NEW DELHI: Software companies, led by Infosys Technologies and Tata Consultancy Services, are set to report higher revenues for the December quarter as firms such as British Petroleum increased outsourcing, but a stronger rupee and higher wages could reduce profitability, say analysts. Although profitability may fall, industry may cheer the revival of order flow after more than four quarters of uncertainty on new businesses as companies in the West grappled with recession and credit crisis. Revenues may rise as much as 4% on quarter, some analysts say.
“The macro situation has improved. The order book is better now. Companies might outperform vis-a-vis guidance,’’ said Harit Shah, research analyst at Karvy Stock Broking. The $60-billion Indian IT sector that depends on the US and Europe for most of its revenues, has been facing tough business conditions for more than a year as their clients such as Citigroup and General Electric were cutting costs as the credit crisis reduced demand. But the situation has improved in the past few months with steady flow of orders as developed economies emerged out of recession. But the appreciation of the rupee against the US dollar, would reduce profitability.
“We are seeing stability and an improvement in demand that we had talked about the last quarter,’’ said Suresh Vaswani, joint CEO, AT Wipro Technologies. The rupee’s rise from 49-50 levels in Q2 to 46-47 levels in the third quarter will impact margins. For every 1% strengthening in rupee, margin impact can be up to 50 bps in large companies, analysts said.
The rupee has been one of the best performing currencies in the region in the December quarter as global funds poured money into India expecting a strong economic growth. The quarter saw deals like British Petroleum global vendor consolidation contract worth over $2 billion shared among others by TCS and Infosys. Also, implementation of software packages such as SAP and Oracle which were onsite heavy are now about 60% offshore. IT companies like HCL Technologies have gained from this shift and HCL’s buyout of Axon helped.
The revival of order flow has also brought in higher costs for companies as they paid more wages, in some cases as much as 11% more, to retain talent to execute orders. And companies could not raise the fees they charged for services as they had to compete aggressively for new orders. “There will be a margin impact of about 25 bps due to salary hikes and variable payout,” said Shashi Bhushan, senior research analyst at Prabhudas Lilladher. “Pricing has been muted with a positive bias that is not too bad for this year,”he said.
The revival of businesses may ensure continued order flows, but may not necessarily lead to rising profitability as the currency movements may be adverse. “Margins are not sustainable as the rupee is strengthening,” Bank of America-Merrill Lynch wrote in a report. BoA-ML sees rupee/dollar at 45 at March end and at Rs 43 at end December 2010 and this will have a negative impact on margins in coming quarters.
Wages will climb up even as pricing will be under pressure. Discretionary sales and marketing spends will also move up.
Showing posts with label Infosys. Show all posts
Showing posts with label Infosys. Show all posts
Monday, January 4, 2010
Indian IT New Services Tougher Times
The year that passed by was one of the toughest in the decade for the Indian IT industry, which reeled under the impact of the worst-ever global economic crisis.
It was a reality check for the industry, with companies facing huge uncertainty on their business outlook for most part of the year as customers held back or cancelled investments in new technology.
Towards the close of the year, the industry began to show early signs of recovery, with customers starting to take decisions on IT spends.
Shares move upReflecting the sentiment, shares of IT companies such as Infosys, Wipro, and HCL Technologies touched 52-week high in the past week, as against yearly-lows in January-March. The BSE IT Index also touched the year's high of 5190 on December 24 as against 1987 on February 24.
The image of the industry took a hit at the beginning of the year due to the $1.4-billion fraud at Satyam Computers. The timely government intervention did mitigate the impact resulting in buy-out of the Hyderabad-based firm by the Mahindras.
On an optimistic note, implementing the learnings from previous downturn in 2001-02, the large and mid-size vendors managed to handle the changing market dynamics effectively by continuing to invest in newer service offerings and expanded their delivery footprint overseas. The smaller firms, however, bore the brunt of the downturn.
The economic crisis, triggered in September 2008, had forced the Indian IT firms to innovate, finetune their business model and tighten the cost structures as the volatile currency movement affected the earnings and pricing power came under pressure with clients seeking hefty discounts of 5-20 per cent.
Such a trend not only exerted pressure on the profit margins, but also forced the companies to shed their flab, resulting in an increase in forced attrition. Though wage cuts and pay hike deferrals were more pronounced till the middle of the year, the situation improved over the past few months, companies have started effecting wage hikes and firmed up their hiring plans for the next year.
Vendor consolidation
Vendors do expect stability in the pricing going forward in 2010. A clearer picture on the 2010 budgets was expected by the end of January-March quarter though some players feel that the 2010 budgets may stay flat over 2009. The consolidation in the market place is expected to benefit the Indian vendors as they are still able to offer the cost arbitrage when compared their global counterparts.
The large Indian players have gained from the recent vendor consolidation exercises at large global clients such as BP Plc, Nokia Siemens Networks, Telstra and Aviva among others.
New pricing models based on fixed price, pay-by-use and ticket-based pricing gained currency in 2009 as the outsourcers demonstrated cost savings to their customers from such newer engagement models. The Indian vendors expect their share of revenues from such newer pricing models to go up as compared to the traditional time and material projects, where billing is done on an hourly basis for the number of persons deployed on the projects.
Newer services
2009 also saw the Indian vendors launch newer services offerings on pay-by-use or Software-as-a-Service model through cloud computing initiatives.
Companies like Wipro have set up private cloud to test and deploy their applications internally to showcase to their customers.
The year saw the large vendors sharpen their focus on the domestic market, where the emergence of large IT deals acted as an offset to the slump in business from traditional markets in US and Europe.
Indian vendors also expanded their global footprint by setting up delivery locations in Latin America, where they see traction in the market place. The industry witnessed merger and acquisition activity on a moderate scale where companies picked up the captive units and smaller niche firms to enhance their competencies.
Friday, November 13, 2009
Party Time at Infosys
Say cheers to this! IT behemoth Infosys has reintroduced binge benefit to its 100,000 employees, entitling them to a fixed quarterly allowance to take time out for recreation.
The company had withdrawn this perk six months ago in the wake of the economic meltdown and stagnation of its business.
There is now buzz in the campus that Infy may soon reintroduce other incentives such as interest-free home loans to needy employees, car loans and other giveaways.
The news comes close on the heels of the IT bellwether revising its full-year revenue guidance upwards and is aimed at boosting staff morale.
Nandita Gurjar, senior VP and group head of HR at Infosys, confirmed the news.
