Bangalore: About one quarter of the top Business Process Outsourcing (BPO) operatives will not exist as separate entities by 2012. The rise of new vendors, acquisitions and market exits will change the BPO provider landscape in the coming years. The enterprises should look for warning signs while evaluating BPO vendors to lessen risks, states a recent report by analyst firm Gartner.
"As providers are exposed to the economic crisis, loss making contracts and an inability to adapt to standardized delivery models, many will struggle to survive in their current form. Some will be acquired and some will exit the market completely to be replaced by dynamic new players delivering BPO as automated, utility services," said Robert H. Brown, Research Vice President, Gartner.
The report "Assess and Manage Vendor Risks to Protect Your Business" has identified six key points to watch for, that might announce the predicted market shakeout. The report also identified the BPO vendors which may be the candidates for acquisition or for instant market exit.
The report suggests to look out for unprofitable portfolio BPO deals, as some BPO providers are carrying unprofitable contract portfolios, largely stemming from too much, too soon pursuit of the deals, without much thought as to how to transition them to a standardized, rationalized, profitable state of ongoing operations.
The enterprises have also been asked to gain insight into the vendor's track record of winning new businesses, particularly over a sustained period of two to three years. The report suggests that the loss of a major customer can be a leading indicator of trouble, especially if the remaining portfolio of business is small. The report suggested that some heavily leveraged vendors may be unable to obtain the necessary investment needed to bid on a business opportunity despite of attractive propositions.
The financial services sector accounts for about one-third of the total BPO market globally and provides significant amount of BPO revenue. The banking sector was the first to be exposed to the credit crunch resulting to financial meltdown. The mergers and acquisitions saw both current and prospective buyers of BPO getting out of play and this exposure could still leave many BPO providers vulnerable for long term.
Also, as per Gartner's previous BPO survey report, cancellation rates rose in 2008 as compared to 2007 data. On this basis, the report advises buyers to build exit strategies into contracts and develop contingencies for contract termination, especially before signing the deal.
Showing posts with label bangalore. Show all posts
Showing posts with label bangalore. Show all posts
Thursday, October 1, 2009
Saturday, August 1, 2009
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
Sunday, March 29, 2009
Expats Leave bangalore as recession hits
Bangalore: As companies look to cut costs in order to offset recession, many expats are being asked to leave Bangalore, which is home to around 1,000 expat professionals, placed mainly in the IT, financial services and manufacturing verticals, serving as overseers, delivery heads, engagement heads and business account heads, reported The Times of India.
While some expats have already left, many others are busy placing their CVs with leading headhunters in India and overseas as they are facing the pressure to leave, say HR professionals. Many 5-star hotels in the city have seen a drop in their long-staying expat clientele, mainly on account of them leaving the city.
Naresh Malik, who is associated with a Mumbai-based CXO search firm, says, "With each offshoring contract that involves 400-500 people, clients normally depute expats at vendor locations to oversee the delivery."Cost is the reason for this exodus. "Companies are eager to cut cost, and expats are really a big cost," says Romi Malhotra, CEO of The Dominon, a top-leadership crafting firm, and former MD of Dell India.
One expat salary, he says, is almost three times that of an Indian salary. "Expat perks and benefits are also very high. One in five expats is under pressure to look out for other job options or move back," he adds.When the aviation boom had created a pilot shortage, many expat pilots had been hired. But now, airlines have been sacking expats due to the pressure imposed by the withdrawal of flights from many routes. Domestic pilots have been demanding that expats should be first asked to go, given their higher salaries.
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