The warrants have a strike price of $6 and Global BPO is trading at $7.80, allowing the warrants to have an intrinsic value of $1.80 and time value of another $1.50 for a total of $3.30. However, the warrants only trade for $0.67. There are two main reasons they trade for such a low value, which we’ll get to later, but more importantly, there is a good chance that one of these reasons will no longer be a factor when shareholders approve the pending merger with Stream Holdings on July 29th.

The shareholder vote is important because warrant holders can’t exercise the warrants until shareholders approve an acquisition. Global BPO is a special purpose acquisition company, or “SPAC,” created to find an acquisition in the outsourcing arena. Earlier this year, Global BPO’s management announced a deal to acquire Stream Holdings. The deal looks like it is priced attractively, plus the CEO of Global BPO, Scott Murray, used to run Stream Holdings from 2000-2002 until he sold it to Solectron. Shareholders have a choice to approve the attractively priced acquisition and own shares in the ongoing company or vote against the deal and receive $7.93 in proceeds from the Global BPO’s IPO trust fund.

The recent history of SPAC stock performances after acquisition approval is horrendous, so it had seemed likely that shareholders would vote against the deal and warrant holders would have worthless warrants. However, in early June, Global BPO’s management increased the likelihood of shareholder approval by announcing an interesting deal with Ares Capital, a private equity firm. The deal would have Ares Capital pay $150 million for convertible preferred stock at $8. Global BPO would use the money from Ares to tender for 70% of its publicly-held shares. This event significantly increased the probability that shareholders would approve the deal, but it didn’t make the vote a foregone conclusion. Full News

Due to the slowdown in the US economy on the one hand and changing business needs on the other, management consulting and IT services provider Accenture’s BPO business is seeing newer trends in pricing pattern as well as in the nature of deals.

The company said because of the slowdown, there is pricing pressure for some kinds of deals, especially for the low-end transactional work. But for more complex or large-scale projects, or projects done out of multiple geographies, there is no significant pricing pressure.

However, there is a change in the pricing pattern, said G Raghuraman, Lead Executive, Accenture India Delivery Centre Network, BPO. There is a shift from fixed-fee contracts to contracts that are a mix of fixed-fee and variable-fee. This is because the clients are looking for more business benefits, he added.

Multi-location advantage

The clients are also looking for more multi-geography contracts and there would be fewer single geography contracts, said Raghuraman. They want to use a wider network of global delivery centres and global opportunities. They want managed distribution of work, he said.

The larger BPOs with global network and multi-geography manpower would benefit because of this trend, he said. Business might shift to the larger companies, he added.

On being asked if the multi-geography contracts would dampen the growth of the Indian BPO business, Raghuraman said the competitiveness of India continues.

Many of Accenture’s clients choose to go to other locations because they have a large footprint in India. The other locations are an add-on to their India presence. Accenture’s clients are considering other geographies in addition to India and not substituting it, he said. Source

The Indira Gandhi National Open University (IGNOU) will soon start a diploma programme to train students from across the country to take up jobs in business process outsourcing (BPO) firms, well known as call centres. This will be a one-year diploma course conducted jointly by Accenture Services, a Bangalore based global technology service and outsourcing company.

“You know the BPO situation in our country. It’s a growing industry and the number of trained manpower required is huge. Here we have stepped in to provide trained human capital,” IGNOU spokesman Ravi Mohan told.

Mohan said the varsity has already signed an agreement with Accenture. Candidates who have passed 10+2 or equivalent can apply for the course.

“It is just not outsourcing for foreign companies, many Indian companies, government offices too have opened and will open call centres for better customer relations.

“This course will create a pool of professionals who will be able to handle the job better and reduce attrition rate,” Mohan added. Those having IGNOU’s certificate course in communication skills will have an edge but alternatively students shall be screened through a communication evaluation test.

The specialization would be offered in finance and accounting, insurance, banking, human resources, sourcing and category management, customer contact services, health care, pharma, engineering services, equity research, capital markets, order management and technical writing and learning services.

IGNOU shall ensure that the course will be imparted through a mix of education delivery channels across India including print, CD, web-based learning materials, contact sessions and simulated exercises labs for language and application learning.

