Source: www.ndtvprofit.com

Mid-sized IT services and BPO companies are vulnerable to the adverse impact of US slowdown due to exchange rate volatility, slower deal closures, inflation and low billing rates than their bigger counterparts, a study said on Monday.

“The mid-size IT services companies are more likely to face the combined pressure of exchange rate risk, lower billing rates, domestic inflation and slower deal closures,” the study by the CyberMedia publication for the outsourcing industry said.

The large vendors with multi-shore delivery capabilities like TCS, Wipro, Infosys, Satyam and HCL Technologies would be better equipped to exploit new opportunities in the slowdown period, it added.
However, the study said slowdown in US economy will have moderate impact on the global IT services and BPO industry.

US slowdown to impact revneues in the short term

The economic slowdown in the US would impact profitability and revenues in the short term, the study said.

The industry is gearing up with a two-pronged approach of re-aligning existing service areas and increasing focus on non-US geographies to shield itself from impact of a slowdown.

Nearly 75 per cent of the service providers who were surveyed said that by adopting this approach, their companies could marginalise the net impact on revenue growth and profitability, it added.

Nearly half of the service providers, primarily representing BPO, infrastructure management and application maintenance areas, indicated that the slowdown has not impacted the deals pipeline in the current quarter.

On the contrary, many of these companies are seeing a stronger deals pipeline and accelerated sign-ups.
However, companies representing the new application development and offshore engagements reported delays, down-sizing or re-negotiation of contracts.

Planned projects

Nearly two-thirds of the buyers of outsourcing said that their companies would go ahead with the planned projects.

On cutting down the IT spending, nearly 36 per cent responded in the negative. However, 36.4 per cent of the respondents admitted that their companies may prioritise the outsourcing of IT projects in the short term.

Almost one-half of the respondents identified cuts in the contract IT staff, full-time internal hires and IT consulting as the likely areas to get impacted the most in the short-term.

The BPO-related services are least likely to be affected by slowdown.

Within BPO, 47.2 per cent of the respondents said that spend on sectors like finance, procurement and customer care will go as per plan. In the claims, mortgage, travel related BPOs, 44.1 per cent of the respondents felt that their clients would continue their BPO projects.
BPO companies like Genpact, WNS Global Services, EXL Services and Cambridge are among the Companies that are more likely to offer better value to clients during this period, the Global Services study noted.

Source: infotech.indiatimes.com

MUMBAI: In the wake of BPO employee Prakash Jadhav’s alleged involvement in a multi-crore credit card fraud, BPOs and ITeS companies are once again in the limelight for data security practices.

With the rising number of such cases coming to light, outsourcing companies in the country have now resorted to conduct infinity screening — background screening more than once for the employees — as a measure to strengthen security.

Jadhav, a Mumbai-based BPO employee was caught on Friday by the local police for alleged credit-card scam.

The focus has also shifted to transport personnel who are increasingly being subjected to regular background checks.

While some companies are content with mere address verifications, a few others are playing Sherlock Holmes conducting sting operations on the cabbies to ensure safety of their associates.

Infinity screening process entails conducting background screening more than once during the year. Background screening typically happens when the employee joins the organisation.

According to First Advantage managing director (West Asia) Ashish Dehade Indian companies are the only ones practising infinity screening.

“It helps in checking criminal records as these are dynamic in nature. Previous employment and education records remain static,” Dehade says. First Advantage is one of the largest employment screening and verification company.

It is difficult though to base this concept on random sampling as it affects companies’ resources. Gurgaon-based background verification company, AuthBridge Research Services’ CEO Ajay Trehan says that background checks conducted more than once have a rationale behind them.

“These tests are held when an employee is put on another project which is more sensitive or when he is sent abroad for an assignment,” says Trehan.

There have been cases of acquisitions where employees of acquired companies are made to undergo background screening. “In one case 10,000 employees of an acquired company underwent background screening,” he adds.

Background screening is a recent concept in India undertaken at the insistence of clients. Screen Facts co-founder Kalpesh Desai says risk mapping followed by perpetual checks would be the ideal.

“High risk areas should be mapped and details of the employees working in these departments should be verified from time to time. As of now, the number of companies doing this is negligible,” adds Desai.

Further, forethought needs to be given to this process as it has a huge financial impact. WNS corporate HR chief people officer Aniruddha Limaye says that under normal circumstances it is not feasible to conduct background screening for a random sample periodically.

“It takes anywhere between Rs 1,000-2 ,000 per person to conduct a background check,” adds Limaye.

And checks are not limited to employees anymore. WNS, a third party BPO with over 17,000 employees conducts fingerprint tests for its drivers apart from its employees in association with district forensic departments.

It also conducts behavioural tests for the company’s transport staff. “The drivers are basically aggressive. The training aims at educating them with the driving norms. We tell them to adhere to the speed limit and not be pressurised by employees,” says Manoj Sharan, chief administrative officer, WNS.

These work shops are held during weekends. The drivers are selected on the basis of feedback received by the employees. There are close to 2,000 drivers at WNS. While WNS has been conducing address verification in the past, license checking and finger printing etc have been institutionalised in the last one year.

Like WNS, the BSE-listed Firstsource too has started taking fingerprints of its security personnel and driving staff. They also conduct random alcohol tests on the drivers.