India BPO Outsourcing: July 2008 Archives

The Democratic presidential hopeful Barack Obama has held the revolution in technology and communication in last few decades responsible for outsourcing of jobs to India and China.

"Over the last few decades, revolutions in technology and communication have made it so that corporations can send good jobs wherever there's an Internet connection. Children here in Missouri aren't just growing up competing for good jobs with children in California or Indiana, but with children in China and India as well," Senator Obama said at a campaign rally in Springfield, Missouri. In a veiled attack on the previous government for its decision on economic reforms, he said, "It was irresponsible decisions that were made on Wall Street and in Washington. In the past few years, we have relearned the essential truth that in the long run, we cannot have a thriving Wall Street and a struggling Main Street." When wages are flat, prices are rising and more and more Americans are mired in debt, the economy as a whole suffers.

Full Story: Outsourcing? Tech to blame, says Obama

Aegis BPO Services, an Essar Group business process outsourcing (BPO) company, is close to acquiring an 8,000-seater BPO firm in the Philippines. The exact size of the deal is not clear.

Aegis has been bullish on inorganic growth as its races to reach a turnover of $500 million (around Rs 2,000 crore) by 2010. Aparup Sengupta, managing director and CEO of Aegis BPO, had told Business Standard that the company was in talks with 7-10 companies for a 'strategic fit' and was looking at firms in the US, South America and the Philippines. The company has also stated its intent to invest anything between Rs 200 crore (Rs 2 billion) and Rs 1,000 crore (Rs 10 billion) to acquire these companies.

Full Story: Aegis eyes Philippine BPO

For instance, a digital advertising contract between India's second largest IT services provider Infosys Technologies and a major American newspaper group is threatening to become a rallying point for the brigade to regroup and renew attacks on outsourcing of management information systems (MIS) and key operations-related work to India.

Infosys Technologies, according to sources, signed an advertising outsourcing deal with Missouri-based Kansas City Star sometime last month. The daily, a part of the McClatchy Company that also publishes the Miami Herald, will outsource advertising production work for its new media/digital business to Bangalore. ] . "While the deal is not substantial in terms of payback, over the next three to five years, City Star has been looking at gaining the economy of scale in its production set-up over the past year by outsourcing digital media production across a few of its publications to different vendors," the source said.

Full Story: Media outsourcing attracts ire of US brigade

A meeting with the staffs at the bank's lending services centre in Auckland and customer transaction service centre in Wellington took place on Tuesday, which according to NZPA report is the beginning of a two-week consultation period over the outsourcing of the work to India.

Meanwhile, Finance workers union Finsec accused the Australian-owned bank of being greedy and a bad corporate citizen. The work will be done in India at a quarter of the cost, the report said. The bank disputed the union's claim of job losses when the story first broke, saying that the back office workers would be offered the chance to work in bank branches, report said.

Full Story: New Zealand Bank to send jobs to India

IT-BPO firms, which are already facing a US slowdown and currency fluctuations, are now busy in firming up their plans to tackle a rising inflation in the country and its impact on salary, sales, general and administrative (SG&A) and travel costs, which can dent their profit margins.

] do it during the year. If inflation continues throughout the year the firms would have to effect a mid-term hike or raise the salary by a good measure in the next financial year. Next in line comes transport costs as many transport associations are planning to increase their rates. The Maharashtra Call Centre Drivers' and Owners' Association (MCCDOA) has asked for an increase in remuneration. "All BPO units pay us Rs 6 per kilometre. Considering the increase in petrol and diesel prices, we now want the charges hiked to Rs 10 per kilometre," said Nana Kshirsagar, president, MCCDOA.

Full Story: BPOs grapple with inflation

Outlining his vision for a strong US economy, presumptive Democratic presidential candidate Barack Obama has said outsourcing of American jobs to India and China cannot be reversed.

"Revolutions in communications and technology have sent jobs wherever there's an internet connection, that have forced children in Raleigh and Boston to compete for those jobs with children in Bangalore and Beijing," Obama said in a speech in Raleigh, North Carolina. "We live in a more competitive world, and that is a fact that cannot be reversed," he added.

Full Story: Jobs' outsourcing to India, China not reversible: Obama

] , the UK-based insurer may drop plans of absorbing the outsourcing operations from its existing vendors, including WNS Global Services, EXL Services and 24x7 Services, sources who declined to be identified said. The outsourcing deal is valued at $1 billion over a 10-year period.

Aviva's BPO operations are run by Aviva Global Services on a built-operate-transfer (BOT) basis and managed by WNS Global, EXL and 24x7 Services. The insurer had plans to absorb these operations over a period of time. "We have been reviewing our offshore operations and that review is now coming to a close. We expect to announce our decision shortly and will let you know as soon as we have further information," an Aviva Global Services (AGS) spokesperson said. The executives of WNS and EXL Services declined to comment on the matter.

Full Story: Aviva may not absorb vendors' operations

National Australia Bank is expected to send another 400 information technology jobs to India by the end of the year.

] and Oracle to develop its billion-dollar, next-generation platform, which will form the key pillar in the bank's technology transformation plan, dubbed Program NEOS. NAB chief information officer Michelle Tredenick told technology staff this week that it was ramping up its offshoring initiatives as part of Program NEOS, in an email quoted by The Australian .

Full Story: Australian bank to offshore 400 IT jobs to India

The US sub-prime crisis may have affected the fortunes of Indian IT firms, which have clients with mortgage exposure, but the country's legal process outsourcing outfits are laughing their way to the bank as American law firms have begun offshoring the credit crisis-related work.

The portfolio includes legal analytics, discovery and litigation support, and first-line document drafting. This is in addition to the renewed demand for traditional LPO skill sets like bankruptcy filing and processing, and claims' scrutiny out of India. The 200-odd LPO firms in India include SDD Global, Evalueserve, Integreon, OfficeTiger, CPA Global, Mindcrest and Pangea3, besides service providers such as Infosys BPO, Quattro BPO and Wipro BPO.

Full Story: Sub-prime swells coffers of Indian LPOs

Warning bells are ringing on Bangalore's future as a leading BPO destination. It is not a full-blown crisis yet but the portents are disturbing, according to a cross section of industry, human resource and real estate experts.

"From January 2008, only a handful of BPO companies have set up shop in Bangalore, as against an average two or three companies beginning operations every month in 2007," says a source in a real estate consulting firm. "Of late, we don't hear of too many companies coming to Bangalore, whereas we have seen many BPO companies starting operations in cities like Chennai, Noida, Kolkata and Kochi. I feel Karnataka is losing its advantage as a BPO destination," said S Nagarajan, founder and chief people officer of 24/7 Customer, a Bangalore-based BPO firm which employs around 7,000 people across various cities in India.

Full Story: Warning bells ring over Bangalore as BPO destination