Archive for July, 2011

Cognizant, Visma in outsourcing pact with Norway Post

July 15th, 2011

Cognizant Technology Solutions, the US-based leading provider of information technology, consulting, and business process outsourcing services, and the Norway-based Visma, provider of business software and services for accounting and administration, have entered into an outsourcing arrangement with Norway Post to deliver finance and accounting (F&A) services.

Cognizant did not reveal the deal size, but in a press release termed it “one of the largest Norwegian outsourcing contracts.”

Norway Post, which is owned by the Norwegian Ministry of Transport and Communications, develops and delivers integrated, value-adding communications and logistics solutions to domestic and international customers through physical and electronic networks.

Visma brings in local Norwegian accounting and regulatory expertise to the table and is responsible and accountable for ensuring that the delivery adheres to Norwegian Tax Laws, said Mr Santosh Thomas, Senior Vice-President and Head of Continental European Operations, Cognizant.

Localised approach

The European market demands a localised approach to address lingual and cultural differences. Cognizant’s strategy is to hire local talent for local domain, regulatory and language capabilities and better cultural compatibility and enter into transformational partnerships, he said.

Today, Cognizant serves marquee clients in Continental Europe such as UBS, Credit Suisse, Volvo, Sanofi Pasteur, AXA, Deutsche Telekom and Continental AG (the last two jointly with T-Systems), he said.

It is in dollar terms, which is Cognizant’s reporting currency revenues from Continental Europe (excluding the UK) grew by 11.7 per cent on a sequential basis to $93 million for the first quarter ended March 31, 2011. The company’s key markets in the Continent are Switzerland, Benelux, Germany, France and Nordics,

Continental Europe IT spend is estimated to grow to $206 billion in 2013 from $185 billion in 2010, he said.

Source:http://www.thehindubusinessline.com/industry-and-economy/info-tech/article2218878.ece

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India may no longer be outsourcing hub as UK companies such as Aviva, BT & Santander move work to home country

July 15th, 2011

India may no longer be the preferred destination for call centre work from the United Kingdom as a trend to shift back work by UK companies to their home country is gaining momentum.

A high UK jobless rate and a need to better connect with their customers, coupled with rising costs in India, are driving firms such as Aviva, BT and Santander to move work back home.

Last week, another UK-based telecom firm New Call Telecom decided to move its call centre back to Lancashire from Mumbai. On Tuesday, shares of Mphasis fell over 6% as banking group, Santander, moved its retail banking-related call centre services from the Indian vendor back to the UK.

For many, having a UK customer call centre has also become a differentiator in commoditised markets such as voice telephony services, say experts. It is also viewed as ‘patriotic’.

“In the current economic climate, it is very good PR to be investing in the UK economy at a time of real economic hardship and high unemployment. To be seen to be ‘putting something back in’, rather than to be ‘taking something out’ is likely to be a strong selling point for a brand,” said John O’Brien, research director at TechMarketView, in a note.

In the retail banking and mobile telecom sectors, UK-only call centres have become a real differentiator, he added. UK bank NatWest used this as the punchline for an ad campaign some time back. “With UK call centres, it’s also easy to manage your bank account” a line on UK bank NatWest’s website said.

UK insurer Aviva moved back some jobs from its Indian BPO partner WNS to Norwich, UK, earlier this year. Although it did not give a reason, people familiar with the matter said it was facing quality issues.

UK BPO giants Serco and Capita have also been actively acquiring UK-based and predominantly onshore call centre capability in recent months, according to TechMarketView, which added, “They clearly know the way the tide is turning.”

Indian outsourcers, HCL Technologies and Firstsource Solutions , already use onshore capability for voice-based customer-facing roles in UK. Santander is expected to create 500 new jobs in the UK while New Call Telecom will create about 100. Although these numbers seem small in comparison to the over 2 million people employed by the Indian IT-BPO sector, it is a fairly significant number in the UK.

“The whole issue around accents just became really big in the UK, for some reason it was never seen as a problem in the US. It just got highlighted a lot in the UK and then some companies started using it as marketing tool too,” said Pramod Bhasin, ex-CEO and non- executive vicechairman of the country’s largest BPO firm Genpact .

“It will continue to happen from time to time, due to customer services issues, but given the amount of work that happens in India, it will not be a problem,” he said.

A lot of voice-based work, mostly to US-based clients, have moved to Philippines given its cultural affinity to the US and similarity in accent.

