Outsourcing Alert 28/08/2006

[Agarwal, Anish]

COMPANIES INSIGHT                                                                                             

  Satyam wins Qantas IT services deal
Satyam Computer Services Ltd., has won a software services deal from Qantas Airways Ltd. The size of the deal was not disclosed. Officials at Qantas, Australia's biggest airline, could not be immediately reached. Indian software services firms have been thriving on an outsourcing boom as companies worldwide look to cut costs at home to stay competitive. A large pool of English-speaking engineering workforce and cheaper wages of nearly one-fifth of western salaries have helped Indian companies attract outsourcing deals over the past decade. Satyam, which specialises in business software, last month beat analysts' forecast with a 75 percent jump in quarterly profit and raised full year revenue estimates by about 3 percent.

  JP Morgan Chase India BPO HR chief quits, to join IT co
Deependra Chumble, head HR, JP Morgan Chase (JPMC) BPO operations India has decided to quit the company to join a software firm, company sources say. The software company, whose name is not known, is based in Mumbai and has an employee strength of about 5,000 with operations in the US, Europe and Asia Pacific. Mr Chumble will be joining in the second week of September as global head of HR operations. He will continue to operate out of Mumbai. The reason behind Mr Chumble quitting JPMC, say company sources, could be the opportunity to venture into a bigger role and move out of the BPO industry. The decision is also believed to be based on the fact that growth in the call centre industry has slowed down. Also, the salary jump is suppose to be 'good', say company sources.Prior to joining JPMC India, Mr Chumble was heading the HR department of Morgan Stanley BPO here. He has a total work experience of 20 years with banks such as HSBC and ANZ Grindlays.

D&B to shift more core work to India
Dun and Bradstreet (D&B), one of the biggest corporate database providers in the world, will shift more of its core data-modelling work to its Indian facility in Chennai. The company, which maintains a database of around 10 crore companies – 6 lakh of them Indian, will also augment its training programmes in the country to an annual turnover of around $200 million (Rs 900 crore) over the next three to four years. D&B, which established its forecast-modelling centre in Chennai last year, currently employs around 200 scientists and technicians at its Predictive Science and Analytics Centre in Chennai, said most of its developmental work for its predictive models would be carried out in India by the end of the next two years.  The company uses mathematical models, integrated into its proprietary software, to generate points and ranks for companies based on factors such as growth, profits, size and previous credit records. Before establishing the Indian centre, D&B had tried to outsource its modelling work to other organisations. The firm, which has been bringing out a performance rank list of Indian companies for the last 10 years, is also planning to spruce up its marketing in the country. 

Nasdaq to up outsourcing to local IT firms
The Nasdaq Stock Exchange, the $900 million US-based stock exchange, is increasing the outsourcing of its IT requirements to Indian firms so that the facade of Nasdaq to investors will be developed in India. Nasdaq will increasingly rely on these outsourcing partners to fuel the trades executed through a sophisticated computer and telecommunications network, a system that transmits timely, critical investment information to all users. Nasdaq has around 3,200 firms listed on it with market capitalisation of close to $4 trillion. The average daily volume in Nasdaq-listed securities for 2005 was 1.8 billion. Nasdaq manages, operates and provides its products and services in two business segments, issuer services and market services. The issuer services segment includes its securities listings business and its financial products business. Nasdaq's market services segment includes its transaction-based business and its market information services business. According to the information available, Indian firms will play a significant part in the issuer services segment. The service providers in the ensuring months will take on more work as transactions on Nasdaq are set to increase. For the record, transactions involving 363.3 billion equity securities were executed on or reported to systems last year. According to market information, TCS did a significant amount of work when Nasdaq's trading platform was being developed and presently Nasdaq is amongst the largest electronic screen-based equity securities trading platform.

  INDUSTRY INSIGHT                                                                                             

Dubai Outsource Zone Announces Start of Phase III Development
Dubai Outsource Zone (DOZ) has started of construction on Phase III of the infrastructure for its $200 million free zone for the outsourcing industry. The third phase is being developed in response to the tremendous demand Dubai Outsource Zone has evoked from outsourcing companies in the region and from around the world. Phase III of Dubai Outsource Zone will have a range of facilities customised to the needs of the outsourcing industry. One of the key features is a Plug and Play Centre that offers pre-built infrastructure equipped with cutting-edge technology. This centre provides a ready infrastructure that enables outsourcing service providers to start operations with minimal upfront investment. Meanwhile, work on the first and second phases of Dubai Outsource Zone is nearing completion, with the first companies set to move in by October this year. Phase I has five buildings in an area of 300,000 sq ft while Phase II and III have four buildings each spread over 250,000 and 200,000 sq. ft respectively. Dubai Outsource Zone is the perfect base for both captive and third-party outsourcing companies to provide mid and high-end services in areas such as finance, accounting, IT, payroll processing, engineering, R&D and design. DOZ is targeting a share of 5 per cent of the global outsourcing industry. In five years, DOZ aims to attract nearly 300 companies.

Shanghai boosts service outsourcing
The Shanghai government has issued guidelines to boost the development of service outsourcing. Following the requirements of the central government on giving top priority to the development of the service industry, Shanghai will focus on the development of its service economy and improve its competitiveness in the world. Service outsourcing covers Information Technology Outsourcing (ITO) and Business Process Outsourcing (BPO), with ITO accounting for 60 percent of the global market. The period of the 11th Five Year Plan (2006-2010) is a key period for the city to form an industrial structure with a service economy playing a major role. The facilitation of service outsourcing is a key measure for the city to speed up the modern service sector, said the Shanghai government spokeswoman. The government spokeswoman also briefed on the existing service outsourcing situation in the city. ITO has played a dominant role in local service outsourcing, with most software exported to Japan.