Indian IT outsourcing to benefit

Doomsday predictions not withstanding domestic IT companies are hoping to dig for gold in the rubble from the collapse of some of the biggest financial giants in the US and perhaps in other regions that could follow. The global financial crisis they believe could in fact result in bigger volumes of IT outsourcing they believe as the banking, financial services and insurance BFSI, majors are forced to cut costs and improve efficiencies.

For instance, Vineet Nayar, CEO of HCL Technologies Ltd, is looking at capitalising on the zones of frustration of the IT clients.

That is what the company had done during the 200001 dotcom bust.

We believe in converting threats into opportunities. During the previous slowdown also we did the same, we will do it again. In my view, 200809 will be a watershed year for the Indian IT industry, where we will see volume surge, and tech companies offering new services and entering new geographies, said Nayar.

Srinivas Vadlamani, chief financial officer CFO, Satyam Computer Services seconds that. The contrarian theory will come into play the same as in 2000 01.

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BPO exports grow 21.4 per cent

NEW DELHI: India's third party business process outsourcing (BPO) services exports in 2007-08 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 $6.6 billion, up from $4.8 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.

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Australian BPO may set up branch in Davao

MANILA, Philippines - Australia-based business process outsourcing (BPO) operator Admerex is eyeing Davao City as the possible location of its second contact center in the Philippines, an umbrella group for outsourcing services said Thursday.

Eriberto P. Barriga, Jr., vice-president for external affairs of ICT Davao, Inc., said in a statement the Admerex group had inspected the area as it plans to expand within the year.

Ces A. Sembrano of Admerex Philippines confirmed that the company was considering Davao for its second site. It has one contact center in Makati City with 500 agents. The expansion will require 500 more agents.

There are 18 call centers in Davao City operated by companies like Cyber City, Call Box, Sutherland and Western Wats.

"Their interest [in Davao] now is higher [than] two years ago," Mr. Barriga said. He said the increasing willingness of property owners to adjust to requirements of the information and communications technology sector has attracted investor interest.

At present, 12 sites are available for locators, and most property owners are willing to retrofit buildings to accommodate investors’ needs.

The Business Processing Association of the Philippines earlier said the country must develop three-quarters of talent living outside the National Capital Region. The BPO sector, IT and engineering sectors can grow by as much as 40% annually through 2010 if this talent is tapped, the group said.
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BPO vendors see larger US deals by year-end

Clients expected to complete internal evaluation process by then

Mixed fortune

It is a temporary slump in offshoring due to the US credit crunch and the BPOs expect the same factors to fuel increased demand for outsourcing by year-end.

The uncertain environment has indeed forced client companies in the US to ‘reprioritise’ and ‘review’ their roadmap for the future
Adith Charlie

Mumbai, May 4 Is recession good or bad for the business process outsourcing sector? Probably both! Recession in US seems to be a mixed bag for Indian BPO vendors.

They do agree there has been a temporary slump in offshoring due to the US credit crunch, but expect the same recession-related factors to fuel increased demand for outsourcing by the end of the calendar year.

Both IT and BPO companies are witnessing a spate of project delays and cancellations, especially in the financial services space, due to recession in the world’s largest economy. It must be noted that clients can save up to $5 million in costs annually if they enter into a major outsourcing contract. So why are the US companies going slow on their BPO engagements even when they want to cut costs in a recession?

Says Mr Raju Venkatraman, Joint Managing Director and Chief Operating Officer of Mumbai-based Firstsource Solutions, “When a company is hit by a crisis that is at least 100 times bigger than the cost benefits that outsourcing will bring, would it think about saving $5 million a year or find solutions for the bigger problem?” Outsourcing is important, but not a priority in a crisis-like situation, he adds. -
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Honing BPO skills - BPO News

Getting the right talent to work for you, is like searching for the proverbial needle in the haystack. Who would know this better than BPO firm 24/7 Customer? The company has initiated several programmes as part of its corporate social responsibility initiatives to expand the base of professionals in the BPO industry.

Recent research and studies have shown that the BPO sector is going to face a talent shortage of about 262,000 professionals by 2012. Keeping this in mind, the company has chalked out CSR programmes which focus on empowering youth, providing them with equal opportunties and educating the underprivileged.

Take its 24/7 Ascend programme, for instance. Under this initiative, students are taught the skillsets needed for the BPO sector. The website www.247customer.com/ascend helps any student get free information on skills needed to join the BPO Industry.

They also have a career opportunity programme wherein common doubts that college students have in pursuing a career in the BPO industry are addressed. To improve the skillsets, courses on language/communication are provided and special study courses are also taken up. Career planning tools like interview tips, resume writing lessons, counselling on BPO careers and scholarship information are also offered.

