To overcome the visa problems and strengthen their businesses, Infosys Technologies is likely to hire more number of local talents in the U.S. The company has already recruited 72 Americans and 140 more offers are under way.
Nandita Gurjar, Senior Vice President and Group Head of Human Resources at Infosys told Financial Chronicle that under a hiring plan started in April, 1,000 Americans will be taken on board. This lateral hiring will be typically for people with four to five years of experience and domain knowledge of different technologies. They are intended to replace Indian staff on deputation to the U.S.
The hiring of more Americans is part of the company's strategy to have more non-Indians, who now account for 4.67 percent of the employee strength. The company wants to take the figure to 15 percent by 2012.
According to the company's Director, T V Mohandas Pai, Infosys has not planned to fill senior management positions in the U.S. now, except a couple in sales. Asked if an American could be hired to head its North American operations, he said that the company believed in having the 'most capable person heading the best positions'.
Infosys has about 17,000 people working outside India. Of this, over 10,000 are in North America (most of them in the U.S.), including 4,900 non-Indians. 1,000 Indian staffs are stationed in the U.S.; the rest are in Europe, China and Australia. The total headcount at Infosys is 1,05,000.
Infosys is also recruiting in small numbers in Brazil (about 250 people initially), China, Germany, Mexico and the Philippines. It is generally believed that local hiring costs Indian companies more. However, Gurjar said, "This is no longer true. The U.S. minimum wages law requires companies to pay a certain amount to employees, even to staff on deputation sent there on visa. There is not much difference in salaries paid to those on deputation and locals. So we would rather recruit locals who have more experience and domain expertise. This leads to greater productivity."
Showing posts with label Infosys. Show all posts
Showing posts with label Infosys. Show all posts
Thursday, October 15, 2009
Wednesday, October 14, 2009
Accenture, IBM, Infosys, Outsourcing
Wal-Mart to issue $1 bn IT contract: Sources
Global retail giant Wal-Mart may be all set to issue an IT contract worth USD 1 billion. CNBC-TV18 learns that it will select upto 10 IT vendors for the contract. CNBC-TV18’s Kritika Saxena reports that the contract, for which the bid will open by July 2010, will span across six to eight years. TCS, Infosys, Wipro and HCL Tech emerge as potential bidders along with IBM and Accenture.
However, Wal-Mart says they do not engage in speculation about IT activities in India.
Here is a verbatim transcript of her comments on CNBC-TV18.
Wal-Mart is all set to issue a large scale IT project. This could be the largest project in the retail space. What we pick up from our sources is that the contract is expected to be valued between USD 800 million to a USD 1 billion. Who are the IT firms?—this is good news for IT companies definitely. It will be too early to talk about the likely contenders but who are the potential bidders?—What we pick up from our sources is that four large-cap Indian IT firms—Infosys, TCS, Wipro and HCL Tech would be looking to bid for this project. Even multi-national firms like IBM and Accenture would be looking to bid for these projects. But these are the potential bidders and it’s way too early to comment for these individual companies, since the bids will be open only by approximately July to August 2010.
If you see the recent activities by British Petroleum and Exxon Mobil in the IT space—they have issued large scale contract of USD 1.5 to USD 1 billion but in the retail space this would be the largest so far.
Wal-Mart and obviously individual IT companies too would be looking to see boost in the revenues after this IT contract. These individual IT companies—the plan is to issue about USD 50-100 million individual contracts as spread across, some would be about USD 250-300 million.
When we contracted Wal-Mart for an official comment on this they said that they have several inquiries about their IT activities in India but they do not comment on individual specifications on this.
However, Wal-Mart says they do not engage in speculation about IT activities in India.
Here is a verbatim transcript of her comments on CNBC-TV18.
Wal-Mart is all set to issue a large scale IT project. This could be the largest project in the retail space. What we pick up from our sources is that the contract is expected to be valued between USD 800 million to a USD 1 billion. Who are the IT firms?—this is good news for IT companies definitely. It will be too early to talk about the likely contenders but who are the potential bidders?—What we pick up from our sources is that four large-cap Indian IT firms—Infosys, TCS, Wipro and HCL Tech would be looking to bid for this project. Even multi-national firms like IBM and Accenture would be looking to bid for these projects. But these are the potential bidders and it’s way too early to comment for these individual companies, since the bids will be open only by approximately July to August 2010.
If you see the recent activities by British Petroleum and Exxon Mobil in the IT space—they have issued large scale contract of USD 1.5 to USD 1 billion but in the retail space this would be the largest so far.
Wal-Mart and obviously individual IT companies too would be looking to see boost in the revenues after this IT contract. These individual IT companies—the plan is to issue about USD 50-100 million individual contracts as spread across, some would be about USD 250-300 million.
When we contracted Wal-Mart for an official comment on this they said that they have several inquiries about their IT activities in India but they do not comment on individual specifications on this.
Tuesday, October 13, 2009
Infosys, new openings
Infosys adds a total of 5,000 employees
Notwithstanding the economic slump, software services firm Infosys Technologies has increased its headcount and has made a total addition of over 5,000 employees in the last 12-month period.
The total employee strength of the group stood at 1,05,453 till the quarter ended September 30, where as in the corresponding period a year ago the figure stood at 1,00,306, Infosys said in a statement.
During the quarter, there was a gross addition of 6,069 employees for Infosys and its subsidiaries and a net addition of 1,548 employees, even as the hiring trend across the board was on a downslide.
In a bid to wriggle out of the economic crisis, Infosys made certain changes and adopted new methods of company management.
"In response to the economic crisis, we had stepped up our investment in training. This has made us more competitive in fulfilling clients' needs today," member of Infosys board and Head - HRD and Education and Research T V Mohandas Pai said.
In line with the economic slump, the attrition rate of Infosys has decreased considerably and stands at 10.9 per cent, registering a significant decline from the year ago period when the attrition rate stood at 12.8 per cent.
The total employee strength of the group stood at 1,05,453 till the quarter ended September 30, where as in the corresponding period a year ago the figure stood at 1,00,306, Infosys said in a statement.
During the quarter, there was a gross addition of 6,069 employees for Infosys and its subsidiaries and a net addition of 1,548 employees, even as the hiring trend across the board was on a downslide.
In a bid to wriggle out of the economic crisis, Infosys made certain changes and adopted new methods of company management.
"In response to the economic crisis, we had stepped up our investment in training. This has made us more competitive in fulfilling clients' needs today," member of Infosys board and Head - HRD and Education and Research T V Mohandas Pai said.
In line with the economic slump, the attrition rate of Infosys has decreased considerably and stands at 10.9 per cent, registering a significant decline from the year ago period when the attrition rate stood at 12.8 per cent.
Infosys
Infosys creates job opportunity for Americans
Infosys Technologies will hire more local talent in the US in a bid to overcome visa hurdles. It has already started hiring Americnas for its operations in that country.
Under a hiring plan started in April, 1,000 Americans will be taken on board, Nandita Gurjar, senior VP and group head of human resources at Infosys, told Financial Chronicle.
According to her, 72 Americans have already been recruited and 140 more offers are under way. The planned hiring could be completed by April next year.
“This lateral hiring and typically for people with four to five years of experience and domain knowledge of different technologies. They are intended to replace Indian staff on deputation to the US,’’ she said.
In the IT industry, that level of experience generally implies senior programmers, team leaders, senior architects and sales personnel. According to the company’s director, T V Mohandas Pai, Infosys does not plan to fill senior management positions in the US now, except a couple in sales. Asked if an American could be hired to head its North American operations, he said the company believed in having the “most capable person heading the best positions”.
The North America operations are at present headed by Ashok Vemuri, who also looks after the BFSI business, the company’s largest revenue garnering vertical.
Infosys has about 17,000 people working outside India. Of this, over 10,000 are in North America (most of them in the US), including 4,900
non-Indians. A thousand Indian staff are stationed in the US; the rest are in Europe, China and Australia. The total headcount at Infosys is 1,05,000.
The hiring of more Americans is part of the company’s strategy to have more non-Indians, who now account for 4.67 per cent of the employee strength. The company wants to take the figure to 15 per cent by 2012.
Infosys has no mandate as yet to hire locally in Europe in big numbers. But this could change when the economy is back on track and
demand increases in the region.
Infosys is also hiring in small numbers in Brazil (about 250 people initially), China, Germany, Mexico and the Philippines.
It is generally believed that local hiring costs Indian companies more. However, Gurjar said this was no longer true. “The US minimum wages law requires companies to pay a certain amount to employees, even to staff on deputation sent there on visa. There is not much difference in salaries paid to those on deputation and locals. So we would rather recruit locals who have more experience and domain expertise. This leads to greater productivity,’’ she explained.
Gurjar said that Infosys did not find it tough to attract people despite being an Indian company. However, she added, there was a lack of awareness about Indian IT firms.
The Bangalore-based company is investing in a branding campaign which includes working on Facebook, websites, and participating in and sponsoring conferences in the US.
Under a hiring plan started in April, 1,000 Americans will be taken on board, Nandita Gurjar, senior VP and group head of human resources at Infosys, told Financial Chronicle.
According to her, 72 Americans have already been recruited and 140 more offers are under way. The planned hiring could be completed by April next year.
