Archive for May, 2011

Express Automation rides outsourcing wave to grow profit

May 31st, 2011

Virtually unknown in the Kenyan market a decade ago, outsourcing has become a common practice as companies seek to reduce costs and focus on core business.

Mr Priyesh Shah, CEO of Express Automation has ridden the outsourcing wave to build a company specialising in leasing information technology office equipment that has just crossed the Sh1 billion annual turnover mark.

It all started in 2000 when Mr Shah, 36, a Bachelor of Science Economics graduate of the University of Nottingham, with backing from his brother — the late Anoop Shah of Kensta Group — decided to buy Stationery Express, a company dealing in office equipment.

Until then, he had been working for the Kensta Group, which has interests in the printing and packaging industry, expanding its operations into Uganda and Tanzania.

“We realised that print as a form of communication was going digital so we thought of diversifying into IT office equipment communication. We chose Stationery Express because they had some decent brands like Motorola and Samsung which would be a good platform to build on,” says Mr Shah.

They changed the company’s name to Express Automation with Mr Shah as the CEO. “Our goal was to be a company in the IT office equipment arena, but with a slight difference- there is no need to own equipment because most people use it as a means to an end, and can lease it as long as they get the right back up support and maintenance. Our business is leasing IT office equipment with managed service,” he says. The company focuses on printing/copiers, multifunction equipment, PCs, servers, and laptops.

Initially, its main clients were multinationals, but lately small and medium enterprises are adopting the leasing model. “If you look at the banking industry, outsourcing in Kenya was first embraced by multinational banks which were chasing cost savings from economies of scale and adopting a global trend. Now we are seeing second tier banks adopting it as well,” says Mr Shah. The pattern is the same in the manufacturing sector where the company’s first clients were EABL and Unilever, but now smaller companies like KAPA and Dawa Pharmaceuticals, a Top 100 company have come on board. This indicates the growth potential in the industry.

Banks were early adopters because of the huge cost savings they could get from leasing as opposed to outright purchase. A bank with hundreds of branches would need an entire floor of managers and technicians to manage its information technology system. By leasing, it could save staff costs and use its capital to focus on lending for profit, its core business. Many Express Automation clients prefer to have a team of technicians permanently stationed at their offices to facilitate quick response to problems.

“We supervise and pay them, not the client. They however fit in to the client’s schedule in terms of working hours. They ensure that we deliver on the service agreement we sign with the client,” says Archith Rao, head of business development.

“The other advantage of having resident technicians on site is that 70-80 per cent of troubleshooting can be done online since the team at the client’s office is connected to our team of engineers at headquarters.”

Leasing of printing/copiers brings in 30 per cent of the company’s revenues. The company has 200 employees and offices in Nairobi, Mombasa and Kisumu with an active customer base of 3,000 customers. Regionally, it operates in Uganda, Tanzania and Rwanda.

Faces challenges

The company closed the just ended financial year with turnover of Sh1.5 billion compared to Sh800 million the year before. This makes it the latest graduate of the Top 100 Club whose members have turnover of between Sh70 million and Sh1 billion.

Despite this success, the company faces challenges top among them being the high cost of doing business in Kenya. “We are totally uncompetitive compared to Egypt, South Africa and globally compared to India, Malaysia, Singapore and Thailand. In our business of managed service, people are looking at global outsourcing so we’re already at a disadvantage,” says Mr Shah.

The company is, however, banking on its young talented team to achieve its plans which include rolling out the leasing model Africa wide.

“We believe in using home grown talent in each of the countries we operate in because they understand the market in a way that expatriates cannot,” says Mr Rao.

“We spend a lot of time researching what services clients need and we deal with branded, tested, world class products. This helps to reduce our overall costs by preventing a lot of down time.”


Gender politics just parental outsourcing

May 31st, 2011

They know their toddler would want only organic milk, that their primary school-age children have ethical and gastronomic objections to fast food from big multinationals, and that none of their offspring is interested in competitive sport.

But there are two SNAPs who’ve finally snapped.

Canadian couple David Stocker and Kathy Witterick say they are trying to rear a “genderless” child on the basis they don’t want being a male or female to determine its place in the world. They won’t identify four-month-old Storm as a boy or girl to anyone outside their immediate family.

