Out of the U.S. $35-37 billion offshore BPO market in 2008, India remained the leading offshore destination with 35% market share. The Philippines, which is barely 1/10th of India’s size, represented 15% of the offshore BPO market. The Philippines has emerged as a key destination for English-based work especially for the North American market.

Growing at 46% annually since 2004, the US $6.8 billion Philippines’ offshore market today employs over 450,000 people. Most of the people employed are for voice-based services. The Everest Research Institute study called “The Silent Knight: The Philippines’ Emerging Non-Voice BPO Capability”, shows that the Philippines is poised to emerge as an important destination for non-voice offshore BPO work. The Philippines is an offshore option for buyers that are looking beyond India. It is estimated that by 2012, the offshore BPO market will be worth U.S. $220-280 billion — almost 90 percent of this addressable market opportunity will be in non-voice BPO services. Full News

Essar’s Aegis BPO, is planning a major expansion in South Africa including buying out assets.  “We are looking aggressively at geographical expansions. In addition to enhancing operations in the existing markets, we are currently looking to expand our footprint to South Africa, which is a developing market,” Aegis BPO’s Chief Executive Mr Aparup Sengupta told PTI here. In South Africa, Aegis might go for an outright acquisition or buying out assets of an existing BPO firm, Mr Sengupta said, adding, “we are yet to finalise on that.”

He, however, added that the merger and acquisition team of the company, which at any point of time evaluates at least six targets, was yet to zoom in on a particular target. “The acquisition or assets purchased will be in the area of customer lifecycle management space,” Mr Sengupta said, declining to reveal any financial estimate. Mr Sengupta had on January 23 said that Aegis was waiting for a go-ahead from Satyam Computer’s board to conduct its due diligence towards acquiring the Business Process Outsourcing (BPO) business of the beleaguered IT firm.

One of the fastest growing global process outsourcing providers, Aegis BPO has acquired 11 firms worldwide in the last three years. Last October, it had acquired Nasdaq-listed off-shoring firm ‘PeopleSupport’ for close to Rs 1,057 crore that enabled it to add Philippines to its list of delivery locations.  Source

If you thought that the damage is over think again. Here’s some more collateral damage of the fraud at Satyam Computer Services: it may turn the tide against third-party Business Process Outsourcing (BPO) vendors. Post-Satyam, third-party vendors are being subject to closer scrutiny with higher level of disclosures being sought by customers.

Not surprisingly, the captive units (that is, a foreign company’s own backoffice) may find it more attractive to ramp up their services rather than offshore some of their work to third-party players. Analysts say that costs of due diligence of third party vendors are set to go up by 15% and captive BPO units might gain in the process.

“After the Satyam fiasco, clients may again look at setting up captive units even though they are 10-20% more expensive than outsourcing services to third-party companies. A captive unit offers a much more secure model of outsourcing and the increased cost of due diligence may even level the cost.

Clients will be wary of outsourcing critical processes like IT, mutual fund transactions and cash management to third party players,” says Rajnish Kohli, an independent consultant and former head of Fidelity Investments (India).
Currently, out of $10.9 billion BPO business, captive units constitute 40%. “While the cost of due diligence on supplier side will increase by 15%, corporate governance will also be a very important criteria for third- party vendors to fulfill,’’ adds Bangalore-based offshore advisory firm Tholons’ CEO, Avinash Vashistha.

Offshoring analysts and captive BPO heads say that now corporate governance will become an integral parameter of judging a BPO vendor. Everest Research, an offshore consultant’s engagement director Kumar Subramaniam affirms: “Earlier that parameter (corporate governance) was less limited as qualifying for a third-party vendor.’’ Source

As per the old tradition the $800-bn global technology services sourcing business has found new destinations, India being the largest.  Technology services companies here employ over 2 million people and do a whole spectrum of retail to research tasks, overwhelmingly for the US companies.

Hit by slowing demand for their services, Indian outsourcing firms could also face new challenges dictated by policy directives from US President Barack Obama. The industry, however remains optimistic that it will find new opportunities as its business model is too compelling to be impacted by political moves.

