Friday, September 30, 2005

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.


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

Thursday, September 29, 2005

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

Reported by Associated Press

Monday, September 26, 2005

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

Friday, September 23, 2005

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.

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

Thursday, September 22, 2005

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)

Wednesday, September 21, 2005

Hewitt may Acquire Watson Wyatt

Hewitt Associates could be a potential buyer for competing consulting firm Watson Wyatt.

Hewitt has made more than USD 1 billion of acquisitions in the past few years.
In 2002, it bought the UK’s Bacon & Woodrow for USD 259 million. It also acquired HR firm Exult for around USD 776 million in 2004.

Although Hewitt indicated HR outsourcing as a major driver of its revenue and profit growth, so far it has not hinted at any new acquisitions.

In August 2005, Watson Wyatt completed the acquisition of its UK-based affiliate firm in an effort to increase its long-term profitability and stockholder value. It repurchased more than 800,000 shares in 4Q 2004 – giving investors around USD 21 million.

Officials from both Hewitt and Watson Wyatt declined to comment on the planned acquisition.

Reported by
ABB to Shift Engineering R&D to India

ABB, the European power company, is planning to shift its high-end engineering research from high-cost centers to India.
Sten Jakobsson, President and CEO, ABB Sweden, revealed that the company plans to cut back on operations in high-cost centers such as Germany, Sweden and the US and shift work to India. These centers focus on power technologies and automation, among other things.

The company plans to augment its research operations in India, and the number of engineers employed at its corporate research center in Bangalore is slated to nearly double to 500 by next year.

Jakobsson added that the Indian engineers were responsible for development and engineering work in integrated circuit control systems, engineering core systems and processing systems. There were also about 200 people in engineering services within pulp and paper industry and metals industry.

According to Jakobsson, there was a dramatic increase in outsourcing of engineering services to India, both for development of projects within the company and for projects ABB gets from customers, which helped to keep costs low for its total engineering capacity.

The company has nine corporate research centers - one each in Finland, Germany, Poland, Norway, Sweden, Switzerland, US, India and China. The Indian center was opened in 2002, followed by one in China in 2005.

India operations are currently focused on meeting R&D demands of ABB's software-intensive products and systems.

Reported by Business Standard

Tuesday, September 20, 2005

WNS to Set Up New Centers, Plans Global IPO

WNS Global Services, an Indian BPO services provider, is considering setting up 500 -seat centers in Hyderabad and Chennai, India.

The USD 165 million company currently has offshore delivery centers in Mumbai, Pune, Nashik and Gurgaon in India, and Colombo in Sri Lanka. It also has client service and transition offices in New York, US, besides London and Ipswich in the UK.

The company is also planning to go for an IPO next year. However, company officials declined to provide further details in this regard.

WNS’ service offerings include transaction processing in accounting and finance, core business administration, marketing program support, HR administration, and client interaction management. At present, the company employs around 8,000 professionals in India.

Its six business units include travel services, insurance services, health claims, knowledge services, mortgage and real estate, manufacturing, distribution and retail.

WNS services is one of the Best managed BPO s in India.

Reported by Business Standard

Monday, September 19, 2005

Evalueserve Opens KPO Center in China

Evalueserve has announced the opening of its operations center in Shanghai, China. The new operations center will provide Business Research and Investment Research services with a special focus on the Chinese and Asian market.

Evalueserve introduced the concept of Knowledge Process Outsourcing (KPOSM) in December 2000 and is the first KPOSM company to enter China. The company has been operating from its center in Gurgaon, India, which has over 850 analysts, providing Business and Market Research, Investment Research, Data Analytics Research and Intellectual Property Research services to companies worldwide. Evalueserve will first start providing basic services from China, but will continuously add capabilities over time.

According to Marc Vollenweider, CEO and Co-founder, Evalueserve, “For a growing number of Western companies, the focus of research has shifted to Asia. Many of our clients wanted us to provide research services in Asian countries. By adopting a strategy of multi-delivery locations, and opening an operations centre in China, we now have the capability to serve our clients better in Asia.”

This strategic move makes Evalueserve the first global KPOSM Company to have multi-delivery locations in two of the world’s most rapidly growing economies – India and China -- each having a huge talent pool of knowledge workers.

After successfully redefining the global BPO industry by offering higher-end knowledge services in the outsourcing arena from India, we believe that having an operations centre in China will add significant value to clients wanting a ‘first hand’ understanding of the dynamic Chinese and Asian markets” – says Robert Daigle, Vice President – Sales and Marketing.

Sumeet Chander, AVP -- Business Research, will head Evalueserve’s China operations.

Source : Evalueserve’s PR and Corporate Communications

Mick James article on the continuing controversy that surrounds Outsourcing ( Consulting Times magazine Sept 2005) is really interesting.

"British people clearly react against certain accents on the phone—I doubt they even consider that the nice Scottish and Irish people at their favourite bank may themselves be outsourced. And,frankly, what do you expect when you entrust someone with dark skin with a complex technical operation like button-pushing?"

The article clearly analysing the ups and downs , dos and donts,hows and whens of outsourcing and give the reader a fair impression on this heavily negativly used tearm - " Outsourcing"!

And the case studies are awesome and discribes the real face of the 'corporate life saving drug' called - Outsourcing !