“Yes, we have reintroduced this particular scheme. This was put on hold due to economic downturn. Under this scheme, the company pays Rs 300 per person every quarter as party incentive. All employees will get this benefit,” Gurjar said.
Infoscians say the sop marks a return to good times both for the company and for the employees located at around 50 offices across the globe.
The party incentive comes as the icing on top of an across-the-board salary hike and promotions announced earlier this month. Offshore salaries have risen by 8 per cent while onsite remunerations have gone up 2 per cent.
For quarter ending September 30, Infosys reported a rise in net profit by 7.5 per cent on a year-on-year basis at Rs 1,540 crore and 3 per cent revenues growth at Rs 5,418 crore, beating street expectations.
The company had withdrawn this perk six months ago in the wake of the economic meltdown and stagnation of its business.
There is now buzz in the campus that Infy may soon reintroduce other incentives such as interest-free home loans to needy employees, car loans and other giveaways.
The news comes close on the heels of the IT bellwether revising its full-year revenue guidance upwards and is aimed at boosting staff morale.
Nandita Gurjar, senior VP and group head of HR at Infosys, confirmed the news.
“Yes, we have reintroduced this particular scheme. This was put on hold due to economic downturn. Under this scheme, the company pays Rs 300 per person every quarter as party incentive. All employees will get this benefit,” Gurjar said.
Infoscians say the sop marks a return to good times both for the company and for the employees located at around 50 offices across the globe.
The party incentive comes as the icing on top of an across-the-board salary hike and promotions announced earlier this month. Offshore salaries have risen by 8 per cent while onsite remunerations have gone up 2 per cent.
For quarter ending September 30, Infosys reported a rise in net profit by 7.5 per cent on a year-on-year basis at Rs 1,540 crore and 3 per cent revenues growth at Rs 5,418 crore, beating street expectations.
Infosys opens second development center in Mexico
Infosys Technologies has opened its second development centre in Monterrey, Mexico, serving as a near shore unit to serve the regions of North America, Latin American and Europe.
The development centre will provide technology services for clients in all industries including banking, financial services, manufacturing, retail, distribution, insurance and many others, Infosys said in a notice to the stock exchanges.
“From our first development centre opening with a few clients and a dozen employees, we now have some 30 clients and 330 professionals,” said Ashok Vemuri, senior vice president, Infosys. After examining several countries in the region, Infosys chose to establish its presence in Mexico due to the broad language skills available in the region, its geographical proximity to Canada, the US and the Europe, the notice said.
The development centre will provide technology services for clients in all industries including banking, financial services, manufacturing, retail, distribution, insurance and many others, Infosys said in a notice to the stock exchanges.
“From our first development centre opening with a few clients and a dozen employees, we now have some 30 clients and 330 professionals,” said Ashok Vemuri, senior vice president, Infosys. After examining several countries in the region, Infosys chose to establish its presence in Mexico due to the broad language skills available in the region, its geographical proximity to Canada, the US and the Europe, the notice said.
Friday, November 6, 2009
Infosys Wipro in race for 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.
Infosys Overhired
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.
Infosys BPO 22 Centres in AP
Infosys BPO Limited, a subsidiary of IT major Infosys, signed an agreement with the Andhra Pradesh government to set up rural BPO centres in 22 districts of the state.
Infosys BPO Limited CEO and Managing Director Amitabh Chaudhry and State Society for Elimination of Rural Poverty CEO T Vijaya Kumar signed an MoU in this regard in the presence of Chief Minister K Rosaiah.
"The first such BPO centre will be set up in the next six weeks which will provide a testing ground for this model. The capital expenditure and other details will be worked out subsequently," Chaudhry said adding that all the 22 districts would have one BPO each.
"Over 1,000 people would get direct employment through the rural BPO centers in the next 12-15 months. Statistics suggest that direct employment generates 1.4 times indirect employment as well," he added.
Noting that Andhra Pradesh would be the first state where Infosys would be setting such facilities, Chaudhary said, "We are in talks with some other states as well for similar ventures but I can't disclose the names at this stage".
Infosys BPO Limited CEO and Managing Director Amitabh Chaudhry and State Society for Elimination of Rural Poverty CEO T Vijaya Kumar signed an MoU in this regard in the presence of Chief Minister K Rosaiah.
"The first such BPO centre will be set up in the next six weeks which will provide a testing ground for this model. The capital expenditure and other details will be worked out subsequently," Chaudhry said adding that all the 22 districts would have one BPO each.
"Over 1,000 people would get direct employment through the rural BPO centers in the next 12-15 months. Statistics suggest that direct employment generates 1.4 times indirect employment as well," he added.
Noting that Andhra Pradesh would be the first state where Infosys would be setting such facilities, Chaudhary said, "We are in talks with some other states as well for similar ventures but I can't disclose the names at this stage".
IT Biggies after Foreign Grads
Mumbai: Indian IT companies are attracting talent from German, Swiss and Austrian universities to work in India as paid interns. Infosys, Wipro, Cognizant and Mindtree are among the nine companies that have taken the lead by joining hands with the Frankfurt-based Vibe Internships to create 50 paid internship positions in Mumbai, Chennai and Bangalore, said Dr Karl Kurbel, Project Supervisor of Vibe Internships and Head of the Business Informatics Chair at the European University Viadrina (EUV) to Business Line.
The interns will be paid between 150 euro and 600 euro (approximately Rs. 10,000-Rs. 40,000) a month for three- to six-month projects for business development, test automation, software development. Unlike U.S., European countries have been a bit reserved when it comes to sending people to India due to cultural issues and linguistic barriers.
Indian IT firms are evaluating this initiative in the context of their market development and brand building strategy for Germany. "As part of our brand building initiatives in Germany, we will get these interns to work out of our centers here as a result of which they will gain considerable exposure to the global delivery model. Our endeavor is to hire the best of these interns for client facing operations in Germany," said Nandita Gurjar, Senior Vice-President and Global HR Head, Infosys Technologies.
As of 2008, the market for IT services in Germany was 33 billion euro. While the case for offshore services is slowly registering in the minds of German managers, only a very few really believe it is a strategic imperative.
This program could help clear misgiving about offshoring causing job losses, as the participating offshore firms will create a significant number of new employment opportunities for top talent in Germany, said Peter Schumacher, President and CEO of Value Leadership Group, a strategic management consultancy firm, which advised Prof Kurbel and Vibe Internships for the initiative.
