IT Outsourcing Company india

Kanbay International details IPO

2004-07-07T00:26:00.000-07:00

Technology services firm Kanbay International Inc. on Tuesday provided details of its planned initial public offering (IPO), the proceeds of which will be used to expand the outsourcing company's operations in India.
The Rosemont-based company expects to offer 7.15 million shares at $13 to $15 each. Kanbay estimates it will receive net proceeds of $66 million from the offering and will use $45 million to build a delivery center in Hyderabad, India, and expand its existing center in Pune, India.
A date for the IPO has not been set. Kanbay officials were not available to comment Tuesday.
Kanbay designs computer systems that track customer payments and information for the insurance, banking and consumer lending industries It's the largest outsourcer in financial services, with clients like Britain's HSBC Holdings plc and New York-based Morgan Stanley & Co.

The company's plan for additional ventures abroad is not without risks, Kanbay warns in public filings. “Negative public perception in the United States regarding offshore IT service providers and recently proposed federal legislation may adversely affect demand for our services,” the company noted in a July 2 Securities and Exchange Commission (SEC) filing. Economic factors such as increasing wages in India and fluctuations in currency exchange rates also could contribute to the risks of such an investment, Kanbay said.

The 15-year-old company has 2,300 employees worldwide and posted net income of $11.1 million on a record $107.2 million in sales last year. Much of Kanbay's growth has come from the IT outsourcing company trend among U.S. companies seeking to cut costs by using technology service centers that operate offshore, mainly in India.

The majority of Kanbay's workforce, or about 1,805 employees, is based in India and the work done there accounted for about half of its revenues last year.

Kanbay has applied to have its shares listed on Nasdaq under the ticker “KBAY.”

Source:-
By Julie Jargon
Chicago Business

US company Aventeon Opens Software Center In India's Tech Hub

2004-07-07T00:22:00.000-07:00

NEW DELHI -- Aventeon Inc. of Seattle opened a software development center Tuesday at Bangalore, joining a swelling list of U.S. technology companies logging on to India's outsourcing boom.

Aventeon, which also has operations in Germany and the Netherlands, plans to recruit around 40 engineers in India to write software for its Europe-based telecom and utility clients.

"The cost benefit is attractive and we have decided to run our core engineering development operations from here," Krishanu Seal, managing director of Aventeon's India unit, told Dow Jones Newswires.

"Most of our new hires will be based in India," said Seal, adding that the software center in Bangalore won't result in job losses at the company in Seattle.

"Software functions done out of Seattle will remain in place," he said.

Among Aventeon's mobile software clients are Dutch energy and telecoms company Essent N.V., Germany's T-Mobile International AG and Universal Music Group.

Although Aventeon has chosen India as its biggest outsourcing base, it isn't keen to explore the domestic market for revenue.

"We have enough orders from clients in Europe. In Asia-Pacific, we will rather look at Japan and South Korea than India as our key markets," Seal said.

U.S.- and U.K.-based companies have moved thousands of software and back-office jobs to India over the past two years, turning such cities as Bangalore, New Delhi and Bombay into regional outsourcing hubs. IT Outsourcing company is expected to be one of India's biggest revenue generators by 2008.

Source:-
THE ASSOCIATED PRESS

Visa curbs, BPO backlash hurting IT

2004-07-06T22:42:00.000-07:00

Backlash against outsourcing, restriction on H1 and L1 visas, emergence of new offshore destinations and a cut in IT budgets by European financial organisations are some of the challenges Indian IT industry will continue to face, according to software firm Polaris.

Backlash against outsourcing is likely to gain strength. With job loss becoming a big issue in the West, employment of local population has become a highly-sensitive subject taking strong political overtones, the company said in its annual report for 2003-04.

Many workers' unions are protesting outsourcing work too. In Australia, even as experts believe offshoring leads to savings of 15-30 per cent in costs, there is a general air of scepticism.

In addition, restrictions imposed by the US government on H1 and L1 visas have made it even more difficult for Indian firms, the report said adding such curbs will affect revenues of Indian companies as a good portion comes from onsite work.

Another challenge is the emergence of new destinations like New Zealand which, according to Gartner, is 'up and coming' along with China, Ireland, Northern Ireland, South Africa, Russia and Poland.

Gartner has claimed China could overtake India's IT outsourcing company crown by 2007 with its 2,00,000 software professionals and a booming domestic software market with spending on IT increasing by 20 per cent per year since 1999.

Source:
Sify

English rules, but language power tilts to China

2004-07-02T04:52:00.000-07:00

India's information technology (IT) and business process (BP) outsourcing sector grew by almost 30 per cent in the year to April, booking revenues of $US16 billion ($A22.9 billion). The sector is booming. But only one thing is certain about booms. They end. Wages are bid up, other costs rise, and competitors are attracted into the marketplace. That is happening now.

Dozens of outsourcing companies from Sri Lanka, China, Egypt, Romania and South Africa exhibited their capabilities at last month's OutsourceWorld Conference in London, each a newly emerged competitor to India. And Malaysia, the Philippines, Russia, and even Mauritius, are among others competing for a piece of the action.

