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HR's
Rising Star in India
With an
enormous, young workforce (the median age is 25)
living in the largest democracy in the world, India is poised to become one
of the global economy's newest powerhouses. Since India opened its markets to foreign
investment in the early 1990s, its economy has grown at an impressive
average 8% annual rate, and the nation is now
projected to become the world's third-largest economy (behind
China and the
United
States) within two or three decades,
according to global investment banking and securities firm Goldman Sachs and other
economists.
Most of the
nation's job and economic growth has been
generated by family-owned Indian enterprises and multinationals in
industries such as information technology (IT), telecommunications,
business process outsourcing (BPO) and pharmaceuticals. Maintaining high growth rates is a
high priority for these industries because they face increasingly stiff
international competition, most notably from China.
Sustaining the
growth may be difficult, despite the fact that India has a population of more than 1
billion people, and a workforce of 422 million, since its literacy rate is
a low 59.5 percent (compared with 99 percent in the United
States). Further, only about 48 million
people-less than 12% of the entire workforce-are college graduates. And those who do hold college
degrees often don't possess the skills needed by the nation's surging
industries.
IT & BPO
industries have contributed substantially to this growth, the revenues
earned by these companies, and numbers of employees have grown
multifold. Infosys for
example- revenues has grown from about Rs 1,901 crore in 2000-01 to about
Rs 9,521 crore in 2005-06 and the number of employees from about 9,800 to
about 52,700. Analyzing the
revenue per employee (RPE) calculated as Revenue (Rs Crore)/ Number of
employees in as reported in the annual report, reveals a decline. Which means an employee today is
bringing in less money to his organisation compared to 2002-03. (1 Crore is 10
million)
The revenue
per employee (RPE) for Infosys Technologies Ltd in 2002~2003 RPE was 0.229
in 2005~2006 RPE was 0.181, for Wipro in 2002~2003RPE was 0.164 in
2005~2006 RPE was 0.15 and Satyam Computer Services Ltd in 2002~2003-RPE
was 0.228 in 2005~2006 RPE was 0.167. (Wipro Technologies revenue and
number of employees are considered for global IT and BPO business
consolidated revenues excluding other
incomes)
Does this mean
that scaling up of business is not reflected in
the revenue generated per employee?
Companies declined to comment on this, but said the RPE was not a
preferred metric for measuring productivity. Mr V. Balakrishnan, Chief Financial Officer,
Infosys Technologies, says RPE analysis is inadequate as revenues are affected by factors such as exchange rates
(rupee-dollar) and revenues from non-IT services such as business process
management. When asked how
Infosys measures productivity, he said, 'Through in-house methods. Productivity is reflected in the
differential pay scales of our employees,' he
says.
But Satyam
Computer Services seems to be following the RPE method besides others to
measure productivity. 'We use
stand-alone revenues to measure RPE and this ratio has remained the same
for the last two years - at Rs 19 lakh per employee,' says Mr T. Hari,
Senior
Vice-President, Global Human Resources, Satyam
Computer Services. The
company has anticipated the effect of this year's planned intake of
10,000-12,000 people on the RPE.
'We are confident of retaining RPE at the present level,' says
Mr Hari.
Compounding
further is the dearth of middle managers in India. 'India has
plenty of technocrats and engineers; what's in short supply are General
managers who can pull it all together,' says Guarav Lahiri, operations manager at the Hay
Group India in Gurgaon. One
other problem faced is that, for personal or family-related reasons, half
of all the women they hire will opt out of the workforce by age 30,
according to Anita Belani, Country Head for Watson Wyatt
India in Mumbai. That is a
potentially significant problem since women make up about 20 percent of
the workforce in urban areas, and far more in certain fields. Thus, the human capital challenges
facing many Indian companies are both daunting and crucial to the
continued success of their businesses, the number of enlightened HR
leaders helping to tackle those challenges in a strategic fashion is
small, some claim. While
everyone is swimming against the tide of HR challenges in
India, some companies do appear
to be ahead of the curve and making progress.
For many
companies in highly competitive sectors, a lack of talented workers
constitutes a 'make-or-break' HR issue, which makes the value of good HR
management readily apparent to top executives. The profession, as a result, is
gaining both respect and attention-the kind that comes from being on the
hot seat. |
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Bioinformatics
outsourcing poised for growth
According to
a study by Frost & Sullivan, outsourcing is
expected to become an important force in the European
bioinformatics industry. The
company has attributed its finding to the increase in the number of
companies operating in the bioinformatics domain and the intense
competition between them to offer economical and easy-to-use applications
to the customers. The
expansion of application scope of the bioinformatics industry will also
play an important role in outsourcing emerging as an important function of
the industry. The European
bioinformatics industry is expected to expand
rapidly over the next three to seven years, with various IT companies
expected to venture into the industry. In addition, software firms in
bioinformatics area and biotechnology companies with bioinformatics
operations are also expected to venture in the
bioinformatics domain.
Rise
in network outsourcing- IDC forecast
According to
a study by IDC, enterprise
network outsourcing service providers are
expected to register high growth rates over the next few
years. The
high growth rate is attributed to the increasing magnitude of efforts by
various companies for reducing their network costs. In addition, the changing business
models and an increase in the merger and acquisition activities will also
play a role in the expected high growth rates for enterprise network
outsourcing service providers.
The surge in demand is expected in all industry verticals, with the
maximum effect taking place on the
banking/finance and insurance as well as education verticals. The respondents from these
verticals stated cost savings, better network accessibility and
reliability, and ability to free-up their workforce for core business
activities as the main reasons for outsourcing their network
communications infrastructure activities. In addition, the service providers
might have to modify their delivery models according to the ongoing
standardization process in the industry, which is
expected to gain momentum over the next few
years.
