Posts Tagged ‘BPO’

Detusche Bank extends Accenture BPO procurement contract

July 3rd, 2015

Accenture (ACN) today announced a five-year contract extension with Deutsche Bank to continue to provide procurement business process outsourcing (BPO) services globally to the bank. The extended agreement is designed to reduce operational costs, enhance spending control and streamline sourcing and procurement services of Deutsche Bank.Outsourcing21

Accenture is a member of Deutsche Bank’s Supplier Partnership Programme which was successfully launched in June 2014 and concentrates the most strategic vendors based on business impact across all categories of the bank.

Under the original contract signed in 2004, Deutsche Bank outsourced its procurement operations and accounts payable processing to Accenture, as well as the maintenance of its procurement information technology (IT) system. The new contract extends the initial agreement, which was scheduled to expire in December 2016, through the end of 2021.

In addition to continuing to provide Deutsche Bank with procurement operations and accounts payable processing services, Accenture will further automate the source-to-pay process, including invoice processing and contract compliance management. Accenture will also migrate Deutsche Bank’s current on-premise procurement IT platform to an on-demand procurement solution from Ariba, an SAP company.

“We extended our relationship because Accenture understands how to derive real financial benefits and business value from sourcing and procurement,” said Mark Loring, Head of Source-to-Pay and Travel Operations, and John Goyanes, Head of Purchasing, Deutsche Bank. “The contract extension positions Accenture as one of our few strategic business partners, and we can now leverage their enhanced sourcing capabilities to accelerate the source-to-pay process with strong compliance, and ultimately work towards meeting our clear business objectives, including sustainable cost savings targets.”

Julian Crossley, a managing director within Accenture Operations, said, “Procurement organizations, specifically in the banking industry, are under increasing pressure to deliver cost efficient and effective source-to-pay operations whilst maintaining high levels of compliance. In an ever-changing business landscape, our robust yet flexible services offerings create the foundation that will enable us to continue helping the bank meet its goals.”

“Our BPO contract extension with Deutsche Bank is a testament to the business value Accenture is able to create,” said Julian Skan, a managing director in Accenture’s Financial Services operating group and the client account director for Deutsche Bank.

Source:http://www.finextra.com/news/announcement.aspx?pressreleaseid=60333

Getting A Piece Of Business Process Outsourcing

June 25th, 2015

The intersection of technology and globalization has changed the way business is done and created new business opportunities in the international marketplace.Outsourcing22

Business process outsourcing (BPO) has evolved with time and the rampant innovation in technology. The BPO trend is accelerating. It is a subset of outsourcing that involves the contracting of the operations and responsibilities of a specific business process to a third-party service provider. Originally, outsourcing was associated with manufacturing firms, such as Coca-Cola, that outsourced large segments of its supply chain.

BPO is typically categorized into back office outsourcing, which includes internal business functions such as human resources or finance and accounting, and front office outsourcing, which includes customer-related services such as contact center services. In addition, other outsourcing segments within the global industry include business services, energy, technology, healthcare and pharmaceuticals, retail, travel and transport, and telecom and media.

The revenue of the global outsourced services industry rose steadily year over year from $45 billion in 2000 to just under $100 billion in 2012.

India is a clear leader in this area, offering a highly skilled, educated, cost effective, English-speaking labor pool. Still, many organizations are understandably apprehensive about having people on the other side of the world support critical business functions. However, some of the best outsourcing providers have mitigated the risk and addresses the concerns that clients may have about placing their work offshore through their innovative project management strategies.

WNS Holdings (WNS) operates in two segments: WNS Global BPO and WNS Auto Claims BPO. Its clients are primarily in the travel, banking, financial services, insurance, healthcare and utilities, retail and consumer product industries. WNS Global is a global business process management company headquartered in Mumbai, India. It has more than 29,000 employees working in 37 “delivery centers” across the world, including India, the U.S., United Kingdom, China, Costa Rica, Philippines, Poland, Romania, South Africa, and Sri Lanka.

Another company that has embraced the BPO model is Accenture (ACN). One of the top multinational management consulting, technology services, and outsourcing company, ACN reported revenues of over $30.0 billion with approximately over 330,000 employees, serving clients in more than 200 cities in 56 countries. In 2012 Accenture had about 80,000 employees in India, more than in any other country, about 40,000 in the US, and about 35,000 in the Philippines.

While there has been push back from U.S. consumers regarding poor service at certain international call centers, it is clear to me that the more a company is willing to think globally, they open themselves to greater profits. The BPO model should be expected to grow for years to come.