Earlier this year, Genpact, the largest business process outsourcing (BPO) player in India, gave Harpreet Duggal a new role: responsibility for developing and executing the company’s domestic BPO strategy. Duggal is already well into discussions with potential customers, and is finalizing operating locations. He’s moving fast because Genpact isn’t the only Indian company interested in this space. For many reasons, the domestic BPO market is one that no one can afford to ignore anymore.

Duggal primarily is targeting two sets of potential customers: existing global customers who are looking to increase their presence in India and require the same systems and processes they have elsewhere; and Indian companies with global aspirations, both by way of moving beyond Indian boundaries and by providing a global experience in the Indian market. These require world-class processes and systems. Says an upbeat Duggal: “We believe that India is a very exciting market to be in.”

Having been on the periphery, the domestic BPO business is steadily moving onto everyone’s radar. Companies including IBM Daksh, Firstsource Solutions, MphasiS BPO and Intelenet Global Services are looking to significantly increase their presence. Others, such as Wipro BPO and Infosys BPO, are waiting for the right time to enter the space as part of a total outsourcing solution along with their IT arms. And, firms such as 24/7 Customer have no immediate plans to enter, but are watching the space keenly.
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Earlier this year, Genpact, the largest business process outsourcing (BPO) player in India, gave Harpreet Duggal a new role: responsibility for developing and executing the company’s domestic BPO strategy. Duggal is already well into discussions with potential customers, and is finalizing operating locations. He’s moving fast because Genpact isn’t the only Indian company interested in this space. For many reasons, the domestic BPO market is one that no one can afford to ignore anymore.

Duggal primarily is targeting two sets of potential customers: existing global customers who are looking to increase their presence in India and require the same systems and processes they have elsewhere; and Indian companies with global aspirations, both by way of moving beyond Indian boundaries and by providing a global experience in the Indian market. These require world-class processes and systems. Says an upbeat Duggal: “We believe that India is a very exciting market to be in.”

Having been on the periphery, the domestic BPO business is steadily moving onto everyone’s radar. Companies including IBM Daksh, Firstsource Solutions, MphasiS BPO and Intelenet Global Services are looking to significantly increase their presence. Others, such as Wipro BPO and Infosys BPO, are waiting for the right time to enter the space as part of a total outsourcing solution along with their IT arms. And, firms such as 24/7 Customer have no immediate plans to enter, but are watching the space keenly.

What has brought about this growing interest in India’s BPO market? Industry players and analysts cite multiple factors. These include reduced costs of connectivity, the scorching pace of the Indian economy, the phenomenal growth of companies in sectors including telecommunications and financial services, rising customer expectations, Indian firms’ global aspirations, and global firms entering the Indian market. The changing rupee-dollar equation and the slowdown in the U.S. economy, which is forcing players to look at other markets, have added to the momentum.

University of Pennsylvania’s Wharton School management professor Saikat Chaudhuri says the factors driving that trend are the “tremendous growth” of India’s domestic markets, the slowdown in Western markets, and the dollar’s weakness against the rupee. He notes that a whole new class of medium-sized companies outside of the well-established and large industrial houses like those of Tata, Birla, Ambani or Goenka is looking at farming out noncore activities to increase efficiencies and focus on core competencies. “These companies are becoming customers of Oracle, Cisco, SAP and so forth,” says Chaudhuri. Full News
 

India has always been an attractive destination for offshoring - reasons being availability of skilled manpower (English speaking workforce), strong business ties with US, etc. In addition the lower rupee value against the US dollar is one of the crucial factors that make India an ideal place for outsourcing.

But a sudden steep rise in the rupee value during early 2007 didn’t seem to go well with some industries including the outsourcing community. The value of the dollar incessantly went down and touched Rs. 39.25 in October 2007, before bouncing back to currently being around Rs. 43 - thus bringing a respite to the industry.

Due to the upswing of the rupee value business outsourcing enterprises’ bottomlines started eroding fast. The industry initially got edgy, but remained poised - thinking that currency fluctuation is an aberration. People from the industry are of the opinion that the Indian market is growing mature enough to bear the impact of the currency fluctuation.

