India’s largest business process outsourcing (BPO) firm, Genpact, plans to bid for the union government’s Unique Identity (UID) project and is likely to enter a tie-up with IT players who can work on the hardware aspect.
“Other than the banking, financial services and insurance (BFSI) segment, government is a key sector for Genpact in India. We will be focused more on the process optimisation aspect than on the IT. But since there is a small aspect of hardware involved in the government deals, we think we are capable of handling this, as well as get into tie-ups if required,” said Harpreet Duggal, Senior Vice President and Business Leader India, Genpact.
The NYSE-listed BPO forayed into the domestic market nine months ago and has already signed four customers from the banking and finance and travel segments. The company is in the final stages of signing three to four deals. It serves customers from its centres in Jaipur and Hyderabad and has plans to further expand into tier-II cities.
As a part of its strategy to expand in the domestic market, Duggal said the company will introduce its international learning to the market and the operations would also be different from its international operations. “In total, we have 1,000 people working on the domestic market. This includes the sales and marketing. But we will leverage our talent base for winning market share in India,” said Duggal.
Like its international focus, Genpact will focus on BFSI, telecom, healthcare and government. Duggal further stated: “Small and medium enterprises (SME) will be another focus area. We think a lot of hosted solutions that Genpact has in the finance and accounting space and healthcare can be used in the domestic market also.”
Mudit Saxena, Senior VP and Business Leader heading the BFSI focus said that is not a driver in India for firms to outsource. “Rather, the discussion that we have been having with some of the banks are on outcome-based models. And a shift from fixed to variable cost,” he added.
The Nasscom-McKinsey Perspective 2020 report says the domestic outsourcing opportunity is expected to expand from $26 billion in 2008 to $90-100 billion by 2020, a compounded annual growth rate of 11 per cent. Wherein, BFSI and public services will account for 40 per cent of the addressable market. Among the business services, call centres, BFSI non-voice services and finance and accounting (F&A) will comprise 55 per cent.
Monday, July 27, 2009
IT market
Use of Facebook cuts productivity: Study
Facebook lovers, here is another survey showing how employee productivity is robbed at workplaces. So, put a limit on its usage before employers and the bosses put a stop to its usage at work.
While it won’t make employers popular, restricting Facebook can reclaim lost productivity. A new study by Boston IT advisory firm, Nucleus Research finds that, company that allow users to access Facebook in the workplace lose an average 1.5 per cent in total worker productivity.
Nearly half of employees in the recent ‘social net-working’ study use Facebook during work hours some as much as two hours per day. The average worker uses it for 15 minutes a day, and most couldn't come up with a legitimate “business reason” for logging on. The survey of 237 employees also showed that 77 per cent of workers who have a Facebook account use it during work hours. And “some” employees use the social networking site as much as two hours a day at work, the study found. Nucleus Research did not say how many workers fit into that category, but did note that one in 33 workers surveyed only used Facebook at work.
Of those using Facebook at work, 87 per cent said they had no clear business reason for using the site. “If your company is facing tight margins and low profitability, as many are now, then how can you accept any work distractions that drain your overall productivity?” asked Rebecca Wettemann, vice president of research for Nucleus Research, in a statement.
The study also noted that 87.25 million US users visited Facebook from home and work during June, and each of those people spent an average of 4 hours, 39 minutes and 33 seconds on the site during the month.
While it won’t make employers popular, restricting Facebook can reclaim lost productivity. A new study by Boston IT advisory firm, Nucleus Research finds that, company that allow users to access Facebook in the workplace lose an average 1.5 per cent in total worker productivity.
Nearly half of employees in the recent ‘social net-working’ study use Facebook during work hours some as much as two hours per day. The average worker uses it for 15 minutes a day, and most couldn't come up with a legitimate “business reason” for logging on. The survey of 237 employees also showed that 77 per cent of workers who have a Facebook account use it during work hours. And “some” employees use the social networking site as much as two hours a day at work, the study found. Nucleus Research did not say how many workers fit into that category, but did note that one in 33 workers surveyed only used Facebook at work.
