Wednesday, November 25, 2009


Firms can mitigate IT skills shortage

The shortage of information and communications technology (ICT) skills in developed countries could become a serious issue once the worldwide economic crisis starts easing.

This will be exacerbated by the falling number of masters and PhD holders in science and engineering, restrictions on cross-border movement of IT professionals and the US H-1B visa programme. However, this vicious circle could be mitigated by the Indian service firms increasingly recruiting internationally, according to a new OECD report on employment trends in the ICT secto

The report notes that Indian tech firms like TCS, Wipro and Infosys have seen slower recruitment since the first quarter of 2008. However, the pent-up demand in the European economies and the US will ensure that good workers are available for the taking when these companies are looking to further expand their international operations.

“Concerns have been raised whether increased offshore activities could lead to a shortage of ICT skills in the OECD countries in the long term,” the report said, adding that such a shortage could reinforce the need for further offshoring as ICT skills shortage is known to be a driver for offshore outsourcing.

The report said that while no additional largescale layoffs have been announced by the top 10 IT services firms, employment levels will stay at almost the present levels until 2009-end. IT services firms like IBM and Cap Gemini have announced slower hiring for 2009. So have Indian IT giants like Tata Consultancy Services (TCS) and Infosys, which despite the crisis, still expect to grow in single digits in the third quarter of 2009-10.

The economic crisis has put IT service costs under pressure, but this may benefit outsourcing due to the increased internal cost-cutting and perceived benefits from more flexible external sourcing of IT and business process services. The recent quarterly data on the outsourcing markets indicate that despite the number of outsourcing transactions still on the rise, revenue growth through IT and BPO will probably decline in 2009, due to the falling total contract values (TCV), the OECD report said.

However, the Asia-Pacific region has been performing well with TCV in the first half of 2009 increasing over 150 per cent over the first half of 2008. The report suggested that higher TCVs in the APAC region could explain the optimism of the Indian tech service firms who have been changing their product-product mix to adapt to the changing market demands.

“Recruitments have already started to slow in the beginning of 2008 when new hiring by leading Indian service providers dropped 22 per cent in the first quarter of 2008 and by almost 50 per cent in the second quarter compared to the same period one year earlier. These lower recruitment rates are also reflected in the decreasing number of new offshore centres opened by IT services firms,” the report added.

Symbiosys Tech to add 230 seats

Software exporter Symbiosys Technologies is planning to add another 220-230 seats by 2011. The company has set up its offshore development centre at the Visakhapatnam IT Special Economic Zone with an investment of Rs 20 crore.

Chief Minister K Rosaiah would inaugurate the 100,000 sft facility on November 25, Naresh Kumar Oruganti, chief executive officer, Symbiosys, told mediapersons here on Monday.

The company, which has offices at Hyderabad and Bangalore, expects its Vizag unit to account for Rs 14 crore software export turnover. “Currently our manpower strength is 220 and by 2011, this would increase to 450,” he said.

China eyes Indian outsourcing cos for software solutions

As top Chinese enterprises such as Bank of China and China Telecom seek to globalise their operations, they are increasingly turning to multinational and Indian outsourcing firms, including IBM and TCS, for deploying and maintaining standard software solutions, giving them an edge over local service providers.

In many ways, Chinese customers’ shift towards global and Indian vendors is reminiscent of how top Indian customers such as Bharti Airtel preferred an IBM over domestic suppliers around two decades ago for modernising their IT and business systems.

While state-owned and local Chinese software services suppliers, such as Digital China Holdings and Neusoft, continue to work with the country’s large customers, IBM along with TCS and others are being preferred for large, complex outsourcing contracts by customers such as China Telecom and Bank of China.

“A fragmented local vendor landscape and a domestic market dominated by wholly foreign-owned enterprise customers means that it will be the major western and Indian outsourcing vendors that will reap the rewards,” said Patrick O’Brien, senior analyst at the UK-based research firm Ovum. “Apart from scale, local service providers also lack experience in handling large outsourcing contracts, something global and Indian firms are really good at,” he added.

While IBM earned nearly $690 million from China’s almost $10-billion IT services market last year, both TCS and Wipro have started making progress as well. TCS on its part, has recently won several large contracts beating local Chinese rivals, including over $100-million deal for implementing a core banking software at Bank of China.

Until recently, most companies in China were running homegrown ERP and other systems, however, many of them are now planning to deploy standardised solutions from SAP and Oracle, this is where we have better expertise,” said Girija Pande, head of TCS’ Asia business.

Chinese banks have not yet made significant technology investments, compared with their US counterparts. While only 10% of the country’s banks offer online banking, there is only one ATM machine in China for every 10,400 citizens, compared with one ATM for every 735 citizens in the US.

A core banking software based on modern platforms from TCS or Infosys will help these Chinese banks centralise their retail and wholesale banking operations, and also enable them to cope up with increased lending activities, as required by their government.

“Banking and telecom customers in China want vendors with global expertise, we recently advised one of the top three phone firms in China to go with IBM and TCS,” said an outsourcing expert, who consults Chinese customers on their outsourcing strategies. He requested anonymity because he is not authorised to speak about his engagement with these clients.

For Indian tech firms, such as Infosys and TCS, the past experience of working with large customers in the US and Europe is paying rich dividends. “Local Chinese outsourcing providers have not been providing services across the IT/BPO services spectrum, but are gradually trying to move up and address multiple market needs,” said Srinath Batni, who is a board member of Infosys’ Chinese subsidiary.

Apart from local Chinese customers, Infosys is also able to serve its global customers rolling out their operations in the country. For instance, Infosys’ core banking software Finacle has made some progress in China with significant wins at China Bank and ABN Amro’s operations in Greater China. Companies such as IBM, TCS and Infosys are also able to bring their project management experience to serve large Chinese customers.

Wipro to hire more locals in US for Atlanta operations

Global software major Wipro Technologies is expanding its US operations and will hire about 1,000 people, including more locals, at its Atlanta development facility, the IT bellwether said on Monday.

"We are expanding our US operations to scale up our headcount to about 1,000 from 350 presently at our Atlanta centre," the company said in a statement here.

"About 80 percent of them are locals and includes graduates from leading academic institutions in Atlanta," it added.

"The local employees will support our North American clients in diverse verticals such as healthcare, manufacturing, telecom, utilities, retail and financial services," Wipro chief global delivery officer Sambuddha Deb said in the statement.

Lauding Wipro for investing in the Georgia state capital, Metro Atlanta Chamber vice-president Jorge Fernandez said the trade body's goal was not to just attract global firms, but also ensure that they thrive and grow in the US market.

"Wipro's success signifies more high-tech jobs to metro Atlanta and continues to build our reach into India," Fernandez said.

Atlanta Development Authority director Charles Whatley said Atlanta has emerged as the prime location for global firms like Wipro to set up their US headquarters.

"Wipro is finding attractive talent and our market is welcoming its services," Whatley added.
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Tata Comm, Infosys & four others in deal with US cos

Six Indian companies, including Tata Communications, Infosys Technologies and Apollo Hospitals, have signed separate collaboration agreements with US-based firms for joint business development at Washington on Monday.

The agreement signing ceremony, organised by industry body CII, coincides with the state visit of Prime Minister Manmohan Singh to the US.

Data services provider Tata Communications has inked a Memorandum of Understanding (MoU) with Tyco Electronics to work together in providing additional connectivity and transmission, using dark fibers on the submarine cable system.

Indian IT major Infosys Technologies has signed a multi-year enterprise agreement with Microsoft, to work together in areas like databases, besides infrastructure and application software.

Apollo Hospitals has signed an MoU with stem cell therapeutics company StemCyte to establish a cord blood bank facility at its Ahmedabad-based hospital.

Drugmaker Cadila has joined hands with biotech firm Novavax to support production of key vaccines in India, including the recently-developed H1N1 Pandemic Vaccine. Jubilant Organosys also entered into a joint venture with two US institutes — University of Alabama and Southern Research Institute.

Satyam scam is of over $2.8 bn: CBI

The accounting scam at Satyam Computer Services is to the tune of Rs.14,000 crore (Rs 140 billion/$2.8 billion)) and not Rs 7,800 crore (Rs 78 billion) as the company's disgraced former chairman B Ramalinga Raju stated earlier this year, the Central Bureau of Investigation (CBI) has said. ( Watch )

The federal agency Tuesday filed a 200-page charge sheet in the special court for CBI cases here that had details of properties acquired by Raju and other accused and their financial transactions abroad through fictitious firms.

"The quantum of scam and the loss suffered by investors has been quantified. The loss suffered by investors works out to over Rs 14,000 crore," said CBI Deputy Inspector General Lakshminarayana.

Microsoft CFO to leave, look for bigger job

Microsoft Corp's Chief Financial Officer Chris Liddell is to leave the company at the end of the year, indicating that he is looking for a bigger job at another company.

Liddell, 51, has been CFO at the world's largest software company since May 2005, after joining from paper and packaging maker International Paper Co, where he was also CFO.

The New Zealander, who has a masters degree in philosophy and does triathlons in his spare time, is now "looking at a number of opportunities that will expand his career beyond being a CFO," according to Microsoft.

Before coming to the United States, Liddell was CEO of New Zealand forest products company Carter Holt Harvey Ltd, and also worked as an investment banker.

He will be succeeded as Microsoft CFO by Peter Klein, who is currently CFO of Microsoft's Business Division, which makes the highly profitable Office suite of programs.

Microsoft shares fell 21 cents in after-hours trading to $29.74.

HCL opens centre in Brazil

HCL Technologies said it has opened a global IT development centre in Sao Leopoldo, Brazil, to cater to clients across Latin America, North America and Europe.

The centre, which compliments HCL's operations in Sao Paulo, is expected to hire over 300 engineers by 2012, HCL Technologies said in a statement.