This, they argue, will give him-her the opportunity to decide for himself-herself down the track whether he-she would prefer to be a boy or a girl. (One would think simply looking down might offer a fair sort of clue.)

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And it will stop those around Storm from engaging in that heinous hate crime of gender stereotyping, which would start with a gift of a pink or blue jumpsuit and take an inevitable path to truck driver or nurse.

The Witterick-Stockers have managed to out-American the Americans, taking the wide-eyed US credo of “You can grow up to be whatever you want to be” to its illogical extreme.

“If you really want to get to know someone, you don’t ask what’s between their legs,” Stocker said, summarising the couple’s parenting philosophy for all three kids, including Storm’s two older brothers Jazz, 5 and Kio, 2.

But aren’t their actions the ultimate outsourcing of parental responsibility? Putting it on a child to decide what gender they would prefer to be, particularly when it’s pretty clear the odds are going to be physiologically stacked in favour of one side or the other, is an anxiety-filled burden.

The parents must be fervently hoping the child goes against the gender grain. Otherwise why all the palaver?

You can imagine how proud the couple would be if girl Storm shows an interest in mechanics, or boy Storm in ballet. Their little lab experiment will have worked!

But The Wry Side would love to be a fly on the Witterick-Stocker wall if baby boy Storm takes to Tonka trucks and toy planes or baby girl Storm is content combing out the knots in Barbie’s hair.

“Where did we go wrong?” they will say.


Bangalore set to lose IT capital tag: Survey

May 31st, 2011

Bangalore, that boasted its tag of the country’s IT capital, may now lose it as companies have expressed their interest in setting up shop at the National Capital Region (NCR) of Noida and Gurgaon. This would include IT, IT-enabled services (ITes), business process outsourcing (BPO), knowledge process outsourcing (KPO) and other areas of operations, reports the Indian Express, quoting an Assocham survey.

The agency cited “crumbling infrastructure” is one of the main causes for this trend. It has also said that companies are moving towards more “convenient and industrial-friendly centers”.

Justifying their findings, Assocham said that the growth explosion in Bangalore has pushed the city towards serious civic issues. Assocham further attributed the problems to power shortages, inadequate and unreliable water supply, heavy traffic, roads and also poor sanitation facilities. Identifying these issues as the main problems, he further states that Gurgaon and Noida have, on the contrary, been growing rapidly against and increasing their odds.

The forum interacted with around 800 CEOs, CFOs and managing directors of both Indian and multinational companies. The survey was conducted in five cities where they saw the best advantage to operate from. Assocham claims that nearly 30 per cent evinced interest in moving to Gurgaon, while another 25 per cent were willing to move to Noida. About 20 per cent wished to shift to Chandigarh, 15 per cent to Pune and 10 per cent to Hyderabad.

The forum said that Gurgaon’s cosmopolitan culture, modern infrastructure, availability of skilled workforce and closeness to Delhi, along with industry friendly government policies are the factors which give it an edge over Bangalore city.


WNS recognized with the CISO 100 Awards 2011

May 31st, 2011

WNS (Holdings) Limited (NYSE: WNS), a leading provider of global Business Process Outsourcing (BPO) services, has been recognized by the Top 100 CISO Awards 2011, for demonstrating outstanding performance in its information security and technology practices. WNS’s Chief Information Security Officer (CISO)- Arup Chatterjee, was recognized amongst the Top 100 CISOs, for implementing one of the best Information Security practices amongst Indian companies, at a gala event in Mumbai.

The ‘Top 100 CISO Awards’ recognizes executives who have demonstrated outstanding initiatives in using information security practices and technology to secure their business and mission critical information in the most effective manner and deliver business value, by creating competitive advantage, optimizing business processes and improving relationships with customers. The award is first-of-its-kind and aims to bring to the centre stage, the contribution security officers make in the shaping and securing the integrity of businesses.

“We are extremely proud of our Risk Management & Audit Team, for bringing us this honor.” said Keshav R. Murugesh, Group CEO, WNS Global Services. “The award is a recognition of WNS’s robust information security practices, which have a right balance of intelligent security platforms and processes, coupled with a strong monitoring framework, which allows our clients to confidently extend their operations to WNS.” he added.

The Award also acknowledges WNS’s endeavor in working closely with NASSCOM to better equip the Police Department in different cities, in their efforts to combat cyber crime.


