Daily ITES Breaking News - Monday, May 22 2006

[BPO Business Intelligence]

 

COMPANY NEWS FLASH

Watson Wyatt Adds 3 Clients in 3Q ’06 
Watson Wyatt, a US-headquartered HR and staffing consultancy services provider, has gained three new clients in 3Q 2006. The new clients of the company include Uniq, Sunderland Marine, and TUI UK (Thomson Holidays). The new clients of the company have awarded Watson Wyatt mandates pertaining to various investment services. 

Maple Announces $12Mn Facility Launch in India 
Maples ESM Technologies, an Indian enterprise systems management services provider, has announced the launch of a new facility in Chennai, India. The company has invested about USD 12 million for its new facility. The facility will provide IT services to the company’s global clientele in the remote IT infrastructure management segment. The company has an employee base of 750 and plans to increase it to 1,500 by end 2006 and to 2,500 by end 2007. The company had reported a turnover of USD 3 million in the last year and targets to increase it to USD 10 million in the current year.

Hinduja Group Opens Outsourcing Facility in Manila
Hinduja TMT Ltd. has announced the opening of an eight million dollar outsourcing facility in the Philippines. “The operation, HTMT Philippines, is a result of an acquisition of firms C-Cubed and SourceOne,” said Ramkrishan Hinduja, co-Chairman, HTMT. HTMT entered the Philippines three years ago after it decided to buy into C-Cubed. The C-Cubed facility now employs 2,400 agents for 2,000 seats. The new facility will handle in-bound calls for mainly American clients. HTMT has invested over $25 million in the Philippines, with eight million dollars going to the construction of the Manila facility. The rest went to the acquisition of C-Cubed and SourceOne, according to Hinduja. That investment is just the firm’s initial investment in the Philippines. Further investments are expected as HTMT acquires more firms in the country, and expands operations. HTMT has a total of around 7,000 employees for its outsourcing business, with 2,400 presently employed in the country. C-Cubed is now a wholly owned subsidiary of HTMT Philippines, and will henceforth act as its marketing arm in the country. HTMT also maintains operations in the Mauritius, the U.S.A. and Canada.

Sutherland Global Services to open shop in Kerala
Sutherland Global Services, a global leader in business process outsourcing (BPO) will open a new centre at Technopolis, Kerala's first private IT Park. The agreement to establish the BPO facility was successfully concluded between the New York-headquartered Sutherland and the Muthoot Pappachan Group that owns Technopolis. Technopolis is a state-of-the-art park built upon an area of 3,55,000 square feet housed in the Cochin Special Economic Zone. Sutherland manages global client relationships in 14 locations across the US, Canada, India and the Philippines.

BT ’06 Revenues Increase 6% to Reach GBP 19.51Bn 
BT has reported a 6 percent increase in its 2006 revenues to reach GBP 19.514 billion. The revenues for the company include the impact of reduction in mobile termination rates and acquisitions. The company’s 2006 profit before taxes and specific items increased 5 percent year-on-year to reach GBP 2.177 billion. The 4Q 2006 revenues for the company increased 7 percent over 4Q 2005 to reach GBP 5.134 billion.  The company’s profit before taxes and specific items for 4Q 2006 was GBP 562 million. The corresponding figure for 4Q 2005 was GBP 560 million. The 2006 revenues of the company’s Global Services reached GBP 8.632 billion. The corresponding figure for 2005 was GBP 7.488 billion. The 2006 EBITDA for the division reached GBP 1.001 billion as compared to GBP 961 million in 2005. The company’s 4Q 2006 revenues for Global Services increased 10 percent over 4Q 2005 to reach GBP 2.369 billion. The 4Q 2006 EBITDA for the Global Services also increased 10 percent over 4Q 2005 to reach GBP 311 million.

