The BPO unit of Infosys Technologies, India’s leading software and services exporter, expects a nearly 20 per cent growth in revenues in the next fiscal, driven by the banking, financial services and insurance (BFSI) sector.

D. Swaminathan, chief executive and managing director of Infosys BPO, told reporters in Bangalore that he was bullish on the BFSI segment, especially with the easing of the global economic crisis. He expects operating margins of 20 to 22 per cent in the next fiscal.

Established in 2002, Infosys BPO focuses on integrated end-to-end outsourcing; it operates in India, the Czech Republic, China, the Philippines, Poland, Mexico, USA and Brazil. The unit employs nearly 20,000 people has ended the last fiscal with revenues of $352.1 million.

According to Swaminathan, the company plans to hire 8,000 people next year, which would stabilise the 25 to 30 per cent attrition rate. It would also add about 500 seats in Poland and the Czech Republic as part of its growth strategy. Source

According to a research report by the consulting firm Dun & Bradstreet Indian IT-BPO industry is expected to adopt the inorganic growth route in order to widen their service offerings and enter new geographical markets. It is expected that several third party and captive BPO units are likely to increasingly acquire small size companies to ramp up their revenue, clients acquisition, expand business segments and enhance geographical reach. “Consolidation will also be driven by international M&A deals, propelled by robustness of the Indian players,” the report said.

Indian IT-BPO industry has been seeing a spurt in consolidation with done deals like Sutherland Global Services’ acquisition of Adventity Global services, Hinduja Global Solutions’ acquisition of a UK based customer relationship management company, Careline Services, etc. Now a consortium of private-equity firms Apax Partners and iGate are close to buying 63 per cent of Patni Computer in a deal valued at about $915 million.

Increasing focus on fast growing domestic market for IT-BPO will be another trend for the industry. Dun & Bradstreet expects that in a booming economy domestic market is likely to grow rapidly driven by major government initiatives such as increased spending on e-governance and increased thrust on technology adoption/up-gradation across various government departments to bridge the gap of digital divide. “The Government of India has enacted a national e-Governance Plan (NeGP) which creates a big opportunity for the IT vendors to create an effective partnership. It has separately allocated US$9 billion for investment in NeGP projects till FY14.” Source

India is considered the BPO powerhouse of the world. Of the top ten BPO destinations in the world, there are as many as six Indian cities. A study conducted by Global Services has ranked the cities based on skills and scalability, savings, business environment, operational environment, business risk and quality of life in these cities. Cost still plays a significant factor in choosing a location, says the study.

Bengaluru

Bengaluru remains the top outsourcing hotspot for fourth successive year, with high talent and established service delivery capabilities.

Mumbai

Mumbai moved up to second place this year, with its huge labour pool with enhanced service delivery in high-value services. The financial capital of India has 60,000 employees in the BPO sector.

New Delhi

India’s capital city, New Delhi (NCR), has slipped to third place from second last year. The National Capital Region, which comprises the three cities of Delhi, Noida and Gurgaon, offers a good eco-system for business analytics, finance and accounting, software development, product development, engineering services and contact centre services in English. (more…)

IBM is restructuring and rechristening its Indian business process outsourcing (BPO) subsidiary as part of a global move.

The recast will also lead to the exit of Pawan Vaish, one of the founders of Daksh e-Services, who led the subsidiary since it was acquired nearly seven years back, the global head of BPO for IBM, John Lutz, said.

The restructuring is partly targeted at growing IBM’s BPO business outside India to meet its customers’ demands for geographical diversification, while it will also integrate recent acquisitions and some service sections within traditional IBM with the BPO service more closely.

IBM, whose first major entry into the BPO business was its acquisition of Daksh in 2004, has been acquiring companies like the Singapore-based analytics firm RedPill and the US-based mortgage processing firm Wilshire.

It had also taken over the consulting business of PricewaterhouseCoopers in 2002, all of which are being brought under the ‘IBM Global Process Services’ brand. (more…)

BPO major Genpact today said it has entered into a three-year agreement with IT products distributor firm Ingram Micro to provide an end-to-end IT service desk for infrastructure and application support services.

Under the agreement, Genpact has created a consolidated global IT service desk to support Ingram Micro across 35 countries globally, Genpact said in a statement.
 
The new IT service desk, which first went live in July this year, has helped Ingram Micro reduce costs, significantly increase security and in-depth data analytics and insights for Ingram Micro.

“We are pleased to partner with Genpact as we upgrade our global IT systems across the company,” Mario Leone, EVP and CIO, Ingram Micro said.

