Source: http://www.domain-b.com/infotech/itnews/20080130_cybermedia.html

Twenty-nine Indian companies have been selected among the world’s best 100 IT and BPO service providers by Global Services magazine from 17 countries in its fourth annual survey to be made public next month.

The ‘2008 Global Services 100′ listing identified the best companies in 10 categories covering technology providers; customer service and business-process providers; and providers by regions.

The toppers from each of the 10 categories included four companies each from India and the US, and one company each from China and Mexico.

The Indian companies include Tata Consultancy Services, HCL Technologies, Genpact, WNS Global Services; America’s EDS, Sitel, EPAM Systems and Computer Sciences Corporation; Mexico’s Softtek and China’s Neusoft.

The top 100 list includes 43 US and 29 India headquartered companies with four each from China and Malaysia, and three each from Russia and Brazil indicating their emergence as viable outsourcing destinations.

Two companies each headquartered in Argentina, Canada, Mexico, the Philippines, Singapore and the UK have made it to the list, while only one from the Czech Republic, France and Ukraine figure in it.

Functionally, these providers covered a range of services across IT and BPO, including IT Application Services, Infrastructure, Finance and Accounting Outsourcing (FAO), human resources outsourcing (HRO) and contact centres.

“The 2008 Global Services 100 represents the world’s best providers of technology, customer service and business process services,” says Pradeep Gupta, chairman, CyberMedia, publishers of Global Services magazine.

The year 2007 reported a total of 436 M&A deals in the services industry. Nearly one-third of the Global Services survey respondents said that they merged with or acquired one or more providers. Of these, 11 per cent confirmed acquisition of a consulting firm.

Choice of a quick inorganic route to growth helped companies gain a readymade talent base and access to new geographies, and customer base. As the global services industry matures and consolidates, the M&As during 2007 are just a sign of many more to come in the future, the survey adds.

The Global Services survey says that 47 per cent of the respondents saw the sliding dollar and the strengthening currencies of some key outsourcing destinations (India, the Philippines and Canada) as the most critical business concern. Many service providers are compromising on their margins and putting a hold on hiring plans.

Indian service providers who derive between two-third to three-fourth of their revenues from the US are back to the drawing board to consider non-U.S. avenues. While many IT-services companies were looking towards Europe and Japan as potential markets, others have strengthened plans for servicing the maturing domestic Indian market.

The survey adds that outsourcers could expect price increases and currency risk sharing defined in the contracts.

ADM, back-office operations emerge at the top

• Over 46 per cent respondents to the Global Services survey handled outsourced Application Development and Maintenance (ADM) work, followed by 30 per cent who specialized in outsourced managed services while 10 per cent handled engineering or R&D services. On the BPO front, 65.7 per cent providers specialized in back-office operations.

• While it is challenging to align people and capital to correlate IT and BPO operations, the demand for bundled IT and BPO services by customers of services remained steadily high over the past two years. Fifty four per cent of respondents to the 2008 Global Services 100 survey said that they saw customers seeking more bundled IT and BPO services than in the past.

• About 48.4 per cent of the global services providers polled offer both IT and BPO services; 21.6 per cent provide only BPO services and 30 per cent offer only IT services.

• “In its fourth year, the Global Services 100 study has become an industry benchmark and an essential reference for clients starting or re-evaluating sourcing relationships with global service providers,” says Eugene Kublanov, CEO, neoIT. India Reigns Supreme as a Delivery Location.

• India has emerged as the hub for global delivery with 57 per cent of the employees engaged in delivery centres located in India, followed by 18 per cent in the US. Coincidentally, software delivery centres of IBM in India also employ 57 per cent of the US headquartered giant’s full-time employees world wide. China had just 3 per cent of the full-time employees. Central and Eastern Europe followed with a similar number. Canada and Australia were at the bottom of the pile with just one per cent each of the employees.

• The $ 4.3 billion software provider Tata Consultancy Services (TCS) topped the list of best performing IT services companies list. TCS also featured among leaders in two other categories - infrastructure service provider and human capital development.

• HCL Technologies was named the best performing infrastructure service provider, one of the earliest providers of remote infrastructure management. HCL Technologies also features in the Global Services’ Top 10 list of IT service providers, FAO providers and leaders in human capital development.

• Genpact, which boasts over 30 delivery centers in the US., Mexico, India, China, Philippines, Romania and Hungary, was ranked the best performing BPO. Genpact, once a GE-promoted company, is also among the best performing FAO providers and leaders in human capital development.

• WNS Global Services ranked the best performing FAO providers list. One of the early starters in the BPO space in India, WNS has Travelocity, British Airways and United Airlines among its customers and also ranks among leaders in the top performing HRO providers listing.

