Human Resources (HR) department heads, particularly of the Business Process Outsourcing (BPO) firms are facing the toughest time due to the sudden jump in the attrition rates.

Even the large BPO firms are hit. During the April-June quarter of the financial year 2010-11, attrition rate in TCS BPO was around 20 per cent, and the same in Wipro was around 16 per cent respectively.

According to HR consulting firm Talentar Managing Director Abhishek Udayai, “The job market is opening up and this has become a worry for many BPO firms. BPO is the highest job provider in the IT industry and the attrition rate is also very high in this segment.”

However, headhunters feel that BPO sector which was considered as a stepping stone to an IT or corporate career is slowly transforming and the industry has gone up the value chain.

The industry has matured significantly and is one of the fastest growing sectors of India, employing 7,68,000 professionals which also pose a challenge of getting right talent. “The workforce is the backbone of the BPO industry and the attrition rates have becoming alarmingly high for the industry.

Most of the companies are promoting within to ensure that talent remains,” said Kelly Services India Managing Director Kamal Karanth. HR firms and companies feel that the high rate of attrition is due to a sudden spurt in the market after dormancy for more than four quarters.

As software companies started hiring engineers, employees in the BPO companies are changing their field to software development. This is also a reason for worry.

CBaySystems VP – HR Sanjay Shanmugaum believes that, “the average attrition rate in the BPO sector is higher than the normal IT industry average. The key challenge faced by employers is the need to retain talented employees.

Attrition is seen high among junior level people.” Many HR heads of the top IT and ITeS companies have come out with new methods to curb attrition. Companies are giving salary hikes and promotions to retain talent to address the problem. They are even signing non-poaching agreements— first time in the history of the Indian IT industry.

According to Patini Computers Senior Vice President and Global Head – BPO Sanjiv Kapur, “Salary hike is not only reason for employees leaving the organisation.

Corporates should provide ample growth opportunities and a well-defined career track for growth.”

Experts believe that the attrition rate will be stabilised after one or two quarters.

Source:http://www.deccanherald.com/content/84978/indian-bpo-facing-huge-churn.html

Outsourcing has become the buzzword of modern business. Entrepreneurs do not want to do any thing other that administrative work. They do not want to be bothered with those jobs. They term those bothering jobs as noncore activities. They outsource these non core activities to a third party so that they can concentrate on strategic issue and issues involving big corporate.

The current trend shows that India and many Asian countries get the majority of the outsourcing market .there are some Latin American centers, however they are pretty insignificant. The Lion’s share of outsourced business comes to India say about 80%.Moreover there is a large pool of educated youth , who cannot succeed in general non BPO jobs .Hence manpower is not a matter of concern. The youth in third world are waiting, for jobs fetching them decent salary. They can work under tremendous pressure and they are well able to complete the jobs according to client provided parameters. So BPO India provides excellent facilities for its clients to do business.

There are a variety of services that business process outsourcing includes and involves. They are to name a few OLTP, banking back office, customer care for telecom, telesales for different processes like mortgage, grants, mobile phones, website redesigning and SEO sales.
Another important reason of outsourced business coming to India is of comparatively low remuneration. since in developing countries the remuneration is pretty low so it has become a very popular destination for global multinational giants.

BPO includes a wide range of services like starting from call center to the transaction processing. Besides this the back office operation, telemarketing, relationship management, billing accounting etc. By outsourcing your businesses processes to the BPO Company you can get a high quality work and service due to the fact that the service providers are well trained and educated. Business process outsourcing services are getting more firm root as the time and days are passing by. BPO services also aimed at providing better delivery service. And BPO Company India provides the best quality service to the clients.

India has become a major market today for businesses processes outsourcing services. There are basically many reasons for these firstly Indian companies are more focused on maintaining the quality and standards of service. Besides this they promise a significant and continuous improvement in quality and improvement. The technical and skilled manpower is another reason for outsourcing of businesses processes to India. Businesses processes outsourcing is a competitive field because it is place where each and every industry has to compete at a global level in terms of services, costs and returns.

And India has become a major market today for back office outsourcing. And there are basically many reasons for these firstly Indian companies are more focused on maintaining the quality and standards of service. Besides this they promise a significant and continuous improvement in quality and improvement. The technical and skilled manpower is another reason for outsourcing of businesses processes to India. Businesses processes outsourcing is a competitive field because it is place where each and every industry has to compete at a global level in terms of services, costs and returns.

Source:http://www.lonad.com/2010/07/23/indian-the-new-destination-for-bpo/

Indian stocks trading on American bourses collectively witnessed a value erosion of $5 billion last week, with IT bellwether Infosys Technologies accounting for nearly half of the total losses.

For the week ended July 16, the 16 Indian entities listed on the New York Stock Exchange and Nasdaq together lost $5.04 billion from their market capitalisation (mcap), with the software major Infosys shedding $2.4 billion from its valuation to $3.3 billion.

Among the 16 companies listed as American Depository Receipts (ADRs) 3 of them including auto giant Tata Motors, telecom major Tata Communications Ltd (TCL) and internet firm Sify Technologies saw a gain in their respective mcap.

Infosys is followed by another IT firm, Wipro Technologies whose valuation plunged by $1.5 billion to a total of $30.38 billion.

Private sector lender HDFC Bank’s valuation fell by $714 million to $21.8 billion, while that of copper producer Sterlite Industries declined by $176.3 million to $2.8 billion.

Meanwhile, Tata Motors emerged as the biggest gainer, which saw its market capitalisation rising by $188 million to a total of $190 million.

On the other hand, valuation of ICICI Bank decreased by $129 million to $21 billion.

IT firm Mahindra Satyam (earlier known as Satyam Computer Services) saw a value erosion of $60 million to $3.4 billion followed by the outsourcing firms Genpact and WNS Holdings, which lost $55 million and $27 million from their valuations, respectively.

