ThinkingStreet - Business Strategy for the Flat World

Symphony Services Expanding Indian Operations

Rajashree — Fri, 02 May 2008 08:30:00 +0000

Symphony Services is set to further expand its Indian operations with the addition of about 1,000 people during the year with thrust on embedded systems design business, reports The Hindu BusinessLine.
The technology product development services provider is scouting for another possible location for a development centre which could potentially be in Hyderabad. The company is headquartered in Palo Alto (California) with centres in Bangalore, Pune and Mumbai.
The President of Symphony Services, Mr Amitava Roy, told Business Line that after the acquisition of the Silicon Valley-based Optimal Engineering, the company has expanded the scope of services in embedded systems design.
The company, which has revenues of over $100 million in 2006, is expecting a growth of over 45 per cent this year.

Five Indian Cos In Top 10 Global Service Providers List

Rajashree — Fri, 02 May 2008 07:30:00 +0000

US-based companies, Accenture and IBM, have seized the top two spots of the world’s best outsourcing service providers. But Indian software majors dominate the list - there are five of them among the top 10.
Infosys made it to the top three behind Accenture and IBM in the list. The Bangalore-based software major was on the Leaders List representing firms with annual sales of $60 million or more in the annual expert ranking of the world’s best outsourcing service providers compiled by the International Association of Outsourcing Professionals (IAOP).
Other Indian companies are Tata Consultancy Services, Wipro, Genpact and Tech Mahindra. TCS moved up 20 places to finish sixth this year. There are 20 Indian companies in the list.

Now WNS Forays Into Platform-Based BPO

Rajashree — Fri, 02 May 2008 06:30:00 +0000

The Economic Times reports that India’s second-largest third party BPO firm, WNS Global Services, has decided to carve out a separate group from its existing services called the ‘business technology group’ and has moved its chief information officer, Atul Davda, to head the effort.

The move will represent the first serious foray by a pure-play BPO firm into ‘platform-based BPO services’, business processes that are run on a unified technology platform owned by the vendor rather than on separate client platforms.

The subject of platform-based BPO has been slightly controversial with IT firms favouring it because of their natural bias towards building and owning technology and a few pure-play BPO firms opposing it.

Indian IT Exports To Mideast Will Grow 30%: ESC

Rajashree — Wed, 30 Apr 2008 08:30:00 +0000

India’s IT exports to the Middle East are expected to cross $1.30 billion in 2008, an increase of 30% compared to $1 billion last year, Electronics and Computer Software Export Promotion Council of India (ESC) said.

According to ESC, an autonomous body under the Indian Ministry of Communications and IT, Indian IT exports are growing at more than 30% annually and are expected to cross $50 billion this year and touch $100 billion by 2012.

“IT exports from India to the Middle East, particularly to the UAE, have increased substantially in recent years. We see huge potential for further growth as ESC is devising new strategies to expand its market-share in the region,” ESC regional director for the Middle East and UAE Kamal Vachani said.

Firstsource Net Dips 40%

Rajashree — Wed, 30 Apr 2008 07:30:00 +0000

City-based BPO firm Firstsource Solutions has recorded a 40 per cent dip in net profit for the fourth quarter ended March 2008 to Rs 21 crore against Rs 34.9 crore recorded in the quarter a year ago.
Due to a loss on foreign currency loan and an exchange rate related ‘mark-to-market’ loss on the foreign currency convertible bonds (FCCB) that Firstsource had raised in November last year, the company took a hit of about Rs 19.5 crore.Net revenues were up by 35.4 per cent to Rs 375.6 crore (Rs 277.3 crore)
For the year ended March 2008, it reported a 35.3-per cent rise in net profit to Rs 131.5 crore from Rs 97.25 crore in the same period a year ago.

Govt Extends Tax Concessions On STPI By A Year

Rajashree — Wed, 30 Apr 2008 06:30:00 +0000

In a much-awaited relief for the IT industry, software companies can now enjoy benefits of the Software Technology Parks of India (STPI) scheme for another year. The government has extended the tax concessions under Section 10A of the Income Tax Act to March 2010.
The scheme was to expire in March 2009 under the sunset clause provided in the scheme. On an average, IT companies would get a revenue benefit of at least 5-7% - on the effective tax rate - because of this extension. Normally, companies have about 50% business located in technology parks, export revenue from which is fully tax-exempt.
The move will benefit smaller companies more because SEZs have remained off-limits for them.

3i Infotech Buys Regulus For Rs 320 Cr

Rajashree — Wed, 30 Apr 2008 05:30:00 +0000

IT product and services company 3i Infotech has acquired the US-based Regulus Group for $80 million (about Rs 320 crore). An additional consideration of up to $20 million (Rs 80 crore) has been provided based on an earn-out linked to performance parameters.
3i Infotech has acquired close to 25 companies since 2000. Out of these, 10 were acquired in the last financial year itself. The company in total has acquired 35 firms so far.
Regulus reported revenues of $148 million (about Rs 590 crore) for the 12 months ended December 2007. The company, headquartered in Napa, California, provides remittance services and document (bills) processing services in the US through a network of ten centres employing close to 1,300 people.