Puneet Jetli, Head, People Function, at the Bangalore-based Mindtree Consulting, said the company was still working out the stipend details for the initiative. "We will try to structure the stipend in such a way that the interns can help recover the costs as well as see a bit of India," he said.
Cognizant, Hexaware and L&T Infotech have also agreed to participate in this internship program.
The interns will be paid between 150 euro and 600 euro (approximately Rs. 10,000-Rs. 40,000) a month for three- to six-month projects for business development, test automation, software development. Unlike U.S., European countries have been a bit reserved when it comes to sending people to India due to cultural issues and linguistic barriers.
Indian IT firms are evaluating this initiative in the context of their market development and brand building strategy for Germany. "As part of our brand building initiatives in Germany, we will get these interns to work out of our centers here as a result of which they will gain considerable exposure to the global delivery model. Our endeavor is to hire the best of these interns for client facing operations in Germany," said Nandita Gurjar, Senior Vice-President and Global HR Head, Infosys Technologies.
As of 2008, the market for IT services in Germany was 33 billion euro. While the case for offshore services is slowly registering in the minds of German managers, only a very few really believe it is a strategic imperative.
This program could help clear misgiving about offshoring causing job losses, as the participating offshore firms will create a significant number of new employment opportunities for top talent in Germany, said Peter Schumacher, President and CEO of Value Leadership Group, a strategic management consultancy firm, which advised Prof Kurbel and Vibe Internships for the initiative.
Puneet Jetli, Head, People Function, at the Bangalore-based Mindtree Consulting, said the company was still working out the stipend details for the initiative. "We will try to structure the stipend in such a way that the interns can help recover the costs as well as see a bit of India," he said.
Cognizant, Hexaware and L&T Infotech have also agreed to participate in this internship program.
Monday, September 28, 2009
Training Staff still on the agenda of Indian Companies
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.
Sunday, September 27, 2009
No Hikes 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.
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.
Wednesday, September 23, 2009
IT Firms See Higher Demand
Bangalore: As the effects of the economic slowdown begin to wear out, India’s information technology firms are seeing more demand for building high-value applications from customers upgrading or maintaining their business software.
Enterprise resource planning (ERP), or business software, is a high-margin segment that includes consulting as a key component and commands at least 40% higher billing rates than plain-vanilla applications and development and maintenance services. Such software is typically sold and maintained by firms such as SAP AG and Oracle Corp. Indian firms began acquiring ERP capabilities only in recent years to enter the big league of companies such as International Business Machines Corp. (IBM) and Accenture Ltd.
For instance, Infosys Technologies Ltd and HCL Technologies Ltd, India’s second and fifth largest software firms, fought a bid last year to buy British ERP implementation and consulting firm Axon Group Plc HCL won.
The impetus came during the downturn, when firms in the US and Europe, the biggest markets for Indian IT firms, slashed technology budgets and spent a bare minimum on the so-called lights-on projects for maintaining existing IT infrastructure, to keep their businesses running.
Now, with a recovery in sight, firms such as British oil explorer BP Plc. and power equipment maker ABB group are again upgrading their business applications but prefer outsourcing the work to firms in low-cost countries such as India, analysts said.
Mint could not independently verify ERP contracts won by Indian firms.
“Clients are becoming more open to discretionary IT spending, especially in areas such as enterprise resource planning, in which deep spending cuts have already happened,” Harmendra Gandhi and Pinku Pappan, analysts with brokerage Nomura Financial Advisory and Securities (India) Pvt. Ltd, wrote in a 10 September report to clients.
By discretionary spending, the analysts are referring to the money that customers keep aside to spend over their planned IT budget.
“Customers are also talking about some transformation of deals, apart from offshoring support and maintenance work. Thus, the propensity to spend out of the 2009 Budget is much more now compared with that a quarter ago,” Gandhi and Pappan said.
The shift to Indian firms was also prompted by price increases at their regular vendors.
Germany’s SAP last year raised its annual support costs to 22% of the licence fee from 17% earlier, saying this would bring down the total cost of ownership of the licence for customers.
Firms had not factored in a hike in maintenance fee during the recession and “are exploring outsourcing to Indian vendors, who can maintain at half the cost, but with the risk of losing support on upgrades from the vendor,” said Asheesh Raina, a principal research analyst at Gartner Inc. “Indian companies have also been able to demonstrate maturity in offering support.”
Spending on business software was the lowest in the five years to 2009, but is expected to pick up in 2010, Raina said.
Firms such as Wipro Ltd, HCL, Cognizant Technology Solutions Ltd and even smaller companies such as Defiance Technologies Pvt. Ltd, the IT services unit of the Hinduja group, say customers are looking to improve efficiency and integrate their business software with their core processes, and not just to cut costs. But it does help that Indian ERP firms are cheaper by at least a third than Accenture or IBM.
“Saving costs and capital continues to be the most important thing clients are discussing,” said Sangita Singh, head of enterprise application services, or EAS, for Wipro. The segment contributed a third out of the 26 customers that Wipro added in the first quarter ended June.
“You don’t have many companies spending $100-200 million (Rs482-964 crore) on new licences. It may be in the range of $50-70 million. The implementation business is three to four times on licences,” Singh said.
HCL earns nearly a quarter of its overall revenue from business software projects. EAS projects accounted for 23.6% of its fourth quarter revenue of Rs2,908 crore, up from 10.8% a year ago.
Enterprise resource planning (ERP), or business software, is a high-margin segment that includes consulting as a key component and commands at least 40% higher billing rates than plain-vanilla applications and development and maintenance services. Such software is typically sold and maintained by firms such as SAP AG and Oracle Corp. Indian firms began acquiring ERP capabilities only in recent years to enter the big league of companies such as International Business Machines Corp. (IBM) and Accenture Ltd.
For instance, Infosys Technologies Ltd and HCL Technologies Ltd, India’s second and fifth largest software firms, fought a bid last year to buy British ERP implementation and consulting firm Axon Group Plc HCL won.
The impetus came during the downturn, when firms in the US and Europe, the biggest markets for Indian IT firms, slashed technology budgets and spent a bare minimum on the so-called lights-on projects for maintaining existing IT infrastructure, to keep their businesses running.
Now, with a recovery in sight, firms such as British oil explorer BP Plc. and power equipment maker ABB group are again upgrading their business applications but prefer outsourcing the work to firms in low-cost countries such as India, analysts said.
Mint could not independently verify ERP contracts won by Indian firms.