Of those using Facebook at work, 87 per cent said they had no clear business reason for using the site. “If your company is facing tight margins and low profitability, as many are now, then how can you accept any work distractions that drain your overall productivity?” asked Rebecca Wettemann, vice president of research for Nucleus Research, in a statement.
The study also noted that 87.25 million US users visited Facebook from home and work during June, and each of those people spent an average of 4 hours, 39 minutes and 33 seconds on the site during the month.
IT market
Social sites hamper office work culture: Survey
Social networking sites, which are being touted as the next big thing by industry pundits, are impacting the office work culture with majority of the corporate houses world over losing an average of 1.5 per cent of total office output due to this, a survey has said.
Nearly half of office employees access social networking sites sduring work and one in every 33 workers built their entire Facebook profile during work and this in turn impacts office productivity, according to a report by Nucleus Research.
Though social networking sites are really useful in terms of business uses, most of the respondents when as-ked to actually identify business uses for these sites cou-ld not point to a true business reason. “Given that 61 per cent of employees access Facebook at work, companies can reasonably estimate a cost of 1.5 per cent of employee productivity,” the report said.
Nearly half of office employees access social networking sites sduring work and one in every 33 workers built their entire Facebook profile during work and this in turn impacts office productivity, according to a report by Nucleus Research.
Though social networking sites are really useful in terms of business uses, most of the respondents when as-ked to actually identify business uses for these sites cou-ld not point to a true business reason. “Given that 61 per cent of employees access Facebook at work, companies can reasonably estimate a cost of 1.5 per cent of employee productivity,” the report said.
Cost cutting, Recession, TCS
Worst may not be over yet, says TCS chief
Chief executive officer S Ramadorai has spent 13 years at the helm of Tata Consultancy Services (TCS). In this time, he has turned the company into the largest IT services provider in the country. As he prepares to bid adieu to the organisation in a couple of months, he spoke to Sharang Limaye about the present economic crisis and his post-retirement role. Excerpts:
Are ‘Green Shoots’ sprouting?
To some extent, it is true. We must see how it plays out. There are some signs of improvement. But we should not get carried away by these. One should be prepared for some more volatility. The volatility has not disappeared. There will still be some shocks along the way.
But is the worst over?
In terms of some parameters, the worst may not be over. For example, when you look at unemployment, it looks like more bad times are in store. We are still seeing increasing unemployment. When people see the banks performing well, they think there has been some recovery. But it remains to be seen whether it’s a one-off thing.
Do you see pricing pressure easing?
There is some extent of easing of pricing pressure. But, there may be specific sectors with pricing problems. Telecom, for one, will certainly experience some pressure. So also will manufacturing. Hi-tech may also find the going tough in terms of pricing. But this will be due to sector-specific issues.
Domestic market contribution to your turnover is less than 10 per cent. Will we see more focus on India?
We are anyway focusing on the domestic market. But we have to see how much Indian companies are ready to spend on information technology. Right now, the IT budgets are nowhere near what Western economies do. If the growth is not faster, then the contribution of the Indian business as a percentage would still be minimal.
What could be done to increase the size of the domestic market?
I have always said that the government must spend a lot. It’s the right time for it to work on digitisation of data at both the state and central levels. Consolidation of information in areas such as taxation, healthcare and education should be of high priority. This expenditure will show in the GDP growth and also lead to improvement of services.
What about the contribution of the domestic private sector?
If the Indian private sector wants to be globally competitive, technology adoption and deployment is a must. Also, in sectors like microfinance, IT can help in greater financial inclusion.
What’s the outlook for TCS from a human resource point of view?
There is recruitment at entry level jobs for the year 2009-10 based on the offers made in 2008-09. For the year 2010-11, recruitment will take place at the time of students’ graduation, unlike in the past where we did three or four quarter earlier. Experienced professionals will be hired on a need basis.
