Reports & Surveys...

According to a study by Frost & Sullivan, combined revenue of contact centres in the Asia-Pacific region from outsourcing services will reach USD 25.1 billion by 2012, as compared to USD 7.2 billion in 2005.  In 2005, the Asia-Pacific region executed various contact centre-outsourcing contracts worth USD 2.17 billion from the US and the UK.

Low labour cost, increasing competition, globalization, increased IP (Internet Protocol) adoption, and improved network infrastructure are driving the contact centre outsourcing market in Asia Pacific.  High growth in both domestic and offshore outsourcing is expected in the coming years.  However, offshore outsourcing expects to drive a majority of the growth.  The banking, telecommunications, and technology sectors are likely to fuel this growth as customer service and technical support services are on the rise.

The study finds, labour attrition, agent recruitment, and data security as the key challenges that the industry faces today.  Contact centre outsourcing service providers are developing structured career paths, training and coaching, better incentives, stringent processes, and quality certification in order to overcome these challenges, and focus on managing the huge incoming demand for contact centre outsourcing services.

To enhance data security and safeguard customer information, outsourcers in India and other offshore destinations are taking stringent measures to ensure that data security is maintained.  ISO and COPC (Customer Operations Performance Centre) certifications, along with Six Sigma processes are gradually being adopted by outsourcers to increase the confidence level of customers and enterprises that outsource their customer information to the Asia Pacific region

According to another study by PMP Research, buyers of IT outsourcing and BPO services have started preferring multiple suppliers, instead of awarding large contracts to single service providers.

More than two thirds of respondents (68pc) said they are selecting multiple suppliers, with less than one in five (19pc) preferring a single outsourcer.  This doesn't appear to be a temporary development, as 77pc indicated that they will be going down the multi-sourcing route in the future, compared to 16pc who want to stick with one supplier.

The survey also uncovered significant levels of customer churn, with close to half of those polled (47pc) saying they tried to transfer from one outsourcing supplier to another at some point, or else they sought to reactivate their services internally.  That said, many respondents said such moves were 'difficult' (53pc) or 'very difficult' (5pc).

However, it wouldn't be true to say that, these developments are a response to customer dissatisfaction.  Half of the sample reckon their current service level agreements are met exactly as anticipated (26pc) or even exceeded (36pc).

In 10pc of cases, there has never been an instance where a supplier failed to provide a service as specified once the contract begins.  One third of respondents (33pc) said problems were very rare occurrences.

Instead, organisations appear to be concerned about retaining flexibility over their outsourcing deals.  Not one of those polled said they signed a contract of 10 years' duration or longer.  The majority now expects a contract to cover a period of one to two years (39pc) or two to five years (39pc).  Deals lasting less than a year are rare (3pc) but one in 10 organisations expect their outsourcing arrangement to last between five and 10 years.

The survey also indicates that outsourcing's popularity isn't waning.  Almost two thirds of the sample feel outsourcing is either 'important' (36pc) or 'very important' (26pc) to their organisation's IT strategy.  Some 48pc said that their own spending in this area would increase over the next 24 months; 25pc said investment would remain the same and 17pc expect their outsourcing budget to be reduced.

 Top Stories

Australia: finance union's policy on offshoring
The Finance Sector Union of Australia (FSU) has released its policy document on offshoring.  In the policy paper, FSU recommends introduction of a legislation requiring service providers to disclose the country where their employees are located at the time of transaction and ensuring that any financial or personal information shall not be sent offshore without permission.  In addition, the union advocates a scenario wherein the contracts involving work for the Australian government agencies shall include a clause prohibiting the work to be sent offshore.

Prudential inks £40m Capita outsourcing deal
Prudential has signed a £40m contract to outsource its UK life and pensions support to Capita.  Capita will provide sales and administration services for life and pension operations to Prudential. Around 450 staff in Prudential's customer services and support services operations in Belfast will move across to Capita under Tupe employment transfer regulations this autumn.

Yarra Valley Water, Woodside sign major contracts
Yarra Valley Water and Woodside Petroleum announced multi-million dollar outsourcing deals this week with Fujitsu and CSC respectively.  Fujitsu will manage Yarra's desktops, networks, and servers.  In addition, it will manage Yarra's core enterprise applications, including customer information and billing system, as well as voice communications.  Woodside Petroleum appointed CSC to provide infrastructure services.  These include desktop support, help desk, server support, as well as problem, change and asset management.

Westpac to move jobs offshore
Westpac Banking Corporation is expected to offshore about 500 jobs from its Concord West-based transactions and unsecured lending operations centre to India. The centre processes child support payments, dishonoured checks, electronic payrolls, Internet banking, and deceased estates.

