From:	Baroni Limited [Baroni-Limited@tiscali.it]
Sent:	28 February 2008 09:46
Subject:	Baroni Limited - Offshoring Newsletter' - 03/08

Sensitivity:	Confidential

NelsonHall Study Links KPO with Market Entry and Product Introduction
Client perception of Knowledge Process Outsourcing (KPO) is changing, according to NelsonHall. KPO has been seen as a periodic service that supports discrete initiatives, such as sales campaigns. Increasingly, KPO is viewed as an integral part of business operations. Upshots include emerging growth opportunities in financial, pharma and other sectors, and a greater emphasis on globalization.  'KPO services currently are mostly bought by large multi-national corporations out of their U.S. and U.K. operations. As these mature markets slow down over the next few years, KPO vendors are increasingly being asked to support new market entry, in emerging markets such as those in Eastern Europe,' said Andy Efstathiou, Research Director at NelsonHall.
Highlights from the NelsonHall research report include:
	KPO service providers collect, scrub, process, and interpret data. The key capability for a KPO provider is the ability to rapidly scale personnel, with skills relevant to a specific data type, and deliver improved insights on that data. Necessary skills are therefore less industry specific than data type specific.
	Using KPO services, enterprises have been able to convert fixed to variable cost and shorten process execution cycles
	Key areas of growth are in sell-side financial services research for emerging markets/new financial instruments, drug trial data management across an increasing country-base, and market research services for enterprises entering emerging markets
	KPO services are typically centrally delivered from offshore delivery Centres, replacing highly localized in-house service delivery. By centralizing KP service delivery, enterprises, are able to increase consistency and transparency and improve command and control
	Expansion of geographic scope by existing clients will be a key feature of the KPO market in 2008

Globalization
NelsonHall’s research also supports the conclusion that globalization is leading clients to want improved consistency of business intelligence across a wider range of geographies. Customers are outsourcing knowledge processing services to adapt their operations rapidly to capture earnings opportunities in emerging markets.
'Enterprises want the flexibility to respond rapidly to new market opportunities, which is increasingly difficult to deliver using traditional in-house methods. Vendors need to respond to this opportunity supporting new knowledge requirements with rapid provisioning flexibility,' said Efstathiou.
Forecast
Given the pressing need for business intelligence to enable managers to respond aggressively to rapidly changing marketplaces, NelsonHall forecasts that the global knowledge process outsourcing market will grow at thirty per cent per annum over the next five years to reach $4.45Bn by 2012.	

 	
 Top Stories	
 	
IT R&D offshore market to touch $21.4bn
The IT R&D offshoring market in India is expected to record a CAGR of 23% to touch $21.4bn by 2012, according to a study done by Zinnov, a consulting firm. Zinnov said there are around 600 MNC captive centres in India and for 2008, the total revenue is expected to touch $9.4bn with $5.8bn going to come from the MNC captive centres rest from the third-party vendors.

BAA outsources IT apps to LogicaCMG
Airport owner BAA has today announced it has outsourced its IT applications to LogicaCMG. The owner of Heathrow Airport will reduce cost of application services and development with the transfer 50 staff and use of onshore/offshore outsourcing deal model. 

Barclays Bank Sells Support Site to FirstSource.
Barclays' credit card business in the U.S. has struck a five-year deal with Indian outsourcer Firstsource Solutions (earlier known as ICICI OneSourc) to run their existing call Centre in Colorado Springs, Colorado. The value of the deal could be as much as US$80M, (around Rs 320 crore).

Pay Plus Benefits Awards IT Support Contract to AtlasTG
Pay Plus Benefits, Inc. and Atlas Technology Group, Inc. have signed a multi-year Service and Support Agreement whereby AtlasTG will analyze Pay Plus Benefits' IT network, make system enhancements, then embed its proprietary Monitoring, Alert, and Management software to provide ongoing, 24/7, remote support.

Scotiabank Signs Five-Year Payroll Deal with ARINSO International
ARINSO International, will implement a new payroll solution, based on SAP, to deliver payroll services to 43,000 of the bank’s employees and pensioners. The deal also includes application management outsourcing and hosting services.	
 	
 Service Provider News	
 	
BPO Industry can touch $50bn by 2012: Nasscom
The Indian BPO industry can reach $30bn by 2012 but has the potential to grow five-fold to $50bn if the 'right choices' are made by the industry stakeholders, says a joint study between Nasscom and Everest Group. 

India set to ride the KPO wave: Report
The market for KPO or Knowledge Process Outsourcing is expected to touch $10-17bn by 2010 and India is well poised to grab a major share of the market, a research paper released by the global audit, tax and advisory services group KPMG has revealed. In financial services sector alone, the market for KPO is expected to touch $5bn in the next 2-3 years and this form of outsourcing will extend to other industries in the near future.

India Aims to Double Revenue From Infrastructure Management Services
Research done by management consultancy firm McKinsey for Nasscom, suggests that the Infrastructure Management Services (IMS) business could generate between 325,000 to 375,000 jobs in India by 2013, as 70% to 75% of the roles in IMS can be moved offshore. Low-cost locations, including India, have so far captured a mere $6bn to $7bn of the IMS opportunity.

40% increase in BPO industry eyed : Philippine
President Gloria Macapagal-Arroyo is eyeing a 40% growth rate in the business process outsourcing (BPO) industry for 2008, which currently employ 300,000 people in the BPO and call Centre industry.

HP Signs Seven-Year, $675M Outsourcing Services Contract with Unilever
Hewlett-Packard said it has extended its relationship with Unilever with the signing of a seven-year contract to manage Unilever's technology infrastructure, worth US$675M.

Fujitsu wins two key public sector deals with a potential combined value of £140m.
The first is a £100m eight-year contract to supply managed IT services to the Police Service of Northern Ireland (PSNI). The second is a £40m ten-year deal with the Research Councils UK (RCUK) to implement a shared services infrastructure.

Ness Tech selected product development partner by Pearson
Pearson an international education and information company whose businesses include the Financial Times Group, selected Ness Tech s its product development partner in a three-year agreement to help expand Pearson's engineering capacity. Ness will establish and operate an India Development Centre in Mumbai for Pearson to enable close collaboration on end-to-end product engineering for next-generation products and systems.

WNS BPO transfer to Aviva to be delayed
WNS (Holdings) Ltd has informed the US Securities Exchange Commission (SEC) that it has exercised the call option given by Aviva Global Services to extend the date for transfer of the project and operations of its Pune facility to Aviva from January 1, 2008 to April 1, 2008.

Xansa plans to double workforce
Steria-owned Xansa is all set to expand its India operations. The company is looking at doubling its workforce this year and adding more office space in Chennai and Pune. The India delivery centre is expected to contribute up to 40 per cent of the total business revenues in 2008-09, said company executives.

Pangea3 expands operations in India
Pangea3, legal process outsourcing provider to U.S., European and Japanese corporations and law firms, announced the opening of a 16,000 square foot facility in the Andheri district of Mumbai, India.	

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