk equation.

Gartner recommends that organizations seeking an offshore provider consider multiple country options around the world. Study revealed that strong governmental support is making China competitive, while Latin America, Brazil and Mexico are increasingly attractive options. In Eastern Europe, the Czech Republic, Hungary, Poland and Russia are among the countries becoming increasingly attractive.




Reported by CXOtoday.com

ACS Signs Extension of State of Colorado Child Health Program

Affiliated Computer Services (ACS), the US-based provider of business process and IT outsourcing solutions, has signed a USD 3.8 million, one year contract extension with the State of Colorado's Department of Health Care Policy and Financing for the Child Health Plan Plus (CHP+) program.

The contract is an extension of the Colorado CHP+ contract awarded to ACS in 2003 to support enrollment of uninsured children into Colorado CHP+.

Under the contract, ACS will provide multilingual call center services to providers and members who need information about CHP+ application and eligibility processes. ACS will also process CHP+ applications, determine eligibility, collect premium payments, manage complaints and appeals processes, handle correspondence, and administer a website for the CHP+ program.




Source: ACS (Edited Press Release)