Tech Mahindra on yesterday said it has opened a BPO centre in Kolkata with the initial capacity of 1,000 seats.  The facility would focus on providing customer service delivery to telecom service providers and primarily be servicing Reliance Communications’ operations in the first phase, the company said in a statement. The Kolkata centre would cater to other clients in the future, it added.

The centre would have about 1,000 seats in the initial ramp up with 500 seats coming up in end July 2009 and another 500 in the end August 2009. The firm already has centres in Noida, Chandigarh, Pune and Chennai and two overseas centres in Belfast and New Castle.

Tech Mahindra President (Corporate Affairs) Sujit Baksi said: “Tech Mahindra has always expanded in major cities around India to leverage the availability of local skilled staff. This centre allows us to spread our operations in Eastern India in a big way and we are keen to tap the local talent pool in this region to make this centre a major hub that will service other telecom service providers in this region as well.” Source

In a year when outsourcing of application development and maintenance projects has slowed down, top customers such as Bank of America,  JPMorgan and Citibank continue to send more back office projects to India, as they seek to lower their cost of operations by up to 40%. According to Nasscom, India’s back office outsourcing industry will grow at 18.4% this year to reach $14.8 billion. Outsourcing of IT services will clock a lower growth at around 13.5% this year, and could even decline to single digit growth if the situation does not improve.

“The Indian BPO industry is likely to maintain double digit growth rate as most of the work done by them is ‘keeping the lights on’ or non-discretionary ,” said Everest Group principal & country head Gaurav Gupta. The current recession is forcing companies from other verticals such as media, entertainment, healthcare, energy and utilities to consider outsourcing of back office work.

“BPO business is largely annuity in nature where the contracts are for a longer term making it slightly more immune from economic recession,” said Intelenet EVP Sandeep Aggarwal says. “A CFO is constantly looking at gaining control on the cost structure,” said Gartner senior research analyst Arup Roy. (more…)

Infosys BPO yesterday announced that it has received the ‘ASTD Excellence in Practice Award’ for its ‘diversity hiring initiatives’. 

The award honours a company practice which leverages diversity for enhanced performance and recognizes corporate programmes or efforts to address issues around inter-cultural, gender or sexual orientation, a release said.

The ASTD (American Society for Training and Development) association is the world’s largest asssociation dedicated to workplace learning and performance, it said.

The award was conferred during the award ceremony held by ASTD in Washington. Source

Essar Group’s business process outsourcing and technology arm, Aegis Ltd, has acquired CCN Group PTY Ltd, a South Africa-based BPO firm, for around $30 million. This is Aegis’ 12th acquisition and will mark its entry into the South African market. In May this year, Aegis had announced the acquisition of UCMS Group, a BPO firm in Australia, for around Rs 203 crore (A$54 million). The deal, however, is still awaiting regulatory approvals.

The company plans to invest $60 million in South Africa in the next three years and plans to create around 5,000 jobs there. Sandip Sen, global chief marketing officer and head of sales, Aegis, said: “We are putting in a significant amount of our overall South Africa planned investment of $60 million into this acquisition.” Though the company officially declined to comment on the deal size, sources put the number to around $30 million. (more…)

Infosys BPO Ltd., the business process outsourcing unit of Infosys Technologies Ltd. (500209.BY), is looking to buy companies worth $50 million-$200 million in the U.S. and Europe, its chief executive said Friday.

“We are looking for acquisitions, which are platform-based or allow us strengthen a domain, or something that gives us scale,” Amitabh Chaudhry said on the sidelines of a press conference.

Infosys BPO expects $340 million of revenue in the current fiscal year, Chaudhry said

Earlier Friday Infosys Technologies reported a net profit of $313 million on revenue of $1.12 billion for the April-June period. Infosys BPO’s revenue for the quarter was $68.47 million with a net profit of $12.34 million. Source

The IT industry on Monday hailed the government’s decision to extend the tax holiday to the software export units by another year, and abolition of FBT, giving much-needed relief to the slowdown-hit sector facing contracted orders and sharp earnings fall.

“In order to tide over the slowdown in exports, I propose to extend the sunset clauses for these tax holidays by one more year– financial year 2010-11,” Finance Minister Pranab Mukherjee said in his Budget speech today. The scheme was due to expire on March 2010.     more

HCL BPO has plans to offer remote technical support services to the global small office-home office (Soho) market, whose current size is estimated anywhere between Rs 960 crore and Rs 1,440 crore.  “The one-time solutions include virus and spyware removal, printer/scanner support, software installation and support, wireless support, internet connectivity issues, automated data backup, among others,” Gautam Saha, Head-Technical Support Services, HCL BPO, told Business Standard. The company will provide, according to Saha, both one-time incident based and subscription-based services. The monthly subscription would be around Rs 1,000 a month and around Rs 10,000 annually.

Technical support services (TSS) contributes around 31 per cent to HCL BPO’s revenues and is expected to grow by 50 per cent in two years, with these additional, platform-based, remote service offerings. There are more than 3,500 employees working in this division.

