Print this articleTata Consultancy Services acquisition of Citigroups India based captive business process outsourcing BPO arm CitiGlobal Services for USD505 mn is a bold move in these difficult times. When every one seems to be holding on to whatever liquid funds they have, TCS has gone and made an all cash acquisition.
That, however, does not in any way diminish the strategic significance of the deal. CitiGlobal employs over 12,000 backoffice workers that, together with about 8,000 employee strong existing outsourcing operation, makes TCS the second biggest BPO outfit globally.
Scaling up organically to this level would have taken TCS a long time even if so much business was available in these difficult times. Citi has also committed to providing TCS outsourcing business worth USD2.5 billion over the next nine and a half years.
This guaranteed revenue stream somewhat derisks the acquisition. More importantly, it builds a bond between TCS and Citigroup that could yield a greater business engagement subsequently. Besides, through this divestment Citi becomes the first global bank to outsource its entire banking processes, including core operations, to a third party.
This is an important development for the Indian BPO industry, one that could open up the possibility of other global banks also outsourcing banking processes to service providers in India.
The obvious criticism of the acquisition is that at nearly twice CitiGlobal's expected 2008 revenues of USD278 mn TCS may have paid well above the fair price. But then all acquisitions tend to be expensive on standard valuation measures.
That is because, as against starting a greenfield business, an acquisition brings an established operation and so some premium is built into the price. One can also question the timing of the acquisition. Tatas have acquired CitiGlobal at a time when IT business is seen to be spiralling down and there is concern about growth rates being sustained.
Source : http://www.offshoringtimes.com/
That, however, does not in any way diminish the strategic significance of the deal. CitiGlobal employs over 12,000 backoffice workers that, together with about 8,000 employee strong existing outsourcing operation, makes TCS the second biggest BPO outfit globally.
Scaling up organically to this level would have taken TCS a long time even if so much business was available in these difficult times. Citi has also committed to providing TCS outsourcing business worth USD2.5 billion over the next nine and a half years.
This guaranteed revenue stream somewhat derisks the acquisition. More importantly, it builds a bond between TCS and Citigroup that could yield a greater business engagement subsequently. Besides, through this divestment Citi becomes the first global bank to outsource its entire banking processes, including core operations, to a third party.
This is an important development for the Indian BPO industry, one that could open up the possibility of other global banks also outsourcing banking processes to service providers in India.
The obvious criticism of the acquisition is that at nearly twice CitiGlobal's expected 2008 revenues of USD278 mn TCS may have paid well above the fair price. But then all acquisitions tend to be expensive on standard valuation measures.
That is because, as against starting a greenfield business, an acquisition brings an established operation and so some premium is built into the price. One can also question the timing of the acquisition. Tatas have acquired CitiGlobal at a time when IT business is seen to be spiralling down and there is concern about growth rates being sustained.
Source : http://www.offshoringtimes.com/
NEW DELHI: Nearly 53 per cent of working women feel insecure, especially during night shifts in all major hubs of economic activity across the country, particularly in the key sectors of BPO/ITeS, hospitality, civil aviation, nursing homes and garment. They call upon their establishments to evolve safety norms, according to the Associated Chamber of Commerce and Industry Social Development Foundation (ASDF).
The assessment, based on feedback from the stakeholders, reveals that 48 per cent of the women working with small-scale firms are extremely worried about their outside movements. Nearly 26 per cent of such workforce in the medium sector is quite apprehensive of safety and security, particularly after dark. The same fear of security lapses is felt by about 23 per cent of women in large-scale establishments.
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The assessment, based on feedback from the stakeholders, reveals that 48 per cent of the women working with small-scale firms are extremely worried about their outside movements. Nearly 26 per cent of such workforce in the medium sector is quite apprehensive of safety and security, particularly after dark. The same fear of security lapses is felt by about 23 per cent of women in large-scale establishments.
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New York-based REcap Partners-LLC is all set to buy out Chennai-based business process outsourcing (BPO) firm HOV Services along with its two units operational in Beijing and Hong Kong for around Rs 950 crore ($202 million).
Last February, HOV Services hit the headlines when it acquired US-based Lason for $148 million (around Rs 660 crore) — one of the biggest acquisitions then in the BPO segment.
In a statement to the Bombay Stock Exchange (BSE), the company said it has received an offer of from REcap Partners-LLC to purchase all assets (including shares) owned by HOV Services and LLC (a key subsidiary of the company incorporated in Nevada, USA), the entire share capital in HOV Services (Beijing) currently held by HOVS Holdings — another wholly-owned subsidiary of the company incorporated in Hong Kong — and all operating assets used by HOVS and HOVS Beijing-owned by the company. This follows the announcement that the company had made on June 5, 2008.
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Last February, HOV Services hit the headlines when it acquired US-based Lason for $148 million (around Rs 660 crore) — one of the biggest acquisitions then in the BPO segment.
In a statement to the Bombay Stock Exchange (BSE), the company said it has received an offer of from REcap Partners-LLC to purchase all assets (including shares) owned by HOV Services and LLC (a key subsidiary of the company incorporated in Nevada, USA), the entire share capital in HOV Services (Beijing) currently held by HOVS Holdings — another wholly-owned subsidiary of the company incorporated in Hong Kong — and all operating assets used by HOVS and HOVS Beijing-owned by the company. This follows the announcement that the company had made on June 5, 2008.
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Study shows only four cities in the list of top 50 newly emerging outsourcing hotspots
BANGALORE: If you are one of those tracking the outsourcing industry then better brush up your geography, as IT vendors and service providers are venturing far and deeper into the hinterland across the globe in a bid to beat the global slowdown.
Cebu City and Bacolod City (the Philippines), Ho Chi Minh City (Vietnam), Krakow (Poland), Tianjin (China), Amman (Jordan), Nizhniy Novgorod (Russia) and Cork (Republic of Ireland) are some of the fastest growing destinations for IT and ITeS outsourcing, according to a study by investment advisory firm Tholons.
