Outsourcing Newsletter - April 2nd

8/14/2019 Outsourcing Newsletter - April 2nd

1/15

Offshoring & outsourcing newsletter- April, 2008

Offshoring and Outsourcing market intelligence newsletter

(April 2nd, 2008)

Recent news, upcoming events, competitor news, analysis, facts and trivia about offshoring and outsourcing

industry

[email protected]

www.coreadvisor.com/globalwise

RECENT NEWS ARTICLES(click on the link to go the article)

1. Outsource Partners International Opens Office inDelhi, India to Support Research & Analytics

Outsourcing

2. KPMG signs BT with 62m five-year outsourcingcontract

3. GE withdraws nominees from Genpact board,may hasten exit

4. Equinitis India move sparks security fears

5. Change in employee demographics createsretention problems in Philippines firms

6. HCL Techs infrastructure deal with Bear Stearns

in trouble

7. Financial Services captives stop/slow down hiringin India

8. Indian offshoring firms raise rates; costs oftenhidden

9. Philippines call centers reel from worlds highestturnover

10.Infotech slowdown bites real estate hard

11.HP Beefs Up The Capabilities Of Big OutsourcingBusiness

12.Essar`s Aegis BPO acquires AOL arm

13.Contract to give TCS revenue boost in long term

14.SAP faces $100m fraud claim from WasteManagement Inc

15.Shell signs $4 billion outsourcing deal with AT&T,EDS and T-Systems news

16.IIM-A student bags highest salary package($360K)

Upcoming outsourcing and offshoring

events for April

April 7th 9th - $$$

IACCM Americas conference Phoenix, AZ

April 8th - $$

Outsourcing Webinar Destination Philippines

April 16th - 17th $$$$

HRO World conference, New York

April 22nd - $$

IDC Outsourcing conference, Madrid, Spain

April 21st 22nd - $$

TPI Sourcing conference Chicago, IL

April 23rd - $$

Baker and Mckenzie outsourcing seminar - NY

April 24th - $$

IDC Outsourcing conference, Barcelona, Spain

Market trends

1
mailto:[email protected]:[email protected]


2/15


Bear Stearns deal with JP Morgan has had adirect impact on two large vendors in India HCL for the infrastructure deal and Satyam forIT development.

Financial services still continue to go slow onoffshoring decision process and IT vendorscontinue to look at innovative ways to reducecost of operations offshore

Slow down in campus hiring in India with ITfirms and a number of candidates continue tohave extended joining dates. Hiring slowingdown in IT captives

Limited M&A activity in this period. Firms prefer

to wait out the downturn. Smaller acquisition inthe ERP package implementation at reducedvaluations.

Pictures from India

Gurgaon: 1992

Gurgaon: 2007

Mostly densely populated city in the world

Mumbai: 29,650 people per square kilometer

People waiting at a local train station in rush hour

Leela Palace Hotel - Bangalore

Rental property rates in Bangalore May 2007

2


3/15


Interesting Links:

Global Services Media news:

http://www.globalservicesmedia.com/content

/index.asp

BPO opportunities in South Africa:

http://www.southafrica.info/doing_business/inve

stment/oppurtunities/bpo-overview.htm

DETAILED NEWSARTICLES:

Outsource Partners International OpensOffice in Delhi, India to Support Research &Analytics Outsourcing

SOURCE: Press ReleaseDATE: March 25th, 2008

Outsource Partners International, Inc. (OPI), a leadingprovider of finance, accounting & tax business process

outsourcing (BPO) and related services, todayannounced the growth of its business with the opening ofa Delhi, India service center. The service center willhouse 200 professional staff dedicated to the delivery ofhigh-end, finance related research and analytics (R&A)outsourcing.

This expansion to Delhi-Gurgaons Unitech Cyber Cityrepresents a strategic opportunity for OPI to strengthenits R&A services. The area is known for its abundance ofwell qualified and experienced research professionals,and this location affords OPI the ability to recruit andretain staff with financial research expertise across arange of industries.

OPIs R&A offerings are a natural extension of its financeand accounting BPO services. Similar in its approach toBPO, OPI offers fully customized knowledge processoutsourcing services to its global client base. OPIs R&Aofferings include:

Investment Research

Financial Data Modeling

Business Research & Analytics

Market Research & Analytics

Procurement & Strategy Support

Intellectual Property Research & Litigation

Support

Kishore Mirchandani, President of Outsource PartnersInternational said, The Delhi-Gurgaon area has grown tobe the epicenter of Indias knowledge processoutsourcing industry. Our new service center allows usthe proximity to ensure access to talented R&Aprofessionals, to nurture relationships with leadingresearch partners and to best maintain pace with therapidly growing industry.

Mr. Mirchandani goes on to say, OPIs R&A offeringshave been developing for some time, driven by frequentclient requests for advanced data modeling, marketvaluations and assorted business research. With the

opening of our new Delhi service center, OPI now standspoised with the requisite bandwidth and focused skill-setto meet the growing demand for delivery of high-end,custom research and analytics.

KPMG signs BT with 62m five-yearoutsourcing contract

SOURCE: ComputerWeeklyDATE: March 31st, 2008

ARTICLE

KPMG is to outsource a significant chunk of its ITmanagement to BT in a deal worth 62m over five years.If successful the contract, in the UK and Germany, maybe extended to other countries in which KPMG hasoffices.

No announcement has been made as to how this willaffect jobs.

KPMG said the deal would deliver significant operatingcost savings. A statement from BT Global Services CEOTim Smart suggested that IT is increasingly being seenas a utility, rather than a strategic tool. "Our clients areincreasingly looking to us to run their non-core business

processes and assets," he said.

BT will run services such as the management andrefreshment of both local and wide area networks,integrating KPMG's Microsoft Office CommunicationsServer (OCS) platform with its Cisco IP Telephony,management of video and audio conferencing andmanagement of fixed voice and Time-DivisionMultiplexing (TDM) telephony.

3
http://www.globalservicesmedia.com/content/index.asphttp://www.globalservicesmedia.com/content/index.asphttp://www.southafrica.info/doing_business/investment/oppurtunities/bpo-overview.htmhttp://www.southafrica.info/doing_business/investment/oppurtunities/bpo-overview.htmhttp://www.computerweekly.com/Articles/2008/03/31/230053/kpmg-signs-bt-with-62m-five-year-outsourcing-contract.htmhttp://www.globalservicesmedia.com/content/index.asphttp://www.globalservicesmedia.com/content/index.asphttp://www.southafrica.info/doing_business/investment/oppurtunities/bpo-overview.htmhttp://www.southafrica.info/doing_business/investment/oppurtunities/bpo-overview.htmhttp://www.computerweekly.com/Articles/2008/03/31/230053/kpmg-signs-bt-with-62m-five-year-outsourcing-contract.htm


4/15


Central to this contract will be an obligation for BT todeliver a fully converged, IP-based, networked telephonyinfrastructure on time. This will then allow KPMG officesin other countries to follow suit and outsource theirservices. Initially, the agreement will be limited to the UKand Germany.