“Clients are becoming more open to discretionary IT spending, especially in areas such as enterprise resource planning, in which deep spending cuts have already happened,” Harmendra Gandhi and Pinku Pappan, analysts with brokerage Nomura Financial Advisory and Securities (India) Pvt. Ltd, wrote in a 10 September report to clients.
By discretionary spending, the analysts are referring to the money that customers keep aside to spend over their planned IT budget.
“Customers are also talking about some transformation of deals, apart from offshoring support and maintenance work. Thus, the propensity to spend out of the 2009 Budget is much more now compared with that a quarter ago,” Gandhi and Pappan said.
The shift to Indian firms was also prompted by price increases at their regular vendors.
Germany’s SAP last year raised its annual support costs to 22% of the licence fee from 17% earlier, saying this would bring down the total cost of ownership of the licence for customers.
Firms had not factored in a hike in maintenance fee during the recession and “are exploring outsourcing to Indian vendors, who can maintain at half the cost, but with the risk of losing support on upgrades from the vendor,” said Asheesh Raina, a principal research analyst at Gartner Inc. “Indian companies have also been able to demonstrate maturity in offering support.”
Spending on business software was the lowest in the five years to 2009, but is expected to pick up in 2010, Raina said.
Firms such as Wipro Ltd, HCL, Cognizant Technology Solutions Ltd and even smaller companies such as Defiance Technologies Pvt. Ltd, the IT services unit of the Hinduja group, say customers are looking to improve efficiency and integrate their business software with their core processes, and not just to cut costs. But it does help that Indian ERP firms are cheaper by at least a third than Accenture or IBM.
“Saving costs and capital continues to be the most important thing clients are discussing,” said Sangita Singh, head of enterprise application services, or EAS, for Wipro. The segment contributed a third out of the 26 customers that Wipro added in the first quarter ended June.
“You don’t have many companies spending $100-200 million (Rs482-964 crore) on new licences. It may be in the range of $50-70 million. The implementation business is three to four times on licences,” Singh said.
HCL earns nearly a quarter of its overall revenue from business software projects. EAS projects accounted for 23.6% of its fourth quarter revenue of Rs2,908 crore, up from 10.8% a year ago.
Monday, September 14, 2009
TCS, Wipro, Infy win 1.5 Billion Contract
TCS, Infosys, Wipro win $1.5 billion outsourcing contract
With this, BP has reduced the number of its technology vendors from 40 to five and expects to save as much as $500 million over the next five years
Bangalore: India’s top three technology firms—Tata Consultancy Services Ltd (TCS), Infosys Technologies Ltd and Wipro Ltd—have each won part of a five-year software outsourcing contract valued at around $1.5 billion (Rs7,320 crore) from British oil and gas firm BP Plc.
IBM Corp. and Accenture Ltd are the other vendors.
With this, BP has reduced the number of its technology vendors from 40 to five and expects to save as much as $500 million over the next five years, a company spokesman said.
“Over the last 12 months, we undertook an effort to consolidate our technology vendor base and eliminated 35 of them. These five were selected for scale and ability to support us from around the world,” BP’s spokesman David Nicholas said over the phone from London. “Otherwise, with 40 vendors, we would have spent $2 billion.”
He declined to specify individual contract values.
IBM said in a statement it has won the largest pie of the contract to manage and run all of BP’s enterprise applications and service desk responsibilities, but did not specify the value. The three Indian vendors, which were part of the earlier line-up of 40 information technology firms, will carry out application development and maintenance work for the British firm.
“The engagement with BP underscores our ability to help global corporations become more competitive in the current economic scenario...,” N. Chandrasekaran, chief operating officer and executive director of TCS, said in a statement.
The Indian vendors may not earn significant revenue from the deal, but it will help them gain expertise in the manufacturing domain in the European market, where they are keen to expand services, said Sabyasachi Prasad, partner with Tholons Inc., an advisory firm for offshore exploration firms.
Europe accounted for around 30% of India’s software exports of $46.3 billion in fiscal 2009. BP’s chief information officer Dana Deasy said in a statement issued by Infosys that the deal would help BP simplify and streamline processes and bring down its overall cost base.
In July, BP said it had already exceeded the $2 billion reduction in cash costs targeted for 2009 and expected a further $1 billion in savings over the rest of the year.
“Our extensive capabilities and experience in oil and gas domain will enable us to deliver significant value to the energy major’s business,” Suresh Vaswani, joint chief executive at Wipro, said in a statement.
With this, BP has reduced the number of its technology vendors from 40 to five and expects to save as much as $500 million over the next five years
Bangalore: India’s top three technology firms—Tata Consultancy Services Ltd (TCS), Infosys Technologies Ltd and Wipro Ltd—have each won part of a five-year software outsourcing contract valued at around $1.5 billion (Rs7,320 crore) from British oil and gas firm BP Plc.
IBM Corp. and Accenture Ltd are the other vendors.
With this, BP has reduced the number of its technology vendors from 40 to five and expects to save as much as $500 million over the next five years, a company spokesman said.
“Over the last 12 months, we undertook an effort to consolidate our technology vendor base and eliminated 35 of them. These five were selected for scale and ability to support us from around the world,” BP’s spokesman David Nicholas said over the phone from London. “Otherwise, with 40 vendors, we would have spent $2 billion.”
He declined to specify individual contract values.
IBM said in a statement it has won the largest pie of the contract to manage and run all of BP’s enterprise applications and service desk responsibilities, but did not specify the value. The three Indian vendors, which were part of the earlier line-up of 40 information technology firms, will carry out application development and maintenance work for the British firm.
“The engagement with BP underscores our ability to help global corporations become more competitive in the current economic scenario...,” N. Chandrasekaran, chief operating officer and executive director of TCS, said in a statement.
The Indian vendors may not earn significant revenue from the deal, but it will help them gain expertise in the manufacturing domain in the European market, where they are keen to expand services, said Sabyasachi Prasad, partner with Tholons Inc., an advisory firm for offshore exploration firms.
Europe accounted for around 30% of India’s software exports of $46.3 billion in fiscal 2009. BP’s chief information officer Dana Deasy said in a statement issued by Infosys that the deal would help BP simplify and streamline processes and bring down its overall cost base.
In July, BP said it had already exceeded the $2 billion reduction in cash costs targeted for 2009 and expected a further $1 billion in savings over the rest of the year.
“Our extensive capabilities and experience in oil and gas domain will enable us to deliver significant value to the energy major’s business,” Suresh Vaswani, joint chief executive at Wipro, said in a statement.