In addition, valuations of other ADRs — Pharma major Dr Reddy’s, IT firm Patni Computer Systems, BPO company EXL Service Holdings, Mahanagar Telephone Nigam Ltd and internet firm Reddif.com valuations slipped in the range of $4 million to $24 million.

On Friday the US markets ended in the red, with Dow Jones Industrial Average settling down by 261.41 points at 10,097.90 and S&P 500 fell by 31.60 points at 1,064.88. Besides, tech heavy Nasdaq was down 70.03 points at 2,179.05.

Source:http://timesofindia.indiatimes.com/Biz/India-Business/Indian-ADRs-lose-5-bn-in-a-week-Infosys-top-loser/articleshow/6182871.cms

Outsourcing IT jobs to India has been a trend in the last 10 years and is sure to continue, given the cheap cost of labor and technology-savvy pool of workers available in India. The next time you speak to an Indian tech support guy, consider how fast Indian IT companies have grown. Is now a good time to invest in Indian IT companies?

Five Indian IT companies are listed on US exchanges. NASDAQ listed companies are Infosys Technologies Limited , Sify Technologies Limited  Satyam Computer Services Limited , and Wipro Limited are also listed on NYSE. Patni Computer Systems Limited is the third Indian IT company listed on NYSE.

Infosys Technologies Limited is one of the largest IT companies in India and it employs 113,796 people globally. As on July 15, Infosys stock had the closing price of $59.35 on NASDAQ. The stock’s 52 week price range is $36.43-$64.50. The company’s market cap is $33.89 billion. Infosys is headquartered in Bangalore, India and has offices in 22 countries. It also has development centers in India, China, Canada, Australia, Japan and the UK. The company employs 113,796 employees worldwide. The company’s chairman is N.R. Narayana Murthy and Kris Gopalakrishnan is its Chief Executive Officer.

Wipro Limited is a business conglomerate with leaning toward IT services. The stock is currently trading at $12.90 on the NYSE. The stock’s 52 week price range is $6.83-$14.84 and its market cap is $31.55 billion. Wipro Limited is headquartered in Bangalore, India and employs more than 108,071 people worldwide. The company’s chairman is Azim Premji, who is regularly featured on the Forbes list of Global billionaires.

Satyam Computer Services Limited is currently trading at $5.14 level on NYSE. The company was involved in an accounting scandal in 2009. Subsequently, the company was taken over by Mahindra Group. The new entity is now called “Mahindra Satyam”.

Sify Technologies Limited is an integrated internet, network and electronic commerce services company. The company stock is at $1.40 on NASDAQ and its market cap is $59.95 million.

Patni Computer Systems Limited  is a provider of IT services and business solutions. The company is headquartered in Mumbai, India and has 23 international offices across the globe. It also has its offshore development centers in 8 cities in India. The company stock closed at $23.36 on NYSE as of July 15th. Its market cap is $1.5 billion and the stock’s 52 week price range on NYSE is $10.84-$28.33. The company has made several acquisitions in the US and other countries. It was listed among the “Best 20 Leaders in Financial Services (Insurance)’ in the 2010 Global Outsourcing 100, by IAOP.

Source:http://www.benzinga.com/global/10/07/380274/ride-the-outsourcing-wave-indian-it-companies-on-us-exchanges-say-wit-pti-infy-s

India’s second largest software exporter, Infosys Technologies Ltd., reported quarterly earnings Monday of 57 cents per share, meeting the Street’s consensus view but its inability to keep up with last quarter’s net income leaves some analysts asking tough questions and is prompting investors to dump the stock.

Revenues grew for Infosys  4.8% from last quarter to $1.36 billion, a 21% increase from last year’s first quarter. Net income of $326 million was down 6.6% from the previous quarter but up 4.2% from 2009 comparable quarter. The company projects revenues to be up to $1.4 billion next quarter, and expects fiscal year end consolidated revenues to be around $5.7-$5.8 billion, an estimated year over year growth of 22.4%-23.7%.

Infosys is an important proxy for other IT outsourcing services companies in India such as India’s largest software exporter, Tata Consultancy , because it is the first major company in its industry to report earnings each quarter, explains Cowen and Company analyst Moshe Katri. Katri says that while the currency volatility in the euro and Indian rupee are significant factors, Infosys’ issues this quarter stem from mixed EPS guidance, contract renegotiations with companies like British Telecom, and “playing catch-up with their own spending” Jeffries & Co. analyst Joseph Vafi also points to increased costs as a contributing factor for the negative growth this quarter in addition to a marginally higher tax rate. Vafi believes the numbers being down is not a result of the stock being weak, citing strong volume growth this quarter as an indicator of plenty more outsourcing to be done there.

S. Gopalakrishnan, CEO and Managing Director of Infosys, says that “[the] challenge for the industry is to enhance the investment to grow the business, given the uncertainty in the environment.”In line with the proposed growth, Infosys hired a net 1,026 new employees and added 38 clients in this past quarter, adding to the 113,796 people working Infosys and its subsidiaries in over50 offices worldwide.

Katri and Vafi agree that the company most closely related in this industry is Cognizant , another IT firm headquartered in New Jersey but with operations in India. Cognizant is up 1.43%, or 76 cents, to $54.01 Monday, and is up 19.15%, or $8.68, this year to date. Tata Consultancy sliding 2.15% Monday, or $17.05, to $774.65. Another significant regional competitor, Wipro Limited , is up a penny, or .1%, to $12.96.

Source:http://www.forbes.com/2010/07/13/infosys-earnings-it-markets-equities-india.html?boxes=Homepagechannels

Indian exporters of software and related services are seeking to tap an expected increase in technology spending in the US, their biggest market, but concerns of protectionist barriers in the world’s largest economy are still rife.

