Monday, December 17, 2007

Taking a cue from the success of Indian Idol, a popular television talent contest, Infosys BPO has now started a similar contest for its employees.

Infosys BPO Idol, as the contest is known, is expected to get the employees involved in activities other than business, and "create a vibrant, passionate and culturally stimulating workplace," says the company.

The show has been organised on the lines of the American Idol. The elimination rounds have already been held. To maintain the same aura and energy around the event, the Infosys BPO has introduced the concept of wildcard entries, SMS voting system and a live band. Each participant is given time to practice with the band to ensure their singing is flawless.
The SMS voting system was introduced in the fifth round, which had 10 contestants. The SMS votes are given 20 per cent weightage, according to organisers. In a week, following the start of the fifth round, the event has received 5,525 SMS votes.

Besides, the company is also sending out mailers on each participant called 'Know Your Infy Idol', wherein the participants share personal information. Each participant is also expected to canvass for votes with innovative ideas to increase his/her SMS poll rating.
Said Newtom Paul, a participant: "Infosys BPO Idol is a great opportunity to show my talent. Very few people know I can sing, Infosys BPO Idol has given me the much-needed exposure. I have also established friendships with other colleagues."

The event is being organised at three locations in India including Jaipur, Pune and Bangalore. For the final round scheduled at Infosys' Bangalore campus on December 21, Bollywood playback singer Kavita Krishnamurthy will be the judge.

The winners of the contest will be awarded an all-expenses paid trip to Singapore for two persons. The other six finalists would get an i-Pod shuffle.

"The participants of Infosys Idol are given opportunities to participate at all our other events and functions. We are providing them with various platforms to showcase their talent," said Nandita Gurjar, Group Head, HR, Infosys Technologies.

Looking at the response received for the Infosys BPO idol, Infosys BPO is looking at continuing the event next year and making it an annual affair.

Infosys BPO, which was in the news till recently for high attrition rates, is planning to organise many such events to get its employees involved with the organisation.

With the aim of raising awareness on India as a sourcing hub for global firms in different sectors,

The Supply Management Institute (SMI) in partnership with the Indian Institute of Management — Bangalore (IIM-B) are going to organize India Sourcing Summit in Bangalore.

The two-day summit is scheduled to begin on February 8. , is expected to see a participation of representatives from over 150 global firms, the organisers said here on Friday.

In a flat world, global firms prefer sourcing materials from cheaper and cost-effective destinations without compromising on quality of the goods they are procuring. India is fast emerging as a hub for global sourcing not only for IT or ITeS, but also in traditional sectors like apparel, automotive, special chemicals and electronic components.

According to a CII-McKinsey report, the sourcing of electronic components from India is expected to touch $15-18 billion in 2015 from $1.25 billion in 2005. The report also says sourcing of apparel from India is expected to be in the range of $25-30 billion in 2015 from $6.1 billion in 2005, and auto-components to be $20-25 billion from a mere $1.1 billion in 2005. The sourcing of special chemicals which was of the order of $1.6 billion in 2005, is expected to reach $12.15 billion in 2015.

At a time when sourcing occupies the top priority of lot of global firms, India will remain in the forefront before they go in for global sourcing being a low-cost destination; relatively safer place for IP protection, language capabilities and know-how of the people regarding the requirements of global sourcing.

“Sourcing is global and international business. This will change the dynamics of doing business in future. However, Indian firms need to undertake steps to meet the scale of the Chinese firms, and groom talents in sourcing and supply chain management to stay competitive in the game,” said Constantin Blome, secretary, Indian Sourcing Summit.
Many a global firms have recently come out with their sourcing from India. Auto major BMW has recently opened its international procurement office in Gurgaon. EADS, a major player in aerospace and defence, has opened its sourcing office in India, apart from sponsoring a chair for sourcing and supply management at IIM-B.

According to Bolme, who is also the EADS-SMI Endowed Chair for Sourcing and Supply Management, German auto majors are now aggressively looking at India as a major supply base of auto-components, after the success of Japanese auto manufacturers. This would create enormous opportunities for students in India, to pursue career in sourcing and supply chain management, he added.

Source: Business Standard

Tuesday, November 13, 2007

Satellier, a pioneer and global leaderin the development of value-added design support and Building InformationModeling (BIM) service solutions for the global architecture, engineering,construction (AEC) industry, announced today that it has raised $10 millionin a second round of venture funding from Sequoia Capital. The investment accelerates the company's rapid migration to full technology-enabled BIMservices and will facilitate robust global expansion.

Friday, October 19, 2007

Expected Growth in Global BPO and KPO Markets (2003-2010)

Wednesday, October 10, 2007

Fujitsu India announces expansion

Fujitsu Consulting launched its fourth development centre at Noida, just outside the national capital, at an investment of $10 million. It also announced plans to mirror this facility in 12 months.John T. Rose, president and chief executive officer of Fujitsu India, said the company expected a huge demand for offshore development in the country for which it will make strategic acquisitions with a focus on mid-tier firms.

The company had recently acquired OKERE Inc, a New York-based consulting and information technology services company that has operations in India.

“The opening of this office will substantially improve our ability to deliver leading services to clients anywhere in the world,” Rose told reporters here after inaugurating the new office, which can seat 1,200 people.

He said the induction programme and expansion plans - where an additional 10,000 sq. ft. of space will be added over the next 12 months - would focus on employing quality personnel.

Sunday, September 30, 2007

World’s coming to India: five cities among the top outsourcing hubs

Bangalore, September 28: Chennai, Hyderabad, Pune and Kolkata are rated among the top five emerging destinations worldwide in the latest ranking of top 50 promising outsourcing cities around the globe. Bangalore, Delhi NCR and Mumbai, along with Manila and Dublin, are the five established hubs that are unlikely to fade from the outsourcing map, according to a study by services globalisation & investment advisory firm Tholons and media group Global Services.

he study ranked Chennai as the top most emerging hub for outsourcing globally, with established expertise in application development and maintenance, finance and accounting, product development, engineering services and testing. The Tamil Nadu government was IT-friendly, and an upcoming Mahindra World City, slated to be the world’s largest IT Park, in Chennai was favourable to its outsourcing climate.

Hyderabad, with relatively low property rentals and favourable government policies, recently attracted investments from BPO majors such as HCL BPO, EXL Services and Genpact and was ranked second in the list. However, recent terrorist attacks in the state have alarmed investors, the report pointed out. Pune gained prominence among outsourcing hubs owing to lower operating costs and attrition rates compared to other metros.

Among the 50 global hubs, Chandigarh, which was described as “one of the best planned cities in India” was ranked at nine and Coimbatore at 21. Cebu City in the Philippines, Ho Chi Minh in Vietnam, Sri Lanka’s Colombo and the Chinese cities of Shanghai and Beijing were also among the ten top outsourcing locations.

Kolkata and Bangalore were emerging as workplaces for application development and maintenance and business analytics, respectively. Tholons CEO & chairman Avinash Vashistha said tier-II centres are gaining prominence as investors become wary of investing in a single city as operations grow. Locations were being gauged for the available skill-sets, and investment decisions were business-driven, he said.