While, some of the high-end work continues to be doled out to time-tested destinations such as Bangalore, contracts for less complex services are increasingly going to companies operating out of newer locations. As the global slowdown has something to do with this, the cost advantages and sops offered by respective governments is an added attraction.
Jaipur, Kolkata, Chandigarh and Coimbatore figure in the list of top 50 newly emerging outsourcing hotspots. Six Indian cities appear in the list of top eight global outsourcing destinations — Bangalore, Chennai, Delhi National Capital Region, Hyderabad, Mumbai and Pune.
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BANGALORE: If you are one of those tracking the outsourcing industry then better brush up your geography, as IT vendors and service providers are venturing far and deeper into the hinterland across the globe in a bid to beat the global slowdown.
Cebu City and Bacolod City (the Philippines), Ho Chi Minh City (Vietnam), Krakow (Poland), Tianjin (China), Amman (Jordan), Nizhniy Novgorod (Russia) and Cork (Republic of Ireland) are some of the fastest growing destinations for IT and ITeS outsourcing, according to a study by investment advisory firm Tholons.
While, some of the high-end work continues to be doled out to time-tested destinations such as Bangalore, contracts for less complex services are increasingly going to companies operating out of newer locations. As the global slowdown has something to do with this, the cost advantages and sops offered by respective governments is an added attraction.
Jaipur, Kolkata, Chandigarh and Coimbatore figure in the list of top 50 newly emerging outsourcing hotspots. Six Indian cities appear in the list of top eight global outsourcing destinations — Bangalore, Chennai, Delhi National Capital Region, Hyderabad, Mumbai and Pune.
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Bangalore: At a time when most IT stocks have been hammered on the stock exchanges, Bangalore-based back office and IT services firm Cambridge Solutions Ltd has been able to sell its stake at premium of over 30 per cent to its current price to UK’s Xchanging plc.
On September 3, Cambridge’s share closed at Rs 59.40 on BSE and NSE. The price being offered by British business process outsourcing firm Xchanging Plc is Rs 81.25 per share.
Speaking to DNA Money from the UK over the phone, Satyen Patel, vice-chairman, Scandent Holdings Mauritius Ltd, said the buyer offered to pick up a stake in the Indian tech company at Rs 81.25 per share.
“If you ignore the recent upsurge in the Cambridge share prices then it (price being offered by Xchanging) is at a premium of almost 70-80 per cent,” said Patel.
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On September 3, Cambridge’s share closed at Rs 59.40 on BSE and NSE. The price being offered by British business process outsourcing firm Xchanging Plc is Rs 81.25 per share.
Speaking to DNA Money from the UK over the phone, Satyen Patel, vice-chairman, Scandent Holdings Mauritius Ltd, said the buyer offered to pick up a stake in the Indian tech company at Rs 81.25 per share.
“If you ignore the recent upsurge in the Cambridge share prices then it (price being offered by Xchanging) is at a premium of almost 70-80 per cent,” said Patel.
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BANGALORE: Healthcare BPO firm Omega Healthcare Management Services plans to add 7,000 employees to its India facilities.
CEO Gopi Natarajan said the company anticipates its client base will double and revenues grow four-fold by 2012.
Omega, which currently employs about 2,000 staff at its Bangalore and Chennai facilities, will invest $50 million to expand in India and grow sales from $15- $20 million to $70- $90 million. Bulk of the hiring will take place in Bangalore, Natarajan added.
The US-focussed company, whose investors include private equity firm Healthedge and Enam Holdings, provides services such as medical coding, billing, claims processing and healthcare revenue management.
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CEO Gopi Natarajan said the company anticipates its client base will double and revenues grow four-fold by 2012.
Omega, which currently employs about 2,000 staff at its Bangalore and Chennai facilities, will invest $50 million to expand in India and grow sales from $15- $20 million to $70- $90 million. Bulk of the hiring will take place in Bangalore, Natarajan added.
The US-focussed company, whose investors include private equity firm Healthedge and Enam Holdings, provides services such as medical coding, billing, claims processing and healthcare revenue management.
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NEW DELHI: The BPO-KPO sector in India is facing the heat of the US slowdown, particularly following the recent events in the financial markets. Prospects of a host of small- and mid-sized firms have taken a further hit since a major chunk of their business comes from banking and financial services firms in the US.
“The slowdown is going to impact the BPO firms in India. This will eventually result in overall slowdown in the BPO industry. But now a large pool of professionals will be able to provide quality services to the Indian BPO-KPO industry at much lower prices,” says IDBI Capital Market Services research head Shahina Mukadam.
According to a report released by Nasscom, the BPO and KPO industry together generated Rs 1,160-crore revenue and provided employment to 7 lakh people in 2007-08. The share of the US in the Indian BPO-KPO export market was 61%, making it the largest contributor to exports in the segment in 2007. Ahmedabad-based KPO Azure Knowledge Centre foresees a slowdown in the financial services by 25% and in the insurance services by 15% by the end of this year.
Azure Knowledge Centre director Jay Ruparel says: “The debacle in the US will create a lot of uncertainties regarding the continuity of current financial services contracts and also raise doubts as to how the future contracts are signed with the US financial companies.” So far, this company has hired four people from Lehman Brothers and Merrill Lynch.
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“The slowdown is going to impact the BPO firms in India. This will eventually result in overall slowdown in the BPO industry. But now a large pool of professionals will be able to provide quality services to the Indian BPO-KPO industry at much lower prices,” says IDBI Capital Market Services research head Shahina Mukadam.
According to a report released by Nasscom, the BPO and KPO industry together generated Rs 1,160-crore revenue and provided employment to 7 lakh people in 2007-08. The share of the US in the Indian BPO-KPO export market was 61%, making it the largest contributor to exports in the segment in 2007. Ahmedabad-based KPO Azure Knowledge Centre foresees a slowdown in the financial services by 25% and in the insurance services by 15% by the end of this year.