The centre will offer a range of services, including enterprise application services, custom applications development and maintenance, and remote infrastructure management to clients primarily in Latin America, North America and Europe, the statement said.

Brazil accounts for more than 40 per cent of the overall IT spending in Latin America. According to global market research and analytics company IDC, spending in IT services activities in Latin America will be more than USD 20 billion in 2009 and will grow to more than USD 25 billion in 2012.

"Brazil offers the perfect balance of cost savings and talent base that allows HCL to serve clients not only in this fast-growing region, but also in the US and Europe," HCL America President Shami Khorana said.

HCL's operation in Brazil is the first in a series of locations the company will establish in Latin America, he added.

Legislation to make H-1B hiring tough

There seems stricter H-1B restrictions are in the offing for IT firms. According to a report, two senators Bernie Sanders and Charles Grassley, have introduced legislation that would bar any company that lays off 50 or more workers from hiring guest workers.

The legislation could potentially affect a large number of technology firms that have laid off large numbers of workers but continue hiring, says the report in ComputerWorld.

The high-tech industry overall has laid off more than 345,000 workers since August 2008, according to the two senators. In a statement released last week, Grassley said "With the unemployment rate over 10%, companies that undertake mass layoffs shouldn't need to hire foreign guest workers when there are plenty of qualified Americans looking for jobs."

Earlier this year, the duo successfully got H-1B hiring restrictions added to the financial bailout bill. In February 2009, US Senate agreed to set restrictions on the hiring of H-1B workers by financial services firms that receive federal bailout funds.

The amendment passed though didn't include a blanket restriction on H-1B use, it did set a series of strict standards on H-1B hiring. Any company receiving TARP funds is automatically considered H-1B-dependent, regardless of the percentage of H-1B workers on its payroll.

The H-1B-dependent designation subjects employers to a number of requirements, including a good-faith effort to hire US workers first.
Source: IndiaTimes

Honeywell to open centre in India

US-based multinational company Honeywell plans to set up a new technology centre in India with an investment of $34 million.

"The centre will also include labs for process and applications development for other specialty materials technology areas, including fluorine products and nylon materials," the company said in a release.

The centre is expected to employ 100 people in five years, it added. Honeywell will invest $34 million in an existing property to develop the centre at Gurgaon.

"This centre will allow us to conduct development closer to our end customers, while at the same time tapping the recognised engineering talent of India," said Andreas Kramvis, president and chief executive of Honeywell Specialty Materials.
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TechM bags 5-year STel deal

New telecom entrant STel Ltd has awarded a five-year IT outsourcing contract to Tech Mahindra, at least two people familiar with the transaction told ET last week.

STel, which plans to compete with incumbent phone firms including Bharti Airtel and Reliance Communications, had shortlisted Tech Mahindra and Wipro for outsourcing system integration, managed services. The contract also includes maintenance of the phone firm’s business and operational support systems.

A senior STel executive confirmed the transaction, but a Tech Mahindra spokesman declined to offer any specific comments. “This contract does not include any fixed investments by STel, and is based on ‘pay as you go’ model,” another person added.
Under this model, a service provider offers different services to a customer as and when required, and charges a fee based either on number of users or number of transactions completed. This model helps customers avoid high capital expenditure in setting up their own IT infrastructure.

Chennai-based STel plans to start rolling out GSM services pan-India during the fourth quarter of the current financial year.
The company has unified access services licences and spectrum to operate in six Indian states - Bihar, Orissa, Jammu & Kashmir, Himachal Pradesh, North East and Assam. The telecom service providers in India opt to share passive infrastructure such as telecom towers and outsource non-core activities such as network and technology management, to reduce costs and roll out services faster, the second person said.

Recently, Tech Mahindra also bagged a Rs 2,000-crore deal for end-to-end outsourcing of IT applications and infrastructure from Etisalat DB Telecom, a joint venture between the UAE-based Etisalat and the Dynamix Balwas group. It also won a $500 million outsourcing contract from new telecom entrant Swan Telecom in August this year. STel had earlier applied for licences in all the 22 circles but was eventually granted a licence for only six circles.

Privately held STel is a joint venture between Bahrain Telecommunications Company (Batelco) and the Siva group. Siva Group is a $3-billion group with diversified business interests in verticals such as wind energy, shipping and logistics and hospitality, while Bahrain’s Batelco is a diversified, integrated telecommunications operator with mobile, fixed and wireless broadband, datacom and fixed line services.
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25,000 onsite H-1B inspections

US immigration officials are taking H-1B enforcement plan to conduct 25,000 on-site inspections of companies hiring foreign workers over this fiscal year, according to a report in ComputerWorld.

According to the report, the move marks a nearly five-fold increase in inspections over last fiscal year, when the agency conducted 5,191 site visits. The new federal fiscal year began Oct. 1.

Tougher enforcement comes in response to a US Citizenship and Immigration Services (USCIS) study (in October 2008), titled H1-B Benefit Fraud & Compliance Assessment, which found a 27% rate of fraud in the H1-B visa programme.

According to the study, there were a total of 51 cases from the sample of 246 H1-B petitions that were fraud or a technical violation of the regulations. The research primarily found two types of fraud, one, where there was 'willful misrepresentation, falsification, or omission of a material fact'; and two, where there was no willful fraud, but `there was evidence that the employer or alien beneficiary failed to comply with applicable laws and regulations.'

Some of the fraudulent activities included cases where either the business did not exist or the degrees and supporting documentation were found forged. In several cases, signatures too were found forged. USCIS study also found that 27 percent of the workers surveyed were being paid less than the prevailing wage for a particular job description and location.

According to US immigration authorities, over 11,000 H-1B visa slots are still vacant against the Congress-mandated cap of 65,000 for the fiscal 2010.

This is for the first time in several years that thousands of H-1B visas are still to be filled up. In previous years, the entire visa slots used to be grabbed on day one.

HCL Tech bags $200-m deal from UK co

HCL Technologies said it has bagged a long-term deal worth about $200 million from UK-based insurance firm Equitable Life Assurance Society.

“The contract is ‘evergreen,’ it is for a period of 30 years. The revenue from the deal will come (mostly) in the first five to six years and decline gradually as policies decline,” HCL Technologies’ senior vice-president Stuart Drew said.

The deal has been awarded to HCL Insurance Business Services, the IT firm’s UK-based life and pensions administration business.

Currently, about 340 people are servicing the account. “We expect about 100 people will be taken in by Equitable Life, rendering about 240 people surplus. They will be relieved under suitable schemes,” Equitable Life Chief Executive Chris Wiscarson said.

“HCL will take care of the work of these 240 employees, with about 50-70 jobs being taken care of from HCL’s Chennai centre,” he added.

As part of the deal, HCL will provide complete solutions, including policy administration, finance, actuarial services, IT operational support and call centre services.

Juniper to invest $400 mn in India

IT and computer networking firm Juniper Networks today said it plans to invest 400 million dollar in India in the next five years.

"Juniper plans to invest 400 million dollar in India in total operations, including sales and research and development in the next five years," Sanjay Jotshi, Director of Enterprise and Channels, India and SAARC, Juniper Networks, told PTI.

"As we see revenue growth, we will thoughtfully begin investing more in areas that will continue to drive growth for the company," he said.

He said it was viewing India as a strategic market with focus on BFSI (banking, financial, services, insurance) governments and telecom sectors.

"India is a strategic market for us. BFSI, government and telecom sectors are our vital markets," he said.

Jotshi said the company has invested 200 million dollar to date in its Bangalore R and D facility. This includes infrastructure, equipment for labs and salaries, he said.

"The India engineering centre is a crucial part of Juniper success story. Any products shipped by Juniper has some contribution from R and D centre in Bangalore. Twenty five per cent of Juniper's engineers are based out of the Bangalore R and D facility," he said.

Nokia to cut 220 R&D jobs

Nokia, the world's biggest mobile phone maker, said today it would cut around 220 jobs in Japan as part of its plans to streamline its vast research and development operations.

"As part of its global efforts to align its research and development (R&D) operations to be in line with its focused portfolio of future products, Nokia will be reducing its R&D activities in Japan," the Finnish company said in a statement.

Last week Nokia announced that about 330 employees at its research and development units in Denmark and Finland would be made redundant.

The company employs about 17,000 people in research and development worldwide.

It said that despite the planned reductions, it would continue to have "significant sourcing activities in Japan."

"Vertu, Nokia's exclusive line of handcrafted mobile phones for the luxury market, will also continue operations in Japan unaffected by today's announcement," it noted.

The mobile phone giant launched a cost-cutting programme last January, after its earnings fell as consumers cut back on buying handsets amid the global financial crisis.

The programme aims to generate more than USD 1.0 billion in annual savings.

Before today, Nokia had announced about 4,000 job reductions since January, including around 1,300 voluntary redundancy packages.

Thursday, November 19, 2009

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IBM eyes tier II, III cities for expansion in India

IT solutions provider IBM is planning to expand its footprints in tier II and tier III cities with a bouquet of hardware, software and services offerings primarily targeted at mid-market clients.

IBM Growth markets vice president Harish Krishnamurthy told ET that the company is soon going to set up its hubs in potential cities like Raipur, Bhopal, Bhubhaneshwar, Vizag and Nagpur. “These cities have great untapped potential.

By starting our hub in these cities we would be able to cater to the requirements of surrounding tier III cities through our partners under hub and spoke model. The small and medium enterprises offer great business opportunities,” he said.

At present, IBM has a direct presence in 22 cities across the country. The company has also appointed IT players Sequel Infocom and Icon Integrated services as the channel partners to sell IBM’s infrastructure services to clients. “These two partners will focus primarily on Rajasthan market. They will help us in enhancing our reach in the state by offering infrastructure services to clients helping them in areas of Green IT, security, business continuity, improved collaboration and communication among others,” he said.