This is an ambitious outsourcing programme, admittedBryan Clark, the KPMG partner leading the IT

infrastructure consolidation. He remained confident that itcould bring about cost savings while improving service toclients.

He also predicted the deal would help KPMG's futureexpansion. "Having a consistent infrastructure platformand service model will help the integration of new KPMGfirms joining our newly created European firm," he said.

Clark said he was happy with BT's track record as anoutsourcing partner.

"BT's deep expertise in network and IT services andexperience in managing complex global contracts werekey factors in making this investment decision."

BT's Smart concluded: "This deal demonstrates theexpansion of BT's partnering approach in Europe andglobally. With employees working across multiple sitesacross Europe including thousands in the UK andGermany, KPMG needs a fast and flexiblecommunications network. Meeting these needs is ourprimary focus."

GE withdraws nominees from Genpact

board, may hasten exit

SOURCE: EconomicTimesDATE: March 29th, 2008

ARTICLE

Corporate conglomerate GE has moved out of the boardof Genpact, Indias largest BPO firm that started out as aGE back-office 10 years ago. It has also brought forwardby nine months the period till which it is required to hold a

minimum of Genpact shares.

While these moves seem to point towards plans of anearly exit from the NYSE-listed BPO firm, GE hasextended its client relationship with Genpact. The BPOfirms biggest client has extended its master servicesagreement (MSA), guaranteeing a minimum annualvolume with it, till December 2014.

The two GE nominees on Genpact board, Gary Reinerand Ferdinando Beccalli-Falco, have resigned, following

an amendment in the BPO firms shareholders pact bywhich GE gave up board representation. GE, which isrequired to hold a minimum of 26.74 million Genpactshares till December 2009, will now have to hold theshares till March 20, 2009.

GE had, in December 2007, sold 8 million shares inGenpact for about $100 million to an affiliate of a limitedpartner of another Genpact shareholder. GE now holds

39.94 million shares or 18.8% in Genpact.

The changes announced today will allow GE additionalflexibility in managing its equity portfolio. In the event ofany future sales of Genpact shares by us, we expect tomake them through managed offerings with Genpactsother principal shareholders, or otherwise in an orderlyfashion, said Ron Herman, CEO of GE CommercialFinance- Equity.

Analysts said the move was in line with similar stepstaken by GE earlier to pare down its stake. That GEdoes not want to run the operations (of Genpact) wasalso clear when they first divested their stake. So it wasfairly obvious that at some point they would look at

exiting the venture, said Forrester India head SudinApte.

The two former GE nominees on Genpacts board willnow join a new Commercial Council created by Genpact.The Commercial Council will build upon Genpactsunique and long-standing relationship with GE andprovide a senior level forum for GE and Genpact to meetperiodically for discussion of topics ranging fromperformance feedback, future avenues for Genpact togrow GE business, GEs specific business goals and howGenpact can help them achieve those goals to anexchange of ideas and advice, the BPO firm said in itsSEC filing.

On the MSA extension, Genpact president & CEOPramod Bhasin said, We are excited by this vote ofconfidence from our biggest client. GE chief financialofficer Keith Sherin said, Given the value we place onGenpacts service offerings, we expect our MSArevenues with Genpact to grow in 2008.

Genpact, a GE captive till 2004, got listed on NYSE inAugust 2007, raising $494.11 million. It sold 17% stake tothe public, of which half was offloaded by GE and PEinvestors General Atlantic and Oak Hill. The remainingwas through issue of fresh shares.

Genpacts net proceeds from the IPO were about $247million. While GE got about $95 million for its stakedilution from 28% to 23%, General Atlantic and Oak Hills8% stake dilution fetched them $152 million. GE had solda 62.63% stake in the BPO firm to the two PE players in2005 for about $500 million.

Equinitis India move sparks security fears

SOURCE: ThisisMoney.co.ukDATE: March 31st, 2008

4
http://economictimes.indiatimes.com/Infotech/ITeS/GE_withdraws_nominees_from_Genpact_board_may_hasten_exit/articleshow/2908423.cmshttp://economictimes.indiatimes.com/Infotech/ITeS/GE_withdraws_nominees_from_Genpact_board_may_hasten_exit/articleshow/2908423.cms


5/15


ARTICLE

Britains biggest share-registration company, whichhandles details of investors in most FTSE 100companies, plans to ship key parts of its businessoffshore, slashing hundreds of jobs and passing thehandling of crucial data on millions of UK investors tooffices in India.

Equiniti, which employs 2,000 in Lancing, West Sussex,was formerly known as Lloyds TSB Registrars until it wasbought from the High Street bank last year for 550m byAdvent International.

The American private equity group is looking for ways tocut costs and a move of key functions to sites in Delhiand Hyderabad is being considered, which could lead tothe loss of 600 UK jobs.

The move will also raise fears over security and servicelevels, concerns that have hit a number of groups totransfer business to India.

Norwich Union last year closed a call centre in India amidconcerns over service standards. And a Channel 4investigation in 2006 found that some unscrupulous callcentre staff in India were selling personal details of UKbank customers.

Equiniti is the largest of three share registrars in the UK,with 58% of FTSE 100 companies as clients.

The others, Capita and Computershare, both haveoffshore operations.

Equiniti looks after 24m shareholder and employeerecords and acts as registrar to more than 700companies.

The company would not comment on any specific plans,but chief executive Bill Dye said: Equiniti is a companywith very exciting growth opportunities and we arereviewing options to grow the business.

It is not revolutionary for a financial services business touse offshoring to help growth.

Equiniti handles the payment ofdividends and posting

important documents, such as takeover proposals, to

shareholders as part of its share registration divisions.

Change in employee demographics

creates retention problems in Philippines

firms

SOURCE: ManilaTimesDATE: March 30th, 2008

ARTICLE

Local companies are having problems in terms ofkeeping their employees in the organization as thedemography of workers in the Asia-Pacific regionchanges, a human resource consulting firm recently said.

In a briefing, Watson Wyatt Worldwide, which has beenproviding Philippine companies compensation andbenefits data and solutions, said that changes in terms ofage group of work force in Asia have been proven to be amajor factor in retaining employees within anorganization. According to Andrew Heard, Watson Wyattregional practice director, Asia generally has an ageingpopulation as a result of falling fertility and risinglongevity.