Late last month, Congressmen Gary Peters, Tim Bishop and Jerry McNerney proposed another legislation to curb outsourcing to countries such as India. Called the Stop Outsourcing and Create American Jobs Act of 2010, the Bill aims to discourage US firms from shipping jobs overseas.

“Outsourcing has contributed to unprecedented job losses in my home state of Michigan over the past decade,” Peters said in an email on the rationale for the legislation.

Indian software exporters have been hopeful of receiving a boost from the US recovery from recession that prompted US clients to slash technology spending. Industry body Nasscom has forecast that exports would rise to $57 billion (Rs2.65 trillion) in the year to next March from $49.7 billion in the last fiscal.

If enacted, the legislation proposed by Peters, Bishop and McNerney would allow the US government to give preference to firms not engaged in shipping jobs overseas in awarding contracts. It deters US firms from using tax havens and creating jobs overseas by increasing civil and criminal penalties for illegal transactions involving a tax haven country, such as fraud, false claims and tax evasion.

“I don’t believe that the US government should be rewarding companies that move jobs overseas with contracts funded by American taxpayers,” said Peters, a Democratic member of the US House of Representatives. He referred to two non-partisan studies to back his argument. While the Congressional Research Service says 3.4 million service sector US jobs would be outsourced overseas by 2015, the Government Accountability Office (GAO) said in a 2009 study that around 83 of the 100 biggest public corporations have subsidiaries in tax haven countries.

Nasscom has been lobbying with US senators and policymakers for several years now to stop any such legislation from going through.

“Any kind of Bill which penalizes IT outsourcing would lead to distortion in the globalized marketplace,” said Ameet Nivsarkar, vice-president, global trade development, Nasscom. “There have been quite a few Bills aimed at curbing outsourcing that have been introduced recently. The high unemployment rate in the US—9.5% in June—is a big challenge and the government there is trying various ways to create more jobs. But we have to see how many of such legislations are actually passed and become law,” he said.

Infosys Technologies Ltd, India’s second largest software maker, is not feeling the heat of anti-outsourcing sentiment in the US, but is keeping a close watch on the Comprehensive Immigration Reform Bill which yet to be introduced, CEO S. Gopalakrishnan said on Tuesday.

The Bill, being initiated by Senator Charles Schumer, is expected to focus on H-1B and L1 visas given to IT and other professionals and could possibly impose some restrictions on them. Infosys plans to apply for 3,000 visas this fiscal.

“The success of such Bills depends on (the) length to which people would go to stop outsourcing. Barring companies from participating in government contracts could be one of the ways to punish them for outsourcing,” Bala Rajaraman, a partner at consultancy Deloitte, said.

Another cause of worry for the software industry is the American Jobs and Closing Tax Loopholes Act, which is on similar lines as the Stop Outsourcing and Create American Jobs Act. While the former has been passed by the House of Representatives, it is yet to be cleared by the US Senate.

“With the elections to the US Senate scheduled to be held in November, the protectionism sentiment will only rise in the months to come,” said the CEO of a leading business process outsourcing firm, who did not want to be identified.

Source:http://www.livemint.com/2010/07/14220457/Protectionist-US-moves-worry-I.html?atype=tp

New Delhi: Leading Indian IT companies are planning to tap the $380-million low-carbon IT market, which is projected to grow at a CAGR of 40% to $4.2 billion by 2017, according to US-based Pike Research, a clean technology market research and consulting firm.

In 2009, the market included a carbon management software pie worth $132 million, and consulting, implementation and outsourcing services chunk of $248 million. The carbon management software market is expected to grow to $1.2 billion and the consulting, implementation and outsourcing services market is slated to touch $3 billion by 2017.

While Wipro has struck a co-innovation agreement with German software company SAP to develop sustainability and energy management solutions, TCS has entered into a collaboration with UK-based low-carbon advisory firm Xyntéo.

The Wipro-SAP collaboration would seek to ride on the former’s green IT services and the latter’s sustainability performance management and environment, health and safety management applications.

According to Sanjay Gupta, senior vice-president, service products, Wipro Technologies, “Wipro is working with partners like SAP to build a suite of solutions to enable companies follow sustainable business practices for regulatory and reporting compliance needs, and to gain greater efficiency in managing environmental impact.” New solutions would complement Wipro’s sustainability services stack that covers full carbon lifecycle, including measuring, managing and monitoring..

Similarly, the TCS-Xynteo partnership aims to enable companies to cut carbon emissions and increase productivity of their value chains. While making the announcement recently, AS Lakshminarayanan, vice-president & head of TCS Europe, said, “We recognise the need for collaboration to create solutions that address the challenge of global climate challenge by leveraging technology.”

The important role of technology in helping the world to make a transition to a low-carbon economy can be gauged from the fact that smart IT alone has the potential to help reduce global greenhouse gases by 15% by 2020.

And with the Wal-Marts and the Tescos of the world recently taking on carbon emission reduction targets in their supply chains, and countries like the United Kingdom, France, Australia and Japan adopting carbon labels, the role of IT in the fight against climate change only gets bigger. Besides, the low-carbon IT market is bound to get a shot in the arm with even developing countries like China and India committing to reduce their carbon intensity.

Source:-http://www.financialexpress.com/news/Indian-IT-firms-seek-greener-pastures-in-low-carbon-market/644780/

Leading Indian IT companies are planning to tap the $380-million low-carbon IT market, which is projected to grow at a CAGR of 40% to $4.2 billion by 2017, according to US-based Pike Research, a clean technology market research and consulting firm.

In 2009, the market included a carbon management software pie worth $132 million, and consulting, implementation and outsourcing services chunk of $248 million. The carbon management software market is expected to grow to $1.2 billion and the consulting, implementation and outsourcing services market is slated to touch $3 billion by 2017.

