The projects proposed by Infosys Technologies and Wipro in a township just outside the state capital has been scrapped, the West Bengal government informed the two IT majors on Monday.
The projects were to come up in the proposed IT township at Rajarhat near Salt Lake but had become controversial in recent weeks following allegations that land sharks had been involved in acquisition of plots there.
The announcement on Monday came barely a month after state IT MInister Debesh Das declared that the government had already acquired land for the Infosys and Wipro in the proposed township. West Bengal stands to lose out on a staggering Rs 10,000 crore of potential IT investments and the creation of 3 lakh IT/BPO jobs.
“Since the IT township project is about to scrapped, latest estimates by the state IT department suggest West Bengal could lose out on Rs 10,000 crore of potential investments and the chance of creating nearly 3 lakh jobs. Had Infosys and Wipro been able to set up shop in the township, a string of greenfield projects from the likes of ICICI Bank to ITC Infotech were expected to follow,” said a very senior state government official.
In the 1,600-acre township, IT/ITeS companies were to be allotted over 600 acre, with the balance was for building township and common infrastructure facilities. At present, nearly 1 lakh people work in the state’s IT sector with 80,000 working in city’s Salt Lake Sector V IT hub.
While Infosys and Wipro had both announced that they would initially employ 5,000-odd people in the Vedic Village IT township project, sources said both companies had actually informed the government that eventually planned to create at least 40,000 jobs in the IT township between themselves.
Sources indicated that state IT minister Debesh Das was likely to finalise the draft of his regret letters to Infosys and Wipro in consultation with the chief minister on Monday. Following this, the state IT minister could send the letters to both companies stating that the state government would be unable to provide any land at the proposed IT township.
In fact, before the Vedic Village fiasco and the consequent political upheaval, the state government was working on a “crash basis” to allot 50 acre out of the promised 90 acre to Wipro by Durga Puja.
Showing posts with label Infosys. Show all posts
Showing posts with label Infosys. Show all posts
Wednesday, September 9, 2009
Wednesday, September 2, 2009
Infosys, New Deals, Outsourcing, TCS, Wipro
IT majors chase $6.5-bn Belgian outsourcing deals
Belgian Grand Prix is not the only race where Indian hopes are riding high. A worsening economic crisis is forcing companies such as AXA, Dexia Bank, Belgacom, drugmaker UCB and car insurer Allianz in Belgium explore IT offshoring and back-office projects, making it almost $6.5-billion opportunity for Indian outsourcing vendors including TCS, Infosys and Wipro apart from MNC rivals.
According to Quantum Step, an outsourcing advisory firm, customers in Belgium will spend around $1.8 billion on infrastructure management outsourcing, almost $2.6 billion on application development and maintenance and nearly $2 billion on BPO this year.
“We have recently started discussions with some Indian suppliers for pure offshoring of our ERP maintenance — it would be fair to assume that until last year, we were not prepared for any such initiative,” said an official at one
of the biggest Belgian enterprises.
While many Indian offshoring firms have been attempting to hire more local European sales professionals and project consultants, it appears that now customers only want to deal with Indian offshore experts. “Many outsourcing dialogues these days are being spearheaded by Indian offshore delivery managers, unlike in the past when some local expert would help us gain entry into an account — the CIOs are specifically asking for Indian suppliers,” said a top executive at one of the Indian IT firms pursuing outsourcing contracts in continental Europe. Officials at the Belgian firms did not respond to an e-mail query sent by ET.
When contacted by ET on Tuesday, TCS said the company’s early investments in the Belgian market are now fetching dividends. “Belgium represents one of the more mature markets for us within Continental Europe. After 15 years of operations in the country, we hold a significant share of the market and are now a prime IT partner to some of the largest BEL20 companies,” said AS Lakshminarayanan, vice-president and head — Europe, TCS.
“Our strategy to invest in localised delivery centres in Europe, particularly the ones in Eindhoven and Luxembourg, fuses well with our Global Network Delivery Model,” he added. TCS already has around 700 professionals working for Belgian customers, with around 200 onsite. InBev, AXA and Belgacom are among TCS’ top customers in Belgium.
Experts such as Sridhar Vedala of outsourcing advisory firm Quantum Step say that the key European markets opening up for offshoring include BeNeLux, Nordics, Germany and France. “Most of the European companies are more or less first time outsourcers. Some big multinationals had offshored previously such as ABN Amro, Ikea, Nokia and Philips.
However, this did not trickle down to regional customers as many of them felt that there was cultural mismatch. Also, to a large extent, Indian providers also did not focus on this market,” he told ET in an interview.
As reported by ET recently, BASF AG, the world’s biggest chemical company, along with Euroclear-Europe’s largest settlement firm, and Anheuser-Busch InBev — the world’s biggest brewer are among companies looking at offshore outsourcing for the first time, as they seek to lower their operational costs and cope more effectively with an unprecedented slump in demand for their products and services.
According to Quantum Step, an outsourcing advisory firm, customers in Belgium will spend around $1.8 billion on infrastructure management outsourcing, almost $2.6 billion on application development and maintenance and nearly $2 billion on BPO this year.
“We have recently started discussions with some Indian suppliers for pure offshoring of our ERP maintenance — it would be fair to assume that until last year, we were not prepared for any such initiative,” said an official at one
of the biggest Belgian enterprises.
While many Indian offshoring firms have been attempting to hire more local European sales professionals and project consultants, it appears that now customers only want to deal with Indian offshore experts. “Many outsourcing dialogues these days are being spearheaded by Indian offshore delivery managers, unlike in the past when some local expert would help us gain entry into an account — the CIOs are specifically asking for Indian suppliers,” said a top executive at one of the Indian IT firms pursuing outsourcing contracts in continental Europe. Officials at the Belgian firms did not respond to an e-mail query sent by ET.
When contacted by ET on Tuesday, TCS said the company’s early investments in the Belgian market are now fetching dividends. “Belgium represents one of the more mature markets for us within Continental Europe. After 15 years of operations in the country, we hold a significant share of the market and are now a prime IT partner to some of the largest BEL20 companies,” said AS Lakshminarayanan, vice-president and head — Europe, TCS.
“Our strategy to invest in localised delivery centres in Europe, particularly the ones in Eindhoven and Luxembourg, fuses well with our Global Network Delivery Model,” he added. TCS already has around 700 professionals working for Belgian customers, with around 200 onsite. InBev, AXA and Belgacom are among TCS’ top customers in Belgium.
Experts such as Sridhar Vedala of outsourcing advisory firm Quantum Step say that the key European markets opening up for offshoring include BeNeLux, Nordics, Germany and France. “Most of the European companies are more or less first time outsourcers. Some big multinationals had offshored previously such as ABN Amro, Ikea, Nokia and Philips.
However, this did not trickle down to regional customers as many of them felt that there was cultural mismatch. Also, to a large extent, Indian providers also did not focus on this market,” he told ET in an interview.
As reported by ET recently, BASF AG, the world’s biggest chemical company, along with Euroclear-Europe’s largest settlement firm, and Anheuser-Busch InBev — the world’s biggest brewer are among companies looking at offshore outsourcing for the first time, as they seek to lower their operational costs and cope more effectively with an unprecedented slump in demand for their products and services.
Tuesday, September 1, 2009
Infosys, IT market
IT companies free of labour laws for 2 years
With IT firms buffeted by today’s turbulent times, the government has reached out a helping hand. Reciprocating their needs, it has exempted IT/ITES and software establishments from the provisions of Industrial Employment (Standing Orders) Act 1946 (Central Act 20 of 1946).
These laws are strict on classifying workers, their working hours and shifts, the wages payable, besides other archaic rules on leave and attendance.
Head of HR in Infosys Technologies said, “We have antiquated labour regulations, which do not fit the requirement of the knowledge-based industry. This reform is necessary. We do not want inspector raj here, what we want is more such reforms across industries.’’
These laws are strict on classifying workers, their working hours and shifts, the wages payable, besides other archaic rules on leave and attendance.