1. Chennai (India)
2. Hyderabad
3. Pune (India)
4. Cebu City (Philippines)
5. Kolkata (India)
6. Ho Chi Minh City (Vietnam)
7. Colombo (Sri Lanka)
8. Shanghai (China)
9. Chandigarh (India)
10. Beijing (China)
According to The Economic Times, Citigroup Venture Capital (CVC) has also entered the race to acquire Citigroup’s BPO arm, Citigroup Global Services.

ET, quoting sources say that Genpact, WNS Holdings and CVC are the final three players who are interested in this transaction. The report adds that while Genpact is the frontrunner, CVC may also have an advantage being part of the Citigroup family.

The current valuation of the deal is expected to be in the region of $ 600 million. The BPO arm is expected to report revenues of $ 200 million this year.

Another potential bidder, Firstsource Solutions is learnt to have moved out of the race, having already acquired the US-based MedAssist for $ 300 million recently.

Friday, September 14, 2007

India is still the most attractive country to which to move back-office operations, according to the 2007 Global Services Location Index compiled by A.T. Kearney.

The index evaluates 50 countries according to three main categories: financial attractiveness, availability of skilled workers and the business environment. India stays ahead of China, ranked second, thanks to lower wage, infrastructure and regulatory costs. Both countries lead the rest by a good margin. Policies to promote service exports in Latin America have helped Brazil and Mexico rise in the global league. Less established locations in eastern Europe, such as Bulgaria and Slovakia, are now ranked higher than either Poland or the Czech Republic.
LAST month, Amazon, an online retailer, announced that it had opened a software development centre in Cape Town. Chris Pinkham, a South African who is returning home from Seattle to head the operation, says that Amazon chose South Africa because of its pool of high-calibre IT workers and good infrastructure. The new outfit will create programmes for users around the world. Will other foreign firms also move such operations—a strategy known as offshoring—to South Africa?

According to a recent study by McKinsey, a consultancy, South Africa is well placed to benefit from the trend of firms shifting business processes, such as customer care and payroll administration, to cheaper places. This, says McKinsey, could create 100,000 jobs in South Africa as well as attracting a modest but useful $90m-175m in foreign investment by 2008. …

Wednesday, September 12, 2007

IT Spending by Indian SMEs Expected to Reach $900Mn in ’07 – AMI

According to a study conducted by AMI Partners (a US-based market research company), IT spending by Indian small and medium enterprises (SMEs) is expected to reach USD 900 million in 2007, reflecting an increase of 19 percent over 2006. IT spending by Indian companies includes both product support and professional services.

Among the key findings, the long-term managed services in the Indian market are strengthening, while the traditional services, such as applications development and integration are losing their foothold. The managed IT services in the country comprises end-to-end outsourcing and discrete managed services. Currently, the maximum amount of investment by Indian SMEs is made in discrete managed services.

According to Nirupam Chaudhuri, the Research Manager at AMI Partners, the managed IT service market in India is growing at a faster rate than the average market growth. He further added that a good relationship between both the sides is essential with a single point of contact for dealing with various issues regarding IT infrastructure and facilities.

Till now, a majority of Indian SMEs have spent heavily on annual maintenance contracts (AMC) for hardware and software applications. These annual service contracts are likely to mature into distinct outsourcing deals, where the service provider will deliver risk sharing, round-the-clock support, and facilities management services.

The competition among vendors delivering desktop management and routine network management services is enormous in India as the number of contracts in this domain is increasing. In addition, the contracts regarding FCAPS (fault, configuration, accounting, performance, and security)-based network management are increasing.

SolutionInc Acquires Line 4 Communications & Pelatis BPO Solutions

SolutionInc Technologies (SolutionInc), a Halifax-based Internet connectivity, billing, and management software and services provider, has entered into a letter of intent to acquire the Halifax-based Line 4 Communications from Armshore Investments (a merchant and investment bank based in Halifax, Canada). In addition, SolutionInc signed a letter of intent to acquire a 51 percent interest in Pelatis BPO Solutions (a BPO service provider) from Pelatis BPO. Through the deal, the company’s headcount will increase from 40 to 200. The financial terms of the transactions were not disclosed.

The transaction with Pelatis BPO, a BPO service provider with operations in Canada and the Philippines, will facilitate SolutionInc to deliver more services through its own firm, and hence lessening third-party outsourcing costs and increasing profits. In addition, the company has the option to acquire the remaining 49 percent of Pelatis BPO Solutions within the next 2 years.

The acquisition of Line 4 Communications will strengthen SolutionInc’s portfolio to include IP telephony systems as well as enhancing the potential recurring revenue streams.

Glen Lavigne, the President and CEO of SolutionInc, cited that the two acquisitions will strengthen the company’s credibility in key areas, such as support services, customer services, network management services, and product testing services.
Brocade Partners with Ness to Set up R&D Center in India

Brocade, a US-based provider of networked storage solutions that help enterprises connect, share, and manage their information, has signed a partnership agreement with Ness Technologies, an Israeli IT services and solutions company, to set up an advanced R&D center at Pune, India. The center has been set up with a focus to provide support for Brocade’s File Area Network (FAN) business. It possesses state-of-the-art IT infrastructure, such as advanced connectivity infrastructure and energy saving hardware. In addition, the R&D center meets high security standards.

This partnership will provide Brocade with access to Ness’ resources to support its FAN technology development, maintenance, and test activities.

Ness’ Indian operations are spread across Bangalore, Hyderabad, Mumbai, Pune, and Chennai. The company’s Indian operations offer outsourcing and offshore services to clients in IT, financial services, BFSI, life sciences, telecom, and utilities verticals across North America and Europe.

Global investment in research and development is rapidly shifting from North America and Europe to Asian centres such as Bangalore, Hyderabad, Mumbai and Beijing, according to new research.Researchers at the University of Sheffield and Aston Business School found that the shift was resulting in a small elite club of regions, in both the advanced and developing world, that are dominating the global knowledge economy.

The researchers found that companies in advanced regions such as Silicon Valley in the US, Cambridge in the UK, Ottawa in Canada and Helsinki in Finland, are increasingly establishing partnerships and networks with companies and universities in fast-developing Asian regions.

They found that of the US $50 billion invested by multinational companies in R&D projects around the world between 2002 and 2005, Asian economies received 58 percent of this investment, with Europe receiving 22 percent and North America 14 percent. The research has been published in a report titled ‘Competing for Knowledge´.

The majority of the investment in Asia is concentrated in a very small number of locations such as Bangalore, Hyderabad, and Mumbai in India and Beijing, Guangzhou, Hangzhou and Shanghai in China.

While Asia was the dominant destination of R&D investment, North America was the primary source, accounting for 50 percent R&D investment, followed by Europe with 28 percent This resulted in North America having net R&D investment deficit of US$18 billion and Europe a deficit of US$3 billion.

According to report authors Robert Huggins, of the University of Sheffield´s Management School, and Hiro Izushi, of Aston Business School, the key impact of this global redistribution of knowledge is that many regions in North America and Europe were losing out and the competitiveness gap between these locations and the elite regions was becoming even wider.
The research also showed that companies in advanced economies were finding it increasingly difficult to create innovations resulting in market-leading goods and services.
For example, between 1996 and 2006 productivity growth resulting from innovation in the United States amounted to only 1.5 percent per annum, considerably lower than that achieved in the 1950s or 1960s.