IBM has also launched first of its kind service offering named IBM Express Remote managed Infrastructure Services (ERMIS) exclusively to be sold by its channel partners. “IBM cannot sell it directly to the clients. It has to be sold through our channel partners. It is designed to enable IBM business partners in providing their clients with remote monitoring, management and service reporting of their IT infrastructure,” said Vivek Malhotra, IBM vice president – North & East, General Business.

Apart from that the company has also launched a cost-efficient Scalable Modular Server Rooms (SMSR), which has been successfully implemented in Shree Cements. “This is also first of its kind in the country. Unlike other conventional servers, which take 6-7 months for installation, this data server takes shipment time of 2-3 weeks and just 3 days of implementation time. Also, it consumes 15-30% less power than other servers. The entry level model comes at a competitive price point of $50,000 which is almost 10% of any conventional server,” Mr. Malhotra said.
Source: EconomicTimes

Over 2,000 Indian firms adopt Windows 7

In less than a month since its launch on October 22, over 2,000 Indian companies are in the process of installing Microsoft’s latest operating system (OS), Windows 7.

The companies include major IT companies like Infosys, Wipro, NIIT, car companies like Maruti and even the Bangalore airport, and Manipal University, besides many small- and medium-sized businesses (SMBs), according to Steven Guggenheimer, Microsoft’s corporate vice-president, OEM.

“We also see a reasonable amount of Windows XP (which has been around for eight years) on machines. We expect the natural refresh cycle over the next 12-24 months,” says Guggenheimer. Microsoft has tied up with 17 original equipment manufacturers (OEMs) in India. During the launch, the company had set a target of having Windows 7 installed on over 100 personal computer (PC) models.

All major PC manufacturers in the country, including HP, HCL, Acer and Dell, among others, have come forward to offer the new OS with their range of desktops and laptops. “We have reached around 80 PC models. The target is well within our reach,” he asserts.

Windows 7 has five versions priced between Rs 5,800 and Rs 11,000. The starter edition is cheaper but is not available on shelves (only through OEMs). And the Windows 7 versions are 25-35 per cent cheaper than comparable versions of Windows Vista.

Ciber to double the headcount in India to 1300

System integration consultancy and outsourcing firm Ciber plans to double its employee strength in India from its current headcount of 650, within a year.

The Greenwood Village, Colorado based company operates two offices in India at Bangalore and Chennai. "We are going to hire aggressively in India and also we are planning to open another facility in Bangalore," says Raghurama Kote, President of Ciber India.

The New York Stock Exchange listed company has been operating in India from 2005 after it acquired Knowledge Systems in Bangalore. The Bangalore facility is one of several globally distributed delivery centers, which Ciber brands as 'Cibersites'. There are 12 Cibersites around the globe that support the various divisions of the company. These centers offer application development, application management and information technology (IT) operations services for firms seeking ways to outsource business functions, which are not part of their core business.

According to Tony Hadzi, Executive Vice President and President - Customs Solutions Division at Ciber, the Bangalore centre is a major part of the company because it supplements the global operations of the company. Currently, Ciber has 85 offices in 18 countries across Asia, Europe and North America with total employee strength of 8,500. For 2008, the company reported $1.1 billion revenue, which is a seven percent increase as compared to fiscal 2007.

After the advent of recession, like all companies even Ciber has adopted new strategies to stay ahead of its competitors. One of them is the collaboration of its smaller branches with its larger branches, to develop solutions for the former's customers by using the capabilities of the latter. "The Bangalore centre plays a crucial role in this collaborative effort, by providing the necessary offshore support," says Hadzi. Ciber's client list includes all kinds of companies, apart from the various governmental agencies that it serves in the U.S.

Though, Ciber still gets a majority of its revenue from U.S., the company is seeing a lot opportunities emerging in the Indian market. "Currently we have only eight customers in India, but we plan to add more especially in the retail and financial services segments," says Kote.

The company is also looking to grab the opportunity in the healthcare space, following the announcement of Barack Obama's multi- billion dollar healthcare reforms. "Currently, healthcare is a major area of focus for us, along with the mobility segment," adds Hadzi.

Pegasystems to triple its Indian workforce

United States-based software company Pegasystems plans to triple its workforce in India over the next 12 months. The provider of business process management software has a research and development centre in Hyderabad, which employs over 100 people.

“Our operations in India are aimed at making the best of the talent available here, not at cutting costs,” Suman Reddy Eadunuri, managing director of the company’s Indian arm, said. “To that end, we have seen tremendous traction here.”

Pegasystems has also launched its customer support centre in Hyderabad, which would cater to its customers both in India and abroad. So far, the company’s support centres located in Massachusetts, US, and Reading, UK, have been servicing global support requirements, including 10 per cent of requirements from customer and partner staff located in India.

India’s support centre will open with an initial staff of 10, and is expected to scale up over the coming years, Eadunuri said. “Expansion of the India operations is expected to give a further economic lift of $50-$100 million to the Indian economy over the next five years,” he added.

The company expects turnover for financial year 2009 to be $250 million. For the next year, the company anticipates breaching the $300 million mark.

“We have had several consecutive quarters of record growth even while the world was reeling under the economic recession. Once the situation starts improving, we are hopeful of doing even better,” Mike Pyle, senior vice-president, engineering, said.

Europe is still distant for Indian IT

Indian IT firms have been beefing up their focus on the European market in the wake of the US downturn. While this potential market, especially continental Europe, is large, it won’t generate proportionate opportunity in the next three years, according to Forrester Research.

Sudin Apte, principal analyst, Forrester Research, said that at present Europe appears to be a lucrative opportunity which is not achieving its targets vis-à-vis the traditional offshore sales story. “It is a huge challenge and only providers who are culturally fit have a better chance to succeed,’’ the analyst added.

A study conducted by the analyst firm — Continental Europe: Growth opportunity or never ending sales cycle — highlights the fact that for Indian service providers European business is difficult to realise. The issues they face include highly federated decision making in European firms, complex procurement processes and contracting terms, language barriers and political relations with India, including the visa policy.

Apte said that there are possibilities of work alliances coming from Europe, but the business is dominated by the UK, which is more like the US market. Offshoring from continental Europe is still in a stage of infancy with only companies with global operations willing to pursue it.

India’s IT/BPO export figures with Europe is presently about $14 billion with UK accounting for $9 billion and continental and nordic regions contributing $5 billion. It has a small base and the deal sizes are very small, said Apte.

According to him, the advantage that US majors like IBM, Accenture and HP have over Indian firms is that they have been in Europe for a longer time and have invested heavily in setting up development centres offering broad-based solutions in several countries.

“Indian firms have started to set up near-shore and local centres, but most have capabilities in particular services or verticals,’’ said Apte. He argued that Indian companies and their sales model will have to redefine the cost structure, their value proposition, and cultural affinities to become successful.

Wipro ties up with Intel for rural medical solutions

Wipro Technologies has tied up with Intel to provide medical solutions in rural areas. With its new medical gateway solution aided by Intel Atom processor, Wipro is hoping to address some of the difficulties faced by healthcare providers, the company said on Tuesday.

The medical gateway is essentially an intelligent embedded platform, which enables patients, doctors and other healthcare professionals to monitor and track healthcare information from a remote location. The solution enables real-time clinical view by capturing vital data from multiple medical devices, such as blood pressure monitors and glucose meters. Devices can connect to the gateway solution through wired and wireless technologies such as Bluetooth/USB to provide real-time medical data, video and image transfer.

According to Manimaran, general manager -medical devises, Wipro Technologies, ageing population in the developed markets are playing an active role in taking care of their health. “This has spurred advances in remote patient monitoring technologies. But these are beyond the financial reach of a large section of the population in the emerging economies. Wipro’s medical gateway solution would help bridge this gap and enable faster time-to-market for medical device OEMs to launch customised products,” he added.

In hospitals, the medical gateway has the ability to transmit real-time medical data to application servers and physician handhelds. According to Wipro, the low-cost solution would bring about improvements in existing solutions whose adoption has been low due to their high cost.

Intel South Asia’s marketing director for emerging markets, Sanat Rao, said the new solution is an example of how Intel enables groundbreaking applications. “The Intel design house programme provides hardware and software support and training to get products to market,” he said. Intel, however, said that no clear figure had emerged about the addressable market size for this particular solution. “But India will emerge as one among the top six destinations for medical software by 2010,” said Rao.

Honeywell’s $34m Gurgaon centre

Honeywell is planning to invest $34 million to establish a new technology centre in Gurgaon to expand its global research capabilities in refining, petrochemical and other technologies in order to better serve customers in the region. The company also plans to employ about 100 people within five years in the centre.

The 400,000 square-foot centre will be set up at an existing Honeywell-owned property and will be managed by UOP India, a wholly-owned subsidiary of UOP that has an existing 250-person process technology engineering centre in Gurgaon.

“This centre will allow us to conduct development closer to our end customers, while at the same time tapping the recognised engineering talent of India,” said Andreas Kramvis, president and CEO of Honeywell Specialty Materials. “It will strengthen our product and process commercialisation capabilities globally, especially in Asia, where it will complement our existing research centre in Shanghai.”

“With four technology centres operational in the country, we are excited about this new technology centre, which is yet another reinforcement of Honeywell’s commitment to grow in the country and leverage its intellectual capabilities.” said Anil P Gupta, president, Honeywell India.

Honeywell’s employee base in the country has grown from 1,000 employees in 2002 to more than 10,000 today. Honeywell earlier this year opened a $50 million research, development and engineering facility in Bangalore, India, its second in the city.

Honeywell looks for hiring 1,000 people next year

Business conglomerate Honeywell said on Sunday that it is considering to increase its India headcount by about 1,000 employees next year as it expects growth to bounce back in line with global economic recovery.

The company is also planning to provide bio-fuel technology for the country's airlines industry.