Head of HR in Infosys Technologies said, “We have antiquated labour regulations, which do not fit the requirement of the knowledge-based industry. This reform is necessary. We do not want inspector raj here, what we want is more such reforms across industries.’’
Infosys
Infosys finding difficult to acquire companies
Software major Infosys, which has a robust cash chest for sure and made no secret of its intention to buy out companies with strategic fit, is finding it difficult to acquire right firms at right price.
The country's second largest software exporter had cash and cash equivalents of Rs 12,030 crore, including investment in liquid mutual funds and certificate of deposits, as of June end this year.
"....we are looking at acquisitions. But acquisitions will happen only when you find the right company, it has to be at the right price, they want to be acquired and that's difficult", the Bangalore-headquartered company's CEO and Managing Director S Gopalakrishnan said.
"We don't want to do an acquisition for acquisition sake".
The NASDAQ-listed firm is eyeing regions other than the US and Europe to expand overseas.
"We are expanding into the Middle East, South and Latin America. We already have a siginificant presence now in Japan, China and Australia. We are looking at geographies outside the US and Europe", Gopalakrishnan said.
Asked if the transition phase following the exit of Nandan M Nilekani, who quit as Chairman to head the Unique Identification Authority of India (UIDAI), has been completed, Gopalakrishnan said: "Yes, it's immediately done".
Nilekani's responsibilities have now been distributed among the top management of the company. There is no proposal to appoint an executive chairman in his place "at this point".
Gopalakrishnan did not agree with perception of some analysts who have argued that the global recession has bottomed out.
"It's very difficult to extrapolate at this point because there are negative cues also", he said pointing out to failure of another set banks in the US last week.
"There are positive news and negative news. So, I think the uncertainty will continue and it's better to be cautious at this point and wait for two quarters of good numbers before we can say that it's all behind us".
He said Infosys' customers are also echoing similar sentiments.
"Customers are also saying the same thing. They are also saying it's too early to say that it (global recession) is behind us and it's over. So, we have to be cautious", he said.
The country's second largest software exporter had cash and cash equivalents of Rs 12,030 crore, including investment in liquid mutual funds and certificate of deposits, as of June end this year.
"....we are looking at acquisitions. But acquisitions will happen only when you find the right company, it has to be at the right price, they want to be acquired and that's difficult", the Bangalore-headquartered company's CEO and Managing Director S Gopalakrishnan said.
"We don't want to do an acquisition for acquisition sake".
The NASDAQ-listed firm is eyeing regions other than the US and Europe to expand overseas.
"We are expanding into the Middle East, South and Latin America. We already have a siginificant presence now in Japan, China and Australia. We are looking at geographies outside the US and Europe", Gopalakrishnan said.
Asked if the transition phase following the exit of Nandan M Nilekani, who quit as Chairman to head the Unique Identification Authority of India (UIDAI), has been completed, Gopalakrishnan said: "Yes, it's immediately done".
Nilekani's responsibilities have now been distributed among the top management of the company. There is no proposal to appoint an executive chairman in his place "at this point".
Gopalakrishnan did not agree with perception of some analysts who have argued that the global recession has bottomed out.
"It's very difficult to extrapolate at this point because there are negative cues also", he said pointing out to failure of another set banks in the US last week.
"There are positive news and negative news. So, I think the uncertainty will continue and it's better to be cautious at this point and wait for two quarters of good numbers before we can say that it's all behind us".
He said Infosys' customers are also echoing similar sentiments.
"Customers are also saying the same thing. They are also saying it's too early to say that it (global recession) is behind us and it's over. So, we have to be cautious", he said.
Thursday, August 27, 2009
Infosys, New Deals, Outsourcing, TCS, Wipro
TCS, Infosys, Wipro bag big chunk of BP's 5-year IT deal
Country's top three IT companies TCS, Infosys and Wipro today bagged a seizable chunk of five- year outsourcing deal from British oil Spokepersons of all three companies did not disclose the size when asked whether the total deal size is worth $ 1.5 bn (approximately Rs 7,500 crore). They also did not reveal their independent size of the contract they have won.
The multi-crore rupee contract is a big boost for the domestic outsourcing majors, currently under pricing and margin pressure in the wake of gloabl downturn.
Global IT majors IBM and Accenture have also has snapped a part of the deal. The three companies announced separately that they have entered into an outsourcing deal with BP.
Infosys said it will operate BP's business systems. Wipro said it will provide IT Application Development and Application Maintenance (ADAM) services for BP's Fuels Value Chain and corporate business globally.
TCS said it has been selected for engagements in refining, manufacturing and corporate IT with opportunities across fuels value chain including upstream and trading.
As part of the deal, IBM will manage and run the oil giant's enterprise applications and integrated service desk responsibilities, IBM said.
The big three closed up in the range of 2-4 per cent on BSE after the news of them bagging the deal broke out.
The multi-crore rupee contract is a big boost for the domestic outsourcing majors, currently under pricing and margin pressure in the wake of gloabl downturn.
Global IT majors IBM and Accenture have also has snapped a part of the deal. The three companies announced separately that they have entered into an outsourcing deal with BP.
Infosys said it will operate BP's business systems. Wipro said it will provide IT Application Development and Application Maintenance (ADAM) services for BP's Fuels Value Chain and corporate business globally.
TCS said it has been selected for engagements in refining, manufacturing and corporate IT with opportunities across fuels value chain including upstream and trading.
As part of the deal, IBM will manage and run the oil giant's enterprise applications and integrated service desk responsibilities, IBM said.
The big three closed up in the range of 2-4 per cent on BSE after the news of them bagging the deal broke out.
Infosys, New Deals, Outsourcing, Wipro
Infosys, Wipro bag 5-yr BP deal
Indian outsourcers Infosys Technologies Ltd and Wipro Ltd bagged five-year outsourcing deal from oil and gas firm BP.
Under the terms of the deal, Infosys will operate a large portion of BP's business systems. No financial details were available.
Kris Gopalakrishnan, CEO and Managing Director, Infosys Technologies, said, “Infosys has a long standing relationship with BP, delivering consulting and technology services. We are well positioned to use our global sourcing expertise and transformational capabilities in the oil and gas domain.”
Under the five-year agreement with BP, Wipro will provide IT applications development and maintenance services for the company’s fuel and corporate businesses globally.
Earlier last week, Infosys Technologies said that it has bid for more than 10 large government projects in India as part of a drive to lower its dependence on the US market.
Infosys, which gets more than half its business from the United States, plans to generate $1 billion in revenue from the Indian market in 2-3 years versus an insignificant level now, the head of its India business unit said.
"There are large opportunities in India. So we are definitely going to go after these kinds of businesses very aggressively in India," Binod Rangadore said. "We have a very healthy pipeline right now."
The market for technology and business outsourcing services in India is expected to expand five-fold by 2020 to $90 billion to $100 billion on the back of a growing economy, according to a recent study by lobby group NASSCOM and consultancy McKinsey.
Outsourcing firms such as Infosys and bigger rival Tata Consultancy Services are tapping new markets such as India, China, Japan and countries in Europe to beat a recession in the United States.
The Indian firms face competition from big global players such as IBM Inc, Hewlett-Packard and Accenture that have raided their home turf as they look for growth outside their mature markets.
Under the terms of the deal, Infosys will operate a large portion of BP's business systems. No financial details were available.
Kris Gopalakrishnan, CEO and Managing Director, Infosys Technologies, said, “Infosys has a long standing relationship with BP, delivering consulting and technology services. We are well positioned to use our global sourcing expertise and transformational capabilities in the oil and gas domain.”
Under the five-year agreement with BP, Wipro will provide IT applications development and maintenance services for the company’s fuel and corporate businesses globally.
Earlier last week, Infosys Technologies said that it has bid for more than 10 large government projects in India as part of a drive to lower its dependence on the US market.
Infosys, which gets more than half its business from the United States, plans to generate $1 billion in revenue from the Indian market in 2-3 years versus an insignificant level now, the head of its India business unit said.
"There are large opportunities in India. So we are definitely going to go after these kinds of businesses very aggressively in India," Binod Rangadore said. "We have a very healthy pipeline right now."