Huggins said: “As the knowledge required to produce innovations becomes more specialised and located in new locations around the world, companies are having to ensure that they are closely linked and aligned with these new sources wherever they may be.

“Since China is now the second highest research spender it is increasingly likely that it will feature more prominently as one of these new sources.”

Source: Indo-Asian News Service

Saturday, September 08, 2007

In the first phase of expansion, Wipro had tapped cities like –
Delhi, Mumbai, and Bangalore

In the second phase it had tapped cities like –
Kolkata, Chennai, Hyderabad, and Pune.

Now Wipro is looking at the third phase of expansion
Nasik, Guwahati, Bhubaneshwar, Kochin, Vishakhapattanam, and Jaipur.
Wipro’s employee strength of key delivery centers in India:
[Delhi and Pune: - ~3,000; Kolkata: ~2,900; Mumbai: ~5,000 ]

With established centers close to saturation point, it was logical to stabilize them and look at new cities. Wipro already recruits a lot from satellite towns for its Kolkata operations. The ratio of ‘met to offer’ to ‘fit’ candidates had declined from 15-16 per cent earlier in cities like Delhi or Mumbai, to 8-10 per cent currently in the big cities. In smaller towns, the ratio was lower.

Wipro preferred to have people on board who would stay on for longer periods and one way to do this was to ensure they started off with realistic expectations from the industry. Attrition rates fell 40 per cent since last year thanks to this. At the same time, Wipro developed incentive schemes, with around 200 employees going to offshore operations, and around 400 shifting from BPO to IT. The company today provided personal growth opportunities to deserving employees including on-going education while on the job. Candidates below internal criteria in some way or the other received training in skill-deficit areas and were absorbed if they cleared tests.

Kolkata was a leading training centers. Kolkata as a centre grew at 100 per cent over last year. Wipro would add 500 recruits in the coming six months. One of the major advantages of Kolkata was that it attracted talent from satellite towns like Jamshedpur, Ranchi, Bhubaneshwar, and eastern Indian cities.

Thursday, September 06, 2007

Globalization Changing Service Delivery Models for Organizations’ Business Processes – EquaTerra

Globalization is rapidly forcing a paradigm shift in G2000 organizations’ delivery models for their core business and information technology (IT) functions, as per EquaTerra perspective paper titled, ‘How to Design and Optimize Global Service Delivery Models’. These delivery models are becoming increasingly global themselves, and encompass a mix of internal and external delivery options including domestic shared services centers, offshore captive centers, and local, nearshore, and offshore outsourcing.

Virtually all functions within an organization – including IT, human resources, finance and accounting, procurement, call center, engineering, research and development, logistics services, research and analytics, clinical trials, and legal – contain some processes that could be optimized if delivered via an external captive, offshore or outsourced delivery model.

Thus, according to the paper, the question for today’s leading organizations is not whether a global service delivery model is needed, but rather, how to design, deploy and manage such a model. Given the plethora of in-house and third-party delivery alternatives, corporations must address how to assess, prioritize, execute on and exploit the breadth of options to achieve the desired outcomes. The paper also identifies the value achieved when organizations move beyond a focus on just cost reduction or labor arbitrage, and include an increased emphasis on multi-pronged service delivery models to achieve process improvement and transformation.

Said paper co-authors Cliff Justice, EquaTerra’s Managing Director of Globalization, and Stan Lepeak, EquaTerra’s Managing Director of Research, ‘Today’s buyers must understand their global options and opportunities for enterprise-wide delivery of a broad range of functions and process areas. They must also assess their organization’s unique needs in terms of what benefits they seek, which service providers and geographic locations to add to their short list when outsourcing, how to prepare a retained organizational model to govern the effort, and how to undertake outsourcing and still support various regulatory compliance mandates.’

According to the paper, organizations must address many topics when developing and implementing a global service delivery model, including:

Firstly, a process to determine which business and/or IT functions are suitable for and should be outsourced beyond local providers and boundaries, as well as those that should be managed via domestic or offshore captive shared services centers. Secondly, what the business case is – including expected benefits – and how to measure achievements for a specific outsourcing scenario. Thirdly, a risk profile to identify and assess the additional potential risks involved (e.g., financial, personnel, regulatory, compliance, data privacy, intellectual property, negative public relations) in offshore and outsourcing models. In addition, processes to identify, vet, assess and select candidate service providers and service locations and geographies. Lastly, a retained organization and outsourcing governance model capable of supporting global sourcing efforts.

The paper also discusses how service providers are addressing the growing need for global service delivery capabilities, how to design a global services governance model, and graphically depicts how a services delivery model answers the questions of what work gets done, by whom, and how.


RR Donnelley on Expansion Move in India

RR Donnelley & Sons, an Illinois-headquartered print and BPO service provider, has announced the opening of a 1,000-seater BPO delivery center in India at the Technopark Thiruvananthapuram, Kerala. The new BPO facility will focus on delivering transaction processing and financial management services to the US and European clients. The company already has a BPO facility in the city with 500 professionals. In addition, the company’s Chennai-based Indian facility employs more than 4,500 professionals. It will continue to focus on offering non-voice BPO services.

RR Donnelley specializes in delivering solutions in commercial printing, direct mail, financial printing, logistics, call centers, and content and database management to clients across several industries, such as publishing, healthcare, and technology.

Tuesday, September 04, 2007

Hewitt Associates has announced its decision to acquire RealLife HR to strengthen its benefits outsourcing services and solutions portfolio for middle-market companies. The transaction is expected to be concluded by end-August 2007. According to the acquisition, Hewitt will acquire RealLife HR's existing 35 clients with about 15,000 employees and/or retirees. The RealLife HR's clients will also have access to Hewitt's outsourcing and consulting services portfolio as part of the transaction. Post-acquisition, about 85 professionals and the facility of RealLife HR in Maryland will be transferred to Hewitt.

HOUSTON & LONDON--(BUSINESS WIRE)--EquaTerra has acquired Morgan Chambers, creating the market leading independent sourcing advisory firm.

As EquaTerra and Morgan Chambers are, respectively, the world's number one and number two top ranking Full Service Outsourcing and Offshoring Advisors(1), the acquisition creates the advisory firm of choice for organisations seeking to improve their business and IT processes through shared services, outsourcing and offshoring.

The collective teams will provide unrivalled depth of knowledge and services across all business support functions, including Information Technology (IT), Human Resources (HR), Finance & Accounting (F&A), Procurement and Customer Care. The firms have additional expertise in sector-specific processes such as claims management, mortgage processing and policy administration. The acquisition will also broaden and solidify the firm's geographic reach, thereby providing greater value for clients. The combined firm has approximately 300 employees across North America, Europe and Asia Pacific.

Mark Toon, CEO, EquaTerra said, "The leadership teams of our firms are excited about this acquisition. We are in the unique situation of bringing together two organisations with a strong presence in different geographies, yet with similar cultures, methodologies and depth of experience in the markets we serve. The expanded geographic reach and enhanced service offerings, combined with the tenure and expertise of our advisors makes this acquisition a positive event for our clients, employees and business partners."

Phil Morris, CEO, Morgan Chambers said, "Both EquaTerra and ourselves possess a relentless commitment to our clients and their needs and objectives. We've built a well-respected advisory business in Europe and we feel joining EquaTerra gives us the organisational depth and geographic reach our clients need. We believe our collective strengths will further support our clients on their journey to create sustainable value in their business support functions."

