Posts Tagged ‘India’

Huawei enters IT services with telecom projects

September 19th, 2014

Telecom networking giant Huawei has entered IT services, a shift from its hardware-focussed strategy which will eat into the marketshare of Indian software exporters, especially in telecom-related projects.Outsourcing10

The world’s largest privately held technology company is using its India R&D centre to take up projects involving managing of telecom infrastructure and their networks, thereby treading on the bread-and-butter businesses of Indian IT exporters. When contacted, Wilson Wang confirmed the development and told BusinessLine that engineers from India have started doing projects onsite and offshore for its clients such as China Mobile, China Telecom and others.

“Our 2,700 Indian engineers are paving the way in services, working on areas such as Ring Back Tones, cloud computing and agile software development, which helps telcos to provide different solutions to their customers” he said.

Huawei started off making telecom equipments such as routers and switches for telecom operators globally and within a span of a decade, the company gained significant marketshare from competitors like Cisco and ZTE. This development also underscores the ambition of Huawei, as it branches out into services, especially with global client base, noted Sanchit Vir Gogia, Analyst at Greyhound research.

The company, which started off selling networking equipment to Chinese telcos, now counts Mobily, MegaFon, Etisalat as their customers. “We already have an existing installed base of products that telecom companies use and services is our next frontier,” explained Wang. Also, services an area where Chinese companies have been laggards when compared to their Indian counterparts who have exported $75 billion worth of software in the 2014 fiscal year.

For a decade-and-a-half, Indian IT exporters have been trying to make a mark in the Chinese market, with the likes of TCS, Infosys, Wipro and others have subsidiaries in cities like Shanghai and Shenzen. However, they have not been able to make much inroads and almost all of these companies contribute a fraction of its overall turnover, according to company data. In a bid to spruce up revenues from China, TCS last year, Tata Information Technology was merged into TCS China.

Accroding to analyst data, global telecom outsourcing market is estimated to hit $76 billion by 2016.


Infosys Seeks More European Acquisitions, Executives Say Company’s Recovery Plan On Track

September 16th, 2014

Infosys Ltd., India’s second-largest IT services provider, will likely look at acquisitions in Europe with a greater sense of urgency in the second year of its three-year recovery plan, top executives told investors on Monday.outsourcing51

The Bangalore-based company, under new leader Vishal Sikka, is also looking to innovate and industrialize its bread-and-butter outsourcing business — automating large chunks of data center management, for instance — to differentiate and free itself for higher-margin services, Chief Operating Officer Pravin Rao said.

“Irrespective of the macroeconomic environment,” there is growing momentum of companies in continental Europe to be “more open” to awarding IT contracts to Indian service providers, Rao said at a conference organized by brokerage CLSA, in Hong Kong.

Britain is already the second-largest market for India’s top IT providers, but language and cultural barriers in countries like France and Germany, which have a strong preference for dealing with local sales people and consultants, and more restrictive labor laws, have typically prevented Indian IT companies from making serious headway in these markets.

Many European companies “have never experimented with pure-play players like us” Rao said, referring to India-based companies specializing in IT-offshoring, adding that acquisitions have begun to change that, especially in the last two years. Therefore, purchasing local companies to quickly build presence will be a “critical element” of Infosys’s strategy in Europe, he said.

Chief Financial Officer Rajiv Bansal added: “Continental Europe is one area where to build up your local talent and local pool, if we have to do only through organic means, it would take much longer time, so we would definitely look at companies with front-end there.”

Bansal is also chairman of Infosys Lodestone, a subsidiary created out of Lodestone Holding AG, the Zurich, Switzerland-headquartered consultancy that Infosys purchased in 2012, adding some 750 specialists in business management software.

Bansal said Infosys now had much greater control over the cost of doing business compared to about three years back, allowing the company to take faster decisions on investments such as acquisitions. Infosys has no debt and close to $5 billion in cash reserves.

“Not doing anything is not a choice anymore,” Bansal said.

A strategy to chase a greater proportion of revenues from proprietary software distracted Infosys from IT outsourcing — maintaining computer systems and software applications, an increasingly commoditized area — costing it market share and predictability of business.

CEO Sikka, former head of technology at business software giant SAP SE, was appointed to lead Infosys by founder Narayana Murthy, who articulated a three-year plan in June 2013. The plan comprises reducing costs, winning more large outsourcing contracts, and fulfilling those orders more effectively.

Sikka has started with attempts to get Infosys’s more than 160,000 staff more involved in the turnaround — attrition, at 19 percent, is the worst among the top three Indian IT firms — and plans to use at least $100 million to engage with technology startups, whose intellectual property could help accelerate Infosys’s growth.


Asian Countries Top List of Outsourcing Destinations

September 16th, 2014

India, China and Malaysia are the top countries chosen by multinational firms to outsource operations overseas, according to a survey by consulting firm A.T. Kearney.outsourcing54

Asian nations topped the A.T. Kearney Global Services Location Index, which measures the offshoring potential in 51 countries based on financial attractiveness, people skills and availability and business environment.