NEW INDUSTRY NEWS FLASH

European Service Providers Increasing Offshore Presence – IDC 
According to a study by IDC, European service providers are enhancing their offshore capabilities. The service providers are doing this as part of their strategy to compete with the offshore-based and global service providers, such as TCS, Wipro, IBM, and Accenture. As compared to their US and Asian competitors, the European service providers at present have a lower proportion of their staff placed offshore. The European service providers plan to increase their offshore assets by 65 percent during 2006 which will enable the them to compete with both the US and Indian service providers in a better way. Some large and medium-sized European service providers have already established themselves in some offshore locations, such as India, Eastern Europe, and South America. The needs of the European financial sector, manufacturing, and utilities will drive the European service providers to increase their offshore presence. The offshoring is expected to become a medium to be adopted by all the service providers for their customers. The usage of the offshore resources started as application development services, but the scope has expanded to include infrastructure services and BPO also. In addition to the high-end companies, offshoring will also benefit medium-end of the market which is the core area of operation for the European service providers. 

Mid-market Cos Increasing BPO Adoption for Cost Reduction – IDC 
According to a study by IDC, mid-market companies are increasingly turning to BPO services for reducing their cost. Both the small and large BPO service providers have started targeting their products and services towards mid-market companies. Many BPO service providers have started working towards building and consolidating their BPO solutions and value propositions for mid-market companies. The BPO service providers, who have a track record of primarily targeting large companies, are also assertively working towards including mid-market companies in their client base. In fact, a few new BPO service providers have also emerged to capture opportunities being provided by mid-market companies. The report also analyzed HR and F&A functions of mid-market companies. A majority of respondents from both the functions are currently using, will begin using, or are considering taking-up the BPO services. Both the functions estimated their future BPO spending to either increase or remain at the current levels. Amongst other findings, a vendor’s industry knowledge was the desired primary attribute for its selection by the HR mid-market respondents. The respondents desired BPO service providers to help them understand the cost of HR within their organizations and educate them on the benefits they will realize by adopting a standard offering. The vendor’s industry knowledge, price competitiveness, business consulting expertise, and technology expertise are the prime attributes for its selection by the F&A mid-market respondents. The F&A respondents showed readiness for adopting an offshore value proposition. 

LPOs here head for consolidation
Legal Process Outsourcing (LPO) in India, which offers many opportunities, may be headed for a phase of consolidation in its bid to move up the value chain. Presently, the sector sees little high-end work as most Indian LPO companies restrict themselves to areas like accounting, document management, agreement formatting and other secretarial services. There are a little over 100 companies in the LPO space but only a handful are actually influencing intelligent decisions. Despite challenges in the industry, the opportunity is estimated at $200 bn for the US alone, not considering the equally high-potential European market. India is likely to receive 60% of around 40,000 legal jobs outsourced by the US by ‘10. Much of the back-end work that happens in India requires little or no expertise. A lot of companies do litigation support where even an ordinary graduate can work.

OTHER INDUSTRY NEWS FLASH

India business confidence up:CII
Expectations of more than 8 per cent GDP growth and higher exports this financial year raised confidence among Indian businesses for first half to September 2006, a survey by the Confederation of Indian Industry (CII) showed. The CII survey of 254 companies released on Sunday showed the main business confidence index rose to 69.3 points for April-September 2006 from the September-March 2005/06 level of 67.2 points. A score above 50 indicates "positive confidence" while a score above 75 would indicate "strong positive confidence", the industry lobby group said in a statement. The higher confidence level revealed in the 65th survey of the country's largest industry lobby group, published every six months, comes despite expectations of an increase in input costs that may put pressure on profit margins. The CII survey showed the expectations index, which reflects firms' outlook for the next six months, also increased to 70.8 points for April-September 2006, from 68.5 points in the previous half. CII's current conditions index also increased to 66.3 points from 64.7 points as most respondents expect the Indian economy to grow by more than 8 percent in 2006/07. The survey showed 88 percent of respondents willing to make additional investments during 2006/07. About 57 percent of them expects 75-100 percent capacity utilisation during first half of 2006/07.