One Dozen Outsourcing Stories
One Dozen Outsourcing Stories
Date: Friday, March 21, 2003 1:22 PM
H-1B and JOB DESTRUCTION NEWSLETTER
www.ZaZona.com
Article 1: Sun Microsystems to invest in India
Article 2: Missile Technology Sent to China
Article 3: Guardian Life Outsourced to Patni
Article 4: Wall Street Set To Embrace Offshore Outsourcing
Article 5: Convergys Sets Up Call Centre in Manilla
Article 6: Philips Steps Up Chipmaking Outsourcing
Article 7: EDS sends IT work Down Under
Article 8: BT faces strikes threat over move to India
Article 9: Syntel to invest $60 m in Pune facility
Article 10: KMG Infotech set to open Calcutta centre
Article 11: Xansa UK-based company plans to invest in India
Article 12: CSC is on an expansion spree in India
http://www.globetechnology.com/servlet/story/RTGAM.20030320.gtsunmar20/GTStory
POSTED AT 9:29 AM EDT Thursday, March 20
Sun Microsystems to invest in India
Associated Press
New Delhi, India U.S.-based Sun Microsystems, a computer hardware and
software maker, plans to invest in research, development education and
training in India, the company's chief said Thursday.
"Compared to Japan, the United States and Germany, whose growth was
flat for the last few years, India and China have the potential to be
the growth engines with their remarkable growth rates," Scott McNealy,
chief executive officer of the Santa Clara, Calif.-based company, told
a conference of India's top 200 business leaders.
Sun Microsystems offered to donate $300-million (U.S.) worth of free
software to nonprofit Indian institutions to enhance co-operation in
electronic governance and networking, the Indian government said after
Mr. McNealy's meeting with Disinvestment Minister Arun Shourie on
Thursday.
The global economy, Mr. McNealy said, is short of optimism right now,
but Sun Microsystems is on a sound financial footing with a cash inflow
of more than $5.3-billion. He also said it has been receiving positive
cash inflows for the last eight years.
http://www.insightmag.com/news/357426.html
Insight on the News - World
Issue: 04/01/03
Missile Technology Sent to China
By Scott L. Wheeler
An important U.S. high-tech manufacturer is shutting down its American
operations, laying off hundreds of workers and moving sophisticated
equipment now being used to make critical parts for smart bombs to the
People's Republic of China (PRC), Insight has learned.
Indianapolis-based Magnequench Inc. has not yet publically announced
the closing of its Valparaiso, Ind., factory, but Insight has confirmed
that the company will shut down this year and relocate at least some of
its high-tech machine tools to Tianjin, China. Word of the shutdown
comes as the company is producing critical parts for the U.S. Joint
Direct Attack Munition (JDAM) project, more widely known as smart
bombs, raising heavy security issues related to the transfer of
military technology to the PRC. The factory uses rare earths to produce
sintered neodymium-iron-boron permanent magnets that have many
industrial applications but are essential to the servos critical to
precision-guided munitions. According to documents obtained by Insight,
Magnequench UG currently is producing thousands of the rare-earth
magnets for "SL Montevideo Tech," a Minnesota-based manufacturer of
servos. That company confirmed to Insight that it holds a Department of
Defense (DoD) contract to produce the high-tech motors for the
precision-guided JDAM.
The Valparaiso-based manufacturer, originally known as UGIMAG, became
Magnequench UG when it was acquired by Magnequench Inc. in August 2000.
Magnequench Inc. had been purchased in 1995 by a consortium that
included the China-based San Huan New Materials and Hi-Tech Co.,
created and at least partially owned by the Chinese Academy of Sciences
in Beijing. Magnequench was a spin-off company of General Motors Corp.
(GM), and at the time of the buyout was headquartered in Anderson, Ind.
Clyde South was a negotiator for the United Auto Workers Local 662
representing the workers at Magnequench when the consortium began
negotiating to buy the company in 1995. In an interview with Insight,
South says that worker concern about PRC influence over the consortium
led to an "agreement with GM" that the plant would remain in Anderson
for at least 10 years According to South, the buyers made the same
agreement with the union, but since he had doubts about their
intentions he took his concerns to Washington. Warnings fell on deaf
ears. In August 2001, the sixth year of the 10-year agreement, South's
distrust was validated when the consortium's managers "told us they
intend to close the plant" and eliminate roughly 400 jobs.