"This year the growth has been flat, but still we are hiring 500-700 people for the entire group in India. Next year we should recruit about 1,000 people as our domestic base expands," Honeywell Automation India Managing Director Vimal Kapur told PTI.

The company, which has an employee strength of 11,000 people, has been adding about 1,000 staff every year in line with its annual growth during the last few years, he added.

"The new recruitments will be done in all our verticals, including R&D, avionics (aircraft cockpit system), auto components and chemicals division," he said.

On Honeywell India's, the wholly-owned subsidiary of the US-based firm, new initiatives in the country, Kapur said: "We are developing bio jet fuel technology as part of our energy saving initiative and the test flights are being carried out in the West. Our aim is to introduce this in India."

The company plans to work in conjunction with fuel suppliers, like HPCL and BPCL, for use of the technology in the Indian aviation industry, he added.

3i Infotech to implement four day work week for US employees

In a bid to cut costs, 3i Infotech, plans to implement initiatives such as offshoring and a four-day work-week for its US employees, a top company official said.

3i Infotech is a leading information technology services firm.

"Apart from debt management, we plan to focus on cost reduction during the current fiscal. We plan to give a four-day work-week to at least 400 US employees," 3i Infotech's Managing Director and Chief Executive Officer, V Srinivasan, told news agency here.

Presently, 3i Infotech has a staff strength of 13,500 with around 4,500 employees working overseas.

Increasing offshoring, which involves moving work from onsite to India and other low-cost destinations will help the company in reducing its costs, he said.

"Offshoring of work will help in cutting costs," Srinivasan said.

He, however, did not disclose how much savings the company would effect by these initiatives.

Asked whether the company planned to up its headcount, Srinivasan replied in the affirmative, saying the company would increase its headcount in the coming days.

"We plan to hire at least 500 professsionals for our India and foreign offices," he said.

Dell sees public-sector boost from Perot deal

Computer maker Dell said its Perot Systems acquisition will boost its IT services offering to the public sector, as some of its government customers face a freeze on spending due to the recession.

"(The acquisition) was a really good fit for a bunch of reasons, but the domain expertise that Perot brings in government and healthcare is particularly powerful," Paul Bell, president of Dell's global public sector business, said in an interview in London on Wednesday.

About half of Perot's revenue comes from healthcare, and a further roughly 20 percent from government, but Bell said he was not the only one of the group's four divisional heads pushing for the $3.9 billion deal, which closed earlier this month.

"It was unanimous," he said. "This was a company-wide decision, with the intention of leveraging their capabilities across all of our customer types."

Dell is increasingly offering higher-margin IT services to its public-sector customers, which include schools, hospitals and government departments, as computer hardware prices fall.

Its services revenue of $5.7 billion in its last fiscal year, however, is dwarfed by IBM's $58.9 billion global services revenue and HP's $22.4 billion.

Bell said Dell is typically increasing efficiency through cutting the number of applications for its customers, and making more use of virtualisation, even though that can cannibalise its sales of servers, PCs and notebooks.

"The range of solutions we can bring to bear is quite broad now," he said.

For example, Dell announced on Wednesday it was stepping up its push into the healthcare services market with a new offering aimed at simplifying life for doctors on the move.

Public-sector budgets are coming under pressure, however, particularly in Europe where government spending has soared in the recession.

"Right now, many of our customers have projects ready to go (that) can reduce costs in coming years for their own departments and yet they are faced with a freeze," Bell said. "That could be backwards economic logic."

Dell, which recently fell to third position in PC makers behind Taiwan's Acer as demand from its corporate bedrock slowed, reports third-quarter results Thursday.

Accentia to add 2,000 jobs at techno-lodges

The Kerala IT department’s decision to roll out techno-lodges, making IT infrastructure available at the panchayat level, has drawn instant interest from the industry, with Accentia Technologies announcing that it intends to add 2,000 jobs to be based out of these techno-lodges.

Accentia CEO Pradeep Viswambharan said his company planned to create these jobs across the villages of Kerala where the IT department and the local panchayats would develop requisite infrastructure for the IT industry. Healthcare receivables cycle management (HRCM) major Accentia, based at the Technopark here, had recently commenced operations from the UK, with the objective of tapping potential markets in Northern Ireland, England and Scotland.

The first two of the techno-lodges in Kerala, both located in Kollam district, have been fully taken up by Accentia Technologies. Mr Viswambharan said the company would base its production centres at these lodges and that all openings generated in these centres would be given to graduates from the respective villages.

He said the company was willing to take up more space at the upcoming techno-lodges, and that the political leadership had promised an environment free of hartals in these villages. Accentia has a presence in Oregon and New Jersey, US and in Ras Al Khaimah, UAE besides over half a dozen cities in India.
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Wipro bags Australian univ deal

Australia's University of Canberra, which awarded an outsourcing contract to Wipro in May earlier this year, plans to bring down its operational costs by up to 40 per cent over next three to four years, and focus better on its core business of teaching and research.

The University of Canberra, along with other Australian educational institutes are expected to spend around $650 million on different IT initiatives in order to modernise their processes, bring down operational costs and compete better in the global education market.

“There is a real competitiveness happening in education and I want every spare dollar to go into teaching and research”, said professor Stephen Parker, vice-chancellor and president of the university.

The university decided to outsource when it felt its IT support was expensive and not as effective as it should be. “It was a new world to me and we linked to the people in India who can do such things,” said Mr Parker.

Bruce Lines, registrar of the university added that offshoring of services was not an easy choice because of anti-offshoring sentiments in Australia.

However, the university decided to go ahead with outsourcing in order to save 30-40 per cent in operational costs, and manage different applications and data records of almost 10,000 students better.

“I almost fell off my chair when somebody mentioned the term offshoring, but gradually we realised that it is more about efficiency gains beyond pure cost savings,” he said.

Universities in Australia are also expected to use some $350 million infrastructure grant from the government towards modernisation of their processes and administrative systems.

“Education is Australia’s third biggest export market. There is a huge potential to tap this unexplored market, where universities need huge IT support not only to maintain administration, but also for high end research and development,” said Kannan Natarajan, general manager at Wipro for Australia, Asean and Middle East Markets.

Meanwhile, the university did face backlash when it announced its contract with Wipro. “We realised that it makes sense not only for cost benefits, but also because there are people who can do a job better than us,” said Mr Parker. “We are living in globalisation which is about exchange and it is not one way,” he added.

As educational institutes prepare to address a growing market, their investments in modernisation of different systems is likely to increase.
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TCS wants a global workforce

India's largest software services exporter, Tata Consultancy Services (TCS), is aiming to move beyond its traditional Western market to serve new transnational companies in the emerging markets to become a truly global company.

"We want to become global not just in terms of sales but from a people perspective," TCS Head Natarajan Chandrasekaran told the Financial Times in an interview.

Multinationals in emerging markets now account for about one-fifth of the company's sales. TCS has operations in about 42 countries and about nine per cent of its workforce is foreign. At present, it contributes nearly 10 per cent of the revenue of the Tata conglomerate.

Besides diversifying its client base, TCS is pursuing an "integrated full service" business model to garner higher revenue.

Under this model, TCS would design, develop and manage a given client's software as well as maintain its hardware systems and handle its business processes.

After years of double-digit - sometimes even triple-digit-growth, India' outsourcing companies got battered pursuant to the global economic slowdown as their largest clients, the global financial services groups, faltered under the pressure.

Accordingly, TCS' Chandrasekaran told FT that the company has to restore growth first as the past six quarters were challenging as revenue grew just 7 per cent for the year ended March, down more than 30 per cent previously.

However, Chandrasekaran was optimistic about a recovery and said that whether the global recovery is "V-shaped, W-shaped or 'square root'-shaped", clients will look to the offshore outsourcing industry to cut costs.

The Indian Information Technology industry including -- TCS and its peers such as Infosys Technologies and Wipro -- played a major part in "the country's transformation from ox-cart economy to fast-growing, sophisticated Asian giant."

The IT industry generated $47 billion in exports in the fiscal year ending in March and claims it has created nearly half of India's urban jobs directly and indirectly.

Satyam rejects Rs 1,230-cr claims

Mahindra Satyam on Tuesday rejected claims worth Rs 1,230 crore made by 37 companies linked to the company’s former promoter B Ramalinga Raju in a filing to the stock exchange.

The company said the claims were legally untenable. Satyam received letters from these 37 companies reclaiming the money a day after Raju confessed to the Rs 7,000-crore fraud.

Raju, in his confession statement, said he owed Rs 1,230 crore to some of the privately-owned companies of the Raju family who had loaned out money to the IT firm. He said the amount was an understated liability and was not stated in the books of the firm that were dressed for seven years.

A Satyam spokesperson said the companies sent legal notices to Satyam two weeks ago. The notices claim the money back to allegedly repay their creditors, some of whom include Maytas Properties and Maytas Infra.

However, the information pack given to the bidders has listed this only as a claim and not a liability since there are no entries in the company’s books.

After Raju’s disclosure about financial wrongdoings, the Indian government had superseded the company’s board appointing its nominees to monitor the fraud-struck firm’s bidding process. Tech Mahindra emerged as the highest bidder and acquired control of Satyam in April this year.

Satyam, while disclosing the financials for October-December 2008 quarter and the first two months of 2009, had said that the 37 companies had made claims totalling Rs 1,230 crore from it. The company then said it didn’t acknowledge any of these claims as the matter was being investigated.

The fraud is still being investigated by the Central Bureau of Investigation, the country’s apex investigation body. Satyam’s shares closed at Rs 104.85 on BSE on Tuesday.

SAP goes flexible to save customers

Business software group SAP AG said that it will offer more flexible contracts to help it hold on to customers. The global economic crisis and technology changes allowing customers to use software on demand instead of buying a major IT system is putting a squeeze on IT spending.

SAP has enjoyed double-digit growth in the past but its software licence sales dropped 31 per cent in the third quarter.