Robert Morgan, Chairman and founder of Morgan Chambers will leave the organisation once the deal is complete. "Creating Morgan Chambers back in 1994 was such an exciting opportunity and I am extremely proud of what the company and its hugely talented staff have achieved for our clients. I am pleased to be able to hand over to such a likeminded organisation, which in turn provides me with the opportunity to invest in new ventures."

(1) Source: Black Book of Outsourcing 2007

Notes for editors:


EquaTerra sourcing advisors help clients achieve sustainable value in their business and IT processes. With an average of more than 20 years of industry experience in over 600 global transformation and outsourcing projects, our advisors offer unmatched industry expertise. EquaTerra has deep functional knowledge in Finance and Accounting, HR, IT, Procurement and other critical business processes with advisors throughout North America, Europe and Asia Pacific. We help clients achieve significant cost savings and process improvement with outsourcing, internal transformation and shared services solutions.


Established in 1994 with a single purpose - to provide high quality, practical and totally independent advice on the best client Sourcing solutions, Morgan Chambers remains true to these principles today. Morgan Chambers employs business and service delivery experts who passionately believe that balanced Sourcing strategies deliver sustainable business advantage and huge flexibility. Whether in-house, Shared Services or utilising external suppliers, we drive innovative, accountable and measurable solutions. Europe's leading specialist Sourcing advisory firm, we employ over 60 full-time consultants from eight offices world-wide. With more than 1000 client engagements in over 60 countries, we have unrivalled experience in achieving successful results.

Tuesday, August 28, 2007


1. Tata Consultancy Services
2. HCL Infosystems
3. iGate
5. Synechron
6. IBM
7. Capgemini
8. Infosys
9. Tavant Technologies
10. Sun Microsystems

According to the annual survey conducted by Cybermedia's flagship publication Dataquest in collaboration with IDC India., TCS, with a large workforce based in foreign shores, followed innovative HR practices and maintained ethos across geographies to achieve consistency in workforce. The employees of HCL Infosystems were found to be satisfied with the growth opportunities, job security and relationship with peers in the company.

According to Pradeep Gupta, publisher of Cybermedia, multinational employers IBM, Capgemini, Sun Microsystems and CSC have mastered the art of managing Indian employees to rank among the Top 20 best IT employers in the country. "Others, especially many India-based IT employers, need to balance aggressive recruitment with the warmth and personal retain people as they ramp up headcount". A notable absentee in this list is Wipro

The seventh annual Dataquest-IDC survey was participated by 2,844 software, hardware and marketing professionals from 33 IT companies, totally employing 3,04,834 people in seven cities. The rating of employers was done upon the basis of employee satisfaction and HR scores.

Saturday, August 25, 2007

"2007 - TOP 20 Companies in the Training Outsourcing Industry"

The 'Top 20' list includes those leaders in the training industry that have demonstrated experience and excellence in providing learning BPO services to a variety of clients.
Because of the diversity of services included in training outsourcing engagements, no attempt is made to rank the ‘Top 20’.

1. Adayana
Minneapolis, MN

2. Raytheon Professional Services
Dallas, TX

3. Development Dimensions International
Bridgeville, PA

4. IBM Learning Solutions
Armonk, NY

5. Delta College
University City, MI

6. Global Knowledge
Cary, NC

7. NIIT, Ltd.
New Delhi, India (World Headquarters)Atlanta, GA (USA)

7. Element K
Rochester, NY
[Note: For the purposes of the Top 20, NIIT & Element K are considered to be one company since NIIT acquired Element K in 2006]

8. GeoLearning
West Des Moines, IA

9. KnowledgePool
Berkshire, UK

10. Accenture Learning
New York City, NY

11. Expertus
Mountain View, CA

12. Convergys
Cincinnati, OH

13. Affiliated Computer Services, Inc. (ACS)
Dallas, TX

14. Aptech Worldwide Corporation
Mumbai, India (World Headquarters)San Mateo, CA (USA)

15. Lionbridge
Waltham, MA

16. RWD Technologies
Baltimore, MD

17. Intrepid Learning Solutions
Seattle, WA

18. General Physics - GP
Elkridge, MD

19. Innovatia
Saint John, New Brunswick, Canada

20. SkillSoft
Nashua, NH

Wednesday, August 22, 2007

FirstSource Solutions, has emerged as the frontrunner in the quest to buy the US-based healthcare player MedAssist.

  • Approx deal size - $300 million (around Rs 1,200 crore).
  • If materialised, it would be one of the largest overseas acquisitions after Wipro’s buyout of Infocrossing for around $600 million and the largest in the BPO space
  • MedAssist, which has revenues of $90-100 million and provides patient services, eligibility services, patient financing and healthcare collections. It has around 1,400 employees and 950 healthcare providers as clients

[Disclaimer - This information has not been provided to thestock-exchanges, and is source-based]

FirstSource is also rumoured to be in the race to acquire Citi’s BPO unit after the first round of bidding. The sale of the BPO business, being run by Citigroup Global Services (formerly eServe), is expected to fetch Citi around Rs 3,200 crore.

Other bidders include WNS and Genpact. Around 13 per cent of FirstSource's revenue comes from the healthcare segment. In January this year, it acquired BPM — a Delaware-based healthcare claims outsourcing company — for around $30 million.

CAIRO, Egypt -- As rising wages and attrition rates in India spur some international companies to seek new locales for outsourcing operations, Southeast Asia, Eastern Europe and Latin America have all been competing to become new offshore hubs.

Now, the Middle East and North Africa are elbowing into the race to host remote sales staff, service centers, tech support and the like, thanks to a favorable time zone, a multilingual work force and an oil-fueled investment and expansion spree. Companies also are attracted by some efforts by some governments there to diversify and liberalize their economies, as well as the prospect of tapping into the growing local market.

The offshore industry faces challenges in the Mideast, which is better known for political instability and ingrained bureaucracy than customer support. But underscoring the region's promise, some of the biggest outsourcing companies operating in India -- the industry's undisputed powerhouse -- are establishing outposts there.

Satyam Computer Services Ltd. is hiring 300 people for a new center in Cairo that will handle clients in Saudi Arabia and the Arab world. Earlier this year, Wipro Ltd. set up an outsourcing joint venture in Saudi Arabia and recently announced plans to enter Egypt. Tata Consultancy Services Ltd. says it will soon start offering services from Morocco to French-speaking European clients.

Indian companies pulled in nearly $1 billion of outsourcing revenue from the region in the fiscal year ending March 2007, up from $600 million the year before, according to India's National Association of Software and Service Companies, a trade group.
"There is a lot of money flowing in the region, and it doesn't make sense to not make best use of it," says Virender Aggarwal, Satyam's director and senior vice president for Asia-Pacific, Middle East, India and Africa.

Much of the Middle East offers the same appeal other outsourcing hot spots have: cheap, skilled labor. But companies are finding other advantages, including a time zone that roughly straddles the world's three biggest economies -- North America, Europe and Asia. The region's geographic proximity to Europe and a multilingual labor force also help. And with business booming in much of the Mideast, there is more demand for Arabic speakers.