“This lateral hiring and typically for people with four to five years of experience and domain knowledge of different technologies. They are intended to replace Indian staff on deputation to the US,’’ she said.
In the IT industry, that level of experience generally implies senior programmers, team leaders, senior architects and sales personnel. According to the company’s director, T V Mohandas Pai, Infosys does not plan to fill senior management positions in the US now, except a couple in sales. Asked if an American could be hired to head its North American operations, he said the company believed in having the “most capable person heading the best positions”.
The North America operations are at present headed by Ashok Vemuri, who also looks after the BFSI business, the company’s largest revenue garnering vertical.
Infosys has about 17,000 people working outside India. Of this, over 10,000 are in North America (most of them in the US), including 4,900
non-Indians. A thousand Indian staff are stationed in the US; the rest are in Europe, China and Australia. The total headcount at Infosys is 1,05,000.
The hiring of more Americans is part of the company’s strategy to have more non-Indians, who now account for 4.67 per cent of the employee strength. The company wants to take the figure to 15 per cent by 2012.
Infosys has no mandate as yet to hire locally in Europe in big numbers. But this could change when the economy is back on track and
demand increases in the region.
Infosys is also hiring in small numbers in Brazil (about 250 people initially), China, Germany, Mexico and the Philippines.
It is generally believed that local hiring costs Indian companies more. However, Gurjar said this was no longer true. “The US minimum wages law requires companies to pay a certain amount to employees, even to staff on deputation sent there on visa. There is not much difference in salaries paid to those on deputation and locals. So we would rather recruit locals who have more experience and domain expertise. This leads to greater productivity,’’ she explained.
Gurjar said that Infosys did not find it tough to attract people despite being an Indian company. However, she added, there was a lack of awareness about Indian IT firms.
The Bangalore-based company is investing in a branding campaign which includes working on Facebook, websites, and participating in and sponsoring conferences in the US.
Infosys, Outsourcing
Infosys to expand in China, Brazil & Mexico
As the global economy recovers fully, the resilient Indian information technology industry can bounce to double-digit growth again, Infosys Technologies chief executive S Gopalakrishnan has said adding that his own company will expand in Brazil, Mexico and China.
"If we go back to normal conditions after the world economy recovers, a double-digit growth in the range of 10-20 percent is possible for the Indian IT industry," Gopalakrishnan told IANS in an interview here.
In the aftermath of the global financial crisis, the Indian software services sector, led by bellwethers like Tata Consultancy Services, Infosys and Wipro, have to contended with single-digit growth this fiscal, as their global clients put spending on new projects on hold, be they for services or products.
"We have to wait and see what type of recovery takes place because many believe we will not go back to the level of activity seen in 2007. That was an unprecedented period of economic activity, driven by enormous leverage, which in turn created significant risks in the economy," the co-founder of the global software major said.
After the tech, or the dot.com, meltdown in 2002-03, the Indian IT industry staged a major recovery to boom over the next five years, registering 30 percent annual growth till fiscal 2008, but declined sharply to 16-17 percent in fiscal 2009.
The industry's representative body, the National Association of Software and Services Companies (Nasscom), also estimated that the Indian IT-BPO (business process outsourcing) services sector will grow by a mere 4-7 percent this fiscal.
In fiscal 2008-09, the Indian software industry posted revenues of $59 billion, including exports valued at $46 billion and domestic business at $13 billion. Nasscom estimated software exports at $48-50 billion and domestic revenues to grow 15-18 percent this fiscal.
Constrained by regulations to forecast his company's prospects when the world economy recovers and tech spending bounces from mid-2010, Gopalakrishnan said with the worst-ever crisis behind, the Indian software industry would come out strong to seize the opportunities, as it was better prepared to face challenges and compete with peers.
"The momentum our company has seen in the second quarter (July-Sept) will continue to give us better growth in the third and fourth quarters of this fiscal. From a flat growth year-on-year or marginal growth quarter-on-quarter till now, the annual growth has been projected to be on the higher side," he asserted.
But the extreme volatility in the currency market continues to haunt the company's top management as erratic fluctuations in the exchange rates vis-a-vis the US dollar can make or mar its revenue guidance.
"Currency movement will have an impact on our guidance and operations. Depending on how the rupee, dollar or other currencies fare in the second half of this fiscal, we may end up with more revenue or less, as we have assumed the rupee to be at $47 for this quarter," Gopalakrishnan pointed out.
"We are sharpening our focus on research and development, intellectual property-based solutions and new engagement models that offer flexible pricing and greater operational control and efficiency to our global clients," Gopalakrishnan noted.
In line with its global delivery model, the company is investing in building new capacity to expand in regions such as Brazil, Mexico, China and India.
"If we go back to normal conditions after the world economy recovers, a double-digit growth in the range of 10-20 percent is possible for the Indian IT industry," Gopalakrishnan told IANS in an interview here.
In the aftermath of the global financial crisis, the Indian software services sector, led by bellwethers like Tata Consultancy Services, Infosys and Wipro, have to contended with single-digit growth this fiscal, as their global clients put spending on new projects on hold, be they for services or products.
"We have to wait and see what type of recovery takes place because many believe we will not go back to the level of activity seen in 2007. That was an unprecedented period of economic activity, driven by enormous leverage, which in turn created significant risks in the economy," the co-founder of the global software major said.
After the tech, or the dot.com, meltdown in 2002-03, the Indian IT industry staged a major recovery to boom over the next five years, registering 30 percent annual growth till fiscal 2008, but declined sharply to 16-17 percent in fiscal 2009.
The industry's representative body, the National Association of Software and Services Companies (Nasscom), also estimated that the Indian IT-BPO (business process outsourcing) services sector will grow by a mere 4-7 percent this fiscal.
In fiscal 2008-09, the Indian software industry posted revenues of $59 billion, including exports valued at $46 billion and domestic business at $13 billion. Nasscom estimated software exports at $48-50 billion and domestic revenues to grow 15-18 percent this fiscal.
Constrained by regulations to forecast his company's prospects when the world economy recovers and tech spending bounces from mid-2010, Gopalakrishnan said with the worst-ever crisis behind, the Indian software industry would come out strong to seize the opportunities, as it was better prepared to face challenges and compete with peers.
"The momentum our company has seen in the second quarter (July-Sept) will continue to give us better growth in the third and fourth quarters of this fiscal. From a flat growth year-on-year or marginal growth quarter-on-quarter till now, the annual growth has been projected to be on the higher side," he asserted.
But the extreme volatility in the currency market continues to haunt the company's top management as erratic fluctuations in the exchange rates vis-a-vis the US dollar can make or mar its revenue guidance.
"Currency movement will have an impact on our guidance and operations. Depending on how the rupee, dollar or other currencies fare in the second half of this fiscal, we may end up with more revenue or less, as we have assumed the rupee to be at $47 for this quarter," Gopalakrishnan pointed out.
"We are sharpening our focus on research and development, intellectual property-based solutions and new engagement models that offer flexible pricing and greater operational control and efficiency to our global clients," Gopalakrishnan noted.
In line with its global delivery model, the company is investing in building new capacity to expand in regions such as Brazil, Mexico, China and India.
Thursday, October 8, 2009
HCL, Infosys, IT market, Satyam, TCS, Wipro
Variable, pay hike make a comeback this Diwali
Salary-earners are seeing their pinched pockets bulging, as companies are untying their purse strings. Top IT companies such as TCS and Infosys are leading a revival of employee-centric HR policies in India Inc marked by high variable payouts, double-digit salary hikes and promotions, less than a year after the global meltdown forced them to slash salaries and freeze hiring.
Buoyed by signs of faster-than-expected economic recovery from India and elsewhere and a jump in demand, a clutch of companies across sectors including carmakers Maruti Suzuki, Tata Motors and Hyundai Motors are busy paying out variable bonuses ahead of Diwali.
Some others, like top white goods maker LG Electronics, biotech firm Avesthagen, consumer products company Dabur and private insurer Bharti AXA Life Insurance are rewarding select employees with salary hikes and promotions.
India Inc has turned its focus back on its people power as companies are looking to expand, encouraged by improved demand and enquiries, BSE Sensex more than doubling in just six months, and signs of faster-than-expected global recovery that made the International Monetary Fund up its forecast for world economic growth in 2010 to 3.1% from 2.5% predicted in July.
This is in stark contrast to just a year ago when the global recession that felled several global financial giants including Lehman Brothers hit India, forcing companies to shelve expansion plans, downsize operations, cut salaries and freeze recruitment.
“In the past 15 months, HR heads were not at all bothered about attrition. But now that several sectors are bouncing back to normalcy, poaching might see a rise. Hence, companies want to secure their talent pool with mid-term hikes and promotions,” said P Dwarkanath, Max India group director (human capital) and a former president of the National HRD Network.
The drive to please employees is most visible in the country’s $60-billion technology services sector that is seeing more business trickling in.
Worst-hit sectors may give hikes
"It is a people-driven industry. At a time when the sector is witnessing positive signs of recovery, such announcements become even more relevant for both the company and employees. This would not only help companies in retaining their existing talent, but attracting new talent as well," said Joy Nandi, client partner, global technology practice, with Delhi-based headhunting firm Korn/Ferry International.
