Source: www.business-standard.com

The Greek mythological battle for Pandora’s box or the military games played by the US army will now have to make way for Indian epic hero Hanuman and rustic games like “gilli danda” and “kabaddi” as the Indian console gaming market gets set for launch of locally developed games.

Indian console gaming enthusiasts, who have been trying their skills manoeuvring on alien land of Greek in the “God of War” or tried a hand on “Uncharted Territories” with alien military warriors, could now have some “desi” flavour with Sony Computer Entertainment all ready to launch games developed by Indian developers on Indian themes in the next one-and-a-half years. “So far, 100 per cent of the console games are imported,” said Sony Computer Entertainment’s Country Manager Atindriya Bose. “Though India has a strong IT infrastructure, we have not seen any Indian-developed games for the console market,” he said.

Most of the current work being done was more of an outsourcing work, he said, adding, “Roughly out of the 150-odd animation and gaming firms, an estimated 20-30 of them are involved in the outsourcing component for the console gaming segment.”

In view of the rapid growth in the Indian gaming market, with the console market having grown seven times, Sony Computer Entertainment has tied up with Indian firms to launch eight games, four of which will be out by early 2009 and the remaining four between 2009-end and early 2010, he said.

Source: www.hindu.com

Satyam Computer Services, India’s fourth largest software exporter, is eyeing to tap a large portion of the European market. The company is targeting 30 per cent of its total global revenue from Europe by financial year 2010.

The IT major had been investing carefully and at the right places. It aimed at providing the preferred near-shore option for European companies.

The company wanted to leverage strategic initiatives such as nurturing global accounts in the region, consultative and solution-based selling and forming alliances with local technology and business partners, according to Keshub Panda, Head of Europe Operations.

Mr. Panda told Indian journalists who visited Satyam’s development centres in the U.K and Germany recently that the company hoped to see a higher IT spend in areas such as application outsourcing, project shared services, business process outsourcing and infrastructure-related outsourcing in Europe by 2010. The main aim of Satyam in the U.K. and Europe was to have deeper engagement with the major accounts and increase the revenue growth above the market trend. With the current U.S. recession, customers were having less money to spend. But business activity would neither reduce substantially nor would come to a complete standstill, added Mr. Panda.

Risk-and-reward model

He said the European region, which accounted for 21 per cent of Satyam’s revenue, had an addressable IT outsourcing market opportunity of $168 billion. The company had adopted the “risk-and-reward” model for scaling up the future outsourcing deals and turn into a partner rather than pure service provider to clients. Earlier, the companies used to adopt time and material model and fixed bid model. With risk and reward model, the companies take a calculated risk anticipating higher returns from the customers.

Mr. Panda said Satyam already deriving a certain per cent of revenue from the risk and reward deal structure. It intended to get into business transformation models instead of plain vanilla ones to increase its margins.

Today, the companies are undergoing business transformation and it became necessary for any IT company to take part in the decision-making of other companies business strategies. It also became important for the IT companies to influence decision making processes of the chief executive officers and chief financial officers in their respective businesses, which was a tough process. This led to the growth of consultancy business vertical.

The Head of Satyam’s Continental Europe, Drs Peter M Heij, said that there was a significant market in Continental Europe that was still untapped.

Market behaviour

On the market behaviour, he said the purchasing behaviour of any European company varies from that of a U.S. company. Any company in this part of the world would like to start its business in a modest way and expand in future. The local content was large when compared to the U.S. It had a protective environment and the companies wanted a blended model in the business. At present, Satyam had 25 per cent local content in its European business. That means, the local companies wanted 25 per cent of their local people to work in the onsite and rest offshore, he added.

According to Satyam penetrating into the European countries, would be done by tapping the small and medium sized companies. It was hoped that nearly 10 to 15 per cent of the small and medium companies in the European market would be tapped by Satyam. It would be providing complete end-to-end solutions to all these SMEs, said Mr. Heij.

Similarly, he said to market their product, the model would also have to be different such as “pay as you use” and ’end-to-end solutions”. Under the pay as you use model Satyam will pay for the IT systems based on the usage. Similarly for end-to-end solutions, the company will provide services from installation to maintenance.