How do you see the European market doing this year?
Currently, Europe is facing bigger problems than the US. Countries like Germany, Italy, UK, Spain and Portugal have been under a lot of stress. To me, Europe is a very important market, but it will recover slower than the US.
Does TCS have an inorganic growth strategy?
We have a Mergers & Acquisitions (M&A) group for this purpose. But haven’t planned any acquisition strategy as such. The M&A group will continuously look at opportunities for synergies. If there is anything that makes sense from a growth perspective, we will look at it. But there is nothing in the pipeline as of now.
Is there a move to concentrate more on the retail vertical as compared to telecom and BFSI?
There are opportunities for growth in the retail sector. Hence, it is very important for us. Having said that, the IT spends in the BFSI sector are still the largest. We would like to have presence in multiple domains and geographies. Our new focus areas include healthcare, lifesciences, energy, utilities etc.
What are your plans post-retirement?
I will continue to be on the board of TCS. I am also on the board of other Tata companies as well as some non-group companies. I would continue mentoring people in TCS. I would also be involved in some brand-building exercises. I might have lesser time on my hands after retiring.
Source: FinancialChronicle
Are ‘Green Shoots’ sprouting?
To some extent, it is true. We must see how it plays out. There are some signs of improvement. But we should not get carried away by these. One should be prepared for some more volatility. The volatility has not disappeared. There will still be some shocks along the way.
But is the worst over?
In terms of some parameters, the worst may not be over. For example, when you look at unemployment, it looks like more bad times are in store. We are still seeing increasing unemployment. When people see the banks performing well, they think there has been some recovery. But it remains to be seen whether it’s a one-off thing.
Do you see pricing pressure easing?
There is some extent of easing of pricing pressure. But, there may be specific sectors with pricing problems. Telecom, for one, will certainly experience some pressure. So also will manufacturing. Hi-tech may also find the going tough in terms of pricing. But this will be due to sector-specific issues.
Domestic market contribution to your turnover is less than 10 per cent. Will we see more focus on India?
We are anyway focusing on the domestic market. But we have to see how much Indian companies are ready to spend on information technology. Right now, the IT budgets are nowhere near what Western economies do. If the growth is not faster, then the contribution of the Indian business as a percentage would still be minimal.
What could be done to increase the size of the domestic market?
I have always said that the government must spend a lot. It’s the right time for it to work on digitisation of data at both the state and central levels. Consolidation of information in areas such as taxation, healthcare and education should be of high priority. This expenditure will show in the GDP growth and also lead to improvement of services.
What about the contribution of the domestic private sector?
If the Indian private sector wants to be globally competitive, technology adoption and deployment is a must. Also, in sectors like microfinance, IT can help in greater financial inclusion.
What’s the outlook for TCS from a human resource point of view?
There is recruitment at entry level jobs for the year 2009-10 based on the offers made in 2008-09. For the year 2010-11, recruitment will take place at the time of students’ graduation, unlike in the past where we did three or four quarter earlier. Experienced professionals will be hired on a need basis.
How do you see the European market doing this year?
Currently, Europe is facing bigger problems than the US. Countries like Germany, Italy, UK, Spain and Portugal have been under a lot of stress. To me, Europe is a very important market, but it will recover slower than the US.
Does TCS have an inorganic growth strategy?
We have a Mergers & Acquisitions (M&A) group for this purpose. But haven’t planned any acquisition strategy as such. The M&A group will continuously look at opportunities for synergies. If there is anything that makes sense from a growth perspective, we will look at it. But there is nothing in the pipeline as of now.
Is there a move to concentrate more on the retail vertical as compared to telecom and BFSI?
There are opportunities for growth in the retail sector. Hence, it is very important for us. Having said that, the IT spends in the BFSI sector are still the largest. We would like to have presence in multiple domains and geographies. Our new focus areas include healthcare, lifesciences, energy, utilities etc.
