With high cost structures during a recession, many Nordic countries are looking towards India to help them cut those costs by almost 30-40%. Some of the biggest banks in the Nordic region, NORDEA AB, Svenska Handelsbanken and SEB are looking at outsourcing technology to India.
According to a senior official of an offshore advisory firm, QuantumStep, Nordic companies studied many successful offshoring case studies like Ericsson and Ikea before considering India. Nordic countries prefer to start off with small contracts in the region of $10-20 million, but are expected to sign larger ones only after looking at the benefits of the earlier contracts. Belgium, another potentially huge market for service providers, is also signing contracts to the tune of almost $30-40 million and more, said the official from QuantumStep.
EquaTerra, an outsourcing advisory firm, in a study involving 370 contracts, signed by over 200 Nordic customers and worth around $4.3 billion, found that Indian service providers were better than their European counterparts such as TietoEnator and Capgemini when it came to quality of services offered. EquaTerra said in a recent report that there’s no doubt that India leads the pack when it comes to providing services for the Nordic firms with at least 61% of firms using India for all or at least some of their outsourcing needs.
Unlike other European markets, such as Germany, where labor laws make it difficult for service providers, Nordic countries are more flexible and this is what makes it more viable for India. Major Indian IT companies are looking at outsourcing contracts to the tune of $100 million each, in the coming years.
When Handelsbanken was looking at offshoring, it shortlisted many firms, including European and Indian ones, before finally deciding on Indian firms. Handelsbanken had tentatively been exploring offshoring for almost a year; the recession forced them into considering it as a definite possibility. Handelsbanken are looking for suppliers to maintain their legacy mainframe systems in addition to making them work with newer business software applications.
Though one top Indian IT firm confirmed that Nordic countries are indeed looking at outsourcing to India, others declined comment.
The head of the European division of an Indian IT firm says that the overall Nordic market will not grow much this year but the demand for outsourcing is seeing a steady growth. According to him, about 100 deals which have been signed over the past six to eight months are collectively in the vicinity of € 500,000 to € 150 million with the most significant one in size and in terms of frequency being in the vicinity of € 8-20 million.
Norway is expected to show a high IT market growth in Europe this year, around 1-2% every year, while most other markets have not grown or have declined.
Showing posts with label BPO canda. Show all posts
Showing posts with label BPO canda. Show all posts
Infy scouting for BPO firm in Canada
Infosys BPO Building
Infosys BPO Ltd, the business process outsourcing operation of Infosys Technologies, is looking at raising its headcount in the Americas through inorganic growth. The company is understood to be scouting for a strategic acquisition in the $40-60 million range either in Canada or the US, according to industry sources.
"Infosys is looking at acquiring a small or mid-sized company, specialised in providing mortgage or insurance BPO services to grow faster in Canada.
This will help speed up verticalisation efforts currently on at Infosys BPO. The mortgage sector in Canada has seen a number of promising start-ups, as well as established mid-sized companies coming up over the years.
This will help speed up verticalisation efforts currently on at Infosys BPO. The mortgage sector in Canada has seen a number of promising start-ups, as well as established mid-sized companies coming up over the years.
Infosys BPO is looking at further growth in the key mortgage and insurance verticals in Canada, where a strategic acquisition will boost the scope for higher knowledge work, like financial research and analytics," sources said.
The BPO arm has a stated focus on transaction-based processing work, particularly in the finance & accounting software space. Mortgage solutions have emerged as a key vertical for the BPO operations.
The BPO arm has a stated focus on transaction-based processing work, particularly in the finance & accounting software space. Mortgage solutions have emerged as a key vertical for the BPO operations.
An Infosys BPO spokesperson declined to comment on any acquisition plans or time-frame for the deal. The company is presently in its self-imposed silent period as a run-up to announcing its first quarter financial results on July 10.
Infosys has said that it will increase its hiring in overseas markets, including the US and Canada. In the current fiscal, the company plans to hire about 1,000 people in overseas locations, including the US, which is more than double that of last year's figure.
The company is not keen on making acquisitions in India, as it is capable of growing organically quite fast in the country. Chief Executive Officer S Gopalakrishnan had said at the company's annual general meeting in Bangalore on June 21 that Infosys saw a requirement for acquisitions more outside India, where it faced challenges in adding employees.
The company is not keen on making acquisitions in India, as it is capable of growing organically quite fast in the country. Chief Executive Officer S Gopalakrishnan had said at the company's annual general meeting in Bangalore on June 21 that Infosys saw a requirement for acquisitions more outside India, where it faced challenges in adding employees.
To tackle pricing pressures from clients in the US and Canada, Infosys Technologies has been increasing its focus on new engagement models, such as platform-based BPO services, Software-as-a-Service and Finacle to maximise the value delivered to its clients. The BPO business of Infosys posted gross revenues of $316.2 million (Rs 1,520 crore) in the fiscal year to March 31, 2009 and employed 17,398 people at the end of the fiscal. The BPO arm is presently recruiting from smaller towns like Mangalore and Mysore, as part of its focus on the domestic market and to capitalise on lower rentals and employee costs. It is also looking at tying up with rural BPO outfits to save on real estate costs. The company had last month set up a dedicated domestic market arm, with an eye on the $1.6-billion domestic BPO market.
Infosys Technologies, which had cash reserves of Rs 9,695 crore (Rs 96.95 billion) as on March 31, had made two successful acquisitions during its nearly three decades of existence. Earlier acquisitions were that of Australian firm Expert Information Technologies for close to $23 million in 2003, and the buyout of Philips' global BPO operations in 2007.
Infosys Technologies, which had cash reserves of Rs 9,695 crore (Rs 96.95 billion) as on March 31, had made two successful acquisitions during its nearly three decades of existence. Earlier acquisitions were that of Australian firm Expert Information Technologies for close to $23 million in 2003, and the buyout of Philips' global BPO operations in 2007.
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