The Magnequench plant in Anderson transforms neodymium, iron and boron
into powder using a unique patented process that produces the exotic
rare-earth magnets. Following the buyout in 1995, the production line
at Anderson was "duplicated in China" at a facility built by the PRC
company. According to South, after the company "made sure that it
worked, they shut down" the Anderson facility. South says he suspects
the buyout was about getting the technology, adding, "I believe the
Chinese entity wanted to shut the plant down from the beginning. They
are rapidly pursuing this technology."
Meanwhile, says the union negotiator, "They told us, 'We are going
bankrupt,'" and therefore had to close the Anderson facility. This was
not long after the consortium purchased UGIMAG in Valparaiso, according
to critics, telling the workers there that they planned to keep the
factory running. But, according to some sources, Magnequench Inc. had
"refused to buy the buildings or the property" on which the factory was
located, "suggesting a temporary arrangement." South said of his
experience, "You just couldn't believe anything they told you."
The plant workers at Magnequench UG are organized by the United
Steelworkers of America. Insight contacted union official Michael
O'Brien, who confirmed negotiations with Magnequench UG regarding the
company's future, but declined to comment further.
The transfer to Communist China of technologies that make rare-earth
permanent magnets also is a matter of concern for defense and
national-security experts, says Peter Leitner, a senior strategic-trade
adviser to the DoD. Leitner says rare-earth magnets "lie at the heart
of many of our most advanced weapons systems, particularly rockets,
missiles and precision-guided weapons such as smart bombs and cruise
missiles." He tells Insight why the PRC's need for this type of
technology is urgent, noting that "China has an ongoing high-priority
effort to produce a long-range cruise missile. They are trying to
replicate the capabilities the U.S. has, such as with the Tomahawk
[cruise missile], as part of their power projection, and expanding
their ability to strike targets at long distances."
Since the 1995 buyout of Magnequench by the consortium of two Chinese
companies and a cooperating U.S. firm, it has in turn bought at least
two more high-tech companies that deal in rare-earth magnets. In
addition to UGIMAG in 2000, which became Magnequench UG, it has bought
GA Powders, which was a spin-off company of the Idaho National
Engineering and Environmental Laboratory, a U.S. national lab. An
insider tells Insight that "Magnequench UG is the last American company
making these rare-earth magnets. When it moves to China, there are none
left." Leitner sees a pattern. He says the Chinese "have targeted the
manufacturing process through a variety of suspicious business
activities and have been furiously transferring the manufacturing
technology to China, thereby becoming the only source. They are
purchasing U.S. companies, shutting them down and transferring them to
China."
According to Leitner, "The Chinese are clearly trying to monopolize the
world supply of rare-earth materials such as neodymium that are
essential to the production of the militarily critical magnets that
enable precise guidance and control of our most advanced weapons and
aircraft." He warns that risks are involved in allowing this kind of
technology transfer, adding: "By controlling the access to the magnets
and the raw materials they are composed of, U.S. industry in general
and the auto industry in particular can be held hostage to PRC
blackmail and extortion in an effort to manipulate our foreign and
military policy. This highly concentrated control -- one country, one
government -- will be the sole source of something critical to the U.S.
military and industrial base."
Intelligence analysts emphasize that the PRC routinely combines
espionage operations with business deals. Internal PRC documents refer
to this as advancing "economy and ... national-defense construction." A
1999 congressional report on PRC espionage states that the Beijing
government sees "providing civilian cover for military-industrial
companies to acquire dual-use technology through purchase or
joint-venture business dealings" as a responsibility of the government.
The report lists "rare-earth metals ... for military aircraft and other
weapons" as one of the primary targets of the PRC.
So how could this be happening? Because of the PRC's involvement in the
1995 buyout of Magnequench, the deal required the approval of the
Committee on Foreign Investments in the United States (CFIUS), which is
chaired by the secretary of the Treasury. CFIUS approval of the buyout
predated a series of reports by the FBI and congressional committees
warning of massive PRC espionage efforts against U.S. businesses and
military technology. In one case, which involved the then-struggling
McDonnell Douglas Corp., the China National Aero-Technology Import and
Export Corp. (CATIC) targeted the U.S. aircraft giant's plant at
Columbus, Ohio, according to government sources. Plant 85, as it was
known, is where the bodies of the U.S. Air Force C-17 strategic
transport plane and the MX intercontinental ballistic missile were
made.
