HCL BPO eyeing buys in US, UK

HCL BPO is looking for acquisitions of platform-based BPO firms in the US, UK and Australia with revenues of up to $250 million, its chief executive said. “We want to de-link revenue growth from headcount growth. So, we want to acquire companies in English-speaking countries that derive revenues from output or outcome-based pricing and platform-led services,” HCL BPO president and CEO N Ranjit said.

Last year, the BPO arm of HCL Technologies had acquired two firms —UK-based Liberata Financial Services (LFS) and US-based Control Point Solutions. The BPO firm aims to earn revenues of $1 billion by 2010-11 and expects about 56% or $560 million to come from acquired entities. HCL BPO had revenues of about $223 million in the year-ended June 2008.

HCL Technologies laid off 450

India's IT services firm HCL Technologies has shown door to 450 employees at its Delhi and Bangalore offices. A majority of those axed were on the bench- the buffer of employees kept on the rolls for new projects, reports The Economic Times (ET).

An HCL Technologies official told ET that the company had sacked 400 people in Delhi and another 50 in Bangalore in the last one-two months. The firm had earlier asked those on the bench, to get assigned to projects or face the prospect of being asked to leave the firm, he said.

In an email reply, a company spokeswoman didn't comment on the number of people sacked by the company but indicated that the move was linked to the performance of employees. "HCL follows a systematic process of performance review and development, and the expectation of the organization is for employees to meet the stringent performance standards. This is a routine and ongoing process," she said.

As of December 31, 2008, HCL had about 52,957 employees. The global downturn has impacted the revenues of clients of Indian IT companies, thereby dampening demand for software services.

Wait set to end for HCL Tech recruits

Source: BusinessLine
Mumbai, Feb. 23 In what could end several months of uncertainty for the 1500-odd campus recruits selected by HCL Technologies in their penultimate year of college (in 2007), they could now be joining the company within the next five months.

“You will be given an eight-week notice to join the organisation and the joining dates shall be communicated to everyone over the next three months as we decide city, technology and service line for each student,” the company said in an e-mail dated February 13, to its employees-in-waiting.

It added that the appointment letter with the joining details will be shared two weeks prior to the date of joining.

Business Line had reported earlier this month that about 1,500 campus recruits were groping in the dark as HCL had neither given the date of joining nor a hard copy of the offer-letter to the freshers. HCL had then said that the hard-copy of the offer letter was provided only closer to the date of joining.

Subsequently, about 50-70 recruits organised a peaceful protest in front of the HCL campus in Noida. And the company eventually wrote back to its employees-in-waiting that they would get their date to join the company in three months.

In its latest communication to the employees-in-waiting, the country’s fifth largest software exporter agreed that the challenging macro-economic environment had forced it to rethink some of its strategies for training, hiring, performance evaluation and deployment.

“Unfortunately, unlike the past few years, this year we will be unable to demonstrate any flexibility on defined norms and process,” the company said.

Due to shrinking client-spend, IT firms are going slow on recruitments. Even those freshers with a valid offer letter are being brought on board in a staggered manner. Recently, the country’s largest software company Tata Consultancy Services said the last batch from the previous year’s campus recruits (about 1,000 persons) would join the company latest by this month-end.

“Deployment at HCL is planned in a phased manner and done in batches. The first batch has already joined the organisation after completing their training and certifications, while few others are undergoing training,” the company said.

HCL BPO arm partners Ketera for source-to-pay services

HCL Technologies said its BPO arm and Ketera Technologies have entered into a strategic alliance to provide source-to-pay services. Through this partnership with Ketera, HCL BPO will deliver full procurement outsourcing across industry verticals, HCL said in a statement.

The programme offers mid- and large-size enterprises management solutions to reduce and control corporate spending for direct and indirect goods.

HCL Technologies receives gold Boeing performance excellence award

HCL Technologies has received the Boeing performance excellence award for 2008. The Boeing company issues the award annually to recognize suppliers who have achieved superior performance HCL Technologies maintained a gold performance composite rating for each month of the 12-month performance period from 01 October 2007 to 30 September 2008. This year, Boeing recognized 411 suppliers who achieved either a gold or silver level Boeing performance excellence award. HCL Technologies is one of only 86 suppliers to receive the gold level of recognition.

HCL Technologies opens office in Canada

IT services firm HCL Technologies on Wednesday announced the opening of a new office in Toronto, Canada to expand its North American operations.

"North American market constitutes 55 per cent of HCL Technologies' global revenues. We are committed to a long-term investment in this country as part of our plans to expand operations in the region," HCL (America) Senior Corporate Vice-President and President Shami Khorana said in a statement.

In Canada, HCL delivers services to 11 of the Global 1,000 clients across various industries under five business lines -- product engineering (R&D), custom applications, enterprise application services, infrastructure management services, and BPO.

HCL Tech bags deals worth $1 bn in Q3

For HCL Technologies, the December 2008 quarter has proved to be the best in terms of deals it has signed. The company said it won deals

worth $1 billion during the three-month period, nearly double its average quarterly revenue. It is also transitioning contracts from other vendors for free, according to analysts who attended its quarterly earnings call presentation.