The market for technology and business outsourcing services in India is expected to expand five-fold by 2020 to $90 billion to $100 billion on the back of a growing economy, according to a recent study by lobby group NASSCOM and consultancy McKinsey.
Outsourcing firms such as Infosys and bigger rival Tata Consultancy Services are tapping new markets such as India, China, Japan and countries in Europe to beat a recession in the United States.
The Indian firms face competition from big global players such as IBM Inc, Hewlett-Packard and Accenture that have raided their home turf as they look for growth outside their mature markets.
Infosys, new openings
Infosys to open IT SEZ in Thiruvananthapuram shortly
Thiruvananthapuram: The IT special economic zone (SEZ) being developed by software major Infosys on a 50-acre plot adjacent to the Technopark IT campus here will open shortly.
The SEZ would have two separate buildings, one is almost ready and work on the other is progressing, said M. Vasudevan, Senior Business Development Manager of Technopark.
"Each building has a capacity to seat 1,500 professionals. The first one will open shortly, some last bit of work on common amenities and a food court remains. The other building is also nearing completion," Vasudevan told IANS.
At present, Infosys has a development centre in the Technopark campus that employs more than 1,500 professionals.
According to some officials, Infosys preferred to open both buildings together by 2009-end or early next year after completing all works, but the state government wants the IT major to open the first building at the earliest.
The agreement for transferring land to Infosys for the project was signed in 2006 and the ground-breaking ceremony took place in 2007.
The SEZ would have two separate buildings, one is almost ready and work on the other is progressing, said M. Vasudevan, Senior Business Development Manager of Technopark.
"Each building has a capacity to seat 1,500 professionals. The first one will open shortly, some last bit of work on common amenities and a food court remains. The other building is also nearing completion," Vasudevan told IANS.
At present, Infosys has a development centre in the Technopark campus that employs more than 1,500 professionals.
According to some officials, Infosys preferred to open both buildings together by 2009-end or early next year after completing all works, but the state government wants the IT major to open the first building at the earliest.
The agreement for transferring land to Infosys for the project was signed in 2006 and the ground-breaking ceremony took place in 2007.
Friday, August 21, 2009
Infosys, New Deals, Outsourcing, Satyam
Infosys, Satyam vie for $200 mn deal
Bombardier, the world’s third biggest aircraft maker, has invited tech vendors to bid for an outsourcing contract potentially worth up to $200 million over next few years, as the company seeks to increase outsourcing of design projects in order to lower its operational costs.
While Mahindra Satyam and Capgemini already work with Bombardier and are in discussions with the aircraft maker for this contract, India’s second biggest software exporter Infosys and smaller rival QuEST Global are also pursuing this opportunity.
The contract will involve engineering design projects for Bombardier’s CSeries jetliners being procured by Lease Corp. International Aviation and Lufthansa are in transactions worth over $3 billion.
From around $1.8 billion currently, India’s engineering services outsourcing (ESO) market is expected to reach $50 billion over the next ten years as more aviation and manufacturing companies seek to lower their design costs by outsourcing to the country.
When contacted, a Bombardier spokesperson declined to provide any specific details of this contract. “Bombardier Aerospace is active in India through associations with Capgemini and Mahindra Satyam in Bangalore since 2005. Bombardier Aerospace in its normal course of business continues to hold exploratory discussions with several entities located around the world to address various business opportunities,” said Marc Duchesne, Manager, Public Affairs & Senior spokesperson, Bombardier Aerospace.
Apart from smaller focused firms such as Infotech Enterprises and QuEST Global, large Indian software firms including TCS, Infosys and HCL have been attempting to increase their revenues from aviation design projects.
While Infosys would not comment on any specific customer, a person familiar with the company’s strategies told on conditions of anonymity that Infosys is among vendors bidding for the Bombardier contract. “Infosys is in conversation with Bombardier which is the main OEM among the four to five big players in this market. Bombardier’s future road map is throwing up an enormous potential as they have formed the blueprint for C-Series,” he said.
Companies such as Infosys now want a bigger pie of the outsourcing contract, which will include some portion of mechanical engineering design work as well.
“Bombardier is looking for design work for metallic and composite structures to be done in India which also includes work like floor panels, la
nding gears, doors, fuselage, wings. Infosys is looking for complete package rather then doing work for one part or another,” the person added.
Aviation customers are increasingly looking at sourcing design and other IT projects from India not necessarily for cost savings, but also because the country offers a pool of skilled engineers who understand complex avionics.
“QuEST Global has typically provided our customers with cost savings from 20% to 40%, in business models where we setup a dedicated engineering team for them consisting of at least 20-25 engineers providing a similar range of services. These kind of cost savings can be achieved in a period of 18 to 24 months from the setup of operations,” said Bejoy George, chief marketing officer of QuEST.
Two of the world’s biggest aircraft makers Airbus and Boeing have been outsourcing to India-based vendors over past many years. Boeing awarded a deal to HCL Technologies to develop software for its 787 Dreamliner and has also formed collaborations with several institutions such as IISc, IIT and National Aeronautical Laboratory, for development of futuristic aerospace technology.
Hindustan Aeronautics Limited (HAL) is developing components for Airbus’s A380, including the doors. QuEST on other hand is making the components that go in to the landing gears of aircraft’s made by Airbus and Boeing.
While Mahindra Satyam and Capgemini already work with Bombardier and are in discussions with the aircraft maker for this contract, India’s second biggest software exporter Infosys and smaller rival QuEST Global are also pursuing this opportunity.
The contract will involve engineering design projects for Bombardier’s CSeries jetliners being procured by Lease Corp. International Aviation and Lufthansa are in transactions worth over $3 billion.
From around $1.8 billion currently, India’s engineering services outsourcing (ESO) market is expected to reach $50 billion over the next ten years as more aviation and manufacturing companies seek to lower their design costs by outsourcing to the country.
When contacted, a Bombardier spokesperson declined to provide any specific details of this contract. “Bombardier Aerospace is active in India through associations with Capgemini and Mahindra Satyam in Bangalore since 2005. Bombardier Aerospace in its normal course of business continues to hold exploratory discussions with several entities located around the world to address various business opportunities,” said Marc Duchesne, Manager, Public Affairs & Senior spokesperson, Bombardier Aerospace.
Apart from smaller focused firms such as Infotech Enterprises and QuEST Global, large Indian software firms including TCS, Infosys and HCL have been attempting to increase their revenues from aviation design projects.
While Infosys would not comment on any specific customer, a person familiar with the company’s strategies told on conditions of anonymity that Infosys is among vendors bidding for the Bombardier contract. “Infosys is in conversation with Bombardier which is the main OEM among the four to five big players in this market. Bombardier’s future road map is throwing up an enormous potential as they have formed the blueprint for C-Series,” he said.
Companies such as Infosys now want a bigger pie of the outsourcing contract, which will include some portion of mechanical engineering design work as well.
“Bombardier is looking for design work for metallic and composite structures to be done in India which also includes work like floor panels, la
nding gears, doors, fuselage, wings. Infosys is looking for complete package rather then doing work for one part or another,” the person added.
Aviation customers are increasingly looking at sourcing design and other IT projects from India not necessarily for cost savings, but also because the country offers a pool of skilled engineers who understand complex avionics.
“QuEST Global has typically provided our customers with cost savings from 20% to 40%, in business models where we setup a dedicated engineering team for them consisting of at least 20-25 engineers providing a similar range of services. These kind of cost savings can be achieved in a period of 18 to 24 months from the setup of operations,” said Bejoy George, chief marketing officer of QuEST.
Two of the world’s biggest aircraft makers Airbus and Boeing have been outsourcing to India-based vendors over past many years. Boeing awarded a deal to HCL Technologies to develop software for its 787 Dreamliner and has also formed collaborations with several institutions such as IISc, IIT and National Aeronautical Laboratory, for development of futuristic aerospace technology.
Hindustan Aeronautics Limited (HAL) is developing components for Airbus’s A380, including the doors. QuEST on other hand is making the components that go in to the landing gears of aircraft’s made by Airbus and Boeing.