"We will give our customers the option to decide which software they want to use," Chief Executive Leo Apotheker said, adding clients can rent or buy.

"All in all we want to make SAP faster, simpler and more agile," Apotheker said.

Businesses such as McDonald's, Pepsi, Audi, Apple and GE are just a few of SAP's more than 92,000 customers.

SAP focused in the past on contracts with large customers but is increasingly turning towards mid-sized companies and Apotheker said the delayed Business by Design software for this segment would be launched in 2010.

SAP said it also hopes to offset the decline in licence revenue with more smaller contracts and an increase in global entreprise agreements.

SAP has high hopes for its in-memory data bank technology, which is designed to save and access data on a chip instead of a server. Intel provided the chip for the technology that SAP says will allow companies to access and analyse data in real time.

"It's like an ABS system in a car, analysing data at lightning speed and making decisions based on that so you don't hit a tree," said Apotheker, speaking to journalists in the company's Berlin office.

Apotheker said that while the worst of the economic crisis was over it was too early to speak of an upswing.

Asked about recurring rumours of Microsoft interest in SAP, Apotheker said it was company policy to not comment on such rumours.

"However, management, board, shareholders and customers see the future of SAP positively and it should remain an independent company," Apotheker said.

Sunday, November 15, 2009


Syntel rated top IT outsourcer on Forbes "200 best small companies" list

Syntel, a global information technology services and Knowledge Process Outsourcing (KPO) company, announced on Friday that it is the top-ranked IT outsourcing company on Forbes Magazine's "200 Best Small Companies" list for 2009.

Syntel jumped more than 60 spots on this year's list, which ranks the fastest-growing companies in America with annual revenues between $5 million and $750 million.

In order to be named one of Forbes' "200 Best Small Companies," firms are evaluated based on a number of criteria looking at both short and longer-term performance, including sales, profit, and earnings-per-share (EPS) growth rates, return on equity, and stock price.

Syntel, which has been named to the list for three consecutive years, jumped more than 60 spots to rank 27th overall. Syntel's ascent was attributable to strong growth in EPS and return on equity, as well as stock performance that ranked in the top 10 relative to the industry.

"It's an honour to receive this recognition from Forbes," said Keshav Murugesh, CEO and president of Syntel. "Syntel's performance over the last year has been very strong despite a difficult economic environment, which is a testament to the passion, talent and dedication of our employees worldwide. We will continue to focus on our core strengths of delivering flexible, innovative solutions to help our customers increase efficiency and maximise their technology investments."

TCS’ passport project misses 3rd deadline

The Indian government's ambitious 'Passport Seva' project, which seeks to give out passports in three days, has missed another deadline - Friday, the 13th of November.

This will be the third time the external affairs ministry's project -- a major e-governance initiative -- will not meet its launch date. Officials are blaming software glitches for the delay.

The first deadline was in June, then October, before the revised date of November 13 was arrived at. The pilot project was to take off in Bangalore.

Minister of State of External Affairs Shashi Tharoor had said in a tweet dated October 30 that the project "should be rolled out next month after some technological snags delayed it".

According to officials, the physical infrastructure is ready. This includes a user-friendly building with swanky interiors, 25 counters and electronic token boards.

"The software which will be the basis for the new system is still having too much problem," said an official.

Information Technology major Tata Consultancy Services is in charge of implementing the project after it signed the contract in October 2008. The project is reportedly worth over Rs 1,000 crore.

The pilot project would have seen 'Passport Seva' centres in Bangalore and later in Hubli and Mangalore, also in Karnataka, followed by Chandigarh, Ludhiana in Punjab and Ambala in Haryana.

A mini centre will also be opened in Gulbarga (Karnataka) as an addition in the pilot project. The project is to run for two months. According to informed sources, the software is giving basic problems like flawed printing of passports. "There was a problem in audit trail," said an official.

In all the passport offices in the country and missions abroad, the ministry looks after the process of passport services, while the software is provided by the state-run National Informatics Centre.

"As far as software goes, we did not have any problem over the years," said a senior foreign ministry official. But one key problem with the TCS has been lack of domain knowledge.

The Department of Information Technology's Standarization Testing and Quality Certification (STQC) has done three rounds of testing on the software. But all of them have found hundreds of bugs which are being slowly rooted out.

"We will have another round of STQC testing before we decide on the future course," he said. The ministry has issued a letter to TCS invoking the penalty clause in the master services agreement -- after failing to start the pilot project in October.

Intel to pay AMD $1.25b, settle all disputes

Intel Corp will pay rival chipmaker Advanced Micro Devices Inc $1.25 billion to settle all outstanding legal disputes, in a move that can hasten the resolution of Intel's antitrust troubles.

AMD, whose shares jumped 22 percent, agreed to withdraw essentially all its regulatory complaints and litigation against Intel, ending a global campaign that it has waged on the world's largest chipmaker for 12 years.

Some analysts said the deal takes the steam out of a pending U.S. Federal Trade Commission investigation into Intel's business practices.

But others said Intel has critics beyond AMD and its regulatory troubles are far from over. Among Intel's adversaries are graphics chip maker Nvidia Corp and New York Attorney General Andrew Cuomo.

Intel Chief Executive Paul Otellini denied any wrongdoing by the company but said it decided to settle the dispute with AMD to avoid the risk of a triple-damages finding by a jury.

"Intel got the fact that it was a major risk of a huge settlement in front of a jury," said Broadpoint Amtech analyst Doug Freedman. "It removes the coin-flip of a jury trial."

AMD has argued that Intel used illegal means to preserve its 80 percent share of the global market for central processing units, which are the brains of personal computers.

Regulators in Asia and Europe have agreed, imposing fines and other remedies on Intel. The U.S. Federal Trade Commission is close to filing its own complaint, sources have said.

FTC Chairman Jon Leibowitz said the agency will review the settlement and could not comment further because of its ongoing investigation. Otellini said Intel will meet with the FTC to explain the settlement.

Experts have said it is in Intel's interest to resolve its antitrust troubles as quickly as possible so it does not wind up like Microsoft Corp, which has spent a decade fighting competition agencies around the world.


If the FTC goes ahead with its complaint, Intel will have to address broader questions on its business practices that go beyond its dealings with AMD.

"If they (FTC) were going to file a lawsuit, they're going to file a lawsuit. It will have no impact," John Briggs, antitrust attorney with Axinn Veltrop Harkrider LLP said of the AMD settlement.

The AMD deal covers central processing units and has nothing to say about the fast-growing market for graphics processing units, which facilitate pictures and video on PCs.

Graphics chip maker Nvidia is already in Delaware court with a patent dispute with Intel, and said its ability to compete is being squelched by the larger company.

"We would be extremely disappointed with a decision to drop the FTC case. We don't think that protects consumers for current technology, as well as future technology," said Nvidia's general counsel, David Shannon.

New York Attorney General Andrew Cuomo has separately filed an 83-page lawsuit last week asserting that Intel threatened computer makers and paid billions of dollars in kickbacks to maintain its market dominance.

A source familiar with the matter said the AMD-Intel settlement does not change the attorney general's complaint.

"We strongly disagree with the New York Attorney General's case, and believe the complaint is entirely without merit. Discounting and rebates are standard business practices and perfectly legal," Otellini said.

Intel has hired WilmerHale partner and antitrust specialist Douglas Melamed to fill its vacant general counsel position, a source familiar with the company said.


AMD agreed to drop a lawsuit against Intel in Delaware and two cases in Japan, saying the settlement creates a level playing field and is "a pivot from war to peace." AMD noted though that some narrow issues on Intel rebates remain.

The two companies also sealed a five-year cross license deal and gave up any claims of breach from a previous licensing agreement, paving the way to make AMD fully "fabless."

AMD had spun off its chip fabrication factories into GlobalFoundries, but was forced to maintain a majority ownership because of existing licensing provisions.

An independent GlobalFoundries is expected to combine with Chartered Semiconductor Manufacturing Ltd in Singapore because both companies have heavy investment from Abu Dhabi's sovereign wealth fund.

"It will take time for people to understand how operating conditions in the processor business have changed. But make no mistake, they have changed," said AMD CEO Dirk Meyer.

Analysts expect AMD, which reported its 12th consecutive quarterly loss last month, to use the settlement to pay down some of its $3.2 billion of debt.

"It eliminates a large amount of uncertainty for both companies. $1.2 billion is a lot of money and I believe AMD will use it to accelerate their debt payment," said Joanne Feeney of FTC Equity Capital Markets.

Shares of AMD jumped $1.16 to $6.48, lifting its market value to about $4.3 billion from $3.6 billion.

Shares of Intel fell 16 cents to $19.68, in line with the broader decline on Nasdaq.

Intel chipmaker adjusted its fourth-quarter outlook due to the settlement, raising its spending forecast to $4.2 billion from $2.9 billion. It said its effective tax rate would be about 20 percent, down from 26 percent.

(Additional reporting by Steve Eder in New York, Yun Chee Foo in Brussels, Gabriel Madway and Ian Sherr in San Francisco, and Diane Bartz in Washington)

Bengal government to hand over 50 acres to Wipro next month

Information technology (IT) company Wipro has agreed to pay Rs.1.5 crore per acre for A 50-acre plot at Rajarhat at the northeastern fringes of this city and the land will be handed over to them next month, a minister said here Saturday.

"Wipro has accepted our offer and we would hand over the land by next month. We are in touch with the Wipro chief and within the next three to four days we will be able to fix the date on which he would be available to touch down in the city," Housing Minister and Chairman of Housing Infrastructure Development Corporation (Hidco) Goutam Deb told reporters at a programme in Rajarhat.

Wipro will pay the land price to Hidco.

Hidco managing director Saurabh Das said Hidco will soon send the offer letter to Wipro. "We will complete the process of handing over the land to them within the next 15 days," he said.

