The BPO market in the Asia-Pacific region excluding Japan will grow at a five-year compound annual growth rate of 11.2 percent, from US$17 billion in 2008 to US$29 billion in 2013, IDC said Monday in a statement.
Emerging economies in the region are expected to undergo rapid growth during the forecast period, the market analyst group added. For example, the Indian market is predicted to achieve 17 percent growth between 2009 and 2010, due in part to a strong domestic demand especially from the telecoms sector and mainstream uptake of BPO services.
Suchitra Narayan, IDC's research manager for Asia-Pacific IT services research, noted that the current economic downturn is playing a part in the accelerated adoption of BPO, and in particular, platform BPO. Platform BPO typically refers to business processing services based on a vertical or horizontal technology platform.
Analysts to Show How To Implement and Manage a Successful Outsourcing Partnership During the Gartner Outsourcing Summit, April 4-6 in Los Angeles, CA
STAMFORD, Conn.--(BUSINESS WIRE)--March 29, 2005--Worldwide business process outsourcing (BPO) is projected to reach $133.7 billion in 2005, an 8 percent increase from 2004 revenue of $123.8 billion, according to Gartner, Inc.
Gartner analysts predicted earlier this year that eight to 12 major BPO contracts, each exceeding $300 million in contract value, were likely to be signed between the fourth quarter of 2004 and the end of the first quarter in 2005. That prediction is rapidly turning into a reality. Gartner analysts now believe interest and demand for BPO will surge as more of these larger deals are signed.
Gartner defines BPO as the delegation of one or more IT-intensive business processes to an external provider that, in turn, owns, administers and manages the processes based on defined and measurable performance metrics. BPO has many markets. They typically include staff functions such as human resources, finance and accounting, and contact centers or vertical specialization such as insurance claims processing or banking payments.
"A year ago, BPO providers and prospective buyers held many discussions, but few deals were signed," said Lisa Stone, research vice president at Gartner. "The level of activity that we are seeing now reflects the fact that the value proposition behind BPO has been accepted by buyers. Through year-end 2005, prospective buyers will be energized, creating a seller's market,""
Ms. Stone said that prospective buyers should understand that as rising demand materializes into more completed deals, the top vendors of BPO services will be focused on this newly acquired business. For this reason, more vendors will be in a position to bid only on projects that have a high probability of resulting in a sale.
"If a company is considering new BPO projects, it must begin to develop a BPO strategy and make decisions soon," said Robert Brown, principal analyst at Gartner. "Companies must consider if BPO offers an opportunity for them to improve services without capital investment, offload noncore services or reduce operational costs. The sooner prospective buyers can start meaningful discussions with providers, the more likely they will be to get the BPO vendor's attention."
Even as the buzz around Vivel Paul's candidature as CEO is still doing the rounds at Satyam Computer Services [Get Quote], insiders say the government is considering a person who was an integral part of the company till three months ago.
The name of Venkatesh Roddam, former CEO of Satyam's BPO subsidiary Nipuna, is being seriously considered, since Paul is not keen to return to India, according to highly-placed sources. The search for a CEO has been following founder Ramalinga Raju's disclosures of financial fraud January 7 and his subsequent arrest.
Roddam, who is taking a break from corporate life and lives in Hyderabad, said: "I'm not too sure what is happening. I am getting calls from close friends and relatives who are asking me about this."
Roddam did not, however, offer a direct reply when he was asked if he was interested in the post but suggested he was not averse to it either. "It is a fantastic company to work with. It's an interesting and challenging role. They have a competent board now, to provide all kinds of support," said Roddam who worked for Nipuna for about three years.
Last week, Business Standard reported that the government had exhorted the new board, whose six members it has nominated, to look within the company or identify a person who knew Satyam's operations well, for the post of CEO and CFO.
Genpact, a BPO (business process outsourcing) company in India, is investing in a training joint venture with NIIT, a large Indian training company. Genpact's entry into the training business reflects the extent to which Indian companies are finding it tough to attract and retain top quality talent.
"Our focus is not so much on profits, but to have access to top quality staff trained at the institute," said a spokesman for the company on Wednesday. Genpact is to hold 25 percent of the equity of the training joint venture, called NIIT Institute of Process Excellence, with NIIT holding the rest of the equity. The joint venture will be managed by both companies.
As Indian industry shifts focus from voice-based services to business-processing functions, there is a strong demand for professionals with business-processing knowledge in addition to voice capabilities, the companies said.
