Source: infotech.indiatimes.com

NEW YORK: Dell Inc plans to make fewer computers itself and rely on contract manufacturers to cut costs, but the company could find it hard to get rid of its North American factories at a good price.

The world’s second-largest PC maker said in April it would outsource more manufacturing, and the Wall Street Journal reported on Friday that Dell was trying to sell most of its factories within the next 18 months.

Analysts said the most likely buyers of Dell’s plants are big contract manufacturers, most of which are based in Asia because production costs are lower there.

They questioned how much cost savings Dell can get, since it would likely have to give the buyer of its plants an accompanying personal computer manufacturing deal. “They will have to lock in a long-term production contract as well because no one will buy facilities unless there’s business to go with it,” Cross Research analyst Shannon Cross said.

“I just don’t know how much they get for them. They may also transfer the manufacturing assets to a partner.” Dell wants to boost its profit margins to levels enjoyed by rivals such as Hewlett-Packard Co and pour some savings into new product development, analysts said. Some 58 percent of Dell’s 5 million square feet (465,000 sq m) of manufacturing and distribution space is in the United States, according to regulatory filings.

Twenty-two per cent is in Asia and 20 per cent is split between Ireland and Poland. It has manufacturing plants in Brazil, Florida, North Carolina, Ohio, Tennessee and Texas. “Competitors have done it over the years. They have migrated to outsourced manufacturing,” Cross said, citing HP, the world’s top PC maker.

“It probably doesn’t give them (Dell) an advantage because their competitors are already there.” The Journal, citing people familiar with the matter, said Dell had approached contract computer manufacturers with offers to sell the plants.

Dell declined to comment except to reiterate that the company has eyed more outside manufacturing help. “We plan to expand our use of original design manufacturing (ODM) partnerships over time to deliver products faster and better serve customers in certain segments and geographical areas,” Dell spokesman David Frink said.

Read More

Source: economictimes.indiatimes.com

NEW DELHI: UK-based $2.6-billion services major Serco Group is in talks to acquire Indian BPO player InfoVision Group. The deal size is learnt to be Rs 200-250 crore. Industry sources say InfoVision, which is talking to a couple of IT-BPO firms, including Serco for a sellout, could finalise a buyer in 3-4 weeks. InfoVision provides customer relationship management, finance & accounting outsourcing, KPO and HR outsourcing. It employs over 11,500 people at centres in India, the US and Australia.

When contacted, InfoVision CEO Aditya Gupta declined comment. However, company sources said the BPO is likely to finalise a buyer in the near future with Serco being the frontrunner. InfoVision was earlier in talks with BPO firms Genpact and ExlService Holdings for a sellout.

In response to an email query, a Serco Group spokesperson said, “Serco is an international service company and we often see speculation of this nature. I’m afraid that we are not in a position to comment.” Industry sources said the deal would help Serco get a stronger foothold in India, especially for catering to the domestic market. InfoVision provides services to clients such as Airtel, Shoppers Stop, Lufthansa and Whirlpool in the domestic market, apart from international clients such as American Express and GE Capital.

The domestic BPO market recently saw WNS Holdings acquiring Aviva Global Services, the outsourcing arm of insurance major Aviva, for $228 million. The race for Citigroup’s captive has also heated up again. The booming domestic market has caught the fancy of both international and Indian players, which were so far focused on the overseas markets. The domestic BPO market, estimated at $1.6-1.8 billion, is expected to swell to $11 billion by 2012.

Hampshire-based Serco Group has a subsidiary in India—Serco Global Services (SGS)—that employs about 800 people. SGS provides a range of IT-ITeS services such as software development and support, remote managed services, payroll and HR services.

Serco Group is a services company that gets over 90% of its revenues from the public sector. It operates trains and traffic management systems and provides software and support services to law enforcement agencies as well as consulting services to clients in public and private sectors.

It has over 40,000 employees catering to government and private clients in over 30 countries. About 74% of its revenues come from the UK. It also has operations in continental Europe, Middle East, Australia and north America.