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Archive for November, 2009

BFSI, Telecom to help BPO sector to cross $ 6.82 Billion by 2013

November 23rd, 2009

Indian domestic BPO market is ready to grow at a CAGR of 33.3 percent to reach $6.82 billion by 2013 from $ 1.62 billion in 2008.

According to IDC India’s new study, BFSI and Telecom sector contribute 37 percent and 25 percent respectively to the sector. Other sectors contributing to the sector include utilities and services, energy, food and hospitality, aerospace and automotive, consumer durables and government.

The domestic BPO is expected to grow into third party ‘transformational outsourcing’ relationships from the existing captive dominated market structure. IDC says that rather than merely running isolated processes for customers, BPOs would engage more deeply to identify and transform core business processes to add greater market value in the creation and delivery of end products and services.

The research says that non-English BPOs in Tier-II and Tier-III centres that can provide services to the telecom and aviation sectors at a lower overall cost that are expected to play an increasing role in the growth of domestic outsourcing industry. Kochi, Nagpur and Chandigarh find a special mention among such cities.

“The domestic BPO market shows promise of growth, especially in verticals like BFSI and Telecom in the short term. As the industry enhances focus on human resource outsourcing (HRO), legal process outsourcing (LPO), billing and high-end analytics, the BPO market would see a gradual shift from voice processes to non-voice processes,” says Arpan Gupta, Lead Analyst for the BPO, Industry Verticals and Government sector at IDC India.

Source:-http://www.siliconindia.com/shownews/BFSI_Telecom_to_help_BPO_sector_to_cross__682_Billion_by_2013-nid-63161.html

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Tags: BFSI BPO IT Outsourcing Telecom

IT spending in Asia to rise 5% next year

November 23rd, 2009

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THE Asia Pacific information technology industry will improve only slightly next year and recover fully by 2012, a global IT research and advisory company says in its latest projection.

IT spending in the region is expected to reach $515.6 billion, a 5-percent growth over this year’s $490.9 billion, said Peter Sondergaard, senior vice president and global head of research at Gartner Inc.

Speaking at a recent symposium in Sydney, Sondergaard said the turnaround represents a fast V-shaped recovery for technology spending in Asia Pacific from what he described as “the worst year in the history of IT.”

Improvements in software and IT services spending, which are forecast at 10.2 percent and 9.3 percent, respectively, are seen as major drivers of growth in the IT industry.

Software spending reached $20.09 billion this year, while IT services hit $52.1 billion.

Telecommunications, the largest segment of the industry with $350.24 billion in total spending this year, is only expected to increase by 4.2 percent to $364.84 billion next year.

Sondergaard said the figures are not consistent across countries in the region and cautioned IT leaders against being overly optimistic.

In the Philippines, the IT industry is expected to continue drawing growth from business process outsourcing.

“I would assume that the highest significant expenses will be from BPOs,” said Jose Locsin, senior analyst of research firm XMG Asia Pacific.

He said cheap labor and high manpower expertise will fuel the the sector, contributing considerably to the local IT industry.

Also, with business processing companies relying heavily on telecommunication services, Locsin said, the regional forecast of 4.2 percent is attainable in the local setting.

“Telcos should also benefit from the IT [growth] forecast as BPOs depend heavily on telco services,” Locsin said.

On the other hand, consumer IT spending will still be sluggish next year as Filipinos are still financially challenged due to economic crisis and natural disasters, Locsin said.

The Business Process Association of the Philippines (BPAP) earlier forecast that the BPO industry would grow 26 percent to 30 percent this year. But the outlook was later lowered to 20 percent to 23 percent as the financial crisis continued to hurt the global economy.

The association said the local industry aims to generate $12 billion in annual revenues in 2011, but is still threatened by a weaker US dollar and a manpower surplus in the US, which remains the major source of offshore jobs globally.

Business processing companies earned P94.4 billion last year, 21 percent more than the previous year’s P78.3 billion.

Source:-http://www.manilastandardtoday.com/insideInteractive.htm?f=2009/november/23/interactive1.isx&d=/2009/november/23

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Tags: Asia IT Outsourcing

V-th Annual Outsourcing Forum – Poland as European knowledge process outsourcing center. 19th January 2010. Warsaw, Poland

November 23rd, 2009

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Roadshow Polska in cooperation with Ernst&Young and Forbes have pleasure to invite you to the next, V-th edition of ANNUAL OUTSOURCING FORUM – POLAND AS EUROPEAN KNOWLEDGE PROCESS OUTSOURCING CENTER which will take place on 19th January 2010 at Hyatt Hotel in Warsaw.

During this edition we have decided to consider new issues and face new challenges which will, as we expect, result in a discussion very interesting both to participants and media.

