India’s Tech Mahindra to Acquire Lightbridge Communications

November 21st, 2014 by Rahul Jain No comments »

India’s Tech Mahindra Ltd. said Thursday it has agreed to buy U.S.-based network-engineering services provider Lightbridge Communications for an enterprise value of about $240 million.Outsourcing9

Lightbridge, which helps telecommunications clients design and optimize their networks, has more than 5,000 employees in more than 50 countries. Lightbridge has annual revenue of more than $400 million, the Indian outsourcing-services company said in a statement.

Tech Mahindra said it would absorb all of Lightbridge’s employees.

Tech Mahindra earns more than 50% of its revenue from telecommunications business.

The deal would bolster Tech Mahindra’s telecommunications network-consulting and operations through Lightbridge’s tools and technology platforms to provide services to clients.

Enterprise valuation usually adds the target company’s debt as well as the value of any preferred shares, but excludes its cash and cash equivalents. Tech Mahindra didn’t provide any details on Lightbridge’s cash or its obligations.


Infosys gains on collaboration with Stanford Graduate School of Business

November 21st, 2014 by Rahul Jain No comments »

Infosys rose 0.65% to Rs 4,207.10 at 09:49 IST on BSEafter the company announced collaboration with Stanford Graduate School of Business to create a comprehensive executive education program.Outsourcing8

The announcement was made after market hours on Wednesday, 19 November 2014.

Meanwhile, the BSE Sensex was down 24.31 points, or 0.09%, to 28,008.54

On BSE, so far 6,197 shares were traded in the counter, compared with an average volume of 72,222 shares in the past one quarter.

The stock saw initial volatility. The stock hit a high of Rs 4,215 and a low of Rs 4,182 so far during the day. The stock hit a record high of Rs 4,225 on Tuesday, 18 November 2014. The stock hit a 52-week low of Rs 2,894 on 30 May 2014.

The large-cap company has an equity capital of Rs 287.12 crore. Face value per share is Rs 5.

Infosys announced after market hours on Wednesday, 19 November 2014, that it will collaborate with Stanford Graduate School of Business (GSB) to create a comprehensive executive education program. As part of this agreement, Stanford GSB will team with senior Infosys executives to design and deliver a customized strategic leadership development program for the company’s executives, clients and partners. The executive education program will include a suite of business management skills, as well as courses in corporate innovation processes to help Infosys balance business discipline and entrepreneurial spirit. The office of Executive Education at Stanford GSB and Infosys will deliver the leadership program through in-person and online instruction, as well as live sessions enabled by distance-learning technology. The initiative will include 200 executives who will each participate in a part-time, year-long program in groups of 40 over three years. Executives will be able to test and apply their learning to real business challenges in parallel, the company said in a statement.

Infosys’ outsourcing unit Infosys BPO had on 18 November 2014, announced the separation of Abraham Mathews, its Chief Financial Officer from the services of the company for not complying with its code of conduct. This departure was in keeping with the company’s goal of setting the highest standards of corporate governance and adhering to the letter and spirit of the company’s code of conduct. Gautam Thakkar, the current Chief Executive Officer has submitted his resignation to the company effective 30 November 2014, taking responsibility on moral grounds and will be assisting Uppadhayay in this transition. Meanwhile, the company appointed Anup Uppadhayay as Chief Executive Officer and Managing Director of the company. The board of Infosys BPO also appointed Deepak Bhalla as Chief Financial Officer of the company.

Infosys’ consolidated net profit as per International Financial Reporting Standards (IFRS) rose 7.28% to Rs 3096 crore on 4.48% rise in revenue to Rs 13342 crore in Q2 September 2014 over Q1 June 2014.

Infosys is a global leader in consulting, technology and outsourcing solutions.


Infosys unit’s overbilling Apple led to exit of top executives: sources

November 21st, 2014 by Rahul Jain No comments »

Indian outsourcing major Infosys Ltd’s back-office services unit was overcharging Apple Inc, leading to the exit of top executives, two senior Infosys people said on Thursday.Outsourcing6

Infosys, India’s second-largest IT services exporter, said on Tuesday it had fired Abraham Mathews, chief financial officer of its Infosys BPO unit, for failure to comply with the company’s code of conduct.

Infosys BPO chief executive officer Gautam Thakkar resigned on “moral grounds” and would leave the company on Nov. 30, Infosys said. It did not give details about the charges against Mathews.

Infosys spokeswoman Sarah Gideon said the company would not comment further on the confidential investigations.

“The financial irregularities are not material in nature and the company has already made required disclosures. The company has taken disciplinary action on employees,” she said in an email.

Apple did not immediately respond to an email sent outside business hours seeking comment.

The irregularities in Infosys BPO’s dealings with Apple came out during an internal audit, said one of the people at Infosys, who declined to be named as he was not authorized to speak to the media.

Though the audit showed that the financial impact of the wrongdoing on the company was minimal, Infosys decided to take a tough stance to demonstrate its “zero-tolerance policy for any improper conduct,” he said.

