IT, BPO firms join hands to enhance business
It is a two-way affair. While the IT firms are gearing up to augment their outsourcing business, business process outsourcing companies too are collaborating with information technology companies with a view to offer software solutions.
It is a well known fact that the BPO companies are efficient in reducing operational costs for their clients and what they are deficient in is the basic aptitude in developing applications. Nevertheless, with an increasing number of clients now seeking software development along with process efficiencies, more and more business process outsourcing firms are now looking for collaborations with information technology companies. In fact, such tie-ups also provide the BPO firms with additional capabilities and help them to augment their revenues since competition in this sector is becoming tougher.
According to a report in a website, a number of BPO and IT companies have teamed up during the recent months with the view to promote each other. While India’s largest BPO firm Genpact Ltd. entered into a contract with the Mumbai-based IT company Mastek’s division in the United States in May this year to provide combined services, including technology and back-office facilities, to insurance carriers, Hinduja Global Solutions Ltd. based in Bangalore has signed several deals with a view to enhance process improvement through information technology. Similarly, ExlService Holdings Inc., a BPO firm based in New York, collaborates with major IT companies like Infosys Technologies Ltd. and Wipro Ltd., occasionally depending on their clients’ demand for software development along with outsourcing services.
Elucidating the advantages of such tie-ups, Hinduja Global Solutions chief executive Partha Sarkar said that they do not have to maintain a separate software development team and whenever required, they partner with any major IT firm to deliver software applications to their clients. He said that as a BPO firm, they are into a $10-$15 business per hour, while the operational costs of IT are two-fold. According to Sarkar, Hinduja Global Solutions earned revenue worth $2 million from such partnerships during the 2009-2010 fiscal contributing around one per cent of the firm’s annual turnover.
Sarkar’s views were echoed by ExlService Holdings Inc. chief executive Rohit Kapoor. He said that while they did not have any IT expertise, the firm specialized in process and the manner to utilize information technology to advance the processes. Meanwhile, the founder and chief executive of ‘Horses for Sources’, a consultant to BPO firms on outsourcing, Phil Fersht said that this type of collaborations between IT and BPO firms were on the rise since BPO involves technology these days. According to Fersht, the demand for combined BPO and IT services too is increasing everyday.
Meanwhile, the major IT firms too are engaged in reinforcing their outsourcing departments. For instance, while the BPO business of Infosys, India’s second largest IT firm, contributed six per cent of the firm’s annual turnover during the 2009-2010 fiscal, Wipro, the third largest IT firm in India, generated as much as 11 per cent of its annual revenue from its BPO business during the same period.