Some Silicon Valley companies having second thoughts on outsourcing

Source: SiliconValley.com
The global recession — combined with the Satyam Computer Services scandal and the terror attacks in Mumbai — is changing the once rosy portrayal of endless good days for the growing outsourcing industry.

Silicon Valley companies now must grapple with the risks of sending critical functions offshore even while the economic downturn adds to the pressures to cut costs.

"We are in an environment where companies want to save money, but they also want to avoid risks. Offshoring is seen as an adventurous and risky thing to do," said Forrester Research Vice President Andrew Bartels.

While outsourcing is now a permanent fixture in many American business plans, the industry is facing its greatest challenge ever.

In India, software services companies face tough negotiations as clients seek to further trim costs. At the same time, they are subjected to greater scrutiny to ensure they are reliable and financially stable. In China, contract manufacturers are shutting factories, raising questions about their reliability as well as China's prospects as millions of migrant workers face unemployment.

The once high-flying outsourcing industry that boasted stunning growth has begun to slow dramatically. Infosys, India's second-largest outsourcing company, last month reported its first sequential quarterly drop in revenue and sliced its guidance for the year for the second time. Wipro, another outsourcing giant, warned investors that it expects revenue from its software-services business to drop this year.
Overall, global tech outsourcing is expected to drop 3 percent this year, according to a recent report by Forrester Research.

"We are living in tough times; the macroeconomic challenges are significant and impacting businesses across segments," Wipro Chairman Azim Premji said in a statement.

Satyam scandal

The scandal involving the Hyderabad-based outsourcing company Satyam centered on $1 billion worth of falsified financial statements. Satyam founder and chairman B. Ramalinga Raju has been arrested and stands accused of inflating the size of its work force by more than 10,000 and diverting wages from fake workers. Its Silicon Valley clients include Adobe Systems, Ariba, Brocade Communications Systems, Oracle, Network Appliance and Symantec.

The fall of the outsourcing giant, once considered a leader in corporate governance, shocked India's IT services industry.

"Satyam has scared the pants off of a lot of people," said Forrester Research analyst Stephanie Moore. "If you can't trust them, who do you trust?"

It has forced executives to look more closely at potential overseas partners.

"I get people stopping me in the hallways asking me, 'Should we be in India? Do we have a diversification plan?' " said Cory Eaves, chief technology officer with British software group Misys, which has 1,000 employees in India and also contracts with outsourcing companies, including Palo Alto-based Symphony Services. "Two months ago, I was not asked those questions."

Outsourcing executives say, only half jokingly, that they fear outsourcing firms will announce they will run out of cash in a month — and demand upfront payments, said Vamsee Tirukkala, co-founder of Zinnov, a Silicon Valley outsourcing consultant.

The Mumbai terror attacks in November added to the uncertainty felt by some company decision-makers, he said.

Still, such concerns are not reversing plans to outsource, particularly for startups trying to stretch their dollars. Pressures to reduce overhead in this bleak recession is intense.

It's particularly critical for small and mid-size companies to find cost relief, Tirukkala said. "They have to reduce their (cash) burn rates."

Companies have frozen new projects, said Gordon Brooks, chief executive of Symphony Services, a product development outsourcing company with extensive operations in India. But not those that need to update product offerings.

"They are afraid of losing their customer base if they don't get the new features out to market," he said. "It's a tricky time. It's not so much about growth. It's about doing well in a down economy and coming through on the other side."

The process of finding an outsourcing partner, though, has become more cumbersome. "There are a lot more questions people are asking, a lot more documentation they are reviewing, a lot more interviews, a lot more reference calls," Tirukkala said.

Overseas presence

He is also seeing a greater interest among companies to set up their own operations overseas, or at least have their own people located near outsourcing partners so they can react quickly to crises. "The biggest thing companies are saying is, 'I have to have some control over my operations,' " Tirukkala added.

It is unclear if U.S.-based outsourcing companies will pick up more business as a result of worries about the stability of foreign-based outsource firms.

"To a certain extent it helps us, being a U.S. company," Symphony Services CEO Brooks said. "But I think people understand Satyam was an anomaly, like Enron."

India, though increasingly faced with competition from lower-cost East Europe and other countries in Asia, remains a relatively inexpensive place to find great engineers, CTO Eaves said.

"They've got this huge skill base and a culture a bit like Silicon Valley," he said.

Contact John Boudreau at jboudreau@mercurynews.com or (408) 278-3496.

Worldwide sales of information technology products and services are expected to drop 3 percent to $1.66 trillion.
Global IT services and outsourcing also is expected to drop 3 percent.
The United States is expected to account for 34 percent of the global tech market in 2009 and 2010, down from 37 percent in 2005.

HCL bags Nokia's Desktop Management contract

Nokia has outsourced desktop management and help desk functions in 76 countries to Indian outsourcer HCL Technologies. HCL announced on Thursday that the handset maker has signed a five-year contract for an undisclosed sum. HCL manages over 650,000 desktops under its remote infrastructure management program.