• The $16-billion outsourcing behemoth, US-based EDS, was the best performing human resources outsourcing company. EDS, which acquired a majority stake in applications and BPO services provider, MphasiS, was also listed among the Top 10 best performing infrastructure service providers. (See: EDS completes Mphasis acquisition) Sitel that has specialized in call-centre management and back office processing for over 20 years, was named the best performing contact centre. Sitel has 155 centers spread across 27 countries with a very strong presence in Latin America.

• The Mexico headquartered Softtek was the winner of the leader, south of the border. One of Mexico’s most renowned IT Services provider, Softtek expanded to the east by acquiring IT United, a China-based IT-services provider. Softtek was also listed among the top 10 IT-services providers by Global Services 100 survey.

• Russian services company, EPAM Systems was ranked the leader in the Emerging European Markets segment. The company’s well-entrenched delivery capabilities spread from Ukraine to Budapest servicing high profile customers like Oracle and Reuters. EPAM was also listed among the Top 10 best performing IT services providers.

• The leader of the Emerging Asian Markets title went to the Chinese offshore IT-services company, Neusoft, a 16-year old Chinese application development, maintenance services and engineering services provider that handles work for Boeing, Motorola and Sony.

• The 49-year old Computer Sciences Corporation won the Leader, Human Capital Development recognition for its immense focus on human capital development. With delivery centers in India, China, the UK and US, Computer Sciences Corporation acquired Covansys and First Consulting Group.

• Infosys Technologies was listed among the Top 10 in five categories. The other companies to feature among the top firms across multiple categories include HCL Technologies (4), America’s 24/7 Customer and Neoris, India’s Genpact, EXL Services, Tata Consultancy Services and WNS Global Services and Philippines’ SPi Technologies were listed among top 10 in three categories.

The methodology

The top 100 list and the ranks in the 10 categories are based on a scientific methodology, starting with the responses being clubbed under four broad buckets: Size (revenue, employee strength, geographies covered, etc.), customers (customer base, testimonials and references, average contract size, etc.), skills (depth and breadth of offerings, delivery capability, quality initiatives, verticals covered, etc.) and others (attrition, training, etc.).

A weighted scoring scheme was used to rate each question. For the category lists, weights were assigned to address specific strengths and capabilities.

The scoring scheme was designed by a panel from Global Services’ and neoIT’s practice experts. Care was taken to ensure that all service providers (global, niche or regional) were given a level playing field. For a revenue-based question, for example, if the scoring scheme gave weightage to higher revenue, small or niche companies pared this disadvantage by scoring high on better growth rates.

The 2008 Global Services 100 study along with the list of the top 100 service providers and the toppers in 10 categories can be seen at globalservicesmedia.com in February 2008.

Source:http://www.vnunet.com/itweek/news/2208453/nasscom-blow-offshoring

UK firms could find it more difficult to obtain offshored IT services as the Indian national software body this week advised local firms to shift their focus to the domestic market.

The Roadmap 2012 report from the National Association of Software and Service Companies (Nasscom) and consulting firm Everest Group revealed that India’s domestic industry for business process outsourcing (BPO) has increased by 50 per cent in the last five years. Further predicted growth in this area is likely to have a significant impact on the current offshore model, which places India as the main outsourcing destination of choice.

Outsourcing consultant Richard Sykes said that if India focuses more of its efforts on building up its domestic BPO market, there will be less resources and people skills to devote to the international arena. Although firms supplying the domestic market could hire graduates without English language skills, he added that this is unlikely because graduates trained with language skills tend to be of higher quality.

The report revealed that there is a shortfall of one million skilled graduates in the current Indian BPO market, while it predicts five-fold growth for the industry over the next five years that will require another two million new jobs. Nasscom is also urging stakeholders to encourage the growth of domestic BPO in order to enhance the competitiveness of the Indian industry.

Sykes said until now the country’s domestic BPO market had been largely neglected by Indian providers, and although it might mean a skill shortage, Sykes welcomed the recognition Nasscom is giving to the domestic space.

“The growth of the domestic industry has caught the Indian BPO providers off mark because they were so focused on developing their offshore capabilities. This has meant the industry has been picked up by multi-nationals,” Sykes said.

Eric Simonson, managing principal of Everest’s research institute, supported this view, citing IBM’s dominance in the Indian domestic services market. He added that although some Indian providers such as Wipro and HCL have concentrated their efforts in the domestic space, many others such as Infosys have mainly focused on the export arena.

Source: afp.google.com

India’s outsourcing industry on Tuesday set itself the goal of lifting revenue almost five-fold to 50 billion dollars by the end of 2012 by tapping new markets and a booming local economy.

The target set by the National Association of Software and Service Companies (Nasscom) was based on a study that said the industry could accelerate growth by an annual 50 percent in the next five years from 35 percent in the last five.