Tata Consultancy Services, the largest IT exporter, for example, has restored variable pay it had cut earlier this year due to a drastic demand slump.
Its main rival Infosys Technologies plans to give higher variable pay for the second quarter, besides declaring salary hikes and promotions across levels in October.
The firm will increase the variable component of employee salary if its overall performance is up in the second quarter, said a company executive requesting anonymity. Infosys will announce its Q2 results on October 9.
TCS did not pay variables in the January-March quarter due to overall decline in performance, while Infosys cut its variable pay by up to 55% in the first quarter. The average variable component in both firms is 30% of an employee's total salary.
The third largest player, Wipro, did not cut any variable pay and will continue to give variable linked with performance, a company executive said. Earlier this month, Mahindra Satyam (erstwhile Satyam Computer Services) announced restoration of variable pay of its 28,000 employees. Satyam had held back variable payouts from April to trim costs as revenues were under pressure.
Zensar Technologies, which employs more than 5,000 people, has hiked salaries by 6.5% on an average on a selective basis, besides paying full variable to 95% of its employees, its CEO Ganesh Natarajan said. With the recovery in economy activating the job markets again, companies in other sectors too are promoting key performers and doling out 8-12% mid-year salary hikes.
Avesthagen, for example, is promoting employees "who have worked overtime during the recession and were loyal to us", according to Villoo Morawala-Patell, its founder and CMD. Similarly, LG Electronics has just promoted a select bunch of employees in the general manager level and gave them a mid-term hike, according to Y V Verma, its HR director. Bharti AXA Life Insurance's HR director Priya Ranjan said the insurer will hand out about 15% hike to some 20-odd employees later this month.
Also, several companies that had last year migrated from half-yearly appraisal cycle to one-year cycle due to the slowdown are returning to six-month appraisal cycle. "For companies who had given measly hikes or cut salaries, a mid-term appraisal provides an opportunity for salary correction," said E Balaji, CEO of executive search firm Ma Foi Management Consultants.
HR circles say the trend is seen in some of the erstwhile worst-hit sectors like real estate, stockbroking and mutual funds. Brokerage firm Angel Broking recently gave 8% hike to its top 5% talent base of 6,200 people.
DLF, the country's largest real estate firm, said it was yet to decide on a mid-term appraisal, while Kolkata-based Ambuja Realty chairman Harsh Neotia said the firm was evaluating it.
Dabur India, which had already hiked salaries in April and July this year, plans to undertake another round of salary correction in January next year. It will undertake mid-term appraisals this month, according to HR head A Sudhakar.
Tyremaker Ceat too plans to go in for mid-term appraisal confirming the fact that companies are no longer fighting shy when it comes to pay packets.
Buoyed by signs of faster-than-expected economic recovery from India and elsewhere and a jump in demand, a clutch of companies across sectors including carmakers Maruti Suzuki, Tata Motors and Hyundai Motors are busy paying out variable bonuses ahead of Diwali.
Some others, like top white goods maker LG Electronics, biotech firm Avesthagen, consumer products company Dabur and private insurer Bharti AXA Life Insurance are rewarding select employees with salary hikes and promotions.
India Inc has turned its focus back on its people power as companies are looking to expand, encouraged by improved demand and enquiries, BSE Sensex more than doubling in just six months, and signs of faster-than-expected global recovery that made the International Monetary Fund up its forecast for world economic growth in 2010 to 3.1% from 2.5% predicted in July.
This is in stark contrast to just a year ago when the global recession that felled several global financial giants including Lehman Brothers hit India, forcing companies to shelve expansion plans, downsize operations, cut salaries and freeze recruitment.
“In the past 15 months, HR heads were not at all bothered about attrition. But now that several sectors are bouncing back to normalcy, poaching might see a rise. Hence, companies want to secure their talent pool with mid-term hikes and promotions,” said P Dwarkanath, Max India group director (human capital) and a former president of the National HRD Network.
The drive to please employees is most visible in the country’s $60-billion technology services sector that is seeing more business trickling in.
Worst-hit sectors may give hikes
"It is a people-driven industry. At a time when the sector is witnessing positive signs of recovery, such announcements become even more relevant for both the company and employees. This would not only help companies in retaining their existing talent, but attracting new talent as well," said Joy Nandi, client partner, global technology practice, with Delhi-based headhunting firm Korn/Ferry International.
Tata Consultancy Services, the largest IT exporter, for example, has restored variable pay it had cut earlier this year due to a drastic demand slump.
Its main rival Infosys Technologies plans to give higher variable pay for the second quarter, besides declaring salary hikes and promotions across levels in October.
The firm will increase the variable component of employee salary if its overall performance is up in the second quarter, said a company executive requesting anonymity. Infosys will announce its Q2 results on October 9.
TCS did not pay variables in the January-March quarter due to overall decline in performance, while Infosys cut its variable pay by up to 55% in the first quarter. The average variable component in both firms is 30% of an employee's total salary.
The third largest player, Wipro, did not cut any variable pay and will continue to give variable linked with performance, a company executive said. Earlier this month, Mahindra Satyam (erstwhile Satyam Computer Services) announced restoration of variable pay of its 28,000 employees. Satyam had held back variable payouts from April to trim costs as revenues were under pressure.
Zensar Technologies, which employs more than 5,000 people, has hiked salaries by 6.5% on an average on a selective basis, besides paying full variable to 95% of its employees, its CEO Ganesh Natarajan said. With the recovery in economy activating the job markets again, companies in other sectors too are promoting key performers and doling out 8-12% mid-year salary hikes.
Avesthagen, for example, is promoting employees "who have worked overtime during the recession and were loyal to us", according to Villoo Morawala-Patell, its founder and CMD. Similarly, LG Electronics has just promoted a select bunch of employees in the general manager level and gave them a mid-term hike, according to Y V Verma, its HR director. Bharti AXA Life Insurance's HR director Priya Ranjan said the insurer will hand out about 15% hike to some 20-odd employees later this month.
Also, several companies that had last year migrated from half-yearly appraisal cycle to one-year cycle due to the slowdown are returning to six-month appraisal cycle. "For companies who had given measly hikes or cut salaries, a mid-term appraisal provides an opportunity for salary correction," said E Balaji, CEO of executive search firm Ma Foi Management Consultants.
HR circles say the trend is seen in some of the erstwhile worst-hit sectors like real estate, stockbroking and mutual funds. Brokerage firm Angel Broking recently gave 8% hike to its top 5% talent base of 6,200 people.
DLF, the country's largest real estate firm, said it was yet to decide on a mid-term appraisal, while Kolkata-based Ambuja Realty chairman Harsh Neotia said the firm was evaluating it.
Dabur India, which had already hiked salaries in April and July this year, plans to undertake another round of salary correction in January next year. It will undertake mid-term appraisals this month, according to HR head A Sudhakar.
Tyremaker Ceat too plans to go in for mid-term appraisal confirming the fact that companies are no longer fighting shy when it comes to pay packets.
Infosys, IT market, Recession
Infosys Q2 result to shed light on recovery
The quarterly results of Infosys often guide sentiments on Dalal Street. And when the country’s second-biggest IT exporter declares its second quarter performance on Friday, it is likely to provide much awaited cues to investors.
While analysts would look for tell tale signs of recovery in the global markets and billing rate movement, a rapidly appreciating rupee may bring to the fore the relevance of near-term guidance of Infosys.
For the first time in four quarters, Infosys is likely to report sequential growth in its dollar revenue, buoyed by decent volume growth. A dollar growth of 2-3 % would translate into near equal rise in the rupee-denominated sales since the latter has not drifted much against the dollar from the previous quarter.
Net profit is expected to grow at a slower pace, given higher selling and marketing costs. As always, the market will keenly follow Infy’s future growth guidance.
Infosys issues guidance based on the rupee-dollar rate at the end of the quarter, which is 48.11 for the September quarter. In the past few days, the rupee has appreciated by 3% to 46.68, which will not be reflected in Infy's guidance.
What should investors watch out for post-Infosys' results? Analysts feel that the IT bellwether's current valuations have already captured the possibility of decent growth and improved guidance.
On technical charts, the recent movement in open interest and volume with declining price reflect a weak trend for the scrip. Considering the open interest in the October options, Rs 2,250-2 ,220 is a crucial support range for the stock in the near future. The stock ended at Rs 2252.8 on Wednesday.
While analysts would look for tell tale signs of recovery in the global markets and billing rate movement, a rapidly appreciating rupee may bring to the fore the relevance of near-term guidance of Infosys.
For the first time in four quarters, Infosys is likely to report sequential growth in its dollar revenue, buoyed by decent volume growth. A dollar growth of 2-3 % would translate into near equal rise in the rupee-denominated sales since the latter has not drifted much against the dollar from the previous quarter.
Net profit is expected to grow at a slower pace, given higher selling and marketing costs. As always, the market will keenly follow Infy’s future growth guidance.
Infosys issues guidance based on the rupee-dollar rate at the end of the quarter, which is 48.11 for the September quarter. In the past few days, the rupee has appreciated by 3% to 46.68, which will not be reflected in Infy's guidance.
What should investors watch out for post-Infosys' results? Analysts feel that the IT bellwether's current valuations have already captured the possibility of decent growth and improved guidance.