While Wipro has struck a co-innovation agreement with German software company SAP to develop sustainability and energy management solutions, TCS has entered into a collaboration with UK-based low-carbon advisory firm Xyntéo.

The Wipro-SAP collaboration would seek to ride on the former’s green IT services and the latter’s sustainability performance management and environment, health and safety management applications.

According to Sanjay Gupta, senior vice-president, service products, Wipro Technologies, “Wipro is working with partners like SAP to build a suite of solutions to enable companies follow sustainable business practices for regulatory and reporting compliance needs, and to gain greater efficiency in managing environmental impact.” New solutions would complement Wipro’s sustainability services stack that covers full carbon lifecycle, including measuring, managing and monitoring..

Similarly, the TCS-Xynteo partnership aims to enable companies to cut carbon emissions and increase productivity of their value chains. While making the announcement recently, AS Lakshminarayanan, vice-president & head of TCS Europe, said, “We recognise the need for collaboration to create solutions that address the challenge of global climate challenge by leveraging technology.”

The important role of technology in helping the world to make a transition to a low-carbon economy can be gauged from the fact that smart IT alone has the potential to help reduce global greenhouse gases by 15% by 2020.

And with the Wal-Marts and the Tescos of the world recently taking on carbon emission reduction targets in their supply chains, and countries like the United Kingdom, France, Australia and Japan adopting carbon labels, the role of IT in the fight against climate change only gets bigger. Besides, the low-carbon IT market is bound to get a shot in the arm with even developing countries like China and India committing to reduce their carbon intensity.

Acknowledging that the use of IT solutions in carbon management is likely to get more traction in coming years, Ashutosh Pandey, CEO, advisory business, Emergent Ventures India, a carbon advisory firm, adds, “IT companies need to focus not only on developing off-the-shelf solutions but also customised company products.”

Rama Vedashree, a vice-president with IT industry association Nasscom, too, says, “In the emerging context, building capabilities and expertise in the carbon space would give Indian IT companies an added competitive edge in the low-carbon space because they have already an advantage owing to their large customer base and deep footprint and the trust they enjoy.”

It may be all the more needed because Indian IT companies will be competing not only with niche players like Hara, CarbonView and Verisae, but also established software and services firms like Accenture, IBM and PE International, which have already taken a headstart in the low-carbon space.

Source:http://www.financialexpress.com/news/indian-it-firms-seek-greener-pastures-in-low-carbon-market/644780/0

* Outsoucers lead on hopes of volume growth in Q1
* June quarter earnings, monsoon key factors – dealer (Updates to mid-morning)

Indian shares were trading 0.5 percent higher on Tuesday, with software outsourcing firms leading the gains, as Asian markets bounced back from early losses and as the revival of monsoon boosted sentiment.

Software majors rose on expectations of good volume growth at its June quarter results, to be unveiled later this month.

“We expect the big three to report strong 5.1 percent to 6.5 percent surge in volumes quarter-on-quarter,” brokerage Edelweiss said in a note, referring to Tata Consultancy Services, Infosys Technologies and Wipro.

By 11:10 a.m. (0540 GMT), the 30-share BSE Index . was trading up 0.52 percent at 17,532.65 points, with 25 of its components gaining.

A revival of June-September monsoon rains, the main source of water for India’s summer-sown crops, also boosted sentiment.

Monsoon rains advanced into its key grain-producing states of Punjab and Haryana, narrowing the shortfall since June 1 to 13 percent from 16 percent earlier.

“Recovery in rainfall is a key positive. Monsoon and June quarter earnings will be closely watched for further cues,” said Neeraj Dewan, director of Quantum Securities.

Edelweiss expects June-quarter earnings growth for Sensex to come at 6.1 percent on a year-on-year basis.
Foreign funds have poured in $6.8 billion so far this year after pumping in a record $17.5 billion in 2009, which had fuelled a rally of 81 percent.

Top IT firm TCS was up 1.9 percent while rivals Infosys and Wipro rose 0.9 percent and 1.4 percent respectively.
Energy giant Reliance Industries, which has the highest weight on the main index, climbed 0.5 percent to 1,073.60 rupees.

Lenders shrugged off a hawkish interest-rate outlook and advanced on hopes that a strong economic growth would boost demand for loans.

A Reuters poll forecast the central bank is likely to raise interest rates again in its quarterly review on July 27, topping up its last Friday’s quarter-point rate hike.

Top lender State Bank of India was up 0.8 percent while leading private-sector rivals ICICI Bank and HDFC Bank climbed 0.7 percent and 0.6 percent respectively.

In the broader market, gainers led losers in a ratio of 1.7:1 in a volume of 147 million shares.

The 50-share NSE index was up 0.5 percent at 5,263.90 points.

STOCKS ON THE MOVE

* Eicher Motors was up 2.5 percent at 954.20 rupees, after VE Commercial Vehicles, the joint venture between the company and Sweden’s Volvo said its trucks and buses sales jumped 43 percent in June.

* Network18 rose 3.1 percent to 161.35 rupees, after it said late Monday it will consider selling its stake in London-listed Indian Film Company Ltd to Viacom 18, a joint venture between its unit IBN18 Broadcast and U.S.-based Viacom Inc.

TOP THREE BY VOLUME

* Spicejet on 29.7 million shares

* Jindal Cotex on 2.8 million shares

* IFCI on 2.7 million shares

FACTORS TO WATCH * For technical analysis double click on www.reutersindia.net * Indian rupee report [INR/] * Indian bond report [IN/] * Dollar and yen gain on renewed caution, Aussie down [FRX/] * Oil extends drop to 4-week low on economic pessimism [O/R] * Asia stocks fall on growth worry; yen climbs [MKTS/GLOB] * Wall St dips on jobs data, worst week in 2 mths [.N] * For closing rates of Indian ADRs INADR

Source:http://www.reuters.com/article/idUSSGE66506H20100706

Obama has won the US Presidential election. Democrats will now occupy the supreme seat of power at Washington for 4 years to come. The election of Obama as US President is sure to cheer many Indians and needless jitters to few others.