He hoped with these strategies, Satyam would be in position to acquire two very large accounts worth $ 100 million and 30 other accounts worth $ 10 million by 2010.

Satyam Central Europe Head Aloke Palsikar, said despite the global financial meltdown, the outsourcing market, in Europe and particularly in Germany and France, was expected to increase. In the present market scenario, the company saw more opportunities than challenges in the European markets, he added.

Mr. Palsikar said though the U.K. market continued to dominate, there was every probability to have change in the ratio. It was hoped that its share together with Ireland would come down from 52 per cent to 40 per cent, while that of continental Europe would increase from 48 per cent to 60 per cent over the next two years. In Q2 of current fiscal, revenue from Europe was 20.60 per cent of Satyam’s total revenue of $ 652 million. The U.S. market had contributed 62.03 per cent of Satyam’s revenue in the quarter. Satyam’s operation in European countries commenced in 1997 and at present has branch operations in 15 countries and presence in more than 20. Its three development centres in the U.K., Germany and Hungary serve over 160 active customers in Europe.

Source: economictimes.indiatimes.com

MANILA: Business outsourcing may not be the most glamorous industry in the world but it is one of the few bright lights amid the doom and gloom of the global financial crisis.

The two countries which have benefited the most from outsourcing, India and the Philippines, expect to see some initial pain from the financial turmoil but the industry is confident it will ride out the storm.

In the Philippines the business process outsourcing (BPO) industry expects growth this year of between 35-40 per cent on revenues of around seven billion dollars.

“We are part of the solution, not part of the problem,” Oscar Sanez the chief executive of the Business Processing Association of the Philippines (BPAP) said in a recent interview.

The BPO sector expects annual growth of around 40 per cent with revenues hitting 12 billion dollars by 2010 and employing one million people compared with 300,000 this year.

In India, where the industry generates some 40 billion dollars in annual export revenues, the story is much the same although it admits that it could expect some initial pain.

The sector traditionally views bad times as offering opportunities as Western companies cut costs by moving work to cheaper destinations offshore.

India leads the world when it comes to outsourcing with more than half the global business while the Philippines is a distant second with around 10 per cent.

Both countries place a great deal of importance on the sector as its growth creates jobs and much-needed revenue.

Rick Santos, the Philippine country chairman for global property services company CB Richard Ellis, told reporters that the crisis would “actually drive more BPO business to the Philippines”.

“You will see many more companies having to go offshore just to survive,” he said.

He said he expects about 502,000 square metres (5.4 million square feet) of Philippine office space to be leased this year, up 52 per cent from 2007.

India and the Philippines are the preferred destinations for European and American banks and IT companies for outsourcing their back room and call centre operations due to the highly educated work force and English speaking skills in both countries.

Sanez said that despite the financial turmoil he was confident the BPO industry in the Philippines will continue to see growth.

“Judging from the investor meetings we’ve been having recently our clients will want to ramp up their outsourcing activities in order to accelerate cost savings,” he said.

“The Philippines is in a very strategic position due to its strong and successful experience with BPO particularly with large American and British multinationals giving it a high level of credibility and trust especially in critical times.”

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Source: www.ciol.com

LONDON, UK: The financial crisis and global recession will accelerate adoption of global outsourcing and offshoring as strategic business tools as organisations respond to economic adversity with a forceful push toward cost-reduction according to leading sourcing advisory firm EquaTerra. Factors expected to impact outsourcing and offshoring over the next year are:

Globalisation will continue but at a slower pace: Numerous factors, including the severe global economic downturn, repeated product health/safety scares related to Chinese goods, a collapse of commodity prices (critical to supporting many emerging market economies) and the election of a new U.S. administration concerned with the loss of domestic jobs will slow globalisation and one of its key manifestations, the global sourcing of services. But the compelling business benefits of global sourcing, especially in tough economic times, will continue to drive growth.

Reassessment of current global outsourcing strategies/destinations: As buyer focus shifts to cost reduction and cost avoidance, organisations will carefully analyse current and future outsourcing efforts and service provider partners to ensure they are getting services from the most cost-effective location.