The IT major wrote to the state government Oct 30 seeking land at concessional price.

Earlier a release by the state IT department said: "Today on 30th October, 2009 the Wipro officials met the managing director, Housing Infrastructure Development Corporation (HIDCO) and submitted their request to allot 50 acres of land at a concessional price."
Courtesy: EconomicTimes

India is morphing into a global R&D hub, but can it ever take on Silicon Valley?

When Americans think of the Indian technology sector, they still perceive a nation of call center workers and low-level computer programmers administering databases and updating websites. But while the West was sleeping, Indian IT morphed into a giant R&D machine.

Indian companies that started out doing call center and low-level IT work have climbed the value chain to become outsourced providers of critical R&D in sophisticated areas such as semiconductor design, aerospace, automotive, network equipment and medical devices.
Continue reading on

Thursday, November 12, 2009


Infosys BPO to acquire US co McCamish for initial $38 mn

IT bellwether Infosys Technologies on Thursday said its subsidiary Infosys BPO will acquire US-based McCamish Systems for an initial payment of $38 million (about Rs 176.6 crore).

Infosys BPO has signed a definitive agreement to acquire all the outstanding interests of McCamish Systems LLC, Infosys Tech said in a filing to the Bombay Stock Exchange.

"The upfront consideration for the deal is $38 million, with up to an additional $20 million payable to the sellers if McCamish Systems achieves certain financial targets in the future," the company added.

The acquisition is expected to be completed later this year.

"We look forward to this combination with McCamish, and welcome an exceptional group of professionals with strong skill sets to the Infosys family who will enrich our service capabilities in the USA," Infosys BPO CEO & MD Amitabh Chaudhry said.

The acquisitions is expected to enhance Infosys' capability to provide complete business solutions for insurance and financial industries.

"Infosys BPO has in-depth knowledge of the insurance and financial services sector, and this deal reinforces our relationship position in providing business platform services," Chaudhry said.

The combination is likely to enable McCamish to serve larger portfolio of transactions for clients and expand into global markets.

Shares of Infosys Technologies were trading at Rs 2,336 on the BSE, up 1.18 per cent from its previous close.

IIMB gets 180 slot zero offers, highest across IIMs

The Indian Institute of Management Bangalore has bagged 180 "slot zero" (the first two days) offers for the batch of 348 students for year 2010, the highest across all IIMs for summer placements.

"The entire batch of 348 students, the biggest ever batch at IIMB, was placed within a span of five days by over 150 companies, with as many 180 slot zero offers being made, the highest across all IIMs", Prof P D Jose, chairperson of the placement committee, told reporters.

More than 50% of the batch was placed by the end of Slot Zero (the first two days of placement offers).

The major recruiters included Goldman Sachs, Citi, HSBC, ABG, Nomura, Bain & Co, Standard Chartered, A T Kearney, Boston Consulting Group, McKinsey & Co, Credit Suisse, Macquarie, Merril Lynch, Morgan Stanley, J P Morgan and Barclay's Capital.

Recruiters from Sales & Marketing formed the major chunk (21 per cent) as a result of more number of FMCG companies this time, followed by Investment Banking (19 per cent), finance (16 per cent), consulting (15 per cent), general management (12 per cent), IT (9 per cent) and private equity (three per cent).

"There was a welcome jump in Investment Banking this time compared to last year (14 per cent). It was Investment Banking which occupied the top slot last time as far as recruiters were concerned", Jose said.

Eighty-nine major offers were made with the highest from Goldman Sachs (13), closely followed by Citi and HSBC (nine each).

Adobe cutting 680 jobs

Adobe Systems, known for its Photoshop editing programme and Acrobat document software, announced that it was cutting some 680 jobs worldwide, about nine percent of its workforce.

Adobe, in a filing with the US Securities and Exchange Commission (SEC), said it would incur between $65 million and $71 million in restructuring charges because of the layoffs.

Adobe said the jobs being cut only involve employees who were with the San Jose, California-based company ahead of its October acquisition of Web analytics firm Omniture Inc.

Adobe, which employed 7,564 people worldwide at the end of August, also produces the Flash and Shockwave software used in many games and Internet applications.

Adobe shares were trading 0.14 percent higher at 36.65 dollars in after-hours electronic trading in New York.

Wednesday, November 11, 2009

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TCS employing local talent in U.S.

To expand its U.S. operation, TCS (Tata Consultancy Services) plans to hire 1,000 local workers at its new facility near Cincinnati, Ohio, by the end of 2010, reports DNA.

The company opened a $20 million delivery and software development centre in Milford, Cincinnati in Ohio, in March last year - in a bid to win federal contracts and be closer to the headquarters of its U.S. clients. Suryakant, President of TCS North America said, "The Cincinnati region is a great place for U.S. to recruit local talent to meet the demands of our customers as they grow out of the downturn."

The ohio facility is also aimed at securing what some major Indian service providrs are chasing - defence and avionics work. TCS is reportedly in talks with Boeing and Lockheed Martin for defence and aerospace contracts. This work can only be done by American citizens or green card holders.

Recently, the company bagged projects related to unemployment insurance for the states of Nebraska, New Mexico and Mississippi. "The U.S. by far our largest market and the seven hills park facility in Ohio plays an integral role in our strategy of putting our customers first," said Suryakant.

Currently, TCS employs 15,000 people in the U.S. The company has been shipping quite a bit of work to U.S, ignoring India's popular IT hubs.

Infy to up sales staff by 50% before year-end

Infosys, the country’s second-largest information technology services exporter, plans to increase its sales and client services headcount by almost 50 per cent by the end of this financial year, most of which will happen in Europe.

“We are going to add another 100-200 people worldwide in sales and client services by the end of this fiscal on a base of 500. This doubling is in line with our interest in Europe,” said Subhash Dhar, senior vice-president, Infosys Technologies. The headcount increase could happen for sales people in infrastructure and applications services.

Moreover, the company sees its communication, media and entertainment segment to be a cash flow driver. It currently gets around 18 per cent of its overall revenues from this area, up from single-digit in 2002-03. Infosys is bullish about this segment, as many of its customers are restarting their capital expenditure on networks, which usually accounts for half of a company’s total expenditure.

“The spend had slowed down in the last one year. But handheld devices are now driving more traffic. In the media and entertainment space, we are seeing greater activity in digital media and not conventional media,” added Dhar.

He expects budgets to be better next year, too, compared with this year. “We are servicing almost 25 clients in this space and are always in talks with 10-15 more. Usually, we sign one big client per quarter and two or three small clients,” he said.

The non-US revenue is greater than the US revenue for Infosys’ communication, media and entertainment vertical. And, though India does not figure in the top countries’ list, the IT major is seeing new business coming from within India.
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Wipro to recruit experienced hands

Related: Wipro to hire sacked employees
With an increase in business, India’s third-largest IT services company Wipro is holding recruitment drives to hire experienced IT professionals (termed lateral hiring) across the country. The company said in a statement today that it plans to organise two-day walk-in interviews for experienced IT professionals in Bangalore, Chennai, Mumbai, Pune, Hyderabad, Noida and Kolkata, starting November 14.

The drive is a part of its regular hiring in line with business demands, the company said. Vice-President (Talent Acquisition) Pradeep Bahirwani said the company would hold recruitments simultaneously across the country to provide applicants a quick process to allow them to consider opportunities in other cities.

“We are looking to meet applicants across skill requirements in all business divisions with experience levels ranging from 2-14 years,” he said.

He added the company had released recruitment advertisements to inform applicants of the drive.

“We encourage applicants to apply directly to us and not fall prey to fraudsters misusing company names and duping candidates,” he added.

Wipro has also announced plans to hire BSc, BCM and BCA students graduating in 2010 for its Wipro Academy of Software Excellence.

Deloitte to hire 15,000 people in India

Global business consultancy Deloitte is planning to hire 15,000 people in the country over the next two to three years, the company's top official said here Tuesday.

"We are very upbeat about the Indian economy and have major expansion plans in India," said Deloitte's global chief executive Jim Quigley.

"At present, we are employing about 11,000 people in India. To increase our business, we are planning increase it by 15,000 people over the next two to three years," Quigley told reporters.

"The (global economic) crisis is also an opportunity to expand and acquire assets at attractive valuations. We believe that India and China will be leading the global economic recovery. Europe will very slow to recover. So it makes sense to invest here," he added.

"Even during the time of economic slowdown we saw a (business) growth of 30 percent in India. We are going for active acquisition and expansion plans here."

Lloyds to cut 5,000 jobs to reduce costs

Lloyds Banking Group said it plans to cut about 5,000 jobs in its administration, insurance and mortgage units. The bank will eliminate 2,600 full-time positions and a further 1,000 contractors and temporary workers by the end of next year, Lloyds said. About 1,400 workers will redeployed or relocated, the bank said. Lloyds had about 129,000 UK employees as of June.

The lender has eliminated over 8,000 jobs since its January takeover of HBOS, a deal which led it to seek a government bailout. Lloyds follows Royal Bank of Scotland and HSBC in cutting jobs. The two lenders said last week they would eliminate a combined 5,400 positions.

Lloyds is in the midst of a three-year plan to reduce costs by more than £1.5 billion ($2.5 billion). The lender, which is 43% owned by the government, reported a £3.1 billion loss in the first half. x

“The government cannot afford to continue to look the other way as hard-working families are punished in this manner.” “There is a lot of overlap with HBOS and Lloyds,” said Irfan Younus, an analyst at NCB Stockbrokers in London. “There will always be casualties when you go through a significant restructuring.”