Azure Knowledge Centre director Jay Ruparel says: “The debacle in the US will create a lot of uncertainties regarding the continuity of current financial services contracts and also raise doubts as to how the future contracts are signed with the US financial companies.” So far, this company has hired four people from Lehman Brothers and Merrill Lynch.
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India's BPO firms will be hit by the current global economic turmoil over the next few months but could be well placed to take advantage of the crisis in the longer term, says the National Association of Software and Service Companies (Nasscom).
Industry body Nasscom says spending by US financial institutions has been hit by the sub-prime crisis and this will affect Indian IT BPO firms for two to three quarters as clients become cautious in their discretionary spending and as decision making cycles get extended.
These concerns were reflected in Wachovia Capital Markets' decision to downgrade IT offshore outsourcing sector to "market weight" from "overweight" earlier this month.
But Nasscom says that ever since the sub-prime crisis began, BPO companies have been taking steps to insulate themselves and argues the industry has shown resilience to periods of reduced demands in the past.
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Industry body Nasscom says spending by US financial institutions has been hit by the sub-prime crisis and this will affect Indian IT BPO firms for two to three quarters as clients become cautious in their discretionary spending and as decision making cycles get extended.
These concerns were reflected in Wachovia Capital Markets' decision to downgrade IT offshore outsourcing sector to "market weight" from "overweight" earlier this month.
But Nasscom says that ever since the sub-prime crisis began, BPO companies have been taking steps to insulate themselves and argues the industry has shown resilience to periods of reduced demands in the past.
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CHENNAI: If day one at the job fair, organised by Naukri.com, saw a large turnout of freshers, it was no different on Sunday -the last day.
Some 39 companies from IT and ITES sectors had 49 stalls, which were well-attended. But it was the BPO stalls, set up by companies including SITEL, Ajuba Solutions, Perot Systems and HCL BPO, that saw a sea of earnest job aspirants.
Most of the BPO companies reaped a rich harvest. For instance, HCL BPO received more than a 1,000 resumes during the course of the two-day fair.
The company’s senior HR manager, Richard, was a tired but satisfied man. “We are very happy with the large turnout. Most of the visitors to our stall were freshers and out of an approximately 1,000 resumes that we received, about 20 have been short-listed and will be called for the final interview,” he said. “As for the others, their resumes will be scrutinised and put on the waiting list.
V Karthikeyen and C Kar- thik, who were on the verge of joining a software company, came to the job fair looking for newer options.
They said they were not surprised to see freshers outnumbering experienced professionals at major job fairs.
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Some 39 companies from IT and ITES sectors had 49 stalls, which were well-attended. But it was the BPO stalls, set up by companies including SITEL, Ajuba Solutions, Perot Systems and HCL BPO, that saw a sea of earnest job aspirants.
Most of the BPO companies reaped a rich harvest. For instance, HCL BPO received more than a 1,000 resumes during the course of the two-day fair.
The company’s senior HR manager, Richard, was a tired but satisfied man. “We are very happy with the large turnout. Most of the visitors to our stall were freshers and out of an approximately 1,000 resumes that we received, about 20 have been short-listed and will be called for the final interview,” he said. “As for the others, their resumes will be scrutinised and put on the waiting list.
V Karthikeyen and C Kar- thik, who were on the verge of joining a software company, came to the job fair looking for newer options.
They said they were not surprised to see freshers outnumbering experienced professionals at major job fairs.
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MUMBAI: Hinduja group company and outsourcing major, HTMT Global Solutions, has allocated $100-million for BPO company acquisitions in the domestic and international markets, a top company official said.
"We are looking at acquisition of BPO companies and have earmarked a $100-million for the purpose. But we are not in a rush," HTMT's Chairman, Ramkrishan P Hinduja, said at the company's annual general meeting held here.
The company has a merger and acquisitions division which would handle acquisitions, he said.
"We have an M&A division which looks for opportunities best suited for the group," he said.
The company may seal a few deals in this financial year, Hinduja said, without, however, revealing further details.
HTMT is a key provider of relationship management solutions, business process outsourcing, outsourced call centre sales/service support and market research.
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"We are looking at acquisition of BPO companies and have earmarked a $100-million for the purpose. But we are not in a rush," HTMT's Chairman, Ramkrishan P Hinduja, said at the company's annual general meeting held here.
The company has a merger and acquisitions division which would handle acquisitions, he said.
"We have an M&A division which looks for opportunities best suited for the group," he said.
The company may seal a few deals in this financial year, Hinduja said, without, however, revealing further details.
HTMT is a key provider of relationship management solutions, business process outsourcing, outsourced call centre sales/service support and market research.
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Indian legal process outsourcing LPO sector is currently experiencing a positive effect of U.S. financial crisis as bankruptcy filing incidents as that of the major investment firm Lehman Brothers make many corporate houses and investment banks to shift their credit crisisrelated work to lawyers in India as it is a more viable and costeffective option.With more international firms turn to India for LPO, the sector is expected to witness a surge in business. Major LPOs such as Pangea3, Quislex and Mindcrest have seen a significant increase in the number of outsourced projects in the last few months.
Kevin Reilley, Senior Vice President of Legal Services with leading legal outsourcing provider says,There were several comments from law firm speakers, along with inhouse attorneys, who all indicated that it was not a question of if, but when, they embraced this, and how they embraced this. There was no question mark over whether LPO was going to be a big part of their practices. So theres still a lot of learning going on about, How do we really manage our offshore partner, and, for corporations, How do we manage to get consistent results across many outside law firms, What should be the role of inhouse counsel, and what should be the role of an LPO provider partner? Law firms have indicated that times are very tough. Their costs are high, theyre under immense pressure from their clients to come up with valuebased billing and, therefore, they have recognised that they need to have a strategy around LPO.
