Indian Shares

Genovate Solutions Pte Ltd of Singapore, a provider of business IT solutions today announced the establishment of five new offices in India, increasing the company's total presence to 12. Genovate's major lines of business at present includes, SAP solutions training both Instructor led and e-learning, SAP Consulting/ Implementation & Maintenance Services for Mid Markets, RapidStart (Integrated Retail and Business Management software) and Knowledge Window Asia Pacific (KWAP) Training Centre.
Revenue from International Operations are expected to contribute up to 70 to 80% of Genovate's total annual Revenues, with 40% of this from the Indian market alone. To support the growing market demand for business solutions in India, these new offices will be established in Hyderabad, Thane, Bangalore, Baroda and Lucknow, to further increase Genovate's ability to provide better information technology solutions, sales of products and services, information technology training and education, as well as consulting and implementation services in respect thereof.

 

In a detailed article on Multinationals investing in India and the growing variety of service which can be performed from India the BBC highlight some interesting facts.

• More than 500 major international companies have IT operations in Bangalore alone
• India, exports $25bn per year worth of BPO services, a figure that is expected to rise to $60bn by 2010
• Foreign IT investments in India over $1bn during 2006 were made by IBM, Intel, SAP, Accenture, Cisco Systems, AMD, Microsoft and Dell

Read the full BBC article here and here.

Indian software giant Infosys is reporting a 52.4% risein quarterly profits and 47% increase in revenue, on the back of strong outsourcing orders from Western firms. JC Penny recently outsourced to InfoSys as did over 40 more companies this quarter.

The demand for skilled IT professionals in India is so high that companies are starting to find it hard to find suitable recruits. Infact some India companies (such as Intel) are setting up programmes to attract Indian's working abroad back to India. Software industry body Nasscom has warned that India faces a shortfall of half a million skilled workers by 2010

 

 

New research has found that shares in the major India-based IT services providers have vastly outperformed their western rivals so far this year, despite falling sharply in May and starting from valuations based on much higher multiples of earnings and revenues.

Full Article

Indian IT companies such as Infosys, Wipro, and TCS are having to respond to the increase rate of staff turnover by increasing salaries by upto 20%. The trigger being the likes of IBM and EDS investing heavily in India and luring staff to new positions. Some analysts are predicting that India will see more and more work move to countries like China and Vietnam as the wages of Indian IT staff increase.

Andy Mukherjee at Bloomberg takes a closer look at the issue.

IBM is looking to provide small and medium businesses with pre-packaged solutions which have a fixed price and quality driven. IBM will be providing the following packages:

• IBM e-Mail Security Services
• IBM Security Assessment Service
• IBM Site Assessment Services

IBM has launched the latest version of its DB2 database product, and Version 9 contains a significant input from IBM India. IBM India Software Labs is acknowledged as having made a significant contribution to the 5 year development of DB2 9 (aka Viper) and in particular the products testing.

IBM DB2 V9 is a major update to provide further capabilities for handling XML data and building SOA environments.

It is being reported that Telstra and Optus are looking to outsource work to India from Australia to reduce costs. Optus is an Australian leader in integrated telecommunications, delivering cutting-edge communications, information technology and entertainment. Telstra provide a range of fixed phone, mobile, Internet and Pay TV solutions.

Optus is looking to increase the size of its Indian call centre and Telstra is looking sign a major deal outsourcing deal with Wipro. In 2004 Telstra outsourced parts of it's business to IBM, EDS and InfoSys.

NASSCOM have announced the top 20 IT service and computer software exporters in India for 2005-06.
During the period exports rose by 32% to US$17.3 billion.
  
The top 5 companies are:

1. TATA Consultancy Services (TCS)
2. Infosys
3. Wipro
4. Satyam Computer Services
5. HCL Technologies

See the Full NASSCOM list.

The data does not include contributions to the Indian economy by US listed companies like IBM, HP, and EDS.

To meet growth targets and manage costs Wipro is opening a new Business Process OutSourcing (BPO) centre in Vietnam. Wipro is looking to take advantage of the countires lower operating costs. Vietnam will join Romania as an international BPO center in the Wipro service portfolio.

Convergys the Cincinnati based company announced today that it is continuing its expansion of Business Process Outsourcing (BPO) in Asia. With the addition or expansion of BPO centres in Malaysia, Singapore, China and India.

See Convergys Press Release

IBM have announced that the company will be tripling it’s investment in India over the next 3 years. The company will invest a further US$ 6 in its software development, support, call centre and BPO activities in India; in addition it will use Indian talent to further its research.

• IBM Chairman and CEO Announces Plans to Triple Investment in India over Next Three Years (IBM)
  
• IBM plans big India investment (BBC)
  
• IBM plans $6B investment in India (CNN)
  

The further investment follows on from the purchase of Daksh, Indian’s third largest business outsourcer in April this year.

TESCO has grown immensely in the UK market and internationally in recent years, to the point that concerns are being raised by British MPs about its sheer size.
To support its phenomenal growth the company has turned to India, where it has created its own business support centre instead of turning to Business Process Outsourcing (BPO). The Business Support Centre in Bangalore will be used for IT development and Business Process support.

The Business Support centre will initially focus on TESCO financial services and online customer service activities.

Tesco Hindustan Service Centre (HSC)

InfoSys (INFY) announced today that they are acquiring a further 23% stake in Progeon from CitiCorp for cash. InfoSys is the majority owner of Progeon a Business Proccess Outsourcing (BPO) and Business Process Management (BPM) specialist operating in India, Czech Republic and the Philippines. Progeon implements BPO, BPM and Knowledge Process Outsourcing (KPO) in the following industries:

• Banking
• Capital Markets
• Communications Service Providers
• Healthcare
• Insurance
• Manufacturing

 

It is expected that as part of honouring a clause in the contract when Indian Airlines purchased new Airbus aircraft last year, Airbus will be outsourcing and estimated $400 million of AEROSPACE work to India. The work will go to a consortium of Indian companies headed by Hindustan Aeronautics Limited (HAL) and will include Wipro, Tata Consulting Services (TCS) and InfoTech.

Hindustan Aeronautics Limited (HAL) is a public company backed by the Indian Ministry of Defence, who have manufactured planes and components under license. At present Hindustan Aeronautics Limited (HAL) builds under license the Sukhoi Su-30MKI is preparing to start production of the British Aerospace (BAe) Hawk.  

With a relatively small population base speaking Danish, Norwegian or Swedish some wonder how outsourcing from these countries would work. However there are a growing number of examples of success stories in this field. Where companies such as Wipro and Kring are leading the way.

An interesting discussion on outsourcing to India from Norway is captured in the minutes of a meeting help at the India embassy in Norway between IT professionals.

A further example of how the outsourcing model can work is provided by KRING, to whom Telia have recently outsourced work on an internal knowledge management system. The KRING outsourcing model provides the development resource for this project in India put keeps the project management aspect within Denmark

Further examples of growth in the level of outsourcing from Scandinavia to India are that during 2005 Kring:

• Increased their office space in Denmark
• Opened an office in Oslo Norway
• Expanded there facilities in India

Wipro Scandinavian Case Studies:

• Barwil (www.barwil.com)
• The Norwegian Directorate of Taxes 
• JD Edwards in Sweden
• Streamlining the sales order process for a telecom service provider

The Business Standard and The Hindu newspapers are both reporting that TATA Consultancy Services (TCS) are eyeing significant parts of the IT work Boeing intends to outsource to Indian companies as part of the re-investment from the recent Air India order for Boeing aircraft.