Tuesday, September 1, 2009
Indian IT firms explore Belgium USD 6.5 Billion Deals
Bangalore: Indian IT firms TCS, Infosys and Wipro are exploring IT offshoring and back office projects in Belgium worth $6.5 billion from firms like AXA, Dexia Bank, Belgacom, UCB (drug maker) and car insurer Allianz, reports the Economic Times.
This year, customers in Belgium will spend around $1.8 billion on infrastructure management outsourcing, $2.6 billion on application development and maintenance and about $2 billion on BPO, according to an outsourcing advisory firm Quantum Step.
"We have recently started discussions with some Indian suppliers for pure offshoring of our ERP maintenance it would be fair to assume that until last year, we were not prepared for any such initiative," confirmed an official at one of the biggest Belgian enterprises.
As a number of Indian offshoring firms are looking to hire more local European sales professionals and project consultants, it makes out that now customers only want to deal with Indian offshore experts. "Many outsourcing dialogues these days are being spearheaded by Indian offshore delivery managers, unlike in the past when some local expert would help us gain entry into an account, the CIOs are specifically asking for Indian suppliers," said a top executive at one of the Indian IT firms pursuing outsourcing contracts in continental Europe.
TCS has informed that the company's early investments in the Belgian market are now bringing dividends. "Belgium represents one of the more mature markets for us within Continental Europe. After 15 years of operations in the country, we hold a significant share of the market and are now a prime IT partner to some of the largest BEL20 companies," said AS Lakshminarayanan, Vice President and Head, Europe, TCS.
"Our strategy to invest in localised delivery centres in Europe, particularly the ones in Eindhoven and Luxembourg, fuses well with our global network delivery model," he added. The company has around 700 professionals working for Belgian customers with around 200 working onsite. InBev, AXA and Belgacom are TCS' top customers in Belgium.
"The key European markets opening up for offshoring include BeNeLux, Nordics, Germany and France. Most of the European companies are more or less first time outsourcers. Some big multinationals had offshored previously such as ABN Amro, Ikea, Nokia and Philips. However, this did not trickle down to regional customers as many of them felt that there was cultural mismatch. Also, to a large extent, Indian providers also did not focus on this market," said Sridhar Vedala, Expert, outsourcing firm Quantum Step.
BASF AG, the world's biggest chemical company, Euroclear, Europe's largest settlement firm, and Anheuser-Busch InBev, the world's biggest brewer are looking at offshore outsourcing for the first time as they seek to lower their operational costs and cope more effectively with a new fall in demand for their products and services.
This year, customers in Belgium will spend around $1.8 billion on infrastructure management outsourcing, $2.6 billion on application development and maintenance and about $2 billion on BPO, according to an outsourcing advisory firm Quantum Step.
"We have recently started discussions with some Indian suppliers for pure offshoring of our ERP maintenance it would be fair to assume that until last year, we were not prepared for any such initiative," confirmed an official at one of the biggest Belgian enterprises.
As a number of Indian offshoring firms are looking to hire more local European sales professionals and project consultants, it makes out that now customers only want to deal with Indian offshore experts. "Many outsourcing dialogues these days are being spearheaded by Indian offshore delivery managers, unlike in the past when some local expert would help us gain entry into an account, the CIOs are specifically asking for Indian suppliers," said a top executive at one of the Indian IT firms pursuing outsourcing contracts in continental Europe.
TCS has informed that the company's early investments in the Belgian market are now bringing dividends. "Belgium represents one of the more mature markets for us within Continental Europe. After 15 years of operations in the country, we hold a significant share of the market and are now a prime IT partner to some of the largest BEL20 companies," said AS Lakshminarayanan, Vice President and Head, Europe, TCS.
"Our strategy to invest in localised delivery centres in Europe, particularly the ones in Eindhoven and Luxembourg, fuses well with our global network delivery model," he added. The company has around 700 professionals working for Belgian customers with around 200 working onsite. InBev, AXA and Belgacom are TCS' top customers in Belgium.
"The key European markets opening up for offshoring include BeNeLux, Nordics, Germany and France. Most of the European companies are more or less first time outsourcers. Some big multinationals had offshored previously such as ABN Amro, Ikea, Nokia and Philips. However, this did not trickle down to regional customers as many of them felt that there was cultural mismatch. Also, to a large extent, Indian providers also did not focus on this market," said Sridhar Vedala, Expert, outsourcing firm Quantum Step.
BASF AG, the world's biggest chemical company, Euroclear, Europe's largest settlement firm, and Anheuser-Busch InBev, the world's biggest brewer are looking at offshore outsourcing for the first time as they seek to lower their operational costs and cope more effectively with a new fall in demand for their products and services.
Wednesday, August 26, 2009
Infosys, Wipro, TCS bag BP Contract
Mumbai: Infosys, Wipro and Tata Consultancy Services (TCS) have bagged IT maintenance contracts from oil and gas giant British Petroleum (BP) Plc, the Indian IT firms said in separate statements on Wednesday.
According to the companies , BP selected them after undertaking a programme to consolidate its IT vendors for application development and maintenance.
According to the companies , BP selected them after undertaking a programme to consolidate its IT vendors for application development and maintenance.
Saturday, August 22, 2009
Infosys most admired Indian company: WSJ survey
BANGALORE, INDIA: Indian IT giant Infosys Technologies has been adjudged as the most admired Indian company, ahead of Tata Consultancy Services and Bharti Airtel, according to a says a survey.
Infosys has topped the list of 10 most admired Indian companies and is followed by IT major TCS at the second position, according to the Asian 200 survey conducted by The Wall Street Journal Asia.
Telecom giant Bharti Airtel is at the third spot, engineering major Larsen & Toubro is fourth while IT firm Wipro is at the fifth position, said a PTI report.
TCS, Bharti Airtel come second and third, while Wipro is at fifth position
Others on the list are Tata Steel, Hindustan Unilever, HDFC Bank, State Bank of India and ITC. The ranking is based on the Asian 200 survey of subscribers of The Wall Street Journal Asia and other business people.
The survey takes into account factors such as financial reputation, vision, corporate reputation, quality and innovation. Infosys has also been ranked first in terms of corporate reputation, vision and quality.
When it comes to corporate reputation, TCS and Tata Steel are at the second and third spots, respectively.
As far as innovation is concerned, TCS has topped the list followed by Bharti Airtel and Infosys.