According to Kevin, transformational partnerships work equally well for inhouse legal teams of large corporations, who will be free to focus on innovating through the use of technology. For example, he said, a corporation could be using 50 people to perform a compliance function. We may be able to perform that same function with 30 people in India, but using technology thats more efficient and effective for managing the workflow. So we can actually build efficiencies into the model , and the way that thats done best is through a partnership, rather than on a temporarylabour basis.
Kevin stressed that clients will find a wellschooled and adaptable provider indispensable. Past performance is an indicator of future results, he said, and that comes down to the governance of your people – their hiring; their training; defining bestpractices, and those other methodologies that weve developed for engaging clients: assessing our servicedelivery model and measuring it in reporting. We have a big training effort underway in India right now where our clients subject matter is taught in very detailed curricula, both in classroom lectures and elearning – and we are training our attorneys in very specific areas of US and UK law, plus contract management law and legal research. So its been a very significant investment and effort, but its certainly something that our clients have said really matters.
Antony Alex, Pangea3 VP Legal Services, said, The demand for LPOs is on the rise as legal work related to bankruptcies in the global market has increased. Experts also opine that turmoil in the financial sector is driving more legal outsourcing to India.
Since appointing a lawyer is expensive overseas, especially in the U.S. and UK, it is natural for corporate to shift higher value work to India at this time of crisis, said a source.
Presently, there are over 200 LPOs in India and the number is expected to rise in next few years. The Industry has grown at over 60 percent yearonyear . The market stood at Rs 630 crore in 2007.
According to a study by research firm Value Notes, revenue form offshoring legal services in India will reach over Rs.2,770 crore with job opportunities of 24,000 by the end of 2010.
Source : http://www.offshoringtimes.com/
Kevin Reilley, Senior Vice President of Legal Services with leading legal outsourcing provider says,There were several comments from law firm speakers, along with inhouse attorneys, who all indicated that it was not a question of if, but when, they embraced this, and how they embraced this. There was no question mark over whether LPO was going to be a big part of their practices. So theres still a lot of learning going on about, How do we really manage our offshore partner, and, for corporations, How do we manage to get consistent results across many outside law firms, What should be the role of inhouse counsel, and what should be the role of an LPO provider partner? Law firms have indicated that times are very tough. Their costs are high, theyre under immense pressure from their clients to come up with valuebased billing and, therefore, they have recognised that they need to have a strategy around LPO.
According to Kevin, transformational partnerships work equally well for inhouse legal teams of large corporations, who will be free to focus on innovating through the use of technology. For example, he said, a corporation could be using 50 people to perform a compliance function. We may be able to perform that same function with 30 people in India, but using technology thats more efficient and effective for managing the workflow. So we can actually build efficiencies into the model , and the way that thats done best is through a partnership, rather than on a temporarylabour basis.
Kevin stressed that clients will find a wellschooled and adaptable provider indispensable. Past performance is an indicator of future results, he said, and that comes down to the governance of your people – their hiring; their training; defining bestpractices, and those other methodologies that weve developed for engaging clients: assessing our servicedelivery model and measuring it in reporting. We have a big training effort underway in India right now where our clients subject matter is taught in very detailed curricula, both in classroom lectures and elearning – and we are training our attorneys in very specific areas of US and UK law, plus contract management law and legal research. So its been a very significant investment and effort, but its certainly something that our clients have said really matters.
Antony Alex, Pangea3 VP Legal Services, said, The demand for LPOs is on the rise as legal work related to bankruptcies in the global market has increased. Experts also opine that turmoil in the financial sector is driving more legal outsourcing to India.
Since appointing a lawyer is expensive overseas, especially in the U.S. and UK, it is natural for corporate to shift higher value work to India at this time of crisis, said a source.
Presently, there are over 200 LPOs in India and the number is expected to rise in next few years. The Industry has grown at over 60 percent yearonyear . The market stood at Rs 630 crore in 2007.
According to a study by research firm Value Notes, revenue form offshoring legal services in India will reach over Rs.2,770 crore with job opportunities of 24,000 by the end of 2010.
Source : http://www.offshoringtimes.com/
NEW DELHI: US sub-prime crisis may be a boon to the Indian business process outsourcing (BPO) units, which provide financial services, with the sector expected to grow 40-45 times the current market size over the next five years, according to a global consultancy firm.
"The key drivers of growth will come from cost pressure and the timely advent of more vertical-specific offerings by offshore suppliers," a study from Everest Research Institute pointed out.
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"The key drivers of growth will come from cost pressure and the timely advent of more vertical-specific offerings by offshore suppliers," a study from Everest Research Institute pointed out.
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NEW DELHI: Next time, when a client’s transaction is forwarded to a BPO in India, he might actually end up getting more value on the service offered than he ever expected.
The Indian BPO industry is undergoing a shift in its revenue-generation model to spur more efficiency among the service providers.
From the input-based pricing or FTE (full-time equivalent) model based on per person on hourly basis, the sector is embracing outcome (a client pays a vendor based on the output or outcome) and transaction (vendor will be paid on the number of transactions performed) based pricing models.
“Gauging productivity of providers based on the FTE format was becoming quite difficult. In the new output based model, the effort and success is out in the open for everyone to see. It shall have positive impacts in revenue generation,” said Sameer Chopra, president, Business Process Industry Association of India (BPIAI).
The industry believes that outsourcing is not strictly a cost-cutting exercise; it’s a business-value creator. The new pricing model based on the output delivered to a client would help in achieving the latter role.
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The Indian BPO industry is undergoing a shift in its revenue-generation model to spur more efficiency among the service providers.
From the input-based pricing or FTE (full-time equivalent) model based on per person on hourly basis, the sector is embracing outcome (a client pays a vendor based on the output or outcome) and transaction (vendor will be paid on the number of transactions performed) based pricing models.
