BT extends BPO deal with Steria for £75.5m

BT has extended its IT service support and development contract with Steria in a six-year £75.5m deal.

The new BPO (business process outsourcing) deal lasts until March 2014, and Steria will continue to support the key applications that underpin BT's UK operations for finance and accounting transaction processing, ledger and payroll services.

Building on a 20 year relationship with Steria, the contract extension, said BT, will enable it to optimise use of Steria's integrated delivery capability to move towards a more cost-effective and efficient service.

Kevin Richards, director of the Enterprise Management Platform at BT Design, said, "Steria has worked with BT for many years and has evolved its services and approaches along with BT's changing business and IT requirements.

"Keeping the business process and IT service closely coupled provides us with a streamlined and efficient service that maintains effectiveness at critical business periods."
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The IT Examiner's quick guide to outsourcing

In recent years India has become an outsourcing Hub for the West, mainly because of lower costs and a good talent base available in the country.

The outsourcing services include customer care, BPO, medical transcription, telemarketing, market research , manufacturing, designing data management services, engineering services, financial services, creative services, web analytics services, healthcare services, ghost writing, digital image editing services, and software services.

So what exactly is outsourcing and why do companies do this, with India hogging the limelight? There are questions whether or not the economic slowdown will affect the outsourcing trend and even whether it will expand to other areas.

Outsourcing can be defined as a process in which a company delegates some of its in-house operations/processes to a third party. Thus, outsourcing is a contractual transaction through which one company buys services from another while keeping ownership and ultimate responsibility for the underlying processes. The clients inform their provider what they want and how they want the work performed. So the client can authorize the provider to operate as well as redesign basic processes in order to ensure even greater cost and efficiency benefits. Importance in outsourcing should be understood where the third party or partner company takes full responsibility of any part of operations undertaken.

When a company decides to concentrate on what it's best at, it decides to subcontract some of the process such as testing, manufacturing, development to a certain extent to a vendor company to reduce the overhead costs of the main company and make more efficient use of land, labour and resources for more important activities.

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IT and BPO sectors to grow by 33%

Revenue from the Indian IT and BPO sectors is predicted to grow by 33% in the fiscal year 2008, reported Sify.com.

Revenue from exports is expected to go over $40 billion for the two sectors while that of the domestic market will go over $23 billion. The BPO sector is predicted to reach $12.5 billion in 2008 and can grow five times by 2012. As many as two million people are directly working in the BPO sector and seven to eight million people are indirectly working for this sector.

Pramod Bhasin, Vice-Chairman, National Association of Software and Services Companies (Nasscom) and President and Chief Executive Officer, Genpact, at the 2-day Nasscom BPO Strategy Summit in Bangalore on 9 June, said that the BPO industry needs more manpower and is currently looking at employing more than 200,000 eligible graduates. He added that BPOs also have to fight attrition. According to Bhasin, India needs to bring in education reforms and improve infrastructure. He said that a private-public partnership is important in this regard.

Ganesh Natarajan, Chairman, Nasscom, and Deputy Chairman and Chief Executive Officer, Zensar Technologies said that the BPO sector needs to utilise the prospects in rural areas, promote reverse migration and focus on environment-friendly IT practices, cultivate creativity and encourage women to become leaders.

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Internet cable breakdown affects Infosys BPO services

NEW DELHI: The BPO arm of country's second largest software exporter Infosys said on Friday that the company was experiencing a slow response time while accessing internet following a breakdown of cables in the Mediterranean sea.

"We are observing high latencies and packet drops on affected internet circuits resulting in slow response times while accessing applications, VPN, email and internet browsing," a company spokesperson said in an emailed statement.

While repair of these cable systems is expected to take about two weeks, the cable system providers are working on alternatives to mitigate this damage, the spokesperson said.

There has been damage of cable systems in Alexandria off Egypt coast, which has impacted internet connectivity and IPLC/MPLS services in India, the statement added.
However, another IT major Satyam said its BPO operations have multiple service providers and following the crisis they have rerouted their connections.

"Given our robust business continuity framework, we have succeeded in ensuring that services to our customers remain unaffected and continue meeting service level agreements," Satyam's Head (Network and Systems) Srinivasu C said.

Another BPO firm Infovision said the BPO business has not seen a major affect.
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