Genpact was the Indian back-office subsidiary for GE Capital, until it was spun off in 2005 as an independent BPO company. The company currently has 34,300 staff in India and other locations.
NEW DELHI: The global economic slowdown is beginning to spell a windfall for some BPO firms. Companies such as WNS, EXL, Steria and Quatrro are finding new opportunities as clients aggressively pursue cost-cutting.
“With reality dawning that these are going to be tough times, companies have become more aggressive on outsourcing,” said WNS (Holdings) CEO Neeraj Bhargava.
The BPO firm recently renewed its contract with Centrica that includes a new, three-year transformational plan for streamlining the energy firm’s operations. WNS, which is witnessing traction in utilities, telecom and insurance, is in active discussions for 5-6 deals that it expects to close in the next quarter.
BPO firm ExlService Holdings says the last few weeks have seen clients cut down on their decision-making time to four weeks from 12-18 weeks earlier. “There is a healthy business pipeline and there is a fair number of companies looking to cut costs,” president and CEO Rohit Kapoor said. Apart from insurance vertical, the firm is also seeing demand for finance and accounting work in retail and manufacturing.
Clients are now looking towards their outsourcing vendors to suggest ways to cut costs, Genpact president and CEO Pramod Bhasin had said recently. “There are some project cancellations but there are new opportunities too.”
As per a report by telecom and software consulting firm Ovum, BPO will overshadow the importance of IT in the outsourcing market in 2009. While there is lower level of offshoring in BPO at present, it is more non-discretionary in nature.
MANILA, Philippines—President Macapagal-Arroyo on Friday said a business process outsourcing (BPO) company has denied reports that it had laid off hundreds of Filipino employees and was in fact looking for more workers to hire.
The President said Malacañang was alarmed by reports that Advanced Contact Solutions Inc. (ACS) had laid off 700 workers, and verified these with the company itself.
“We checked with that center, ACS, and they totally denied it,” she said in a speech at the launch of the UP-Ayala Land Techno Hub at the University of the Philippines on Friday.
According to Ms Arroyo, ACS said it had been receiving calls from other call centers which expressed interest in hiring the laid-off workers.
“But ACS said we’re not laying off anyone, we’re looking for more,” she said.
The Trade Union Congress of the Philippines called the attention of the Department of Labor and Employment to the supposed mass layoffs, urging the DOLE to redeploy the displaced workers to other BPOs.
We started operations here two years ago in October 2006. We now have over 600 staff in Derry and [the] announcement of 160 jobs will bring it up to around 800. The staff have done a phenomenal job over the last two years with the customer, and we have a very positive relationship with the customer," said Shaun Harnett, a Firstsource manager.
The Indian-BPO attributes its hiring spree to a successful relationship with Sky.
"What's working for us in this relationship is the ability to hit targets every month for the last two years. I do think there is a significant difference here. The people are very friendly and are committed to the job. We've had a lot of people coming to us and what we are looking for are people with an ability to talk - something the people in Derry are good at," added Harnett.
Firstsource opened its first office in 2006 and employs 550 individuals in Belfast. The new positions will be filled in the Londonderry facility, which is staffed by more than 600 workers. An increasing number of Indian companies have chosen Northern Ireland as their European base, including HCL, Polaris, Pix Transmission and Tech Mahindra.
NEW DELHI: In a first of its kind acquisition of a India-focused BPO by a foreign company, the UK-based $6-billion Serco Group has bought out Gurgaon-based BPO major InfoVision.
The deal marks the entry of Serco Group, a business services company, into India. The company has bought a 60% stake and will acquire the rest over the next couple of years.
According to sources, Serco will pay about $75 million for the Rs 250-crore InfoVision. ET had reported earlier in September that Serco is among the frontrunners to acquire InfoVision.
InfoVision group has about 10,000 personnel and 60 clients. Serco, which offers a whole spectrum of support services but did not have a presence in the BPO space prior to the InfoVision acquisition, plans to have a workforce of 20,000 in the next 2-3 years.
NEW YORK: The economic crisis may present a growth opportunity for India's top outsourcing firm, Tata Consultancy Services Ltd (TCS), as US financial services companies look to cut costs, but that opportunity is likely some months away, the company's CEO said on Wednesday.
It does not make sense for Wall Street firms to run their own "captive" back-office information technology operations that perform functions such as order processing, TCS Chief Executive Subramanian Ramadorai told Reuters.