In 1994, CATIC made an offer to buy Plant 85 and relocate it to what
was to be a civilian aircraft-production facility, according to
government documents. The request for an export license for the plant's
machine tools touched off a bitter feud among export-control officials
at the DoD that still lingers nine years later. Those opposed to the
sale argued that once the Plant 85 machine tools were exported to the
PRC, they would be used to produce missiles for China's People's
Liberation Army (PLA). Those who favored the sale pointed to the
ancillary deal the PRC dangled in front of McDonnell Douglas to
purchase more than $1 billion worth of aircraft.
In the end, those in favor of the sale of Plant 85 won out and those
opposed almost immediately were vindicated. According to government
documents, within months of exporting the plant to China, U.S.
officials learned that the sensitive machine tools had been diverted
for use in a Chinese factory that makes the Silkworm missile that
Beijing has provided to rogue nations. United Auto Workers union
official South tells Insight he sees similarities between the cases of
McDonnell Douglas and Magnequench, noting that immediately after the
consortium's first Magnequench acquisition, "They transferred the
patented jet-casting process to China."
In an interview with Insight, Magnequench Inc. President Archibald Cox
Jr. initially denied but later confirmed having a contract for the
production of rare-earth magnets for the JDAM. When asked about the
shutdown of the Anderson plant last year, he acknowledged having a
10-year agreement with GM and the steelworkers, but insists that
despite the early termination of that agreement the workers "got a fair
deal" when the company bought out their contract. Cox tells Insight the
closing of the Valparaiso plant was a matter of economics, and denies
that the company is moving equipment to China.
"We are going to sell everything in the plant ... unless we can use it
somewhere else," says Cox. Insight has obtained evidence that
"somewhere else" may mean China. A copy of an internal memo from the
Valparaiso plant seems to contradict the "sell or auction" option. A
brief memo, dated Jan. 23, states in part, "In the near future you will
be seeing people in the plant performing measurements and a variety of
estimating and planning activities in preparation for equipment sale
and/or removal ... to give the company an idea of cost and logistics."
According to eyewitness accounts, all such "people have been from
China." Cox also acknowledges that Magnequench Inc. did not purchase
the buildings or land where the Valparaiso plant is located, but
refuses to characterize reluctance on the company's part: "It just
wasn't part of the deal," Cox says.
And, Cox insists, "China is already selling the same products for less
money."
A source with detailed and specific information about the internal
operations of the company tells Insight that "the company set up their
own competitors by transferring the machines and technology to China.
Once the Chinese companies bought into Magnequench, they created their
own competition."
According to company officials, Mangnequench asked for and received
clearance to export equipment it has shipped to the PRC.
Meanwhile, employees of Magnequench UG have placed their hope in an
unlikely labor-union ally. The one surefire deterrent to Magnequench
UG's move to China would be for President George W. Bush to exercise
his authority under the 1988 Exon-Florio amendment to the Defense
Production Act and order San Huan New Materials to divest its holdings
in this strategic U.S. company. In his State of the Union Address, the
president offered a glimmer of hope for Magnequench employees by
declaring his administration's intent to "strengthen global treaties
banning the production and shipment of missile technologies." If so,
say the workers, this may be a very good place to begin the process.
Scott L. Wheeler is an investigative reporter for Insight magazine.
email the author
http://www.newsalert.com/bin/story?StoryId=CpM6:0bKbytuZnty
March 12, 2003 09:37
Guardian Life Insurance Awards 80 Percent of Its Outsourced Technology
and Business Processes to Patni; Initial Contract Valued Over $35
Million
CAMBRIDGE, Mass.--(BUSINESS WIRE)--March 12, 2003--The Guardian Life
Insurance Company of America, the fourth largest mutual life insurance
company in the United States, today announced that it has awarded
outsourced software services to Patni Computer Systems (P) Ltd.,
India's sixth largest software services company.
Under the terms of the initial contract, potentially worth $35 million
over seven years, Patni will assist Guardian in introducing new life
and annuity products, and undertake gap analysis and implementation of
IT systems to meet the changing business needs in the insurance
marketplace.
Seventy percent of the work will be delivered out of Patni's Offshore
Development Centers in India, which will lead to significant cost
savings for Guardian. Patni's proven on-site/offshore capabilities,
supported by an integrated disaster recovery and knowledge management
systems, made it a vendor of choice.