Steep learning curves: As buyers turn to outsourcing/offshoring to help weather economic turbulence, they will need to consider mitigating factors, including service provider capacity levels, prior direct experience and whether engaging a service provider expands or consolidates the supplier base, supplier consolidation/rationalisation is viewed as a means to gain economies of scale, reduce overall costs and speed implementation of new efforts to meet shorter term business needs.

Volatility in foreign exchange markets: Outsourcing buyers and sellers must become more effective/efficient at hedging against currency fluctuations that often negatively impact local currencies in emerging markets, creating instability in cost structure/pricing/profit margins. The seesawing value of the dollar will make calculating the true costs of outsourcing/offshoring more complicated, challenging buyers and service providers to plan/project longer-term pricing, cost and profitability levels. Efforts to do this should include explicit contractual contingencies and, when possible, spreading global service delivery efforts across multiple markets.

Wage inflation in offshoring markets will abate, at least temporarily: As Western markets pause to digest events and determine a go-forward strategy,demand for global outsourcing services will slow temporarily, curbing the recent trend toward wage inflation in offshoring markets and helping top outsourcing destinations remain competitive.

Evolving outsourcing business model: Buyers will continue to shift away from the use of project-based contract labor in favor of longer term, formalised outsourcing relationships. By committing to longer term and larger scale deals, buyers can get better pricing from service providers, better levels of service and lock-in longer term cost savings strategies.

Move toward flexible service delivery models and acquiring in-house skills needed to manage sourcing successfully: As buyers gain outsourcing/offshoring management experience, they will seek greater flexibility in service delivery models to fit form to function and tasks. The result will be a mix of domestic, nearshore and offshore shared services/captive centres and other outsourcing efforts that will evolve with the marketplace. Organisations will also place greater emphasis on defining, acquiring and transferring skills needed to successfully govern outsourcing/offshoring efforts.

Source: www.business-standard.com

ValueLabs, a Hyderabad-based software development, testing and knowledge process outsourcing (KPO) company, is planning to set up its second facility in the city at an investment of Rs 150 crore. ValueLabs currently has two facilities – a 175,000-sft centre in Hyderabad employing 1,420 and the other in Kuala Lumpur in Malaysia housing 40 professional.

“We are in the initial stages of discussion with the state government for allotment of 10 acre of land in an SEZ near Hyderabad and expect a positive response in the next few weeks. We plan to start work on the facility within two and a half months of allotment,” Arjun Rao, chief executive officer of ValueLabs, told Business Standard.

Rao said the first phase of the new facility will involve an investment of Rs 100 crore and would accommodate 750 employees upon completion in the next two years. “The 500,000-sft facility will be fully operational in the next four years employing 5,000, two-thirds of which will be catering to new businesses,” he said. The zero-debt company would fund the expansion partly through debt and the rest through internal accruals.

The company has also acquired 30 acres in Pune’s upcoming IT hub Hinjewadi and had already received necessary approvals from the Maharashtra government for setting up its centre there. “We believe that our current and proposed facilities in Hyderabad will meet our requirements for the next three to four years. We plan to take the Pune project forward after three years from now,” Rao said. ValueLabs headcount will go up to 7,000 when its Pune facility is ready.

The company had also secured a licence to operate in Dubai’s IT cluster – Dubai Internet City – and recently opened its sales office there, which besides acting as the primary engine of growth in the Gulf Co-operative Council countries will also serve as the springboard into the central Asian and African markets.

Rao said the company saw a huge traction in energy and telecom sectors in West Asia and expects to clinch five clients in the region to offer them custom application development, maintenance solutions and remote infrastructure management services. “We expect West Asia to contribute 10 per cent to our revenues in the next one year,” he added.

At present, the US contributes around 60 per cent to ValueLabs business, which it plans to bring down further to 50 per cent by expanding to other markets including South Africa, West Asia, India and Europe.

ValueLabs reported revenues of Rs 120 crore in the last financial year. It expects to close the current fiscal with a revenue run rate of Rs 200 crore on the back of its extended team model (ETM) and geographical diversification. The company follows an ETM approach in which its team becomes a part of the independent software vendor’s (ISV) organisation. Today, 50 per cent of its 60 clients are ISVs.