A $29 billion US-based corporation, Ingram Micro is one of the world’s largest technology distributor and offers solutions and services to more than 1.8 lakh resellers. Source

Buoyed by the infrastructure and talent pool available in and around Gandhinagar, Patni Computer Systems Limited, leading global IT services provider is planning to move all its new BPO business to MindSpace Special Economic Zone (SEZ) in Gujarat. So far the company’s BPO business used to run from its Noida SEZ even as Patni Computer launched its offshore development centre (ODC) at the MindSpace SEZ in Gandhinagar.

“The inauguration of our new facility in Gandhinagar demonstrates our sustained commitment to this region. We are looking at strengthening our presence in this burgeoning IT delivery hub and expect Gandhinagar to play a crucial part in this delivery expansion strategy. We are doubling our capacity in Gandhinagar from the current 400 seats in the STPI to 770-800 with the launch of ODC facility in the SEZ. Moreover, all our new BPO work, which currently happens in Noida, will move to Gandhinagar because what makes the city attractive is the infrastructure here,” said Jeya Kumar, chief executive officer, Patni Computer Systems Limited.
 
While BPO forms only 15 per cent of Patni Computer’s total business of $ 656 million (Rs 3,000 crore approx.) as on financial year 2009, the company expects a growth of 45 per cent in its BPO business. (more…)

Tata Consultancy Services (TCS) has become the second-largest insurance business process outsourcing (BPO) provider in the UK, after winning two deals worth £250 million (around Rs1,800 crore). UK-based Capita is the number one player in this space.

Diligenta, a subsidiary of TCS, had yesterday announced that it had acquired Unisys Insurance Services (UISL) from Unisys Corporation, in lieu of which the company received business worth £250 million for the next six years. With this, Diligenta won business from Phoenix Group (earlier known as Pearl Group) and Old Mutual International. Phoenix Group is an existing customer of Diligenta.
 
Diligenta is already in talks with a few more insurance players for similar deals. “The cycle time for deals to materialise in case of Diligenta is six months to a year, especially for similar deals. So, in the next 12-18 months, we will have something to share. But winning these deals validates our strategy,” said Phiroz Vandrevala, chairman of Diligenta and executive director at TCS. (more…)

Shimoga, the home town of chief minister BS Yeddyurappa and BJP state unit president KS Eshwarappa, is set to become a business process outsourcing (BPO) hub soon.

David Andrews, CEO of Xchanging, who is part of Cameron’s business delegation, signed the MoU with the state owned enterprise KEONICS managing director Harikumar Jha, to develop a special economic zone (SEZ) in Shimoga, in the presence of Yeddyurappa, on Wednesday, Jul 28. This global business processor, will develop the new SEZ with a state-of-the-art processing centre on six acres of land.

It will thus be among the first multinational firms to set up a centre in a tier-3 location in the country. The BPO will have an initial capacity of 1,000 people with an option to scale up to a 2,000-seat centre

“We have received tremendous cooperation from the state government. We are looking forward to expand our business in the state,” Andrews said. (more…)

India’s first Business Process Outsourcing (BPO) facility in jail will become a reality with the Andhra Pradesh government Wednesday giving its nod to the proposal. As part of jail reforms and to provide income generating opportunities to prisoners, the government decided to allow private industry including BPOs to set up their units in prisons.

Chief minister K. Rosaiah gave the green signal for the proposal at a meeting called to discuss a draft bill to use the services of convicts for social activities. Home minister P. Sabita Indra Reddy told reporters that the chief minister had cleared the proposal, enabling India’s first BPO unit to come up in Hyderabad’s Cherlapally Central Jail.

Under the public-private partnership, Bangalore-based Radiant Info Systems Ltd will set up the unit, to be manned by educated convicts. Out of 2,000 inmates in the Cherlapally jail, the authorities will shortlist 250 convicts. They will be trained for few months before the BPO starts its operations. (more…)

Hinduja Global Solutions (HGSL), a business process outsourcing company and part of the Hinduja Group, today announced that it had bought UK-based customer relationship management company Careline Services. The financial details of the deal were not disclosed.

The acquisition will act as a launch pad for HGSL to enter the UK and European markets and will also be a platform to cross-sell its global delivery model to Careline’s European clients. Ashok P Hinduja, chairman of Hinduja Group India, recently told Business Standard that the group was looking to acquire BPO units in the UK and the US as part of its plan to deploy idle cash. HGSL had a cash and cash-equivalents of Rs 648 crore as of March 31, 2010, of which Rs 577 crore was with Pacific Horizon, a wholly-owned Mauritian subsidiary.
 
Hinduja had said that the BPO deals were expected to be finalised over the next few weeks. While the BPO outfit in the UK, with which the Hindujas were in talks, had sales of around 25 million pound (around Rs 170 crore), the US company had revenues of $250 million (around Rs 1,000 crore). (more…)