Significantly, IT companies in China that have been providing outsourcing work to multinationals in China are now beginning to look offshore for clients in the same way that Indian IT companies do. Beijing-based IT United Corporation is one such company. Its clients include Airbus, British Airways, Cisco Systems, Siemens, and Kraft Foods.

The company has around 100 mostly Chinese staff. It now offers its web and IT-based solutions and call centre management services not just to companies based in China or with operations there but to companies worldwide.

China-based companies such as IT United probably are the Indian outsourcing sector's biggest fear. Even some Indian outsourcing companies, such as Tata Consultancy Services and Infosys, have picked outsourcing to China as a future trend and are now hiring Chinese staff and opening branches in China.

Both have populations in excess of a billion but China scores better than India on a range of criteria. Around $US800 billion in foreign investment has poured into China in the past 20 years. For India the figure is probably around $US20 billion. Literacy in China is 86 per cent. New figures suggest that in India it's just 59 per cent. Gross domestic product per capita (purchasing power parity basis) in China is $US5000. For India it's $US2900.

The numbers keep changing but when China had 214 million fixed telephone lines in the past two years, India had 41.4 million. When China had 207 million mobile phone connections, India had just 22 million. When China had 60 million internet users, India had only 17 million.

IT research company Gartner has estimated that when China had 6000-plus software companies, India had 3000-plus. And when China's domestic software sales were $US4.3 billion, the figure for India was $US2.06 billion.

Meanwhile last month, Kiran Karnik, head of Nasscom, the industry body in India, pleaded with the new Indian Government to "back off" on intruding in the outsourcing sector with new regulations that he said were like "constant pinpricks". Instead he said the Government should focus on modernising the country's airports and improving power supply, which he described as "dismal". Compare Shanghai's airport with Mumbai's and you'll see what he means.

Telecommunications infrastructure in China's main cities is of a high standard. Starting fresh and from a low base means that they have the latest and best.

Ironically there are many Chinese cities that have telecommunications infrastructure that is now more advanced than many cities in Western Europe. The same cannot be said of India.

English language abilities are an important driver too in the IT and BP outsourcing stakes. But English is not taught as widely in India as is commonly believed. There is a two-tier level of schooling in which only the elite are taught English. Often English language education does not extend to the village level. As it is, India is not the largest country of English speakers after the US. It is the Philippines, with its population of 85 million.

But in China, English language skills have become a national priority. It is not clear how many good English speakers there are, but what's certain is that there have never been so many.

Speaking English in China has become a matter of "face". It is seen as progressive and modern, and for status-conscious Chinese that is important. Nor is learning English the city-based phenomenon that it is in India by and large. The entire country is in on the trend.

Late last year I had a conversation with a man in a Beijing street who spoke impeccable English. He told me that he'd been in Beijing for just two weeks. And from where had he come? Inner Mongolia. It was not an isolated incident.

Perhaps soon the country with the largest number of English speakers after the US will not be the Philippines or India but China. Already, the central and some provincial governments now tie promotions for certain senior levels in public administration to English language abilities.

The thousands of Western companies that now have a presence in China will push the country into becoming a new outsourcing hot spot. Many Western companies have a good knowledge of China. Comparatively few know much about operating in India. And so increasingly, it will seem only natural to outsource business processes to China particularly if they also have manufacturing facilities there.

IT United chief executive Cyrill Eltschinger is certain of it. He is aggressively courting outsourcing business from around the world. And he's as dynamic as his sector. When he visited Australia four years ago he arrived in Brisbane from Beijing and rented a Piper Cherokee and flew himself down the east coast and then through the outback, stopping along the way. He became the first foreigner in China to hold a local pilot's licence.

With so many foreign companies operating in China, already many have the experience of outsourcing their Chinese operational needs to local companies. The next step is to outsource their worldwide needs to China. And that, says Eltschinger, is a trend that has started to emerge in only the past 18 months. Outsourcing to China could have a big future. Eltschinger is banking on it.

Source:-
By Michael Backman
Asia Online
July 2, 2004

Astron Invests in India

2004-06-23T23:16:00.000-07:00

Astron BPO, the Chennai, India-based subsidiary of the UK's Astron Ltd, has announced that it will invest $2m and double its staff headcount to 700 over the next three months.

The company, which focuses on transaction processing and print-related outsourcing services, claims it is the UK's fourth largest business process outsourcing company of its kind due to its October 2003 acquisition of three business from rival Hays Group. That acquisition gave Astron operations in England, Poland, India, and Sri Lanka, as well as boosting its revenue to over 180m pounds ($329m) and adding 2,700 staff.

More recently, the company acquired UK-based Edotech Ltd, a customer communications outsourcing company, for 130m pounds ($238m) in March 2004. Astron employs 4,100 staff across 70 sites. Over half of the company's business is now outside the United Kingdom, with offices situated in Austria, France, Poland, Spain, Switzerland, India, and Sri Lanka.
Source:-
Computer Business Review Online