The leading topics will include Knowledge Process Outsourcing, Outsourcing of the State functions, Barriers for BPO development from corporation perspective, Poland in BPO sector in three years and Barriers for BPO development in Poland from the perspective of self-government, government, university and industry.

During the event Forbes awards will be announced.
This event is a cyclical consequence of previous Outsourcing Forums – Poland as European Service Hub conferences which enjoyed enormous popularity as well as they won a circle of loyal participants. The objective of the Forum is to promote Poland as a modern center of BPO services as well as present and discuss the latest trends in the outsourcing market both in Poland and worldwide. We will analyze how the situation in the financial markets worldwide influenced BPO sector and what perspective of development BPO investments face currently in Poland.

Forbes, as the Main Media Partner, will issue a special album about the event, outsourcing and BPO investments 6 weeks after the Forum (as a supplement to Forbes). We are also planning, together with E&Y (Contents Partner) and Forbes, to send a survey to towns/corporations and outsourcing companies (the result will be discussed during the event as well as used in Forbes publication, among others).

Source : http://itonews.eu/en/events/outsourcing-events/v-th-annual-outsourcing-forum/index.html

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Tags: BPO Ernst&Young Europe events Outsourcing Poland

IT cos voice concern over proposed US law on hiring

November 23rd, 2009

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Two US senators have introduced a legislation seeking to prohibit companies that lay off large number of American workers, from subsequently hiring temporary workers (such as tech professionals) from outside the US.

The proposed ‘Employ America Act’, if passed, could severely hit tech companies that had resorted to axing jobs during the economic downturn even as they continued to file for H-1B visas.

The IT industry has expressed concern over the proposed legislation given its ramifications on businesses. But industry watchers also point out that the possibility of the new legislation being passed on a standalone basis may be somewhat low at a time when the US is slated to look at comprehensive immigration reform next year.

When contacted, Ameet Nivsarkar, Vice-President of Nasscom, said, “The proposed legislation will be painful for global companies, if it becomes a law. While it may not get cleared as a standalone legislation, what we need to watch out for is whether it gets tagged as a provision to other must-pass Bills. We are constantly monitoring the situation.”

The proposed Employ America legislation has been introduced by Senator Bernie Sanders and Senator Chuck Grassley – the duo had tagged similar provisions to the economic stimulus package with an aim to prohibit companies receiving bailout from the Troubled Asset Relief Program from replacing laid-off American workers with guest workers from overseas.

The Employ America legislation would require employers hiring temporary workers such as IT professionals to certify that they have not resorted to mass layoffs in the past 12 months and that they do not intend to fire in the future.
Companies that have announced layoffs of over 50 American workers in the past year could be subjected to the prohibition.

The two US lawmakers have claimed that the tech industry, a major employer of H-1B workers, has laid off over 3,45,000 workers since August 2008.

“With the unemployment rate still climbing and millions of people looking for work, we have a responsibility to ensure that companies do not use the temporary guest-worker programme to replace American workers with cheaper labour from overseas,” said Senator Sanders, a member of the Senate Budget Committee.

Earlier this year, Grassley, along with Senator Richard Durbin, introduced a legislation that, among other measures, proposed to prohibit employers from hiring additional H-1B and L-1 guest workers if over 50 per cent of their employees were already in that category.

The 50:50 provision as it was dubbed, raised the hackles of the Indian IT industry, which felt that such a clause would not only impact the outsourcing per se but also hurt competitiveness of the US.

However, the passage of the Durbin-Grassley legislation may be remote given that comprehensive immigration reforms appear to be just around the corner.

Source:http://www.moneycontrol.com/news/business/it-cos-voice-concern-over-proposed-us-lawhiring_426464.html

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Tags: IT LAW Outsourcing US

India May Get $1 Billion in IT Outsourcing Contracts

November 23rd, 2009

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Leading Indian outsourcers such as Tata Consultancy , Infosys and Wipro stand to gain contracts worth about $1 billion in the next one or two years as U.S. banks emerge from the troubled asset relief program, the Economic Times reported on Monday.

The newspaper said JPMorgan , Goldman Sachs and Morgan Stanley that received approval to buy back government stake worth $68 billion earlier this year are among the firms seeking operational efficiencies by outsourcing non-core IT and back-office projects to India.

American Express , Bank of New York Mellon and Capital One, which have started repaying government debt, were also considering outsourcing,it said.

Source : http://abcnews.go.com/Business/wireStory?id=9150917

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Tags: Infosys IT Outsourcing

IT: China learning English to beat India?

November 23rd, 2009

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India is falling behind China in its attempts to increase the use of English, risking squandering a key economic advantage, a new report says.

A “huge shortage” of teachers and quality institutions means China may now have more people who speak English than India, says the study by the British Council, Britain’s international cultural relations body.