In Singapore, the proportion of population older than 50

years old is expected to increase from 23 percent to 50percent over the next 25 years, and many firms in AsiaPacific are now facing a shortage of fresh skilled laborSince more affluent countries like Singapore lack ayounger pool of workers, they turn to the youngerPhilippine population in recruiting more workers to filltheir requirements, rendering local firms in short supply oftalent. For employers, hiring and retaining qualifiedemployees is still a perennial task. More Filipinos aregoing abroad to seek work and better standards of living.Due to the increasing manpower demands especiallyfrom the business process outsourcing (BPO)-contactcenter industry, qualified new graduates are in shortsupply as well as other younger generation workers,Watson Wyatt said in a research note. James G. Matti,

Watson Wyatt managing consultant, said that 50 percentof those that leave their companies go abroad while theother half are pirated by competitors. To retain itsemployees, firms have to look into the factors that makeemployees stay and be flexible about it. The consultingfirm found that the number one concern or factor forstaying in a company among Filipino workers is thecompensation package, followed by job security and thirdis employee benefits. The BPO or outsourcing andoffshoring (O&O) industry has the highest averageturnover rate among all other industries which is at 23percent a year, particularly in the voice-related serviceswhich has about 46 to 53 percent turnover rate perannum. Matti said BPO firms have tried the cash-heavyroute, like giving bonuses, to entice workers to stay.However, that didnt work. Now that things have movedon to a more predictable level, BPO firms are nowmoving on to offering more health and life insurance, hesaid. Employers should also be responsive to the needsof employees in terms of giving them a choice in the typeof benefits they receive. Since the Philippines movedfrom an older to a younger workforce in recent years,especially with the boom of the BPO industry, the choicesof employee benefits have changed. Some companiesnow have given workers a choice of whether to monetize

5
http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=435452&in_page_id=3&ct=5http://www.manilatimes.net/national/2008/mar/30/yehey/career/20080330car1.htmlhttp://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=435452&in_page_id=3&ct=5http://www.manilatimes.net/national/2008/mar/30/yehey/career/20080330car1.html


6/15


their life insurance benefits, since younger people tendnot to worry much about saving and retirement andinstead they are more concerned about instantgratification like traveling, gym or spa benefits. Olderworkers, on the other hand, choose life insurance andmedical benefits over tangible material things since theyhave their families and dependents in mind. Benefits likeiPods and laptops are now fading since it is too costly forcompanies to sustain, Matti said. Instead, firms are

being flexible with the insurance and medical benefitsand the employees choose what is the best package forthem. The Philippines, second to Singapore, has thebest medical and insurance programs among theSoutheast Asian region. However the challenge isinflation, which pushes medical costs by 58 percenthigher annually, he said.

Mounting inflation aside, Watson Wyatt has beenadvising companies on how to implement totalremuneration and flexible and benefits. By tailoring theirbenefits to suit their needs, companies have a betterchance of retaining employees. The firm claims that 92

percent of firms that adopted the flexible benefits systemreported an increase in employee retention

HCL Techs infrastructure deal with BearStearns in trouble


ARTICLE

In yet another fallout of US investment bank BearStearns bankruptcy , Indias fifth-largest technology firmHCL Technologies infrastructure management deal with

the company faces an uncertain future. The companysremote infrastructure management (RIM) arm HCLInfrastructure Services Division (ISD)was handling BearStearns data centre, network management and otherrelated services.

HCL ISD was handling work for Bear Stearns out ofseparate premises as clients are cagey about gettingtheir critical operations like data centre managementbeing shared with others. The headcount deployed in theoperations are not known but according to companysources, its a small number.

When contacted, an HCL ISD spokesperson confirmedthe companys engagement with Bear Stearns but addedthat its bankruptcy will not have a significant impact onthe companys earnings. Our engagement with BearStearns is fairly small and, hence, the impact on ourbusiness will be negligible, the spokesperson added.

Remote infrastructure management deals are typicallyless manpower-intensive and their size is about a fewmillion dollars, said offshore advisory firm StradlingSourcing India president Pradeep Mukherjee.

At the end of the December 2007 quarter, about 15.3% ofHCL Technologies revenue came from infrastructure

services while financial services accounted for 29.2% indollar terms. Analysts feel that the Indian outsourcingfirms would not be affected in the short term by the crisislike Bear Stearns. Earlier this month, ET reported thatBear Stearns $10-million contract with Satyam ComputerServices also faces uncertainty due to the clientsbankruptcy.

The impact of these events (like the Bear Stearns crisis)on the balance sheets of Indian outsourcing firms wontbe visible at least for a year as the whole sale processwill take time to complete. However, I do seerationalisation by such financial services firm of their

service providers once this crisis is over, said offshoringadvisory firm Tholons chairman & CEO AvinashVashistha.

The financial downturn on Wall Street and the real estatecrisis in US has made many banks write down billions ofdollars in losses. CIOs are cutting their IT budgets andmaintaining only critical offshorable components onboard. The downturn is also expected to affect techhardware sales along with services as companies taketime to restructure themselves. Most analysts say thatthe affect will be deep but last long only three quartersafter which outsourcing may pick up.

According to analysts like Gartner, BPOs and ITcompanies should focus on other geographies as well tominimise risk. According to HCL ISD, the company isdoing just that.

The whole thrust of our adoption of the Blue Oceanstrategy has been to go to new markets and geographiesand provide new solutions in new verticals and micro-verticals. This strategy has over the years reduced ourdependence on any one geography/economy and helpedbuild credibility in focused micro-verticals, an HCL officialadded.

The subprime crisis has seen Indian outsourcing firmslose some of their clients to bankruptcy. In August 2007,NYSE-listed WNS lost its client, First Magnus after it filedfor bankruptcy. The second-largest privately-held USmortgage firm was expected to account for about 5% of

6
http://economictimes.indiatimes.com/Infotech/ITeS/HCL_Techs_infrastructure_deal_with_Bear_Stearns_in_trouble/articleshow/2905319.cmshttp://economictimes.indiatimes.com/Infotech/ITeS/HCL_Techs_infrastructure_deal_with_Bear_Stearns_in_trouble/articleshow/2905319.cmshttp://economictimes.indiatimes.com/Infotech/ITeS/HCL_Techs_infrastructure_deal_with_Bear_Stearns_in_trouble/articleshow/2905319.cms


7/15


WNS revenue less repair payments for the periodbetween July 1, 2007 and March 2008.

Bangalore-based iGate Global Solutions and InfosysBPO both serviced GreenPoint Mortgage, the mortgagearm of CapitalOne, that declared bankruptcy last year.