“President Barack Obama’s first job is to get the economy back on track and the country can’t make choices to increase costs. American companies have to be competitive and India can help in reducing costs and time to market as well as providing better access to emerging markets,” Nasscom president Som Mittal said.

In his inaugural address, Mr Obama was unsparing in condemning the failed ideology of uncontrolled markets. He said the current economic crisis showed how “without a watchful eye, the market can spin out of control”. So will there be controls on offshoring, that has in less than a decade or so helped save over $100 billion for global businesses? Full News

 Satyam BPO (formerly Nipuna Services) is recruiting fresh batches of employees for their various projects. According to a senior executive, a “sizable” number of 50 people have been recruited this week for a project, which was in the pipeline for some time now.

“We are recruiting as per requirement for a particular new business which we have bagged recently,” confirmed Manjula Manjotra, head of Global Marketing and Communications (GM&C), Satyam BPO Limited.

“According to the requirements of a client, who has given a new business order, a batch of freshers have been recruited by the company. The brand Satyam perhaps still sells. None of our clients have backed out,” a senior employee of Satyam BPO said.

And even though the company is not on a recruitment spree, hiring is taking place at an average level to fulfil demands of clients. “The numbers are neither good nor are they very low. There is a lull in the market at the moment and even we cant escape that. However, people have been recently recruited at the agent level, which is level zero, and they are expected to report either today or tomorrow,” said another associate.

Talks of the BPO arm of Satyam being up for sale have been doing the rounds and reportedly, Essar Group’s outsourcing firm Aegis BPO is on the verge of approaching Satyam Computers for a possible buyout of its BPO operations. Nipuna Services which was established as a BPO arm of Satyam in June 2002, was renamed Satyam BPO Ltd last January and currently employs about 3500 to 4500 people.  Source

“When I first heard the news, I was scared, coming as it does after the Satyam fraud. Although we are in the BPO sector and not directly linked with Wipro Technologies, we are scared,” said Debanjan Bhattacharya, a trainee who has just completed three months at the firm. Tanmoy Sarkar, also a trainee with in the same facility, was similarly tense. “We may be safe as of now, but after the Satyam fraud came to light, there is panic among the junior staff heer,” said Sarkar.

Group leader Abhijeet Dey, however, was unaware of the recent developments on Wipro being banned by the World Bank. “I am not too sure about the developments. But the Satyam incident has surely triggered some panic among the younger staff here,” said Dey, who heads a team of 25 executives. Wipro’s BPO facility in Sector V was started in 2004 by with 1,500 personnel hired in the first phase. Wipro Spectramind currently employs around 3,000 people in its Sector V office. The company has also been allotted 90 acres of land in Rajarhat for a proposed SEZ.

Officials at the Spectramind said the facility was in no way affected by the World Bank’s decision to blacklist it. State’s IT minister Debesh Das said the new development has in no way affected the company’s future plans in West Bengal. “We are in constant touch with them and the company’s plans in the state remain as they were,” the minister said. Source

The chairman of Satyam Computer  was arrested on Friday on charges of cheating and forgery, a state police chief said on Friday, two days after the executive resigned from the outsourcer.

Chairman and founder Ramalinga Raju was arrested along with his brother and co-founder B. Rama Raju on charges of criminal breach of trust, criminal conspiracy, cheating, falsification of records and forgery, S.S.P. Yadav, police chief of the southern Andhra Pradesh state, whose capital Hyderabad is home to Satyam, told Reuters.

Raju resigned on Wednesday after revealing years of accounting fraud, which has called into question the future of the outsourcing company. He will appear before the market regulator on Saturday. Source

Read all about Satyam Scandal / Ghotala at

www.Ghotala.in

• Satyam CFO, who attempted suicide, had offloaded over 92,000 shares
• Satyam’s bank statements go missing
• In India, Crisis Pairs With Satyam Fraud
• Raju family also pledged Maytas stocks, assets as collateral
• Satyam head Raju arrested, board scrapped
• Satyam’s U.S. Investors File Actions Alleging Fraud
• ‘Satyam fraud: Not a one man show’
• Does Satyam have cash to pay salaries?
• Satyam CFO Srinivas Vadlamani Attempts Suicide
• A team from India’s capital markets regulator will meet Satyam’s Raju

more news & details at www.Ghotala.in

The disastrous scandal of Satyam did not come as a bolt from the blue for the Bangalore-based IT-BPO union, who had written to the IT industry body Nasscom, the Prime Minister, IT minister and Ramalinga Raju himself to conduct an inquiry into the affairs of the company in 2008.