The multinational winner of the survey would be named on September 11.
http://www.ciol.com/News/News-Reports/Infosys-most-admired-Indian-company-WSJ-survey/14809123610/0/
Infosys has topped the list of 10 most admired Indian companies and is followed by IT major TCS at the second position, according to the Asian 200 survey conducted by The Wall Street Journal Asia.
Telecom giant Bharti Airtel is at the third spot, engineering major Larsen & Toubro is fourth while IT firm Wipro is at the fifth position, said a PTI report.
TCS, Bharti Airtel come second and third, while Wipro is at fifth position
Others on the list are Tata Steel, Hindustan Unilever, HDFC Bank, State Bank of India and ITC. The ranking is based on the Asian 200 survey of subscribers of The Wall Street Journal Asia and other business people.
The survey takes into account factors such as financial reputation, vision, corporate reputation, quality and innovation. Infosys has also been ranked first in terms of corporate reputation, vision and quality.
When it comes to corporate reputation, TCS and Tata Steel are at the second and third spots, respectively.
As far as innovation is concerned, TCS has topped the list followed by Bharti Airtel and Infosys.
The multinational winner of the survey would be named on September 11.
http://www.ciol.com/News/News-Reports/Infosys-most-admired-Indian-company-WSJ-survey/14809123610/0/
IT majors preparing strategy in line with revival of demand
With the first signs of recovery in the information technology (IT) sector, the three biggest IT companies — Tata Consultancy Services (TCS), Wipro Technologies and Infosys — are not only hopeful of bagging more overseas deals but have also modified their strategy to focus on near-shoring, where employees work at customer premises.
These companies are also reinforcing their product line, changing product offerings, focusing on ‘recession-proof’ sectors like pharma and healthcare, education, telecom and utilities to tide over the dip in volumes.
Wipro, for instance, is expecting a few big-ticket outsourcing deals — each valued upwards of $100 million — in the second quarter of 2009-10, in areas like IT services, consulting, remote management and business process outsourcing (BPO).
Suresh Senapaty, executive director and chief financial officer of Wipro, said, “Despite the slowdown, we expect to bag a few good deals in the second quarter, especially in the $100 million-plus range.”
Wipro had reportedly added 26 new clients in the first quarter (April-June 2009). “The total value of the new deals bagged in the first quarter works out to around $700 million, where a few are in the range of $30 million plus,” Senapaty said.
Likewise, Infosys, which posted a 17.3 per cent rise in first quarter net profit, is pursuing 12 to 15 deals worth $1 billion in the second quarter.
“We are pursuing deals worth $1 billion. The economy is gradually recovering and so we have 12-15 deals we can pursue right now. Emerging markets are a big opportunity for us, like Latin America, Europe, Japan, West Asia and Australia,” said S Gopalakrishnan, CEO and MD of Infosys.
TCS, on the other hand, is tweaking its product offerings for small and medium enterprises (SMEs).
Source:
http://www.business-standard.com/india/news/it-majors-preparing-strategy-in-linerevivaldemand/366493/
These companies are also reinforcing their product line, changing product offerings, focusing on ‘recession-proof’ sectors like pharma and healthcare, education, telecom and utilities to tide over the dip in volumes.
Wipro, for instance, is expecting a few big-ticket outsourcing deals — each valued upwards of $100 million — in the second quarter of 2009-10, in areas like IT services, consulting, remote management and business process outsourcing (BPO).
Suresh Senapaty, executive director and chief financial officer of Wipro, said, “Despite the slowdown, we expect to bag a few good deals in the second quarter, especially in the $100 million-plus range.”
Wipro had reportedly added 26 new clients in the first quarter (April-June 2009). “The total value of the new deals bagged in the first quarter works out to around $700 million, where a few are in the range of $30 million plus,” Senapaty said.
Likewise, Infosys, which posted a 17.3 per cent rise in first quarter net profit, is pursuing 12 to 15 deals worth $1 billion in the second quarter.
“We are pursuing deals worth $1 billion. The economy is gradually recovering and so we have 12-15 deals we can pursue right now. Emerging markets are a big opportunity for us, like Latin America, Europe, Japan, West Asia and Australia,” said S Gopalakrishnan, CEO and MD of Infosys.
TCS, on the other hand, is tweaking its product offerings for small and medium enterprises (SMEs).
Source:
http://www.business-standard.com/india/news/it-majors-preparing-strategy-in-linerevivaldemand/366493/
Saturday, August 1, 2009
British Telecom to cut 2,750 call center jobs in India
British telecom giant BT will transfer more than 2,000 call centre jobs from India back to the UK, chief executive Ian Livingston revealed during the firm's annual general meeting at the Barbican Centre in London.
BT will transfer at least 2,000 jobs to Britain from India, where it employs 11,000 customer service staff. However, the eventual number of job cuts in call centres will be closer to 2,750, representing half the group's 5,500 call-centre staff in India, the Times reported on Thursday.
The firm, however, insisted that its move had nothing to do with the quality of service offered in India. "This is not about customer service, as the service in our operations around the globe is of very similar standards. It is about the effective deployment of our resources. We have opportunities to bring some activities, carried out by our partners, back from outside the UK to permanent BT employees in the UK who are skilled to do this work," a company spokesperson said.
The pullout of jobs from India would be phased with no specific timescale set for the transfer of jobs. "This is part of a long-term strategy to reduce costs and the dependency on third parties globally," the spokesperson added.
Industry watchers in Bengaluru said the move would keep the local population, struggling with a deep recession, happy. Unemployment in the UK is at its highest in the last one decade and salaries have dropped - so has India's cost advantage.
Managing partner of consulting firm Browne & Mohan Dr. T.R. Madan Mohan says that while Indian firms charge about $18 per resource, in the UK charges have dropped to $22-23 per resource from $33 in December last year. "However, technology work, which requires high skills, may continue to be outsourced. BT had axed 6000 jobs last year in the UK and much of this work came to Tech Mahindra and HCL," he says.
The firm, he adds, was looking at more high-end outsourcing and may consider players such as Patni, HCL, Infosys, and Subex.
The primary hit for Indian IT services vendors - mostly the top five players - will come when low-end work contracts are not renewed next year, says engagement manager with Zinnov Karthik Ananth. A spokesperson said that by next year, approximately 4,000 less people will be contracted in India than was the case in early 2008.
"The BT Global Business Services division, which mainly offshored to APAC countries, has been a loss making unit. The rationalisation of headcount would be to cut costs and scale down operations," he says.