Thursday, August 20, 2009
Infosys, New Deals
Infosys bids for over 10 govt deals
Infosys Technologies, India's second-largest IT services exporter, has bid for more than 10 large government projects in India as part of a drive to lower its dependence on the US market, an official said.
Infosys, which gets more than half its business from the United States, plans to generate $1 billion in revenue from the Indian market in 2-3 years versus an insignificant level now, the head of its India business unit said.
"There are large opportunities in India. So we are definitely going to go after these kinds of businesses very aggressively in India," Binod Rangadore said. "We have a very healthy pipeline right now."
The market for technology and business outsourcing services in India is expected to expand five-fold by 2020 to $90 billion to $100 billion on the back of a growing economy, according to a recent study by lobby group NASSCOM and consultancy McKinsey.
Outsourcing firms such as Infosys and bigger rival Tata Consultancy Services are tapping new markets such as India, China, Japan and countries in Europe to beat a recession in the United States.
The Indian firms face competition from big global players such as IBM Inc, Hewlett-Packard and Accenture that have raided their home turf as they look for growth outside their mature markets.
US business software maker CA expects its bookings, an indicator of future business, will rise 50 percent in the year to March 2010 and by 30-40 percent for the following two years on growing technology spending.
Infosys, which set up its India business unit in late 2007 as part of a strategy to diversify its revenue base, has put in bids for IT services contracts from railways and state-run telecom Bharat Sanchar Nigam Ltd (BSNL) among others, Rangadore said.
He declined to set a timeframe for the outcome of the bids. The US market had contributed 63.2 percent of Infosys’ 2008/09 revenue of $4.4 billion, with just 1.3 percent coming from India.
Rangadore said the business from IT services in India was very
Window of opportunity
Last month, Infosys said it had won a contract to design, develop and support a portal for the ministry of commerce and industry. A government official said the contract was valued at Rs 150 million ($3 million) for three years.
Infosys, which has a market value of $23 billion, has also won a project from the tax authorities for a project to enable electronic filing by taxpayers, Rangadore said.
He said spending on technology by private companies was seeing a slowdown in India due to the economic downturn, but investment by the government remained robust and was likely to increase in the near term.
A host of IT services firms are expected to vie for the government's initiative to provide the country's more than 1 billion people with identity cards, a new project which is being headed by Infosys co-founder Nandan Nilekani.
"The window of opportunity in India is probably in the next one to two years when most of the decisions will be made for large spending in India," Rangadore said.
The Infosys stock has jumped about 75 percent this year, compared with a 54 percent rise in the main index.
small and bulk of the revenue in India came from Finacle, the banking solutions and services unit of Infosys.
Infosys, which gets more than half its business from the United States, plans to generate $1 billion in revenue from the Indian market in 2-3 years versus an insignificant level now, the head of its India business unit said.
"There are large opportunities in India. So we are definitely going to go after these kinds of businesses very aggressively in India," Binod Rangadore said. "We have a very healthy pipeline right now."
The market for technology and business outsourcing services in India is expected to expand five-fold by 2020 to $90 billion to $100 billion on the back of a growing economy, according to a recent study by lobby group NASSCOM and consultancy McKinsey.
Outsourcing firms such as Infosys and bigger rival Tata Consultancy Services are tapping new markets such as India, China, Japan and countries in Europe to beat a recession in the United States.
The Indian firms face competition from big global players such as IBM Inc, Hewlett-Packard and Accenture that have raided their home turf as they look for growth outside their mature markets.
US business software maker CA expects its bookings, an indicator of future business, will rise 50 percent in the year to March 2010 and by 30-40 percent for the following two years on growing technology spending.
Infosys, which set up its India business unit in late 2007 as part of a strategy to diversify its revenue base, has put in bids for IT services contracts from railways and state-run telecom Bharat Sanchar Nigam Ltd (BSNL) among others, Rangadore said.
He declined to set a timeframe for the outcome of the bids. The US market had contributed 63.2 percent of Infosys’ 2008/09 revenue of $4.4 billion, with just 1.3 percent coming from India.
Rangadore said the business from IT services in India was very
Window of opportunity
Last month, Infosys said it had won a contract to design, develop and support a portal for the ministry of commerce and industry. A government official said the contract was valued at Rs 150 million ($3 million) for three years.
Infosys, which has a market value of $23 billion, has also won a project from the tax authorities for a project to enable electronic filing by taxpayers, Rangadore said.
He said spending on technology by private companies was seeing a slowdown in India due to the economic downturn, but investment by the government remained robust and was likely to increase in the near term.
A host of IT services firms are expected to vie for the government's initiative to provide the country's more than 1 billion people with identity cards, a new project which is being headed by Infosys co-founder Nandan Nilekani.
"The window of opportunity in India is probably in the next one to two years when most of the decisions will be made for large spending in India," Rangadore said.
The Infosys stock has jumped about 75 percent this year, compared with a 54 percent rise in the main index.
small and bulk of the revenue in India came from Finacle, the banking solutions and services unit of Infosys.
Infosys, Outsourcing
Infosys using new billing model
IT bellwether Infosys has started using a new billing system offering clients flexible schemes and protecting its margins.
Most of clients are now billed on the time and material based contracts (effort-based model) model under which Infosys charges a client based on the number of hours put in by the employees on a particular project. "We are pushing the new model across the client verticals. Over the next one-two years the company expects that about 5-10% of the revenue to come through the new model," Infosys senior VP and executive council member Subhash Dhar said.
In the last 6-9 months the company has signed 12-14 new clients under the new engagement model. "We have a large pipeline of deals under the new model," he said.
India's No. 2 software services exporter, is pursuing 12 to 15 deals worth $1 billion in this quarter, its chief executive said, amid hopes of a revival in outsourcing business momentum.
Hopes of a pickup in outsourcing demand, hit by the economic downturn, has soared after major Indian software services firms such as Infosys and sector leader Tata Consultancy Services Ltd smashed street estimates in their April-June earnings.
But export-driven outsourcers remain uncertain about a near-term earnings rebound, with Infosys forecasting its first annual revenue fall for the year to March 2010 on demand for fee cuts by its overseas clients.
Most of clients are now billed on the time and material based contracts (effort-based model) model under which Infosys charges a client based on the number of hours put in by the employees on a particular project. "We are pushing the new model across the client verticals. Over the next one-two years the company expects that about 5-10% of the revenue to come through the new model," Infosys senior VP and executive council member Subhash Dhar said.
In the last 6-9 months the company has signed 12-14 new clients under the new engagement model. "We have a large pipeline of deals under the new model," he said.
India's No. 2 software services exporter, is pursuing 12 to 15 deals worth $1 billion in this quarter, its chief executive said, amid hopes of a revival in outsourcing business momentum.
Hopes of a pickup in outsourcing demand, hit by the economic downturn, has soared after major Indian software services firms such as Infosys and sector leader Tata Consultancy Services Ltd smashed street estimates in their April-June earnings.
But export-driven outsourcers remain uncertain about a near-term earnings rebound, with Infosys forecasting its first annual revenue fall for the year to March 2010 on demand for fee cuts by its overseas clients.
Tuesday, August 18, 2009
Infosys, new openings, TCS, Wipro
IT firms to come calling in December for campus selections
The recruitment season in engineering colleges has seen a shift. Usually, August-September is when IT firms queue up to tap the best talent on campus. This year, however, is different with companies deciding to keep away until the eighth semester as per a Nasscom directive.
Hiring season will now start only from December while some firms such as Wipro have opted for a February 2010 timeframe.
“The number of IT companies going to campuses now is almost negligible. We have been told by our clients that they are looking to hire only from December since they are still absorbing the 2009 batch,” said Madan Padaki, MD of MeritTrac, a firm which works with IT companies for student assessments.
In March this year, Nasscom sent out an email to IT companies requesting them to visit engineering colleges only in the last semester.
It was felt that such a move would benefit companies who were struggling from the economic meltdown, burdened with excess bench strength and deferred campus offers.
