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Archive for April, 2011
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April 12th, 2011
BPO is a Hot Topic for Broadridge at the TowerGroup/CEB Annual Conference
April 12th, 2011As global financial services firms continue to integrate business process outsourcing (BPO) into their business models, leading BPO provider Broadridge Financial Solutions, Inc. (NYSE:BR) will present emerging BPO trends and delivery models at the 2011 TowerGroup/CEB Annual Financial Services Strategy & Technology Conference & Exhibition on April 13-15, 2011, in Boston. The conference focuses on sustainable innovation in financial services and targets senior level executives from financial services firms.
During his keynote presentation, Joseph Barra, President, International Securities Processing & Global Outsourcing Solutions, Broadridge, will discuss the key challenges facing the financial services industry, such as increased regulation, globalization and margin pressure, along with the industry’s imperative responses including the need to redefine traditional business models and reassess how value is assessed within outsourcing models.
“Business process outsourcing in the financial services industry has entered a new era where the old benchmarks for success are no longer applicable,” said Joseph Barra. “Firms are no longer content with merely cost savings as the end result. They now are looking for business process outsourcing to help them achieve multiple business goals … to reduce costs, enhance the customer experience and enable revenue growth.
Mr. Barra will also review findings from the 2011 TowerGroup white paper, 21st Century Business Process Outsourcing: Delivering Operational Excellence and Enabling Revenue Growth. The TowerGroup was commissioned by Broadridge to conduct the independent research and analysis of the emerging practices and trends in financial services business process outsourcing.
“The TowerGroup’s research in the BPO space validates what Broadridge has seen over the past several years,” continued Mr. Barra. “Financial services firms are looking for flexibility in their BPO arrangement and for a provider to have strong functional expertise and a deep understanding of the industry as well as the unique needs of their clients.”
This past September, Broadridge announced a major expansion of its business process outsourcing solutions offering. With this expansion Broadridge clients have the ability to use their technology of choice while taking advantage of Broadridge’s front-office, middle-office, back-office, corporate and finance BPO solutions.
Source:http://www.businesswire.com/news/home/20110412005636/en/BPO-Hot-Topic-Broadridge-TowerGroupCEB-Annual-Conference
“Free – SME IT Clinic” – International ICT Expo 2011 13-16 April, 2011 Hong Kong
April 12th, 201101 Synergy is pleased to announce that we will be providing Free IT Consultation Service at the “SME IT Clinic”in conjunction with HKTDC. The IT Clinic will be located at Hall 3F-G (opposite to booth no. 3F-F39), Hong Kong Convention and Exhibition Centre.
Should you want to make an appointment, please contact Mr. Jake Lee at (852) 2240-4585 or via email: jake.kw.lee@hktdc.org.
We at 01 Synergy are looking forward to welcoming you at International ICT Expo 2011!
Indian Business Process Outsourcing Market to grow 23.2% in 2011:Gartner
April 12th, 2011The business process outsourcing (BPO) market in India totaled $1.139 bn in 2010, a 28.6 percent increase from 2009 revenue of $885.6 mn, according to Gartner, Inc. The market’s growth was driven primarily by increasing volumes in existing BPO engagements, clients expanding the scope of existing BPO relationships, and a number of new BPO deals in 2010 were from pent-up demand from 2009.
Gartner estimates the Indian domestic BPO market reach $1.4 bn in 2011, up 23.2 percent from 2010. The market will grow into a $1.69 billion market by 2012 and increase to $2.47 billion by 2014.
The BPO services market in Asia/Pacific and Japan is made up of a good mix of multinationals, regional and local pure-play BPO service providers; IT services providers with BPO assets and capabilities; and telecom vendors. Though the BPO market is dominated by global and India-based service providers, there are also a number of fast-growing regional and niche BPO service providers.