“Gauging productivity of providers based on the FTE format was becoming quite difficult. In the new output based model, the effort and success is out in the open for everyone to see. It shall have positive impacts in revenue generation,” said Sameer Chopra, president, Business Process Industry Association of India (BPIAI).
The industry believes that outsourcing is not strictly a cost-cutting exercise; it’s a business-value creator. The new pricing model based on the output delivered to a client would help in achieving the latter role.
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NEW DELHI: BPO firm Vertex plans to make India its global hub and is looking at acquisitions of domestic BPO companies.
The company also plans to move 300 roles in HR and finance, among other functions, from its UK and North America operations to India.
Employees on these roles would be re-deployed in other functions in their home market.
“We can’t be a leading global BPO player without India being a vital part,” according to Vertex managing director for private sector Bruce MacLeod.
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The company also plans to move 300 roles in HR and finance, among other functions, from its UK and North America operations to India.
Employees on these roles would be re-deployed in other functions in their home market.
“We can’t be a leading global BPO player without India being a vital part,” according to Vertex managing director for private sector Bruce MacLeod.
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HCL Technologies, India’s fourth largest software exporter, is pursuing a non-linear growth strategy for its business process outsourcing arm and a business model to hedge against currency fluctuations.
Set up seven years back with 30 people, HCL BPO today is 13,000-people strong, contributing about 12% to the parent’s revenues. It closed FY08 with $225 million in revenues. Over the last five years, revenues have grown by compounded annual growth rate (CAGR) of 50% while net profit has risen by 130% CAGR. At 26%, it has amongst the best operating margins in the industry.
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Set up seven years back with 30 people, HCL BPO today is 13,000-people strong, contributing about 12% to the parent’s revenues. It closed FY08 with $225 million in revenues. Over the last five years, revenues have grown by compounded annual growth rate (CAGR) of 50% while net profit has risen by 130% CAGR. At 26%, it has amongst the best operating margins in the industry.
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NEW DELHI: Mumbai-based Kalpesh Malhotra (name changed) was on top of the world when he joined the iconic investment bank, Lehman Brothers, early this year. He was among the select few, picked after a rigorous recruitment session, from one of India’s premier B-schools at a salary of Rs 18 lakh a year.
But in a matter of months, the dreams of a great future, global business travel and meetings with top honchos turned into a nightmare. After America’s fourth-largest i-bank filed for bankruptcy there was chaos, panic and despair at its plush Powai office. Kalpesh is not alone. He now shares his uncertain future with about 2,500 employees of Lehman’s India unit and about 23 lakh people who work in the Indian IT and BPO industry. Almost 60% of the IT-BPO companies get their bread and butter from American financial institutions like Goldman Sachs, Washington Mutual, Citigroup, Bank of America, Morgan Stanley and Lehman Brothers.
With the crash of these financial behemoths at the Wall Street, layoffs are witnessed in cities like Bangalore, Hyderabad and Chennai. Leading global HR consulting firm Manpower has drastically downgraded hiring outlook for India. According to Manpower, hiring outlook (percentage of hiring that companies plan) dipped from 56% to 33% for quarter ending March 2009 for finance and insurance sectors. For IT-ITES, the outlook has declined from 58% to 47%. Companies are going to be badly hit, especially in the banking financial services & insurance (BFSI), IT and BPO, say experts.
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But in a matter of months, the dreams of a great future, global business travel and meetings with top honchos turned into a nightmare. After America’s fourth-largest i-bank filed for bankruptcy there was chaos, panic and despair at its plush Powai office. Kalpesh is not alone. He now shares his uncertain future with about 2,500 employees of Lehman’s India unit and about 23 lakh people who work in the Indian IT and BPO industry. Almost 60% of the IT-BPO companies get their bread and butter from American financial institutions like Goldman Sachs, Washington Mutual, Citigroup, Bank of America, Morgan Stanley and Lehman Brothers.
With the crash of these financial behemoths at the Wall Street, layoffs are witnessed in cities like Bangalore, Hyderabad and Chennai. Leading global HR consulting firm Manpower has drastically downgraded hiring outlook for India. According to Manpower, hiring outlook (percentage of hiring that companies plan) dipped from 56% to 33% for quarter ending March 2009 for finance and insurance sectors. For IT-ITES, the outlook has declined from 58% to 47%. Companies are going to be badly hit, especially in the banking financial services & insurance (BFSI), IT and BPO, say experts.
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Even as the Wall Street is suffering a jolt over the collapse of leading investment bankers, there are unconfirmed reports that Satyam Computer Services Limited is seriously planning to buy the Indian back office of Lehman Brothers Holdings. The new report assumes great significance at the back drop of the reports that IT giant Wipro Technologies and Gurgaonbased knowledge process outsourcing firm Copal Partners have expressed interest in bidding for the USbased investment firm, which has already filed for bankruptcy protection causing finance jitters all over the world.
According to Business Standard, the US based investment banking firm is expected to close its captive unit at Powai in Mumbai by the end of this month. It has already asked the employees in Mumbai office to look for another job and they would be paid only for this month, which would be treated as a severance package.
When CyberMedia News contacted Satyam Computers, it refused to make any comment saying, We are in our quiet period and would not be able to respond to the queries.
Meanwhile, British bank Barclays PLC said that it had agreed to acquire Lehman Brothers North American investment banking and capital markets businesses for USD250 million in cash. Reports say it will also purchase Lehmans New York headquarters and its two data centers in New Jersey for USD1.5 billion.
But one will have to wait and see whether this would reduce the impact of the shock in the financial market.
Though the Indian IT firms say the financial earthquake in US will have no immediate impact over them, it will not be a smooth ride ahead for the techies, if the overall scenario is any indication. Cloud is looming large over the IT horizons.
It was only yesterday that HP had declared it would cut 24,600 jobs over the next three years, which amounts to nearly 8 per cent of HPs 320,000employee work force.