Asia
Wan market to hit $18bn as VPN takes over
According to a study by
Frost & Sullivan, the Asia-Pacific wide area network (WAN) services
market is expected to reach US$ 18.57bn by 2012,
as compared to US$ 17.41bn in 2005.
India and
China are
expected to lead the market and garner a collective market share of
18.1% by 2012. The surge in
the demand is primarily due to the increase in demand for business
connectivity services, which in turn is fuelled
by the positive business outlook for the region and a relatively stable
political scenario, as compared to other parts of the world. The region's fast emergence as a
preferred BPO services location has also contributed to the increasing
demand for WAN services. By
categories, Internet Protocol Virtual Private Network (IP VPN) is expected to contribute about 52% to the region's WAN
services revenues by 2012.
UK
DCA Selects Atos Origin and LogicaCMG for $941.6 Million IT
...
Atos
Origin and LogicaCMG have been selected as winners of two new IT services
contracts by the UK Department for Constitutional Affairs
(DCA). The infrastructure
contract, awarded to Atos Origin, includes deployment of a unified IT
infrastructure across the department, while the application services
contract, awarded to LogicaCMG, includes developmental, support, and
maintenance services for the current set of IT applications at the
department
Kimberly
Clark to outsource 350 positions
Consumer-products giant
Kimberly Clark has announced its decision to
outsource 350 positions across IT, HR, and sourcing and supply management
functions. The move is part
of the company's plans, announced in 2005, to eliminate about 6,000
positions from its global headcount by 2008
Government gateway selects
ATOS Origin to provide IT managed services
The UK Cabinet Office has
selected Atos Origin, an international IT services company, to provide IT
managed services for the Government Gateway. The transfer of responsibility for
design, build and operation of the service and
development of the Government Gateway application shall be completed by
the end of 2006. The contract
will run for an initial period up to 31 March 2011 and is valued at
£46.7M.
Kroger selects
Systems Xcellence to provide pharmacy benefit
...
Kroger will utilize System
Xcellence services to manage prescription drug claims and rebate contracts
with pharmaceutical manufacturers along with the reimbursement of retail
pharmacy network contracts.
In addition, it will use the services to analyze the drug
utilization and management of helpdesk calls.
Finnair
chooses ITC Infotech as outsourcing partner
ITC Infotech will
implement Finnair's frequent flyer programme and marketing and
promotions. It will also
offer support and maintenance services, ITC said in a
statement |
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Unisys To
Open Two More India Facilities
Unisys has
announced its plans to establish two new global sourcing operations
centres in India. The move is a part of the
company's aim to increase the headcount of its offshore workforce to 6,000
by 2008.
HP
launches 3 enterprise IT service units
Hewlett Packard has announced the launch of
three new service-oriented architecture (SOA) competency centres. The new centres are located in
Cupertino (US), Singapore, and Bangalore (India), and are a part of the
company's US$500 million investment in the SOA technology. Through the new centres, the
company aims to assist its customers and partners to assess the SOA
technologies, solutions, and implementations.
International
Technology Alliance formed to drive joint research
...
The newly formed
International Technology Alliance (ITA) in Network and Information
Sciences, has been selected by the United States Army Research Laboratory
and United Kingdom Ministry of Defence, to undertake a research program
exploring advanced technology for secure wireless and sensor networks to
support future coalition operations, over a potential 10 year period, with
a value of up to $135.8M
TeleTech
Expands Relationship With Leading Consumer Products
...
TeleTech Holdings today
announced that one of the world's largest consumer products companies has
signed an expanded agreement with TeleTech to consolidate all of its
Brazilian customer management programs.
ACS Renews and
Expands BPO Contract With First Horizon Home Loan
Corporation
ACS and First Horizon launched their
successful BPO partnership in 2002, with ACS providing document preparation, scanning,
and indexing of mortgage loan files for the company. These services will continue under
the terms of the renewed contract, and will expand in scope to now include mailroom
services.
HP
and DIRECTV Extend IT Outsourcing Contract for Seven Years
...
Hewlett Packard has announced the extension of
its IT outsourcing contract with DIRECTV for a seven-year period. The
extension is estimated at US$500M. As part of the contract, it will
provide support for both billing and non-billing domains, which include
systems integration and management, local area network (LAN) management, and data centre
operations.
Epam Systems acquires
Vested Development Inc
Yesterday, Epam Systems,
the US-headquartered software engineering outsourcing provider, announced
its merger with Russian software company Vested Development Inc.
(VDI). The new entity will
have more than 2,200 staff spread across eight
countries.
En Pointe
Buys BPO Firm
En Pointe Technologies has
entered into a definitive agreement to acquire a 70%stake in two
Pakistan-based BPO services providers, Ovex Technologies and Ovex
Pakistan. Through the acquisition, En Pointe
aims to reduce its back-office processing spend. It also expects the acquisition to
consolidate its position in the outsourcing domain. Ovex Technologies and Ovex
Pakistan have a collective
headcount of 700. Apart from
other clients, Ovex Technologies also provides back-office operational and
financial accounting services to En Pointe.
GMT opens India office
to meet demand for workforce management
GMT Corporation has opened its first office in
Chennai to market enterprise-wide workforce and performance management
solutions to Indian contact centres.
The investment will also establish a global customer support centre
and an offshore research and development facility for the Atlanta, US,
headquartered company.
OFS bags
three contracts
Object Frontier Software
Pvt Ltd, (OFS) a provider of IT services, today announced that it has
signed three projects with US-based Perago Consulting, Analystic Inc, and
FinRad, both based in Canada. |