For the academic staff in colleges and universities, 24/7 Customer offers special programmes (24/7 Varsity programme) to train students who are interested in pursuing a BPO career.

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IGNOU To Start A Diploma Course For BPO Jobs

The Indira Gandhi National Open University (IGNOU) will soon start a diploma programme to train students from across the country to take up jobs in business process outsourcing (BPO) firms, well known as call centres. This will be a one-year diploma course conducted jointly by Accenture Services, a Bangalore based global technology service and outsourcing company.

“You know the BPO situation in our country. It’s a growing industry and the number of trained manpower required is huge. Here we have stepped in to provide trained human capital,” IGNOU spokesman Ravi Mohan told.

Mohan said the varsity has already signed an agreement with Accenture. Candidates who have passed 10+2 or equivalent can apply for the course.

“It is just not outsourcing for foreign companies, many Indian companies, government offices too have opened and will open call centres for better customer relations.

“This course will create a pool of professionals who will be able to handle the job better and reduce attrition rate,” Mohan added. Those having IGNOU’s certificate course in communication skills will have an edge but alternatively students shall be screened through a communication evaluation test.

The specialization would be offered in finance and accounting, insurance, banking, human resources, sourcing and category management, customer contact services, health care, pharma, engineering services, equity research, capital markets, order management and technical writing and learning services.

IGNOU shall ensure that the course will be imparted through a mix of education delivery channels across India including print, CD, web-based learning materials, contact sessions and simulated exercises labs for language and application learning.

BPO professionals get their own social networking space

NEW DELHI: It's the era of social networking groups. When everyone is either joining or starting a social networking group on the net these days, how could the young crowd from the Indian BPO sector be left behind? That's why BPO Voice, a new social networking group for people with a background in the BPO industry, is fast catching up in cyberspace.

Formed a few months ago but opened for membership only last month, the group meant exclusively for BPO employees already has over 200 members. ‘‘The idea took shape when I started using some of the BPO communities on other networking sites,'' says Amit Saxena, the brain behind the latest online community.

"The more I used other networking sites, the more I realised how they could offer much more than what they were currently giving,'' says Saxena. "Most networking groups in Google, Yahoo or even Orkut, offer nothing more than a space for reuniting old friends and making new ones. In fact, most of what they have is either spam or recruitment drives or some mindless activity or games," explains Saxena.

Realising the potential, this former BPO employee saw the need to make use of the collective intelligence of BPO employees and create a platform to share their domain related expertise. Saxena and his band of friends, Ankush Wadhwa and Siddharth Jindal who joined him later, have their job cut out.
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More jobs in UK, thanks to outsourcing

London Jul 15: According to the experts there are more outsourcing work by British companies to India does not cause job losses but there are more jobs or employment a research by economists at the University of Nottingham.

Scores of major UK companies have been involved in offshoring, which has often been opposed by unions. But the research by the Globalization and Economic Policy Centre (GEP) at the University of Nottingham says the efficiencies it has brought has actually boosted business and led to them employing more people in the UK, not less.

David Greenaway, director of the centre, said: “People fear their jobs are being exported to countries like India and China where labour is cheaper, but the picture is far more complex than that and much more positive.

“It would seem that firms that offshore part of their production process or service provision overseas become more efficient. This boosts productivity and turnover and as a result these firms grow and end up employing more people at home, not fewer."

The GEP research says there are losers when offshoring takes place through higher job turnover and people are unable to adapt to new skills. Richard Kneller, who co-wrote the research, says it also explodes another myth about off-shoring.
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'It is really expensive to do BPO business in India'

24/7 Customer, the Bangalore-based business process outsourcing (BPO) firm, started operations at a time when the very concept of offshoring jobs was not much known.

The BPO industry in India has grown up in size and scale since then, providing employment to thousands of youth. However, 24/7 Customer, which could have grown much bigger in headcount, has preferred to maintain its leanness but never compromised the quality of services.

S Nagarajan talks about his company and its future plans in an interview with Bibhu Ranjan Mishra. Excerpts:

In spite of being one of the pioneers in the BPO industry, you have not grown much in terms of headcount?

Our emphasis is not just on increasing headcounts or opening multiple centres. We grew our revenues by 30-35 per cent last year, whereas the headcount has not gone up in that pace.

It shows that we have started growing in a non-linear fashion. The focus is to improve the per-employee productivity.

Does it mean that you are going to emphasise more on non-voice services and high-end KPO areas?