Top tech firms including Infosys, Wipro and TCS are still in the process of taking in students they had offered jobs to from the 2008 and 2009 batches. For instance, about 7,000 students are yet to be accommodated in Wipro.
Wipro’s VP – Talent Acquisition, Pradeep Bahirwani said, “We plan to visit campuses only in the final year unlike previous years. Our hiring is based on business need and training plans.” He added that depending on the colleges, Wipro would begin campus recruitment from February-March 2010 onwards.
Many colleges are happy with the delay saying that it will allow students to concentrate more on study and research, an aspect they tend to go easy on once they get their job.
N Vijayadev, head of placement and training department of M S Ramaiah Institute of Technology said, “Earlier, with placements happening during the sixth semester and students bagging jobs, there was a drastic decline in the number of students taking up research and higher studies.”
DY Patil College of Engineering’s placement head S V Dravid said that the extra two semesters will give students
time to be better prepared for the interviews.
Hiring season will now start only from December while some firms such as Wipro have opted for a February 2010 timeframe.
“The number of IT companies going to campuses now is almost negligible. We have been told by our clients that they are looking to hire only from December since they are still absorbing the 2009 batch,” said Madan Padaki, MD of MeritTrac, a firm which works with IT companies for student assessments.
In March this year, Nasscom sent out an email to IT companies requesting them to visit engineering colleges only in the last semester.
It was felt that such a move would benefit companies who were struggling from the economic meltdown, burdened with excess bench strength and deferred campus offers.
Top tech firms including Infosys, Wipro and TCS are still in the process of taking in students they had offered jobs to from the 2008 and 2009 batches. For instance, about 7,000 students are yet to be accommodated in Wipro.
Wipro’s VP – Talent Acquisition, Pradeep Bahirwani said, “We plan to visit campuses only in the final year unlike previous years. Our hiring is based on business need and training plans.” He added that depending on the colleges, Wipro would begin campus recruitment from February-March 2010 onwards.
Many colleges are happy with the delay saying that it will allow students to concentrate more on study and research, an aspect they tend to go easy on once they get their job.
N Vijayadev, head of placement and training department of M S Ramaiah Institute of Technology said, “Earlier, with placements happening during the sixth semester and students bagging jobs, there was a drastic decline in the number of students taking up research and higher studies.”
DY Patil College of Engineering’s placement head S V Dravid said that the extra two semesters will give students
time to be better prepared for the interviews.
Saturday, August 15, 2009
Infosys, Outsourcing
Infosys Looks to China Outsourcing Market for Growth
When India's second-largest outsourcer, Infosys Technologies, opened a China office six years ago, it followed the offshoring industry into a country seen as a rising alternative to India. Since then, China has mainly served as an added base from which Infosys can serve global customers, but now the company is now looking to China's domestic market for continued growth.
India remains the clear global leader in outsourcing, but more companies are choosing to outsource to China even as Chinese companies themselves demand more IT services.
Infosys China gets the majority of its revenue from offshore services, while a little over one-third comes from services performed for Chinese businesses and for local operations of multinational companies, said Rangarajan Vellamore, chief operating officer for Infosys China, in an interview.
"Our goal is to increase our local numbers as well," he said.
Indian outsourcers so far have made little headway into China's burgeoning market for IT services, said Tina Tang, a senior analyst at Gartner. Companies like IBM and Hewlett-Packard have built a stronger presence, she said.
Indian players want more of the domestic market as well but have generally not taken major steps to gain Chinese customers, said Tang. Recognition of brands like Infosys is lower in China than overseas, she said.
Infosys is trying to change that. Banking is one area where the company hopes to win more Chinese customers. Several multinational banks operating in China use an Infosys banking product called Finacle, and the company is now talking to local banks about introducing the product as well, said Vellamore.
Infosys also hopes to gain more business from Chinese state-owned enterprises, which are often huge companies -- including banks -- that dominate their sectors of the economy. But one obstacle to winning those deals could be government constraints on the actions of state-owned businesses, said Vellamore. Chinese government policies sometimes favor domestic companies over foreign competition.
"I do hear that in certain areas it's not always a level playing field, with respect to some of the state-owned enterprises," Vellamore said.
Infosys is in the initial stages of offering IT infrastructure management from China, a service now provided mainly from India, he said.
Tang said many outsourcers now operate in both India and China, and it is increasingly common for customers to offshore to multiple countries at once, sending different services to different locations. Indian outsourcers have been drawn to China partly by the country's low-cost labor and reliable infrastructure, coupled with rising costs and labor shortages in India.
Both outsourcers and customers can reduce their exposure to risk by moving part of their operations to China, she said.
But when asked why a customer would choose to outsource to China rather than India, Vellamore said the first concern for global customers is choosing an outsourcer that can provide services in multiple locations and time zones. The outsourcer itself can then decide where to perform the service, he said.
"For multinational customers it doesn't matter where it is getting done," he said.
China is largely a satellite for Infosys and its operations in India. Infosys has about 1,250 staff in China, compared with 100,000 worldwide.
The talent pool in China is similar to India at the entry level, and Infosys China has about 90 percent local staff, said Vellamore. Chinese universities are known for producing well-trained engineers who speak English. But the outsourcing industry is young in China, and client demand for more experienced staff usually exceeds supply in the country, he said. That can make it more difficult for outsourcers to suddenly expand for new client projects, though Infosys China usually has a few hundred surplus employees waiting for assignments, he said.
"This talent pool is limited at that level," Vellamore said.
Source: PCWorld
India remains the clear global leader in outsourcing, but more companies are choosing to outsource to China even as Chinese companies themselves demand more IT services.
Infosys China gets the majority of its revenue from offshore services, while a little over one-third comes from services performed for Chinese businesses and for local operations of multinational companies, said Rangarajan Vellamore, chief operating officer for Infosys China, in an interview.
"Our goal is to increase our local numbers as well," he said.
Indian outsourcers so far have made little headway into China's burgeoning market for IT services, said Tina Tang, a senior analyst at Gartner. Companies like IBM and Hewlett-Packard have built a stronger presence, she said.
Indian players want more of the domestic market as well but have generally not taken major steps to gain Chinese customers, said Tang. Recognition of brands like Infosys is lower in China than overseas, she said.
Infosys is trying to change that. Banking is one area where the company hopes to win more Chinese customers. Several multinational banks operating in China use an Infosys banking product called Finacle, and the company is now talking to local banks about introducing the product as well, said Vellamore.
Infosys also hopes to gain more business from Chinese state-owned enterprises, which are often huge companies -- including banks -- that dominate their sectors of the economy. But one obstacle to winning those deals could be government constraints on the actions of state-owned businesses, said Vellamore. Chinese government policies sometimes favor domestic companies over foreign competition.
"I do hear that in certain areas it's not always a level playing field, with respect to some of the state-owned enterprises," Vellamore said.
Infosys is in the initial stages of offering IT infrastructure management from China, a service now provided mainly from India, he said.
Tang said many outsourcers now operate in both India and China, and it is increasingly common for customers to offshore to multiple countries at once, sending different services to different locations. Indian outsourcers have been drawn to China partly by the country's low-cost labor and reliable infrastructure, coupled with rising costs and labor shortages in India.
Both outsourcers and customers can reduce their exposure to risk by moving part of their operations to China, she said.
But when asked why a customer would choose to outsource to China rather than India, Vellamore said the first concern for global customers is choosing an outsourcer that can provide services in multiple locations and time zones. The outsourcer itself can then decide where to perform the service, he said.
"For multinational customers it doesn't matter where it is getting done," he said.
China is largely a satellite for Infosys and its operations in India. Infosys has about 1,250 staff in China, compared with 100,000 worldwide.
The talent pool in China is similar to India at the entry level, and Infosys China has about 90 percent local staff, said Vellamore. Chinese universities are known for producing well-trained engineers who speak English. But the outsourcing industry is young in China, and client demand for more experienced staff usually exceeds supply in the country, he said. That can make it more difficult for outsourcers to suddenly expand for new client projects, though Infosys China usually has a few hundred surplus employees waiting for assignments, he said.
"This talent pool is limited at that level," Vellamore said.