About 5.5% of iGates revenue in the quarter endedSeptember 2007 came from US mortgage companies,down from 7% in the previous quarter. The impact onInfosys BPO was not much.

Last year, ExlService Holdings also saw one of its clients,a non-prime mortgage lender that accounted for 2% of itsrevenue for the first half of 2007, reducing the volume ofservices provided to it by about 60%. It seems whenevera big Wall Street institution sneezes Indian IT majors arebound to catch cold. The way out could be to

aggressively go to markets like Europe and Japan toreduce the overwhelming exposure to US businesses.

Financial Services captives stop/slow down

hiring in India

SOURCE: HindustanTimes

DATE: March 20th, 2008

ARTICLE

The global meltdown is putting severe strains on Indiasbooming back-office industry. US investment banks havestopped recruitment and expansion in their Indian back-office operations.

JP Morgan, Lehman Brothers and Citigroup, which arebearing the brunt of the global financial turmoil, have puta freeze on fresh recruitments in Indian back-office units.There were no fresh recruitments during the last 4-5months, said an executive working with a leading USbanks Mumbai-based back-office operations for equityderivatives.

Lehman has decided to drop its plans for a back-officeunit in Delhi. The proposed unit, designed as a supportcentre for market-related investment services, wasscheduled to open in the last week of March. Lehman isalso shutting down its mortgage capital division in India,where it employs over 100 people.

JP Morgan has closed its equity research operation inIndia. Now research is being coordinated from HongKong, according to sources close to JP Morgan. The USbank has also not been recruiting people for the lastthree-four months.

Citigroup is in the process of selling its Indian back-office

operations, where it employs over 5,000 people.Spokespersons from Lehman Brothers, JP Morgan andCitigroup did not reply to e-mails sent on the subject.

UBS may soon stop its recruitment at its India servicecentre, according to sources close to UBS. The Swissbank employs 1,750 people at its India office inHyderabad that provides financial research, businessanalytics, core investment, banking operations, finance,IT Infrastructure and risk operations. A UBSspokesperson said they have not stopped recruitment inthe country. Employee recruitment continues asplanned, said a UBS spokesperson. UBS had reported

$18 billion in losses while trading in mortgage securities.

Panic is spreading among the employees of back-officeunits. US banks are holding assurance meetings forthese employees. After the news of Bear Stearns sale toJP Morgan broke out on Monday, the US office ofLehman Brothers had organised a video-conference withemployees of a third-party back-office unit in Mumbai.

Indian offshoring firms raise rates; costs

often hidden

SOURCE: CIO


ARTICLE

For years, Indian offshore providers have dealt with risingwages, talent wars and the escalating cost of real estateon their native soil. Despite the increasing cost of doingbusiness, however, Indias offshoring industry hasmanaged to hold the line on rates for its Westerncustomers.

But thats all changing, according to a report from analystStephanie Moore, who covers the offshore industry atCambridge, Mass.-based Forrester Research Inc.

7
http://www.hindustantimes.com/StoryPage/StoryPage.aspx?id=6eca8eb3-76c5-4090-995b-13db36260ccf&&Headline=BPO+Meltdown%3A+US+banks+hold+meetings+to+pacify+staffhttp://searchcio.techtarget.com/news/article/0,289142,sid182_gci1306212,00.htmlhttp://www.hindustantimes.com/StoryPage/StoryPage.aspx?id=6eca8eb3-76c5-4090-995b-13db36260ccf&&Headline=BPO+Meltdown%3A+US+banks+hold+meetings+to+pacify+staffhttp://searchcio.techtarget.com/news/article/0,289142,sid182_gci1306212,00.html


8/15


As the rupee appreciates against the dollar, the poundand the Euro, Indian providers are beginning to chargetheir customers more, Moore reports in UnderstandingIndian Providers Margin Defense Tactics.

While hourly rates have increased only minimally,important price increases are often embeddedelsewhere, Moore contends, advising CIOs to pay closeattention to contracts as they come up for renewal.

Embedded price hikes show up in the following areas:redefining what constitutes a workweek, relying moreheavily on inflation clauses and higher-cost-of-livingadjustments, including clauses allowing for currencyinflation and charging more for travel and substantiallymore for on-site rates, which tends to get less scrutinythan the offshore rates. That last item can add up evenwhen the worker ratio is 80% offshore to 20% onshore.Staff members sent by a provider to a customer sitealready command higher pay than the providers offshoreworkers.

A weeks worth of work

Kashyap Kompella, advisor, global service delivery atTechnology Partners International Inc. (TPI), anindependent sourcing advisory firm headquartered in TheWoodlands, Texas, said his firm is definitely seeing morebelt-tightening measures among the Indian providers.

Service providers are trimming the fat by eliminatingnonperforming employees, Kompella said. And heconcurred with Moore that providers are also becomingmore conscious of the number of hours an employeeworks. They want to ensure that they are not givingaway free hours like in the past. So managers are beingasked to keep track of all the unbillable hours their teamsspend on client work. Some providers have alwayscharged for 8.75 or 8.8 hours per day, Kompella said.

Now, more and more are asking for the 10% extra.

By the way, it is not just the Indian providers who aredoing this, Kompella said. The foreign IT services firmsoperating in India have also started doing the same.

All that said, TPI has not seen a clear trend emerging yetregarding rates for Western customers. Some providershave been able to get some small price increases whenthe contracts come up for renewal, while others have notbeen able to get any increases, Kompella said.

The redefinition of the workweek represents aninteresting shift in how Indian providers are valuing work.In the past, Indian providers customarily billed clients fora set number of hours per week (40-45 hours),regardless of how many hours their salaried staff worked,Moore said. Now, however, providers are starting toeither increase the number of hours counted as a week(from 40 to as high as 50 hours) or simply charging forthe actual number of hours salaried staff members work.

India, back on the agenda

Indian providers are not standing still in the face of a U.S.meltdown. In the past, Indian providers have not focusedon the opportunity in their own backyard, the local Indianmarket. Mostly it was the multinational providers whowere tapping the Indian market, Kompella said. But that,too, is changing, as margins erode with U.S. customers.India is back on the agenda, he said, along with other

parts of the globe. European markets, long resistant tooffshoring, have warmed up to sending work overseas,but Europe is still underpenetrated, and representspotential growth for Indian providers, Kompella said.

CIOs need to ask their providers point blank how they aredealing with inflationary pressures.

As sourcing and vendor management experts attempt toengage and negotiate with Indian service firms, it isimportant to make sure that these providers are at leasttrying to minimize the impact of inflationary pressures,Moore said.