Source:http://www.forbes.com/sites/greatspeculations/2015/06/22/getting-a-piece-of-business-process-outsourcing/

Pharma outsourcing accounts for 75% of Indias healthcare BPO market: Study

June 24th, 2015

At USD 2.5-3.1 billion (bn), pharmaceutical outsourcing market (excluding contract manufacturing services) accounts for about 75% of the India’s Outsourcing20medical process outsourcing (MPO) segment which is currently estimated at USD 3.3-4.2 billion, according to a just concluded Assocham-EY joint study.

”While the payer outsourcing market constitutes USD 700-900 million (mn) of India’s MPO market, the provider market accounts for the remaining share of about USD 100-200 million,” noted the study titled ‘Medical Process Outsourcing in India,’ jointly conducted by The Associated Chambers of Commerce and Industry of India (Assocham) and global professional services organisation EY.

The recent US regulation on Patient Protection and Affordable Care Act (PPACA) together with the proposed introduction of ICD-10 standards have given impetus to the Indian MPO market. Besides, domestic players are also gradually moving up the value chain in terms of service offerings while maintaining their cost competitiveness.

”All of these combined will give a boost to the MPO market, with payer BPO market likely to grow at about 10% year-on-year (Y-o-Y) in the next three to four years globally, provider outsourcing at more than 30% during 2011-2016, and the Contract Research Organisations (CROs) market at 18%-20% in the coming years,” highlighted the Assocham-EY study.

”We believe that there has been an ample push from healthcare payers, providers and pharmaceutical companies to move non-core processes to third-party service providers, and India has been one of the leading destinations for outsourcing in this space,” said D.S. Rawat, secretary general of Assocham.

”India has emerged as the second largest destination after the US in the healthcare outsourcing space. The growing ability of Indian players to analyse big data, discover hidden patterns and unknown correlations are driving new service offerings in this market,” said Milan Sheth, Partner and Technology industry leader, EY India.

Overall, Indian BPO industry stands to gain from the growing demand in healthcare outsourcing. An evolved medical education system and its established prowess as a hub for outsourcing give India an inherent advantage.

Factors like a mature pharmaceutical and medical education system, large English-speaking population, low cost base, large talent pool and diverse set of business process outsourcing (BPO) providers including local and multinational BPO companies are driving outsourcing in healthcare in India, noted the study.

Besides, rising demand for high-end healthcare facilities and multi-specialty hospitals, established medical and central lab infrastructure and training centers is contributing to the growth of healthcare and life sciences industry thereby fuelling the domestic demand for medical process outsourcing, it added.

In order to fuel growth in MPO sector, the Assocham-EY study has suggested the government to focus on implementing data privacy laws, introducing proper regulations around intellectual property and patent laws, and give a boost to education to help bridge the skill gap.

Although, Indian regulatory environment has been constantly evolving, the challenges around privacy laws, intellectual property laws and changing clinical trial laws continue to exist.

A favorable and stable regulatory environment coupled with increased transparency is critical for growth in this sector, according to the Assocham-EY study.

Source:http://www.myiris.com/news/sector/pharma-outsourcing-accounts-for-75-of-indias-healthcare-bpo-market-study/20150623185657199

CVC leads race for $400m Serco arm

May 27th, 2015

CVC Capital Partners, a global private equity house managing $71 billion in funds, has emerged the preferred bidder to acquire the Indian unit of business process outsourcing (BPO) major Serco Plc, valued at about $400 million, or Rs 2,500 crore, multiple people familiar with the matter said.Outsourcing7

CVC Capital and world’s largest private equity manager Blackstone Group had fired binding offers to acquire Serco’s Indian operations (formerly Intelenet) last month. Blackstone was making a strong bid to buy back Intelenet which it sold to Serco for $634 million four years ago, TOI reported in February this year.

In context, CVC Capital’s emergence as preferred bidder is surprising given that Intelenet still garners almost 15% revenue from some Blackstone portfolio companies like Hilton Hotels and Travelport. “CVC Capital is clearly the top bidder to clinch the deal, though Blackstone remains in the fray,” one of the sources cited earlier in the report said.

Senior executives from CVC Capital and its portfolio company — Philippines largest BPO company SPi Global —were in India recently to conduct due diligence on Intelenet’s centers and interact with the management. “We do not comment on transactions,” Serco Plc spokesperson Marcus Deville said in an emailed response. CVC Capital Partners could not be reached for immediate comments.