Source: PCWorld
Infosys, IT market, TCS
Infosys most admired Indian company: Survey
IT bellwether Infosys Technologies has been adjudged as most admired Indian company, ahead of Tata Consultancy Services and Bharti Airtel, says a survey.
Infosys has topped the list of 10 most admired Indian companies and is followed by IT major TCS at the second position, according to the survey conducted by The Wall Street Journal Asia.
Telecom giant Bharti Airtel is at the third spot, engineering major Larsen & Toubro has cornered the fourth place and IT firm Wipro is at the fifth position.
Others on the list are Tata Steel (sixth), FMCG major Hindustan Unilever (seventh), HDFC Bank (eighth), State Bank of India (9th) and conglomerate ITC (10th).
The ranking is based on the Asian 200 survey of subscribers of The Wall Street Journal Asia and other business people.
The survey takes into account factors such as financial reputation, vision, corporate reputation, quality and innovation.
Infosys has also been ranked first in terms of corporate reputation, vision and quality.
State Bank of India has topped the list in terms of financial reputation followed by Mukesh Ambani-led Reliance Industries at the second place and HDFC Bank at the third position.
Tata Steel and Reliance Industries have cornered the second and third places, respectively, in terms of vision.
When it comes to corporate reputation, Tata group firms TCS and Tata Steel are at the second and third spots, respectively.
In terms of quality, Larsen & Toubro is at the second position while Bharti Airtel is placed third.
TCS has topped the list when it comes to innovation and followed by Bharti Airtel at the second place. Infosys is at the third spot, respectively.
A total of 2,622 executives and professionals participated in the Asian 200 survey across 12 Asian-Pacific countries.
According to the publication, the multinational winner of the survey would be named on September 11.
Infosys has topped the list of 10 most admired Indian companies and is followed by IT major TCS at the second position, according to the survey conducted by The Wall Street Journal Asia.
Telecom giant Bharti Airtel is at the third spot, engineering major Larsen & Toubro has cornered the fourth place and IT firm Wipro is at the fifth position.
Others on the list are Tata Steel (sixth), FMCG major Hindustan Unilever (seventh), HDFC Bank (eighth), State Bank of India (9th) and conglomerate ITC (10th).
The ranking is based on the Asian 200 survey of subscribers of The Wall Street Journal Asia and other business people.
The survey takes into account factors such as financial reputation, vision, corporate reputation, quality and innovation.
Infosys has also been ranked first in terms of corporate reputation, vision and quality.
State Bank of India has topped the list in terms of financial reputation followed by Mukesh Ambani-led Reliance Industries at the second place and HDFC Bank at the third position.
Tata Steel and Reliance Industries have cornered the second and third places, respectively, in terms of vision.
When it comes to corporate reputation, Tata group firms TCS and Tata Steel are at the second and third spots, respectively.
In terms of quality, Larsen & Toubro is at the second position while Bharti Airtel is placed third.
TCS has topped the list when it comes to innovation and followed by Bharti Airtel at the second place. Infosys is at the third spot, respectively.
A total of 2,622 executives and professionals participated in the Asian 200 survey across 12 Asian-Pacific countries.
According to the publication, the multinational winner of the survey would be named on September 11.
Wednesday, August 12, 2009
Infosys, IT market, TCS
Swine Flu: IT companies issue advisory
Taking precautionary steps against swine flu, Infosys Technologies has restricted both inbound and outbound travel from its development centre in Pune. On the other hand, Wipro is continuing with its general travel advisories.
Infosys said: “We have restricted all inbound and outbound travel at our development centre in Pune. We are continuing efforts to educate our employees, monitoring health bulletins and taking necessary precautions.” Infosys has 20,000 employees at its Pune development centre.
Both these IT majors have development centres across the country, with Pune being among the larger centres. According Wipro CIO Laxman Badiga: “We continue to provide required travel advisories .... We are communicating with our employees to exercise extreme caution and to avoid unnecessary travel. Our employees at the affected countries are reported to be safe and our business operations continue to function as normal.” Wipro has close to 9,000 people at the Pune centre.
Pune has seen the maximum attention from outbreak of HIN1 virus, especially with the first death being reported from the city.
At the first outbreak of the H1N1 in Mexico, IT majors like Infosys, Wipro and TCS had temporarily closed down their centres in Mexico for a week as a precautionary measure.
Infosys said: “We have restricted all inbound and outbound travel at our development centre in Pune. We are continuing efforts to educate our employees, monitoring health bulletins and taking necessary precautions.” Infosys has 20,000 employees at its Pune development centre.
Both these IT majors have development centres across the country, with Pune being among the larger centres. According Wipro CIO Laxman Badiga: “We continue to provide required travel advisories .... We are communicating with our employees to exercise extreme caution and to avoid unnecessary travel. Our employees at the affected countries are reported to be safe and our business operations continue to function as normal.” Wipro has close to 9,000 people at the Pune centre.
Pune has seen the maximum attention from outbreak of HIN1 virus, especially with the first death being reported from the city.
At the first outbreak of the H1N1 in Mexico, IT majors like Infosys, Wipro and TCS had temporarily closed down their centres in Mexico for a week as a precautionary measure.
Infosys, new openings
Infosys to use its internships to attract more global talent
Infosys Technologies, India’s second largest software exporter, plans to use the success of its global internship programme, InStep to attract more global talent to the company. From the launch of the programme in 1999, the company has so far trained 664 people from 41 nationalities.
“The programme, launched almost 10 years ago to create a platform for the brightest engineers from the US to understand India and our (Infosys) business better, has now metamorphosed to cover most other countries globally. Our belief is that sooner or latter InStep will become a good conduit to recruit more and more global talents,” N R Narayana Murthy, chairman and chief mentor of the Nasdaq-listed company told here on Monday.
In 2008, about 175 trainees from 27 countries joined the internship programme. This year, as of now, over 100 students have joined the programme. The company says, while at least 15-20 people from every internship batch were joining the company earlier, this number is expected to go up as it is planning to recruit more overseas talent going forward.
According to the company, once they return to their respective countries, the interns work as brand ambassadors for Infosys which helps the company promote itself as a global recruitment brand. “Today if you go to 85 universities worldwide considered the best in those countries, you will see us present there and you will see our ex-interns. It has done wonders to us in terms of building a global brand amongst the global academia,” said Sanjay Purohit, vice president and head of corporate planning.
The duration of Infosys' global internship programme targeted at young engineers and MBAs is in the range of 8-24 weeks. During the internships, the trainees are being provided monthly stipends.
“The programme, launched almost 10 years ago to create a platform for the brightest engineers from the US to understand India and our (Infosys) business better, has now metamorphosed to cover most other countries globally. Our belief is that sooner or latter InStep will become a good conduit to recruit more and more global talents,” N R Narayana Murthy, chairman and chief mentor of the Nasdaq-listed company told here on Monday.
In 2008, about 175 trainees from 27 countries joined the internship programme. This year, as of now, over 100 students have joined the programme. The company says, while at least 15-20 people from every internship batch were joining the company earlier, this number is expected to go up as it is planning to recruit more overseas talent going forward.
According to the company, once they return to their respective countries, the interns work as brand ambassadors for Infosys which helps the company promote itself as a global recruitment brand. “Today if you go to 85 universities worldwide considered the best in those countries, you will see us present there and you will see our ex-interns. It has done wonders to us in terms of building a global brand amongst the global academia,” said Sanjay Purohit, vice president and head of corporate planning.
The duration of Infosys' global internship programme targeted at young engineers and MBAs is in the range of 8-24 weeks. During the internships, the trainees are being provided monthly stipends.
Infosys
Infosys turns trainer for 30K students
Come June every year, and Infosys Technologies, India's second-biggest software services exporter, turns trainer for the nearly 30,000 students it recruits from top engineering colleges every year.
Its training campus in Mysore, a two-hour drive from its sprawling headquarters in Bangalore, can house about 15,000 people.
New recruits spend up to six months honing their skills as Infosys attempts to fill the gaps left by inadequate college education.