Steria Announces The Opening Of A New Centre Of Excellence For Java Agile Development In Luxembourg

Rajashree — Tue, 29 Apr 2008 09:30:00 +0000

The Steria Centre of Excellence for Java Agile Development opened on April 28, 2008 in the presence of M. le Ministre de la Justice, Ministre du Trésor et du Budget, Sir Luc Frieden and his Excellency the ambassador of France, Sir Charles-Henri d’Aragon.
The purpose of this Java Agile Development Centre is to reach excellence in the development of high quality J2EE applications. By capitalising know-how and industrialisation of the Java development process, this excellence centre will provide to customers a high level service with high reactivity and mission critical capacities in the area of software implementation.
The target of Steria is to allow the Customer to benefit from this proven industrialised infrastructure and know-how in their development programmes.

TCS In Deal With UK-Based Scottish Water

Rajashree — Tue, 29 Apr 2008 08:30:00 +0000

Tata Consultancy Services (TCS) has entered into an eight-year deal worth £60 million (about Rs 478 crore) to provide ‘end-to-end’ IT applications services to UK-based water utility firm, Scottish Water.
The outsourcing engagement will enable Scottish Water to save a minimum of £8 m (about Rs 64 crore) in operating expenditure alone over the next 8 years, according to a news release from TCS.
TCS has been selected as the only partner for services such as application management and support, strategic enterprise information, business intelligence and integration services. TCS has also been selected as one of five partners to participate in the development framework for enterprise package implementations.

Tech Mahindra Ties Up With US Company

Rajashree — Tue, 29 Apr 2008 07:30:00 +0000

IT Services company Tech Mahindra has furthered its security consulting practice by partnering with Veracode, a US-based technology start-up that provides on-demand security testing platform on software as a service model.
With the partnership, Tech Mahindra aims to offer security consulting services to customers in the enterprise market, apart from telecom which is its traditional stronghold.
The company aims to corner an additional $6 million in revenue in the fiscal 2008-09 with the help of this partnership. The company also aims to double the headcount of its security consultants to 500 by the end of the current fiscal.

Mindtree, Satyam Bag ArcelorMittal Contract

Rajashree — Tue, 29 Apr 2008 06:30:00 +0000

Mindtree Consulting and Satyam Computer Services have together won a three-year IT outsourcing deal from ArcelorMittal, the world’s largest steel making company. The contract is a part of the steel giant’s efforts to consolidate its western European IT work.
About 70 per cent of these sub-contracted activities will be carried out by the two Indian firms, ArcelorMittal said today. The overall deal size for the partnership is around $50 million (Rs 200 crore).
Mindtree, which has bagged a majority share of the contract, will work in partnership with European Sopra Group, an incumbent provider to ArcelorMittal. It will consolidate current sub-contracted activities with the objective to increase cost efficiency, flexibility and service levels.

Patni Shows The Way With Actuarial Strategy

Rajashree — Mon, 28 Apr 2008 07:30:00 +0000

News published at Livemint reports that if Patni was going to handle something like actuarial work-meaning evaluating whether or not a pension fund has enough assets to pay off promised benefits, and calculating prices and payouts for insurance policies-it would have to break it down into a process.

Its strategy is significant because it represents how BPO firms are moving into the more lucrative knowledge process outsourcing, or KPO-even amid rising salaries and a talent crunch. It also reflects a new role for clients, often based in the US and Europe, as mentors to industries that are new and skill-intensive for Indians.

TCS Plans Abu Dhabi, Egypt And Oman Centres

Rajashree — Mon, 28 Apr 2008 06:30:00 +0000

Tata Consultancy Services (TCS), India’s largest IT-services provider, has announced that it will open centres in Egypt, Abu Dhabi and Oman to focus more on emerging markets, especially Middle East and North Africa (Mena), owing to the sub-prime crisis and recession tendencies in the US, its main market.
“Mena has been active in the last couple of years as the infrastructure, energy, utility and alternative sources of energy are showing strong growth and there are robust opportunities for further growth,” S. Ramadorai, chief executive officer and managing director of TCS, told Gulf News in an exclusive interview.
The company now has centres in Dubai, Riyadh, North Africa, Morocco and Bahrain in the Mena.

Wipro Logs On To LPO Services

Rajashree — Mon, 28 Apr 2008 04:30:00 +0000

The Economic Times reports that India’s third-largest software exporter, Wipro, has started offering legal process outsourcing (LPO) services as part of the knowledge process outsourcing (KPO) services business headed by former banker and Wipro BPO senior VP Ramit Sethi.

The focus of the LPO will be to offer services such as patents and contract management rather than paralegal services and litigation support, where the clientele are mostly law firms.