Chief executive officer Eric Daniels plans to raise £21 billion to avoid the Treasury’s asset insurance plan, which would have given the government a majority stake in the lender. Lloyds is raising £13.5 billion in the UK’s largest rights offer and £7.5 billion in a bond exchange. The bank will also sell 600 branches, including 164 Cheltenham & Gloucester branches it had earmarked for closure in June, to gain European Union approval for state aid.
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Wipro to hire sacked employees

If you are a pink slip recipient from Wipro, here’s a piece of good news. Wipro plans to rehire some of the employees it fired a year ago.

"Non-performance was the reason for these separations. However, we are open to rehire some of these people who were fired by us a year ago, if they come back to us with additional skill sets. A one-year window would have been enough for them to acquire some additional skills," said Joseph John, vice-president (HR) in Wipro Infotech, the business that looks at the India and Middle-East markets.

The tech major's involuntary attrition rate has gone up by 2 percentage points in the last 16 months. Wipro Infotech said it would also resume campus hiring from January. "We are looking at hiring over 1,000 laterals during the fiscal and 1,000 freshers from campuses in January," said John.

The division, which recruited 1,000 people in the first six months of the fiscal, expects hiring numbers in the second half of the year to be more than double of that.

The additional people requirement comes with Wipro winning a slew of large projects in India and the Middle-East, and also to cater to the growing requirements of existing accounts. The company hired 200 people in Saudi Arabia and Egypt recently.

Wipro is also hiring for its Global Service Management Centre in Mysore with almost 5% jobs earmarked for differently-abled people.

Wipro Infotech is planning to raise the ratio of its women employees from 13% now to 20% in the next two years. On salary hikes, John said the company had not budgeted a hike at the start of the fiscal. "But we have decided to raise salaries in the fourth quarter across the board."
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Wipro sees strong deal pipeline

Wipro, India's No. 3 software services exporter, sees robust deal pipeline on the back of improving IT demand worldwide, a senior official said on Tuesday.

"The deal pipeline is good ... the demand environment is building up. The IT demand situation is improving," Suresh Vaswani, joint chief executive of the company's IT business, told reporters on the sidelines of the World Economic Forum.

The company last month reported a 18.76 per cent increase in its consolidated net profit at Rs 1,161.7 crore for the second quarter ended September 30, 2009.

The IT exporter had a net profit of Rs 978.2 crore in the September quarter of last fiscal.

Total income of the company rose to Rs 7,057.4 crore during the July-September quarter of the current fiscal, from Rs 6,664.8 crore in the year-ago period, as per the Indian accounting norms.

"We see more stability in volumes and pricing as well as an improving demand environment. Our broad portfolio of services and strong delivery excellence continues to position us as a partner of choice with customers, as they focus on capital conservation and cost transformation," Wipro Chairman Azim Premji said.

The country's third largest software exporter's revenue from IT services in rupee terms grew by 5 per cent to Rs 4,996 crore from the year-ago period. However, in dollar terms, the revenue fell by 4 per cent to $1,065.2 million.

"Looking ahead for the quarter ending December 31, 2009, we expect revenues from our IT Services business to be in the range of $1,092 million to $1,113 million," Premji said.

In the reported quarter, the firm added 37 new clients to its IT services business, which accounted for 72 per cent of its total revenue.

Mahindra Satyam to reposition itself

Moving away from the shadow of Satyam scam, software exporter Mahindra Satyam today said the company would be repositioned as a complete Information and Communications Technology (ICT) firm from just an IT outsourcing player.

Tech Mahindra bought Satyam in April and encouraged by the addition of 35 new clients is focusing on expanding service horizons by investing in building new technologies.

"We plan to position Mahindra Satyam as an ICT firm. The focus is on converting an IT company to ICT company," Mahindra Satyam Chief Executive Officer CP Gurnani told PTI.

The company is focusing on new areas like digital convergence, as it continues to strengthen its five verticals -- manufacturing, financial, health care, retail and consumer product, he said.

"We are looking at overall growth in digital convergence. That is a focus area. We will also be focusing on mobile applications," Gurnani said, adding "I am taking advantage of our presence in connected solutions, in enterprise solution, in mobility and coming up with new paradigm shift."

On new business additions, he said the company is seeing an uptake in demand and has added 35 new clients from May this year.

"The worst is behind us and we are back on the path to recovery... Mahindra satyam is getting traction in the market and getting new clients. We have added 35 new clients since May this year... We are seeing good demand from clients. The overall IT market is also improving."

Gurnani said only a few former Satyam clients, who walked away from the company after it was hit by the scam early this year have returned, although new clients are coming on board.

He said the company was in talks with one of its old clients, the World Bank, to lift the ban imposed on awarding contracts to Satyam after the scam as the company has now been bought by Tech Mahindra and has a new management.

"We are in active dialogue with the World Bank for revoking the eight-year ban imposed by it," Gurnani said.

Till January Satyam had about 500 clients, but the number dwindled to 380 by the time Tech Mahindra won the bid to take it over.

Yahoo to expand India headcount

Yahoo Inc wants to triple its operating margin to 15-20 percent over the next three years by increasing revenue and keeping costs under control, CEO Carol Bartz said.

She also said that Yahoo, the top US seller of online display ads, planned to expand its business in India and hire more people there as it targets emerging markets with low Internet penetration and high growth potential.

"Six percent operating margin is terrible, terrible... We have a commitment that it will be 15-20 per cent in the next three years," she said at a lunch talk organised by the American Chamber of Commerce in Singapore.

Bartz, who joined Yahoo as CEO in January this year, has been trying to revitalise the Internet giant by shedding staff, dropping unprofitable products and getting the firm to respond faster to changes in the way people use the web.

"We go where the population is, we go where the economies are growing," she said, highlighting India, Indonesia and Vietnam as countries where Yahoo hoped to grow its presence.

She would be heading from Singapore to India, she said, where she is scheduled to meet Indian Prime Minister Manmohan Singh and other senior officials. Yahoo plans to hire more people and find new partners in the world's second-most populous nation for its various Internet initiatives.

Turning to China, Bartz said Yahoo was "very happy" with its 40 per cent investment in China's Alibaba Group although it recently sold shares in, the Chinese firm's listed unit.

Yahoo does not have a direct presence in China as it has an agreement to let Alibaba use the Yahoo brand name in the country.

Microsoft and Yahoo earlier this year signed a 10-year global web search partnership to challenge market leader Google Inc, a pact that US and European antitrust regulators are evaluating.

Bartz said the two partners will formally seek regulatory approval for their tie-up in the first quarter of next year as scheduled.

Tuesday, November 10, 2009

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Capgemini, Logica, AT&T, BT now eye local IT services

The domestic information technology (IT) services market is no more a lowprofit option and entry of global players in this segment is a testimony to its growing maturity and lucrativeness.

Earlier, the domestic IT services market was characterised as ‘where you would pay for the hardware but get the services for free’. This has changed over the last few years with the profit margins in some segments comparable to the developed markets.

Says Seepij Gupta, analyst, software and services research, IDC India: “In some segments of the domestic IT services markets — application management and managed services, for example — the profit margins range between 25-30 % and 16-32 %, respectively. This kind of profitability makes the India market almost at par with the developed economies.”

Rising profits also reveal the growing maturity of the local market where corporates and governments are willing to spend a larger amount on technology. Sudip Saha, analyst, services research, Springboard Research, says the maturity curve is getting sharper in the domestic market reflected in the larger size of IT outsourcing deals as well as longer-term contracts. “Corporates are realising that having internal IT departments is expensive and it better to outsource,” he added.

European IT services majors like Capgemini, Logica, Groupe Steria and Atos Origin have already planned their local market moves. Segment-specific players like AT&T and BT too have made their foray into the telecom technology services market in India.

Anand Sankaran, chief executive, Wipro Infotech, said domestic IT services market is reasonably attractive and has steadily seen more vendors getting in: while the market was dominated by the likes of IBM, TCS, Wipro, Hewlett-Packard and HCL Infosystems, it is now seeing aggressive pitches by Infosys Technologies and Accenture.

Springboard Research says the domestic IT services market size was $5.7 billion in 2008 and is expected to touch $6.6 billion this calendar. According to Mr Saha, there are sectors in India like utilities and infrastructure which are actively looking at outsourcing their IT requirements and in the process expanding the market.

The domestic IT services market has already set certain global benchmarks which are either being very closely studied or even getting emulated. A classic example of this is the Bharti-IBM IT outsourcing deal, which set a benchmark for the global telecom industry.

75% Indian engineering students unemployable: Report

Discussing a report by software industry group Nasscom which says that 75 percent engineering students in India are unemployable, education experts here on Saturday said that the Indian higher education system must give skill building and practical training equal importance as academics to give them an edge.

A.D. Sahasrabudhu, director of the College of Engineering, Pune said that one of the major reasons why engineers, even from reputed institutes, are not easily employed because they lack hands-on skill.

"The focus in most institutes here is always on academics and theory. Thus a mechanical engineer may actually not know how to change a part of a machine. Therefore even if a high scoring student gets placed in a good company, eventually that lack of practical knowledge catches up," Sahasrabudhu said during a panel discussion at the sixth Higher Education Summit organised by Federation of of Indian Chambers of Commerce and Industry (FICCI).

"From our experience we now know that practical, hands-on training is very crucial in the education system," he added.

In their latest report released in the last week of October, National Association of Software and Services Companies (Nasscom) said that Indian IT firms reject 90 percent of college graduates and 75 percent of engineers who apply for jobs because they are not good enough to be trained.

And because there is such a dearth of competent people, companies like Infosys increased its training of employees to 29 weeks from this year. That's seven months of training, the report added.

Richard Kerly, a Scottish university professor, who had participated in the discussion said: "Just recently I came to know that Citi Bank had started its recruiting process here, but was not going to campuses placement cells.

"The possible reason is that students here, although brilliant, don't have an edge when it comes to putting theories to practice."

Sudhir Matthew, Dean, Ecole Hoteliere Lavasa, Lavasa Corporation Limited, Pune said: "The scene is very similar in the hospitality industry. Lack of hands-on trained students have forced hotel chains like the Oberoi, Taj and ITC to open their own hotel schools where the students are trained as per their needs.