Goldman Sachs counts the lack of quality education as one of the 10 factors holding India back from rapid economic growth. Analysts say it raises costs, including salaries as firms vie for the best IT recruits, and reduces firms' competitive edge.
"Ideally, education should happen in colleges, it should not be happening on company campuses," said Srikantan Moorthy, head of education and research at Infosys, whose Campus Connect programme in 430 colleges is aimed at "industry ready" recruits.
"But a gap does exist, and we can't wait for the government to put in place an education system that addresses our needs."
There are growing cries to revamp India's education system, which focuses on learning by rote. The calls for reforms include opening up primary and secondary education to private investment, easier entry of foreign universities seeking to establish campuses in India and better monitoring and evaluation systems.
Nasdaq-listed Infosys, which develops software applications, spent $175 million on training and education in the year to March 2009, at a time when an economic downturn crimped margins.
It is not the only one: rival Tata Consultancy Services has a faculty development programme in 150 engineering colleges, while Wipro founder Azim Premji has set aside some of his personal wealth for primary education and Anil Agarwal, chief of Vedanta Resources, has committed $1 billion to a university.
Tata Group and Aditya Birla Group set up colleges years ago as acts of social responsibility. Now, multinationals such as SAP, IBM and Cisco are designing curriculum and training faculty to meet their needs.
"The talent gap is compromising their growth big time," said Janmejaya Sinha, managing director of Boston Consulting Group (BCG), which estimates there was a 30 percent rise in IT salaries from 2004-06 because of a war for talent between firms. "It is one of the biggest operational risks they face."
Demographic disaster
More than half country's billion-plus population is below the age of 25, a section referred to as its demographic dividend.
But about 40 per cent of its work force of about 400 million people is illiterate and another 40 per cent comprises school dropouts, said BCG in a recent report.
Demand for graduates over the next five years is likely to be 13.8 million. But with only 13.2 million students graduating over the same period, India will face a shortfall of 600,000 graduates.
About 1.3 million unskilled and unqualified workers will also weigh on the economy over the same period, BCG estimates.
"More than 1 million people lacking the ability to participate in the workforce has the makings of a potential demographic disaster," Sinha said.
"We will have an army of young people left behind and increasingly frustrated with their lot. They not only have the potential to derail India's growth prospects, but also challenge the basic fibre of our society," he said.
With a literacy rate of 61 per cent, India scores poorly compared to other BRIC nations in terms of average number of years in secondary education. Rival China already produces more than three times the number of PhDs every year.
Home to one of the world's oldest universities, now only 10 percent of the roughly 20 million who enrol in the first grade every year finish high school. Female participation is abysmal.
With the education sector deemed "not for profit", and limits on private investment in primary and secondary education, there is a thriving cottage industry of coaching centres and tutors.
Hundreds of private tertiary colleges charge high fees. Yet, according to critics, many students graduating from these expensive colleges are practically unemployable. The best colleges, including Indian Institutes of Technology and Management were set up more than 50 years ago.
"Without hundreds of millions of Indians receiving a better basic education, it will be virtually impossible for India to achieve its "dream" potential," the Goldman Sachs report said.
Right to education
For the new Congress party-led government, education is a priority: Sarva Shiksha Abhiyan (universal education programme) helped bring 20 million children into school. It also plans to quadruple the number of universities to 1,500 in 10 years.
A Right to Education Bill, passed by the parliament this month, provides children aged 6-14 years the right to free and compulsory education in a neighbourhood school.
These are vital but inadequate measures, companies say. "Of all the big issues challenging corporates, education is the starting point," said Dilep Rajnekar, chief executive of Azim Premji Foundation, which plans to set up a university.
"If we manage to get the education bit right, then a lot of things can go right in this country."
Its training campus in Mysore, a two-hour drive from its sprawling headquarters in Bangalore, can house about 15,000 people.
New recruits spend up to six months honing their skills as Infosys attempts to fill the gaps left by inadequate college education.
Goldman Sachs counts the lack of quality education as one of the 10 factors holding India back from rapid economic growth. Analysts say it raises costs, including salaries as firms vie for the best IT recruits, and reduces firms' competitive edge.
"Ideally, education should happen in colleges, it should not be happening on company campuses," said Srikantan Moorthy, head of education and research at Infosys, whose Campus Connect programme in 430 colleges is aimed at "industry ready" recruits.
"But a gap does exist, and we can't wait for the government to put in place an education system that addresses our needs."
There are growing cries to revamp India's education system, which focuses on learning by rote. The calls for reforms include opening up primary and secondary education to private investment, easier entry of foreign universities seeking to establish campuses in India and better monitoring and evaluation systems.
Nasdaq-listed Infosys, which develops software applications, spent $175 million on training and education in the year to March 2009, at a time when an economic downturn crimped margins.
It is not the only one: rival Tata Consultancy Services has a faculty development programme in 150 engineering colleges, while Wipro founder Azim Premji has set aside some of his personal wealth for primary education and Anil Agarwal, chief of Vedanta Resources, has committed $1 billion to a university.
Tata Group and Aditya Birla Group set up colleges years ago as acts of social responsibility. Now, multinationals such as SAP, IBM and Cisco are designing curriculum and training faculty to meet their needs.
"The talent gap is compromising their growth big time," said Janmejaya Sinha, managing director of Boston Consulting Group (BCG), which estimates there was a 30 percent rise in IT salaries from 2004-06 because of a war for talent between firms. "It is one of the biggest operational risks they face."
Demographic disaster
More than half country's billion-plus population is below the age of 25, a section referred to as its demographic dividend.
But about 40 per cent of its work force of about 400 million people is illiterate and another 40 per cent comprises school dropouts, said BCG in a recent report.
Demand for graduates over the next five years is likely to be 13.8 million. But with only 13.2 million students graduating over the same period, India will face a shortfall of 600,000 graduates.
About 1.3 million unskilled and unqualified workers will also weigh on the economy over the same period, BCG estimates.
"More than 1 million people lacking the ability to participate in the workforce has the makings of a potential demographic disaster," Sinha said.
"We will have an army of young people left behind and increasingly frustrated with their lot. They not only have the potential to derail India's growth prospects, but also challenge the basic fibre of our society," he said.
With a literacy rate of 61 per cent, India scores poorly compared to other BRIC nations in terms of average number of years in secondary education. Rival China already produces more than three times the number of PhDs every year.
Home to one of the world's oldest universities, now only 10 percent of the roughly 20 million who enrol in the first grade every year finish high school. Female participation is abysmal.
With the education sector deemed "not for profit", and limits on private investment in primary and secondary education, there is a thriving cottage industry of coaching centres and tutors.
Hundreds of private tertiary colleges charge high fees. Yet, according to critics, many students graduating from these expensive colleges are practically unemployable. The best colleges, including Indian Institutes of Technology and Management were set up more than 50 years ago.
"Without hundreds of millions of Indians receiving a better basic education, it will be virtually impossible for India to achieve its "dream" potential," the Goldman Sachs report said.
Right to education
For the new Congress party-led government, education is a priority: Sarva Shiksha Abhiyan (universal education programme) helped bring 20 million children into school. It also plans to quadruple the number of universities to 1,500 in 10 years.
A Right to Education Bill, passed by the parliament this month, provides children aged 6-14 years the right to free and compulsory education in a neighbourhood school.
These are vital but inadequate measures, companies say. "Of all the big issues challenging corporates, education is the starting point," said Dilep Rajnekar, chief executive of Azim Premji Foundation, which plans to set up a university.
"If we manage to get the education bit right, then a lot of things can go right in this country."
Monday, August 10, 2009
Infosys, NRIs, Wipro
Belgian offsites set to be hassle-free, but not totally
Employees of Infosys, Wipro and a host of IT and pharma companies that have a base in Belgium will no longer need to contribute to the social securityscheme there as India implements its first totalisation agreement.
However, Indian tax laws, which have not been aligned with the provisions of the totalisation agreement, threaten to take the sheen off the benefits offered by the treaty signed between two countries to prevent double expenditure on social security.