Threadneedle outsources investment operation to JP Morgan
Threadneedle Investments and JPMorgan Chase Bank have today announced that they have signed the contract on 7th August to appoint JPMorgan as Threadneedle's chosen provider of outsourced Investment Operations services.  JPMorgan will provide various services, including confirmation and settlement, valuations and pricing, and accounting for Threadneedle's funds will provide various services, including confirmation and settlement, valuations and pricing, and accounting for Threadneedle's funds

AirNZ plans more outsourcing
Air New Zealand is preparing to outsource over half its finance department overseas, the Service and Food Workers Union (SFWU) said. Cost saving is the primary reason for considering to offshore.  Fiji is expected to be the primary choice for the company's offshoring plans, followed by India and the Philippines.  The union stated that the latest move is presumably a part of the airlines' plans to increase the valuation of its shares for private buyers.

Zurich financial jobs may be 'offshored' to India
Zurich said it was planning to close its office in Fenkle Street, Newcastle, which employs more than 500 people.  It is understood that the group could be offshoring work to India, where it opened a call centre in 2002 and where staff numbers have grown tenfold in the past four years.

Freescale expands in Bangalore
Freescale Semiconductor has announced the expansion of its India operations with a new 100,000-square-foot facility in Bangalore to support Freescale’s research and development in software for wireless technologies.  The Bangalore centre would develop best-in-class embedded platform software solutions for cellular protocols, multimedia, security, and connectivity.  These platform solutions have support for multiple operating systems like Symbian, Linux, and WinCE.

 Service Provider News

Malaysia to give priority to shared services, outsourcing sector
Malaysian Government has identified the shared services and outsourcing (SSO) industry as a new growth area and plans to give it priority attention, says International Trade and Industry Minister Datuk Seri Rafidah Aziz.  Focus would be given on an ongoing basis to capacity building and skills enhancement, improving infrastructure and other support facilities, and ensuring a tax regime that is comparable to other hubs.

Capgemini Announces Broadened IT Outsourcing Agreement for Astellas
Astellas has expanded its five-year IT outsourcing contract with Capgemini.  Astellas was formed in 2005 with the merger of Fujisawa and Yamanouchi Pharmaceutical Co. Capgemini will work towards improving the service levels of IT and decreasing the base costs for Astellas, as compared to the previous contract between the two companies.  It will also work towards rationalizing data centre and technical helpdesk capabilities of Astellas.

SAIC wins contract worth up to $75M for IT services
Science Applications International has landed an $11.9 million contract that could reach $75 million to provide ashore information technology and support services to the US Military Sealift Command, which operates more than 110 ships worldwide.

Perot Systems Wins 7-year Contract From Forest Park Hospital To Provide Revenue Cycle Sourcing Services
Perot Systems has won a seven-year outsourcing contract with the Missouri-based Forest Park Hospital.  Perot will provide various financial optimization services including billing, accounts receivable management, and patient access services to Forest Park Hospital.  In addition, the company will provide business office management and health information management services.

HP Israel wins navy IT outsourcing contract
The Israel Navy has chosen HP Israel to carry out the outsourcing of its IT infrastructure HP will manage and operate the Israel Navy's IT infrastructure, including computer and communications centres, information security, and end-user support. The company will also provide data security and troubleshooting, and problem fixing services for the IT users.

Genpact launches tenth operation centre in State of Rajasthan India.
Genpact has announced the launch of its second Global Operations Centre in Jaipur.  The new facility will seat over 1300 associates who will provide diverse specialized services to the banking, insurance, healthcare and manufacturing sectors in areas of accounting, accounts receivables, order to cash cycle and customer service and technical support to Genpact customers in the USA, UK, Australia & various other European countries. Genpact, Jaipur will now be looking to increase its employee strength to 3000 by 2007.

i-flex Acquires Compliance Solutions Provider Mantas
The banking software maker i-flex, majority owned by Oracle Corp, has entered into a definitive agreement to acquire Mantas for a cash consideration of USD 122.6 million.  i-flex is targeting the risk and compliance requirements of financial institutions.  Mantas offers software applications that enable financial institutions to conform to the global regulatory compliance mandates and ensure loss prevention and revenue generation.

Accenture to buy privately held NaviSys
Accenture has entered into an agreement to acquire NaviSys.  Through the acquisition, Accenture aims to strengthen its service delivery capabilities in the insurance domain.  The company will obtain access to a life insurance platform, equipped with various processing capabilities, such as front-office sales and back-office policy administration as a result of the agreement.  It intends to use the NaviSys software to develop BPO services for its life insurance business in North America.  It will deliver the BPO services through its insurance business unit, Accenture Insurance Services.

Randstad to buy Getronics HR Services division for Euro 65M
Getronics has signed a letter of intent with Randstad to sell its Dutch HR services arm, PinkRoccade, for a consideration of EUR 65 million.  Through the acquisition, Randstad aims to strengthen its presence in personnel and salary administration domains of HR services.  The company intends to leverage the acquisition by integrating the acquired business with its HR solutions portfolio.

Outsource Partners Moves Operations in Bangalore
Outsource Partners International, Inc. dedicated to finance and accounting outsourcing, has announced the move of its operations in Bangalore, India to a new 65,000 square foot facility offering state-of-the-art technology and numerous amenities.