India BPO Outsourcing: August 2008 Archives

Making a strong anti-outsourcing pitch after getting the Democratic Presidential nomination, Barack Obama vowed to end tax breaks to companies that ship jobs overseas if he is elected to office.

Playing to the gallery on the hot button issue of outsourcing in his acceptance speech, Obama kept up with the rhetoric on the subject that has been a staple of Democratic campaigning and went on to spell out what he would do as President on the front. ". . . unlike John McCain, I will stop giving tax breaks to companies that ship jobs overseas, and I will start giving them to companies that create good jobs right here in America," said Obama, who has been fiercely opposing outsourcing. The remarks drew a loud applause at the Denver Democratic National Convention.

Full Story: No tax breaks if you outsource: Obama to US firms

has set up the country's first ever commercial scale rural BPO at Tirupati in Andhra Pradesh employing youths from weaker sections in nearby villages.

A Rajan, country head, operations, HDFC Bank, said  the BPO, set up by the Bank's subsdiary, ADFC, commenced operations in July and started  supporting several outsourced processing activities of the bank. It presently employs more than 500 staff with plans to ramp it up to over 1,500 by March 2009, making it one of the largest rural BPOs in the banking sector.

Full Story: HDFC Bank launches rural BPO

] , the country's largest lender, is on an outsourcing overdrive. After outsourcing the back-office work in foreign offices, the bank has now decided to rope in external agencies to set up automated teller machines to save on capital expenditure and reduce the rollout time. It plans to initially outsource 500 ATMs to vendors, including original equipment manufacturers.

SBI intends to take the ATMs tally from the current 8,600 to 25,000 by March 2010. This entails large capital expenditure and management time, a senior executive said. "If the bank can provide better customer services (ATM facilities) without buying machines, why not? It is possible to save on capital expenditure," the executive added. He did not spell out the extent of savings.

Full Story: SBI to outsource rollout of ATMs

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

, 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

Offshoring to low-cost places like India may have been perceived as the key reason for job losses in the Western world, but it is mostly internal restructuring that is behind the falling employment rate at European banks, a new report has said.

"Less than 10 per cent of all publicly announced job cuts at European banks since 2002 are due to offshoring. Internal restructuring accounts for the lion's share," according to a latest research report by German banking giant Deutsche Bank. The recent decline in employment rate of European banks is because of internal restructuring and not due to job-offshoring to various countries including India, it said.

Full Story: Europe job-losses not due to offshoring: Report

The Hinduja Group-promoted business process outsourcing firm HTMT Global Solutions has set aside Rs 400 crore (Rs 4 billion) to close two acquisition deals in the US by the end of this year.

Both US companies, with a headcount of 4,000 plus each, offer services in the finance and accounting and remote infrastructure management space in the US and Canada. Subramanya C, global chief technology officer, HTMT Global Solutions, said, "Apart from the current cash on the balance sheet, we can also raise double the amount to fund our inorganic growth plans. We are aggressively looking at acquiring companies that have the right size and the skills that complement our existing verticals." Currently, the company is offering its services in multiple verticals including BFSI, Healthcare, telecommunications among others. The company is also looking to expand its foothold in China and Europe.

Full Story: HTMT to buy two US firms by year-end

Global consulting and technology services major Accenture is planning to expand the company's business process outsourcing footprint in India by increasing its headcount to 50,000 employees in the next five years and opening more centres in various cities.

"We would be increasing our headcount from 37,000 to 50,000 in the next five years and set up more centres. Most of our business would be focused on the third party solutions and a little bit on the captive sector," Accenture BPO Lead Executive P G Raghuraman told PTI. The company is also seeking to tap the BPO industry by securing new acquisitions in the domestic market. "In the last quarter, we made 10 acquisitions globally and there is lot of scope for replicating this in the country." He, however, refrained from mentioning the names of the firms Accenture BPO is eyeing presently.

Full Story: Accenture BPO to hire 13,000 people

Publicis India, the country's sixth largest advertising agency by revenue, said it is planning to set up an outsourcing division to cash in on the offshoring trend.

With significantly higher margins in the business and a growing demand in the developed countries for Indian creative work, leading agencies such as Lowe, McCann Erickson, Ogilvy & Mather and Mudra, are mulling over outsourcing operations. "Our goal is to double our revenues in the next three years. Among some of the new initiatives we have taken is the launch of a brand design agency Red Lion. We are also considering an outsourcing division," Nakul Chopra, the newly-appointed CEO of Publicis, South Asia, told Business Standard .

Full Story: Publicis to set up outsourcing unit in 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

Essar group-owned Aegis BPO on Monday said it will acquire Philippines-based BPO, PeopleSupport, for $250 million (around Rs 1,050 crore) in an all-cash deal.

The Mumbai-based BPO, which announced a definitive agreement to merge with the latter through Essar Services (Mauritius), its wholly-owned subsidiary, said the deal is expected to be concluded by the third or fourth quarter. The merger, to be called Aegis PeopleSupport in the Philippines, has been unanimously approved by the boards of the respective companies. When completed, the PeopleSupport buy will become Aegis BPO's 11th acquisition in the last two-and-half years. The company recently acquired the call centre facility of global internet firm AOL in Bangalore for about Rs 120 crore (Rs 1.2 billion).

Full Story: Essar arm to buy BPO in Philippines