In May, BT had announced that it will cut 15,000 more jobs this year after it reported a pre-tax loss of £1.34bn for the 12 months till March 31.The telecom giant had cut 15,000 jobs last year.
Last year, the majority of the job cuts were in the area of indirect labour, including agency, contractors, subcontractors and offshore workers, including those based in India. The telecom giant has a global workforce of 150,000 and employs 90,000 directly in the UK.
The firm has steered clear of compulsory layoffs in Britain and hoped to cut the jobs through natural wastage and voluntary redundancies.
Source: Asian Age
BT will transfer at least 2,000 jobs to Britain from India, where it employs 11,000 customer service staff. However, the eventual number of job cuts in call centres will be closer to 2,750, representing half the group's 5,500 call-centre staff in India, the Times reported on Thursday.
The firm, however, insisted that its move had nothing to do with the quality of service offered in India. "This is not about customer service, as the service in our operations around the globe is of very similar standards. It is about the effective deployment of our resources. We have opportunities to bring some activities, carried out by our partners, back from outside the UK to permanent BT employees in the UK who are skilled to do this work," a company spokesperson said.
The pullout of jobs from India would be phased with no specific timescale set for the transfer of jobs. "This is part of a long-term strategy to reduce costs and the dependency on third parties globally," the spokesperson added.
Industry watchers in Bengaluru said the move would keep the local population, struggling with a deep recession, happy. Unemployment in the UK is at its highest in the last one decade and salaries have dropped - so has India's cost advantage.
Managing partner of consulting firm Browne & Mohan Dr. T.R. Madan Mohan says that while Indian firms charge about $18 per resource, in the UK charges have dropped to $22-23 per resource from $33 in December last year. "However, technology work, which requires high skills, may continue to be outsourced. BT had axed 6000 jobs last year in the UK and much of this work came to Tech Mahindra and HCL," he says.
The firm, he adds, was looking at more high-end outsourcing and may consider players such as Patni, HCL, Infosys, and Subex.
The primary hit for Indian IT services vendors - mostly the top five players - will come when low-end work contracts are not renewed next year, says engagement manager with Zinnov Karthik Ananth. A spokesperson said that by next year, approximately 4,000 less people will be contracted in India than was the case in early 2008.
"The BT Global Business Services division, which mainly offshored to APAC countries, has been a loss making unit. The rationalisation of headcount would be to cut costs and scale down operations," he says.
In May, BT had announced that it will cut 15,000 more jobs this year after it reported a pre-tax loss of £1.34bn for the 12 months till March 31.The telecom giant had cut 15,000 jobs last year.
Last year, the majority of the job cuts were in the area of indirect labour, including agency, contractors, subcontractors and offshore workers, including those based in India. The telecom giant has a global workforce of 150,000 and employs 90,000 directly in the UK.
The firm has steered clear of compulsory layoffs in Britain and hoped to cut the jobs through natural wastage and voluntary redundancies.
Source: Asian Age
Lower Salaries for Laid of Techies
Bangalore: Till a few months ago, IT professional T.V. George was earning Rs.70,000 per month, plus perks. But after losing his high-paying job, and being unemployed for three months, George, 31, has started giving tuitions in mathematics and physics to aspiring engineering students in his neighbourhood.
"Now, I am earning Rs.15,000 per month. It's been hard. I got married only a few months before losing my job. So, when I lost my job, I was in a difficult position. Thankfully, I had some savings. With the savings, I am paying my rent and for a few other necessities," George, who was employed with a top U.S. IT company, told IANS.
"After losing my job, I tried my best to get a new job. But I remained unlucky. So to help run my home, I decided to give coaching classes to aspiring engineering students."
George is not alone. Recession has hit the IT sector in Bangalore, with scores of techies losing their jobs. Some have been forced to take up low-paying jobs as they wait to bounce back when the recession ends.
Dipankar Dutta, 27, working with an Indian IT company as software engineer, lost his job almost eight months ago.
Today he has a job, but as a content writer in a tech firm.
"Thankfully, writing has been my forte. So, I landed this job of a content writer. Otherwise I would have been in a soup. Since I cannot afford to stay in Bangalore without a job, I compromised and settled for the new job with a much lower pay package," said Dutta.
Scores of IT and ITES professionals in Bangalore have lost their jobs in recent times, an effect of the global economic meltdown. But there is no precise count of the numbers.
According to the latest employment and business outlook report by Bangalore-based staffing firm Teamlease, at 23 percent the attrition rate in this city is higher than in any other city in India.
The report was based on interviews with HR heads, CEOs and senior executives of 495 companies in Bangalore, Chennai, Hyderabad, Kolkata and Pune.
"The city accounted for the highest attrition rate. IT accounts for over 80 percent of the city's total labour pool. The attrition rate was 23 percent in the last quarter, against the previous quarter's 16 percent. Much of the attrition could be involuntary attrition (or layoffs)," Teamlease General Manager Surabhi Mathur-Gandhi said.
India's Silicon Valley has seen thousands of people getting pink slips in recent months. And many more are under the threat of losing their jobs.
"It's painful to lose your job, in today's expensive world. Those who have lost their jobs are desperate now, thus they are settling for low paying jobs," Karthik Shekhar, General Secretary of UNITES-Professionals, an unrecognised union of IT/Call Centre/BPO employees, told IANS.
"Every day we meet young men and women who have lost their IT jobs recently. All they want is a job. But getting a job in the IT sector is very difficult. So, they have no option but to settle for jobs outside their fields and that too with low paying packages," Shekhar added.
It's encouraging that today's youths are ready to move ahead in their lives. Instead of waiting for the economy to revive, IT professionals have started exploring other fields and this is a positive sign," said B.N. Gangadhar, professor of psychiatry at the National Institute of Mental Health and Neuro Sciences (Nimhans), Bangalore.
Mohammed Khan, a trained software engineer, told IANS: "Initially it was difficult, but I am happy with my choice. After losing my job with an IT firm, now I am working as a sales executive. I am hoping the economy will recover soon and all the techies who have lost their jobs will get new jobs in their field."
Source: IANS
"Now, I am earning Rs.15,000 per month. It's been hard. I got married only a few months before losing my job. So, when I lost my job, I was in a difficult position. Thankfully, I had some savings. With the savings, I am paying my rent and for a few other necessities," George, who was employed with a top U.S. IT company, told IANS.
"After losing my job, I tried my best to get a new job. But I remained unlucky. So to help run my home, I decided to give coaching classes to aspiring engineering students."