"Tourism will grow at a rate of 8.8 percent till 2015 in India, making it one of the fastest growing markets but there is a serious lack of skilled hands. Academics combined with practical training is therefore very important to meet this shortage which is estimated at 3.2 million."

StanChart to hire 3,000 employees by next year

Global banking behemoth Standard Chartered plans to hire 3,000 employees in India by the end of 2010, a year that would also see the British firm listing its shares on the bourses here.

The bank intends to add close to 2,500 employees to its payroll in India during 2010, while it is hiring a staff of 500 in the last two months of 2009, StanChart's Regional Head for Human Resources Madhavi Lall told PTI here.

StanChart, which currently employs close to 18,000 people in the country, has already hired 2,000 employees so far this year, she added.

The bank is currently working on the modalities for listing its Indian Depository Receipts (IDRs) here -- which would make it the first foreign entity to exercise the IDR route to raise capital in India.

Barclays to increase workforce by 10% in Asia

UK-based Barclays today said it would increase workforce in merchant banking segment across Asia by 10 per cent during 2010.

"We've seen very strong performance across Asia for all our business classes. We would expect our workforce to increase across Asia by 10 per cent," Barclays chairman and CEO Asia Pacific Robert A Morrice told reporters on the sidelines of the India Economic Summit here.

On India strategy, Barclays said that it would continue to grow the business in the same way as it has been growing in the last five years.

Meanwhile, Bank of America Merrill Lynch county head (India) Kevan V Watts said that India is a structural story and it makes sense to invest money in the equity market. “Sectors that look attractive include infrastructure and stock, which have good exposure to rural markets,” he said.

However, dollar is expected to remain week in the coming months.

Tech firms to go headhunting

Technology firms Accenture and Infosys BPO were on Monday upbeat about hiring plans for next year, an indicator of brightening business prospects, although Microsoft India said it would go easy on new recruitments.

Information technology and consultancy were among the sectors hit by last year's global economic crisis, ripples of which are still being felt by businesses across continents.

Consultant Accenture said it would shore up its staff strength by 8,000 by next year, mainly in the analytics space. "We are 42,000 right now and we imagine we will be about 50,000 by the end of 2010," Accenture Chairman and Chief Executive Officer William D Green said on the sidelines of the India Economic Summit here.

Green added, "We believe that analytics is going to be an important trend that our customers are going to demand from us. We think India is going to be a great place for us."

Infosys BPO, the back-office unit of IT firm Infosys Technologies, said that it would hire 1,500-2,000 people by the end of the current fiscal. "We plan to hire 2,000 people in the next four-five months or by the end of this fiscal. Currently we are 16,000 people in India," Infosys BPO CEO Amitabh Chaudhry said.

Another BPO company Genpact has already hired 6,000-7,000 so far this year for its global operations. Microsoft India Chairman and Corporate Vice-President Ravi Venkatesan, however, said that "there will be no significant hiring. Microsoft has a headcount of 5,300 people in the country and had hired "a few hundreds" last year.

Most of the top domestic and transnational companies go for campus placements from the engineering and management schools around October-December.

Venkatesan said "(Steve) Ballmer (global CEO) has gone on record saying this is a period of consolidation," rather than adding to the headcount. The USD 58-billion global software leader has six business units in India, which include research centre, development centres and sales and marketing divisions.

The company, which boasts of running most of the personal computers worldwide on its operating system, has three centres in Hyderabad. The other units are in Bangaluru and Gurgaon.

Yesterday, global banking behemoth Standard Chartered said it plans to hire 3,000 employees in India by the end of 2010.

Google to buy AdMob for $750 Million

Google is to pay $750 million to buy AdMob, a provider of advertising on mobile phones, the internet search leader announced Monday.

The deal is the third largest ever undertaken by Google and underscores the company's strategy of extending its online advertising dominance to the mobile web, where its Android smartphone operating system is becoming increasingly popular. Google said it expected antitrust regulatory review in the U.S. but not in Europe.

AdMob has a system that serves display ads on mobile phones and its purchase could give the still nascent market a powerful boost, analysts said.

"Google could have built this itself, but this gives them a head start," says mobile analyst Greg Sterling of Sterling Market Intelligence. "It will thrust Google into the forefront of mobile display ads."

"AdMob is a great Silicon Valley story," said Google in a blog posting to announce the deal. "We are looking forward to having them join the Google team and work with us on the future of mobile advertising."

Infosys opens its second development centre in Mexico

Infosys Technologies has opened its second development centre in Monterrey, Mexico, serving as a near shore unit to serve the regions of North America, Latin American and Europe.

The development centre will provide technology services for clients in all industries including banking, financial services, manufacturing, retail, distribution, insurance and many others, Infosys said in a notice to the stock exchanges.

“From our first development centre opening with a few clients and a dozen employees, we now have some 30 clients and 330 professionals,” said Ashok Vemuri, senior vice president, Infosys. After examining several countries in the region, Infosys chose to establish its presence in Mexico due to the broad language skills available in the region, its geographical proximity to Canada, the US and the Europe, the notice said.

Indian techie's iPhone game has highest download

T. Harikumar, who quit his job as an engineer with the Indian Space Research Organization (ISRO) to start Trivandrum based software firm Travancore Analytics, has developed the snakes and ladders board game for iPhone and iTouch.

"The Apple company after seeing the game asked us to re-do it as it had the iPhone logo. We removed it and the game was released on September 27. In a short span of time, the game has achieved more than 250,000 downloads - the highest for an iPhone application developed by any Indian software firm," said T. Harikumar. More than 70 percent of downloads have been from Canada, the UK, and the U.S.

Anyone who has an iPhone or an iTouch can log on to iTunes website and download the game for free. The free version of the game allows the user to be one of the players, while iPhone itself takes the role of the second player.

"We have given it a real feel. When the dice appears on screen, just shake the phone as you would do it while playing on the board game, and the dice shows the number," said Harikumar. The company currently has 22 employees and is mostly into image technology and processing.

Indian IT firms see higher profit per employee this year

Ironically enough, despite the recession, most Indian IT companies have made more revenues and profits per employee this year than they did during the same time last year. Historically, each year had seen these companies raise headcount while revenues did not grow at a comparable pace.

Companies were using more employees to produce the same unit of revenue. But the last 12 months seems to have been a period of reining in costs, managing foreign exchange volatility and cranking up utilization rates, reports the Hindu.

In many cases, among selected companies like TCS, Infosys and Wipro, revenue per employee and profits (before interest, depreciation and taxes) per employee seem to have risen. Notable among these are Cognizant and HCL Technologies.

Also, more than just one player sought to de-link IT services and BPO. A spokesman for Infosys, which saw revenue per employee falling while profits per employee rose slightly, said, "Considering the total number of employees may not be accurate, as it would include those from BPO/products, support staff and also those on the bench. Per capita revenues derived from effort man-months are accurate."

BPO and products businesses are different from IT business in terms of nature of work, skill sets required and employee costs. Thus, Infosys' revenue per employee for the September 2009 quarter was calculated at $6,752 compared to $7,310 in the same period of the previous year.

At Polaris, without considering BPO, revenue per employee rose to Rs. 8.82 lakh for half-year ended September 2009 versus Rs. 8.36 lakh the same time in the previous year. Profits per employee too rose from Rs. 1.22 lakh to Rs. 1.50 lakh. Srikanth, Executive Vice President and CFO, Polaris Software, said that the company managed this rise as "It has a 'built-in' hedge with roughly one-third of the business coming in from the U.S., Europe and APAC, making for a balanced revenue portfolio. We have four growth engines - customer accounts, product (intellect), new country expansion and the insurance business expansion. We grew in all four."

As for per capita growth in profit, he said that the company had focused sharply on internal efficiencies, optimal utilization of resources and rationalization of costs. "The products business has contributed to our healthy margins." Outcome-based pricing also seems to have helped companies.

HCL Technologies attributed its growth in per-employee figures to winning deals in the total outsourcing space. Anil Chanana, the CFO of HCL Technologies (HCL-T) said, "These deals are primarily outcome-based and do not require linear deployment of manpower. We also have a just-in-time hiring policy for skilled manpower." At the profit level during recession, HCL-T focused on savings in the 'general and administration' front while investing in sales and marketing. The support headcount has come down as a percentage of total headcount. Between the quarters ended September 2008 and September 2009, it had fallen from 9.21 percent to 8.95 percent.

Mindtree, which saw a decline in per-employee numbers, attributed it to changing onsite-offshore mix, among other reasons. Rostow Ravanan, CFO of Mindtree said, "When work moves offshore, it's an overall positive while revenue may be impacted in the short term. Also, the industry as a whole has been facing a pricing pressure from clients."

In a recent conversation with Business Line, Ashok Soota, Chairman of Mindtree had said that the company had not sent home any of its employees during the downturn. "We paid a price for it in terms of falling renationalisation rates, but we will reap the benefits when the turnaround happens."

When utilization, or employees being gainfully billed, is lower, the per-employee revenues and profits tend to fall. Cognizant Technology Solutions saw its annualized revenue and profit before interest and taxes per employee rise about 4.5 percent to $51,688 and two percent to $9,799 respectively, as during September 2009. It claims to possess the highest per capita revenue among its peers and attributes this to focusing on two geographies, namely the U.S. and Europe.

A Spokesman for Cognizant said that it had seen growth in the consulting part of the business, in addition to its focus on high-end of BPO and KPO segments. This, by inference, tends to provide high returns with fewer people, compared to mass contact centre businesses.

Net manpower addition over the last 12 months has been the highest for TCS at 20,311 while Infosys and Wipro added 5,147 and 339, respectively. Significantly, per capita figures at TCS have declined for revenues and profits.

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