“Changing demographics, increasing affluence and economic growth in Asia/Pacific continues to drive shared services and BPO adoption, especially in Australia, India, Southeast Asia and China,” said T.J. Singh, research director at Gartner. “There is growing demand for multicountry shared services and BPO services within Asia/Pacific. Buyers continue to invest in services that deliver scalable, high quality and consistent services across their geographical presence. There was significant consolidation in the global and regional BPO market in 2009 and 2010 with some large merger and acquisition (M&A) deals impacting the regional BPO service provider landscape.”
The BPO services market in Asia/Pacific (excluding Japan) reached $8.6 billion in 2010, a 21.5 percent increase from 2009 revenue of $7.0 billion.. The largest BPO country market in the region is Australia, which is more than three times larger than India, the second-largest consumer of BPO services. By vertical industry, banking and financial services, communications, government (both local and federal), technology and travel and transportation were the largest consumers of BPO services in the region.
BPO Vendor Landscape in India
India is one of the fastest-growing BPO market in Asia/Pacific. This segment was earlier dominated by small service providers with some local companies, such as Magus Customer Dialogue, Infovision, Andromeda.
Over the past three years, many established India-based BPO service providers and U.S.- and Europe-based multinational BPO services providers have started focusing on the Indian domestic market. In the past, these providers were focused primarily on the international or offshore market. Some of the local providers include Omnia, Kenkei, Androemeda, Genpact, Magus, MphasiS, Intelenet Global Services, Tech Mahindra, Aegis, Spanco and HTMT.
“This phenomenon has been accentuated by the advent of the global slowdown in the U.S. and Western Europe, in which service providers who were focusing solely on the international market realized that there is merit in the Indian BPO market, given the fact that it grew rapidly even during the global economic crisis. The large and midsize players have now stepped up their activities,” said Mr. Singh.
Source:http://www.indiainfoline.com/Markets/News/Indian-Business-Process-Outsourcing-Market-to-grow-23.2-percent-in-2011-Gartner/5130486900
TCS, Infosys, Wipro set to post robust results as tech spending rises
April 12th, 2011India’s top three technology firms are likely to post strong quarterly profit and indicate robust revenue growth for the year ending March 2012 as overseas clients boost technology spending in an improving global economy.
However, salary increases and currency volatility could put pressure on margins for the country’s top software service exporters, Tata Consultancy Services Ltd , Infosys Technologies Ltd and Wipro Ltd.
“On the whole, this year will be better than last year. There may be some improvement in pricing and the business outlook will be slightly better than last year as the US market is improving,” said K. K. Mital, head of portfolio management services at Globe Capital in New Delhi.
“Wage inflation and the rupee’s appreciation will limit profit improvement.”
Companies could raise salaries by 10 per cent to 15 per cent on average this fiscal year, analysts said. However, some of them expect higher billing rates to offset the effect of salary increases on margins.
In April, research firm Forrester forecast the US technology market to expand 8 per cent in 2011, up from 7.4 per cent projected previously, with software, IT consulting services and technology outsourcing growing faster than last year.
The United States is the largest market for the Indian technology firms, contributing more than 50 per cent of their revenue.
Investors will await management comments on the pipeline for deals, hiring targets and salary rises as Indian firms battle for contracts and employees with larger global rivals such as IBM, Accenture and Hewlett-Packard.
“We will have to see how these companies manage their margins this year,” said Srividhya Rajesh, vice president-equity at Sundaram Mutual. “We have to see if Infosys is willing to give up margin expansion for growth.”
The country’s top three technology firms, who manage computer networks and maintain IT operations for several Fortune 500 companies, are expected to see profit growth of 14 per cent to 22 per cent for the fourth-quarter ending March, according to a Reuters poll of analysts.
Revenue is seen rising 18 per cent to 31 per cent this fiscal.
GROWTH OUTLOOK
Infosys, which sets the tone for the near-$60 billion outsourcing sector, opens the earnings parade on Friday and analysts expect India’s No. 2 software services exporter to forecast dollar revenue growth of 19 per cent to 20 per cent for fiscal 2011/12.