There are prominent issues that were a matter of debate till yesterday, will come to the forefront with a renewed force. An issue that really matters every Indian: Will India sustain its privileged position as the outsourcing destination for US industry.

For sure, outsourcing is to catch more momentum, and the winds of change will favor India. Why I am saying this? To put it other way, what makes me to say this? When we find the few fellow Indians getting jittery of Obama coming to power, as they prophesy could spell bad news for BPO and IT firms in India. These needless concerns will appear baseless, if we take an eagle’s [bald eagle] eye at the changes to come.

Obama is no doubt concerned about protecting the interests of US citizens, who have over-flowingly elected him to power. But, so far, his ideas and ideals as expressed at different public meetings never aimed to disturb political stability, world peace and financial strength of US or of any world nation. This is crystal clear.

Market research conducted by international research institutions like Tecnova showed that 82 percent of Indians expressed choice of Obama. The quality work delivered by Indian firms at lowest price tags much to appreciation of US firms puts the seal of assurance that the new administration can never resort to any initiative that jeopardizes US economic interests.

Similar will the deal with issuing of H1B Visas. In the present times when US economy is in prolonged crisis, cheap labor is increasingly in demand more than earlier. This is sure to put pressure on the administration to issue more H1B visas, which major stakes for Indian workforce to gain.

The five IT majors of India – TCS, Infosys, Wipro, Satyam and HCL have more of cheers than of worries in the coming days. Obama has already hinted at what is to come in terms of the administration’s deal on outsourcing.

At the 2008 Democratic National Convention (DNC) Obama has categorically said of stopping tax breaks to companies that are sending jobs offshore, and extend the same to companies who create jobs in America. IF THESE LINES ARE CLOSELY READ, the really spiced meat to come for Indian IT firms becomes evident. Either way Indian IT industry emerges winner.

Source:http://moso-technology.com/blog/2010/07/obama-wins-indian-information-technology-industry-gains/

Hundreds of IT firms, including Indian bellwethers Infosys Technologies and Wipro will remain closed Monday due to the nationwide shutdown against the hike in fuel prices.

“As a precaution, we have given Monday off to our employees working in the Bangalore campus. They will compensate by working on Saturday (July 10),” Infosys Chief Executive Krish Gopalakrishnan told IANS.

The global software major, however, made arrangements for employees working on essential projects and business process outsourcing (BPO) services to work during the day, when the shutdown will be observed from dawn to dusk.

“We have made arrangement for those software engineers handling key projects for overnight stay and transport to essential staff on day shift,” Gopalakrishnan said.

The $4.8-billion Infosys has its largest software development park in the electronics city, about 30 km from here, where about 16,000 employees work in its sprawling campus.

Similarly, Wipro, which has two software development parks in the electronics city and on the city’s outskirts, declared a holiday, directing its employees to report for duty July 10 in lieu of Monday.

“We have declared a holiday for our employees July 5 in view of the nationwide shutdown. They have been asked to work July 10 though it’s a weekend,” Wipro Executive Vice-President Suresh Senapaty said.

The country’s largest IT bellwether – Tata Consulting Services (TCS) was yet to decide whether to give off or not to its employees working in the Bangalore software development centre at Whitefield, about 20 km from the city.

“We will let you know later. There is no decision yet. In case we decide to declare holiday, the employees will be duly intimated by e-mail and sms,” a company official said.

Due to uncertainty of public transport by the state-run Bangalore Metropolitan Corporation (BMTC), hundreds of small and medium enterprises in IT and biotech sectors have extended the weekend holiday to their employees up to Monday.

“With auto-rickshaw and taxi associations deciding to not to ply in support of the shutdown, we have asked our employees to stay back in the absence of official information on public transport being available,” Deepk Chandra of a start-up IT firm in the Software Technology Parks of India (STPI) said.

As a precautionary measure, several multinational firms have also decided to give an off Monday and ask their employees to compensate by working on a Saturday.

The nationwide shutdown has been called by the leading opposition parties, including the Bharatiya Janata Party (BJP), which is the ruling party in this southern state for the first time, the Janata Dal-United and the Left parties.

Source:http://expressbuzz.com/cities/bangalore/bangalore-it-firms-to-log-out-for-shutdown/186969.html

It’s not that they are going to lose the race immediately. If they spend the next 5-10 years on their existing business model, then you get to the tipping point with Cloud and SaaS.

My impression is Indian companies are little too hopeful that the last five years will have a complexion on the next five.

It’s not that they are going to lose the race immediately. If they spend the next 5-10 years on their existing business model, then you get to the tipping point with Cloud and SaaS.

My impression is Indian companies are little too hopeful that the last five years will have a complexion on the next five.

Susan Cournoyer, Managing Vice-President at Gartner Research, speaks to us over the phone at least once a year. This time, on her maiden visit to India, eWorld caught up with her in person. Even though we ran a copy on her recently, what she has to say now is intriguing. She feels that established IT services players across the world, taken by surprise by the Indian offshoring machinery, are now getting aggressive. This makes them better prepared to take advantage of trends such as Cloud Computing and Software as a Service (SaaS), than Indian providers are.

She feels Indian vendors have only a year or two to up the ante so that they would remain in the contention when the tipping point occurs in six-eight years. Excerpts:

We get a wide range of estimates for growth in IT spending from the banking and financial services (BFS) industry. Your view?

From our current forecast, with data roped in from all over our company, IT spending in BFS would grow 5 per cent globally over five calendar years ending 2014.