Dennis Callahan, Guardian's senior vice president and chief information
officer, said, "Outsourcing to Patni offers us not only cost savings
for existing systems, but also provides us with a technology vendor
with which to collaborate. Patni was evaluated over six months against
numerous Indian vendors on various parameters including quality
processes, domain expertise and on-site/offshore capabilities to
service the US market. Patni's experience in the Life and Annuity
business was seen by us as a clear differentiator."
Narendra K. Patni, chairman and chief executive officer of Patni, said,
"Patni is committed to adding value to its customers by consistently
providing world class services through an efficient, cost-effective
offshore model. Our initial pilot demonstrated our Transcend(R) and
variable annuity resource capabilities over the competition, and this
win further endorses our strength and expertise in the insurance
domain. We are confident of extending our domain expertise for
Guardian's benefit."
Patni has a proven services track record in the Insurance sector
serving GE Financial Assurance, Employers Reinsurance Corporation,
GeneralCologneRe, Conseco and Fidelity Investments (FIRSCo and FESCo),
among others.
About Patni Computer Systems
Patni is a global IT Consultancy and Services provider with revenues in
excess of US $188 million (Rs. 914 Crores). The organization has over
5500 skilled software professionals, and services its Global 2000
customers through 21 international offices and six offshore development
facilities. Patni delivers high quality, reliable and cost-effective
software solutions to customers in the Manufacturing, Insurance,
Banking and Financial Services, Retail, Hospitality, Energy and
Utilities industries. Patni's technology focus areas include eBusiness,
enterprise applications, embedded solutions and enterprise systems
management, while its service offerings comprise of Business Process
Outsourcing, re-engineering, application development and support. These
capabilities are complemented by strategic alliances with leading
software vendors -- IBM, Microsoft, SAP, Oracle, BaaN, Siebel,
BroadVision, and Interwoven.
Patni is an ISO 9001:2000 and SEI-CMM Level 5 certified organization,
assessed enterprise wide at PCMM Level 3. The organization has also
integrated Six Sigma techniques, in line with its focus on continuous
process improvements.
About Guardian Life Insurance Company of America
The Guardian Life Insurance Company of America (Guardian) is the fourth
largest mutual life insurance company in the United States. As of
December 31, 2001, Guardian and its subsidiaries had $34.3 billion in
assets. Founded in 1860, Guardian is listed among Fortune magazine's
top 500 businesses--and in 2002 was ranked once again as one of the top
10 most admired life and health companies in Fortune's "America's Most
Admired Companies" list. With 5,500 employees, over 2,700 financial
representatives and 100 agencies nationwide, Guardian and its
subsidiaries protect individuals, businesses and their employees with
life, disability, health and dental insurance products, and offer
401(k), mutual fund and annuity investment products, and trust
services. More information on Guardian can be obtained at:
www.glic.com.
http://www.informationweek.com/story/IWK20030312S0006
Wall Street Set To Embrace Offshore Outsourcing
A TowerGroup report says spending on foreign outsourcers by North
American brokerage firms will reach $1.31 billion by 2005.
By Eileen Colkin Cuneo, InformationWeek
Mar 12, 2003 (12:00 AM)
URL: http://www.informationweek.com/story/IWK20030312S0006
Expect to see a big boost in offshore outsourcing investments at Wall
Street firms, according to a report released Wednesday by TowerGroup, a
research and advisory firm for the financial-services industry.
According to the report, North American brokerage firms will spend
$1.31 billion on offshore outsourcing by 2005, compared with the $417
million spent on such contracts in 2002. That's a compound annual
growth rate of 46.4%. The report cites the recently announced deal
between Lehman Brothers and Indian outsourcer TCS/Wipro and Merrill
Lynch's expanding offshore strategies as prime examples of a growing
trend. While the overseas movement--primarily to India--is aimed at
cutting costs, the trend will have more far-reaching consequences for
the industry.
IT workers will be the ones feeling those consequences. In 2002, more
than 1,000 IT staffers were replaced with offshore personnel.
TowerGroup expects that number to grow--more than 3,000 jobs are
projected to move overseas in 2005. In cumulative terms, that means
8,150 Wall Street IT jobs, or 15% of the four-year moving average IT
headcount, will be moved overseas in the next two to three years.
