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Skyline Business School |
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Skyline Business School |
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Issue:15
Convergys Expands Global HR Business Process Outsourcing Capabilities with Two
Acquisitions in Asia
Increases Footprint in the Market by Adding Payroll and Benefits
Solutions to Asia Pacific Operations
Convergys Corporation, the global leader in integrated billing, employee care, and
customer care services, announced today it is expanding its global payroll and benefits
outsourcing capabilities with the acquisition of two companies in Singapore. Convergys has
closed on a purchase agreement to acquire Out-Smart, an independent provider of HR,
payroll, and benefits administration outsourcing solutions to companies operating in the
Asia Pacific region, and i-Benefits, a market leader in the Asia Pacific region providing
a comprehensive range of flexible HR and benefits services. With the closing of these
strategic acquisitions, Convergys
-- Takes early leadership in comprehensive HR BPO capabilities for the Asia Pacific market
-- Enhances its network of HR Shared Service Centers that support multiple clients in
multiple countries in multiple languages
-- Becomes uniquely positioned to leverage its integrated technology platform to provide
global business intelligence to clients, while at the same time having the depth of
expertise to provide detailed support at a regional and country level around the world.
Out-Smart and i-Benefits have a diverse group of more than 100 clients covering all
industry segments throughout the Asia Pacific region with offices in Singapore, Malaysia,
and Hong Kong. Their combined client list includes some of the world's largest
corporations such as American Express, Citibank, Dell, Ericcson, JP Morgan, Microsoft,
Pfizer Pharmaceuticals, Prudential Financial, Unilever, and UPS.
Source: Business Wire, April 26th 2004
Air Canada Signs Letter of Intent With Exult for Comprehensive HR
Business Process Outsourcing
Exult, Inc. the innovator and leading provider of human resources (HR) led BPO for
Global 500 companies and other large complex corporations, has signed a non-binding letter
of intent with Air Canada, a leader in the global air transportation market, to provide
integrated human resources processing services. The letter of intent calls for Exult to
assume responsibility for managing core administrative and transactional HR services and
to provide technology support related to those functions. The parties contemplate an
agreement term of seven years, and expect to complete transition by the end of calendar
2004. Exult plans to leverage its MultiDelivery(SM) shared client service centers,
including Toronto, to provide services to Air Canada's more than 30,000 employees.
"This decision aligns with Air Canada's objectives to both reduce costs, and to
utilize proven technologies to e-enable our workforce," said Sue Welscheid, Vice
President, People, Air Canada.
Source: PR Newswire, April 27th 2004
Silence is golden for outsourcing
Mum's the word for U.S. companies exporting jobs to India and
other countries in this presidential election year for fear of political backlash and
media furore
Mum's the word for U.S. companies exporting jobs to India and other countries in a
presidential election year. They are rooted in fear. First, there's the fear of becoming
the latest whipping boy for destroying American jobs as the campaign for the White House
heats up. Democratic presidential candidate Sen. John Kerry has made U.S. job losses to
India and other low-wage countries a major theme of his campaign to unseat President
George W. Bush. And television programs such as "Lou Dobbs Tonight" on CNN, with
its "Exporting America" series of reports, have condemned U.S. companies that
send work overseas. "This is clearly an issue that is very highly charged, very
emotional, very politicized, and, of course, the backdrop is the national election,"
said Bruce Josten, executive vice president of the U.S. Chamber of
Commerce. "But companies will continue to use (various) means and
mechanisms," including the shift of some jobs overseas, "to slice and dice
costs." That leads to the second fear behind the wall of silence surrounding
offshoring, which usually refers to the transfer of clerical jobs from the United States
to India or other countries.
Executives, who have recently become much more reluctant to talk about outsourcing or
offshoring jobs, also fear for their own jobs. They worry that their jobs will be next on
the chopping block -- if they don't cut costs fast enough. Allen added that companies are
more likely to recruit American service providers such as IBM Corp, with offices in India,
instead of going directly to Indian service providers such as Infosys Technologies Ltd.
This can help them mask where the jobs are going, he said. The fear of political backlash
-- and media exposure -- also is driving more clients to ask service providers not to
disclose offshoring deals to the media.
But there is a silver lining to this cloud over the U.S. job market. One positive outcome
of the controversy is that companies are taking more of an interest in seeking to place
employees they lay off in other jobs or training, experts say. In fact, service providers
are taking damage control measures by offering to retrain and recruit client staff and
training their managers to be more sensitive. "The political pressure has created a
step back in thinking and people are being more considerate in their decisions. They
aren't just doing a cost-benefit analysis of offshoring, but are also looking at the
reputation of the company," said Kelly Gay, chief executive of search engine and
research firm KnowledgeStorm Inc.