For 2010, and remember it’s still a recovery year, we expect a 2.5 per cent growth in North America. Canada is showing faster growth with the US looking at 1.5 per cent for 2010.

In the last five years, IT Services has been the fastest growing segment. In the next five years, I see software (products) and telecommunication services being the fastest growing segments in the financial sector.

As to IT services, it would tread the middle path, with some segments declining and some growing. Overall, moderate growth, with very slow growth this year.

In the last two to three quarters, the Top Five Indian IT services companies have seen a recovery, largely led by BFSI. Is that sustainable or has it been due to one-time opportunities from mergers and acquisitions (M&A) among US banks?

They are getting a lot of business from M&A activity — Indian vendors have been at the right place at the right time. They have been able to tap the cost-sensitivity in the market. We had that before the downturn too.

On the one hand, Indian firms are well-positioned for the next several years. But on the other, in the same way that Indian global outsourcing disrupted the IT market 5-10 years ago and surprised the global consultancies and IT services firms across the world, cloud computing and SaaS could potentially be disruptive to Indian firms. That is, unless they really take account of these in their business plans. They need to consider that the market may want alternatives to a lot of systems integration and application work.

Big consultancies and SIs at the global and regional level have been through this disruption of global sourcing and new competitors — they are now very aggressive. A lot of them are adjusting their industry models and portfolios to target industries beyond just banking. They are scanning the globe and finding small, innovative companies and linking up with them quickly on the Cloud and SaaS fronts.

Indian companies don’t seem to have this scanning in place and so they are not committed to it. And though global consultancies don’t like the fact that the cloud could commoditise parts of their business, they do appreciate it. They accept it and they are making plans for it, putting together strategies that have goals for them in the Cloud and SaaS environments so that when the market takes off, they are part of it and not blind-sided by it.

They are taking a broad view of market with disruptive forces. My impression is Indian companies are little too hopeful that the last five years will have a complexion on the next five.

If you are not there at the beginning (as a technology evolves) it’s very hard to play catch-up. It’s better to make investments in new opportunities rather than to be blind-sided by the market.

Irrespective of who takes the cake, wouldn’t India, and possibly China, continue to remain dominant delivery destinations?

Financial institutions globally want to go beyond India for sourcing, to reduce risk. It’s almost like Indian companies unleashed this willingness to go global. One would think that China would be disruptive in terms of labour. It could be disruptive in terms of business model innovation — it’s just starting to become visible. An example is Alipay — an online business-to-business payment service — appears to be doing a lot of business.

There is a large business in b2b payments in China. This is essentially business process utility. Estimates for Cloud payments are at $3.3 billion globally, growing at 10.5 per cent. They weren’t (first) labelled Cloud — but now they fit into the description. So it’s growing right under our noses.

What kind of time would you give Indian companies before they have to get their act together?

They are not left behind. They are still doing a lot of work that they have been doing. Full credit to them for building industry practices and segmented solutions.

But as a colleague said — when a company grows fast, it is very visible. But when it declines, it is slower. It’s not that they are going to lose the race immediately. If they spend the next 5-10 years on their existing business model, then you get to the tipping point with Cloud and SaaS.

Five years out, it would become visible as to who is losing. They do have enough time (but there could be a tech revolution coming).

The average time between major upsets in the market is about 6-8 years. But you don’t want to wait that long. You have a year or two to invest so that 6-8 years from now, you don’t lose out.

SMEs were originally expected to take to the Cloud very quickly but only the large companies have done so, so far, even with private clouds.

That is true. Large and small companies are active while medium-sized ones almost seem like they are going through adolescence and they don’t want to outsource. Everything is to be done with a sense of high independence. If you set them aside, the large banks and investment companies are heavily into the Cloud and Virtualisation — they are also interested in infrastructure utilities (IU). For instance, in a recent survey we did, 14 per cent of respondents in North America said they have used IU at some time but 34 per cent want to use it in the next two years. Large banks use SaaS and the cloud because it improves their time to market. Small banks, with the cloud, now have access to new functions such as trade finance. (Mid-sized banks would be those with $10-40 billion worth of assets — small ones would be below that range while large would be above.)

In Europe, large financial institutions haven’t really opened up to IT outsourcing or offshoring. Could any activity there mean opportunities for India?

There are some die hard hold-outs that won’t outsource — both in the US and in Europe. I know that a one-of-the-top-ten institutions in the US made the leap during the financial crisis — that spurred them. However, there are some that still won’t do it. If you think of it, in all markets, we do want some banks to hold out, so that they can find some innovative, alternative solutions.

Given the conservative nature of European banks, while there will be opportunities from a few of the hold-outs, it won’t be a new, greenfield opportunity.

Source:http://www.thehindubusinessline.com/ew/2010/06/28/stories/2010062850050100.htm

Indian information technology (IT) service companies will report results for the April-June period in around two weeks’ time. How are they likely to perform? Accenture Plc, which reported results for its third quarter ended May last week, provides some clues.

Accenture is a management consulting, technology services and outsourcing company, and competes with large Indian IT firms for outsourcing projects.

The company reported a strong recovery with revenue growing by 8% in dollar terms both on a year-on-year (y-o-y) and a quarter-on-quarter basis. Revenue was boosted by the appreciation in the dollar. But even adjusted for this, i.e. in local currency terms, growth stood at 4% y-o-y.

According to a report by Morningstar Research Inc., this is after five successive quarters of y-o-y revenue declines.
The markets were enthused by the results—especially the fact that the company grew across geographies and industries. Accenture’s shares rose by 8% after the results were announced.