On technical charts, the recent movement in open interest and volume with declining price reflect a weak trend for the scrip. Considering the open interest in the October options, Rs 2,250-2 ,220 is a crucial support range for the stock in the near future. The stock ended at Rs 2252.8 on Wednesday.
Wednesday, October 7, 2009
Infosys, IT market, TCS
TCS, Infosys set to gain from RBS' technology splurge
Indian tech vendors are set to gain from around $9.5 billion technology spend planned by the Royal Bank of Scotland (RBS) over the next five years, as up to $2-billion worth of back office and application development, maintenance projects could be outsourced to the Indian offshore suppliers including Infosys and TCS apart from the bank’s own IT captives in India.
RBS, which is owned 70% by the British government, aims to save around $4 billion in operational costs by 2011 by outsourcing non-core IT activities, integrating different technology banking systems and ensuring better focus on marketing initiatives. In a presentation made to Bank of America-Merrill Lynch investors last week, RBS chief executive Stephen Hester said that the bank has actually underspent on technology during past few years.
“Both in absolute ratio terms relative to our competitors, we have underspent on technology and we have also spent more of it of running the bank — dealing with lots of different systems inherited from past acquisitions — than changing the bank,” Mr Hester said.
When compared to other rival banks, RBS has indeed spent less on technology. Between 2005 and 2007, IT spend accounted for 7.2% of RBS’ revenues, when compared with 8.7% of technology spend by its regional peers. According to the European Banking IT Cost Benchmarking study published last year, IT spend accounted for 12.8% of RBS’ total expenses during 2005-07 , lower than the 16.4% allocated by its peers.
Indian tech like Infosys and TCS see newer opportunities of integration projects, system maintenance and back office outsourcing emerge as RBS takes a hard look at its existing processes for efficiency gains. RBS also works with CSC and Sapient, and may retain them for onsite projects, experts told ET on conditions of anonymity. An RBS spokeswoman did not reply to an email query sent by ET on Tuesday. Indian technology vendors would not offer any comments as they are maintaining a silent period before announcing their financial results later this month.
RBS, which is owned 70% by the British government, aims to save around $4 billion in operational costs by 2011 by outsourcing non-core IT activities, integrating different technology banking systems and ensuring better focus on marketing initiatives. In a presentation made to Bank of America-Merrill Lynch investors last week, RBS chief executive Stephen Hester said that the bank has actually underspent on technology during past few years.
“Both in absolute ratio terms relative to our competitors, we have underspent on technology and we have also spent more of it of running the bank — dealing with lots of different systems inherited from past acquisitions — than changing the bank,” Mr Hester said.
When compared to other rival banks, RBS has indeed spent less on technology. Between 2005 and 2007, IT spend accounted for 7.2% of RBS’ revenues, when compared with 8.7% of technology spend by its regional peers. According to the European Banking IT Cost Benchmarking study published last year, IT spend accounted for 12.8% of RBS’ total expenses during 2005-07 , lower than the 16.4% allocated by its peers.
Indian tech like Infosys and TCS see newer opportunities of integration projects, system maintenance and back office outsourcing emerge as RBS takes a hard look at its existing processes for efficiency gains. RBS also works with CSC and Sapient, and may retain them for onsite projects, experts told ET on conditions of anonymity. An RBS spokeswoman did not reply to an email query sent by ET on Tuesday. Indian technology vendors would not offer any comments as they are maintaining a silent period before announcing their financial results later this month.
Friday, October 2, 2009
Infosys, IT market, New Deals, Outsourcing, TCS, Wipro
TCS, Wipro, Infosys vie deals worth $100 mn each in Nordic region
Nordea AB, the biggest regional bank in the Nordic region, along with peers Svenska Handelsbanken and SEB, are among a new set of customers planning to offshore technology work to India, as they aim to bring down operational costs by up to 30% and cope with the slump more effectively.
Indian tech vendors such as TCS, HCL, L&T Infotech, Wipro, Infosys and Cognizant are in discussion with Nordic customers for outsourcing contracts potentially worth around $100 million each over next few years.
Outsourcing advisory firm EquaTerra recently analysed around 370 outsourcing contracts signed by over 200 Nordic customers and concluded that the Indian service providers scored better than European vendors such as TietoEnator and Capgemini when it came to customer satisfaction. EquaTerra analysed almost $4.3 billion worth of outsourcing contracts signed by these customers.
Most Nordic countries, especially Sweden, have high cost structures. This is putting pressure on local customers to seek low-cost resources in locations like India, which will help them tighten belts by up to 30-40 %.
“India remains the dominant offshore destination for Nordics firms. 61% of the respondents are using India to fulfill at least some of their global sourcing needs,” EquaTerra said in a recent report. When contacted by ET, Indian tech vendors declined to comment on any potential outsourcing contract being pursued by them.
TCS, India’s biggest software outsourcing firm, said Nordic customers are indeed beginning to explore more outsourcing options.
“While the overall Nordic IT market is expected to remain flat in 2009, the demand for services outsourcing continues to be firm and we are seeing continued growth,” said AS Lakhminarayanan, vice-president and head(Europe), TCS. “Norway in particular is expected to demonstrate one of the highest IT market growth rates in Europe in 2009, estimated at between 1-2 % annually, while most other markets have remained flat or even declined,” he added.
Customers such as Handelsbanken have been exploring offshoring of IT work for almost a year, and a worsening economic crisis forced them to look at offshoring more seriously.
The bank is now seeking suppliers for maintaining its legacy mainframe systems, and also make them work with newer business software applications. Nordic customers prefer to start an outsourcing engagement with smaller contracts of $10-20 million, but are expected to ramp up after experiencing the promised benefits.
Unlike other European markets such as Germany where labour laws make it difficult for an offshoring contract, countries in the Nordic region are more flexible.
However, they still prefer to exercise caution during early relationships without succumbing to doling out multi-year, mega outsourcing contracts. “If you look at the last 100 deals signed over the past six to eight months, you would find that they range from € 500,000 to € 150 million, which is a broad range. The most significant deal size segment, in terms of frequency, would lie in the range of € 8-20 million,” agreed Mr Lakhminarayanan.
Indian tech vendors such as TCS, HCL, L&T Infotech, Wipro, Infosys and Cognizant are in discussion with Nordic customers for outsourcing contracts potentially worth around $100 million each over next few years.
Outsourcing advisory firm EquaTerra recently analysed around 370 outsourcing contracts signed by over 200 Nordic customers and concluded that the Indian service providers scored better than European vendors such as TietoEnator and Capgemini when it came to customer satisfaction. EquaTerra analysed almost $4.3 billion worth of outsourcing contracts signed by these customers.
Most Nordic countries, especially Sweden, have high cost structures. This is putting pressure on local customers to seek low-cost resources in locations like India, which will help them tighten belts by up to 30-40 %.
“India remains the dominant offshore destination for Nordics firms. 61% of the respondents are using India to fulfill at least some of their global sourcing needs,” EquaTerra said in a recent report. When contacted by ET, Indian tech vendors declined to comment on any potential outsourcing contract being pursued by them.
TCS, India’s biggest software outsourcing firm, said Nordic customers are indeed beginning to explore more outsourcing options.
“While the overall Nordic IT market is expected to remain flat in 2009, the demand for services outsourcing continues to be firm and we are seeing continued growth,” said AS Lakhminarayanan, vice-president and head(Europe), TCS. “Norway in particular is expected to demonstrate one of the highest IT market growth rates in Europe in 2009, estimated at between 1-2 % annually, while most other markets have remained flat or even declined,” he added.
Customers such as Handelsbanken have been exploring offshoring of IT work for almost a year, and a worsening economic crisis forced them to look at offshoring more seriously.
The bank is now seeking suppliers for maintaining its legacy mainframe systems, and also make them work with newer business software applications. Nordic customers prefer to start an outsourcing engagement with smaller contracts of $10-20 million, but are expected to ramp up after experiencing the promised benefits.
Unlike other European markets such as Germany where labour laws make it difficult for an offshoring contract, countries in the Nordic region are more flexible.
However, they still prefer to exercise caution during early relationships without succumbing to doling out multi-year, mega outsourcing contracts. “If you look at the last 100 deals signed over the past six to eight months, you would find that they range from € 500,000 to € 150 million, which is a broad range. The most significant deal size segment, in terms of frequency, would lie in the range of € 8-20 million,” agreed Mr Lakhminarayanan.
Tuesday, September 29, 2009
Cost cutting, HCL, Infosys, IT market, Recession, TCS, Wipro
IT firms pull out all stops on staff training
Indian IT majors may have tightened their belts in various areas to contain costs as a fallout of the global economic slowdown. However, most of them see continuing value when it comes to employee training, even though it skims crores of rupees off their top-lines.
Top tier IT firms — including Tata Consultancy Services (TCS), Infosys Technologies, Wipro and HCL Technologies — have identified the need to train the brains they handpick annually from India’s top engineering colleges and technical institutes as a critical task, even as the industry is seeing a degree of upturn in client demand.
India’s largest IT services provider, TCS, for instance, spends 2 per cent of its revenue every year on training new entrants. Bangalore-headquartered Infosys recently announced the opening of a grand training facility at its Mysore campus. Infosys annually spends over Rs 800 crore on training alone. Wipro spends about 2 per cent of its net sales in providing training to employees.