In recent years, Egypt, Jordan and the United Arab Emirates have all broken into the top 20 most-attractive offshoring destinations, according to an index published by consultancy A.T. Kearney Inc. Tunisia, Morocco, Israel and Turkey made the top 50 in this year's list.
"The Middle East region is going to be, I think, the next big destination," says Simon Bell, an A.T. Kearney principal, who has worked with the Egyptian government recently on ways to draw in more offshore work.

Despite growing interest, Mideast countries are still small players, dwarfed by India and China and lagging behind hot spots such as Malaysia, Brazil and the Philippines. There are also some big obstacles to boosting growth. First among them: the perception that political instability or conflict in places such as Iraq, Lebanon and Israel makes the region a risky place. And while structural changes have cut red tape in places such as Morocco, efforts to ease bureaucracy elsewhere have lagged behind the rest of the world.

Talent pools in many Middle Eastern countries are relatively small, too. Egypt, the Arab world's most populous country, pumps out about 250,000 university graduates a year. But many of them need additional training to boost foreign-language and other skills before multinationals will consider them. Amid a wave of expansion, local information-technology workers are starting to see more job offers from regional companies. That could put upward pressure on wages and attrition rates.

Satyam's Mr. Aggarwal says wages in Egypt, especially among the more-experienced employees, may be slightly higher than in India. But with businesses expanding in the Middle East, hiring Egyptians still can be cost-effective. Cairo has long been the region's cultural capital, and its export of movies and soap operas, makes the Egyptian dialect familiar across the Arab-speaking world.

Language is also a big plus in French-speaking parts of Arab North Africa. In Tunisia, Paris-based call-center operator Teleperformance SA employs more than 3,500 people catering to its Francophone market. The company is looking to hire for a contact center in Cairo that can serve U.S. and European multinationals.

New outsourcing jobs are a big boon for a region struggling with high unemployment and a bulging birth rate, and some countries have been recruiting the industry. The Egyptian government is offering to pay 80% of training costs for new employees, and officials are offering cheap rates for voice and data links to major U.S. and European cities.

Dubai, in the UAE, is promoting an "outsource zone," one of several zones aiming to attract specific industries. While wages in the UAE are relatively high, officials highlight its advanced high-tech infrastructure and large talent pool, including educated Southeast Asian and Arab-speaking expatriates.

An outsourcing joint venture between Electronic Data Systems Corp. of Plano, Texas, and another UAE emirate, Abu Dhabi, is pouring $100 million into a new center aimed at Mideast customers. EDS recently started hiring in Morocco to service its European clients. It already has 450 employees in Egypt.

"We see the importance of this region both in itself as a market and as a center from which to service other businesses," says Charles Cox, EDS's regional vice president for Middle East and Africa.
Aug 21, 2007: Infosys Technologies Limited (NASDAQ: INFY) today announced the creation of the company’s first Latin American subsidiary, and the opening of the development center and office for the region based in Monterrey, Mexico.

The subsidiary, Infosys Technologies S. De RL De CV, provides the company’s full range of business consulting and information technology services for clients in all industries including banking, financial services, retail, consumer packaged goods, resource, energy and utilities.

The center provides key offerings in business process outsourcing, infrastructure management and packaged solutions implementation.

Often referred to as “nearshore facilities,” such operations provide client solutions in time zones which are more convenient to clients and still provide access to processes, systems, services and talent globally. The Monterrey facility provides Infosys with the dedicated resources to service clients in North America, Latin America and Europe with bi-lingual talent in an agreeable time zone and close proximity. Furthermore, it strengthens the company’s global delivery model capabilities and joins such new facilities already on the network such as a development center in Brno, Czech Republic and BPO facilities in India.

“The world continues to flatten, unlocking Mexico’s potential as a major business center and solidifying its role as a strategic location for technology innovators such as Infosys,” said Mexico Secretary of the Economy Dr. Eduardo Sojo.

After examining several countries in the region, Infosys chose to establish a presence in Mexico because of the broad language skills available in the region, its geographical proximity to Canada, the U.S. and Europe. Latin America is a strong emerging market and one where many of Infosys’ clients have operations already.

“The combination of human and intellectual capital, nurturing business community and entrepreneurial spirit found in Monterrey positions the state for amazing IT service growth,” said Governor of the State of Nuevo Leon Jose Nativdad Gonzalez Paras.
Infosys has appointed Mohit Joshi to head the new subsidiary. Joshi, formerly a group engagement manager with the company’s banking and capital markets organization has more than 12 years of client and leadership experience.

“Our clients are exploring opportunities to mitigate risk while expanding operations into the burgeoning market,” said S. Gopalakrishnan, chief executive officer, Infosys Technologies. “The facility will help us establish our services in the Central time zone which allows us to provide better support to our clients located across multiple geographies.”
For the first year, Infosys Technologies S. De RL De CV will have more than 250 seats. By its third year of operation, the Monterrey facility is expected to employ nearly 1,000 employees. Local and international hires will participate in the standard Infosys training programs to ensure global consistency.
Dallas-based Q Source Global Consulting Private Limited, a provider of BPO and IT staffing solutions, plans to start two more branches in India and one at Singapore.“We have decided to open offices at Hyderabad and Delhi in India and also at Singapore over the next one year,” Ashish Sawant, senior vice-president (Indian operations), Q Source, told media persons here on Friday.

The company currently has offices at Bangalore, Chennai, Pune and Visakhapatnam. It has overseas offices at UK and US.

The company aims to provide job opportunities to 800 graduates by ‘train and deploy mode’ in the country during this fiscal, Sawant said.

Apart from staffing solutions, Q Square is also into the software export business. “Last fiscal, our software exports were about Rs 10 crore,” he said.

Source: Business Standard

Monday, August 20, 2007

According to a survey conducted by Datamonitor, a majority of respondents agreed to outsource their infrastructure services to Eastern European countries, while about 38 percent respondent agreed to outsource their infrastructure services to India. About 15 percent respondents preferred China, while about 9 percent preferred the Latin American countries. Among the key findings, about 50 percent respondents revealed to outsource their infrastructure services to a Western services supplier having worldwide sourcing capabilities. About 35 percent plan to outsource such functions to their captive operations, while only 12 percent plan to outsource to offshore-based third-party service providers.

In addition, about 47 percent respondents revealed that they are expected to generate cost savings between 10 percent and 20 percent by offshoring such functions as against managing their IT infrastructure onshore, while another 41 percent expected savings to be between 20 percent and 40 percent. According to the survey, about 80 percent German respondents cited Eastern Europe as their preferred offshoring location, while about 21 percent respondents agreed to opt for multiple offshore locations to minimize risk. Moreover, security was cited as the prime concern by respondents who were reluctant to offshore their IT infrastructure in the near future.

Tata Consultancy Services (TCS), an Indian IT service provider, has won a USD 16 million information technology outsourcing (ITO) contract from AGL Energy, an Australian gas and electricity retailer. The contract is in line with AGL’s IT change program, under which it plans to outsource its in-house IT operations.

AGL’s major IT change program will enable it to generate cost savings worth USD 60 million per year after the implementation of its new retail solution. The contract with TCS will support AGL’s plans of executing its major IT change program.