For me, KPO, BPO, voice and non-voice are the same because these are the terms invented by competition who can not differentiate themselves.

When a client comes, he does not say give me 50 BPO or 50 KPO agents. He says give us processes which increases our business. We are experts on customer lifecycle management, and that is our niche area. We are already into banking, financial services, insurance, technology, telecom, retail and services.

We want to dig deeper in these industry verticals instead of expanding our portfolio further. The market is not saturated for all these industries.

In addition to your presence in India, you have centres in Philippines, Gautemala, Ireland and China. Is your plan to open centres abroad is driven by the client demand?

We open centres outside India basically to meet the clients' requirements. Sometimes, many small and medium enterprise (SME) clients prefer to outsource business process works to places (like Guatemala) which are closer to the US geographically so that they can come to the centre in 2-3 hours. Larger clients don't mind sending works to any location. Most of the clients in the UK prefer India.

Do you think India is no more enjoying the cost arbitrage it used to enjoy? If not, who would you like to blame for this?

In India, there are so much of added costs in the form of providing food and transportation to employees. India is the only country on earth where the BPO firms provide transportation and food to the employees.

Basically, as an industry we desire to do all these, because our cities do not have transportation facility in the night and no good road. We have to provide everything, and it is little more expensive to do business in India.

What about your plan to go public?

We will certainly go public, but the market is not good right now. We have revenues and internal accruals in terms of profits. We are not in a hurry to go public for the sake of going public. When it happens, it won't be an exit event but a milestone in the company's history.

Has the increase in fuel prices started affecting BPO firms like you?

The growing transportation cost is going to be a major problem in days to come. However, it is not affecting us now since we have long-term contracts with service providers. When the contracts come for a renewal, I am sure that our service providers will come and ask us for a hike.

Source : http://www.business-standard.com/

Despite US recession, BPO’s future looks bright

THE BUSINESS Process Outsourcing (BPO) vendors having United States based clients share mixed reactions due to the temporary slump in the US economy. This will be further heightened till the time final election results are not out and the new president doesn’t announce some relief with string of measures to combat the credit crunch heat.Those BPOs or KPOs, which focus on large US companies or big ticket outsourcing contracts, are facing the recession crisis as seen by the delays in contract renewals or temporary freeze in awarding of new contracts. One of the associated factors is the lengthened decision-making time with a lot of top heads losing their jobs under the recession pressure.


Large companies have now focussed their energies on restructuring their companies through vertical acquisitions or major divestitures besides analysing their internal processes. This has chiefly been observed with IT and financial service companies. It seems that ’outsourcing’ is now on the back-burner for them, as they focus more on meeting their budgeted business targets first.


But there’s some hope in these tough times. The economic crisis has forced the small to mid-sized US companies to assess outsourcing as an option as they struggle to survive against the big mammoths. They are re-evaluating their internal processes to find solutions within tight business budget constraints. This, in fact, opens up a galore of opportunities for BPOs and KPOs from India, which focus on small to mid-sized US clients with revenues lesser than $5 million.


There are few other smart choices available too, like looking beyond the US to stretch the sights to Europe and Australia or changing the client exposure from the typical IT and financial service clients to other industry verticals.


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Issues in the BPO sector

THE fast-growing business process outsourcing (BPO) industry in the country is not without problems and challenges.

The Business Processing Association Philippines (BPAP), has identified three key issues that should be addressed with a clear set of initiatives and an institutional framework to sustain momentum.

The three issues are: talent, which require that the supply of qualified workers be sustained; the business environment, referring to the government’s predictable and consistent regulatory policies, and; the next wave cities, which means that additional cities should be tapped to house the different BPO players doing business in our country.

The above issues can be dissected in the light of the present circumstances and realities. In the case of availability of qualified workers, the industry should confront the need to attract more talent. Efforts have to be made to make the supply meet the skill requirements of the offshoring and outsourcing industry. Focus must be made on the English language, problem solving skills and other competencies required by the industry.

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IT, BPO to grow 10-15 pc in next 5 yrs: NASSCOM

CHENNAI: IT and BPO industry is poised to grow 15 to 20 per cent in the next five years and direct employment likely to go up to eight million, a recent survey by NASSCOM has said.

The survey has revealed that prospects of the industry growing in 50 cities in the country were bright if the state governments concentrate on developing infrastructure in these cities.

Releasing the survey, NASSCOM President Som Mittal told a press meet that the industry was focused in seven locations in the country now, employing about two million people.

The present locations - Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, National Capital Region of Delhi and Pune - might not be able to cope with the pressure developed due to setting up of new units there.