The Economic Times newspaper on Thursday said Infosys would soon fire at least six more employees at the unit, after investigations revealed that they had produced inflated invoices and allegedly overbilled Apple for many months.

Infosys earlier this year brought in Vishal Sikka as its new CEO to chart a new strategy for the company, once a trend-setter for India’s more than $100 billion IT outsourcing industry. Infosys has struggled in recent years to retain staff and market share.


Leading BPO Harnesses Slideshare to Present The 10 Best Reasons to Outsource Telecom Services

November 21st, 2014 by Rahul Jain No comments »

Sound Telecom, a provider of call center services throughout the country with US-based agents, has released a presentation via Slideshare that outlines The 10 Best Reasons to Outsource Telecom Services. The slides touch on the varying functions a call center can exercise before delving into the most beneficial reasons for a business to outsource their telecommunications.Outsourcing7

While each of the ten reasons stands to make its own point, there are themes that grow clear as the viewer progresses through the presentation. Some of the most prevalent motives that would most likely intrigue businesses include gaining an advantage over the competition, being able to focus on core competencies, enhancing customer service, and cutting costs. When compared to keeping call center function of business in-house, the benefits of outsourcing become quite apparent.

According to the presentation, one of the most crucial elements for creating a successful telecom outsourcing program is the relationship between both parties. The author of the article that these slides are based on states, “Building client trust should be embedded in the culture of any top tier telecom business process outsourcer as they strive to fully understand the objectives of each client and develop a customized solution that will meet specific needs. To achieve that goal, they need to listen closely to clients throughout the entire life of the relationship.”

Slideshare was chosen to showcase this content because it presents it in a much more visually appealing format than a simple article. Since Slideshare’s founding in 2006, their goal has been to share knowledge online, and they have grown into what is now the largest presentation sharing community for professional content. Sound Telecom chose this platform to share their presentation based on the natural connection between this type of content and typical Slideshare users.


Steady Rise in IT Operational Spending Expected for 2015

November 20th, 2014 by Rahul Jain No comments »

In 2015, most IT shops across industries can expect a boost for their IT operational budgets, and those gains will be made in additional staff, cloud computing, and enterprise apps including business intelligence, according to a new study released by Computer Economics, a research and advisory organization that provides metrics for IT management.Outsourcing6

The 2015 IT outlook is mostly positive, according to Computer Economics, which based the study, “IT Spending and Staffing Outlook for 2015,” on a survey of 128 IT organizations worldwide, including 68 IT organizations in North America. The annual study assesses IT spending plans, priorities for IT spending and investment, and plans for hiring, outsourcing, and use of contractors and part-time workers as well as pay raises for IT workers.

While the expected increase in IT operational spending may seem lackluster compared to historical trends, it is steadily rising, and should increase 3 percent at the median in the United States and Canada. This compares to a 2.7 percent in 2014.

“Our annual outlook survey indicates organizations are willing to invest in transformational technologies and are more concerned about improving service levels than reducing costs,” John Longwell, VP of research for Computer Economics, said in a prepared statement.

According to the study, organizations expect to increase their IT staff headcount—a trend that carries over from last year. In last year’s study, Computer Economics reported that nearly half of all IT organizations in North America planned to increase the size of the IT workforce, with 49 percent of IT organizations anticipated getting the green light to augment staff headcount in 2014.

This year, in the 2015 study, Computer Economics found that more than half of IT organizations will increase IT staff headcount. In addition, a growing number of survey respondents indicated that they will transition from the use of contractors to hiring more full-time, regular employees. Also, the typical IT worker will receive a 3 percent pay raise, the 2015 study found.

Despite the gains in IT staff, and continuing investments in cloud computing, mobility, enterprise applications, security, and business intelligence—from which organizations will be able to derive transformational value, according to Computer Economics—not everything was upbeat. The study found that IT capital budgets will remain flat, and that capital spending on data center and network infrastructure will remain weak. IT executives will need to grapple with finding resources to maintain existing infrastructure, and that will be an ongoing challenge for many years ahead, according to the firm.

More specific findings on the insurance industry are available in Computer Economics’ comprehensive study, “IT Spending and Staffing Benchmarks – 2014/2015,” a more in-depth study that provides composite statistics of IT spending and staffing data, a segmentation of the same statistics by organization size, and benchmarks for 23 sectors and subsectors. According to this report, insurance organizations are information-intensive businesses that use IT technology for nearly every aspect of their business. Most of the employees use computers in their daily work, and insurance companies spend more per user on IT than any other subsector in the study, according to Computer Economics.