“Immediately after we heard that the World Bank was planning to ban Satyam in 2008, we had written to everyone — the Prime Minister, Nasscom, the IT Minister and to the then chairman Raju to conduct an inquiry into the matter,” UNITES Professionals general secretary Kartick Shekhar told PTI. He further said had the government investigated the World Bank allegations, discrepancies in Satyam would have surfaced earlier, he added.
“UNITES would like NASSCOM to urgently institute an inquiry with the cooperation of the Government of India, Department of Technology and with the cooperation of the World Bank, immediately and get the actual findings,” UNITES had earlier said on its website.

However, when contacted, Nasscom had denied receiving any such communication from any union. Nasscom President Som Mittal had said that it was a company-level matter and the industry body had no right to inquire into it. Source

The Chairman of Satyam Computers, Ramalinga Raju resigned after saying he falsified earnings and assets, prompting a collapse in the stock of India’s fourth- largest software-services provider.

Raju unsuccessfully tried to sell two companies to Satyam last month in a final attempt to plug 50.4 billion rupees ($1.03 billion) of “fictitious” cash on the company’s balance sheet, he wrote in a letter to Hyderabad-based Satyam’s board today. Profits have been inflated for “several years,” he said.

India after Satyam’s Scandal

Also Read Satyam actual letter from Mr. Ramalinga Raju to its board directors admitting fraud

Satyam, which means “truth” in Sanskrit, plunged in New York trading, after earlier dragging down India’s benchmark index, in a scandal described as “horrifying” by markets regulator C.B. Bhave. Raju’s reign unraveled in the past month as a shareholder revolt blocked the asset purchases, a World Bank ban kept Satyam from bidding for orders and four directors quit.

“This is a black day for India, the software sector and corporate governance claims,” Arun Kejriwal, founder of Kejriwal Research & Investment Services, said in Mumbai. “If at all there’s an event that could be the biggest setback for corporate India, it is this.”

Goldman Sachs Group Inc., Citigroup Inc., HSBC Holdings Plc, and Credit Suisse Group AG suspended coverage of Satyam, which slumped a record 78 percent in Mumbai. The National Stock Exchange removed Satyam from its main Nifty index after the benchmark slumped 6.2 percent.

Satyam’s American depositary receipts fell $8.42, or 90 percent, to 93 cents at 9:14 a.m. in early New York trading. (more…)

Sitel, a global leader in business process outsourcing (BPO) with revenues of $1.8 billion today announced that its Bangalore based BPO center which was originally a JV with ITC Infotech will be rebranded as Sitel India. By reaffirming its strength and brand presence in India, Sitel is positioning itself as one of the largest BPO’s globally by highlighting its footprint in India.

India plays a very important part in Sitel’s growth strategy as there has been consistent delivery and excellent customer service with high returns on investment for all its clients by way of its highly talented and motivated workforce. Safir Adeni, Managing Director and CEO of Sitel India, explains “We are very excited to integrate the Bangalore BPO center with the larger Sitel India family. This expanded footprint and capability would further enhance our value proposition to our global clients while also helping us leverage the Sitel brand in the local region. This is a mutually beneficial and complimentary integration”

Sitel will gain in several ways like attracting the right talent into the organization, retention of employees who will now be a part of a single large global brand, offer world-class options spread across 5 locations in India and more importantly a single entity with a large geographic distribution and communications network which offers great flexibility and choice for it’s clients’ customer care needs.

The focus of Sitel’s business strategy is enabling its over 450 customers globally with the expertise of additional service offerings, providing ability to expand and/or centralize customer care initiatives. Services provided will include - customer service, technical support, sales and saves, outbound sales, acquisition, collections, professional services, back office processing and transaction processing. Source