What are your plans post-retirement?
I will continue to be on the board of TCS. I am also on the board of other Tata companies as well as some non-group companies. I would continue mentoring people in TCS. I would also be involved in some brand-building exercises. I might have lesser time on my hands after retiring.
Source: FinancialChronicle
IT market, Outsourcing
Gates: Desi IT cos need to add value
Billionaire Bill Gates urged India to move away from low-cost labour toward high-end research and development to keep its giant IT sector competitive. On a visit to New Delhi, the co-founder of Microsoft Corp called on the Indian government to speed up its commitment to R&D and to boost low number of home-grown PhD students.
Gates told a panel discussion that India's "IT success story" should strive to add value and move away from low-cost labour as other developing countries play catch-up.
"At first some of that (IT boom) was built on low-cost labour. And, of course, as time goes on, you don't want to have that as the only differentiator and it's not a sustainable thing, because others can come along with that as well," Gates said.
India's R&D sector has made strides in recent years and attracted some big foreign hitters, including Microsoft, in keeping with its IT- and service-driven economic boom.
But hampered by structural problems and a lack of government commitment, India's R&D still lags behind the United States and Asian rival China.
China has more than 1,100 R&D centres compared to less than 800 in India.
"Leading companies here are contributing a lot of ideas and techniques. Even more of that has to happen and bring it to its full potential," Gates said.
"You've got to get the government, universities ... and companies like Microsoft to deepen their commitment to R&D."
India produces 100 computer science PhDs a year -- a fraction of China or the U.S -- even as it exports a large number of students abroad.
While English-speaking India is cheaper than China for R&D, New Delhi gives few incentives to researchers.
Beijing offers incentives like tax breaks for R&D centres, and special economic zones provide infrastructure for hi-tech and R&D industries.
Gates told a panel discussion that India's "IT success story" should strive to add value and move away from low-cost labour as other developing countries play catch-up.
"At first some of that (IT boom) was built on low-cost labour. And, of course, as time goes on, you don't want to have that as the only differentiator and it's not a sustainable thing, because others can come along with that as well," Gates said.
India's R&D sector has made strides in recent years and attracted some big foreign hitters, including Microsoft, in keeping with its IT- and service-driven economic boom.
But hampered by structural problems and a lack of government commitment, India's R&D still lags behind the United States and Asian rival China.
China has more than 1,100 R&D centres compared to less than 800 in India.
"Leading companies here are contributing a lot of ideas and techniques. Even more of that has to happen and bring it to its full potential," Gates said.
"You've got to get the government, universities ... and companies like Microsoft to deepen their commitment to R&D."
India produces 100 computer science PhDs a year -- a fraction of China or the U.S -- even as it exports a large number of students abroad.
While English-speaking India is cheaper than China for R&D, New Delhi gives few incentives to researchers.
Beijing offers incentives like tax breaks for R&D centres, and special economic zones provide infrastructure for hi-tech and R&D industries.
IT market, Recession
Pharma, mfg, telecom sectors see highest salary hikes for FY10
Pharmaceuticals, manufacturing and telecom sectors are witnessing the highest increase of up to 11 per cent in salaries for FY 2009-10, while IT and financial services got the least hikes.
With the economic downturn impacting the earnings of companies, they were restructuring their salary structures and focusing more on performance and also cutting down on the increments for the current fiscal, experts said.
As per a mid-year survey on 'Performance & Reward Trends' by Hewitt Associates, pharma sector saw the highest salary hike of 11.1 per cent for FY 2009-10, followed by manufacturing (10.8 per cent), telecom (9.5 per cent) and FMCG (9.3 per cent).
However, retail sector has been impacted by the downturn and the salary hikes for the current fiscal might not be as expected by the industry, Thiruvengadam said.