"Captives will disappear, in my opinion," he said in an interview. "It's one of the big ticket items that will give them the savings they want."
TCS, part of India's Tata Group, provides services such as consulting, system integration and back-office outsourcing. Last month, it bought Citigroup Inc's back-office unit in India for $505 million, a deal that is expected to close by early January.
Ramadorai did not hold discussions with Citi while in New York this week, but added: "We continue to meet them."
As clients consolidate, Ramadorai said he saw further opportunity for Tata.
NEW DELHI: Country's leading BPO company Genpact on Monday said that it is yet to feel the impact of the ongoing global turmoil on its revenues.
"The company is yet to feel the impact of the ongoing slowdown on its revenues," Genpact CEO Pramod Bhasin told reporters on the sidelines of the India Economic Summit 2008 here.
He, however, said that "clarity would emerge in the next three-four months if there has been any impact on the company's finances".
A recent report from TPI shows a slowdown in the signing of outsourcing deals . According to the report new outsourcing contracts in Europe fell from 75 to 56 in the 2nd to 3rd quarter of this year and the only one significant mega deal was signed during the 3rd quarter. This has got people within the industry wondering whether we are about to see the decline in outsourcing contracts as more end users keep a close eye on the bottom line, maybe bring services back in house or just dont do anything at all.
Despite TPI’s reports, organisations are going to turn their back on outsourcing altogether. Instead we may see a change in the nature of outsourcing deals.
In the past couple of years the mega deal has been consigned by many to the outsourcing scrap heap in favour of multi sourcing that is choosing separate suppliers for different processes.
Systems Plus Solutions, Indias fast growing IT Consulting and Outsourcing Advisory firm, has announced the recent opening of its North American sales and operations office headed by the Systems Plus Solutions, LLC USA President Merveille Nagarsheth. Systems Plus is pleased to have the first USA office in New Jersey, said Merveille Nagarsheth, President of Systems Plus Solutions, USA LLC a newly incorporated division of Systems Plus Solutions, India. The opening of our new office in NJ reaffirms our commitment to delivering strong relationship and the best of industry practices to our clients in North America.
The office will initially focus on Business Consulting and Technology Solutions groups of Systems Plus, which include IT Audits, India Outsourcing Strategies, Application Development, Product Engineering, Offshore IT Support and Legacy System Migration.
In a major domestic outsourcing deal, Godrej Industries and Godrej Consumer Products have signed a 10 year outsourcing contract with HewlettPackard HP. The value of the contract was not disclosed, but would include application development and maintenance, infrastructure management and transformational initiatives. As part of the agreement between the firms, HP will also take over the staff working in the IT operations of the two companies.
This strategic outsourced partnership between HP and Godrej, one of Indias best known brands and leading corporate houses, will power various business transformation initiatives within Godrej and ensure longterm growth and competitive edge.
Since the first such outsourcing deal between Bharti and IBM, a number of similar deals have been announced by Indian business groups. In February this year, the Future group had signed a similar outsourcing deal for USD 150 million with Wipro, in which about 265 employees of Pantaloon Retail had moved to the IT firm. In this case, the IT management staff will be retained by Godrej, while the IT operations staff will move to Hewlett Packard.
Ever since the recent BPO fraud, wherein, a young woman working at a call centre was arrested for splurging Rs. 200, 000 with credit cards of her company's US clients, the IT hub in the Salt Lake area is going full throttle to ensure tight security control by involving the police.
As Oney Seal, the Miami-based CEO of Databazaar.com, says, "It is high time we all came together to ensure an all-encompassing cyber security. We must follow best practices and certain standard certification and auditing by authorities like ISO or BS7799 (British Standard),"
"Law enforcement agencies need to be trained in potential areas of security fraud so that when an incident occurs, the police should have some idea of the problem," said Seal, whose company, a wholesale distributor, exporter and e-tailer of computer and printer supplies, has its sensitive back-end office in the IT hub.
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.
Indian outsourcers are facing record staff turnover according to a new report, with companies struggling to hold onto bonus-hungry workers.
Attrition rates in the country's business process outsourcing (BPO) industry are about eight per cent higher than the national average, according to a report by global consulting firm the Hay Group.
Annual staff turnover at Indian BPOs stands at 24 per cent, ahead of the country's average of 16 per cent.
The report blames lower and less attractive short term bonuses – worth about four per cent of total pay for BPO workers compared to 10 per cent generally.