The study estimates less than five per cent of the Indian population speaks English, which would mean that only about 55 million people in India will be fluent English speakers by 2010.

In comparison China adds 20 million English speakers each year as a result of new education policies that require English to be a compulsory subject in primary schools. According to an earlier British Council study, China had 200 million English users in 1995.

India’s emergence as a major software and IT hub has in part been possible due to its English-educated workers, but the study says English is a “casualty of wider problems in Indian education”.

“The rate of improvement in the English language skills of the Indian population is at present too slow to prevent India from falling behind other countries which have implemented the teaching of English in primary schools sooner, and more successfully,” says the study, English Next India, written by British author David Gradoll.

“China may already have more people who speak English than India,” it said, adding India will need many more people speaking English to sustain its economic growth, according to the BBC. “Poor English is one of the causes” of Indian universities falling far short of rival countries in the quality of teaching and research.

The study says a range of approaches is required to improve English proficiency in India, and no single method will help.

Source: http://economictimes.indiatimes.com/Infotech/Hardware/IT-China-learning-English-to-beat-India/articleshow/5255075.cms

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IT companies reduce reliance on headcount to cut costs

November 23rd, 2009

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Information technology companies are realising that just adding to their headcount (termed linear) is no longer enough.

Both Indian and multinational IT companies, including HCL Technologies, TCS, IBM, Infosys, Satyam, Wipro, Genpact, and NIIT Technologies, have implemented a host of non-linear initiatives, such as the reuse of assets and codes, the creation of templates and intellectual property (IP) and the use of platform business process outsourcing (BPO).

The concept has been around for over a year, and the platform model is also known as ‘software as a service’ (SaaS) for BPO. These initiatives are paying dividends by increasing their operating margins per employee, while simultaneously reducing capital expenditure for their clients, according to analysts.

Platform BPO, for instance, involves a bundling of technology, consulting and BPO, and helps in offering models which can be replicated, with some customisation for new customers, instead of reinventing the wheel. Around 40 per cent of all IT services are estimated to come as templates. This helps in saving costs.

HCL BPO, the business process outsourcing arm of IT major HCL Technologies, has been able to reduce costs by 15-20 by such use of non-linear initiatives, which include a platform-based BPO.

The BPO division contributes 9.3 per cent to HCL’s total revenues according to the company’s figures for the quarter ended September 30, and employs 11,362 people. HCL BPO has moved to an outcome-based pricing model from its current input-based model.

If it were to continue its linear growth (headcount-related) strategy, it would require 50,000 staffers to become a billion-dollar business, which is unsustainable from a cost-point of view.

“We are looking at more platform-based services from data which will focus more on automation and less on manual services. Also, the technology headcount has been reducing year-on-year because our business is using less manpower. Automation and centralisation have been the two pillars of this non-linear approach,” says Vijay Reddy (Head – Technology). At present, there are around 200 people for the IT and infrastructure part of the business.

As part of this drive, HCL BPO is automating its IT management platform, by which the number of complaints can be reduced by 50 per cent in a year. The platform was launched three years earlier. This process of rejigging the IT platform started three months before and the new platform will be implemented by 2010. “This is also a part of our strategy for reducing network and services costs. The new platform will give more visibility to the end-user and businesses will know what is happening to them,” adds Reddy.

India’s largest IT services provider, Tata Consultancy Services (TCS), was the first to identify and invest in various non-linear opportunities, namely, software products, platform BPO and software as a service (SaaS), as well as focus on unit-priced contracts, according to Macquarie Research Equities analysts. Infosys Technologies has a supply chain management (or ‘Procure-to-Pay’) platform in alliance with SAP and an HR (‘Hire-to-Retire’) platform with Oracle/PeopleSoft. It also has offerings in the software as a service (SaaS) space.

Global IT giant IBM, too, has an asset-based model as opposed to a labour-based one. It has created assets around each vertical. It re-uses these assets even as it creates “industry templates” that serve as roadmaps in understanding verticals and the players within. For instance, most telecom companies grew by acquisitions.

Wipro, on its part, is known for its capabilities in the infrastructure management services (IMS) space and gets around 12 per cent of its revenues from such services — it has the largest IMS practice among peers. Wipro has been able to capitalise on the experience gained over the years in managing customers’ infrastructure and offers element-based pricing (i.e payment per server, desktop, network switch, etc) for IMS contracts.

The maturing of the new non-linearity initiatives and generation of higher-than-average earnings before interest and tax (Ebit) per employee, predict Macquarie analysts, should provide the leeway for investments in more non-linearity initiatives.

Source: http://www.business-standard.com/india/news/it-companies-reduce-relianceheadcount-to-cut-costs/377339/

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