"Firms have been found to implement metrics to determine return on investment on human resources. Investment in proprietary knowledge and technological upgrade is continuing, albeit slower than during boom times.
"Smart firms have turned inward, consolidating operations, rationalising requirements and optimising resources to ride the slowdown," Deloitte Senior Director (Management Consultancy Services) P Thiruvengadam said.
"In the wake of the economic downturn and the current situation that the Indian economy is witnessing the IT, ITeS sectors will be impacted," Thiruvengadam added.
The Hewitt survey revealed companies across industries were strongly differentiating rewards on basis of performance but majority of them were not considering any layoffs or severe salary cuts in the current fiscal.
The sectors to witness least increase in pay packages for the current fiscal are IT (2.8 per cent), ITeS (4.4 per cent) and Financial Services space (5.2 per cent), the survey stated.
"In IT & ITeS sector, overall salary increases have been kept under control and most companies have reported a stable or marginally reduced pay cost structure in relation to total costs. It reflects the response of a growth economy managing a short to medium term slowdown, while keeping an eye on long term growth," Thiruvengadam added.
Interestingly, layoffs have been generally more prevalent in sectors which hired numbers in the last few years like in the IT, ITeS, and retail sector recently, he added.
The Deloitte survey 'Engaging employees in recessionary times' found that there was an overall decrease in attrition rates. Around 23 per cent of firms surveyed reported attrition figures of less than five per cent and 44 per cent of companies reported figures between five and 10 per cent.
"During these unprecedented times when firms across the world considered options such as mass layoffs and salary cuts, India Inc also considered same measures but with maturity," Hewitt's Performance and Rewards Consulting practice leader in India Sandeep Chaudhary said.
With the economic downturn impacting the earnings of companies, they were restructuring their salary structures and focusing more on performance and also cutting down on the increments for the current fiscal, experts said.
As per a mid-year survey on 'Performance & Reward Trends' by Hewitt Associates, pharma sector saw the highest salary hike of 11.1 per cent for FY 2009-10, followed by manufacturing (10.8 per cent), telecom (9.5 per cent) and FMCG (9.3 per cent).
However, retail sector has been impacted by the downturn and the salary hikes for the current fiscal might not be as expected by the industry, Thiruvengadam said.
"Firms have been found to implement metrics to determine return on investment on human resources. Investment in proprietary knowledge and technological upgrade is continuing, albeit slower than during boom times.
"Smart firms have turned inward, consolidating operations, rationalising requirements and optimising resources to ride the slowdown," Deloitte Senior Director (Management Consultancy Services) P Thiruvengadam said.
"In the wake of the economic downturn and the current situation that the Indian economy is witnessing the IT, ITeS sectors will be impacted," Thiruvengadam added.
The Hewitt survey revealed companies across industries were strongly differentiating rewards on basis of performance but majority of them were not considering any layoffs or severe salary cuts in the current fiscal.
The sectors to witness least increase in pay packages for the current fiscal are IT (2.8 per cent), ITeS (4.4 per cent) and Financial Services space (5.2 per cent), the survey stated.
"In IT & ITeS sector, overall salary increases have been kept under control and most companies have reported a stable or marginally reduced pay cost structure in relation to total costs. It reflects the response of a growth economy managing a short to medium term slowdown, while keeping an eye on long term growth," Thiruvengadam added.
Interestingly, layoffs have been generally more prevalent in sectors which hired numbers in the last few years like in the IT, ITeS, and retail sector recently, he added.
The Deloitte survey 'Engaging employees in recessionary times' found that there was an overall decrease in attrition rates. Around 23 per cent of firms surveyed reported attrition figures of less than five per cent and 44 per cent of companies reported figures between five and 10 per cent.
"During these unprecedented times when firms across the world considered options such as mass layoffs and salary cuts, India Inc also considered same measures but with maturity," Hewitt's Performance and Rewards Consulting practice leader in India Sandeep Chaudhary said.
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