The way IT shops function also will need to change. Brokerages will
adjust their decision-making process, prioritizing projects as either
core activities that they want kept in house or noncore activities that
will be sent offshore. That can be a good thing, as CIOs will be free
of staff management and maintenance issues, leaving them better able to
focus on strategic issues such as next-generation architecture and
projects that will help generate revenue, says Dushyant Shahrawat, a
senior analyst at TowerGroup.
And the political issues could be great. Not only will Wall Street
firms be exposed to global events that could impact their ability to
fulfill contractual obligations, but they could also be also affected
internally, as the movement overseas will undoubtedly create an
internal human-resources issue and public demands for explanations. And
while things are rosy for outsourcing contracts, it would only take one
failed relationship or project to erode the trust between the firms and
overseas partners.
Copyright 2003 Asia Pulse Pte Limited
Asia Pulse
March 21, 2003 Friday
SECTION: Northern Territory Regional
LENGTH: 476 words
HEADLINE: CONVERGYS SETS UP CALL CENTRE IN MANILA
DATELINE: MANILA, March 21
BODY:
Convergys, the world's leader in call center operations, has decided to
set
up a P533.18 million (US$9.79 million) IT-enabled project in the
Philippines
brought about by the country's competitiveness in its quality of
skilled
managers and labor.
"I have to tell you that I have been extremely impressed with the
quality of
leadership and experience that we have been able to identify, which I
think
reflect well the high quality of your advanced education system,"
Jean-Marc
Handoucoeur, Convergys senior vice-president, said in a letter sent to
Trade
and Industry Secretary Manuel A. Roxas II.
In the Philippines, the Convergys' operation is expected to generate
1,876
new jobs and annual sales of $19.92 million.
"We have identified the lead candidates for the key positions of
country
general and head of human resources," Hauducoeur added.
"The decision of Convergys to invest in the Philippines manifests the
business confidence in the country. It answers our need to attract big
businesses to establish firm foothold in the industry and to enhance
the
country's image as a potential investment site," said Roxas.
Convergys is among DTI's targets in one of its US investment missions
focused on the country's IT capabilities, infrastructure and skilled
manpower.
Convergys Philippines Services Corp. will engage in IT-enabled services
which include business process outsourcing and call center.
"We were clearly impressed by the determination of your term and your
government to attract US investments, and Convergys in particular, to
the
Philippines", Hauducoeur said in the letter.
Roxas also said the introduction of math and sciences in the Philippine
curriculum as well as reverting to English as medium of instruction
fortified the country's advantage in the call center industry.
Already, a number of companies have relocated their business operations
in
the Philippines citing educational attainment, English competencies,
adaptability to western business practices and the country's legal and
financial systems patterned from the US legal system as among the major
factors of their decision.
Established in 1983 and based in Cincinnati, Ohio, Convergys is among
the
latest call centers to establish business in the Philippines.
It is known to be a global leader in integrated billing and customer
care
services, and employee care services with 45 call centers worldwide.
Their employee care services reach 1.2 million employees across the
globe.
It is a member of S&P 500 and the Forbes Platinum 400. For the first
semester of 2002, its revenues amounted to $575.57 million and a net
income
of $591.1 million.
Convergys employs 46,000 people in their contact centers, data centers
and
other offices in the United States, Europe, Asia Pacific, Canada, Latin
America and Israel.
http://www.dailypress.com/technology/ats-ap_technology10mar14,0,1131585.story?coll=sns%2Dtechnology%2Dheadlines
Philips Steps Up Chipmaking Outsourcing
March 14 2003, 3:53 PM EST
TAIPEI -- Consumer electronics maker Philips said Friday it plans to
hand off more of its chipmaking production contracts to three companies
in Asia.
Over the long haul, Philips will farm out as much as 20 percent to 30
percent of all chip production, up from 10 percent currently, said
Andrew Goldman, director of global public relations at Philips
Semiconductors in Europe.
However, the Dutch company said no new orders will begin in the short
term.
Philips will give priority to Taiwan Semiconductor Manufacturing Co.,
in which it holds a 21.7 percent interest.
Other companies in Asia to receive Philips' increased orders include
Taiwan's United Microelectronics Corp. and Chartered Semiconductor
Manufacturing of Singapore.
The global chip industry grew just 1.3 percent last year after a record
decline in 2001, according to figures published by the Semiconductor
Industry Association.