George is not alone. Recession has hit the IT sector in Bangalore, with scores of techies losing their jobs. Some have been forced to take up low-paying jobs as they wait to bounce back when the recession ends.
Dipankar Dutta, 27, working with an Indian IT company as software engineer, lost his job almost eight months ago.
Today he has a job, but as a content writer in a tech firm.
"Thankfully, writing has been my forte. So, I landed this job of a content writer. Otherwise I would have been in a soup. Since I cannot afford to stay in Bangalore without a job, I compromised and settled for the new job with a much lower pay package," said Dutta.
Scores of IT and ITES professionals in Bangalore have lost their jobs in recent times, an effect of the global economic meltdown. But there is no precise count of the numbers.
According to the latest employment and business outlook report by Bangalore-based staffing firm Teamlease, at 23 percent the attrition rate in this city is higher than in any other city in India.
The report was based on interviews with HR heads, CEOs and senior executives of 495 companies in Bangalore, Chennai, Hyderabad, Kolkata and Pune.
"The city accounted for the highest attrition rate. IT accounts for over 80 percent of the city's total labour pool. The attrition rate was 23 percent in the last quarter, against the previous quarter's 16 percent. Much of the attrition could be involuntary attrition (or layoffs)," Teamlease General Manager Surabhi Mathur-Gandhi said.
India's Silicon Valley has seen thousands of people getting pink slips in recent months. And many more are under the threat of losing their jobs.
"It's painful to lose your job, in today's expensive world. Those who have lost their jobs are desperate now, thus they are settling for low paying jobs," Karthik Shekhar, General Secretary of UNITES-Professionals, an unrecognised union of IT/Call Centre/BPO employees, told IANS.
"Every day we meet young men and women who have lost their IT jobs recently. All they want is a job. But getting a job in the IT sector is very difficult. So, they have no option but to settle for jobs outside their fields and that too with low paying packages," Shekhar added.
It's encouraging that today's youths are ready to move ahead in their lives. Instead of waiting for the economy to revive, IT professionals have started exploring other fields and this is a positive sign," said B.N. Gangadhar, professor of psychiatry at the National Institute of Mental Health and Neuro Sciences (Nimhans), Bangalore.
Mohammed Khan, a trained software engineer, told IANS: "Initially it was difficult, but I am happy with my choice. After losing my job with an IT firm, now I am working as a sales executive. I am hoping the economy will recover soon and all the techies who have lost their jobs will get new jobs in their field."
Source: IANS
Saturday, May 30, 2009
Infy: 1500 Resumes in Job Market
Bangalore: The slowdown has proved to be a hard ground for the survival of the employees in Infosys, who have resorted to consultancies to seek new jobs. More than 1500 employees of Infosys have filed their resumes on various placement firms, in the last two months.
"Around 1300 resumes have been posted by Infosys employees, of which many of them are in the level of project managers," said Kris Lakshmikanth, Founder CEO and Managing Director, Head Hunters. HRM Consultants, a consultancy firm have received around 60 resumes. "During the last few years, resumes from Infosys were very rare, but this year we have received quite a few," said G.S.Lakshmiprasad of HRM Consultants.
There are other placement centers like HROne, Magnum Consultants and CR Executive Search, which saw many Infosys employees posting their resumes. Adding on to the insecurity, Infosys has laid off around 2100 people owing to non-performance.
Commenting on the sudden layoff, Ruchi Gopal of Magnum Consultants said, "Companies will see their balance sheet, so, handing pink slips to the employees is fair, if they were given proper notice period prior to the layoff."
However, the layoff happened without any prior notice to the employees. According to an employee who has been fired, they were called for a meeting with HR managers, and were immediately given two options either to resign voluntarily or get terminated. "
The company is especially, getting rid of the project managers. If a project manager had been handling 25 people, now he will have to manage 50 people as they are reducing the bulk," said Lakshmikanth.
Wednesday, May 6, 2009
Obama's move to end tax breaks for US firms who outsource
New Delhi: India Inc believes the move by the Barack Obama administration to reduce tax breaks for US firms that ship jobs overseas will hit American companies more than impact on the Indian outsourcing industry.
"It's a more US-US issue rather than one aimed at stopping outsourcing, or off-shoring, or anything to do with India," said Som Mittal, president of the National Association of Software and Service Companies (Nasscom), a representative boddy for the industry.
"If you look at Indian companies operating in the US, or elsewhere, they work there and pay taxes there. Hence, it is not about stopping outsourcing, or off-shoring, but just to collect taxes," Mittal told IANS.
His comments came after President Barack Obama said Monday that the current US tax system gave US-based multinationals that shipped jobs to places like India an unfair advantage over other domestic rivals and wanted corrective steps.
"It's a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York," Obama said, explaining why he intended to close tax loopholes and crackdown on overseas tax havens.
"I want to see our companies remain the most competitive in the world. But the way to make sure that happens is not to reward our companies for moving jobs off our shores or transferring profits to overseas tax havens."
According to a McKinsey-Nasscom study, the Indian software and outsourcing industry employs some two million people, earning total revenues worth $52 billion, of which nearly $48 billion comes from exports.
The Confederation of Indian Industry also felt that the remarks were more in the nature of posturing and that it was not intended at curbing outsourcing of work by US firms to Indian companies.
"It's an internal issue. It will only reduce their competitiveness," said Hari Bhartia, vice president of the chamber. "It is a populist posture. Perhaps his (Obama's) intention was not the same. However, it sends a wrong message."
According to Girish Vanvari, a tax expert and executive director with accounting and consultancy major KPMG, the Obama administration's move was aimed at keeping American money within the country.
"I don't think this will happen. America is one of the largest free markets in the world - otherwise, you will have companies paying as much as 70 percent of their revenues as taxes," Vanvari told IANS.
Nasscom maintained that large US companies had subsidiaries across the world and that more than 50 percent of their revenues were coming from outside the US. The US move was to ensure that the large profits kept outside are also brought into the tax net.
"President Obama is intending to collect those taxes to create more jobs in US," said the industry lobby that sent a delegation to the US last month to meet lawmakers, urging them to refrain from protectionist measures.
Infosys Technologies, India's second largest software and outsourcing company, also felt that the US proposal was aimed at closing corporate tax loopholes and crack down on overseas tax havens.
"We do not believe that it has anything to do with IT outsourcing done by US corporations," a spokesperson for the company said.
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