While Infosys and TCS have, to a certain extent, tried to centralise their training resources, Wipro’s strategy has been of a federal nature to cater to local manpower requirements. Wipro has set up an archipelago of training centres in proximity to its competency centres all over India and overseas.
“Wipro believes in taking learning as close as possible to the learner. Hence, for fresh recruits, training is conducted at the development centres where the employee is to be placed. Training happens primarily at our Talent Transformation Centres in Bangalore, Hyderabad, Pune, Chennai, Kolkata and Kochi,” says Sreekala Ramamurthy, GM (talent transformation), Wipro Technologies. Overseas recruits, she says, are either provided training at the company’s global centres like the Atlanta Development Centre or “...recruits are flown down to our India offices”.
HCL, too, has decentralised its training infrastructure across the globe because its employees are no longer confined to a particular geography or location. According to Anand Pillai, senior V-P and global head (quality, talent transformation & intrapreneurship development), HCL Technologies: “Since learners are spread across the globe, the entire training department is also spread across the world. Our programmes are standardised to cater to global learning challenges and simultaneously manage different cultural nuances and local sensitivities.”
TCS provides an Initial Learning Programme (ILP) at the company’s corporate learning centre in Thiruvananthapuram. “We invest heavily in world-class training for our employees. ILP training is primarily conducted at our corporate learning centre at Thiruvananthapuram for Indian and non-Indian trainees. We replicate our fresher training programme at Guwahati, Bhubaneswar, Coimbatore and Baroda, as well as overseas, to bring scalability to our training model,” says Ajoy Mukherjee, V-P & head (global HR), TCS.
TCS’ new facility, the Peepul Park, is spread over 12 acres of newly acquired land in Technopark. The 3.5-lakh square feet Peepul Park is snazzily designed and also houses a Leadership Development Institute. The ILP Learning Block can accommodate 1,000 employees at a time, a hostel block accommodates 500 people, with a recreation centre and library thrown in. The facility has a capacity of 1,500 people.
The ILP is replicated in overseas geographies for new hires from countries like Australia, China, India, Hungary, Uruguay, the UK and the US. TCS also ensures that it hires people with diverse educational backgrounds and across geographies.
Infosys recently expanded the company’s global training centre, located at its 337-acre Mysore campus, by setting up another dedicated facility (GEC-II) for training. However, Infosys also maintains training infrastructure at all its development centres. The company recently extended the training duration for new recruits (freshers).
“We consider training as an investment in the future. Our investments to enhance our training capabilities are in keeping with future requirements,” justifies S Gopalakrishnan, CEO and MD, Infosys Technologies.
Top tier IT firms — including Tata Consultancy Services (TCS), Infosys Technologies, Wipro and HCL Technologies — have identified the need to train the brains they handpick annually from India’s top engineering colleges and technical institutes as a critical task, even as the industry is seeing a degree of upturn in client demand.
India’s largest IT services provider, TCS, for instance, spends 2 per cent of its revenue every year on training new entrants. Bangalore-headquartered Infosys recently announced the opening of a grand training facility at its Mysore campus. Infosys annually spends over Rs 800 crore on training alone. Wipro spends about 2 per cent of its net sales in providing training to employees.
While Infosys and TCS have, to a certain extent, tried to centralise their training resources, Wipro’s strategy has been of a federal nature to cater to local manpower requirements. Wipro has set up an archipelago of training centres in proximity to its competency centres all over India and overseas.
“Wipro believes in taking learning as close as possible to the learner. Hence, for fresh recruits, training is conducted at the development centres where the employee is to be placed. Training happens primarily at our Talent Transformation Centres in Bangalore, Hyderabad, Pune, Chennai, Kolkata and Kochi,” says Sreekala Ramamurthy, GM (talent transformation), Wipro Technologies. Overseas recruits, she says, are either provided training at the company’s global centres like the Atlanta Development Centre or “...recruits are flown down to our India offices”.
HCL, too, has decentralised its training infrastructure across the globe because its employees are no longer confined to a particular geography or location. According to Anand Pillai, senior V-P and global head (quality, talent transformation & intrapreneurship development), HCL Technologies: “Since learners are spread across the globe, the entire training department is also spread across the world. Our programmes are standardised to cater to global learning challenges and simultaneously manage different cultural nuances and local sensitivities.”
TCS provides an Initial Learning Programme (ILP) at the company’s corporate learning centre in Thiruvananthapuram. “We invest heavily in world-class training for our employees. ILP training is primarily conducted at our corporate learning centre at Thiruvananthapuram for Indian and non-Indian trainees. We replicate our fresher training programme at Guwahati, Bhubaneswar, Coimbatore and Baroda, as well as overseas, to bring scalability to our training model,” says Ajoy Mukherjee, V-P & head (global HR), TCS.
TCS’ new facility, the Peepul Park, is spread over 12 acres of newly acquired land in Technopark. The 3.5-lakh square feet Peepul Park is snazzily designed and also houses a Leadership Development Institute. The ILP Learning Block can accommodate 1,000 employees at a time, a hostel block accommodates 500 people, with a recreation centre and library thrown in. The facility has a capacity of 1,500 people.
The ILP is replicated in overseas geographies for new hires from countries like Australia, China, India, Hungary, Uruguay, the UK and the US. TCS also ensures that it hires people with diverse educational backgrounds and across geographies.
Infosys recently expanded the company’s global training centre, located at its 337-acre Mysore campus, by setting up another dedicated facility (GEC-II) for training. However, Infosys also maintains training infrastructure at all its development centres. The company recently extended the training duration for new recruits (freshers).
“We consider training as an investment in the future. Our investments to enhance our training capabilities are in keeping with future requirements,” justifies S Gopalakrishnan, CEO and MD, Infosys Technologies.
Thursday, September 24, 2009
Infosys
Expect pay hikes and promotions, Infosys tells employees
Infosys Technologies has told its over one lakh employees that they can expect pay hikes and promotions by October, joining India’s top tech companies in lifting wage freezes and signalling rising optimism for the software industry’s growth prospects.
India’s second-largest software exporter has kicked off a performance appraisal process right in the middle of the festival season, saying in an email last week to staff that hikes and promotions will be effective next month.
“Yes, we are giving hikes this October. It will happen across the board,” Infosys group HR head Nandita Gurjar told ET NOW over phone from Poland on Tuesday. She did not say what the extent of the salary increase would be.
India’s largest Software company TCS, third-ranked Wipro, as well as Cognizant and HCL, have already announced a return to salary hikes and their ranks have been joined by smaller rivals such as MphasiS-EDS, Sonata Software and Symphony Services.
Som Mittal, president of software industry grouping Nasscom, said IT services providers have been winning large deals in recent months and investments in new markets are beginning to pay off, driving the revival.“The downturn has been severe but the industry has worked to see that the impact is minimal. They have done well in the first quarter. This is a people-led industry, so lot of companies are selectively rewarding employees who have worked hard,” he observed.
Infosys’ Ms Gurjar said the company decided to skip the promotion cycle in April this year as employee utilisation and billing rates were low. But a sharp rise in utilisation rates since made it decide to reward staff.
While improved demand and natural attrition have pushed up the utilisation rate at Infosys, operating margins are also seen well ahead of its target of 30%. Infosys’ wage bill is estimated at 45-46% of sales, and the company has projected that FY10 revenue will grow by 3.1-4.6% to $4.45-4.52 billion.
Nasscom has projected that the $60-billion IT services industry, which employs about 2.5 million, will grow by just 4-7% this fiscal, hit hard by a recession in its main market, the US.
“The downturn is bottoming out, and we will do a review of the growth target in December. But this 4-7% target also factors in selective promotions and hikes,” Mr Mittal said.
In a normal year, employees in tech firms get pay hikes of 5-15%, but this time companies such as Wipro are being selective about who gets rewarded and restricting pay-raises to only the best performers. MphasiS and Sonata Software, on the other hand, are linking pay hikes to the companies’ performance.
India’s second-largest software exporter has kicked off a performance appraisal process right in the middle of the festival season, saying in an email last week to staff that hikes and promotions will be effective next month.
“Yes, we are giving hikes this October. It will happen across the board,” Infosys group HR head Nandita Gurjar told ET NOW over phone from Poland on Tuesday. She did not say what the extent of the salary increase would be.
India’s largest Software company TCS, third-ranked Wipro, as well as Cognizant and HCL, have already announced a return to salary hikes and their ranks have been joined by smaller rivals such as MphasiS-EDS, Sonata Software and Symphony Services.
Som Mittal, president of software industry grouping Nasscom, said IT services providers have been winning large deals in recent months and investments in new markets are beginning to pay off, driving the revival.“The downturn has been severe but the industry has worked to see that the impact is minimal. They have done well in the first quarter. This is a people-led industry, so lot of companies are selectively rewarding employees who have worked hard,” he observed.
Infosys’ Ms Gurjar said the company decided to skip the promotion cycle in April this year as employee utilisation and billing rates were low. But a sharp rise in utilisation rates since made it decide to reward staff.
While improved demand and natural attrition have pushed up the utilisation rate at Infosys, operating margins are also seen well ahead of its target of 30%. Infosys’ wage bill is estimated at 45-46% of sales, and the company has projected that FY10 revenue will grow by 3.1-4.6% to $4.45-4.52 billion.