The Times of India had recently reported that Satyam Computer Services is planning to cut nearly 4,500 jobs in the near future. Satyam has a work force of 51,000 employees.
When asked how the US crisis is going to impact the IT sector in India, Wipro declined to respond to the question. The PR department of the company said this is the silent period going on for the company and it will not be able to comment anything now.
Since the global economic slowdown has reached its peak at the time of the annual appraisal of the employees, another possibility is that many employees in the lucrative IT and finance segments may not get any increment at all. And this is equivalent to getting a pink slip.
The US slowdown will also force the IT firms anchored in India to look for new markets. Satyam is reportedly looking at expanding its market in the Middle East, which is all poised to grow in terms of IT services spending.
The only ray of hope in this dark scenario is that the Indian rupee is still showing a downward trend against the US dollar, which may help the export segment. And Indian IT segment is all about export is the only reprieve, at least for the time being.
Source : http://www.offshoringtimes.com/
According to Business Standard, the US based investment banking firm is expected to close its captive unit at Powai in Mumbai by the end of this month. It has already asked the employees in Mumbai office to look for another job and they would be paid only for this month, which would be treated as a severance package.
When CyberMedia News contacted Satyam Computers, it refused to make any comment saying, We are in our quiet period and would not be able to respond to the queries.
Meanwhile, British bank Barclays PLC said that it had agreed to acquire Lehman Brothers North American investment banking and capital markets businesses for USD250 million in cash. Reports say it will also purchase Lehmans New York headquarters and its two data centers in New Jersey for USD1.5 billion.
But one will have to wait and see whether this would reduce the impact of the shock in the financial market.
Though the Indian IT firms say the financial earthquake in US will have no immediate impact over them, it will not be a smooth ride ahead for the techies, if the overall scenario is any indication. Cloud is looming large over the IT horizons.
It was only yesterday that HP had declared it would cut 24,600 jobs over the next three years, which amounts to nearly 8 per cent of HPs 320,000employee work force.
The Times of India had recently reported that Satyam Computer Services is planning to cut nearly 4,500 jobs in the near future. Satyam has a work force of 51,000 employees.
When asked how the US crisis is going to impact the IT sector in India, Wipro declined to respond to the question. The PR department of the company said this is the silent period going on for the company and it will not be able to comment anything now.
Since the global economic slowdown has reached its peak at the time of the annual appraisal of the employees, another possibility is that many employees in the lucrative IT and finance segments may not get any increment at all. And this is equivalent to getting a pink slip.
The US slowdown will also force the IT firms anchored in India to look for new markets. Satyam is reportedly looking at expanding its market in the Middle East, which is all poised to grow in terms of IT services spending.
The only ray of hope in this dark scenario is that the Indian rupee is still showing a downward trend against the US dollar, which may help the export segment. And Indian IT segment is all about export is the only reprieve, at least for the time being.
Source : http://www.offshoringtimes.com/
Press one for cost cutting, two for margin improvement BPO companies are wishing for a dream system. But while this is far from reality, outsourcers are experimenting with all options to survive the slowdown.
Salinet Business Solutions is trying to play the volume game by pushing up the number of transactions in the same billing rate.
Manoj Malhotra, CEO, Salient, says: "Typically if we were charging the client for 10 minutes per transaction, we would now be doing the same transaction in 6 or 7 minutes. So the 3 minutes we save goes to our account and that improves our margins because we still charge the client the same what we were charging before."
But while productivity measures may not work for all, Convergys India is experiencing a slowdown in salaries.
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Salinet Business Solutions is trying to play the volume game by pushing up the number of transactions in the same billing rate.
Manoj Malhotra, CEO, Salient, says: "Typically if we were charging the client for 10 minutes per transaction, we would now be doing the same transaction in 6 or 7 minutes. So the 3 minutes we save goes to our account and that improves our margins because we still charge the client the same what we were charging before."
But while productivity measures may not work for all, Convergys India is experiencing a slowdown in salaries.
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Ashish Sinha, a middle-management employee with Lehman Brothers’ business process outsourcing (BPO) unit in Mumbai, was going to move into a bigger house in October for a rent of Rs 16,000 a month. He was also planning to get married in the middle of the month.
However, since Monday, when Lehman Brothers filed for bankruptcy, he found himself jobless. He has approached his new landlord to refund Rs 2 lakh, which he had given as a security deposit.
The situation is worse for Preeti Sagar and her two colleagues, who are in their mid-twenties. They have rented out a flat near their office at Rs 50,000 a month. Now they have no idea how they will continue to stay in that house.
Around 1,200 employees of Lehman Brothers’ BPO in Powai, a Mumbai suburb, are facing similar problems. They have a deadline of 15 days to find a new job. They are free to come to office, if they wish to. And they have been told that this month’s salary is their severance package.
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However, since Monday, when Lehman Brothers filed for bankruptcy, he found himself jobless. He has approached his new landlord to refund Rs 2 lakh, which he had given as a security deposit.
The situation is worse for Preeti Sagar and her two colleagues, who are in their mid-twenties. They have rented out a flat near their office at Rs 50,000 a month. Now they have no idea how they will continue to stay in that house.
Around 1,200 employees of Lehman Brothers’ BPO in Powai, a Mumbai suburb, are facing similar problems. They have a deadline of 15 days to find a new job. They are free to come to office, if they wish to. And they have been told that this month’s salary is their severance package.
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Nasscom, an organisation that represents and sets the policy framework for the Indian software industry, is compiling best practices for providing security to women workers on night shift in BPO and IT companies, and to develop it as a code of conduct for the industry.
Speaking at a seminar on ‘Security Measures for Night Shift Women Workers’ organised by the National Commission for Women (NCW), Karnataka State Legal Services Authority, All India Federation of Women Lawyers and Assocham, Sucharita Eashwar of Nasscom’s product, gender inclusivity and mentorship initiatives, said, “This is being brought out in the wake of cases of atrocities being committed on women workers in Pune and Bangalore in the last two to three years.”
