IT Outsourcing India

IT loses, but BPOs gain

Interestingly, the BPO industry has witnessed a slight bounce back by 10 per cent in October after witnessing a decline in new jobs in August and September.

The telecom industry which was looking up in August and September had seen an increase in jobs, while October witnessed a dip of 17 per cent indexed to July. The fluctuation could be owing to the festive season, the study said.

The pharma industry has been comparatively less affected with a fall in the index of less than 15 per cent. Niche sectors like government and legal have seen an increase in new jobs.

Source : http://specials.rediff.com/ 

New Delhi (IANS): Third party logistics outsourcing business in India will grow to $90 million from the present $58 million by 2012, according to a study released on Monday.

Presently around 55 per cent of Indian companies are outsourcing logistic services like supply chain management and warehousing, said the study by the Associated Chamber of commerce and Industry (Assocham).

This was 10-15 per cent 10 years ago.

The Indian logistics market size will zoom up to $125 billion by 2010 from the present $105 billion, "which means the business would grow at an average rate of 16-17 per cent in the next two years", the report, ‘Building Logistics for Competitive Business’, said.

“One of the contributing factors for this is value added tax (VAT) which is expected to drive Indian industry towards using more third party logistics services,” Assocham secretary general D.S. Rawat said.

He added that the logistics outsourcing services "should be seen as a support to corporate growth".

"With the expansion of globalisation, more companies are turning towards logistics outsourcing to help them in successful management of supply chain processes. The logistics outsourcing provides illustrate their ability to bring down conventional logistics costs and handle more complicated tasks," the paper said.
 

Source : http://www.hindu.com/ 

An Indian legal professional who takes home Rs 25,000 a month earns a tiny fraction of the Rs 10,000 an hour that his counterpart in the US earns.

But with Indian legal process outsourcing (LPO) industry poised to increase it’s hiring, amidst a whirlpool of cost cutting measures being embraced aggressively by the US and the European firms, things could change. Mathematically, this translates into 20 per cent rise in salary packages of LPO employees and bonuses of up to 25 per cent to experienced lawyers employed by various outsourcing outfits.

Bhaskar Bagchi, country head, CPA, leading provider of outsourced legal support services and intellectual property management specialist, claims that CPA would double its headcount from the existing 500 employees, in the next 6 months. “We are targeting a headcount of 2,000 employees by 2010,” he said. Industry sources assert that the average salary benchmark would follow the increase in outsourced legal project revenues, which is rising at an average 30-45 per cent.

Numerous foreclosure-related assignments from US banks and law firms have been keeping Indian LPOs occupied, besides the usual assignments like indexing and coding to database maintenance, patent support, contract review and management, litigation support and legal compliance.

Most LPOs employ an eclectic mix of lawyers, paralegal professionals and engineers for various outsourced functions.

Soumitro Chatterjee, CEO of Legal Circle, a recent startup and subsidiary of the leading law firm Fox Mandal Little feels that salary packages of experienced lawyers would get better by up to 30 per cent in 2009. According to him, “As complexity and volumes of outsourced legal work increases, lawyers from LPO firms would be the most prized professionals leading to a compensation scramble among the growing Indian LPOs.”

Legal Circle is looking to hire 15 lawyers in legal and compliance verticals, and expects the headcount to cross 100-mark by 2009 end.

Attrition rates are on an upward curve for Indian LPOs and most players agree that employee benefits like bonuses and increments would be the key retention tools in 2009. Average attrition rates in the industry vary between 25-35 per cent. Bagchi says, “At CPA, we handed out bonuses and increments, starting at 15 per cent and upwards. For 2009, we have a healthy orderbook and the benefits will only get better for employees.”

Source : http://www.business-standard.com/

Japan turns as right market for Indian IT services companies, who are looking for new destinations to counter the set back from the U.S. market. Considering Japan as a major automobile and consumer electronic manufacturing destination in the world and as one of the most IT spending nations, Nasscom, an IT industry body is presently undertaking a study to evaluate the outsourcing opportunities in Japan.

Revenue from Japan hardly contributes to three percent of our total software services exports. We believe that Europe and Japan offer huge potential for Indian vendors, Ameet Nivsarka, Vice President, Nasscom,says.

Some of the Indian companies have already attempted to enter the Japanese outsourcing market. For instance, Indias second largest IT company, Infosys has signed a pact with Nihon Unisys to combine its global delivery model with the latters strength in the Japanese market. Another IT major, Wipro has also tied up with some of the leading Japanese corporates including NEC. Around 3 percent of Wipros IT revenue comes from Japan. Similarly, Infotech Enterprises, Patni Computer and KPIT Cummins have substantial presence in Japanese market.

An IT analyst opined that local talent and understanding of IT buying behavior of corporations in Japan are critical to make a foray into this market. Unlike the U.S. market, which has been more open to IT outsourcing, in Japan it takes a considerable period of time to build the relationship and get a contract.

According to a Japan market study by neoIT, an offshore advisory firm, the total IT services sector is estimated to be around USD50 billion. Less than 2 percent of this market is offshored, with China getting the majority share.

Sabyasachi, Senior Director, neoIT said currently Japans outsourcing requirement is for embedded software and solutions and a lot of lowend work testing and coding. When it opens up for more complex solutions, Indian services majors will see a traction coming from this region.

Source : http://www.offshoringtimes.com/