Convergys learned its lesson when Florida's Republican Gov.
Jeb Bush, the brother of the president, hired it to perform some payroll and benefits
processing jobs for the state. Democrats accused Convergys of sending jobs abroad even as
the contract specified that the jobs would stay in the state. This incident has added to
pressure that to keep quiet about contracts the company wins.
Source: www.ciol.com
April 27th 2004
HSBC, ICRA plan BPO units in Kolkata
Discussions are on with the state government's IT departments
for incentives on investments in the BPO sector.
Hong Kong and Shanghai Banking Corporation (HSBC) and credit rating agency ICRA are
mulling forays into the business process outsourcing (BPO) sector. Both companies have
showed a keen interest in setting up BPO operations in Kolkata because of the city's low
costs and still lower attrition rates. While negotiations between HSBC and the West Bengal
government have gone some distance, the ICRA management has written to the state IT
department inquiring about BPO business possibilities. There have been two rounds of
fruitful discussions with HSBC, but a formal deal might take some time," said an IT
ministry official. HSBC, which has quite a significant presence in the sector in India,
wants to set up captive BPO units to handle its transactions and customer inquiries. Both
companies are inquiring about the incentives that the government has to offer to investors
in the BPO sector. Several leading firms have based their BPO operations in the city that
is also notching up an impressive figure in software exports. West Bengal's software
exports stood at Rs 1,300 crores during 2002-03, rising from Rs 750 crores in 2001-2002.
Source: CyberMedia News, April 28th 2004
Wipro, IBM bag mother of all BPO deals
This is the mother of all outsourcing deals. In what will be the biggest
outsourcing deal coming to India, Wipro, along with IBM, has bagged a
$1bn, long-term contract from Anglo-Dutch energy to oil major Royal Dutch Shell Group.
Central services at Shell, big chunks of which are being offshored to India, have been
rebranded Group IT Infrastructure (GITI), wittingly also called 'Give It To India'. The
deal is said to have been pegged as the largest for the Indian IT industry so far. Though
the exact break-up of the deal between Wipro and IBM could not be ascertained, the
Bangalore-based company is learnt to be sharing a large chunk of the job and even IBM will
execute the contract from its India development centre. The Shell Group yesterday
announced in London its plans to shift about 3,000 IT jobs to India. The outsourcing deal
would involve partially shifting some of Shell's existing IT jobs from its various IT
centres besides adding a range of new jobs. The contract would involve some high-end IT
and back office jobs to support accounting and marketing and processing departments. The
division affected are learnt to have sites in Britain, Netherlands and the US. The move to
India will cut Shell Group's huge IT budget by about $850m per annum. The oil company has
four key IT locations - the UK, the US, the Netherlands and Malaysia. Shell expects to cut
between 1,900 and 2,800 jobs from its total IT staff of 9,300 - a reduction of 20-30%.
Most of the job losses are expected in high-cost locations like the US and Holland, though
they none of them is likely to fold up. Kuala Lumpur, Shell's another key IT location, is
expected to be retained.
Source: The Economic Times, April 30th 2004
Captive BPOs won't be taxed in India
Companies in Silicon Valley, California, that were highly perturbed by a recent
circular of the Central Board of Direct Taxes (CBDT) relating to taxation of BPO
activities carried out in India, have breathed a sigh of relief. A J Majumdar, joint
secretary, Foreign Tax Division, CBDT, in a telecon address to attendees during a recent
seminar in Palo Alto, said, "India does not intend to digress from internationally
accepted principles of international law, as enshrined in the OECD Model Tax Convention,
nor the tax treaties it has entered into."
Source: The Economic Times April 29th 2004
Nokia to set up CDMA research centre in Mumbai
Nokia has announced it will start a CDMA research and development facility in
Mumbai. "The establishment of such a facility in India testifies to our long term
commitment to this region," said Mr. Soren Peterson, Senior Vice-President and
General Manager of Nokia's CDMA business unit, at the Nokia technology summit on
Wednesday. He said that Nokia viewed the Asia-Pacific region as an important one for its
CDMA operations. The creation of the facility is part of its continuous expansion of its
global efforts to grow and invest in the CDMA business in the APAC region.
Source: Business Line, April 28th 2004
Prepared by - Abhimanyu Puri,
BBA-MAHE-L1-S2
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