The survey said that the development of these 50 locations, including the seven, would depend on knowledge pool availability, infrastructure and social environment, government support and business environment.
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Click BPO for a Great Job - BPO NEWS

Ronald George is with HR Operations, 24/7 Customer. He had a fast-track growth in the company in a span of seven years. Now with HR, his mandate is to make the fresh recruits feel at home. He speaks to ET on the opportunities in the sector.

Can you give a brief overview of your career?

I started my career with 24/7 Customer in March 2001 and it has been more than 7 years since I’m with them. I began as an agent in operations and spent 1.3 years in this role and moved on to become a team leader managing 20 agents. After working for 1.6 years as a team leader, I was promoted as manager (operations) handling 7 team leaders.

I worked for 2.5 years as manager and was promoted as assistant program manager managing approximately 500 employees. After spending a year in that position, I moved laterally to the support function as manager, HR Operations. When I joined 24/7 Customer, it was a young company which was growing and I thought this was the best place where I could get immense opportunities to learn and grow.

The BPO industry is hailed as a sector enabling youngsters to have fast-track careers, with higher levels of responsibility being delegated at fairly early stages in their careers. What are the growth prospects available for people looking at a career in this sector?
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Honing BPO skills - BPO NEWS

Getting the right talent to work for you, is like searching for the proverbial needle in the haystack. Who would know this better than BPO firm 24/7 Customer? The company has initiated several programmes as part of its corporate social responsibility initiatives to expand the base of professionals in the BPO industry.

Recent research and studies have shown that the BPO sector is going to face a talent shortage of about 262,000 professionals by 2012. Keeping this in mind, the company has chalked out CSR programmes which focus on empowering youth, providing them with equal opportunties and educating the underprivileged.

Take its 24/7 Ascend programme, for instance. Under this initiative, students are taught the skillsets needed for the BPO sector. The website www.247customer.com/ascend helps any student get free information on skills needed to join the BPO Industry.

They also have a career opportunity programme wherein common doubts that college students have in pursuing a career in the BPO industry are addressed. To improve the skillsets, courses on language/communication are provided and special study courses are also taken up. Career planning tools like interview tips, resume writing lessons, counselling on BPO careers and scholarship information are also offered.
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Vendors find India’s BPO market attractive

Bangalore: India, already known as the world’s back office, is now emerging as a big market for such services as its economy matures and the global economy slows down.

The opportunities of business expansion in the domestic market have even made US-listed Indian firms such as Genpact Ltd and EXL Service Holdings Inc.—that presently cater mainly to the US market—devise aggressive strategies to enter and expand the presence in the country.

Genpact—listed on the New York Stock Exchange—has signed four customers among Indian financial services firms and banks in the past three months, its president and chief operating officer (CEO) Pramod Bhasin said.

Declining to spell out his firm’s local strategy, Bhasin said Genpact might scale up to 500-600 people by the end of this year from 20-odd now servicing these customers. It expects revenues to flow from the domestic market from the next quarter.

The Nasdaq-listed EXL Service, on the other hand, is scouting for local buyouts. “We are looking for buyouts in the range of $50-100 million,” said its president and CEO Rohit Kapoor, without elaborating. He, however, said the domestic market looks attractive because of its rapid growth and also as a natural hedge against volatile currencies. “With competition increasing in established markets such as US and the UK, they (BPO firms) cannot afford to ignore emerging markets such as India and China,” said Avinash Vashistha, CEO of Tholons Inc., an advisory firm. India’s domestic outsourcing market could emerge as significant as China, he said.

Demand for business process outsourcing, or BPO, services is rising in the country as domestic telecom, banking, aviation and hospitality companies, among others, try to differentiate themselves with sophisticated customer interactions.

The Indian BPO industry, which already employs 7,00,000, generated revenues worth $11 billion in the financial year to March, of which $1.5 billion came from the local market, according to software lobby group National Association of Software and Services Companies, or Nasscom.
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Bihar BPO unit boosts rural employment

The Indian state of Bihar has always been in the news for the wrong reasons. Crime, abduction and corruption have given enough negative images to the eastern state of India. But things are set to change.

Don’t be surprised to see a business process outsourcing unit (BPO) unit functioning in a chaotic remote village of Bihar. Recently, Drishtee Development and Communications Limited started some BPO units under the name of Quiver Info-services Limited in Saurath villages. The sari-clad introverted village women now communicate effectively with their clients. The BPO employment boost in these villages has dramatically changed the socio-economic status of the poor villagers.