The study sponsored by Nasscom and conducted by consulting company Everest Group estimated the size of the untapped outsourcing market at about 280 billion dollars.

“Accelerated growth to capture the addressable spend in the international and domestic market could take the industry to 50 billion dollars by 2012,” the study added.

The targeted growth can create two million direct jobs in India and add up to 2.5 percent to the nation’s economic output, said the study..

India’s outsourcing industry, excluding large software makers, has grown to 11 billion dollars in annual revenue and 700,000 people by head count by doing work for global companies at a fifth of the cost in the US or Europe.

“We have barely scratched the surface so far,” Nasscom president Som Mittal told a news conference in this southern Indian city where he released the findings of the study.

“The industry is now at an inflection point, ready to take off.”

Work farmed out to Indian companies, which account for 40 percent of the world’s outsourcing market, ranges from answering calls by bank customers to processing credit-card applications and insurance claims and equity analysis.

About a third of the new business will be generated by under-penetrated industries such as telecommunications, retail, media and energy, the study said.

While North America will continue to be the largest market, there are “significant untapped opportunities” in Europe and Asia, it added.

“Less than five percent of the total opportunity has been tapped till now, which is indicative of the growth potential available to the industry,” said Raman Roy, managing director of outsourcing firm Quatrro.

“The target is aggressive but achievable,” he said.

India’s outsourcing industry was hit hard last year by a more than 12 percent appreciation of the rupee that reduced the local equivalent of every dollar it earned.

The industry also faces worries of a slowdown in technology spending in the US, the end of a tax holiday and rising wages and other costs, a shortage of skilled professionals and competition from countries such as the Philippines.

India needs to protect its cost advantage and create an educational system that teaches students the skills required for the industry if it is to maintain its competitive edge as an outsourcing location, the report said.

Source: www.smallcapnews.co.uk

India Outsourcing Services has conditionally agreed to buy the London-based Mela Group of three Indian restaurants and a catering business in a reverse takeover worth £2 million in cash and shares.

The move will see India Outsourcing change its name to Indian Restaurants Group plc, with a strategy to roll out a chain of Indian restaurants throughout the UK offering authentic Indian food of a high and consistent quality.

Mela Group is a profitable chain comprising London’s Mela, Chowki and 3 Monkeys Indian restaurants and an outside catering business.

Amit Pau, chief executive of India Outsourcing, said: “Given the large but fragmented Indian restaurant market in the UK we believe we are particularly well placed to replicate the success seen in pizza, pasta and tapas chains.”

Source: economictimes.indiatimes.com

The turbulence in the US financial services sector, hit by billions of dollars in losses owing to subprime and mortgage crisis, has not affected the fortunes of the Indian IT services biggies, at least for now. The BFSI segment has traditionally been the highest spenders on technology and it also accounts for significant portion of the revenues of India based IT services providers like TCS, Infosys, Wipro, Satyam, HCL and Cognizant.

For India based IT services majors, the latest quarterly results show that BFSI segment has recorded a very positive growth rate on a sequential basis, for some, in fact it has been higher than the company’s overall growth rate.

Analysts felt they would be able to maintain the current growth rate even during the current quarter.

In the case of Infosys, the BFSI segment recorded 7% sequential growth while for Wipro Technologies, it was 9.8%. TCS CEO S Ramadorai said, “BFSI continues to be strong and it has grown above the company rate sequentially.” The BFSI segment accounted for 44% of TCS revenues during the third quarter.

However, the big question is whether, these IT biggies would be able to maintain this growth rate given the background of a likely slowdown of US economy and the large financial services giants cutting down on their IT budgets to cut costs.

Offshore advisory firm, Tholons CEO Avinash Vashistha felt that the worst of subprime crisis is over for the Indian IT services majors and they are likely to maintain the current growth rate, if not higher, from the BFSI segment. In case of Cognizant, the BFSI segment accounted for 47% of its revenue and it grew 7% sequentially.

According to its survey among its BFSI segment on the IT budget growth in 2008, 90% did not expect their outsourcing budgets to decline. According to Siddharth Pai of TPI India, it is very unlikely that there will be any change in the current growth rates in the BFSI segment as the compulsory IT spending will continue though there might be bit of an impact on the new projects.

The IT biggies felt that BFSI segment under pressure to cut costs will actually look forward towards increased spending on technology to deliver the benefits.

Infosys senior VP and head Ashok Vemuri said, “Challenges that they are facing are creating more opportunities and this will actually see an increase in the overall spend.” Though, Girish Paranjape, president, financial solutions, Wipro Technologies felt that a clear picture will emerge only in the later part of this year on the actual spending pattern in the BFSI segment.