Union accuses outsourcing firm of intimidation

May 31st, 2011

Outsourcing firm Romec, which provide maintenance personnel for the British Museum, Tesco and Sainsbury’s, have been accused of failing to notify its staff of plans for redundancy.

More than 550 workers have been refusing to work since Friday, as a result of the organisation opting to use on-the-job tracking devices to follow the movements of its staff.

In response, John Fisher, Romec’s personnel director, issued a letter to staff – which was seen by The Times – saying: “Inevitably some people will not want to work in these new ways and would prefer to leave the business.”

The letter then went on to ask employees to fill out a form, detailing whether they still wished to work for the company. If they don’t, the letter explained that there might be a redundancy package available, but that “the amount of money we have available is limited”.

Ray Ellis, from the Communication Workers Union (CWU), which represents Romec staff, told The Times: “Experienced engineers with good service records are being victimised through a misuse of tracking technology. The company is abusing a raft of procedures in the pursuit of cost savings and in the attempt to reduce headcount without following legal redundancy arrangements.”

The company has not officially notified employees of a redundancy programme, despite being legally obliged to. The CWU also argue that Romec are breaking data protection laws.


Bangalore to lose its IT status

May 31st, 2011

According to a survey conducted by Associated Chambers of Commerce and Industry of India (ASSOCHAM), Bangalore might lose its status of being the IT capital of India. The survey states that the status would soon belong to the National Capital Region (NCR) of Noida and Gurgaon.The survey concluded that companies offering IT, IT-enabled services (ITes), business process outsourcing (BPO), and knowledge process outsourcing (KPO) in various domains like banking, financial services, insurance, pharma, auto, FMCG and manufacturing prefer to relocate operations.

The survey also finds out that Bangalore is losing its sheen due to crumbling infrastructure, compelling many companies to head towards more convenient and industrial-friendly centres. Leading IT and ITeS vendors prefer to shift their focus from Bangalore to other satellite cities like Noida and Gurgaon for more revenues.
Officials at ASSOCHAM state that the growth explosion in Bangalore has pushed the city towards serious civic crisis. Civic issues like roads choked with vehicles, frequent power outages, erratic water supply and poor sanitation is making Bangalore lose its luster to Gurgaon and Noida.

ASSOCHAM interacted with 800 directors, CEOs, CFOs, chairmen and managing directors of Indian and multinational companies in various verticals. Five cities were chosen to relocate businesses to garner more revenues. 30 per cent top-ranked officials of IT companies said they preferred Gurgaon, 25 percent wanted to relocate operations to Noida, about 20 per cent preferred Chandigarh, 15 per cent of respondents said that they prefer Pune and 10 percent wanted to relocate their business to Hyderabad.

The cosmopolitan culture, modern infrastructure, availability of skilled workforce, closeness to Delhi along with industry-friendly government policies are the factors which give Gurgaon and Noida an upper hand say officials at ASSOCHAM.


Serco pays £385m for Indian outsourcing group

May 31st, 2011

The newly acquired company focusses on back office functions in the financial services, travel, healthcare and telecom sectors and has operations in seven countries operating out of 24 separate centres.

On announcing the deal, Serco said it would allow it an enhanced ability to compete in the Indian business process outsourcing (BPO) market which is forecast to grow at around 15 per cent per year in the medium term.

The acquisition costs includes contingent payments of up to £50 million, which are to be funded by Serco’s debt facilities already in the place.

In the year ending 31 March 2011, Intelenet declared revenue of £170 million with adjusted operating profit of £19 million.

Chris Hyman, chief executive of Serco, said the acquisition supports the group’s ambitions for growth as it seeks out new ways to improve service and cut costs. He explained, ‘Intelenet’s high value capabilities and customer base, together with its economies of scale, means we can access new markets and strength our existing propositions.

‘The Intelenet management team will join us to continue driving the business. Their passion for their customers and people and their philosophy of service excellence means they will be a great asset to Serco.’

Susir Kumar, chief executive of Intelenet Global Services, said Serco is a good fit for his business.

He explained, ‘Becoming part of Serco will propel us to our next phase of growth, by helping us to address a wider market and to provide more end-to-end solutions.

‘My management team and employees keenly look forward to working with our new global colleagues.

‘We are grateful for Blackstone, Barclays and HDFC for their tremendous support of the company and we are pleased to be continuing the strong relationship with them as our clients.’


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