A confident 26-year-old BPO employee at Madhubani, 220km from Patna, said that she faces no problems communicating in Hindi and if needed, she can manage to handle the clients in English too. So far, training has been provided to eighteen candidates to improve their accent and computer knowledge. Most of the candidates have a Mother Tongue Influence (MTI) in their accent.

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BPO exports could increase five-fold to $50 bn by 2012

Bangalore: India’s back-office exports could grow almost five-fold to $50 billion (Rs1.97 trillion) by 2012 provided stakeholders, including the government and the industry, build skill sets and improve infrastructure, according to a study by software lobby group Nasscom and strategy consulting firm Everest Group released on Tuesday.

The Indian business process outsourcing or BPO sector currently exports around $11 billion worth of services, and is growing at 35% a year. It employs more than 700,000 people and accounts for $4 out of every $10 worth of back-office services contracted out to offshore destinations in the world.

The $50 billion target requires the sector to grow by 45-50% a year.
“The study not only estimates the opportunity ahead but also lays down specific agenda for all stakeholders to help achieve this,” said Som Mittal, president, Nasscom.

The study suggests eight measures to do this, including the extension of a tax holiday that is scheduled to end this year; creation of “BPO hubs” with enabling physical and social ecosystems; development of BPO-specific education modules to improve the talent availability and encouraging domestic BPO, among others.

Everest estimates the maximum addressable market size for Indian vendors at between $220 billion and $280 billion, of which less than 5% is currently tapped. The consulting firm also said that the domestic market provides an addressable market of $15-20 billion by 2012.

“A five-fold growth of the BPO industry will add 2.5% to India’s GDP (gross domestic product) by 2012 and create 2 million direct jobs,” said Gaurav Gupta, country head (India), Everest Group. At the current growth rate of 28-30%, the Indian BPO industry would touch $30 billion by 2012
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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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IT biggies, buyout funds join race for BPO firm Aptara

MUMBAI: A couple of large buyout funds, foreign strategic players and Indian IT & BPO players, including Infosys Technologies, are learnt to be in the race for Aptara, a third-party BPO in technology publishing. Promoted by US-based Indian, Rakesh Gupta, the firm is one of the oldest and established players in the industry, having started in 1988.

No official confirmation was available, but sources said six players have been shortlisted and the sale could be concluded in a couple of weeks. Avendus Advisors is advising the firm on the sale process. The final deal could be around $150 million, a source said.

Till recently, known as Techbooks, the company changed its name to Aptara in 2007 to reflect its intent to diversify into services outside its core publishing and content business.

One of its earlier investors, PE firm American Capital, is also set to exit the company in the sale, the source said.

In its core domain, Aptara counts a few leaders such as Reed Elsevier and Blackwell Publishing among its clients in the niche scientific, technical and medical (STM) publishing business, as well others such as Cambridge University Press, Oxford University Press, McGraw Hill and Wiley.

However, last year, the firm also diversified into legal services by acquiring Whitmont Legal Technologies, a litigation support firm. According to information in public domain, the company has grown from about Rs 247 crore in revenues in 2005-06 to Rs 336 crore in 2006-07.
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Talent crunch forces BPOs to dilute tasks

HYDERABAD: The Indian BPO job may be getting onto a factorylike assembly line chore.

Similar to automobile shop floors, where jobs are broken down into miniscule tasks and processes demarcated step by step, BPO companies in India are experimenting of breaking a complex activity into numerous simple chores, to be easily performed by even school passouts.

The dilution of task difficulty is primarily seen as a solution to talent crunch and a way to check attrition and battle wage inflation. Although it is not yet mainstream, if scaled up, it will throw up an opportunity for rural India to become the backoffice for BPO operations in metros.

According to Nasscom vice-president Ameet Nivsarkar, “These experiments are being piloted by some BPO firms and the results are encouraging. We have to see how this can be scaled up. Essentially, this could help the BPO industry spread to tier II and III towns where smaller tasks can be offshored.”

The BPO industry in India is currently centred around six metro cities in India which account for over 90% of the operations.

Offshoring within India would capitalise on the vast rural and school dropout population. Says rural back office vehicle GramIT chief integrator Verghese Thomas, “Destinations like Dhaka and Philippines are becoming attractive as lowcost centres. There are 30 million 12th pass people in rural India who could be part of the rural BPO revolution.”

Typically, non-voice and data entry activities could be offshored. Take the example of a mobile phone bill. It has components such as name, address, billable amount and so on.

This activity could be broken into multiple tasks where one person is responsible for only typing names while another does only addresses and the third keys in the billable amount. The software aggregates this information to process the final bill. Also, in more complex jobs, a step-by-step process training is being conducted for quicker and accurate job completion.
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