The ongoing slump in sales of technology gear has forced chip companies
to scale back on plants and outsource more orders to contract
chipmakers.
On Thursday, Philips said it would slash 1,600 jobs in the United
States and Europe as part of a restructuring aimed at returning its
semiconductor division to profitability by the fourth quarter.
The cuts include 520 jobs in San Antonio, Texas, and 600 jobs in
Albuquerque, N.M. The remaining 480 jobs will be cut from overlapping
administrative offices in Europe and the United States.
Philips has said it has no plans to reopen a chip factory that it
closed in Albuquerque and one it is closing in San Antonio.
The semiconductor unit accounts for about 25 percent of Philips'
overall sales. Philips posted a record net loss of 3.21 billion euros
($3.47 billion) last year.
In afternoon trading, shares of Philips Electronics rose 47 cents, or 3
percent, to $16.08, on the New York Stock Exchange.
Copyright ) 2003, The Associated Press
http://news.com.com/2100-1011-991918.html
EDS sends IT work Down Under
By Ed Frauenheim
Staff Writer, CNET News.com
March 10, 2003, 6:03 PM PT
http://news.com.com/2100-1011-991918.html
In a move that highlights the flight of U.S. information technology
work overseas, Electronic Data Systems is adding 360 jobs to its
operations in New Zealand.
Plano, Texas-based EDS, which provides a range of IT services, said
Monday that it would add 360 jobs to its current New Zealand staff of
2,300 because of a grant of roughly $840,000 from the government of New
Zealand.
The company said the grant will help it expand its network of
facilities providing clients with software services such as application
development and testing, as well as help-desk services and so-called
business process outsourcing. Business process outsourcing (BPO)
involves an outside company taking over various back-office functions,
including procurement, invoice processing and the like.
EDS said it would match the grant with a multimillion-dollar
investment.
"New Zealand's stable political environment, growing economy,
competitive cost structures and flexible and skilled IT work force make
it an ideal location for the EDS 'Best Shore' program," said Rick
Ellis, managing director at EDS New Zealand.
U.S.-based IT services companies have been rushing to expand their
overseas operations to cut fees for customers and compete with Indian
IT services companies. One of the services being provided from abroad
is business process outsourcing, which also represents a key area of
growth for IT services companies.
Critics of the shift of IT work overseas have raised questions about
the skill levels of Indian programmers and the effect of "offshoring,"
or the moving of work overseas, on U.S. workers. An advocacy group, the
Washington Alliance of Technology Workers, has called for a
congressional study of the trend.
Last fall, EDS launched its worldwide "Best Shore" initiative, which
aimed to undercut the prices of IT service competitors. EDS's office in
Wellington, New Zealand, is one of its 16 best-shore facilities. EDS
also has an office in Auckland, New Zealand, and the new investment
will allow the company to develop a best-shore center there as well,
company spokesman Travis Jacobsen said.
EDS New Zealand already is handling applications work for Coors
Breweries and contact center work for U.S.-based ChevronTexaco.
http://www.business.scotsman.com/technology.cfm?id=282172003
BT faces strikes threat over move to India
JAMES DOW
TELECOMS giant BT was told to expect demonstrations and a vote on
strikes by staff in Scotland within the next fortnight, after the
company confirmed plans to move call centre work to India - putting
1,200 Scottish jobs under threat.
Union leaders unveiled plans to stage protests outside BT contact
centres in Kirkcaldy, Glasgow, Inverness and Bathgate. The
demonstrations are scheduled for 20 March, as part of a UK-wide
campaign.
Derek Durkin, head of the Edinburgh branch of the Communication
Workers Union, said: "We anticipate a motion on industrial action in
the next week to ten days."
The news came as BT said it would open two directory inquiries centres
in Bangalore and New Delhi. The operations will be outsourced to local
companies with an aim to hire 500 staff by the end of the month, and
2,200 by March 2004.
BT said the move was part of a goal to reduce its call centre workforce
in the UK by 12,000. About 10 per cent of those jobs are likely to
disappear in Scotland, where the group employs 2,400 at contact centres
in five locations.
A spokeswoman for BT in Scotland said the company would not make
redundancies. "Call centres tend to be areas of high turnover of staff,
so we can make the reduction through natural losses", she said.