Nasscom has projected that the $60-billion IT services industry, which employs about 2.5 million, will grow by just 4-7% this fiscal, hit hard by a recession in its main market, the US.
“The downturn is bottoming out, and we will do a review of the growth target in December. But this 4-7% target also factors in selective promotions and hikes,” Mr Mittal said.
In a normal year, employees in tech firms get pay hikes of 5-15%, but this time companies such as Wipro are being selective about who gets rewarded and restricting pay-raises to only the best performers. MphasiS and Sonata Software, on the other hand, are linking pay hikes to the companies’ performance.
Infosys
Infosys bags award for IT services
Infosys Technologies was named for 2008 'Partner in Progress' award from Sears Holdings Corporation. In a press release here today the company said Infosys received the award for superior Information Technology services and outstanding client support.
The award is presented annually to a select group of supplier companies that provide quality products and services, apparel, appliances and tools to marketing, facilities design and technology.
Less than one per cent of 'Sears Holdings' over 30,000 suppliers get coveted award each year. Sandeep Dadlani, Vice President and Head of client services for retail, consumer packaged goods and logistics, Infosys, said ''We are honoured that Sears had chosen us as a winner of the coveted award for the third year in a row. We are privileged to be part of Sears commitment to improving its own customers' experience''.
The Partners in Progress programme recognises suppliers for product or service quality, innovation, diversity and overall market performance.
The winners were selected from nominations submitted by Sears Associates, who purchased goods and services for the company in 2008.
The award is presented annually to a select group of supplier companies that provide quality products and services, apparel, appliances and tools to marketing, facilities design and technology.
Less than one per cent of 'Sears Holdings' over 30,000 suppliers get coveted award each year. Sandeep Dadlani, Vice President and Head of client services for retail, consumer packaged goods and logistics, Infosys, said ''We are honoured that Sears had chosen us as a winner of the coveted award for the third year in a row. We are privileged to be part of Sears commitment to improving its own customers' experience''.
The Partners in Progress programme recognises suppliers for product or service quality, innovation, diversity and overall market performance.
The winners were selected from nominations submitted by Sears Associates, who purchased goods and services for the company in 2008.
Friday, September 18, 2009
HCL, Infosys, Outsourcing, Wipro
Infosys, Wipro and HCL in race for low-value US deals
Infosys Technologies, Wipro and HCL Technologies are among the software service providers that are laying foundation for the next round of multi-million dollar orders from the big US corporations, by pitching for low-value, but politically important US state governments’ orders.
Infosys, which counts JP Morgan and Morgan Stanley as clients for its services, bids for Arizona Public Service’s (APS) 400 positions, who work in its information-services department, and another 400 or so contractors to raise the staff strength for undisclosed amount.
Nine other US states, some from where politicians opposed offshoring work, are looking to outsource their healthcare operations worth over $2 billion, said Wipro chief strategy officer KR Lakshminarayana, and the company hopes to get a slice of these.
“The discussions are not about offshore outsourcing, but more about working with newer outsourcing vendors, who can deliver locally and keep the jobs here at lower rates,” said a senior executive at one of the Bangalore-based tech firms exploring this opportunity. Many US states such as Missouri, Virginia and Arizona, which are battling falling revenues amid the worst economic slump in their country since the 1930s, are attempting to reduce costs and at the same time want to increase employment opportunities for their citizens. So, they are including clauses such as recruitment of minimum number of staff from their states.
Indian companies, which were used to contracts of hundreds of million-dollars at one go, are bidding for these low-value orders since their traditional clients are cutting down on technology spending and at the same time provides visibility, which would be helpful in getting big orders when tech spending recovers.
“The marketing muscle that comes from such contracts is huge and working with the US state governments send out a signal of importance to other customers,” said Siddharth Pai, managing director of outsourcing advisory firm TPI’s India unit. “For the Indian IT companies this is not a core business, but it creates a halo effect,” he added.
While the global government IT outsourcing market is estimated to be around $100 billion, experts tracking the sector said the US state governments could outsource projects worth up to $5-6 billion this year. States, which in the past opposed the outsourcing of work to Indian companies by the likes of Microsoft and Citigroup, are now turning to the same Indian companies, as their mission now is in line with that of the companies cut costs.
Rodney Nelsestuen of US-based research firm TowerGroup, said state governments in the US are suffering from a reduction in tax revenue due to high unemployment and lower spending on taxable items by the US consumers. “Significant budget cuts are making it difficult for states to maintain the level of services that residents expect. Outsourcing has become an option that governments are looking at,” he added.
The orders from these state governments are for maintenance of records, accounts, healthcare and other administrative jobs, said a consulting firm engaged with a few governments.
Indian companies are not worried about the fact that they may be at a disadvantage to their US peers such as IBM and Hewlett-Packard, which are more familiar with the functioning of the local governments. “As long as you have the competency and ability to deliver what they want and from where they want, you are as competitive as your local peer,” said Wipro’s Mr Lakshminarayana. Wipro already has a $407-million deal from the state of Missouri for application, maintenance and development (AMD) and BPO work for the state’s healthcare division, which it bagged in December 2007.
“They always ask us how many local jobs will we create and that sometimes is an important factor,” he added. TCS, Wipro, Infosys and Cognizant are among a few vendors, who have already hired local citizens. TCS has hired 120 people for its centre in Cincinnati.
“The level of success that India-based outsourcers will have in the future rests on their ability to add local talent, their ability to be viewed as global service companies and not just India-centric, and how quickly they assimilate government requirements – something India-based companies should be good at given their outsourcing history on a global and multi-industry scale,” said Mr Nelsestuen.
Infosys, which counts JP Morgan and Morgan Stanley as clients for its services, bids for Arizona Public Service’s (APS) 400 positions, who work in its information-services department, and another 400 or so contractors to raise the staff strength for undisclosed amount.
Nine other US states, some from where politicians opposed offshoring work, are looking to outsource their healthcare operations worth over $2 billion, said Wipro chief strategy officer KR Lakshminarayana, and the company hopes to get a slice of these.
“The discussions are not about offshore outsourcing, but more about working with newer outsourcing vendors, who can deliver locally and keep the jobs here at lower rates,” said a senior executive at one of the Bangalore-based tech firms exploring this opportunity. Many US states such as Missouri, Virginia and Arizona, which are battling falling revenues amid the worst economic slump in their country since the 1930s, are attempting to reduce costs and at the same time want to increase employment opportunities for their citizens. So, they are including clauses such as recruitment of minimum number of staff from their states.
Indian companies, which were used to contracts of hundreds of million-dollars at one go, are bidding for these low-value orders since their traditional clients are cutting down on technology spending and at the same time provides visibility, which would be helpful in getting big orders when tech spending recovers.
“The marketing muscle that comes from such contracts is huge and working with the US state governments send out a signal of importance to other customers,” said Siddharth Pai, managing director of outsourcing advisory firm TPI’s India unit. “For the Indian IT companies this is not a core business, but it creates a halo effect,” he added.
While the global government IT outsourcing market is estimated to be around $100 billion, experts tracking the sector said the US state governments could outsource projects worth up to $5-6 billion this year. States, which in the past opposed the outsourcing of work to Indian companies by the likes of Microsoft and Citigroup, are now turning to the same Indian companies, as their mission now is in line with that of the companies cut costs.
Rodney Nelsestuen of US-based research firm TowerGroup, said state governments in the US are suffering from a reduction in tax revenue due to high unemployment and lower spending on taxable items by the US consumers. “Significant budget cuts are making it difficult for states to maintain the level of services that residents expect. Outsourcing has become an option that governments are looking at,” he added.
The orders from these state governments are for maintenance of records, accounts, healthcare and other administrative jobs, said a consulting firm engaged with a few governments.
Indian companies are not worried about the fact that they may be at a disadvantage to their US peers such as IBM and Hewlett-Packard, which are more familiar with the functioning of the local governments. “As long as you have the competency and ability to deliver what they want and from where they want, you are as competitive as your local peer,” said Wipro’s Mr Lakshminarayana. Wipro already has a $407-million deal from the state of Missouri for application, maintenance and development (AMD) and BPO work for the state’s healthcare division, which it bagged in December 2007.
“They always ask us how many local jobs will we create and that sometimes is an important factor,” he added. TCS, Wipro, Infosys and Cognizant are among a few vendors, who have already hired local citizens. TCS has hired 120 people for its centre in Cincinnati.
“The level of success that India-based outsourcers will have in the future rests on their ability to add local talent, their ability to be viewed as global service companies and not just India-centric, and how quickly they assimilate government requirements – something India-based companies should be good at given their outsourcing history on a global and multi-industry scale,” said Mr Nelsestuen.
Thursday, September 17, 2009
Infosys, new openings
We over-hired: Infosys COO
Infosys Technologies Ltd, India's second-ranked software exporter, said the business environment is challenging and clients are cautious in spending, although pressure for price cuts has eased.
The company, which employs more than 100,000 people, is not seeing any reason to accelerate hiring at this point of time due to the uncertain business environment, Chief Operating Officer Shibulal said.
" We are very honestly over-hired ," he said. "There is a very slight blip of activity, but there is nothing to tell me it (a recovery) is secular in nature."