Indonesia, Thailand and the Philippines were ranked fifth, sixth and seventh in the list; Thailand and the Philippines improving their rank from last year.

The A.T. Kearney study is aimed at helping companies make location decisions, especially back-office functions, such as information technology and business-process outsourcing, it said.

Mexico came in at No. 4, Brazil was No. 8 and Egypt came in at No. 10. Bangladesh debuted on the list at No. 26.

India “is unrivaled in both scale and people skills” and leading information technology services firms are expanding their traditional offerings to include research and development, product development, and other niche services, A.T. Kearney said.

As China’s economy moves more towards services, advanced analytics and information technology businesses are rising. However, rising wages are limiting cost competitiveness, especially on lower-end functions, A.T. Kearney said.


Gislen to double head count in India

September 12th, 2014

Swedish IT outsourcing firm Gislen Software is planning to double its head count in India to 100 from 50.outsourcing50

Founded in 1994, Gislen Software is focused on exports to Scandinavia. It has competence in areas such as public transportation and embedded systems, among others.

The firm has a facility at Madras Export Processing Zone near here, and has completed 20 years in India.

“We have grown from a 3-people start-up into an agile company focused on niche applications in the past 20 years,” Mikael Gislen, Managing Director and majority stake holder of Gislen Software, said.

The company counts TNS, ABB, SKF, Scandinavian Airlines, Swedish Match and PostNord as its top clients.

Mr. Gislen said the firm’s current facility could house 80 people, and it would be looking at an extra facility within MEPZ or in the neighbourhood.

Mr. Gislen also said that low attrition had also helped the company.


TCS Expands IT Education Program to 11 U.S. Cities

September 9th, 2014

Indian outsourcing giant TCS says it has expanded its IT education program to 11 cities across the United States and the Canadian city of Toronto.stem
Known as goIT, the program is designed to provide hands- on technology education to high-school students so as to encourage them to launch a career in lucrative information technology sector.

Since inception in 2009, TCS goIT has engaged more than 7,500 students across 50 school districts. The results so far have been encouraging, said the IT firm headquartered in Mumbai, India, with goIT schools reporting a 27% increase in high school students choosing STEM disciplines in college.

As part of the program, TCS volunteers host workshops, teaching basic programming to open source 3D modeling.

“STEM education is necessary to ensure that each and every child is prepared for a 21st century global economy,” said U.S. Congressman Michael M. Honda (CA-Silicon Valley). “Programs such as goIT provide our students the tools and opportunities to succeed and compete for quality jobs.”

According to the U.S. Bureau of Labor Statistics (BLS), there will be two jobs available for every graduate with a Computer Science (CS) degree between 2013 and 2023, and more than 1.4 million jobs created by 2020 that require CS and programming skills – but only 400,000 CS college graduates to fill those jobs. Currently, less than 2.4% of U.S. college students graduate with a degree in CS, with just 12% of CS degrees awarded to women.

Furthermore, nine out of ten schools do not even offer computer programming classes, and in 30 of 50 states Computer Science does not count towards high school graduation in math and science requirements.

This October, goIT will launch an in-school program in Canada, with grade nine students from five high schools learning to develop apps.

Meanwhile, UST Global, another IT firm from India, is also providing STEM education to women across the United States.


Outsourcing And BPO Projects From Philippines Are Coming Back To India

August 28th, 2014

Philippines has realized that Outsourcing is not just about English speaking; but it involves several more factors as well. In a major fight back demonstrated by Indian BPO players, projects are now returning back to India from Philippines as American and European companies discover that their expectations are not being met there.outsourcing23


In the month of April this year, The Associated Chambers of Commerce and Industry in India (Assocham) notified us that India is losing it’s steam in the outsourcing industry as countries such as Philippines may take away upto 70% of businesses from India.

The notification clearly stated that, “It is estimated that in the ongoing decade India might lose about $30 billion in terms of foreign exchange earnings to Philippines which has become the top destination for Indian investors, thus the need to reduce costs and make operations leaner is increasingly becoming significant across the BPO industry.”

Not only Indian investors but MNCs based in America and Europe have started preferring countries in East Europe and Philippines along with Malaysia and Thailand to outsource their projects as the spoken English of citizens of these countries are neutral and easily understood by Americans.

As per the warning, “Employees in Philippine call centers speak English fluently with a neutral accent which is what customers look for and that is something missing in Indian accents.”

Indian Cities Slip in Ranking of Outsourcing Destinations

Tholon, which is a reputed advisory for outsourcing companies all over the world released their annual ranking of the top outsourcing destinations. Although India secured top spot, but several important Indian cities lost their rankings as cities in Philippines such as Manila and Cebu quickly climbed the charts, and several major outsourcing contracts were shifted from India to these locations owning to lower costs and better ‘English speakers’.