The deal is expected to generate cost savings worth USD 12 million per year for AGL over the next 5 years. Moreover, it will allow AGL to reduce its in-house IT support staff from about 300 to 20. According to an AGL spokesperson, the deal will also support the company’s newly integrated retail platform.

Friday, August 10, 2007

Pramod Bhasin

President and CEO, Genpact Limited

Professional Profile:

  • Started his career with General Electric (GE), a $150-billion diversified technology, media and financial services company

  • His career with GE and RCA Corporation spanned 25 years

  • Served as CFO for GE Capital's Corporate Finance Group

  • Served as head of GE Capital in India and Asia

  • Established Genpact (formerly GE Capital International Services) in 1997

  • Part of the Executive Council of NASSCOM

  • Member of Band of Angels (group of Angel investors)
  • Founding member of the International Association of Outsourcing Professionals

  • Board of Director - NGEN

  • Board of Governer – IIM –Lucknow

Academic Profile:

  • Chartered Accountant from Thomson McLintock Co., London

  • Holds a Bachelor of Commerce Degree from Delhi University

Personal Profile:

  • Age: 55 years

  • Lives in Jungpura, New Delhi and New York

Areas of Interest:

  • IT products and services

  • High end BPO services

  • Retail

  • Media, Real Estate, Industrial, Supply Chain

Tuesday, August 07, 2007

Reliance Expected to Achieve 30% Cost Savings by Outsourcing

According to media sources, Reliance Communications, an Indian telecom operator, is expected to award a 5-year outsourcing contract worth about USD 500 million by the end of August 2007. Several big information technology outsourcing service providers, such as Accenture, EDS, and IBM, are eyeing the contract.

As part of the outsourcing contract, Reliance is expected to outsource its entire infotech and related infrastructure functions including billing, call center operations, customer care management, and data management to one of the successful bidders. The successful bidder is expected to modernize the existing IT infrastructure of Reliance. The company expects to achieve cost savings of about 30 percent by outsourcing such functions.

Once this deal is finalized, it will be the third biggest deal awarded by an Indian telecom company over the last few years. About 3 years ago, Bharti awarded a 10-year, USD 750 million outsourcing deal to IBM covering its infotech infrastructure. A few months back, Idea Cellular awarded a USD 600–800 million deal to IBM covering infotech infrastructure and applications outsourcing.

Is the Party Over for Indian Outsourcers?

Infosys, TCS, and Wipro still rake in profits, but they face challenges ranging from a stronger rupee to the likes of IBM and Accenture romping on their home turf

read more | digg story

Wipro Technologies has acquired Infocrossing, Inc.

Deal information

  • For US$600 million, this is the largest-ever overseas acquisition by an Indian IT firm
  • The agreement is for $18.70 per share in an all cash deal

What’s in it for Wipro

  • This deal will address the capability gap regarding capability gap we had regarding managed data center hosting services
  • Wipro would be one of the world leaders in end-to-end IT infrastructure management solutions
  • Through Infocrossing, Wipro would deepen their presence in the United States with the addition of five data center locations and approximately nine hundred employees
  • Wipro healthcare arm is also going to get a boost as Infocrossing is also a heathcare solutions provider, where they have a unique IP and actually own the platform. Wipro will be able to provide healthcare solutions to their large customers, including the specific platform
  • Infocrossing brings about 200 clients to Wipro, thus enhancing its total client base while providing an opportunity to cross-sell its other services

Other information:

Wipro was advised on the transaction by Citigroup and represented by the law firm of Wilson Sonsini Goodrich and Rosati, and Infocrossing was advised by Credit Suisse Securities (USA) LLC and represented by the law firm of Gibson, Dunn & Crutcher LLP.

About Infocrossing

Infocrossing, Inc. is a provider of selective IT infrastructure, enterprise application and business process outsourcing services delivering the computing platforms and proprietary systems that enable companies, regardless of industry, to process data and share information within their business, and between their customers, suppliers and distribution channels. Leading companies leverage Infocrossing's robust computing infrastructure, skilled technical team, and process-driven operations to reduce costs and improve service delivery by outsourcing the operation of mainframes, mid-range, open system servers, networks and business processes to Infocrossing

Thursday, August 02, 2007

The International Association of Outsourcing Professionals (IAOP) has announced the names of companies that have been selected as 2007’s best outsourcing service providers – The Global Outsourcing 100.

Given below is the Top 20 list

Rank - Company - Strength*

1 - IBM - Size and Growth
2 -
Capgemini - Customer Testimonials
3 -
Hewlett-Packard - Executive Leadership
4 -
Sodexho Alliance - Number of Centers/Locations
5 -
Accenture - Balanced Strength
6 -
Wipro Technologies - Balanced Strength
7 -
Infosys - Customer Testimonials
8 -
Genpact - Executive Leadership
9 -
Tech Mahindra - Employee Management
10 -
Cambridge - Executive Leadership
11 -
Mastek - Methodologies/Innovation
12 -
CGI Group - Number of Centers/Locations
13 -
Xchanging - Size and Growth
14 -
EDS - Methodologies/Innovation
15 -
HCL Technologies - Methodologies/Innovation
16 -
ARAMARK - Number of Centers/Locations
17 -
ACS - Number of Centers/Locations
18 -
Teletech - Balanced Strength
19 -
Colliers International - Size and Growth
20 -
Cognizant - Number of Centers/Locations

* Companies were judges on four critical characteristics: size and growth; customer references; organizational competencies; and management capabilities

For the full list visit

Wednesday, August 01, 2007

International football organization chooses global consulting and information technology services company to deliver FIFA Extranet, Intranet, and customized Event Management System with Match AG

Satyam Computer Services, Ltd. (NYSE:SAY), a leading global consulting and information technology services company, announced today that it has signed two multimillion-dollar contracts to support FIFA and its major forthcoming events.

Thanks to the strength of its technical capabilities and flexible approach, Satyam has not only been selected to develop a customized Event Management System for one of the world’s premier sports organizations, but it has also been chosen to build an Extranet and Intranet for FIFA over the next 12 months. Satyam’s partnership will also include full, uninterrupted support for both solutions for FIFA, until the final whistle of each game.

Working primarily from FIFA’s Zurich headquarters, Satyam will provide in-country support for matches. It will also have teams work from offshore locations to enable lower costs and optimized CMM Level 5 quality.

“Clearly, FIFA organizes incredibly large-scale, high-profile tournaments. In fact, we host the world’s most widely viewed sporting events, with as many as 28 billion people watching the 2006 Tournament. As such, we cannot afford even a second’s downtime, even during the huge usage spikes throughout games,” said FIFA head of information technology solutions Michael Kelly. “That is why we have chosen the reliability, flexibility, and reusability of Satyam’s applications. This is the start of a long-term relationship that will see Satyam working closely with FIFA over the next few years.”

“We are delighted to have been chosen to deliver such critical applications for FIFA, and are committed to ensuring the success of managing its event logistics and Extranets/Intranet platforms,” said Dr. Keshab Panda, the senior vice president, director, and head of Satyam’s European operations.

A press release from Satyam Computer Services Ltd. website
Outsourcing can act as a key 'enabler' and catalyst for sectors such as telecom, organised retail, insurance, healthcare, hospitality and airlines, suugests a study.
According to a study by Everest Group, outsourcing can help the ''sunrise sectors'', which are witnessing tremendous growth for the last few years, in multiple ways, ranging from release of scarce capital, providing quality talent, innovative practices and management bandwidth.