Does this mean that Indian IT companies, too, would report strong results? The company gets around 42% of its revenue from outsourcing and part of its consulting revenue is from technology consulting. The outsourcing business grew by 3% in local currency terms y-o-y, lower than the company average. Its chairman and chief executive officer, W.D. Green, said on a conference call with analysts that he isn’t satisfied with the order bookings in the outsourcing business. “I want them to be higher… The good news is outsourcing has come back. The downturn was so severe that people just stopped doing anything, and so now when we look at the pipeline and we look at the activity levels and we look at the bookings, we see people back focused on this. But there’s no question that people are looking for real value for money. And so it’s incredibly competitive out there,” Green said.

There’s little doubt that demand for outsourcing has picked up and revenue of Indian IT firms are likely to get boosted by pent-up demand. Growth in the near-term, therefore, will be strong. Even so, Accenture’s comments don’t suggest an extremely positive environment as far as IT outsourcing goes, and it remains to be seen if the strong growth in the next couple of quarters will sustain. On the positive side, demand for technology consulting is robust, with record order bookings for the second consecutive quarter.

According to a report by IIFL Capital, the strong growth in the firm’s consulting practice points to an improvement in discretionary spending.

Accenture’s growth was led by the Americas region, which grew by 8% y-o-y in local currency. The EMEA (Europe, Middle East, or West Asia, and Africa) region, which has traditionally contributed a larger proportion of revenue compared with the Americas, reported flat revenue y-o-y. Among industries, financial services led growth with a 7% increase in local currency terms. This points to strong growth for Indian IT firms in the June quarter, since they get a majority of their revenue from the Americas region and from the financial services sector.

Unfortunately, all this and more is priced into the shares of Indian IT firms, which trade at around 24 times trailing earnings.

Source:http://mintmoney.livemint.com/mark-to-market/2010/06/indian-it-sector%E2%80%99s-performance-clues-from-accenture-results/

As the business matures in India, companies are setting up offices in rural areas, with lower costs and, possibly, fewer office romances. In the process, they’re bringing middle-class values and modern aspirations to the tradition-bound heartland.

V. Bharadwaj had never used a computer before landing a data-entry job at an outsourcing firm here in India’s Karnataka state. Now he spends his days quietly tap-tapping on a keyboard in a converted school building next to a field of dirt-caked sheep.

Initially his mother was worried for her only child, fearful the 20-year-old would meet the “bad” women who populate the wanton call centers of Indian TV and movies. That changed, however, with his first paycheck, more than his parents ever made, and a new sari for his mother’s birthday.

“Now she wants to know how much longer I’ll be at it,” he said. “She’s counting saris in her head.”

As the outsourcing business matures in India, its tentacles are extending from the big cities of Bangalore and Hyderabad to small towns such as Bagepalli. Their appearance is spurring profound economic and social change, bringing middle-class values and modern aspirations to the tradition-bound heartland.

“We’re getting pulled by tradition while moving very fast with modernity,” said Nandu Ram, sociology professor at Jawaharlal Nehru University in New Delhi. “Values are changing quickly, with the young in a position to carry the country along.”

The 140 twentysomething workers here in Bagepalli, a town of 25,000 people two hours north of the state capital, Bangalore, work from 7:30 a.m. to 6 p.m. handling data-entry work for a U.S. logistics company and several Indian clients.

Seeking lower costs, an estimated 20 centers have been set up in the hinterland in the last few years, with 180 more in small cities. Bangalore-based Rural Shores has six small-town locations, including Bagepalli, with plans for 30 by 2013 and 500 by 2017, or one in nearly every Indian district.

The explosive growth of Bangalore’s information technology sector in recent years has relied on youngsters moving from the countryside, but many have struggled with homesickness and adjustment problems.

“Many youngsters come for a job and don’t know how to behave, how to follow red and yellow traffic signals,” said Nagesh Hegde, assistant editor at Bangalore’s Prajavani newspaper. “They’re driven by the TV culture, which only shows the glamour in the city.”

Taking jobs to the countryside boosts rural employment and helps maintain the social fabric. “My parents are delighted I’m here rather than in Bangalore,” said B. Srinivas, 25. “I can go back to my village every night, and I’m more respected in the village.”

Some workers live in Bagepalli; others, like Srinivas, come from villages an hour or more away, traveling on the ramshackle buses that ply the back roads.

In a sexually conservative society where most marriages are still arranged by elders, call centers have earned a reputation as racy places where young men and women cavort late into the night.

One of the main characters in the 2007 Indian film “Life in a Metro” is a call-center employee whose colleagues are shown drinking, smoking and having premarital sex.

In a case this month, a young man from a Brahmin family reportedly killed his fiancee, whom he’d met at a New Delhi call center, after his parents refused to accept her because of her lower Jaiswal caste.

Rural Shores and competitors say they tread carefully when moving into the countryside. “Although we import the jobs, we don’t import the [outsourcing] culture,” said Murali Vullaganti, the company’s chief executive. “There are a lot of sensitivities there.”

Company managers meet with local elders to dispel fears and hold open houses for parents to see their operation. There’s no overnight shift, and a planned late shift, until 11 p.m., won’t include women.

Chennai-based Desicrew, with four centers in rural areas of Tamil Nadu state, has overnight shifts but ensures they’re all-male.

“Most parents have never even seen a typewriter,” said Prashanth Booravalli, manager of the Bagepalli center. “And now their children are working on a computer.”

But even as the companies are careful about respecting tradition, communities are changing. B.R. Keerthi, 22, said the center has encouraged locals to become more modern in their outlook and has improved communication between generations, driven by an appreciation of the youngsters’ earning power and enhanced opportunities.

“Older people respect us more,” she said. “They listen more to younger people now.”

For men, the added money and prestige can translate into attracting a better-looking, smarter, more socially prominent spouse. “My plan is to work for four years, save and get a really good wife,” said Arun Kumar, 23.

For women, it may mean they don’t have to settle for any man their parents push their way.

Keerthi, 22, said she’s seen friends marry early, often to rather unappealing men chosen by their parents, and doesn’t want that life. Her plan: work two more years, gradually loosening her parents’ grip, pay her own way through graduate school and then move to the big city and never look back.