Hopes of a pick-up in demand for outsourcing, which had been hit by the global downturn, increased after major Indian IT firms including Infosys beat street estimates in their April-June earnings and announced some large deals in the recent months.
But Infosys officials said that decision making by clients continued to be slow. "The situation is still quite challenging," S D Shibulal said. "If you look at our customers, they are not really seeing any increase on their revenue side. And because they are not seeing any increase on their revenue side, they will continue to be concerned."
The head of Nasscom, India's leading IT industry lobby, said signs of recovery in the United States were yet to translate into real business growth for outsourcing firms, though a pick-up was expected in the second half of the year.
Infosys Chief Executive S Gopalakrishnan said he expected technology spending by the company's clients to be flat in 2010 from the previous year. Ahead of the news, shares in the company valued at about $27 billion, closed up 0.9 per cent, underperforming a 1.5 per cent rise in the benchmark index. The company's shares have doubled so far in 2009, outperforming a 70 per cent rise in the broader market.
Large deals yet to come
Infosys has forecast its first annual revenue fall for the year to March 2010 on demand for fee cuts by its overseas clients. Most negotiations with clients on price cuts was over and the company was not seeing a second round of such talks, Shibulal said, but large deal flows were yet to resume.
"Overall, deals above $500 million which used to be there before the downturn, they have not reappeared in significant manner," he said. Infosys and local rivals Tata Consultancy Services and Wipro last month won IT services contracts from oil and gas major BP Plc.
Shibulal said Infosys' share of the contract was worth $116 million over five years.
The company, which employs more than 100,000 people, is not seeing any reason to accelerate hiring at this point of time due to the uncertain business environment, Chief Operating Officer Shibulal said.
" We are very honestly over-hired ," he said. "There is a very slight blip of activity, but there is nothing to tell me it (a recovery) is secular in nature."
Hopes of a pick-up in demand for outsourcing, which had been hit by the global downturn, increased after major Indian IT firms including Infosys beat street estimates in their April-June earnings and announced some large deals in the recent months.
But Infosys officials said that decision making by clients continued to be slow. "The situation is still quite challenging," S D Shibulal said. "If you look at our customers, they are not really seeing any increase on their revenue side. And because they are not seeing any increase on their revenue side, they will continue to be concerned."
The head of Nasscom, India's leading IT industry lobby, said signs of recovery in the United States were yet to translate into real business growth for outsourcing firms, though a pick-up was expected in the second half of the year.
Infosys Chief Executive S Gopalakrishnan said he expected technology spending by the company's clients to be flat in 2010 from the previous year. Ahead of the news, shares in the company valued at about $27 billion, closed up 0.9 per cent, underperforming a 1.5 per cent rise in the benchmark index. The company's shares have doubled so far in 2009, outperforming a 70 per cent rise in the broader market.
Large deals yet to come
Infosys has forecast its first annual revenue fall for the year to March 2010 on demand for fee cuts by its overseas clients. Most negotiations with clients on price cuts was over and the company was not seeing a second round of such talks, Shibulal said, but large deal flows were yet to resume.
"Overall, deals above $500 million which used to be there before the downturn, they have not reappeared in significant manner," he said. Infosys and local rivals Tata Consultancy Services and Wipro last month won IT services contracts from oil and gas major BP Plc.
Shibulal said Infosys' share of the contract was worth $116 million over five years.
Wednesday, September 16, 2009
Infosys
Infosys opens training centre in Mysore
United Progressive Alliance (UPA) chairperson Sonia Gandhi inaugurated a world-class corporate education centre of Infosys Technologies at its Mysore campus.
The facility is an extension of the IT major's Global Education Centre (GEC), which was inaugurated by Prime Minister Manmohan Singh in February 2005.
With the GEC II, set up at an investment of Rs 800 crore, Infosys can now train 14,000 new recruits at the same time.
Given its infrastructure and size of operations, GEC is the largest corporate education centre in the world, Infosys officials said.
After the inauguration, Gandhi said the centre was a testimony that India can also build world-class education and training centres.
"It's a pleasure to be on this beautiful campus. It has a marvellous setting for a university to train and educate young minds," she told a gathering, mostly young employees of the IT bellwether.
"The GEC is the testimony that India can have world-class education centres. The success of Infosys is because of its hard work, dedication and talent."
Karnataka Chief Minister B S Yeddyurappa, Infosys chief mentor N R Narayana Murthy, and chief executive S Gopalakrishnan were also present on the occasion.
The building of the new facility shares architectural resemblance with that of India's parliament and Rome's Colosseum. The entire Infosys campus here is spread over 337 acres.
Murthy told the audience that the main goal of Infosys was to fight poverty with the power of entrepreneurship and creating jobs. "The centre is a proof of the progress we have made so far. GEC is the largest monolith classical building of post independent India," added Murthy.
Infosys, according to officials, invests an average of Rs 250,000 on training a potential employee over a period of 16 weeks.
The facility is an extension of the IT major's Global Education Centre (GEC), which was inaugurated by Prime Minister Manmohan Singh in February 2005.
With the GEC II, set up at an investment of Rs 800 crore, Infosys can now train 14,000 new recruits at the same time.
Given its infrastructure and size of operations, GEC is the largest corporate education centre in the world, Infosys officials said.
After the inauguration, Gandhi said the centre was a testimony that India can also build world-class education and training centres.
"It's a pleasure to be on this beautiful campus. It has a marvellous setting for a university to train and educate young minds," she told a gathering, mostly young employees of the IT bellwether.
"The GEC is the testimony that India can have world-class education centres. The success of Infosys is because of its hard work, dedication and talent."
Karnataka Chief Minister B S Yeddyurappa, Infosys chief mentor N R Narayana Murthy, and chief executive S Gopalakrishnan were also present on the occasion.
The building of the new facility shares architectural resemblance with that of India's parliament and Rome's Colosseum. The entire Infosys campus here is spread over 337 acres.
Murthy told the audience that the main goal of Infosys was to fight poverty with the power of entrepreneurship and creating jobs. "The centre is a proof of the progress we have made so far. GEC is the largest monolith classical building of post independent India," added Murthy.
Infosys, according to officials, invests an average of Rs 250,000 on training a potential employee over a period of 16 weeks.
HCL, Infosys, IT market, TCS, Wipro
Infosys ahead of the rest of the world, says Sonia
Software major Infosys is a "stunning reminder" of what Indian talent, ingenuity and hard work can accomplish, UPA Chairperson Sonia Gandhi said today.
"You have shown to India and the world that an Indian company Cannot just be world class, but be ahead of the rest of the world", the Congress President said after inaugurating the company's Global Education Centre-II here.
She said the success of Infosys, India's second largest software exporter, should not be measured in Dollars alone, but in the difference it makes in transforming a society for the better.
Praising the Indian IT industry, Gandhi said the success of Infosys, Wipro, Tata Consultancy Services and other companies had changed the lives of millions of Indians and propelled the country's economy to a record-breaking growth.
Gandhi also spoke of the enabling environment created by the state government for the growth of Indian IT companies.
She recalled the "temples of modern India" established by former Prime Minister Pandit Jawaharlal Nehru and the groundwork laid down by her husband Rajiv Gandhi for the "revolution" in Communication and Information Technology.
Rajiv Gandhi faced "bitter political opposition" to his vision, not just in introduction of computers, but his greater challenge was on the "mindshift" of people in terms of accepting new ideas, she said.
"You have shown to India and the world that an Indian company Cannot just be world class, but be ahead of the rest of the world", the Congress President said after inaugurating the company's Global Education Centre-II here.
She said the success of Infosys, India's second largest software exporter, should not be measured in Dollars alone, but in the difference it makes in transforming a society for the better.
Praising the Indian IT industry, Gandhi said the success of Infosys, Wipro, Tata Consultancy Services and other companies had changed the lives of millions of Indians and propelled the country's economy to a record-breaking growth.
Gandhi also spoke of the enabling environment created by the state government for the growth of Indian IT companies.
She recalled the "temples of modern India" established by former Prime Minister Pandit Jawaharlal Nehru and the groundwork laid down by her husband Rajiv Gandhi for the "revolution" in Communication and Information Technology.
Rajiv Gandhi faced "bitter political opposition" to his vision, not just in introduction of computers, but his greater challenge was on the "mindshift" of people in terms of accepting new ideas, she said.
Tuesday, September 15, 2009
Infosys, IT market
No hikes, promotions at Infosys
Top IT companies such as TCS, Wipro and Cognizant have kicked off promotions and salary hikes for some employees but the country’s second largest software exporter Infosys prefers to wait and watch till the environment becomes more stable, according to the company’s CEO and MD Kris Gopalakrishnan.
Talking on the sidelines of ICT event Connect 09, Gopalakrishnan also shared his views on the 3-year extension of tax benefits on STPI units proposed by Union Minister A Raja and also a possible solution to counter the recent changes in UK’s immigration norms. Excerpts from the interview:
Some companies in the top five have announced promotions and hikes. When can Infosys employees expect something similar?
The thing is the industry is still facing uncertain times. We would like to look at the situation. As it develops, as it evolves, we are constantly looking at it and then when we decide we will let you know.