The study further suggests that outsourcing may help these growth sectors free up their resources and focus on core business activities. ''So far, India has been seen as a leading supplier destination in the outsourcing arena. Its potential as a buyer of outsourcing has not yet been explored to the fullest. Today, sectors like telecom, organised retail, insurance, healthcare, hospitality, and airlines in India are witnessing unprecedented growth, which will further be fuelled by the increasing entry of global players, said Everest Group Country Head Gaurav Gupta.

It will be important to address the resultant operational growth challenges in these sectors to ensure that they maintain their momentum. Companies in these sectors will need to evaluate a range of 'build or buy' options, to address these constraints suitably, he added.

''Capital efficiency is a huge challenge for business leaders in these growing sectors. Outsourcing can create growth opportunities by releasing the capital otherwise required for investment in non-core assets and activities, thereby, reducing the capital investment required per unit of growth,'' said company
Senior Consultant Punish Mishra.

Outsourcing also reduces operating costs through more efficient and competitive service delivery. The study suggest that IT outsourcing alone can improve EBITDA margins by 30-50 basis points for the retailers, which is significant considering it is imperative for the retailer’s to expand margins.

This saving, apart from improving the bottom-line of companies, can be ploughed back into growth initiatives allowing retailers to drive additional four to five per cent growth with the same capital.

The study also highlights the impact of outsourcing and other challenges facing the country's sunrise sectors.

The study identifies issues of inadequate labour pool, poor quality talent and attrition by outsourcing to suppliers who have extensive experience in hiring in large numbers, creating a powerful engine to recruit and in training talent pool to meet global standards.


Tuesday, July 31, 2007

Virtual Recruiter
Corporation enters chat room to recruit top talent

In January Lockheed Martin launched “live chat” feature on the Careers section of its Web site. The Corporation is the first in the industry to use an online, real-time environment for recruiting.

Scheduled chats take place regularly on topics ranging from software engineering and transitioning military personnel to available opportunities in specific locations. User questions range from questions on starting the application process to tips on how to get their resumes noticed. Participants can also talk about their skills and experience to see how they may fit in a particular program area. Corporate Staffing analyzes chat activity and identifies trends in topics and the process. Employees have already been hired as a result of virtual chat sessions, and many more are expected as the tool grows in popularity.

Source: Lockheed Martin newsletter story.

  • Such a system in very useful when there is an emergency to fill the seats
  • This is surely going to help reduce cost per hire
  • Improves job fit and reduces turnover

Monday, July 30, 2007

Infosys Technologies Ltd has signed a multi-million dollar outsourcing contract with Royal Philips Electronics’ (“Philips”) of the Netherlands.


  • TCV: US$250 M
  • Contract Duration: 7 years
  • Philips will enter into a multi-year contract with Infosys BPO to provide F&A services and the processing of purchasing orders
  • Infosys will also acquire three shared service centers located in India, Poland and Thailand from Philips for US$28 million
  • This contract is amongst the largest Finance & Accounting BPO engagements from India and will expand Infosys’ global network, particularly strengthening its European operations

About PhilipsRoyal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is a global leader in healthcare, lifestyle and technology, delivering products, services and solutions through the brand promise of “sense and simplicity”. Headquartered in the Netherlands, Philips employs approximately 125,800 employees in more than 60 countries worldwide. With sales of EUR 27.0 billion in 2006, the company is a market leader in medical diagnostic imaging and patient monitoring systems, energy efficient lighting solutions, personal care and home appliances, as well as consumer electronics. For more info visit

Wednesday, July 25, 2007

Hot action in the last quarter among top 4


Plans investment of US$75.1m (Rs3.1bn) in a 8,000-seat development centre in Thiruvananthapuram; also setting up a 400-seat facility in Brno, Czech Republic and a 300-people centre in Mexico.

Introduced a non-compete agreement in employee contracts, barring the employee to work for the same client at a defined set of competing firms for a period of six months after their job termination at Infosys.


Bought out the joint-venture partner’s stake in the Brazil subsidiary for US$33.4m; inaugurated a new 500-seat centre in Mexico; targeting 5,000 employees in Mexico over the next five year.
ntegrated its financial services solutions (organic and from FNS acquisition) into a new SBU, TCS Financial Solutions.


Launched a 4,500-sq ft near-shore development centre in Brazil; a 150-seat centre in Sydney (third in Australia); plans development centre in Vietnam by April 2009.

Announced extension of its existing contract with the Nestle group for a further three years; we estimate the current relationship at an annual run-rate of US$15m, that could go to US$25m. We estimate the pricing increase at about 3% in the renewed contract.

HCL Tech

Launched a 100-seat centre in Poland, its second in East Europe.

US$15m contract win from Alenia Aeronautica.

Tuesday, July 24, 2007

Worldwide market trends in Engineering Services

Engineering services is a huge market: global spending for engineering services is currently estimated at $750 billion per year, an amount nearly equal to India’s entire gross domestic product in 2005. By 2020, the worldwide spend on engineering services is expected to increase to more than $1 trillion.

Key sectors that dominate global engineering spends include high-technology / telecom, automotive and aerospace – accounting for over 55 percent of the total. Other sectors include industrial, defense, utilities and construction.

To date, offshoring of innovation services has largely been done in advanced countries — only 9 per cent of the world’s budget for engineering found its way to low-cost countries.

However, like in many other business functions, competitive pressures are driving large corporations to undertake their engineering activities on an increasingly global basis. A 2005 survey by Booz Allen and Duke University’s Centre for International Business Education and Research (CIBER) found that 36 per cent of companies surveyed sent some of their engineering offshore, 31 per cent offshored some research and development, and 16 per cent shipped out a portion of their product design

Of the $750 billion spent today, only $10-15 billion is currently being offshored—a tiny fraction of the total. India brings home about 12-15 percent of today’s offshored market, which it currently shares with Canada, China, Mexico, and Eastern Europe. This trend towards building increasingly global R&D footprints, observed over the past few decades, is expected to accelerate over the coming years with emerging economies – notably India emerging as the destination of choice for these expansions

Updated on: 27 Sep, 2006

Posted by Picasa

Saturday, July 21, 2007

NASSCOM has released the rankings of the top 20 IT-ITES employers in India for FY 06-07.

The rankings are based on the India-based headcount of firms with IT-ITES operations in India, as reported to NASSCOM in its annual survey.


NASSCOM sends out a detailed questionnaire annually to all its member companies, accounting for 95 percent of the Indian IT software and ITES industry revenue. Information collated through the questionnaire includes: aggregate performance; service lines; verticals and geographies.

