BPO looking for more workers—Arroyo

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.

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Indian BPO creates jobs in Northern Ireland

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.

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Rural BPO's next revolution in Indian IT industry: NASSCOM

AHMEDABAD: Rural BPOs are the next revolution in Indian Information Technology (IT) sector to happen, as the industry gears up to achieve $50
billion export target this year, NASSCOM member Ashank desai said.

"The host of rural BPOs that are coming up in the country, is the next revolution in industry to happen, rural BPOs is about creating jobs, Desai who is also the chairman of Mastek, said this at IIM-A confluence here today.

"Rural BPOs will reduce the cost for Indian IT companies first, and later on globally," Desai said. Such BPOs are coming up in Karnataka and Haryana, he said.

"Over last 15 years we have increased the business size of industry almost 800 times, in 1990 our exports were 100 million this year we will do 50 billion, we have created 2 million jobs in the country directly, and another 6-8 million indirect jobs," Desai said.

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Bad news on Citi side may hit TCS too

MUMBAI: TCS, the country’s biggest IT exporter, may see trouble ahead if one of its biggest clients Citigroup sells its business, as cited by
media reports.

This could also put a question mark on TCS’s decision to acquire Citi’s subsidiary Citigroup Global Services (CGSL) last month along with a long-term contract of assured revenue of $2.5 billion from Citigroup.

TCS had acquired CGSL, a captive BPO subsidiary of Citigroup, in the second week of October for $505 million. The Indian firm’s management had cited that the deal would help the company to be the financial giant’s top IT vendor.
However, the talks of Citigroup’s possible sellout would steal the colour off this deal on several counts.

CGSL is a captive outsourcing unit, with Citigroup as the only client. If Citigroup’s businesses are sold in parts to several suitors, TCS may find it difficult to retain the current business volume of CGSL, as the new owners would rethink about existing outsourcing arrangements of Citigroup.

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BPO attrition down 5-15%

he US financial meltdown has finally managed to do what the business process outsourcing sector has been trying to do for years on end - reduce the attrition rate of employees by 5-15 percentage points. BPOs that were coping with 30-40 per cent employee turnover are now reporting numbers between 20 per cent and 30 per cent.

Industry insiders as well as sector experts said that companies are unlikely to miss this opportunity to rationalise bloated boom-time salaries. "Companies are aiming to go back to the cost levels of 2005 and 2006. So, we will see an across the board reduction in salaries," said KPMG Head (people and change advisory) Ganesh Shermon.

Genpact, the largest BPO in the country, reported attrition rate of 26 per cent for the nine months ended September 30, 2008, down from 30 per cent in the same quarter of 2007. 24x7 Customer said the drop in attrition has been 10 percentage points this month. The company's annualised attrition rate is 38 per cent.

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Women are vital part of India's IT workforce'

Bangalore, Nov 19: NASSCOM President Som Mittal on Wednesday, Nov 19 said Women consttuted a vital part of India's IT workforce and the industry will continue to attract more women employees and leaders.

Speaking at the third annual IT Women Leadership Summit here he said the Indian IT-BPO industry was a highly diverse and an inclusive industry. It has set world class HR policies in all areas including recruitments, training, retaining and promoting strategic business plans. NASSCOM announced the winners of Gender Inclusivity Awards at the Summit. The awards, in the second year now, honour companies in the IT-BPO industry which have implemented outstanding practices that promote gender empowerment and women leadership development.

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Genpact yet to feel slowdown impact: CEO

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".

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Outsourcing one bright light in sea of global gloom

MANILA: Business outsourcing may not be the most glamorous industry in the world but it is one of the few bright lights amid the doom and gloom
of the global financial crisis.

The two countries which have benefited the most from outsourcing, India and the Philippines, expect to see some initial pain from the financial turmoil but the industry is confident it will ride out the storm.

In the Philippines the business process outsourcing (BPO) industry expects growth this year of between 35-40 per cent on revenues of around seven billion dollars.

"We are part of the solution, not part of the problem," Oscar Sanez the chief executive of the Business Processing Association of the Philippines (BPAP) said in a recent interview.

The BPO sector expects annual growth of around 40 per cent with revenues hitting 12 billion dollars by 2010 and employing one million people compared with 300,000 this year.

In India, where the industry generates some 40 million dollars in annual export revenues, the story is much the same although it admits that it could expect some initial pain.

The sector traditionally views bad times as offering opportunities as Western companies cut costs by moving work to cheaper destinations offshore.