Union Minister for IT and telecom A Raja said that he plans to extend the tax benefits on STPI units by another three years from 2011 to 2014. What are your views on the same?
If it is done properly, it is going to help the industry. So, what is needed is extension of the 10-year holiday to 13 or 15 years. Then it will help, because most of the STPs have come out of the 10-year holiday. The 3 year extension will also help but in a smaller way.
As the law stands today, the tax break is available for new units. When you create a SEZ it’s a new unit, when you create a STP, it’s a new unit. So the benefits are available only for new units as it stands today. You need to extend the benefit to existing units by extending the term to 13 years or 15 years.
Recently, there’s also been a lot of noise about stricter immigration norms in UK, where lobbyists are trying to work out rules that will benefit local workers. How will this impact Infosys, for which UK & Continental Europe is the second-biggest revenue generator after US?
Till now, the impact has been minimum. But definitely there is a change in attitude because unemployment is going up in these countries. So, they are looking at how they can tighten their immigration rules. This is also targeted towards illegal immigrants. And what is needed is to make sure that you work with these governments to reduce the impact. India is becoming a very attractive location for overseas people, for foreigners to work in. So we can have a counter agreement with these countries.
And we need to canvass for a different kind of visa, which is a work permit visa. Today immigrant visa is used for work permit. So, it’s confusing the issue, because most employees going there are not going to immigrate. They are just going to work and come back.
Nasscom, CII are working with the govt of India, with these governments to make sure that our perspective, our voices are heard and a proper solution is found. This is also part of the WTO discussions.
What is your outlook on the current quarter?
I can’t talk about the current quarter. All I can say is that things are looking better.
Talking on the sidelines of ICT event Connect 09, Gopalakrishnan also shared his views on the 3-year extension of tax benefits on STPI units proposed by Union Minister A Raja and also a possible solution to counter the recent changes in UK’s immigration norms. Excerpts from the interview:
Some companies in the top five have announced promotions and hikes. When can Infosys employees expect something similar?
The thing is the industry is still facing uncertain times. We would like to look at the situation. As it develops, as it evolves, we are constantly looking at it and then when we decide we will let you know.
Union Minister for IT and telecom A Raja said that he plans to extend the tax benefits on STPI units by another three years from 2011 to 2014. What are your views on the same?
If it is done properly, it is going to help the industry. So, what is needed is extension of the 10-year holiday to 13 or 15 years. Then it will help, because most of the STPs have come out of the 10-year holiday. The 3 year extension will also help but in a smaller way.
As the law stands today, the tax break is available for new units. When you create a SEZ it’s a new unit, when you create a STP, it’s a new unit. So the benefits are available only for new units as it stands today. You need to extend the benefit to existing units by extending the term to 13 years or 15 years.
Recently, there’s also been a lot of noise about stricter immigration norms in UK, where lobbyists are trying to work out rules that will benefit local workers. How will this impact Infosys, for which UK & Continental Europe is the second-biggest revenue generator after US?
Till now, the impact has been minimum. But definitely there is a change in attitude because unemployment is going up in these countries. So, they are looking at how they can tighten their immigration rules. This is also targeted towards illegal immigrants. And what is needed is to make sure that you work with these governments to reduce the impact. India is becoming a very attractive location for overseas people, for foreigners to work in. So we can have a counter agreement with these countries.
And we need to canvass for a different kind of visa, which is a work permit visa. Today immigrant visa is used for work permit. So, it’s confusing the issue, because most employees going there are not going to immigrate. They are just going to work and come back.
Nasscom, CII are working with the govt of India, with these governments to make sure that our perspective, our voices are heard and a proper solution is found. This is also part of the WTO discussions.
What is your outlook on the current quarter?
I can’t talk about the current quarter. All I can say is that things are looking better.
Friday, September 11, 2009
Infosys, IT market
Infosys targets $1 billon revenue in 3-4 yrs from India
With its key export market US yet to show any signs of revival, Infosys today said it would bid for all big government projects in the country and would target a billion dollar (Rs 5,000 crore) revenue from India in the next 3-4 years.
"We are now going after the large government projects, deals which are over Rs 200 crore. We are targetting a billion dollar revenue from the services business in India in 3-4 years time-frame," Binod H R, senior VP and head of India Business Unit, Infosys, said.
The Nasdaq-listed IT exporter's rival TCS had also earlier said that it was expecting one billion dollar revenue from India over the next 3-4 years.
"We are going after both government and private projects in the IT services business. But it is going to be 90 per cent ...government (projects), while 10 per cent from the private sector."
Most of the growth would right now come from the government sector as private sector has already made a lot of investment in IT. Probably, they would go a little slow on the investment at this moment due to recession, Binod said.
He said revenue from India is very low at the moment. The company has bid for the IT pilot projects of the Railways.
Infosys's India business is fairly new that was started at 2007-end and is a separate business unit. Earlier, he had said that the firm had taken a conscious decision not to participate in the local market.
"We are now going after the large government projects, deals which are over Rs 200 crore. We are targetting a billion dollar revenue from the services business in India in 3-4 years time-frame," Binod H R, senior VP and head of India Business Unit, Infosys, said.
The Nasdaq-listed IT exporter's rival TCS had also earlier said that it was expecting one billion dollar revenue from India over the next 3-4 years.
"We are going after both government and private projects in the IT services business. But it is going to be 90 per cent ...government (projects), while 10 per cent from the private sector."
Most of the growth would right now come from the government sector as private sector has already made a lot of investment in IT. Probably, they would go a little slow on the investment at this moment due to recession, Binod said.
He said revenue from India is very low at the moment. The company has bid for the IT pilot projects of the Railways.
Infosys's India business is fairly new that was started at 2007-end and is a separate business unit. Earlier, he had said that the firm had taken a conscious decision not to participate in the local market.
Infosys, IT market, Wipro
Cong wants Wipro, Infosys to stay back
Two days after the West Bengal government scrapped the ambitious IT project at Rajarhat, the Congress today said IT majors like Wipro and Infosys should be given alternate land elsewhere in the state.
"We want companies like Wipro and Infosys to stay back and set their shops in the state. The government should provide them alternative land elsewhere," WBPCC working president Pradip Bhattacharje told reporters here.
In the wake of the Vedic Village controversy involving land scam, the state IT department stated earlier this week that "We are unable to stick to our assurances of providing land to Infosys and Wipro. The government had assured 90 acres each to Infosys and Wipro in the project and signed MoUs with the two companies last year."
"We want companies like Wipro and Infosys to stay back and set their shops in the state. The government should provide them alternative land elsewhere," WBPCC working president Pradip Bhattacharje told reporters here.
In the wake of the Vedic Village controversy involving land scam, the state IT department stated earlier this week that "We are unable to stick to our assurances of providing land to Infosys and Wipro. The government had assured 90 acres each to Infosys and Wipro in the project and signed MoUs with the two companies last year."
Wednesday, September 9, 2009
Infosys, new openings
WestBengal lost opportunity to create jobs: Infosys
West Bengal has lost an opportunity to create thousands of jobs when it scrapped the proposed IT hub project in Kolkata, a senior official of Infosys Technologies said.
"By one stroke, a progressive state like West Bengal has lost an opportunity to create about 5,000 jobs by our company. There is a sense of sadness because the state is missing out on the IT job creation," Infosys director and human resources development head T.V. Mohandas Pai told IANS in Bangalore.
As India's second largest IT bellwether, Infosys had applied for about 100 acres to set up a software development centre under the Special Economic Zone (SEZ), with an upfront investment of Rs.250 crore (Rs.2.5 billion) to create about 5,000 jobs.
The proposed IT township at Rajarhat near Salt Lake became controversial following allegations that land sharks - allegedly backed by promoters of Vedic Realty - had been involved in land acquisition.
Terming the sudden decision of the state government an unfortunate development, Pai said the educated middle-class youth of the state stand to lose out more than the global software major.
"We are not the loser as we have enough capacity in other places across the country to expand. The West Bengal government had promised to allot about 100 acres for our facility though our application had been pending since 2005," Pai said.
Though unwilling to blame the state government for reversing the decision, he said politics was playing spoilsport in the state, as evident from what happened earlier in Singur and now in Kolkata itself.
"By one stroke, a progressive state like West Bengal has lost an opportunity to create about 5,000 jobs by our company. There is a sense of sadness because the state is missing out on the IT job creation," Infosys director and human resources development head T.V. Mohandas Pai told IANS in Bangalore.
As India's second largest IT bellwether, Infosys had applied for about 100 acres to set up a software development centre under the Special Economic Zone (SEZ), with an upfront investment of Rs.250 crore (Rs.2.5 billion) to create about 5,000 jobs.
The proposed IT township at Rajarhat near Salt Lake became controversial following allegations that land sharks - allegedly backed by promoters of Vedic Realty - had been involved in land acquisition.
Terming the sudden decision of the state government an unfortunate development, Pai said the educated middle-class youth of the state stand to lose out more than the global software major.
"We are not the loser as we have enough capacity in other places across the country to expand. The West Bengal government had promised to allot about 100 acres for our facility though our application had been pending since 2005," Pai said.
Though unwilling to blame the state government for reversing the decision, he said politics was playing spoilsport in the state, as evident from what happened earlier in Singur and now in Kolkata itself.
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