The tactics used by the most adaptable of the Indian

providers to minimize the impact of inflationary pressuresinclude using tools to automate tasks that could be donemanually by their billable employees; streamlining theirmethodologies in order to deliver value to the customermore quickly; investing millions of dollars in employeetraining to keep the pipeline of capable, efficient staffprimed; building reusable code to cut development time;and offering outcome-based contracts, where customershire the provider to deliver a service, for a price, insteadof paying by the hour.

G.K. Prasanna, senior vice president, technologyinfrastructure services at Wipro Ltd., said the impact ofthe U.S. slowdown was constrained for most of 2007.That may well change in a recession, but Wipro has

taken steps to rationalize costs, including findingcustomers in new parts of the globe, such as Europe andAustralia, and sending its work to cheaper cities in itsown country and cheaper countries. Much of its businessprocess outsourcing is done in the Philippines; Romaniais a stronghold for infrastructure services, and Wipro hassent engineering work to China for a while, he said.

Operating margins are under pressure on both sides ofthe oceans, Prasanna noted. Its not just India; the sameapplies to everybody else, he said, which means thatIndian pricing, even under inflationary pressure, remainsan attractive option for companies looking to cut costs.

Pricing is an important point in companies choosing us,and we have no illusions about it. So as much aspossible, we try to keep that part of the equation stable.

Philippines call centers reel from worlds

highest turnover

8


9/15


SOURCE: Davao Today


ARTICLE

Like zombies, they stumbled out of the elevator: haggard,red-eyed, and sleepy in shabby, crumpled clothes and

disheveled hair. Some in sandals and pajamas, theirhands gripping either a big coffee mug or a water bottle,they chatter away in English.This is a typical earlymorning scene in one of the Philippines biggest callcenter firms along Ayala Avenue in Makati City after agraveyard shift that starts at 10 p.m. and ends at 6 a.m.

Despite efforts by the countrys call center companies toglamorize the industry, call center agents are resigning,job-hopping, transferring or being fired by the hundredsas fast as they are being hired. That image of asuccessful call center executive making it in thebusiness world is lost to these call center agents whoare just too glad to quit the industry.

Turnover rate in the countrys call centers has gotten soworse that it has hit 60 to 80 percent, according to theCall Center Association of the Philippines (CCAP). Thishas given the Philippines the worlds highest turnoverrate for call centers worldwide.

Globally, it is an accepted norm in the industry to have a30 to 40 per cent turnover. Both Australia and India callcenters have turnover rates of only six to 10 percent. Topgovernment officials are alarmed that an emergingindustry that has generated around 2 billion US dollars inannual revenues is reeling from a worsening turnovercrisis.

Its like a zoo factory over there and were the new blue

collar workers, says Rommel Benitez, 32, who quit hiscall center job last week, his eyes still bulging from darkeyebags, from lack of sleep. You cant relax, werealways in a hurry. Were always being watched.

Coffee break is barely 15 minutes and our lunch atmidnight is under time pressure that we have a hard timeswallowing our food.

Catriona Wallace, researcher and industry analyst withthe Journal of Service Industry Management said thehigh turnover oftentimes is the result of a deliberatestrategy of frequent employee replacement to provideenthusiastic and highly motivated customer service at lowcost to the call center.

What you see here is an industry-wide policy of firingand replacing employees to keep their workforce freshand motivated. Wallace said.

Industry analyst Ben Teehankee lambasted this policyamong call center firms to keep changing theiremployees to keep them fresh and enthusiastic. This

strategy is not consistent with giving good jobs toFilipinos and developing people for higher jobresponsibilities, says Teehankee, who chairs the HumanResource Management Department of La Salle School ofBusiness in Manila.

Broken promises and misleading advertising by thecountrys call centers were also blamed by call agentswho quit or requested to be fired to avoid paying

penalties for quitting too early. Many call center firms arestill denying this is happening.

The nations big dailies are filled with full-page ads withscreaming headlines like: Are you getting paid for yourperformance ? Ride your future with us! Great careershappen overnight! Entrust your dreams with us! Earnas much as P40,000 a month! Get our P10,000 signingbonus!

Most of the call centers which came out with theseadvertisements either ignored or neglected the promisesthey made, according to Marrisa Tiongko, 25, another callcenter agent who quit recently.

I was promised 15,000 pesos monthly salary andanother 5,000 pesos for food and transport allowanceduring training- but I got only 11,500 monthly with notraining allowance. They lied. It wasnt worth it, saysTiongko, a masscom graduate from Legaspi City

Most call canter agents, after they passed a two-weektraining, usually get only 11,500 to 13,000 monthly plusbenefits like SSS coverage, health insurance, housingplan,etc which are deducted from the agents salaryevery month. This is equivalent to less than 300 USdollars monthly in the Philippines, a far-cry from the UScall center agent average salary of 2,500 US dollarsmonthly.

Many American call center companies made thePhilippines their favorite choice for investments inbusiness process outsourcing (BPO) precisely due tocheap labor from abundant, highly-skilled English-speaking Filipinos, quips a human resource manager ofPeople Support, Inc.

Joji Ilagan-Bian, president of Six-Eleven Inc, a Davao-based call center firm, however remains very bullishabout the future of the countrys call center industry. ThePhilippines, according to Bian, is a big player in theglobal market for BPO and has been cited one of the topcountries worldwide for BPO investments. BPO servicesoffered by call centers include marketing, sales, customercare, investor relations, bookings, etc.

Although the Philippines and India have the most numberof call centers in the world, its fascinating to note thatIndian call centers are now moving to Philippine cities,says Bian, who also runs a large training institute inDavao for call center agents with ready jobs waiting forthem in Manila and Makati call center companies. Davaoranks third in English-speaking skills in a recent survey of12 Philippines cities.

9
http://davaotoday.com/2008/03/15/philippine-call-centers-reel-from-worlds-highest-turnover/http://davaotoday.com/2008/03/15/philippine-call-centers-reel-from-worlds-highest-turnover/


10/15


As more and more call centers are cropping up in themajor cities of Manila, Makati, Quezon, Cebu, Bacolod,Iloilo, Dumaguete, the number of qualified English-speaking applicants available nationwide is no longerkeeping up with the fast-rising numbers of call centersseeking desperately for applicants.

More than a hundred call centre companies in thecountry are scrambling over each other today, trying toentice any English-speaking applicant they can lay theirhands on- whether very young or very old, Filipino orforeigner, parttime or fulltime, retired or moonlighters, etc.- as long as they can speak very good English.

In one Makati-based call center, its not surprising to findyoung agents like 19 year old Sandy Tordessilllas, astudent at Letran University, sitting side-by-side at theoperations center with retired teacher LeonardoManriquez, 64, from Pangasinan or even a foreigner likeMaxim Motovsky, 52, a Russian trader who speaks goodEnglish and wants to earn extra money.