BT also revealed that it will invest #8 million in new IT software at
its network of 31 contact centres across the UK. "We are investing
heavily in Scotland at the same time we invest in India," the
spokeswoman said.
Unions said they will lobby MSPs to table a motion in Holyrood, raising
concerns about foreign outsourcing. Sally Bridge, a CWU official in
London, said: "We have already seen moves to India by manufacturing and
finance companies. Allowing BT to shift these jobs is allowing the
trend to reach deep inside the service sector."
She added: "This is UK customer-facing work by a UK company. We feel it
should be done by UK workers."
The new Indian operations come as BT attempts to reduce costs at its
retail division by #150 million in two years.
"As a result of deregulation, we now face intense competition," the
company said. "In countries like Germany, established providers have
lost up to 40 per cent of market share.
"We will not allow that to happen to us. By trimming costs we can
remain very competitive and protect long-term jobs
http://www.ciol.com/content/news/repts/103030604.asp
Syntel to invest $60 m in Pune facility
The facility would be fully functional in the next two months and after
the final phase, it would be able to accomodate 2,500 people.
Cyber News Service
Thursday, March 06, 2003
MUMBAI: Syntel India would invest around $60 million in its Pune
development center in three phases. The company is planning to invest
around $20 million in first phase, which is expected to be completed by
April 2004.
Atul Kunwar, Chief Operating Officer, Syntel India said, "This center
will cater to the needs of all our customers and this going to be the
main development center of the company with a capacity of around 9,000
people. Also all our development centers will be assessed at Level 5 of
the SEI's CMM certification."
The company already has development centers in Mumbai, Chennai and
Delhi with strength of around 3,000 people. The company is adding 300
people every quarter in these development centers. The company is also
planning to foray into new verticals that include logistics and travel
and telecom application. It is currently servicing verticals that
include banking and finance, healthcare, insurance, automotive and
retail.
Syntel is a US based company and has now shifted its base to India. It
has also shifted all its backend processing to India that includes
accounts, HR, etc. Since shifting of backend processing required
expertise, which the company has got during the course of time, and is
now leveraging it on its existing clients as a new business line. The
company is now planning to add new clients to this new line of
business.
The company is expecting a substantial growth this year as it saw a
drop in its revenues last year by around $5 million and closed it on
$165 million on December 2002. This year it is expecting to generate
around $87 million by June 2003. Currently, around 56 percent of its
revenues comes from onsite and 44 percent from offshore business, but
the company is expecting to get at least 70 percent of the business
from offshore this year.
Syntel is a global e-Business and Applications Outsourcing company,
which delivers real-world technology solutions to corporations.
Syntel's portfolio of services includes e-Business development and
integration, wireless solutions, data warehousing, eCRM, as well as
complex application development and enterprise integration services.
http://www.telegraphindia.com/1030308/asp/business/story_1745802.asp
KMG Infotech set to open Calcutta centre
ALOKANANDA GHOSH
Mobar India chairman Russi Mody at the inauguration of the new office
of Luminex Technologies in Calcutta on Friday. Luminex CEO G. B. Thakur
is also present. Picture by Kishor Roy Chowdhury
Calcutta, March 7: KMG Infotech, the Indian subsidiary of the $
10-million US-based Key Management Group (KMG), is setting up an
offshore development centre here. It will be the third such centre set
up by the company in India, the other two being in Bangalore and Delhi.
The Calcutta centre will start operations in the first week of April.
We have entered into a service partnership agreement with Luminex
Technologies, says Rahul Gupta, managing director of KMG Infotech. They
will act as facilitators and help us set up the infrastructure.
KMG caters to the software development and maintenance requirements of
large and medium-sized insurance companies in the US and India. It also
provides similar service to the government sector in India. KMG has
employed 70 people in its two centres at Bangalore and Delhi.
Luminex Technologies has been set up recently by city-based
professionals to provide IT-enabled-services in the business process
outsourcing (BPO) segment. The company has former Tisco chairman Russi
Mody and former United Bank of India chairman Basudeb Sen on its board.
Chief executive of Luminex, G. B. Thakur, said: We are in the process
of formulating two to three projects worth around Rs 50 crore. There
are plans to provide ITeS for customer communication and transactions.
Luminex will provide complete solutions for use in intelligent cards
and bar-coding services in hospitals, large shopping centres, transport
operators and other industries.
