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Skyline Business School |
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Skyline Business School |
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Issue:12
IBM acquires Daksh for $170m/Rs 700 crores
IBM has acquired India's third largest call center and one of Asia's leading
business service providers- Daksh eServices. With service delivery centers and staff in
Asia, Europe and the Americas, the $170 million/ Rs 700 crores deal is the American
information technology giant's first major acquisition in India. The acquisition is
expected to increase the scope of IBM's global network of 22 business transformation
delivery centers, adding capabilities in India and Philippines. It is also expected IBM's
business transformation capabilities in key areas like Customer Relationship Management
and financial management services in key industries such as banking, insurance, retail,
technology, telecommunications, and travel and transportation. Daksh employs over 6000
people and offers call center services to clients like Amazon.com and Citigroup's
Citimortgage. Daksh eServices will also bring an experienced, strong management team to
IBM in India.
Source: The Asian Wall Street Journal and
Financial Times April 8th, The Hindu Business Line April 8th and 10th and The Hindustan
Times April 12th 2004
BPOs make merry in US tax season
The current tax-filing season in the US is giving a boost to outsourcing to India.
Indian firms like Mphasis and Datamatics are geared up to meet the demands of the current
tax-filing season in US. Manish Modi, CEO of the Mumbai-based BPO firm Datamatics, says,
"We are now running three shifts daily processing tax forms from US. More work is
coming in from customers which include small-to-medium to very large auditing firms in the
US." According to industry sources, the outsourcing of processing of tax forms to
India is expected to rise four-fold this year, compared to last year. The work done by
Indian firms relates largely to data entry on tax forms, calculating the tax payable for
individuals in US. According to Gary Boomer, CEO of Boomer Consulting, US, AICPA has laid
down guidelines to ensure client confidentiality and data protection in case such work is
outsourced. Boomer says the norms, which are applicable for outsourcing in US will also be
applicable if work is sent offshore to vendors in India. Boomer says most Indian firms
have better standards of security than even a mid-sized US accounting firm. Indian firms
are advising US auditing firms on ways to reduce process inefficiencies, he adds.
Source: Times News Network April 5th 2004
'Sub-BPOing' is fast catching on
Even outsourced jobs are getting outsourced these days. One of the beneficiaries of
these is the $70 million-plus, Michigan, US-based Altair Engineering, which set up base in
Bangalore about three years ago. Among the companies outsourcing work to Altair India is
the Indian arm of GE. And more such deals are likely to happen in future, says Nelson
Dias, managing director, Altair India. Similarly, some work outsourced from US customers
to Altair India , is further outsourced to an outfit in Chennai. Customers are informed
about the arrangement and have nothing against it as long as their requirements are met.
Altair helps companies develop, critique and test new products on the screens of their
desktop computers. Altair Engineering expects to get substantial business this year from
auto giants and existing customers such as GM and GE. The India centre notched up a decent
$5 million in revenues last year - paying off the investment made initially by the parent
company. An internal call-centre of sorts has been set up in Bangalore where engineers are
answering technical queries of customers from the US. It is planned to extend the service
to other English-speaking nations soon. Altair is among the world's leading product
development consulting companies specialising in using computer-aided engineering software
for modelling, visualisation, optimisation and process automation for such customers as
Ford and General Motors.
Source: The Economic Times April 10th 2004
Multinationals join race for stake in GECIS BPO
A number of multinationals BPO companies have put in bids for acquiring some parts
of the BPO business run by GE Capital International Services (GECIS). Companies which are
seen in the talks with the GE management for acquiring a couple of GECIS units are
Convergys Corporation, Electronic Data Services (EDS), and Affiliated Computer Services
(ACS). Indian companies in the race include L&T Infotech and Wipro Spectramind.
Citigroup is advising IBM on the transaction. Companies like WNS Global services, Msource,
the BPO arm of MphasiS, Cognizant and eFunds are trying to enter the bidding process. Two
units of GECIS, the IT help desk and network security are up for sale.
Source: The Economic Times April 11th 2004
The new $12 billion BPO buzz
Procurement Outsourcing growing at 15.2% annually, says
NASSCOM
Procurement outsourcing is all set to emerge as the next big opportunity for Indian
BPO companies as nearly half of the companies in the UK, US and Europe are considering
outsourcing part of their procurement operations to countries like India in the next three
years. Procurement BPO is transfer of management and execution of one or more procurement
activities, transfer of entire procurement sub-segments or transfer of entire procurement
business functions to an external service provider. This has been done by the major
companies for increased productivity, high revenue generation, cost reduction, business
transformation and improvement of shareholder value. According to the NASSCOM study, the
worldwide procurement market has been estimated at $6 billion and is expected to touch $12
billion by 2007. The key inhibitors of growth in this area include prolonged sales and
decision-making cycles for the adoption of procurement BPO engagements and slower rates of
adoption due to infancy of procurement BPO and insufficient precedent and success stories.
Source: The Financial Express
HCL BPO ops to get a new CEO
HCL Technologies BPO arm, HCL BPO, might soon have a new CEO. The firm's global
head for sales, Raj Sirohi, is expected to take over as CEO of the software company's BPO
operations. Mr. Sirohi takes over from Sujit Bakshi, the erstwhile CEO, who quit to join
another Gurgaon-based BPO firm, vCustomer, in September last year. In another move, HCL
Technologies North America president for the BPO division, Saurav Adhikari, is likely to
move to India and would handle corporate strategy and marketing at group CEO Shiv Nadar's
office, sources said. Though HCL BPO has had its senior management in place, the firm did
not formally appoint a CEO to spearhead its operations after Mr. Bakshi's exit. Presently,
Ranjit Narasimhan is the COO of HCL BPO. HCL BPO is in the process of building a capacity
of a little under 3000 seats in the country.
Source: The Economic Times April 9th 2004
Keane to invest $25 m in BPO, raise staff to 5000
Notwithstanding the backlash over outsourcing in the US, IT outsourcing firm Keane
Inc on Tuesday announced its plans to invest an additional $25 million in expanding its
BPO and IT service operations in India, and said it would more than triple its headcount
to 5000 in the next two years. The company currently employs 1600 professionals of which
only 300 work in BPO. The company expects to have 2000 people in BPO within two years and
the rest working in application development and management. The investment in BPO is being
channelised through Worldzen which provides 62% stake in BPO delivery in the country.
Keane acquired 62% stake in Worldzen in October 2003 to expand its services delivery into
the BPO arena.
Outsourcing's Russian Front
High skills and low turnover could make Russia a programming
player
The 1998 banking crisis forced major clients out of business. However, come 2003-04
there is a marked turnaround in the Russian economy. Russia's software exports were worth
an estimated $475 million last year, a 60% rise over 2002 and a ninefold increase over the
previous five years. Russia now has facilities producing software for firms like IBM,
Boeing, and Microsoft. Although compared to India, Russia's outsourcing industry is tiny,
lost cost is a major imperative for western companies to get their programming done at
Russia. A US company that gets its programming done in Russia achieves cost savings of 40
to 60%.
Russian developers understand that price competition is already stiff, and are stressing
on advantages other than cost- tradition of scientific excellence and technology
excellence.
Source: BusinessWeek April 12th 2004
Prepared by - Abhimanyu Puri,
BBA-MAHE-L1-S2
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