Source:Australianit.news.com.au

MORE than a third of Australian financial services firms are on track to embrace offshore information technology and business process outsourcing by this time next year, researcher Frost and Sullivan reports.

Banking, financial services and insurance companies are expected to spend $2.63 billion on ITO and BPO by the end of 2010, up from $1.83 billion in 2006.

The trend towards offshore outsourcing in the financial services sector is yet to pay big dividends for India’s highly publicised outsourcing firms.

Instead, traditional players EDS and IBM occupy the leading spots in the market, followed by Telstra subsidiary Kaz Group, BPO specialist Salmat and multinational outsourcer CSC.

The analyst’s report, Enterprise Outsourcing Opportunities in the Australian Banking, Financial Services and Insurance Vertical 2006-2010, is based on 25 management-level executives in the financial services sector.

Frost and Sullivan senior industry analyst Simon Hayes said the absence of Indian ITO and BPO firms from the top ranks of the Australian financial services BPO market did not mean they weren’t winning business.

“We asked respondents to rate by budget, so that doesn’t necessarily mean that they don’t want to use India firms, it just means those firms are not in the top tier by spending,” Mr Hayes said.

“The Indian firms are growing very rapidly.”

Indian firms still have a long way to go before they rival the sector’s biggest players, EDS and IBM, which have 41.7 per cent and 19.1 per cent of the financial services ITO and BPO market respectively.

Financial services firms also appeared to be more reluctant to give large-scale contracts to Indian firms than they were to outsource IT services and business processes offshore.

Twenty-six per cent of survey respondents said they had sent some information technology services and business processes offshore, and another 12 per cent expected to do so in the next year.

Mr Hayes said the BPO market was set to grow, but financial services executives weren’t aggressively signing contracts.

Instead they were waiting to see the results of business process outsourcing agreements inked earlier this decade. Mr Hayes said Russell Investment Group’s seven-year, $140 million business processing outsourcing contract with IBM, signed early last year, would be closely watched to see if service providers were capable of transforming business processes to make them more efficient.

The Frost and Sullivan ITO and BPO report was released as IDC Australia unveiled the findings of its own BPO survey, sponsored by systems integrator and business process outsourcing player Accenture.

The IDC white paper tips that the entire Australian BPO market will increase to $US3.84 billion ($4.66 billion) by 2010, up from $US2.39 billion last year.

Finance and administration and human resources services will continue to account for the bulk of the BPO market, the report finds.

“Until recently, Australian businesses tended to view BPO as a cost reduction tool only,” Accenture Australia managing director Doug Snedden said.

“Now they see BPO as a way to retire outdated back-office business processes and transform them into responsive and competitive processes that use new technology based on modern, web-enabled applications.”

Source: www.business-standard.com

For a while now, global IT firms and others such have realised the potential of India as a great market, however, it is the turn of security solutions provider McAfee to wake up to the fact that an Indian arm makes good business sense. Earlier operating through a liaison office in India, McAfee will now have its own subsidiary in the sub-continent, which will equip the California-based firm with more teeth and allow it to participate in open tenders and direct customer transactions, since the American firm’s largest software development centre is located in India.

Kartik Shahani, regional director, India McAfee talking to the media stated: “As a liaison office, we were basically doing business development work. We were not able to do actual transactions and sign up great contracts. As a subsidiary, we will now be able to participate in tenders, which require the vendors to quote directly.”

On a global scale, India spells a growth story for McAfee, and according to company sources, while the Asia Pacific region contributed 30% to the company’s sales turnover of about $1.2-billion last year, India contributed 20% to the company’s APAC business. And, its Indian business segment grows by about 50% year-on-year.

Shahani adds: “India is growing the fastest growing business in the APAC region. China has a language problem. We are going to make huge investments in India, which is going to be a separate entity in the next two months.”

Ironically, in the APAC region, McAfee’s China and ANZ (Australia & New Zealand) arms are already operating as separate subsidiaries.

In a month or two, McAfee India Singapore, the company’s liaison office in India, will acquire a different identity, and the new entity will now be known as McAfee India Sales, McAfee’s subsidiary in India.

With India’s corporate segment, the firm’s main growth driver, it contributes over 70% to the the US firm’s total revenue intake.

No wonder then, the World and his Missus are keen to come to India. The ‘Golden Bird’ or ‘Sone ki Chirya’ of yester years was lost to the world and even itself, after the British !‘Quit India’. Today, off-shoring / outsourcing has rediscovered the Sone ki Chirya! Albeit, with dusty feathers and tarnished golden sheen, however, continued success in the field of off-shoring / outsourcing will see to it that India shimmers and glows with a shining lustre, reminiscent of its glorious past! The Wonder That Was India!