The Calcutta centre will have 15 to 20 employees. We expect to generate
revenue around $ 3000 to $ 5000 per person per month. This is the
average revenue generated from our operations at the other two centres,
says Gupta. The Indian operations of KMG generates $ 2 million revenue
annually.
Our operations in the US and Germany provide us with a very large
marketing bandwidth. We have 15 clients worldwide in the insurance
sector. The Calcutta centre will help us ramp up the Indian operations
and contribute largely to the growth of the company, he added.
http://www.business-standard.com/today/story.asp?Menu=24&story=9689
Xansa to invest Rs 160 crore
Our Corporate Bureau in New Delhi
Published : March 8, 2003
Xansa, the $800 million UK-based software services company, plans to
invest Rs 160 crore in India to set up three software development
centres.
The company has already committed to invest Rs 60 crore in its centre
in Delhi, while the rest would be invested in its upcoming centres in
Chennai and Pune.
India is important for us and participates in all the work that we
undertake in various parts of the world, Alistair Cox, chief executive,
Xansa Plc, said.
The company plans to have an headcount of over 10,000 in India. The
Noida centre has a capacity to house 1,600 people, Pune around 3,500
and the Chennai unit with about 6,500.
We are building up capacity as we would be in a better position to ramp
up depending on client requirements, he said
Pointing out that the Indian development centre handles key initiatives
for the company, Cox said of the total 5,000 people it has worldwide,
about 20 per cent are in India.
I can see it only growing. We are moving more work to India as it is a
fundamental business proposition for us, he said.
As a part of the companys growth strategy in India, the company is
also looking at starting business process outsourcing in India.
We have various projects in the pilot stage. We are looking at rolling
this out in a large scale, Cox said.
The companys Indian operations already handles some of the
backoffice operation of Xansas global requirements such as human
resources, finance among others.
India handles the internal requirements of the company. We are now in a
position to handle the BPO requirements of clients from across the
world, he said.
On asked about the companys growth plans in India, he said, We are
looking at utilising India more and more for our global clients.
Companies have also realised outsourcing to India has its own
advantages, he said.
http://economictimes.indiatimes.com/cms.dll/html/uncomp/articleshow?artid=39793228
CSC plans to add two centres, appoint 1,400 engineers
PRASENJIT BHATTACHARYA
TIMES NEWS NETWORK[ SUNDAY, MARCH 09, 2003 10:15:45 PM ]
NEW DELHI: The worlds third-largest IT services MNC, the $11-billion
Computer Sciences Corporation (CSC), is on an expansion spree in India.
The company is planning to recruit 1,400 engineers and start two new
development centres in the country over the next two years. Currently,
CSC has 700 employees and three development centres in the country: two
at Noida and one at Indore.
The company is also developing an offshore BPO facility for its global
operations in India, with tech support, e-mail support and remote
infrastructure maintenance planned in the country.
Speaking to ET, CSCs Asia president Mike Brinsford said that the
company is actively considering two more development centres here, one
at Noida and another at a southern location, either at Hyderabad or
Bangalore.
In terms of size, CSC is next to IBM Global and EDS in the IT services
domain. Apart from outsourced development of IT projects of major
corporations, CSC also has strong branded products in the financial
services segment.
Brinsford added that in the BPO domain, the company is extending the
scope of the Indian operations to contribute more to the companys
global needs. He said that CSC is looking to set up technical
help-desks and e-mail support facilities in the country for the global
CSC operations. The company is also looking at supporting CSCs IT
infrastructure from here. In the BPO space, CSC is looking at hiring
200 employees soon for its help-desk.
Speaking on how CSC compared with major Indian IT services companies,
Brinsford said that any major IT company in the world was a competitive
threat. He also added that, increasingly, customers were getting
price-competitive and offshore operations did help CSC gain cost
advantage. However, Brinsford added that the range of services that CSC
offered to clients was more vast than any domestic IT company can
offer. The scope of services required by many of our bigger clients are
beyond the scope of any Indian IT services company today, said
Brinsford.
He added that the cost structure of CSCs India development centre
was much lower than that of any domestic company. We have zero
marketing cost in India, neither do we maintain any bench in the
country. Hiring is strictly according to the projects we bag. We also
have negligible promotional costs, says Brinsford.
CSC last year set up its third software development centre at Noida,
with a capacity for 400 engineers. This software development centre
entailed an investment of $3 million.
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