Oscar De Mello, head of Hay Group's reward information services in India, said in a statement: "The BPO industry hires a large number of graduates who are bright and ambitious. From our analysis, the overall compensation structure design is not competitive when compared to general market practices.
"This means that BPO employees do not receive as much cash-in-hand as their peers in other industries.
"The BPO industry is a critical sector in the Indian economy, worth $11bn and employing more than two million people.
JAIPUR, INDIA: Infosys BPO Ltd, the subsidiary of Infosys Technologies Ltd, today announced the inauguration of its second BPO campus at Mahindra World City, the Special Economic Zone (SEZ) in Jaipur, Rajasthan.
The Chief Minister of Rajasthan, Vasundhara Raje was the chief guest on the occasion. She was accompanied by Dr. Digambar Singh, Minister of Industries, Government of Rajasthan. Infosys' CEO and MD, Kris Gopalakrishnan, Mohandas Pai, along with CEO and MD of Infosys BPO, Amitabh Chaudhry, were also present.
The new campus at the SEZ at Mahindra World City, Jaipur, spread over 42 acres, is being set up in phases and an estimated amount of Rs. 531 crore would be invested in the project, said a press release.
In the first phase, Infosys has made an investment of Rs. 171 crore, creating a built-up area of 3,69,100 sq. ft with a seating capacity of 3,200.
It works with universities in Rajasthan through 'Project Genesis', a program to enhance skill-sets in students and make them industry-ready.
Since October 2005, it has worked with 229 lecturers in 110 colleges and imparted training to 3,250 students in industry-relevant skills including language, presentation, and analytical skills, the release said.
As a part of company's drive to become carbon neutral, this campus would have 49% of the total area as the green belt.
"Jaipur is becoming an exciting destination for the IT-ITES industry. The Honorable Chief Minister, Smt. Vasundhara Raje has proactively put in place progressive policies and has invested in infrastructure to ensure rapid growth," said Kris Gopalakrishnan. Read more bpo news...
The Business Process Outsourcing (BPO) industry is on track to meet its year end growth target as it employed 345,000 workers during the first half of the year.
"The industry employed 345,000 workers for the first six months of the year and we are hoping that we will meet our yearend target of 420,000," Business Process Outsourcing Association of the Philippines (BPAP) president Oscar Sanez said in an interview.
The offshoring and outsourcing (O&O) industry earned $5.8 billion for the first half of this year. "We are on track to meet our full year revenue target of $6.8 billion," Sanez said.
According to Sanez, O&O revenue for the first six months of the year is up 1.8 percent when compared to the same period the previous year.
Sanez said the slowdown in the world economy had no adverse effects on the industry. "The first half results are encouraging. I think we will meet our target stated in the 2010 roadmap."
IT majors in India have been dependent on international markets since a very long time. But the newly published report from Springboard Research should compel them to thing otherwise and concentrate on the domestic market as well. According to the report, the Indian IT services market is set to grow from USD 4.1 billion in 2007 to USD 8.1 billion by 2011 at a CAGR of 18.6 percent.
The report highlights that the Indian IT services market is heavily dominated by infrastructure services which is expected to grow to USD 4.27 billion by 2011. Application services is estimated to grow at a CAGR of 19.6 percent and IT consulting is expected to reach USD 400 million by 2011. The report says that enterprise IT outsourcing in India will grow at a CAGR of 24.4 percent.
Infosys today announced the inauguration of its BPO at Mahindra World City's SEZ with an investment of Rs 171 crore in the first phase.
Rajathan Chief Minister Vasundhara Raje, who inaugurated the facility, said it was not the issue of land or money, but she had to changed the mindset of people specially bureaucratic set up.
"Though we are lagging behind in the race of SEZ set up, but it is an amazing efforts that the goal was accomplished in less than 2 years of its inception," she said.
Infosys CEO and Managing Director Kris Gopalakrishnan said," Jaipur is becoming an exciting destination for the IT-ITeS industry. Raje has proactively put in place progressive policies and has invested in infrastructure to ensure rapid growth."
The new campus at the SEZ would be spread over 42 acres of land with a total investment of Rs 531 crore to be made in phases, he said.
Infosys HR Director T V Mohandas Pai said their campus at Sitapura near Jaipur has been operational since August 2006 and seen an investment of Rs 22.77 crore with a capacity of 890 employees. The Sitapura BPO made a revenue of USD 15 million, Pai said. Read more...