As long as they speak very good English, as long asthey pass our one-month training, well hire them and paythem well, says a human resource manager atConvergys, one of the countrys biggest call centers withbranches in Makati, Quezon, Pasig, Bacolod and Cebucities.

The high turnover rate in the industry is also blamed oncall center training programs which failed to producemany good agents for the jobs. Our training was adisaster. I was glad they fired me. We cant focus andthink during training at two in the morning. That kind oftraining doesnt make sense to me. says JaysonRamirez, 34, an entrepreneur who needed extra income.

At Convergys, training managers boast to new traineesthat only one out of every 100 applicants they interviewedare actually hired. So, youre the best, the cream of thecrop! he tells a trainee. Eventually, only 3 to 5 out ofevery 20 trainees survive an intensive one-monthtraining.

Rejection and termination of thousands of English-speaking trainees in many call centers nationwide in theirefforts to keep standards high in the industry is costingthe call center industry millions of pesos in wastedtraining costs, admits one training manager of AdvancedContact Solutions.

Both ACS and Convergys have exit interviews for allcall center agents resigning or getting fired, to find out thereasons and causes of the high turnover rate in theindustry. A pattern is slowly emerging from these studies- bad training design, oppressive trainors, too muchstress, too much pressure, prison-like condition, pay notworth the effort, etc.

It may take some time to really get to the bottom of thePhilippine call center industrys abnormally high turnoverrate.

Infotech slowdown bites real estate hard


ARTICLE

Real estate firms are beginning to feel the heat of theslowdown in IT/ITeS sectors. Leading IT companies aresaying that lease of office space to software and BPOfirms have fallen by over 30%. The trend is particularlybound to affect firms like DLF and Unitech which arebuilding several software SEZs (special economic zones)across the country.

Says an Unitech executive: Till just eighteen months ago,

software firms booked additional space two years inadvance. Now, they are not even occupying the spacebooked a year ago. A DLF excutive, in charge of sellingspace to IT firms says: The premium in lease rentals hasevaporated and if the situation continues, rentals couldactually weaken.

Out of the 197 zones formally notified since the Sez Act,2005, 120 are for IT/ITeS sector. Nearly half these zoneswere approved in the last nine months, when the firstsign of slowdown emerged amidst a weakening dollar.According to SEZ rules, these zones can only be used forthe earmarked purposes to avail of the economic benefitgranted to them.

In the past, a steady growth trajectory of softwarecompanies allowed to predict and plan their additionalrequirement for space. Between 2003-07, new hires bythe top three software firms like TCS, Wipro and Infosysgrew at over 20% each year. For 2008, analysts expect adrop in new hires. Says an analyst with a Mumbai-basedbroking firm: Hiring will continue to slow down in future ifthe dollar remains weak. A slowdown in the US economywill worsen things further for software companies in theshort term.

Industry experts expect that if the weak market continuesto persist, companies may actually slow down theirinvestment in the upcoming SEZs. Companies likeUnitech and DLF say that work in all their new zones

across the country are progressing on schedule and theyare not pulling back yet. The DLF executive, howeveradmits, We will be in no hurry to get approvals for newIT/ITeS zones in the near future.

Software companies read the situation as a positivedevelopment. In the last two years, lease rentals inmetros like Mumbai, Delhi and Bangalore have shot upnearly 50-60%, forcing firms to move to smaller cities likePune, Bhubhaneshwar and Jaipur.

10
http://timesofindia.indiatimes.com/Infotech_slowdown_bites_real_estate_hard/articleshow/2872258.cmshttp://timesofindia.indiatimes.com/Infotech_slowdown_bites_real_estate_hard/articleshow/2872258.cms


11/15


HP Beefs Up The Capabilities Of BigOutsourcing Business

SOURCE: CNN Money


ARTICLEHewlett-Packard is building two new data centers forwhat it sees as the next chapter in outsourcing.

The tech giant plans to announce Monday new offeringsthat will let companies easily add new software andhardware capabilities directly from HPs (NYSE:HPQ)HPQ own data centers on a monthly basis, like anyservice contract. The company, which calls the offering

adaptive infrastructure as a service, is targeting thelargest global corporations.

To handle the new demands, the company is buildingdata centers, including one in Europe near completionand another in Asia later this year. Its also using parts oftwo new data centers in the U.S. that handle HPsinternal technology systems.

HPs outsourcing services typically have involved HPtaking over the customers data centers, but nowcustomers can use HPs centers.

Clients no longer have to build out infrastructure, saidPat Adamiak, vice president of marketing for HP

outsourcing services. They can actually save a lot oftime and money.

Adamiak says this is the biggest step in the evolution ofoutsourcing since the megadeals earlier this decade thatsaw companies shift entire tech departments over to HPand other outsourcers.

Bringing the operation into HPs center gives customersmore flexibility and quicker access to cutting-edgesoftware and computing equipment, HP executives say.This should fuel growth in HPs outsourcing business,Adamiak says.

This gives us a powerful lever in the future, he said.

Units Growth Outpaces Parent

Companies around the world have increasingly usedoutsourcing to slash their spending on technology andbusiness tasks. Outsourcing is a big part of HPs servicesunit, which accounts for 15% of total HP revenue. In thequarter ended Jan. 31, HP said outsourcing servicessales rose 15% from the year-earlier quarter, whileoverall services revenue rose 11%. Outsourcing alsobeat the companys overall sales growth of 13%.

Adamiak says the new data centers use the latest inservers, storage, networking and software. He wouldntsay what the new program is costing HP to start and run.

(Customers) can get best-in-class infrastructure withouthaving to custom-design it themselves, Adamiak said.

Services offered include extra computing power for big-time software jobs, such as geothermal analysis or

animation clips for movies. The service gives customersaccess to such software as Microsofts (NASDAQ:MSFT)MSFT Exchange Server and SAP SAP applications, andprovides customization for other types of software.

For example, if an HP customer wants to upgrade itsEuropean operations business software offerings, thecustomer can simply make that a part of a monthly billunder a three- to five-year contract. That means acustomer doesnt have to spend millions of dollars on anew data center to power the software or put up withtime delays.

What we provide is much faster and more adaptive,Adamiak said.

HP says its customers can now upgrade without amultimillion-dollar hit to their balance sheet. Companiescan just make the new service part of its monthlyexpenses instead of taking a big one-time cost.

Highly Competitive Market

John Madden, an analyst at research firm Ovum, saysHP can use the new tools to offer customers morechoices in the competitive market. HPs outsourcing rivalsinclude IBM (NYSE:IBM) IBM and Electronic DataSystems EDS.