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Speaking at a seminar on ‘Security Measures for Night Shift Women Workers’ organised by the National Commission for Women (NCW), Karnataka State Legal Services Authority, All India Federation of Women Lawyers and Assocham, Sucharita Eashwar of Nasscom’s product, gender inclusivity and mentorship initiatives, said, “This is being brought out in the wake of cases of atrocities being committed on women workers in Pune and Bangalore in the last two to three years.”
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In a bid to help Indian BPO companies tide over challenges, technology solutions company Anantara Solutions has embarked on a model that would enable clients in the BPO space to realise their potential.
Ravi Chander, partner, North American operations, Anantara Solutions, outlines the challenges faced by the industry, the possible way out and the company’s strategies in this regard.
With the emergence of cost-competitive destinations such as the Philippines and China, what lies in store for the BPO industry in India?
The BPO industry in India is currently estimated at $11 billion. The industry, according to a Nasscom-Everest Group study, has the opportunity to grow five-fold to be over $50 billion by 2012.
However, realising this potential can prove to be challenging given the fact that cost arbitrage is no longer the source of competitive advantage for Indian BPO companies. It is a level-playing field, with global companies now offering the same value through out-located operations in India.
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Ravi Chander, partner, North American operations, Anantara Solutions, outlines the challenges faced by the industry, the possible way out and the company’s strategies in this regard.
With the emergence of cost-competitive destinations such as the Philippines and China, what lies in store for the BPO industry in India?
The BPO industry in India is currently estimated at $11 billion. The industry, according to a Nasscom-Everest Group study, has the opportunity to grow five-fold to be over $50 billion by 2012.
However, realising this potential can prove to be challenging given the fact that cost arbitrage is no longer the source of competitive advantage for Indian BPO companies. It is a level-playing field, with global companies now offering the same value through out-located operations in India.
Read More Article...
NEW DELHI: Today’s freshers are faced with a problem of plenty. They have multiple options, ranging from the IT industry to BPO, from retail to telecom to banking. So what should they choose and why?
The BPO industry is among the most attractive industries. First, the industry changes personalities for the better. There are numerous examples of people who have been armed with life skills exuding confidence about their future after being in a BPO.
While functional skills can be acquired in any profession, developing life skills is a significant leap. Second is the exposure to the global best practices.
BPOs provide the headstart in terms of ‘process maturity’ and hence helps shape the thinking of young workforce. The third is the opportunity to learn international cultures.
Interacting everyday either with customers as in a call centre or being part of a team that works with international teams, today’s youngsters get the opportunity to experience what it is like to work as a global professional.
Read More Article...
The BPO industry is among the most attractive industries. First, the industry changes personalities for the better. There are numerous examples of people who have been armed with life skills exuding confidence about their future after being in a BPO.
While functional skills can be acquired in any profession, developing life skills is a significant leap. Second is the exposure to the global best practices.
BPOs provide the headstart in terms of ‘process maturity’ and hence helps shape the thinking of young workforce. The third is the opportunity to learn international cultures.
Interacting everyday either with customers as in a call centre or being part of a team that works with international teams, today’s youngsters get the opportunity to experience what it is like to work as a global professional.
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Indias third party business process outsourcing (BPO) services exports in 200708 grew 21.4 per cent to Rs.264.23 billion, up from Rs.217.60 billion in the previous fiscal, according to a new study. In dollar terms, the growth was even more impressive at 36.6 per cent to USD6.6 billion, up from USD4.8 billion last fiscal, said the study. It ranked Genpact as the No. 1 export revenue earner with revenues of Rs.26.59 billion, up by 19.8 per cent from Rs.22.20 billion that the company earned last fiscal.
Aditya Birla Minacs, the second ranking revenue earning company last fiscal, maintained its rank this year as well. Its revenues grew 3.1 per cent to Rs.15.63 billion up from Rs.15.16 billion last fiscal.
Apart from these two top rankers, the other companies that managed to maintain their ranks this year were Wipro BPO and HCL BPO. Wipro BPO maintained its 7th rank by growing 22.7 per cent to Rs.11.47 billion up from Rs.9.35 billion last fiscal.
Similarly, HCL BPO maintained its 10th rank by growing 18.1 per cent to Rs.8.8 billion up from Rs.7.45 billion last fiscal. TCS BPO improved its ranking from 4th last fiscal to 3rd this fiscal by growing 38.6 per cent to Rs.13.64 billion, up from Rs.9.84 billion.
In terms of rankings, the most dramatic improvement has been achieved by Intelenet Global which has moved up six places to come into the top 20 at rank 15. Last fiscal at rank 21 it was not in the list at all. Intelenet Global has grown a whopping 128.1 per cent the highest among the top 20 to Rs.6.57 billion up from Rs.2.88 billion last fiscal.
The other companies to have improved their rankings this year were Infosys BPO which moved up four places to rank eight from rank 12 last fiscal. Its revenues grew 49.3 per cent to Rs.10.02 billion up from Rs.6.71 billion last fiscal.
Firstsource Solutions moved up three places to rank six from rank nine last fiscal by growing 45.7 per cent to Rs.11.64 billion against Rs.7.99 billion last year. WNS Global Services and Mphasis were the other two companies to have improved their rankings. Both moved up one place to 5th and 19th respectively.
Two companies Aptara and Evene4e moved out of the top 20 rankings. They were ranked 18th and 19th last year. Their places have been taken by Accenture India an absolutely new entrant and Intelenet Global.
Among the sliders, Cambridge Solutions slid the most to rank nine from rank five last fiscal. In fact, it was the only company that showed negative growth of 10.3 per cent with revenues coming down to Rs.8.97 billion from Rs.10 billion last fiscal.