Not only Philippines, but cities in Vietnam (Hanoi) , China (Beijing, Shanghai, Shenzhen), Singapore and Hong Kong emerged as the new destinations for outsourcers. Indian cities such as Mumbai, Chennai, Gurgaon and Pune lost several places in the rankings and the Indian BPO industry started to feel the heat.
The Fight Back of Indian BPO Players

Yes, speaking neutral and fluent English is important for any outsourcing projects, but besides that, there are several other factors which contribute to the success of such campaign. To start with, having technical knowledge certainly helps, as most of the outsourcing projects belong to the technical industry.

Then there is sales skill – ability to understand the customer, perform some basic sales evaluation techniques and pitch the right product. Being able to calculate and display analytical skills to solve business problems along with the ability to ‘write’ good English. Today, major companies are looking for customer support experts who can talk and write both at the same time.

It seems that BPO employees in East Asian countries such as Philippines and Vietnam are miserably falling short on these skill sets, as attrition rates are climbing as high as 60% in some big companies.

As a result, companies are now turning back to India, where all the above mentioned skills are found easily, and attrition rates are lower as well.
A senior Vice President at Consultancy firm Gartner recently said, “India has always been a large delivery centre with size and the ability to scale and we are seeing the pendulum starting to swing back to India.”

Sandip Sen, CEO of Essar Group’s BPO arm Aegis shared, “We have a large e-commerce company that asked us to move some jobs to India because there are better skills here to both sell and upsell services. We moved 600 jobs to India from the Philippines for this client,”

Another senior manager at a Call Center in Philippines said, “It will not all move back, because companies have invested in centres in the Philippines. But now India as an option is back on the table and clients are looking at it, which was not the case two years ago. Some incremental work is definitely coming here.”

KS Viswanathan, vice-president at industry body Nasscom said, “The Philippines had an edge in pure voice customer service. But if you have technology-enabled services for customer support, or for services like technology support, for that we see the centre of gravity moving back here,”

Telstra and BestBuy are other outsourcers who have moved back major projects from Philippines to India, as sales skills of Indians are much better than those from Philippines.

The writing is clearly on the wall now – Outsourcing has evolved, and so has the skill set requirements. There is a reason India has outpaced other Asian countries in the IT industry, and the same reason is now helping us to regain lost ground in Outsourcing as well.


Indian IT firms eye opportunities in Japan

August 27th, 2014

Nasscom to lead delegation to Tokyo following Modi’s visit this week
Information technology industry body Nasscom is taking a delegation to Japan in the coming week to coincide with the Prime outsourcing17Minister’s visit to the country. The delegation will interact with the industry leaders of Japan and talk on business opportunities for IT companies in both the countries. In an exclusive interview with BusinessLine, R Chandrashekhar, President, Nasscom, shares more details. Edited excerpts:

What would be the broad highlights/ agenda for this trip?

Indian IT provides a great value proposition for Japanese companies to fuel their innovation at competitive price by leveraging Indian talent in their global sourcing model. However, penetrating the second biggest IT services market in the world continues to be a major challenge for the Indian IT companies. Given the challenging situation, Japan considers India as one of its preferred partners and is warming up for much greater partnership post free-trade agreement between two nations. To further address these challenges, Nasscom is organising a delegation visit to Japan. The agenda of the delegation is to create awareness among the local companies about India and the Indian IT capabilities, as well as identifying potential business opportunities for our members.

How many people/ companies is part of the delegation?

Delegation will consists of over two dozen executives of around 20 companies specialising in offering IT outsourcing, business process management, engineering research and development — some of whom are based in Japan and some are travelling from India to be part of this trip. Delegation has a good mix of big and small companies covering spectrum of services.

The Prime Minister is also visiting Japan around that time (August 30 to September 4) so do you think this visit would bring in positive responses?

Japan is an important geography for the Indian IT-BPM Industry, and Nasscom considers it as one of the next growth geographies. Economic and political relations between the countries have always remained warm.

And, with the Prime Minister Narendra Modi’s emphatic win, the focus is back on relations between these two large economies of Asia. Therefore, the PM’s proposed trip to Japan will help strengthen the bilateral ties between India and Japan. Being a pro-business administration, this visit will additionally provide the necessary push for enhancing business potential between the two nations and will give India an opportunity to establish right value proposition and build trust.

Nasscom hopes to leverage the political goodwill created by the PM’s visit into more business opportunities and considers this the right time for India to make a strong pitch to Japanese corporations to move beyond in-sourcing and adopt outsourcing and leverage more of Indian talent in their global sourcing model.

What are your expectations from the Japanese firms as well as their Government?

Japanese companies are looking for high quality, proven and low-cost sourcing destinations as well as newer markets, which is provided by the Indian service providers.

Some of the largest companies from Japan already recognise this and are warming up to leverage Indian IT by partnering with Indian companies in Japan or by making direct investments into India by setting their own global in-house centres (GICs) to fulfil their IT and globalisation needs. Governments of India and Japan are aware of this opportunity for a strategic partnership and are facilitating increasing number of joint declarations, delegation visits and other business events between the two countries.


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