Industry Updates : ITeS / BFSI Sector

19 May 2011: Quality concerns loom: Top outsourcing customers Amex, Citibank and JPMorgan fret over freshers in IT projects 

Top outsourcing customers, including Amex spinoff Ameriprise and Capital One, are raising concerns over the increasing number of new engineering graduates employed by Indian and foreign tech firms in IT projects.

People familiar with the discussions said customers, especially in the banking and financial services sector, are worried that a high proportion of freshers may affect quality in what they call critical back-office functions.

Already, customers such as Capital One-the Virginia bank that outsources to some of the top tech firms based in India and overseas-are demanding more scrutiny on the ratio of freshers working on critical projects. 

Customers such as Amex, Citibank and JPMorgan are demanding more with less, or the same IT budget, forcing firms to seek ways of sustaining their profit margins through the use of freshers at lower salaries. 

18 May 2011: Infosys says business could be hit if US restricts visa programme 

Facing lawsuit by a former employee, Infosys Technologies has said its business could be adversely affected if the US decides to restrict the visa programme as a fallout of the case. 

Earlier this year, Infosys employee Jack Palmer had filed a lawsuit alleging that he was asked by the company to sign on documents which said workers were heading to the US to have meetings rather than to work there.

18 May 2011: Wipro emerges leader among global R&D service providers: Study 

Wipro has emerged as the leader followed by HCL, Patni, Infosys, Mahindra Satyam and MindTree in the rating of global R & D service providers across various countries like India, China, Russia and Eastern Europe, according to a study.

Announcing highlights of the study here today, Co-Founder & CEO, Zinnov Management Consulting, Pari Natarajan said all the 44 firms had been assessed on parameters like human capital, capabilities, financials, ecosystem linkages, infrastructure and business sustainability.

16 May 2011: No vertical limits: BPOs widen sectoral reach 

Large BPO firms are widening their vertical or sectoral expertise to cater to the changing demands of the outsourcing industry. 

Historically BPOs have been horizontal focused. They offered services like customer interaction and support , finance and accounting, and human resources that are applied across different industry verticals. Industry body Nasscom estimates that horizontal services account for more than 70% of the Indian BPO industry.

But with clients now more open to outsourcing sector specific mid- to front-end functions that require deeper domain knowledge, BPOs are enhancing their expertise in such functions. These include areas like mortgage processing, core banking, supply chain and healthcare insurance. For clients, this helps to contain costs and focus on their core business.

14 May 2011: Intel Capital invests $18 mn in five Indian companies 

Chipmaker Intel's venture capital arm Intel Capital Friday announced an investment of $18 million in five Indian companies as part of its ongoing commitment to support technology in India.

The company signed two new agreements to invest in Policybazaar.com, an online insurance-comparison site, and Sudhir Srivastava Robotics Surgery Center (SSARSC), which provides advanced robotic surgery procedures in the country.

13 May 2011: Tata Mutual Fund’s former MD, Ved Prakash Chaturvedi, to head Larsen & Toubro Finance Holdings

Ved Prakash Chaturvedi, who stepped down as managing director of Tata Mutual Fund a few months ago, is all set to head L&T Finance Holdings, the financial services business of engineering and infrastructure major Larsen & Toubro.  Chaturvedi will head the group's capital market business which includes the mutual fund, equity capital market, product distribution and stock broking verticals.

13 May 2011: Outsourcing customers questioning large unused cash piles of Infosys, others 

Coming out of recession, outsourcing customers are asking cash-rich firms like Infosys to spend more on creating new solutions and are raising concerns on high debt at vendors such as iGate, as they seek to give more work to fewer suppliers and squeeze more bang for their buck. While Infosys is facing pressure from investors and customers to utilize its $3.8 billion cash pile effectively, iGate's over $700 million debt to fund Patni acquisition is causing a rethink among potential customers who are concerned about high financial risks. 

12 May 2011: ICICI Venture acquires 10% in RJ Corp's Devyani International for Rs 250 crore

ICICI Venture has bought a 10% stake in RJ Corp's Devyani International, which runs KFC, Pizza Hut and Costa Coffee chains in India, for about Rs 250 crore.

Analysts said it's a win-win deal because RJ Corp gets money to expand the business, while ICICI Venture gets a foothold in one of the fastest-growing businesses.

10 May 2011: Niche tech firms outbid Infosys and Mahindra Satyam for Airbus deal 

Two of India's biggest software firms -- Infosys andMahindra Satyam -- have been outbid by smaller, niche rivals QuESTand Cades for an outsourcing contract potentially worth over $300 million from the world's largest commercial plane maker, Airbus. 

According to at least three people involved with the discussions, Airbus plans to outsource more design projects for its 380, A350 and A320 series of planes to vendors based in India to slash costs by up to 40% and focus better on competing with rivals such as Boeing.