BPO

India’s tech posterboys and cross-town rivals Infosys Technologies and Wipro have shown interest in buying out the US-based high-end analytics company MarketRx. The indicative valuation of MarketRx is seen between $150 million and $160 million (Rs 615-650 crore), sources said.

This is probably the first time the Bangalore-headquartered Infosys and Wipro are seen chasing the same company for a possible acquisition. MatrixRx’s $160-million valuation is five times its revenue, the sources added. It is believed that the promoter expectation is “slightly north of this valuation”.

It is learnt that four-five suitors have expressed interest in MarketRx after the company mandated William Blair & Company in the US and Avendus in India to explore options, which could lead to a possible sellout. “The promoters are exploring various options regarding the future and will take an appropriate decision. The process is on,” said a source familiar with the developments.

For software services biggies like Wipro and Infosys, the acquisition will give a headstart in the analytics segment of the knowledge process outsourcing (KPO) segment, as it takes considerable time to build one’s practice organically in this business.

According to industry sources, it will take a minimum two years for any BPO to have a credible presence in the analytics space with people coming from diverse backgrounds such as mathematics, statistics and chartered accountancy.

Industry observers said analytics services bring in higher revenue per employee compared to conventional IT services. The rates of analytics services range between $30 and $60 per hour while some high-skilled statistical modeling processes attract up to $150 per hour.

Don’t fret over dissatisfied employees. They will move out anyway. Instead, work hard to keep your flock of ‘fence sitters’ together. Chances of retaining the former into the organisations mainstream, are slimmer than the ones for the latter. With a multitude of reasons to quit an organisation today and the mercenary mindset amongst employees, the HR fraternity has little choice but to ensure that ‘fence sitters’ don’t reach that brink. That’s one of the key takeaways from the India Employee Speak 2007 conducted by CD and the Delhi-based online research firm, JuxtConsult.

Only one in five current white collar employee is really satisfied in the current job, says the study. At the same time, only one in 20 are highly dissatisfied. However, a majority or a massive three-fourths of them are the ‘fence sitters’ . That makes it critical for employers to actively engage ‘fence sitters’ on an ongoing basis rather than let them slip into incurable dissatisfaction. However, many in the HR fraternity rightly argue that it is difficult to identify ‘fence sitters’. “How do you identify a fence sitter?” says Santrupt Misra, executive director-HR at Aditya Birla Group. “He is not a three feet tall animal.”

Low current salary and designation emerge as the biggest demotivating factors in the study. As many as 66 per cent and 44 per cent respectively, cite them as reasons enough to become ‘fence sitters’. They make themselves open to change if exposed to sufficient ‘pull’ factors — a better salary and designation offer — even though they may not be actively seeking a change. The secondary level factors that trigger ‘fence sitting’ behaviour pertain to poor brand image of the company or a lack of marketability on the CV (37 per cent), lack of pleasant work environment (36 per cent) and good support facilities (27 per cent), lack of clarity in job role and expectations (26 per cent), lack of learning opportunities (23 per cent) and an unapproachable and non-transparent senior management (24 per cent).

That leaves a lot of food for thought for the HR fraternity that’s currently facing a seismic shift in employee mindset spurred by changing business environment in the country. While industry practices are trying to keep pace, aligning an organisation to suit employees diverse aspirations, is too challenging a task. CSC India’s director, HR, Neelam Gill Malhotra believes that employees today look for flexible working options for their career growth and a platform to maintain a healthy balance between work and home. “Today, employees are well aware of their external environment than ever before and keep the organisation on its toes,” she adds.

With an eye on Chinese outsourcing market, domestic firm Effort BPO has said it would sell 10 per cent stake to Hong Kong-based Mulitex Holdings for an undisclosed amount.
The acquisition is to be completed by first week of September.
“We have entered into a tie-up to explore the Chinese BPO market. The boards of both companies are in discussion and the transaction is scheduled to be completed by the first week of September,” Effort BPO CEO and Managing Director Akshay Chabbra said in a statement.
The company has at present over 1500 employees in the country with presence across Mumbai, Delhi, Pune and Indore.
The outsourcing firm plans to enlist 2000 staffers in Mumbai and Delhi and will be targeting around 6000 headcounts by March 2009.
It has already entered into a major joint venture with China-based Asia star and Triple Three (Part of Mulitex group) to establish a call centre in China. Starting with an initial investment of 1 million dollar, the aggregate investment is expected to touch 6 million dollar over the next year and a half. While Effort holds 51 per cent, Asia Star owns 24 per cent with Triple Three holding a 25 per cent equity stake.
The company’s current market valuation is close to Rs 1 billion.
Mulitex would set up an investment branch in Mumbai and had been looking to tap the growing BPO and other markets, the release said.

If two bomb blasts in less than three months have battered the image of Hyderabad as a growing international IT hub, even more alarming is the revelation that at least a dozen trained operatives of extremist groups have infiltrated into the rank-and-file of some top IT companies.

Sources in police said efforts are on to track them down. ‘‘They (the operatives) are as good as any other IT professional. They have all the required qualifications and merit to join any IT company. But, they are also elements inspired to carry out a dangerous operation on instruction from their handlers,’’ the source revealed.