“The demand environment seems to be pretty good with the trend for offshoring continuing,” said Srividhya. “We are looking at pretty strong growth this year. It will be volume driven. We do expect to see some price increases this year.”
Source:http://economictimes.indiatimes.com/news/news-by-company/earnings/earnings-analysis-/tcs-infosys-wipro-set-to-post-robust-results-as-tech-spending-rises/articleshow/7960581.cms
Unisys Outsourcing Deal with PSIS Extended
April 12th, 2011Unisys NZ has won a three-year renewal of its longstanding IT services contract with the financial services cooperative PSIS.
The services delivered under the contract include ClearPath and ES7000 servers and other data centre hardware support, disaster recovery hosting and services, and security monitoring of PSIS’ internet banking channel.
In a statement from Unisys announcing the contract extension, Annette Natta, general manager of information services at PSIS, is quoted as saying: “At PSIS our customers are also our shareholders, so our aim is to provide consistent and reliable services that they can depend upon to protect their financial assets. We have worked closely with Unisys since 1967 to develop an IT infrastructure that combines flexibility and dependability to support that aim as the banking industry evolves and the economic environment in which we operate changes.”
Source:http://www.sourcingfocus.com/index.php/site/newsitem/3460/
Investors with two years horizon may stay invested in Satyam Computers
April 12th, 2011Satyam Computer Services is witnessing renewed investor interest. After sluggishness over the past four quarters, the stock rebounded last week on news that the company has settled yet another lawsuit in the US courts. The development is expected to provide more credibility to the current management, which took over in the middle of 2009 following fraudulent practices of Satyam’s previous management.
We had recommended the stock at Rs 80 in October 2010 after the company, which now uses Mahindra Satyam as its brand identity, restated previous financial numbers. In the subsequent period, the stock has underperformed our expectations, mostly trading range-bound below Rs 70. With reducing exposure to lawsuits and improving demand traction across geographies, we believe that the worst is over for the company. It is expected to return to normal business growth and profitability in the next 6-8 quarters.
BUSINESS AND GROWTH PROSPECTS:
Satyam offers IT services and solutions, infrastructure management, and business process outsourcing to global clients. It grossed nearly Rs 3,770 crore in revenue in April-December 2010 by selling its deliverables to customers across verticals, including banking and finance, manufacturing, healthcare, and telecom.
In mid-2009, Tech Mahindra through a special purpose entity took over the management control of Satyam after its earlier board confessed to financial manipulation. Since then, the new management has struggled to bring the company back on the growth track. The company has so far been able to report a gradual improvement in its operating profitability. This will improve further since the proportion of uncertain cash outflows towards meeting prior period obligations and settling legal claims are expected to go down.
The company reported a 2.5% growth in business volumes measured in terms of billed man hours in October-December. Though this is lower than 3-6% growth shown by its bigger peers, what could offer some relief is the fact that Satyam’s billing rates are stable. This reflects that the company is no more facing pressure to retain clients. Moreover, it has begun to grow its client base, adding seven customers in the past quarter. The company has picked up momentum in Australia, Europe and West Asia, which are expected to drive its growth in the near term.
Satyam has settled most of the lawsuits after the new management took over. In the past two months, it has gone for out-of-court settlement, which would result in outflow of around Rs 570 crore. At the last count, the company had cash of Rs 2,900 crore, which would be utilised to pay for these settlements. Therefore, such legal issues will not stretch its balance sheet. Settlement of legal issues would also help reinstate the credentials of the management, thereby improving saleability of its services.
VALUATIONS:
The company’s earnings in January-March 2011 would be a crucial indicator of its future prospects. The company is expected to report operating margin in higher single digits. Given strong outsourcing demand and possibility of higher billing rates, the company is likely to report a 10-12% profitability and a similar revenue growth by FY12. Considering this, the stock trades at a forward P/E of over 15 at the current level of Rs 75. Investors with a horizon of at least two years may stay invested.
Source:http://articles.economictimes.indiatimes.com/2011-04-11/news/29406507_1_mahindra-satyam-satyam-computers-new-management