Sources said CVC Capital is exploring the possibility of merging Serco’s Indian unit with SPi Global to expand its footprint in India and the UK. The bid for Intelenet comes almost two years after it acquired Philippines’ largest BPO company SPi for over $300 million. This deal will be CVC Capital’s their first big bet on the Indian market, if they close the transaction without hiccups.

SPi operates an offshore-based model primarily serving US and Europe-based customers with more than 20,000 employees worldwide across 17 delivery locations in six countries including the Philippines, India, US, China, Vietnam and Nicaragua. It also operates a voice customer relationship management (CRM) business servicing both domestic and international customers.

Serco runs India’s third largest BPO operations after Genpact and TCS, employing over 40,000 people. It caters to customers in banking and financial services, insurance, retail, travel, telecom, healthcare, utilities and media. In November last year, Serco had announced it would divest private sector BPO businesses as part of a business restructuring plan that would see it focus on being a business to government providers across five core areas. The sale proceeds would be used to lower the net debt of the parent company.

Source:http://timesofindia.indiatimes.com/tech/tech-news/CVC-leads-race-for-400m-Serco-arm/articleshow/47435976.cms

MNCs bet big on their India IT centres

May 26th, 2015

Multinational firms continue to prefer setting up global captives, or global in-house centres (GIC), in India. According to a report, in the past two years, 70 companies set up GICs in India, taking the number to more than 1,448, with a headcount of 74,500.Outsourcing1

GICs are an integral part of the Indian IT-BPO (information technology-business process outsourcing) sector. GICs have been viewed as cost-saving centres for parent organisations. But, with the growth of the global sourcing sector, GICs in India are evolving into centers of excellence, profit centres, and program management offices.

Over five years, around 220 GICs have been set up, with firms from Europe and Japan showing higher inclination, said the study by Zinnov. These GICs will hit a revenue of $20 billion a year in 2015, a growth of 11 per cent over FY10. Of this, almost 52 per cent will come from software product development and embedded engineering services; 25 per cent from BPM (business process management) and 23 per cent from IT.

“Year-on-year, we have seen an increase in the setting up of GICs in India. Barring a year or two, the growth has been positive. In the past two years, 70 companies set up their GICs in India and this year, about 20 companies are in different stages of evaluation for setting up of GIC in India,” said Karthik Ananth, director, Zinnov.

Ananth cites growing instances of multinational firms from Europe and Japan wanting to set up centres in India. The total number of GICs from Germany has gone up from 28 to 39 from FY10 to FY15. In the case of Japan, the number of centres has gone up to 40 from 24 over the period. “While North America will continue to be the largest in terms of centres in India, firms from Continental Europe and Japan have also shown interest. Several firms from China are looking at India,” said Ananth.

He added that new players do have an idea of working with Indian IT players, but setting up a GIC in India is new for them.

“Earlier, an IT budget would have 70 per cent for maintenance work, which was outsourced; 20 per cent for growing IT; and 10 per cent for transforming the IT infrastructure. This break-up has changed: 50 per cent for maintenance; 30 per cent for growing IT; and 20-25 per cent for transforming the IT infrastructure. It is in this last segment that firms are looking at what stays inside in GICs and what gets outsourced,” added Ananth.

The report also points out that many GICs in India are enabling digitisation efforts of enterprises. India is emerging as the world’s leading centre for digitisation, with the world’s second-largest pool of digital talent and practitioners. Tesco, Honeywell, Schneider Electric, and Wells Fargo India’s centres are leading efforts on mobility. Microsoft, Amazon, Google, and IBM’s centre in India are leading efforts on machine learning.

MasterCard set up its GIC in 2013. The GIC will be an extension of the MasterCard Advisors’ analytics group in New York, which leverages big data and analytics to solve business challenges.

Singapore-based Redmart, with a revenue of $2 million in 2014, set up its GIC in 2014 to act as an analytics hub for making business decisions.

“India is no more just a outsourcing base. It is a huge market. So, for firms that are tech-enabled such as Uber and LinkedIn, India is a huge market. Twitter acquired Zipdial. With that they got a vibrant engineering ecosystem. It is natural that they will want to leverage this for growth,” said Ananth.

Ananth says only because the number of GICs are going up does not mean the role of third-party IT vendors will get affected. “Though firms are transforming, it does not mean everything changes. A lot of things will continue and for that you need partners. Also, there is a preference for a hybrid model,” he says.