To provide remote technical support to homes in the US and Europe, HCL BPO is in talks with four broadband service providers in the US, and two in Europe, for white labelling (offering clients a branded service) HCL Virtual CIO services, to provide a single-stop shop for all IT-related products in a home/Soho environment. (more…)

The US’ stand on tax breaks for firms outsourcing jobs to overseas destinations, and the competition to Indian IT-ITES (information technology enabled services) from emerging outsourcing destinations such as the Philippines, China, Sri Lanka and Mexico, are among the worries that Balaji N. V., a senior tax professional with Ernst & Young, India, expresses, during a recent e-mail interaction with eWorld.

“A recent report has indicated that the Indian IT-ITES industry, in the light of the worst-ever global meltdown, is expected to grow at 10.8 per cent in 2009, the lowest in the last five years. The decline in growth rate in this sector has repercussions on other sectors too,” he adds.

Excerpts from the interview.

What are the top expectations of the industry?

To ensure that India continues to be an attractive destination for outsourcing of IT-ITES and investment into this sector, the industry expects the Finance Minister to consider the following fiscal incentives, during the Budget:

Extension of the availability of benefits under Sections 10A/10B of the Income-Tax Act for Software Technology Parks of India (STPI) and Export Oriented Units (EOU) beyond the sunset date of March 31, 2010;

Abolition of Minimum Alternative Tax (MAT) for STPI and EOUs;

Amendment in Section 10AA of the I-T Act, relating to Special Economic Zone (SEZ) units to ensure that there is no dilution in the availability of tax holiday owing to an anomaly in the formula prescribed for computing the tax deduction;

Safe harbour provisions in transfer pricing regulations and also introducing advance pricing mechanisms;

Removal of the levy of Fringe Benefit Tax (FBT) on Employee Stock Option Plans (ESOPs);

Abolishing the duplication of indirect taxes for software licensing.

On tax holiday.

The benefits of Sections 10A/10B of the I-T Act for the units located in STPI and EOUs, need to be extended beyond 2010, so that these units also enjoy the benefits for fifteen years, placing them on par with the units located in SEZ. This would particularly help the smaller units, enjoying the benefits under the aforesaid sections, which could not move into SEZ. It is pertinent to note that the Commerce and IT Ministries are also keen on this amendment.

The Government has brought the units enjoying benefits under Section 10A/10B within the purview of MAT. Though, this is not the first time that tax holiday promise is withdrawn partly, it would only be fair that the Government stands by its commitment.

At present, profits of the SEZ unit, in proportion of the export turnover to the total turnover of the assessee, are exempt from tax under Section 10 AA of the I-T Act. This has resulted in discrimination in granting exemption in respect of assesses having units only in SEZ and assesses having units in SEZ as well as in Domestic Tariff Area. Appropriate amendment in Section 10 AA with retrospective effect is desired.

D. Murali   - Source: The Hindu

Tech Mahindra’s business process outsourcing arm is looking to hire around 2,000 employees over the next 3-4 months as the company has recently signed a few deals.
“The BPO arm contributes to around 5-7 per cent of Tech Mahindra’s total revenues. We target to reach 10 per cent of the total revenues in the next 18 months,” said S V Sriram, head of BPO operations, Tech Mahindra BPO. The firm will hire mostly in its new Kolkata facility.

Tech Mahi-ndra has over 4,000 employees at the moment spread over four other centres in Noida, Pune, Chandigarh and Chennai. The company, which primarily services the telecom sector, is not looking to diversify its business because of a prob-able future merger with Mahindra Satyam’s BPO, which may happen after 6-8 quarters, said Sriram.
When asked if the Satyam BPO’s employees in telecom vertical would be taken into Tech Mahindra’s BPO, Sriram said the company does not have any such plan in the immediate future. “Except for a few top-level changes at the entity level, there hasn’t been any other change.”

TechM’s BPO gets around 80 per cent of its revenues from customers who have adopted transa-ctions-based pricing model. Besides BT, the company has three other customers in Europe, two customers in North America and four domestic customers.
“BPO sector is recovering faster than the IT sector,” said Sriram. “The deal pipeline looks healthy. We closed two large deals this quarter, one from a first-time outsourcer.” Source

Outsourcing of healthcare services is expected to gain momentum as the prolonged slowdown forces U.S.-based government agencies and healthcare firms to cut spiraling costs and deal with a shortage in qualified personnel.

Companies such as Affiliated Computer Services (ACS.N), Cognizant Technology Solutions (CTSH.O), Convergys (CVG.N) and Genpact (G.N), whose customers include hospitals, insurers and the Federal government, are expected to gain from the trend.

Business process outsourcing firms that offer healthcare services handle claims administration, supply chain logistics, finance and accounting, billing, human resources management and customer relations.

“Health clients have an accelerated case in which to utilize outsourcing in many facets of their business,” said Christine Kowalczyk, vice president, healthcare, at Convergys. Full News