Incidentally, two professionals working for city-based IT and ITeS companies have already been named in terror attacks so far. While, Naved, who was an employee of an MNC BPO, has been accused of participating in the Mumbai blasts, Kafeel Ahmed, who worked for the city-based Infotech’s Bangalore facility, was the man who drove the flaming jeep into Glasgow airport and later died of burns.

‘‘It is a sensitive issue. Identifying a particular group with trained extremists will alienate an entire community. We have to find a way to handle the issue,’’ the source said. Incidentally, a few months ago, IT companies in Hyderabad got together to form what is called the Cyberabad security council with the idea of stepping up security and gathering intelligence. The council collaborates with the police.

Authorities have passed on the information about the infiltration to the representatives of the industry. ‘‘We have to examine the database of some of the companies. It is still too early to call the situation grave,’’ the source said.

In fact, authorities have also tracked down an association of IT professionals who, they think, have some subversives on their rolls. The details of the association are still being evaluated. ‘‘We need to see who is behind this association and what kind of members are with it,’’ the source said.

All operatives nabbed with a background in IT have been found to be using technology to maximum use. For instance, Kafeel’s PC hard disk revealed the way he was using a syringe technology to trigger a blast. Similarly, there has been unconfirmed information about the people behind the twin blast in the city using the Internet for putting together the bombs.

“The extremists are now tech savvy. They are able to hack into servers, download critical data and use the technology to achieve precision in their operation,’’ a source said.

The Reserve Bank of India (RBI) fears that greater global credit tightening could emerge from the US subprime mortgage market problems, which might put financial stability in India as an issue of significant importance on its agenda.

The central bank has pointed out that the implications of the disruptions caused by the global credit crunch induced by the subprime crisis in the US on the global economy are not yet clear.

If the US economy were to experience a sharper slowdown because of a broader-than-expected impact of the housing sector difficulties, the spill-over effects into other economies would be larger and decoupling from the US would be more difficult, the RBI said in its annual report for the year ended June 2007.

There are concerns that problems in the subprime mortgage market could lead to a more significant tightening of consumer credit thereby putting household finances under greater strain.

The subprime crisis might be symptomatic of loose lending and underwriting standards over a broader range of markets. A resultant worsening of credit crunch across the US and global financial markets would imply a deeper and more prolonged slowdown or even a recession in the US with potential spillovers to other countries, the annual report noted.

The RBI, without making any specific reference to any country including India, said recent developments indicate that subprime lending concerns are spreading globally. Further deterioration in subprime delinquencies could lead to reassessment of risk by investors across products and markets and retrenchment of capital from the emerging market economies given the contagion and herd mentality, the RBI warned.

The central bank went on to whip its usual targets - the hedge funds and private equity funds that have emerged as a key source of capital flows to the emerging markets. Any further monetary tightening in major economies and reassessment of risks by investors has the potential to accentuate volatility in global financial markets, and adversely impact growth and stability in the emerging markets.

The stance of the monetary policy for the rest of 2007-08 would be conditioned by the patterns in which the global, and, more particularly, the domestic environment unfold. And contextually, financial stability may assume greater importance in the months to come.

NIIT Ltd is undertaking a slew of initiatives to ramp up its new businesses — NIIT Imperia and Institute of Finance, Banking & Insurance (IFBI). The company is looking at these two businesses to generate revenues of Rs 90-100 crore by calendar 2009.

For NIIT Imperia, which marked the company’s foray into the executive management space last year, there will be a focus on short-duration management development programmes (MDPs) apart from long-duration ones running now.
“We hope for MDPs to account for 25% of revenues by July 2008,” Smarajit Dey, president, strategic initiatives, NIIT, told ET.

For this, NIIT Imperia will be leveraging its existing partnerships with the IIMs in Calcutta (IIMC), Ahmedabad (IIMA), and Indore (IIMI) and IMT, Ghaziabad. Already, seven five-day MDPs have been developed in association with these institutions ranging from Leadership & Team Building with IIMC to Logistics & Supply Chain Management with IIMI.

“We also propose to invite industry professionals to conduct MDPs. We plan to design more MDPs, ranging from 3-10 days, priced between Rs 3,000-7,000 per day,” said Mr Dey.

These will be launched in a host of functional areas including general management and corporate strategy, finance and marketing, among others that have been identified by NIIT.

NIIT Imperia is also increasingly offering customised training programs for corporates, especially BPO companies. It also plans to launch entry level programs for the retail sector.

“We are working on a general management programme for BPO professionals with 1-4 years of experience with IIM Indore, along with a programme on retail,” said Mr Dey.

These programmes will be offered in NIIT’s centres for advanced learning as well as corporate classrooms. According to Mr Dey, several BPO companies as well as North-East-based PSUs have shown interest.

IFBI, on its part, will be launching a postgraduate certificate in retail banking in part-time evening mode.
Students of this six-month course will be allowed to upgrade to the flagship PG diploma in banking operations. The entire idea is to meet the huge demand of entry-level personnel. “In specialised areas like sales, forex, rural banking and microfinance and wealth management, we will be launching add-on electives to the core programmes or as separate programmes in their own right,” said Mr Dey.

Other plans include rolling out a retail insurance programme for the insurance sector, beginning with a full-time, then a part-time mode, for which the institute plans to tie up with insurance major. “Corporate training is another focus area with programmes for existing professionals in banking, insurance and tech-enabled banking and insurance,” added Mr Dey.