"Nothing new here. My experience with various clients has convinced me that its the fear of change,and NOT the lack of capabilities or the advantages, that drives most of the resistance against outsourcing".

He beautifully describes the fear of the caller when she hear the line "may I have the last eight numbers of your Creditcard please" from the Customer support executive. An interesting point that the article points to is that as Outsourcing matures, we should expect more bad experiences, and some services
moving back in-house occasionally - 'Some' !!!

Here's my favorite line - “Early adopters”, whether of outsourcing or the mini skirt, get significant benefits either in profits or popularity. As others follow suit, the competitive advantage erodes and people who frankly shouldn’t have been seen dead in that style start appearing on the street. And then the world moves on ...

And above things all are just Copy+Paste power of Microsoft XP ! Here's some original advice from me - a kid in the world of outsourcing - for those who still doubt about the term Outsourcing -- please read " The Essence of Survival "!

Click here to read the Article

Saturday, September 17, 2005

Location Attractivness: South Africa

The Latest happening in the Offshore Hunt !

Some International Companies in South Africa [ Company Name & Current/ Projected Investment ]

MindPearl (Swiss) : 200-seat call center located in Cape Town

Computer Sciences Corporation (American) : >500 employees in 3 BPO centers: Cape Town, Johannesburg, Richard's Bay

Global Telesales – Lufthansa subsidiary (German) : Operates a $900,000 call center in Cape Town with ~120 seats

The Qualifyer Group (Dutch) : Operates a call center in Western Cape with more than 400 seats

Sykes (American) : Operates a 300-seat call center in Johannesburg (British) : Operates call centers with more than 500 seats across the country

Dialogue UK (British) : Invested $3.0 million in Cape Town call center

Dimension Data (British) : Operates call centers in Johannesburg and Cape Town

Active Content Solutions (British) : Operates 60-seat call center in Cape Town

Electronic Data Systems (American) : Operates BPO centers in Johannesburg and Cape Town; >1,000 employees

The Budget Group (British) : $15 million to establish a call center in Cape Town

Source :SASSCom

Comparative Labor Rate by Country

Country Vs Labor Rate ($ per hour)

Brazil-------- $3.00 to $4.00

Canada---------- $5.00 to $7.00

India---------- $1.00 to $2.00

Jamaica---------- $2.50 to $3.00

Mexico ---------- $3.50 to $5.00

New Zealand ---------- $5.00 to $7.00

Ireland ---------- $5.50 to $6.50

Portugal ---------- $7.00 to $10.00

Puerto Rico ---------- $5.15 to $8.00

South Africa ---------- $3.50 to $5.00

Spain ---------- $7.00 to $10.00

United States ---------- $7.50 to $14.00
Source : Media Sources and Trade Industry of South Africa

Friday, September 16, 2005

India Emerging as First Choice for Offshoring Financial Services – PwC

According to a recent survey by PricewaterhouseCoopers (PwC), India has emerged as the best choice for offshoring financial services globally.
However, PwC warned that China could overtake India in about three years’ time.
India took the first spot among 156 companies surveyed worldwide as the top destination for off-shoring.

Dominic Nixon, Asia Head for AML, PwC, said, "It is inevitable the position that India has in the area is gradually going to be eroded over time as Philippines and other countries outside Asia begin to become more attractive''.

He added that cost plays an important role, but is not the overriding factor.

He went on to explain that the quality and the education of the workforce and the stability of the country were also taken into account. He, however, cautioned that rising wages are threatening to erode India's advantage as a low-cost base.

The survey pointed out that keeping cost aside, companies which participated in the survey cited other factors when choosing their location. These include improved quality of service and strategic flexibility.

Reported by
Capgemini to Set up Technology services Facility in India

Capgemini, the French IT and consulting services company, has decided to set up an additional technology services facility in India, in view of the increased offshoring of jobs by clients in Europe and the US. The company is also looking at acquisitions in the Indian market to strengthen its position as a core global offshoring location.

Capgemini currently manages three centers in Mumbai and one in Bangalore, with a total strength of 2,000 professionals. The company has decided to increase its headcount to 4,000 people by end of 2005.

According to Baru Rao, CEO, Capgemini India, the company plans to open the new facility by the 1Q 2006. However, he refused to disclose the capital expenditure earmarked for setting up of the new facility.

Capgemini India delivers services to customers in North America, Britain, Europe and Asia-Pacific. Besides India, Capgemini has another offshore outsourcing operation in China, which mainly focuses on the domestic market.

Reported by
After targeting India and the Philippines as the prime destinations for offshoring technology and call-center jobs, major US companies are increasingly looking towards Latin America to meet their 'nearsourcing' requirements. Dell and Procter & Gamble (P&G) are some of the major MNCs heading to the Latin American countries to source such services.
According to Federico Cartín, Executive Director, Costa Rican Chamber of Information and Communication Technology (ICT), the number of call-center positions alone is expected to double in the next two years.

As per Datamonitor figures, the number of call-center workstations in the Latin American region as a whole will touch 730,000 in 2008, up from 336,000 in 2004. One of the prime reasons for the attractiveness of these destinations is the lesser geographical distance, as compared to prime offshore destinations.

reported by