“The objective is to provide end-to-end services catering to the same global customer. LPO becomes a logical extension given the cost pressures that clients are facing now. We find that there is a very healthy demand for the services”, Mr Sethi said.

LogicaCMG Reveals Turnaround Plan But Market Remains Skeptical

Rajashree — Fri, 25 Apr 2008 07:30:00 +0000

Forbes reports that LogicaCMG PLC. unveiled a 110 million pound restructuring plan designed to revitalise the ailing IT services company, but the 80 million pound cost savings forecast through job cuts and the expansion of offshore operations didn’t go far enough for some analysts who are concerned about execution risk and a tightening IT services market.
Logica’s new chief executive Andy Green, who joined the group in January from telecoms giant BT Group PLC., raised a four point plan designed to accelerate growth, increase offshoring, integrate the group and reduce overhead costs.
Logica said in its update today that it will remain well below its 2.65x net debt/EBITDA banking covenants despite these restructuring costs.
The plan failed to convince the market and shares were down 3.49 percent or 4,0 pence at 110.750 pence at 2:05 p.m.

Infosys, Wipro Commit Rs 500 Cr Each In West Bengal

Rajashree — Fri, 25 Apr 2008 06:30:00 +0000

IT majors Infosys Technologies Ltd and Wipro on Thursday committed investments of Rs 500 crore each for setting up development centres near this metropolis.

Both the facilities would come up on 90 acres earmarked in the 1,200-acre IT city which would come up at Rajarhat, West Bengal IT minister Debesh Das told reporters here.

While it would be the first development centre for Infosys in the state, Wipro already has a facility - an IT special economic zone at the Salt Lake electronics complex.

The IT city would be promoted by a joint venture company floated between Akash Nirman and Webel. While 600 acres would be reserved for IT related infrastructure, the balance would be earmarked for IT companies.

Educomp Profits Surge 145%

Rajashree — Thu, 24 Apr 2008 09:30:00 +0000

Educomp Solutions Ltd, an e-learning service provider has registered a 145 per cent rise in its net profit at Rs 31.46 crore for the quarter ended March 31, 2007 as against Rs 13. 1 crore a year ago.
The stand-alone total revenue has increased to Rs 119.53 crore for the quarter ended March 31, from Rs 51.86 crore in the year-ago period.
For the year ended March 31, Educomp posted a net profit of Rs 70.06 crore, against Rs 28.58 crore in the period under review last fiscal. Total revenue of the company increased to Rs 276.92 crore for the year ended March 31, from Rs 112.17 crore a year ago.

Quintegra Sees FY08 Topline At $100 Million

Rajashree — Thu, 24 Apr 2008 08:30:00 +0000

Business-standard reports that IT products and services company Quintegra Solutions Ltd expects a topline of $100 million (Rs 400 crore) in the financial year ended March 31, 2008 from Rs 76 crore in FY07. Shankarraman Vaidyanathan, chairman and managing director, Quintegra Solutions, said that the company would achieve organic growth at a 50 per cent peg over the next five years, coupled with a aggressive inorganic growth strategy for Europe.
After the acquisition of US-based PA Consultancy last year, the company achieved EBITDA margins of about 10 per cent, in line with its guidance for 2007-08. Estimated trailing earning per share at the end of financial year 2008 was Rs 14, up from about Rs 3, last year, Vaidyanathan said.

Realty Bites Tech Hubs In Bangalore, Chennai

Rajashree — Thu, 24 Apr 2008 07:30:00 +0000

The stock of unoccupied properties with real estate developers in the main technology hubs of Bangalore and Chennai is mounting and indications are that their problems will only get worse as software companies head towards greener pastures.

In Bangalore’s Whitefield suburb, once a magnet for IT firms, supply outstripped absorption by 300,000 sq ft in 2007 and about 8% of the developed area remained vacant, data from real estate consultancy Cushman & Wakefield (C&W) show. Prices are stagnating and the situation is deteriorating. In the first three months of 2008, the demand-supply mismatch was more than a million sq ft.

The silver lining for property developers could be the interest from start-ups and mid-sized firms as rentals fall. Nearly a third of the transactions in both the OMR cluster and Whitefield involved small- or mid-sized firms.

Spanco Close To Winning Rs 200 Cr Govt Contract

Rajashree — Thu, 24 Apr 2008 06:30:00 +0000

After bagging the Rs 140-crore deal to set up a state wide area network (SWAN) for the Maharashtra government, Spanco Telesystems and Solutions is close to winning a contract worth Rs 200 crore from Common Services Centres (CSCs).
Under the contract, the company will have to help set up close to 2,100 retail service shops, where business-to-business (B2B) and business-to-customer (B2C) services will be offered.
If Spanco bags the deal, it will have to roll out the operations in the next 18 months. The total contract period for the project is five years. The company is expecting a business of Rs 750-800 crore annually from the sector.