Covergys India fell three ranks from eight to rank 11. Its revenues, however, just managed to show positive growth of 2.5 per cent to Rs.8.78 billion from Rs.8.57 billion last fiscal. VCustomer too slid three ranks to 18 from 15 last fiscal. Its revenues grew 9.5 per cent to Rs.4.85 billion from Rs.4.43 billion last year.
24 7 Customer also slid three ranks to 20 from 17 despite growing 17.3 per cent to Rs.4.06 billion from Rs.3.46 billion last year. IBM Daksh, Aegis BPO, EXL Service and HTMT Global all slid by one rank this year compared to last year.
The top 20 companies accounted for 74.2 per cent of the total industry revenue down from 77.4 per cent in the last fiscal.
Source : http://www.offshoringtimes.com/
Aditya Birla Minacs, the second ranking revenue earning company last fiscal, maintained its rank this year as well. Its revenues grew 3.1 per cent to Rs.15.63 billion up from Rs.15.16 billion last fiscal.
Apart from these two top rankers, the other companies that managed to maintain their ranks this year were Wipro BPO and HCL BPO. Wipro BPO maintained its 7th rank by growing 22.7 per cent to Rs.11.47 billion up from Rs.9.35 billion last fiscal.
Similarly, HCL BPO maintained its 10th rank by growing 18.1 per cent to Rs.8.8 billion up from Rs.7.45 billion last fiscal. TCS BPO improved its ranking from 4th last fiscal to 3rd this fiscal by growing 38.6 per cent to Rs.13.64 billion, up from Rs.9.84 billion.
In terms of rankings, the most dramatic improvement has been achieved by Intelenet Global which has moved up six places to come into the top 20 at rank 15. Last fiscal at rank 21 it was not in the list at all. Intelenet Global has grown a whopping 128.1 per cent the highest among the top 20 to Rs.6.57 billion up from Rs.2.88 billion last fiscal.
The other companies to have improved their rankings this year were Infosys BPO which moved up four places to rank eight from rank 12 last fiscal. Its revenues grew 49.3 per cent to Rs.10.02 billion up from Rs.6.71 billion last fiscal.
Firstsource Solutions moved up three places to rank six from rank nine last fiscal by growing 45.7 per cent to Rs.11.64 billion against Rs.7.99 billion last year. WNS Global Services and Mphasis were the other two companies to have improved their rankings. Both moved up one place to 5th and 19th respectively.
Two companies Aptara and Evene4e moved out of the top 20 rankings. They were ranked 18th and 19th last year. Their places have been taken by Accenture India an absolutely new entrant and Intelenet Global.
Among the sliders, Cambridge Solutions slid the most to rank nine from rank five last fiscal. In fact, it was the only company that showed negative growth of 10.3 per cent with revenues coming down to Rs.8.97 billion from Rs.10 billion last fiscal.
Covergys India fell three ranks from eight to rank 11. Its revenues, however, just managed to show positive growth of 2.5 per cent to Rs.8.78 billion from Rs.8.57 billion last fiscal. VCustomer too slid three ranks to 18 from 15 last fiscal. Its revenues grew 9.5 per cent to Rs.4.85 billion from Rs.4.43 billion last year.
24 7 Customer also slid three ranks to 20 from 17 despite growing 17.3 per cent to Rs.4.06 billion from Rs.3.46 billion last year. IBM Daksh, Aegis BPO, EXL Service and HTMT Global all slid by one rank this year compared to last year.
The top 20 companies accounted for 74.2 per cent of the total industry revenue down from 77.4 per cent in the last fiscal.
Source : http://www.offshoringtimes.com/
NEW DELHI: The Essar-owned $330-million Aegis BPO is once again on prowl. It plans to buy four BPOs in a year. Aegis has already acquired 11 companies during last four years.
“We are in talks with over six BPOs and plan to close deals with at least four of them. Our plan is to add a company every quarter as part of our inorganic and organic growth. Cash is not a problem as we have cash-rich Essar Group as our parent,” says Aegis CEO Aparup Sengupta.
The BPO has an internal M&A team that works on a `five nine’s’ strategy when closing an acquisition. “Once we decide to close a deal, we follow a five nine’s strategy, which revolves around completing the integration in 99 days, 9 weeks, 9 days and 9 hours. While the new organisational strategy is charted out in nine hours, both the companies should be integrated within 99 days,” Mr Sengupta adds.
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“We are in talks with over six BPOs and plan to close deals with at least four of them. Our plan is to add a company every quarter as part of our inorganic and organic growth. Cash is not a problem as we have cash-rich Essar Group as our parent,” says Aegis CEO Aparup Sengupta.
The BPO has an internal M&A team that works on a `five nine’s’ strategy when closing an acquisition. “Once we decide to close a deal, we follow a five nine’s strategy, which revolves around completing the integration in 99 days, 9 weeks, 9 days and 9 hours. While the new organisational strategy is charted out in nine hours, both the companies should be integrated within 99 days,” Mr Sengupta adds.
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Infosys BPO provides billing management, customer technical support, network performance and monitoring, mobile content provisioning, service activation and analytics services among others to Communication Service Providers (CSPs).
"The recent changes in the Indian telecom market have major implications for Indian CSPs and Infosys BPO is well-placed to offer solutions to tackle these challenges," said Gopal Devanahalli, head of telecom solutions business unit of Infosys BPO.
Increased convergence of data, voice and video, and the emergence of Internet telephony will make voice communications very inexpensive or virtually free, said Devanahalli. Also, changes like introduction of mobile number portability (MNP) and 3G services will have implications for CSPs.
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"The recent changes in the Indian telecom market have major implications for Indian CSPs and Infosys BPO is well-placed to offer solutions to tackle these challenges," said Gopal Devanahalli, head of telecom solutions business unit of Infosys BPO.
Increased convergence of data, voice and video, and the emergence of Internet telephony will make voice communications very inexpensive or virtually free, said Devanahalli. Also, changes like introduction of mobile number portability (MNP) and 3G services will have implications for CSPs.
Read More Article...