There have been some cases where BPOs started looking for alternative viable offshore locations and a few also went ahead with some relocation plans. But, according to Anwer Bagdadi, senior VP and CTO of CFC India Services, such cases are sporadic and don’t reflect the general sentiments of the outsourcing community. He believes the rupee-dollar value fluctuation doesn’t have much impact on outsourcing the business overall and India will continue to be the favorable destination for outsourcing activities.
Source & more details

Leaders in the business process outsourcing (BPO) industry tend to be more confident than their counterparts in other industries, according to a global study on leadership development.

BPO leaders were confident because they felt capable of executing their jobs well, said Richard Wellins, senior vice president of Development Dimensions International (DDI), which prepared the “Global Leadership Forecast 2008-2009″ report. This was in stark contrast to the global results that found leaders frustrated, according to Wellins. “Leadership confidence is dropping worldwide. This was leaders rating themselves. It has nose-dived,” he added in an interview.

However, the study found BPO leadership development programs in the country wanting, a summary of the study showed. It found that only 41 percent of senior leaders and 32 percent of HR professionals were satisfied with the quality of their efforts to develop leadership in the BPO industry, a finding in line with global results in other industries.

The BPO portion of the study gathered responses from senior leaders and human resource professionals in 26 BPO firms and was highlighted as part of a partnership with the Business Processing Association of the Philippines (BPAP), a trade organization for BPO companies. Willins pointed out that the study showed little correlation between the economic recession and the confidence of leaders.

Good leaders, he stressed, keep winning despite the “storms.”

Insurance biggie Aviva is to sell off its offshore operations and outsource $1bn worth of back-office work.

The world’s fifth largest insurance group, owner of Norwich Union, struck an eight-year deal with Indian outsourcer WNS Global Services to run its business process outsourcing operations.

Over the next three months about 6,000 staff will be transferred from offshore arm Aviva Global Services (AGS) to WNS, which will take over five AGS centres in India and Sri Lanka. Aviva will withdraw from running the centres offshore after spending five years building them up.

The company said the move will protect it against rising inflation and fluctuating exchange rates.

It is understood that some areas of work, such as property claim call centres and direct sales, could now be brought back to the UK.

A spokesman for Aviva told silicon.com: “It is a process of simplifying and improving the services.

“We get the benefit of continued supply and expertise but with better protection from inflation and exchange rates. You are taking the risk out of running the contract.”

The company says the deal will help it realise aims to streamline the business under its ‘One Aviva, twice the value’ vision.

WNS, a former offshore offshoot of British Airways, has provided BPO services to Aviva since 2004 and will provide BPO services to Aviva’s UK and Canadian businesses under the new deal.

WNS will provide life and general insurance processing functions including policy administration and settlement, finance and accounting, customer care and other support services.

Neeraj Bhargava, CEO of WNS, said in a statement: “We also see significant potential to grow our business with Aviva, not only outside the UK, Canada and Ireland, which AGS serves today, but also in new high growth areas such as analytics.”

Curtains went up on the Black Book of Outsourcing list. The survey of global service users aims to identify the 50 best-managed global outsourcing vendors through surveying client experience and assessing industry developments.

The 2008 issue of the annual list released by US-based Brown-Wilson Group once again proved the fact that change is the only constant in the dynamic outsourcing industry.

The 2008 list saw last year’s leaders Infosys, Hexaware, EXL Service and ICICI Firstsource failing to feature in the Top 50 this year due to low client approval ratings, a fact which clearly shows that Indian BPOs need to work on their delivery levels. IBM Global also lost its position this year. Firstsource (formerly ICICI), a four-year top ranked performer fell the most of any BPO to 1550 of 1690.

The top 50 list this year comprises six Indian companies Wipro, Satyam, TCS, HCL, NIIT and Patni. Interestingly, the survey shows that outsourcing is no longer seen as a refuge of the financially weak or technically-deficient enterprise, nor is it a stick to threaten US workers. It is increasingly being accepted as a strategic tool. As the outsourcing Juggeranaut rolls on, we bring to you the top 10 best BPO vendors globally.  read more

IT and BPO industry is poised to grow 15 to 20 per cent in the next five years and direct employment likely to go up to eight million, a recent survey by NASSCOM has said.

The survey has revealed that prospects of the industry growing in 50 cities in the country were bright if the state governments concentrate on developing infrastructure in these cities.