Source:http://economictimes.indiatimes.com/tech/ites/india-may-no-longer-be-outsourcing-hub-as-uk-companies-such-as-aviva-bt-santander-move-work-to-home-country/articleshow/9217220.cms

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Tata Consultancy Says Global Uncertainty Spurs Outsourcing Opportunities

July 15th, 2011

Tata Consultancy Services Ltd. (TCS), India’s largest software exporter, said it continues to see strong demand for its computer services as the global economic uncertainty prompts customers to adapt and outsource more work.

“The macro uncertainty is real and it’s not going to go away in the near future,” Chief Executive Officer N. Chandrasekaran said yesterday. “Everybody is getting adjusted to the operating environment but staying pretty much focused on what they have to do. That is driving opportunities.”

Tata Consultancy, which yesterday reported a 28 percent jump in quarterly profit, joins larger rival Accenture Plc (ACN) in signaling corporations are boosting spending on computer services and consulting. Chief Financial Officer S. Mahalingam has said the company expects to sustain 20 percent sales growth for the foreseeable future as outsourcing demand grows.

“Globally, information technology spending is expected to grow this year,” said Hitesh Shah, vice president of research at IDFC Securities Ltd. in Mumbai. “And as of now, that looks to be on track.”

Worldwide spending on information technology services is forecast to rise 6.6 percent to $846 billion this year, after growing 3.1 percent last year, Stamford, Connecticut-based researcher Gartner Inc. said in a report last month.
‘Pretty Strong’

Net income increased to 23.8 billion rupees ($535 million) in the three months ended June 30, from 18.6 billion rupees a year earlier, Mumbai-based Tata Consultancy said yesterday. The company stated earnings as per International Financial Reporting Standards, while profit was projected at 22.7 billion rupees under U.S. Generally Accepted Accounting Principles according to the median of 20 analyst estimates compiled by Bloomberg. Revenue climbed 31 percent to 108 billion rupees.

Demand remains strong across the company’s main markets in North America, the U.K. and Europe, which contributed 78 percent of revenue in the last quarter, Chandrasekaran said.

“We’re continuing to see business momentum,” he said. “The deal pipeline is pretty strong. If you look at the top 15 deals we’re chasing today, four of them are in U.S., four in the U.K., four in Europe, and one each in emerging markets areas.”

The software company added 24 clients last quarter, increasing the number of $50 million customers to 33 from 27, according to the statement.

Shares of Tata Consultancy fell 2.2 percent to 1,123.70 rupees in Mumbai yesterday, before the earnings announcement.
Volume Jump

Tata Consultancy, which provides computer services and back office support to clients including Citigroup Inc. and Singapore Airlines Ltd., had a 7.5 percent increase in volume last quarter from the preceding period. First-quarter volume at Infosys Ltd., India’s second-largest software exporter, grew 4 percent, Chief Financial Officer V. Balakrishnan said July 12.

Information technology services companies define volume as the number of man-months workers spend on projects for clients.

Infosys shares fell the most in almost three months in Mumbai on July 12, after the Bangalore-based company forecast sales that missed analysts’ estimates. The software-services provider projected revenue in the year to March to range from $7.1 billion to $7.3 billion. That lagged behind the $7.5 billion average of 56 analyst estimates compiled by Bloomberg.

Tata Consultancy said it added a net 3,576 employees during the quarter, for a total of 202,190. The company remains on course to hire 60,000 workers in the 12 months ending March 31, said Ajoyendra Mukherjee, vice president for human resources.

Workers left Tata Consultancy at a rate of 14.8 percent in the three months ended June, according to the statement, up from 13.1 percent for the same period last year. Infosys reported employee attrition of 15.8 percent for the quarter.

Operating margin at Infosys may come under pressure during the year ending March because of higher salaries paid to attract and retain talent, CFO Balakrishnan said July 12.

Tata Consultancy also gave its largest wage increases in three years, damping operating margin by 131 basis points from a year earlier to 26.2 percent last quarter, Chandrasekaran said.

“The uncertain global macroeconomic environment demands that we adopt an entrepreneurial approach and remain agile to capture growth opportunities as they emerge,” he said.

Source:http://www.bloomberg.com/news/2011-07-14/tata-consultancy-profit-rises-28-on-computer-service-outsourcing-orders.html

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People outsource memory to the Internet

July 15th, 2011

The Internet puts volumes of information within easy reach, and new research conducted at Harvard and Columbia universities suggests that we’re outsourcing our memory to Google as a result — remembering facts less and the places information is stored more.

In the study published today, researchers used a series of simple experiments to demonstrate that having access to a vast digital memory is altering how people retain information in their minds. When research subjects believed that statements they typed on a computer were saved, they were more likely to forget the phrases than those who believed the material was deleted. When the participants typed a series of quirky and engaging facts — that an ostrich’s eye is bigger than its brain, for example — they tended to forget the facts and instead remembered the mundane names of the folders they’d saved the facts in.