But skill sets will be a challenge. The IT sector has created a skill ecosystem that is outside university education. Ananth believes it will be crucial for this ecosystem to grow and nurture relevant skills.

UNDERSTANDING GICs
$20bn: GIC revenue in FY2015, a CAGR of 11 per cent over FY10
745k: Number of employees; 5x growth since FY03
1,000: MNCs have GICs in India; 220 new MNCs set up GICs since FY10

WHAT IS GIC?
Global in-house centres (GICs) deliver IT-BPO services. These are set up by multinationals in countries where costs would be low. But GICs in India are evolving into centres of excellence, profit centres, and program management offices

Source:http://www.business-standard.com/article/companies/mncs-bet-big-on-their-india-it-centres-115052501487_1.html

India-based vendors bag 25 percent of IT deals: IDC

May 25th, 2015

India-based outsourcers bagged nearly 25 percent of the top 100 IT deals in 2012-14, global market research firm International Data Corporation (IDC) said on Wednesday.
Outsourcing50
Analysis of outsourcing deals worldwide in the past three calendar years revealed that top five vendors captured 50 percent of the total contract value as against 43 percent in 2013.

The top five top vendors with captive units are IBM, which bagged deals worth $13.8 billion, followed by CGI with $2.8 billion, Cognizant with $2.7 billion, Capgemini with $2.6 billion and Wipro with $2.3 billion.

“We have also seen a shift in the deals to commercial/private sector from state-run enterprises (pubic sector) in 2014, while an average deal size continued to shrink with fewer mega deals,a IDC vice-president for outsourcing & offshore services David Tapper said in a statement.

Noting that India-based global vendors were making inroads into the global top 100 outsourcing deals, he said leveraging the offshore model, incorporating new service delivery, investing in analytics, social media and mobility and local capabilities have enabled them to compete with established players in the outsourcing industry.

The analysis of top 100 deals across IT outsourcing and BPO (business process outsourcing) services markets provides guidance to outsourcers and service providers looking to optimise potential opportunities in capturing deals that rank at the top of the outsourcing market.

Source:http://www.business-standard.com/article/news-ians/india-based-vendors-bag-25-percent-of-it-deals-idc-115052001660_1.html

Sale of Serco BPO hits pricing stumbling block as PEs drop out

May 19th, 2015

The sale of Serco BPO, India’s third-largest business process outsourcing company, has seen some private equity firms drop out of the bidding, as the price being asked for by the BPO’s UK-parent is too high, leaving Blackstone as the main private equity firm in the fray, sources with direct knowledge of the matter told ET. Outsourcing39

Serco BPO, which has about 60,000 employees globally, was put up for sale by Serco Group late last year, to help fill a £1.5 billion hole in its balance sheet. The process was expected to be completed by May, but it may take a little longer, as buyers and sellers haggle over price.

“Serco Group has set a threshold that is just too high. Apax has dropped out and, though Blackstone is the front-runner, the deal over there too is being held up on the price,” a source with direct knowledge of the matter said.

Part of the problem is the kind of haircut Serco Group will have to take on the sale. It bought Intelenet, as the firm was known, for over $630 million in 2011. Nearly four years later, it is being valued at a little over $400 million.

“The parent is trying to lessen the blow they will have to take on the sale. It’s not an easy negotiation. It makes it worse than Blackstone is trying to buy the unit back for much less than it sold it to Serco for. Serco is looking at a price closer to $500 million,” a second source with knowledge of the matter said.

He added that it was unlikely the sale would fall through entirely because Serco Group is a ‘very motivated seller’. CVC Capital Partners is also in the final stages of the process.

Serco had not responded to a request seeking comment for this story at the time of going to press. Apax declined to comment and Blackstone could not be reached. Serco has mandated Citigroup to manage the sale. Blackstone had backed management buyout of Intelenet in 2007, with investment of about $260 million. It then sold the business to Serco.

In a strategy meeting in March, the group told analysts the process of selling its Entertainment and Leisure was ‘well advanced’ and in its Great Southern Railway business has confirmed diligence and definitive documentation is being negotiated.

“We think Serco could consider selling the Indian and UK BPO private sector BPO businesses separately,” Robert Plant, an analyst with JPMorgan, said.

Source:http://economictimes.indiatimes.com/tech/ites/sale-of-serco-bpo-hits-pricing-stumbling-block-as-pes-drop-out/articleshow/47336602.cms

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