There are a lot of vendors (pursuing) a limited amount of

customers attention, he said.

Madden says he couldnt predict how much thisoutsourcing service might save potential customers, butadds that the savings could be real. He says HP has areputation for taking costs out of its technology.

The adaptive-infrastructure-as-a-service offering is, to adegree, part of a trend known as cloud computing. Itentails letting customers access software and hardwareremotely, any time and anyplace.

But Adamiak says cloud computing is typically morefocused on small and midsize businesses. HP istargeting larger corporations in need of more beefy and

complex technology systems and software.

Adamiak sees the new service as the third wave in techoutsourcing. He says the initial trend in the 1990s was tooutsource pieces of the tech department, such ashandling the service-desk inquiries. The second beganearlier this decade and involved outsourcers taking overentire tech departments. HPs big outsourcing contractwith Procter & Gamble (NYSE:PG) PG was part of thistrend.

11
http://money.cnn.com/news/newsfeeds/articles/newstex/IBD-0001-23786296.htmhttp://money.cnn.com/news/newsfeeds/articles/newstex/IBD-0001-23786296.htm


12/15


This is kind of the start to chapter three, he said. Itreally is a better way to try to do chapter two.

Essar`s Aegis BPO acquires AOL arm

SOURCE: Business Standard

DATE: March 31st, 2008

Global internet firm AOLs call centre facility in Bangalorehas been acquired by Aegis BPO Services, an Essargroup company.

The value of the deal was not disclosed by thecompanies. However, industry sources peg it around $30million (Rs 120 crore).

Aegis will provide customer service and technical supportto AOL customers, while the latter will transfer 1,000-plusof its employees. The acquisition is expected to becompleted by April-end or in May.

The decision by AOL to sell its captive BPO operationscomes after a few global companies started this exerciseto cut costs.

The trend was started by GE, when it reduced its stakein its BPO operations in India by selling majority stake inthe business to two private equity players.

Another global financial institution, Citibank, is expectedclose a similar deal this year. Aviva Insurance is anotherfirm which is planning to take this route.

The acquisition comes as a shot in the arm for Aegis withan annual revenues of over $200 million and an

employee strength of 19,000.

Aegis CEO and Managing Director Aparup Senguptasaid: With AOL as a client, it gives a clear visibility to ourportfolio and will strengthen our offshore customermanagement capabilities. AOLs competence allows us toget into the tech-support area covering voice and non-voice offerings.

At present, 85 per cent of Aegis operations are in thevoice category and the rest in the non-voice category.Acquiring AOLs call centre would aid the company inaugmenting its operations and extending its horizontalservices for new clients, Sengupta said.

We are already working with Fortune 500 companies inthe banking and telecommunications sector.

AOLs Executive Vice-President (international) ManeeshDhir said AOL would continue to strengthen its localoperations. AOL commenced call centre operations inJuly 2003.

Contract to give TCS revenue boost in longterm

SOURCE: The HinduDATE: April 1st, 2008TCS can look forward to several positives from the five-year multi-million dollar deal with ArvinMeritor, to be itsglobal engineering partner. ArvinMeritor suppliescomponents to commercial trucks, trailers and originalequipment manufacturers.

Being a multi-year deal, it gives long-term revenuevisibility.

The deal being in the product engineering servicesspace, the realisations may be better compared withtraditional application development and maintenanceservices.

Fast growing

A chunk of the services are expected to be deliveredoffshore from Pune, which creates a low cost-structurefor the company. This deal specifically will supportArvinMeritors product-line in the Asia-Pacific markets.

This is a fast growing geography compared with thedeveloped markets and this is a positive for TCS.

Engineering and industrial services contribute only 5.3per cent of TCS revenues currently. In this backdrop, themulti-million dollar deal, involving product engineeringservices, may help enhance the contribution frommanufacturing and automotive clientele, to overallrevenues, even as new pressure points emerge in theBFSI (banking, financial services and insurance) vertical.

SAP faces $100m fraud claim from Waste

Management Inc

SOURCE: AccountingWeb

DATE: April 1st, 2008

ARTICLE

German enterprise software developer SAP has been hitwith a $100m lawsuit in the Texas district court by WastManagement Inc over alleged fraud andmisrepresentation of the US version of its wastemanagement system. John Stokdyk reports.

In the plaintiff's petition, helpfully posted on the web byZDnet.com's Larry Dignan, Waste Mangement's lawyersclaim in paragraph 9: "In order to gain acceptance in the

12
http://www.accountingweb.co.uk/cgi-bin/item.cgi?id=181575&d=1025&h=1073&f=1026&dateformat=%25o%20%25B%20%25Yhttp://www.accountingweb.co.uk/cgi-bin/item.cgi?id=181575&d=1025&h=1073&f=1026&dateformat=%25o%20%25B%20%25Yhttp://www.accountingweb.co.uk/cgi-bin/item.cgi?id=181575&d=1025&h=1073&f=1026&dateformat=%25o%20%25B%20%25Yhttp://www.accountingweb.co.uk/cgi-bin/item.cgi?id=181575&d=1025&h=1073&f=1026&dateformat=%25o%20%25B%20%25Y


13/15


United States waste and recycling software market, andto obtain large monetary benefits from current and futurelicence and implementation fees, SAP fraudulentlyinduced Waste Management to license an 'United Statesapplicable' waste and recycling software solution. Thissoftware was represented to be a 'waste industrystandard solution with no customisation required'.

"SAP further represented that the software was an

'integrated end-to-end solution'. Unknown to WasteManagement, this 'United States' version... wasundeveloped, untested and defective."

There are 50 more pages of similar schadenfreude forthe German developer, including the revelation that atpre-contract product demonstrations, SAP presentedmock-ups that it claimed were the actual waste andrecycling system. Senior SAP US executives includingpresident Bill McDermott participated in these demos, thewrit claims.

The business case that SAP helped Waste Management

to prepare estimated that the software would generateannual net benefits between $106m and $220m a year."Based on SAP's fraud, Waste Management has invested$100m in a waste and recycling software project for asolution that does not work," concludes paragraph 44 ofthe original petition.

The blow-by-blow narrative of the claim is fascinating initself, but almost as interesting is the context. SAP hasrefused to comment on the claim, which follows anothercase brought against it by Oracle over unauthorisedaccess to customer records at SAP's TomorrowNowWaste Management itself was a TomorrowNow customer,

according to Infoweek. An SAP press release confirmsthat Waste Management was signed up as a customerunder SAP's Safe Passage programme, which wasdesigned to lure disaffected PeopleSoft customers awaywhen it was acquired by Oracle. Having grown throughmultiple acqusitions, Waste Management had a jumbledcollection of legacy systems and turned to SAP to providea consistent ERP environment.