“Our memories are changing,” said Daniel Wegner, a psychology professor at Harvard and the senior author of the study. “So we remember fewer facts and we remember more sources — which website you saw it on or whose e-mail to look in to find that. … It’s like having information at our fingertips makes us always go to our fingertips.”

The findings, published online by the journal Science, will feel familiar to anyone who has lost Internet access for a matter of hours and felt suddenly helpless, or gone through connectivity withdrawal on vacation. But the findings also have broader implications for how we learn — both in the classroom and in old age.

“In my area, in Alzheimer’s disease, I can see how this application could be very helpful,” said Dr. Gary Small, a professor of psychiatry at the Semel Institute for Neuroscience and Human Behavior at the University of California, Los Angeles. Because Alzheimer’s patients lose short-term memory, he said, it might be useful for them to have a strategy in their long-term memory that helps them retrieve information they can’t remember.

“We’re doing it” already, Small said. “Using the World Wide Web as an external hard drive to augment our biological memory stores.”

The experiments were led by Betsy Sparrow, an assistant professor of pyschology at Columbia who was inspired while watching an old black and white movie one night. Sparrow knew she’d seen one of the actresses in something else. But what? She reached for her laptop, eventually recalling — with the help of the Internet — that she’d seen the actress, Angela Lansbury, when watching “Murder, She Wrote,” with her grandparents.

Then, she began to wonder: How did people figure stuff like this out before they had Wi-Fi, iPhones, and search engines? She decided to rigorously test whether people were truly outsourcing their memory to technology.

First, Sparrow posed a series of easy questions (“Are dinosaurs extinct?”) and complicated questions (“Did Benjamin Franklin give piano lessons?”) to see if research subjects, prompted by a question they did not know the answer to, thought about the Internet. Using a psychological test, she found they appeared to have computer words on their mind, such as Google, Yahoo, screen, browser, and modem when faced with the difficult questions.

In another experiment, Sparrow asked participants to read and type 40 surprising facts, such as “Bluebirds cannot see the color blue” and “Rubber bands last longer when refrigerated.” Half were told the information would be saved and they could access it later, and the rest believed it would be deleted. Those who believed the information had been erased remembered it best.

In another experiment, participants typed the statements and saved them to folders with non-descript names, such as “FACTS,” “DATA,” and“INFO.” They were asked to recall the trivia. Then, they were asked which folder had a certain statement in it. To the researchers’ surprise, people tended to recall the folder names instead of the more interesting content.

Researchers not involved in the study said that the results demonstrate the efficiency of the human mind.

“This idea that a person has to know everything or try to know everything is just maladaptive — it’s just so much easier to remember where information is than what the information itself is,” said Richard Moreland, a psychology professor at the University of Pittsburgh.

Outsourcing memory to gadgets may seem like a distinctly modern phenomenon, but it’s actually an extension of behavior that far predates the iPhone.

About 25 years ago, Wegner and his collaborator and future wife, Toni, had an insight into how memory works — sparked by a question about where they had stored a sponge used for washing the car.

They couldn’t locate the sponge, and realized it was because of the intuitive way they shared and divvied up memory. He was her memory when it came to things that had to do with the garage and the car; she was his memory when it came to all things having to do with washing and cleaning. The sponge fell squarely in the middle. Since then, the idea — called transactive memory — has become influential, especially in understanding how group members and employees work together.

Daniel Willingham, a professor of psychology at the University of Virginia, said that while there are definite advantages to having unparalleled access to information, the new technologies don’t mean that people can just forget everything.

“It is quite different now, the speed with which we can call up information; the ease,” Willingham said. “I think it would be a pretty big mistake if we thought an implication we should be drawing from this is kids don’t need to know much.”

Source:http://www.boston.com/Boston/whitecoatnotes/2011/07/people-outsource-memory-the-internet/Qhh8×2LODird5MHqOefZlN/index.html

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Aegis to enter UK and European outsourcing market

July 15th, 2011

Aegis Ltd, the global outsourcing services provider and part of the Essar Group, on Thursday said it will enter the UK and European market for the first time, creating 600 new jobs in Manchester. The 600 roles will be at a new customer centre in Manchester, which is expected to open later this year, according to a media statement.

Aegis, which is one of the largest outsourcing business with over 50,000 employees across 50 locations, then plans a further significant expansion across various countries in Continental Europe, where a number of additional customer service centres will be opened during the next two years.

