The State of Sourcing

Analytics is a relatively new buzz-word in the outsourcing industry with a lot of service providers offering these services, either as a pure horizontal across industries or as a vertical specific service. With marketing services being outsourced, usually in a bundled format with customer support and other BPO offerings to “sweeten” the deal, there are elements of marketing analytics coming into the outsourcing foray. In a new HfS Research report co-authored by ValueNotes, titled ‘Where Offshore Analytics is Heading in 2011’, we have focused on the emergence of ‘horizontal’ analytics across services such as sales and marketing.

To define marketing analytics, let’s take a look at these two terms separately –

Continue reading ‘Defining Marketing Analytics’ »

“TCS eyes slice of legal process outsourcing market” – a new day, another entrant to the LPO market. The recent announcement by the CEO of Tata Consultancy Services (TCS) regarding exploring of opportunities in the LPO segment should come as no surprise to players in the IT-BPO or KPO sector. The LPO market has grown by leaps and bounds since its inception, examples of which are evident through the number of players in the market currently and their growing client base spanning 3 continents.

A primary reason for Thomson Reuters’s acquisition of Pangea3 and UnitedLex’s of Lawscribe in late 2010, in my mind, was to meet growing demands by organizations and law firms alike to cut costs and increase process efficiencies. These acquisitions saw these market heavyweights expand their businesses, core strengths and the ability to offer clients additional solutions. The market is primarily serviced by pure-play providers, like CPA Global, Pangea3, UnitedLex and Mindcrest, who offer legal services as their core focus. The last 2-3 years has seen IT-BPO players entering the market to add to their top line and expand into new service areas. Their only competition is from these large pure-play providers who have established themselves globally because of their head start.

Continue reading ‘Would you like a slice of LPO pie?’ »

The decade from hell. That’s what TIME magazine called it in 2009- what with terror attacks, two terms of GW Bush, the great big downfall of Fannie Mae / Freddie Mac and subsequent real estate fiasco– it’s no wonder that Americans are really tired.  Well, that and no more MJ!The first decade of the 21^st century is over. So how did outsourcing fare ?

Since so much of what we do consists of looking at trends, here are some of the top of the hat trends that breezed around and then hung like a fog over the decade.

Continue reading ‘2010 is dead. Long live outsourcing’ »

In the recent months, we have been studying the effect of the digital market on the publishing industry. Across segments and geographies, publishers are experiencing challenges centered on costs, resources and technology that have made it necessary for them to re-invent their business models.

Of the 200+ publishing professionals we interviewed, we found that close to 4 in 5 publishers are either outsourcing or considering outsourcing publishing services. So, if the whole industry is pretty much outsourcing technology, back office processes and industry specific publishing services, why is it still taboo? Perhaps some context would help.

Continue reading ‘Why is the outsourcing of publishing services still taboo?’ »

Early last week, we reported and debated in our newsletter, about the

high probability of Patni Computers selling its majority stake to iGate Global Solutions. Well, if Economic Times is to be believed, our expectations were validated, and the wedding is official! So what now? Though in the long run, iGate and Patni will both benefit from this move, there are many hurdles along the way, before the promised happy ending…

1. Battling attrition – Patni already experiences one of the highest industry attritions, at around 26 percent, compared to 14-17% for Infosys and TCS. As with any change in ownership, there is bound to be a slight acceleration in attrition soon. This may especially apply for Patni, as the acquiring company in this case is a much smaller entity. The IT-BPO industry is already seeing very high attrition, and neither Patni nor iGate will be spared, making stability a concern in the next 6 months.
2. Retaining clients – An interesting study by advisory firm Offshore Insights reveals that if iGate emerges victorious, Patni could lose anywhere between 15-20% of its revenues due to client losses. While that may sound like a bit of a stretch, the reality may not be far from these estimates. The biggest cause for concern is that Patni is currently exposed to high risk in its client composition. Nearly half of its revenues have been consistently derived from its top ten clients. Losing any of these will thus significantly impact the topline! Another disadvantage and cause for worry is that Patni is not a top offshore provider to any of its clients, according to the report. Thus most clients are stocktaking their dealings with the service provider, just in case, and are most worried about how their offshore teams would be affected post the merger.
3. Managing stability and risk- For the last few years, it has been known that Patni promoters have sought an exit from the company. With each wave of proposed stake sale, they have had to assure existing and potential clients of their stability of operations. In case there is a fallout with the latest iGate bid, the company will have to undertake a massive campaign to manage risk and restore any lost confidence in the marketplace.
4. Managing growth - Though Patni has been around longer, it has seen far slower growth, compared to newer competitors like Infosys, TCS and Wipro. iGate will face an uphill battle to grow the company, with a carefully crafted joint strategy for the long term.

Continue reading ‘Patni-iGate: I Do. Now what?’ »

- WNS was one of the early BPO entrants in the LPO industry.
- Infosys entered the LPO industry about two years back and currently has a team of 500+ employees in their LPO division.
- Wipro BPO made its presence in the industry around the same time as Infosys and has more than 100 employees in its LPO division.

In addition to these companies, several others such as OfficeTiger (one the early entrants), EXL, Caliber Point have entered the LPO industry. More recently, Accentia Technologies Limited, a BPO provider announced its decision to jump into the LPO industry. The company is scouting for acquisitions to enter the LPO industry.

Continue reading ‘BPOs in the LPO industry?’ »