IT Outsourcing India

NEW YORK: Hewlett-Packard Co is considering selling or shutting parts of its outsourcing business to focus on the higher-margin areas of its technology services offering, people familiar with the matter said. A year after buying Electronic Data Systems for $13 billion, HP executives are discussing the possibility of divesting parts of the outsourcing operations, especially in its business process outsourcing (BPO) arm, sources told Reuters.

"The calculation is, can we get more cash for this asset now versus the cash flow the asset is expected to generate in coming years?" said one of the sources who is familiar with HP’s plans. HP’s India operations or its human resources BPO unit could be among the businesses divested, the source added. Housed within HP’s services division, the BPO unit posted $709 million in revenue in the quarter ended April 30, compared with $40 million a year ago.

HP got most of its technology outsourcing and BPO business from EDS, a pioneer in the field, which it bought in August 2008. HP may decide not to sell anything if the assets fail to fetch a good price, the sources said. If the assets were to be shopped, outsourcers like TeleTech and Stream Global Services could be interested, a second source said. HP is expected to issue its fiscal third quarter results later on Tuesday.

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The ability to focus on core business and cost savings are the primary reasons for IT outsourcing according to a new survey by Irish-owned Hibernia Evros Technology Group. Half (51%) of the companies surveyed were Irish small and medium sized enterprises (SMEs) employing between 1-250 people. The results of the study were revealed at the announcement by HiberniaEvros of a new infrastructure outsourcing service for SMEs called OmniSource.

63% listed ‘focus on core business’ in the top two reasons for outsourcing. Cost saving was the second most popular reason, mentioned in their top two choices by 51%. ‘Releasing internal IT staff for more strategic work’ was highlighted by almost half (47%).*

"Irish firms have an increasingly sophisticated approach to outsourcing," commented John Kennedy, marketing director, Hibernia Evros Technology Group. "Market perception has been that Irish companies have been reluctant to outsource but the results of this survey suggest otherwise. 71% already outsource some element of their IT. It may be that the economic downturn is encouraging companies to focus more on their core business and explore ways to reduce internal costs."

The most common IT function outsourced is hardware support (72%) followed by web hosting (41%). Network management and security/virus protection (both 38%) are in the top four outsourced IT functions.

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NEW DELHI: Bharat Sanchar Nigam (BSNL) plans to outsource the management and maintenance of its towers and cable networks as the state-owned telecom operator looks to compete more effectively with private rivals such as Bharti Airtel and Reliance Communications that dominate the booming industry, and unlock the value of its assets.

BSNL plans to outsource more than 50,000 towers and over 1 lakh km of optic fibre cable, two executives with the telco told ET. The deal could be worth more than Rs 5,000 crore ($1 billion) over five years. The move is expected to face stiff resistance from about 3 lakh employees of the telco as it will impact close to 30,000 jobs.

The company plans to train and re-deploy a significant section of these employees to marketing roles, said these executives requesting anonymity. Most employees are expected to resist transfer to the rolls of the IT firms that win the outsourcing deal.

BSNL is in the process of finalising tender conditions for inviting bids for the contract, the executives said. The move will help BSNL unlock the value from its towers and passive infrastructure as the once-monopoly tries to play catch-up with private rivals, said BK Syngal, senior principal of consulting firm Dua Consulting.

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NEW DELHI: Hospital chain Fortis Healthcare has outsourced its IT systems and processes for all its hospitals to HCL Technologies for five years. The financial details of the deal was not announced.

As per the agreement, the HCL Tech will deploy Hospital Information Systems (HIS) & Enterprise Resource Planning (ERP) solutions to standardise operations across Fortis’ 28 hospitals in the country.

This deal makes Fortis the first healthcare delivery company in India to completely outsource IT applications and infrastructure management, Fortis said in a statement.

Shivinder Singh, MD , Fortis Healthcare said, ”IT forms the back bone for hospital operations and improved patient care. The system integration with high end IT infrastructure would result in enhanced performance and superior patient care.”

Source: http://economictimes.indiatimes.com/