The contract includes multilingual helpdesk services in 13 languages, global account management, workstation packaging, creation and maintenance, workstation security management, and on-site support services delivered by partners, HCL said.

TCS, Infosys, Wipro and HCL to bag deals worth $4 bn

Tech biggies such as TCS, Infosys, Wipro and HCL are all set to get new outsourcing contracts worth $4 billion from top customers including British Telecom, Citi, GE and Bank of America this year. In a bid to cope with their tightened budgets, these companies plan to send their information technology works to offshore locations such as India.

Among some of the top deals coming to India, $250-million outsourcing contract being considered by Australian phone firm Telstra is expected to be finalised by the end of January, followed by several contracts worth between $50 and $100 million from Citi, BT, GE and other customers.

Outsourcing expert Sabyasachi S Sathyaparasad of Mindplex Consulting said that the new deals will include long-term application maintenance contracts. However, even as these customers seek to award new projects by renewing existing contracts, Indian vendors may lose over $300 million because of lower billing rates.

“Many large customers have reduced their IT budgets by up to 10%, and they plan to seek more cost and business output-based deliverables from service providers in these difficult times,” he said.

Satyam out, HCL takes 4th position in Indian IT

With Satyam’s disclosure of falsifying revenue figures, HCL Technologies becomes the fourth-largest Indian IT services firm by revenues. Analysts say HCL’s recent acquisition of Axon Group had bridged Satyam’s lead over it to some extent and the latest development clearly takes HCL up the rankings.

As per Satyam chairman B Ramalinga Raju’s letter to the company’s board on Wednesday, the company’s actual standalone revenues for the July- September quarter in 2008 were Rs 2,112 crore, while it had reported revenue figures of Rs 2,700 crore. Adding revenues from subsidiaries of Rs 120 crore, its actual consolidated revenues would be about Rs 2,232 crore. HCL Technologies had reported revenues of Rs 2,369.3 crore for the same quarter.

HCL defers joining date of recruits, again; affects campus placements

HCL Technologies has deferred the joining month for some of its recruits from January to April, according to a person familiar with the development.

It could not be ascertained as to how many potential employees have been affected as a result of the company's decision. "These recruits were earlier told to join in January. This has been extended by three months," the official said.

The company had in October deferred the joining date for some of its recruits to January. "Our recruitment drive for 2009 is very much in progress, and it hasn't varied much from the previous years. It has been business as usual for us," said Ravishankar B, senior vice-president and head of the Talent Management Group of the company, said via e-mail.

The company had net added 7,072 employees in the four quarters ended September. The company's financial year runs from July to June. Given that HCL Technologies operates in software services and business process outsourcing sectors, a large number of employees that the company adds every quarter comprise engineers.

Most engineering colleges in India complete their academic year in July. Typically every year, campus joining at software services company is spread out over the four quarters. This is done for logistical reasons such as training needs and the consequent demand for seating.

Offers for students pursuing engineering courses, which are of a four-year duration, usually start trickling in from the start of their third year. HCL's decision to defer the date of joining for its recruits is not surprising, as it comes on the heels of its peers already having done more or less the same. The sector has been under severe pressure due to liquidity crunch in the global financial markets, currency fluctuations, cancellation of orders, rise in clients' expectations and the expected downward revision in their budgets.

Shares of HCL Technologies closed the day's trading at Rs 130.55 on the National Stock Exchange, up 3.49 per cent from Monday.

In meltdown, big IT and BPO deals cheer India

MUMBAI: Outsourcing fights back and lives to see another day. While everybody was rushing to write off the industry in the wake of Barack Obama's election and the global economic
slowdown, two major outsourcing deals in the hospitality and the pharma sectors have been
signed which should bring hope and cheer for the Indian IT and BPO sector.

Cognizant bags $100 mn US contract
Cognizant Technology Solutions, which competes with Indian offshore biggies such as TCS, Infosys and Wipro, continues to win new contracts from its existing customers, including
Astrazeneca and Merck, even as the industry prepares to cope with lower information technology spend in top markets of the US and Europe.

Genpact got Hyatt Corporation deal
The world's premier hotel company, Chicago-based Global Hyatt Corporation, has outsourced part of its financial and accounting transaction services to India's Genpact. The Hyatt agreement is a trend-setting move in the hospitality industry and follows in the footsteps of other
global banking and insurance giants who outsourced a large part of their processes to India's BPO sector to save costs.

Infosys bags AstraZeneca
In the other major deal, the $30-billion global pharma giant AstraZeneca has outsourced its
end-to-end maintenance services for a variety of corporate services (such as human relations,
finance) to Bangalore-based Infosys. While the values of the two deals have not been disclosed
yet, both envisage increasing the scope of the work over time.

HCL Tech completes Axon buy

HCL Technologies on Monday closed the acquisition of UK-based Axon Group for £441 million ($658 million), marking the largest tech buyout by an Indian firm. HCL Axon, the new entity formed after the buyout, is now chasing outsourcing deals worth $1.2 billion.