Currently, when an Indian company sends an employee on an assignment for 2-3 years, he and his employer have to contribute to the social security system prevalent in that country as also to provident fund back home. While this puts an additional burden on an employer, it does not benefit the employee in any way as in most countries, the minimum duration for deriving any benefit is 10 years.
According to estimates, Indian IT professionals in the US contribute close to $1 billion every year. Social security in India is covered by the provident fund scheme, under which an employee contributes 12% of his basic salary plus dearness allowance and his employer makes a matching contribution.
But it is not recognised as a social security by other countries in the absence of such an agreement. But now, this hardships will be mitigated in the case of Belgium as the India-Belgium totalisation agreement comes into effect from September 1.
But with the government yet to align the country’s tax laws with the provisions in the totalisation agreement, the treaty may mitigate only part of the hardship. For example, for an Indian national posted in Belgium to get coverage, his Indian employer needs to continue the contribution to his provident fund.
But, to be able to do that, it would be necessary for him to continue paying his base salary in India which would be subject to tax here even if such salary is not related to employment exercised in India.
“Unless our domestic tax laws get similarly aligned, what is saved on account of Belgian social security may get paid out in the form of Indian taxes,” Amitabh Singh, partner Ernst & Young said.
However, Indian tax laws, which have not been aligned with the provisions of the totalisation agreement, threaten to take the sheen off the benefits offered by the treaty signed between two countries to prevent double expenditure on social security.
Currently, when an Indian company sends an employee on an assignment for 2-3 years, he and his employer have to contribute to the social security system prevalent in that country as also to provident fund back home. While this puts an additional burden on an employer, it does not benefit the employee in any way as in most countries, the minimum duration for deriving any benefit is 10 years.
According to estimates, Indian IT professionals in the US contribute close to $1 billion every year. Social security in India is covered by the provident fund scheme, under which an employee contributes 12% of his basic salary plus dearness allowance and his employer makes a matching contribution.
But it is not recognised as a social security by other countries in the absence of such an agreement. But now, this hardships will be mitigated in the case of Belgium as the India-Belgium totalisation agreement comes into effect from September 1.
But with the government yet to align the country’s tax laws with the provisions in the totalisation agreement, the treaty may mitigate only part of the hardship. For example, for an Indian national posted in Belgium to get coverage, his Indian employer needs to continue the contribution to his provident fund.
But, to be able to do that, it would be necessary for him to continue paying his base salary in India which would be subject to tax here even if such salary is not related to employment exercised in India.
“Unless our domestic tax laws get similarly aligned, what is saved on account of Belgian social security may get paid out in the form of Indian taxes,” Amitabh Singh, partner Ernst & Young said.
Friday, August 7, 2009
Infosys
Colombian bank selects Infosys 'Finacle' solution
Country-based software exporter Infosys Technologies today said that Bancolombia, the largest universal bank in Colombia has selected its banking solution --Finacle - to modernise its technology platform.
The Finacle solutions would be implemented in the banks Columbian branches and its international subsidiaries.
"We chose Finacle for its global leadership in new generation banking technology solutions backed by Infosys, a strong partner with excellent delivery track record," Bancolombia Vice President of Information Technology Olga Botero Pelaez said.
Bancolombia has a strong market share in the South American retail, corporate, credit cards, investment banking and housing loan sectors, an Infosys statement said.
After concluding the merger with Conavi and Corfinsura, Bancolombia embarked upon a major transformation project to modernise its technology platform for future growth, business agility and operational efficiency, it said.
The Finacle solutions would be implemented in the banks Columbian branches and its international subsidiaries.
"We chose Finacle for its global leadership in new generation banking technology solutions backed by Infosys, a strong partner with excellent delivery track record," Bancolombia Vice President of Information Technology Olga Botero Pelaez said.
Bancolombia has a strong market share in the South American retail, corporate, credit cards, investment banking and housing loan sectors, an Infosys statement said.
After concluding the merger with Conavi and Corfinsura, Bancolombia embarked upon a major transformation project to modernise its technology platform for future growth, business agility and operational efficiency, it said.
Thursday, August 6, 2009
Infosys
Infosys plans acquisitions; sets aside $450-500m
Country's second-largest software exporter Infosys Technologies is planning to acquire IT companies serving energy and health care sectors in geographies as diverse as Latin America, Europe and Australia. The company has set aside $450-500 million for the purpose.
The acquisition will help Infosys to diversify its client base, especially at a time when growth has been flat from traditional revenue streams like banking, financial services and insurance sector, besides retail and manufacturing.
Infosys is looking at companies serving sectors such as energy and health care, company CEO, Mr Kris Gopalakrishnan, told reporters at the ICT East-2009 event organised by Confederation of Indian Industry.
The geographies the company is looking at also includes the West Asia and Japan, he added. Europe currently contributes 26 per cent of Infosys' revenue and the company is targeting this to go up to 30 per cent. Mr Gopalakrishnan, however, did not mention the timeframe by when the company was planning to achieve that.
On its Bengal plans, the company said it would wait for revival in the economy before going ahead with its expansion plans in West Bengal.
“We need to wait as the situation is not clear,” Mr Gopalakrishnan said. West Bengal IT minister, Mr Debesh Das had earlier said the government would be ready to offer land to Infosys and Wipro by December.
No co-chairman
There were no immediate plans to appoint a co-chairman, a post, previously held by Mr Nandan Nilekani. Mr Nilekani resigned last month.
The acquisition will help Infosys to diversify its client base, especially at a time when growth has been flat from traditional revenue streams like banking, financial services and insurance sector, besides retail and manufacturing.
Infosys is looking at companies serving sectors such as energy and health care, company CEO, Mr Kris Gopalakrishnan, told reporters at the ICT East-2009 event organised by Confederation of Indian Industry.
The geographies the company is looking at also includes the West Asia and Japan, he added. Europe currently contributes 26 per cent of Infosys' revenue and the company is targeting this to go up to 30 per cent. Mr Gopalakrishnan, however, did not mention the timeframe by when the company was planning to achieve that.
On its Bengal plans, the company said it would wait for revival in the economy before going ahead with its expansion plans in West Bengal.
“We need to wait as the situation is not clear,” Mr Gopalakrishnan said. West Bengal IT minister, Mr Debesh Das had earlier said the government would be ready to offer land to Infosys and Wipro by December.
No co-chairman
There were no immediate plans to appoint a co-chairman, a post, previously held by Mr Nandan Nilekani. Mr Nilekani resigned last month.
Wednesday, August 5, 2009
BPO, Infosys
Infosys BPO bags 5-year T-Mobile UK deal
Infosys BPO, the back-office services arm of India's Infosys Technologies Ltd, said on Tuesday it had won a five-year outsourcing deal from mobile operator T-Mobile UK.
Infosys BPO has been engaged by T-Mobile UK to support several core processes for their finance directorate which cover customer finance, commercial finance and accounting (F&A), and procurement operations, Infosys BPO said in a statement.
“Our strong F&A capabilities combined with our understanding of the telecom industry helped us win this account,” said Gopal Devanahalli, vice president and head (Communications, Media and Entertainment), Infosys BPO.
Tim Spence, head of Customer Finance, T-Mobile UK, said, “We were keen to partner with a company that possessed a good understanding of our requirements and business needs.”
The financial terms of the deal were not disclosed. T-Mobile is one of the world's largest mobile operators with more than 125 million customers worldwide and about 16.7 million customers in the UK itself.
Infosys BPO has been engaged by T-Mobile UK to support several core processes for their finance directorate which cover customer finance, commercial finance and accounting (F&A), and procurement operations, Infosys BPO said in a statement.
“Our strong F&A capabilities combined with our understanding of the telecom industry helped us win this account,” said Gopal Devanahalli, vice president and head (Communications, Media and Entertainment), Infosys BPO.
Tim Spence, head of Customer Finance, T-Mobile UK, said, “We were keen to partner with a company that possessed a good understanding of our requirements and business needs.”
The financial terms of the deal were not disclosed. T-Mobile is one of the world's largest mobile operators with more than 125 million customers worldwide and about 16.7 million customers in the UK itself.
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