India leads the world when it comes to outsourcing with more than half the global business while the Philippines is a distant second with around 10 per cent.

Both countries place a great deal of importance on the sector as its growth creates jobs and much-needed revenue.
Rick Santos, the Philippine country chairman for global property services company CB Richard Ellis, told AFP that the crisis would "actually drive more BPO business to the Philippines".

"You will see many more companies having to go offshore just to survive," he said.

He said he expects about 502 million square metres (5.4 billion square feet) of Philippine office space to be leased this year, up 52 per cent from 2007.

India and the Philippines are the preferred destinations for European and American banks and IT companies for outsourcing their back room and call centre operations due to the highly educated work force and English speaking skills in both countries.

Sanez said that despite the financial turmoil he was confident the BPO industry in the Philippines will continue to see growth.

"Judging from the investor meetings we've been having recently our clients will want to ramp up their outsourcing activities in order to accelerate cost savings," he said.

"The Philippines is in a very strategic position due to its strong and successful experience with BPO particularly with large American and British multinationals giving it a high level of credibility and trust especially in critical times."

He conceded that in the short term there could be a "bit of distraction" due to management and ownership realignments in the banking sector.

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Opportunities for Indian IT Industry in Japan

Nasscom, the premier trade body and voice of the Indian IT BPO industry, and Pricewaterhouse Coopers, the leading professional services firm in India, today released a report on Japan titled Opportunities for Indian IT Industry: Japan. This is the second report in the Country Report series that focuses on specific countries , regions that are alternate markets, competitive destinations and or potential partners for India.

Speaking at the launch, Som Mittal, President, Nasscom, said, The Indian IT-BPO companies are fast diversifying into near territories and opening up new opportunities for growth. Currently, 90 per cent of the exports happen to the US and Europe, with rest of the world contributing just 10 per cent. These markets are investing in Information Technology IT offering huge opportunity. To facilitate this, Nasscom has launched the emerging market series.

Japan, as a second largest country economy and highly dependent on technology, currently constitutes only 2 per cent of our exports. With shortage of technical skills in Japan, and urgent need for business transformation, Japan would be a large market. While Indian companies have been targeting this market, a new concerted approach needs to be taken by both sides.”

Ambarish Dasgupta, Partner and Head of Consulting practice at PricewaterhouseCoopers India, the Knowledge partner for this report said, Indian companies must change the mindset, and move from being transactional to transformational in their approach, and be ready to invest in strong relationships upfront. The alternative markets to the US and the UK, like Japan, which we are covering in a series of reports, are very relationship focused. The prospects expect the partners to prove themselves in a relationship, building trust and being a trusted advisor rather than a vendor selling them products and services.”

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Offshoring IT Services To India To Expand

Indian offshoring is expected to grow from current USD 1.4 billion to USD 4.2 billion before year end 2010. Zinnov, a management consultancy outfit, forecasts Infrastructure Management Services IMS to be the next big growth Indian offshoring. The banking, financial services and insurance industries are the biggest users of IMS services and will constitute approximately 43 percent of the market. High tech telecom, manufacturing and retail industries will constitute approximately 12 percent each and will be second biggest consumers of offshored IMS services.

Management consulting firm, Zinnov, today released the results of its study regarding the offshoring of Infrastructure Management Services IMS to India. Zinnov forecasts offshoring of IMS to India to grow from USD1.4 billion today to USD4.2 billion before yearend 2010, with hardware support services accounting for the majority of those revenues. According to the report, the banking, financial and insurance segment BFSI represents by far and away the largest market for such services, at 43 percent. The high tech telecom, manufacturing and retail industries are the next biggest consumers of offshored IMS services at approximately 12 percent each.

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IT outsourcing deal from Godrej

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.

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Outsourcing challenges

Offshore outsourcing is no longer a novel idea. It is an accepted business practice and for many the offshore operation has become a significant part of their overall operations. So it is essential they succeed in this endeavor. However the reality is that better than 50 percent of offshoring initiatives fail to meet original expectations. Successfully managing offshore projects requires that you understand the major challenges. These have broken down into two categories, External and Internal.

External Challenges

Staffing and retention

Competition for the right skills in countries like India is very high, you need to determine whether the vendor has and can offer you the staff with right level of experience. Once you establish a team, you need to proactively manage staff retention.

Time Zone Differences

Your staff in the US will need to get used to staying up late and/or coming in early for telecons with the offshore team.

Country and vendor infrastructure

Both can be issues, you need to determine if your project needs special tools and/or other infrastructure.

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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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