Aparup Sengupta, global chief executive officer and managing director of Aegis said the company’s strategy is to ensure that people calling the centres get an excellent experience. ”.. and we think that generally, the best way to do that is to have a strong onshore presence, rather than having centres offshore. This approach of setting up greenfield centres in our target markets will be at the heart of Aegis’s plans to further expand in other European countries,” Sengupta said.

Source:http://www.livemint.com/2011/07/14203347/Aegis-to-enter-UK-and-European.html

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Public safety labor deal ends Rohnert Park flirtation with outsourcing

July 14th, 2011

A tentative labor deal laden with concessions from Rohnert Park public safety workers has put to rest a controversial proposal to contract out police and fire services.3

The decision on outsourcing hasn’t been formally announced, but the agreement makes it plain, prohibiting “contracting out” during the two-year contract. Rohnert Park officials also confirmed it Wednesday.

“We’re not going to be going to the sheriff,” said Mayor Gina Belforte.

The concessions, which include changes to benefit plans, will save the city $2.3 million over two years. That will help pull the city back from a financial brink it has perched on for three years.

“It’s tremendous for what it means for the city .

.. we don’t have to worry or talk about bankruptcy,” Belforte said.
Central to the savings are changes to the public safety officers pension plan — a major development for a city struggling under the weight of its employee benefit costs.

Under the new contract, which is retroactive to July 1, all officers will pay their own share of their CalPers retirement plan premium, roughly nine percent of their salaries Previously, the city paid that share. That amounts to a two-year savings of $793,000.

“That puts real cash into the city’s general fund coffers that we can continue to use for funding city services to our residents,” said City Manager Gabe Gonzalez.

That give-back was a major goal of city negotiators during the labor talks, he said: “We knew going in that we had to make some structural changes in the compensation packages of our employees.”

The contract also provides no pay raises.

Source:http://www.pressdemocrat.com/article/20110713/ARTICLES/110719802?Title=Public-safety-labor-deal-ends-Rohnert-Park-flirtation-with-outsourcing

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Repro India Ltd set to buy Macmillan BPO

July 14th, 2011

Outsourced printing firm and India’s largest books exporter, Repro India Ltd, is believed to have bought a controlling stake in the Indian arm of business process outsourcing firm MPS Ltd, owned by UK-based publisher Macmillan.

Shares of MPS spurted 13.3% on the buzz to Rs45.90 apiece on the Bombay Stock Exchange while the stock of Repro, which counts Penguin Books, Pearson and Oxford University Press among its clients, rose 8.45% to `146.95 at close on Wednesday.

Macmillan holds 61.46% in MPS. Based on the firm’s Wednesday’s market capitalisation of `77 crore, the promoter holding would be worth as much as Rs47.3 crore. A further 9% equity is held by Macmillan Staff Trust.

DNA could not immediately verify the premium at which Macmillan was selling its ownership stake in MPS.

A Repro India spokesperson declined comment. The company, after calling a press conference to announce a ‘strategic deal with a global publishing firm’ on Thursday, cancelled it citing ‘unavoidable circumstances’, perhaps referring to the Mumbai blasts.

MPS could not be reached for a comment.

Ernst & Young, which has a mandate for finding a buyer for MPS, also declined to comment citing non-disclosure agreements.
The MPS deal would give Repro a chance to diversify its portfolio of services, according to analysts who track the third-party printing and publishing industry.

“Repro is heavily focused on printing services. In fact, they recently went in for huge capacity addition at their Surat facility,” said an analyst, who did not want to be named. “Given the way newsprint prices are rising and the fact that plain-vanilla printing service has become commoditised, especially with increasing competition from China, Repro had to do something.”

As MPS leans more towards pre-press publishing services, its portfolio aligns perfectly with that of Repro, making it a win-win situation for both parties.

The main competition for the Repro-MPS combine would be from New York Stock Exchange-listed RR Donnelly & Sons Co, which acquired India-based outsourced printing and publishing services firm Office Tiger in 2006.

However, as MPS ceases to be an arm of Macmillan, the BPO is likely to get more business from rival publishing houses of Macmillan, which may have been reluctant to engage with the subsidiary of a rival earlier.

Repro had revenues of Rs260 crore in the year to March 31, while MPS recorded sales of Rs128 crore during the same period.

Last week, in another major private equity exit in the Indian publishing sector, Carlyle sold its ownership in Chennai-based publishing services firm Newgen Knowledge Works Pvt Ltd to a consortium of private equity and venture capital firms including Franklin Templeton Private Equity Strategy, Aureos South Asia Fund and ePlanet Capital for an undisclosed sum. Media reports had put the value of the Newgen deal at Rs100 crore.

Source:http://www.dnaindia.com/money/report_repro-india-ltd-set-to-buy-macmillan-bpo_1565533

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