“With this salary, I can now hold them off,” she said. “If you’re determined, you can do things these days, even if you’re a girl.”

Employee V. Aruna, 23, said she plans to continue working even after marriage. “If he says no, I’ll just keep trying to convince him,” she said, laughing nervously.

The center has also brought Christians, Hindus and Muslims together in a state that recently saw a spate of church burnings.

“Religion stays outside the door,” said Noor Fatima, 20, a Muslim and one of the center’s most productive workers. “Working together really helps us understand each other, that in the end we’re all Indians.”

Setting up a rural center can entail higher training costs because some rural residents lack basic skills in using computers.

But salaries are lower — starting at around $110 a month compared with $155 in the cities. And, because there are few white-collar jobs around, employees tend to work harder and stay longer. “Once they pick up the basics, they do phenomenally well,” Booravalli said.

Setting up centers in the countryside is not without infrastructure problems. Booravalli spent a recent morning trying to find someone in charge to speak to after the center’s electricity bill inexplicably rose by 50%, as if someone was trying to see how much could be gotten from the new golden goose.

“Perhaps he was off having tea,” he said. “You know how difficult it can be to catch our government officials.”

Booravalli, who grew up in a village, said he figures his employees are adults and doesn’t try to play moral policeman, but he’s noticed at least one pair in the flirting stage.

“So far, we haven’t had a marriage, which typically happens in city call centers,” he said. “But the first one here would be a big deal. I’d be the celebrity guest for sure. That would be huge.”

Source:http://www.latimes.com/news/nationworld/world/la-fg-india-rural-20100622,0,2076543.story?page=2&utm_medium=feed&track=rss&utm_campaign=Feed:%20latimes/latinamerica%20(L.A.%20Times%20-%20Latin%20America)&utm_content=Google%20International&utm_source=feedburner

Indian BPO firms are tuning in to a global delivery model — doing the right thing from the right geography — as value creation for customers take primacy over cost arbitrage, political pressures mount against offshoring and new offshoring destinations gain traction.

With newer rivals like Philippines snaring 70% of new contact centre businesses and onshore BPOs in Brazil and other Latin American locations picking up steam, local vendors are being forced to set up global delivery centres, or look at near-shore options.

Wipro BPO’s senior vice-president Ashutosh Vaidya says they have set up 15 overseas delivery centres and parked 3,000 people there to neutralise near-shoring by global outsourcing firms like Accenture and CapGemini. The latter, in fact, has a major hub in Guatemala City, which also houses delivery centres by Indian BPO firm 24X7 Customer.

To boot, TCS Iberoamerica employs over 6,000 people in Latin America across eight centres spanning Colombia, Ecuador, Brazil, Argentina, Uruguay and Chile. “If you are going to be a significant player, you will have to have near-shore as well as offshore solutions”, says Deepak Patel, CEO, Aditya Birla Minacs.

“A notable development in 2010 has been the increasing focus on Indian IT majors strengthening their onshore footprint by setting up delivery centres in the US.

Demand arises as a lot of work may not be completely offshorable, so it is good to have a delivery centre in the United States. The other factor is the proposed US legislation around work permits and H1-B visas that may impact suppliers’ offshore delivery mix,” says Salil Dani, senior research analyst, Everest Research Institute.

The move to onshore or near-shore locations is gaining momentum because BPOs have graduated beyond the low-cost model, say industry honchos.

“The next-generation business models are no more about cost, but value. Just because something is cheaper does not mean it has value,” says Deepak Patel. Ashutosh Vaidya says the firm is convincing clients to go for outcome-based business savings, not merely man-hour cost reductions.

“A savings proposition goes beyond labour arbitrage and helps the service provider bring in a level of confidence in customer relationship, which means that work can be done onshore and that can take care of proximity and cultural issues,” says a senior executive of strategic consulting firm IonIdea, which works with clients in the telecom space.

“Two years back, 98% of our workforce was in India but the matrix has changed to 90:10. Going forward, we expect our international centres to grow at a faster rate,” he said.

Wipro BPO has centres in Philippines, Eastern Europe and Australia among others, and plans to tap newer geographies like Japan.

Vendor relationships are evolving into an ecosystem of partners and thus, offshore and onshore operations are getting transformed into global outcome delivery model, an industry watcher said. “The focus should not be on the client but of the client,” said Robert Janssen, director, Outsource Brazil.

A February PricewaterhouseCoopers survey of 514 firms across 50 countries reveal that outsourcing companies in North America and India are being challenged by competition from Latin America, Eastern Europe, and Asia. The research further says within outsourcing, near-shoring — setting up a cheaper offshore base close to the client’s home region — has gained momentum.

HCL recently announced setting up its first Latin American centre to service clients in Portuguese. The company has hired about 150 local citizens and will provide help desk support for HCL customers across Latin America and Europe.

Near-shoring also takes care of regulatory risks and data protection issues. On the other hand, the geographical proximity through near-shoring mitigates cultural problems to a great extent and allows businesses flexibility of management.

Indian BPO sector doesn’t view its near-shore markets as rivals yet, since the opportunity is still huge. “The pie is so big that we do not view anyone as competition. India is not able to fulfil what it already has. Besides, we do higher-end research intensive work for our clients as opposed to other markets like Philippines that focuses on voice delivery,” said Minacs’ Deepak Patel.

“India’s success, as the world’s back-office, has motivated other developing countries with well-educated and under-employed populations to duplicate their experience,” said John Chang, partner and national leader of the Global Sourcing Advisory group.

Source:http://economictimes.indiatimes.com/Infotech/ITeS/Indian-BPO-firms-forced-to-set-up-new-global-delivery-centres/articleshow/6072648.cms?curpg=1