Key findings of the survey:

The top 20 companies collectively employ over 500,000 people of the 1.6 million employed directly in the industry

IT-ITES industry is India’s largest employment generator in the organized sector IT-ITES industry is creating jobs for over 7.5 million people both directly and indirectly and this figure is expected to cross 10 million by 2010

A varied combination of factors have led to this - healthy growth environment, attractive remuneration and different kinds of employment opportunities in the new economy based on varying skill sets, and above all the availability of talent in India which meets the employment projections

This industry needs to work on is the quality factor to ensure we remain the highest employment generator and maintain India’s share of the global offshore IT and ITES industry

Employment is spread across many cities, and the industry is increasingly going to tier II and tier III cities

This process of widespread geographical dispersion of the industry is being adversely affected by the non-extension of the STPI scheme and attendant tax incentives
Posted by Picasa

Tuesday, July 17, 2007

A Frost & Sullivan study cited that the worldwide shared services and outsourcing (SSO) market is expected to grow at a CAGR of 15 percent over the next couple of years to reach USD 1.43 trillion by 2009 as compared to USD 930 billion in 2006.

The banking, financial services, and insurance (BFSI) sector spent the maximum on SSO at USD 273 billion in 2006, followed by the technology/ICT sector and the healthcare industry at USD 233 billion and USD 130 billion, respectively. The spending by other verticals, such as transportation and logistics and energy stood at USD113 billion and USD 84 billion, respectively.

In addition, India was cited as the most preferred destination for SSO operations, followed by China, Ireland, Singapore, Malaysia, Mexico, the Czech Republic, Poland, the Philippines, and Canada, while countries, such as Russia (for software development) and Dubai (for BFSI services) are also emerging as preferred SSO destinations.

The study also cited that the Philippines is a hub for back-office operations for IT and IT-related services, while Malaysia which already has a strong position in the BFSI, transportation and logistics, and energy verticals is also gaining the attention of technology companies (such as IBM and Satyam) due to its excellent infrastructure and low attrition rates.

According to TPI Index report for 1H 2007, the total contract value (TCV) of sourcing contracts awarded in 1H 2007 stood at USD 33 billion, reflecting a 34 percent decline over the TCV awarded in 1H 2006. This value is the smallest first-half TCV value since 2001. In addition, the total number of sourcing contracts witnessed a 25 percent decline in 1H 2007 as compared to 1H 2006.

The annualized contract value (ACV), or average annual spending also declined by 30 percent over 1H 2006 to reach USD 5.5 billion in 1H 2007. The study also reported that the number of BPO contracts awarded in 1H 2007 (78 contracts) were lower as compared to the number of contracts in 1H 2006.

In addition, according to the study, only 56 sourcing contracts were awarded in 1H 2007 in the Americas as compared to 86 contracts in 1H 2006. The TCV of these contracts declined from USD 24 billion in 1H 2006 to USD 10 billion in 1H 2007, reflecting the lowest first-half TCV value since 1994. In contrast, TCV of the contracts awarded in Europe increased from USD 14 billion in 1H 2006 to USD 18 billion in 1H 2007. In terms of sectors, financial services sector accounted for 47 of the total number of contracts having a worth of USD 11.5 billion in 1H 2007. Though the overall outsourcing industry did not perform well in 1H 2007, yet TPI expects a growth of 5 percent in annualized revenue for 2007 as compared to 2006.

A study by the Work Foundation cited that the threat of job losses in the UK due to offshoring to developing countries (such as India) was overstated. It is evident from the study that the computer and information services were the third largest imported services in the UK from India and stood at GBP 122 million; after travel and transport services valued at GBP 626 million and GBP 289 million, respectively. In addition, the study cited that IT and business services imports from Germany to the UK have increased by 4 and 16 times, respectively, as compared to imports from India.

Low labor cost was identified as one of the factors for offshoring. However, cultural aspects are extremely important for successful organizations while offshoring. The study also revealed that offshoring led to job losses of 5.5 percent of the total in Europe in 1Q 2007 as compared to 3.4 percent in 2005. In addition, it has been found that call center jobs in the UK have increased as against expected decline. The trade of services between the UK and India is increasing at a slower rate than expected. It increased from 0.4 percent in 1995 to 1.2 percent in 2004, reflecting a marginal increase.

According to other key findings, an increasing number of western companies are adopting a mix of business models with nearshore, offshore, and onshore operations, while a majority of successful Indian companies are expanding their business operations in western locations to cater to the onshore/nearshore needs of their clients.

Tuesday, July 03, 2007

Merrill Lynch Acquires Minority Stake in Copal Partners

Merrill Lynch, a US-based financial management and advisory company, has acquired a minority stake in Copal Partners, an Indian research firm, through an investment of USD 11 million in the company. The size of the stake acquired by Merrill Lynch was not disclosed. Deutsche Bank, a German financial services provider, and Citigroup, a New York-based financial services company, are the other investors and clients of Copal Partners.

At present, Copal Partners employs about 550 professionals across its operations in India, the UK, the US, and Mauritius. Since the company’s establishment in 2002, it has been offering financial research and analytics services to various investment banks, hedge funds, and private equity funds across the globe. According to Rishi Khosla, the CEO of Copal Partners, Merrill Lynch, Deutsche Bank, and Citigroup collectively hold a stake of about 25 percent in Copal Partners.

Monday, July 02, 2007

IT Exports by Top 10 IT Service Firms Reached INR 682.36Bn – Dataquest

According to a survey and analysis conducted by Dataquest, the IT software and services exports of India by the Dataquest top 10 IT service companies reached INR 682.36 billion in 2006–07 (FY 2007). Of this, nearly INR 392.60 billion was contributed by the top 3 IT services companies – Tata Consultancy Services, Infosys, and Wipro. Satyam accounted for INR 57.89 billion and IBM accounted for INR 48.80 billion, followed by HCL Technologies and Cognizant accounting for INR 45.98 billion and INR 45.84 billion, respectively.

Of the Dataquest top 10 IT service firms, 7 are Indian companies. The study also cited that the IT software and services exports of the Indian development centers of the three international companies (IBM, Cognizant, and Oracle) stood at INR 131.27 billion. Oracle stood at the eighth position with revenues worth INR 36.63 billion in the Dataquest top 10 IT service providers list, while Tech Mahindra stood at the ninth position with revenues worth INR 28.90 billion. Patni dropped two positions down to reach the 10th position, with revenues worth INR 25.73 billion.

In addition, the study revealed that a majority of the top 10 IT companies witnessed a significant increase in their revenues from their European operations in FY 2007. All the top 10 companies are focusing on combining their BPO operations with IT that has resulted in faster growth for BPO. According to the study, the weakening dollar and the strengthening rupee did not affect exporters significantly until the latter half of FY 2007.

According to Everest Research Group, software- and BPO-related functions worth about USD 9 billion were outsourced by big North American and European firms (primarily financial service firms) to their Indian captive centers in 2006. General Motors, Deutsche Bank, JP Morgan Chase, etc., are expanding their Indian offshore operations instead of outsourcing their software and back-office operations to Indian third-party service providers, such as Infosys Technologies, Tata Consultancy Services, and Wipro Technologies.

More than 50 centers have been set up over the past three years by such international firms in India and a majority of them plan to expand their operations two-fold over the next two years as the country offers a huge market. Moreover, such companies plan to conduct important businesses through these offshore centers. However, smaller US-based banks continue to outsource their operations to third-party vendors, such as Infosys, Genpact, and Cognizant Solutions, rather than establishing their offshore captives in India. According to Indian third-party vendors, international companies are also adopting a hybrid model under which work is divided between third-party vendors and company-owned offshore operations. Captive centers are growing at 30 percent annually and have employed more than 200,000 full-time employees for software development, back-office operations, high-end research, and product engineering.