SAP US president McDermott, named in WasteManagement's claim, is quoted in the release saying,"We are committed to building a strong relationship tohelp Waste Management realize its strategic objectives...and are not distracted by the challenges of integratingmultiple code bases and employee organisations."According to the Waste Management petition, SAP wasdistracted from integrating its own code by theopportunity it saw to move into the US waste market.

The claim has given commentators and SAP customersan opportunity to discuss online the nature and quality ofits ERP solutions, as well as Waste Management'schances of winning the case.

"If this spat ever does get to court, it will highlight theenterprise software sales process, which really revolvesaround promises," noted Dignan, who uses the claim asthe basis for a cautionary study of the client'sshortcomings.

"Typically, IT failures arent black or white. There aremany shades of gray. Projects change, theres scopecreep and often the vendor and the customer share some

of the blame."

While viewing the case as having an outside chancebecause of all the other factors involved, Ben Worthen inthe Wall Street Journal sees the case as an indictment oftechnology jargon. "Were excited to see a judge decidethe case. If only to have a legal definition of what'integrated end-to-end out-of-the-box solution' means," hewrote.

In a famous UK case during the 1990s, the claim of StAlbans City & District Council against ICL for a botchedpoll tax system established the principle that softwarehad to be fit for the purpose for which it was sold. Thecouncil won compensation of 1.3m. Central government

has suffered a number of embarrassingly high-profile ITfailures, but claims against the suppliers have negotiatedout of court and or settled under penalty clauses withinthe government's IT outsourcing contracts.

Shell signs $4 billion outsourcing deal with

AT&T, EDS and T-Systems news

SOURCE: Domain-b.com

DATE: April 1st, 2008

Oil powerhouse Royal Dutch Shell plc has announcedthe awarding of billion-dollar contracts as part of a $4billion deal to outsource the bulk of its technologyinfrastructure.

The figures

The $1.6 billion telecommunication services contract hasbeen awarded to AT&T while EDS has bagged the $1billion information technology outsourcing services deal.German telecom major Deutsche Telekom has beenawarded a contract worth $1.4 billion to assumeresponsibility for Shell's data centres worldwide,according to an announcement by its T-Systemscorporate services unit. All of these contracts have beenawarded for a period of five years.

In a nutshell, from July the companies will serve Shelland its subsidiaries in more than 100 countries, withAT&T looking after network and telecommunications, T-Systems hosting and storage, and EDS looking after enduser computing services and operational integration ofthe infrastructure services.

13


14/15


The changes

About 2,960 Shell information technology staff andcontractors are expected to be transferred under the dealwith AT&T, EDS and T-Systems, with Shell saying therewill be ''20 to 30 redundancies at worst''. However, theywill not retain their existing rights and redundancypackages under their new employers, which areexpected to lapse after two years.

This is a concern with employee unions, and UnionAmicus had earlier threatened to block the deal throughlegal action. However, Shell management had tried toassuage fears by saying staff would be able to choose''as much as possible'' whether they were transferred to anew employer, as well as retaining existing packages forthe present.

The oil multinational expects ''significant improvements inefficiency and productivity'' and to deliver ''importantfinancial benefits to Shell'' during the five-year deal, itsaid in a statement.

The AT&T deal

Shell has its US headquarters in Houston, Texas, where60 employees have been given the opportunity totransfer to San Antonio-based AT&T. A total of 560networking professionals in the Netherlands, Malaysia,the United Kingdom and the United States have beengiven opportunities to transfer from Shell to AT&T officesin their respective countries.

AT&T will provide managed network services to Shell andits subsidiary companies in more than 100 countries overthe five years of the contract. It will develop wide areaand local area networks (WANs and LANs), voice and

Voice over Internet Protocol (VOIP) services, managedsecurity and wireless services to connect 1,500 Shelloffices and 150,000 Shell employees.

It will also be responsible for 600 third-party contacts with300 Shell vendors internationally, as well as managingcellular services contracts currently provided by othermobile operations.

The EDS contract

EDS, based in Plano, Texas, will manage Shell's end-user computing services including desktop, service desk,on-site services, back up and disaster recovery, mobileinformation protection and managed messaging services,for 150,000 users in more than 100 countries.

The company will be the operational integrator for thethree contracts, and oversee the work being done byAT&T and T-systems. Around 1,500 Shell staff andcontractors are expected to shift operations to EDSoffices under this deal.

The T-Systems deal

T-Systems will take over the infrastructure and ITprofessionals of Shell's global data centres, includingthree centres in the Netherlands and one each inMalaysia and the US. In addition, most of Shell's SAPservices will be transferred to T-Systems' DynamicServices Platform.

Approximately 900 Shell employees are expected to shiftemployment to T-Systems as part of this deal, whichpromises to boost the latter's foreign revenues by asmuch as 20 per cent. It said it had the option to extendthe contract with Shell for global hosting and storageservices after five years.

IIM-A student bags highest salary package

SOURCE: NDTV


ARTICLE

A student of the Indian Institute of Management atAhmedabad (IIM-A) has bagged the highest salarypackage of Rs 1.44 crore (US$ 360K)

The IIM-A has remained unaffected by subprime crisisand the slowdown in the US economy.

'Our main concern this year was the subprime crisis. Weare relieved that this has not affected the placement at alland the average salary offered has been about 30 percent more in comparison to last year,'' IIM-A directorSameer Barua told reporters on Tuesday.

''The IIM-A enjoys a special status among the recruiters.That might be the reason they (companies) did not wishto break that relationships with us,'' Barua said.

The highest international annual salary of Rs 1.44 crorewas offered by a company in finance marketing sector,informed IIM-A officials.

However, they refused to reveal the identity of either thecompany or the student, saying both have requestedanonymity.

''Given the adverse market conditions, the salariesoffered this year have exceeded all expectations. The

average domestic salary amongst the accepted offersthis year is Rs 17.85 lakh as against Rs 13.7 lakh lastyear,'' IIM-A officials informed.

''The students have preferred to stay in Asia-Pacificregion as 87 per cent of them have chosen thisdestination, while just 11 per cent have preferred to go tothe US and Europe and two per cent have chosen WestAsia,'' Barua said.

14
http://www.ndtv.com/convergence/ndtv/story.aspx?id=NEWEN20080043761http://www.ndtv.com/convergence/ndtv/story.aspx?id=NEWEN20080043761


15/15


The acceptance of Asia-Pacific region indicates thebalance of economic power shifting from West to theEast, Barua added.

15

Outsourcing Newsletter - April 2nd

Documents

Transcript of Outsourcing Newsletter - April 2nd