Six more to be sacked at Infosys BPO for inflated invoices as probe reveals company overcharged Apple

November 20th, 2014 by Rahul Jain No comments »

Infosys, which announced the firing of the finance chief of its back-office arm on Tuesday, is set to sack more employees at the unit to underline its intolerance for financial impropriety as it emerged that the episode which has put an unflattering spotlight on the firm involved one of its marquee clients, Apple. Sources familiar with the company’s thinking said at least six employees at one of Infosys BPO’s European subsidiaries will be asked to leave soon after internal investigations revealed that they had produced inflated invoices and purportedly overbilled Apple for many months.Outsourcing5

The sources insisted the amount involved was “financially insignificant”, but the company was taking harsh action nevertheless to make an example of the case that has become an unwelcome distraction for new CEO Vishal Sikka as he seeks to recapture the IT bellwether status for Infosys. On Tuesday, Infosys announced that the chief finance officer of Infosys BPO, Abraham Mathews, had been fired “for not complying with its code of conduct”. The unit’s CEO, Gautam Thakkar, also said he would quit, taking moral responsibility. “We have always adhered to the highest corporate governance standards,” said a senior executive at Infosys.

“In the particular case, although it was a financially insignificant amount, the CFO should have reported the incident. For reasons best known to him, he did not and so we were left with no option,” the Infosys executive said. Infosys declined comment on the identity of the client at the centre of the case or elaborate the reasons for its punitive actions.

A company spokeswoman said on Wednesday: “The financial irregularities are not material in nature and the company has already made required disclosures. The company has taken disciplinary action on employees. We will not be able to comment on client-specific matters or on investigation as they are confidential in nature.”

An email sent to Apple remained unanswered. Meanwhile, details emerged that Infosys first unearthed the case of financial impropriety in September, following which it set up a panel to investigate it.

One source familiar with the investigation said that in this particular case, a small team of executives appeared to have made inflated invoices for the support provided by Infosys BPO, although these inflated invoices may not have been sent to Apple. After a month-long investigation, on Tuesday, the company said it was terminating the services of Mathews while Thakkar, who is one of the 13 executive vice-presidents at Infosys, will leave the company at the end of the month.

Infosys has already announced their replacements, appointing company veteran and senior vicepresident Anup Uppadhayay as the unit’s CEO and Deepak Bhalla as the new chief financial officer. While the episode could bolster the country’s second-largest software exporter’s long-held reputation for adhering to the highest corporate governance standards, some experts believe this episode could make it vulnerable to some collateral damage, particularly if Cupertino-based Apple, the maker of iPads and iPhones, were to reconsider its decision to engage with the back-office support provided by Infosys BPO.

“Apple for long has been debating on engaging with Indian outsourcers and this incident will certainly not go down well,” said Pradeep Mukherji, president of Avasant, a Mumbai-based management consultant that helps companies choose outsourcing firms. “Apple may even want to reconsider its engagement with Infosys BPO.”

Nonetheless, Mukherji said the proactive steps taken by the company, including the change in leadership at its back-office division, should help the company limit any further damage.

“Organisations like Infosys have an effective mitigation strategy in place to contain the damage and not let it go out of control. So I don’t see why other clients will be worried.” Anil K Gupta, professor of global strategy and entrepreneurship at the Smith School of Business, The University of Maryland, said Vishal Sikka had done the right thing by cracking down hard.

“If you excuse one instance of fraud, especially at the senior executive level, then you’re going down a slippery slope. He had to act and he did the right thing. It also helps boost his credibility both internally and externally,” he said. While the episode and the attention it has generated could, according to some, leave employees and other clients anxious, Infosys officials maintain this is just an isolated case and there was no reason for its other clients need to be “jumpy”.


BPOs leaving Metro Manila

November 19th, 2014 by Rahul Jain No comments »

The Philippine business process outsourcing (BPO) industry was set to challenge China as the world’s biggest BPO employer, but the work force could not supply the demand for skilled workers, Budget Secretary Florencio Abad said. Outsourcing5

He said vacancies in calls centers, back office and customer-related services has been growing every year and some BPO companies have started moving out to major cities outside of Metro Manila where skilled workers were available.

“Some BPO companies are exploring ‘second wave’ cities such as Cagayan de Oro, Butuan and Bacolod where they could recruit personnel,” Abad said.

From about 2,400 workers in 2001, the BPO industry now employs an estimated 200,000 in 120 companies. The Philippines has overtaken Malaysia and India and is set to challenge Chinas the world’s biggest BPO employer.

The Philippines earned $11 billion and employed 900,000 people in 2010. Industry experts estimate the gross revenue to $25 billion by 2016.

Abad said some BPO companies have entered into partnerships with state universities and colleges to train students on particular skills to become call center agents.

He said the government has also considered recalling Filipinos working abroad and provide them with skills on animation, medical transcription and web design to close the gap between supply and demand.

“The government is heavily investing in upgrading technical-vocational centers in order to be able to train potential BPO workers,” Abad said.

Mayor Mauricio Domogan said Baguio City, which was one of the “first wave” cities in the march of BPO companies to the countryside, has benefited from its being an educational center in northern Luzon.

He said from two call centers in 2010, the city now has eight BPO catering to various clients in different parts of the world.

“The operation of call centers in the different parts of the city helped increase the economic activities at night and attracted skilled workers from different parts of the country,” Domogan said.

Records at the public employment and services office show the number of BPO workers have increased from 2,000 in 2010 to nearly 10,000 this year with starting salaries ranging from P20,000 to P25,000 a month.


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