Oak Hill Capital Consortium Buys Vertex for $427 Million

The consortium comprises of the U.S.-based private-equity firms, including Oak Hill Capital Partners, GenNx360 and Knox Lawrence International. Oak Hill Capital consortium, a group of the U.S.-based private-equity firms, including Oak Hill Capital Partners, GenNx360 and Knox Lawrence International, has bought Vertex Data Science (Vertex), a business process outsourcing subsidiary of United Utilities for $427.23 million. The sale of the subsidiary is expected by the end of March 2007. The full story on Global Services …

Exiting a Large Captive? Vertex Buyout Reaffirms LBO Is the Way

The acquisition of Vertex, United Utilities’ BPO arm, by a group of private-equity investors proves that for large-ticket merger and acquisition in the outsourcing space, private-equity buyouts are surely becoming the preferred mode. After months of speculations about the fate of Vertex, the BPO subsidiary of United Utilities, a group of private-equity investors, led by Oak Hill Capital Partners, have finally acquired the firm in a $427 million (GBP 217.5 million) buyout. The other firms involved are GenNx360 and Knox Lawrence International. In most of these reports, the possible valuation figures cited for Vertex have ranged anywhere between $600 million - one billion dollars. The current valuation, by that standard, falls short of expectations. The full story on Global Services …

Infosys BPO, HVS to tap hospitality sector

Infosys BPO, the business process outsourcing subsidiary of Infosys Technologies and HVS International, a New York-based consultancy, have announced a strategic alliance to offer outsourcing solutions in the hospitality industry. HVS International offers valuation and other services to the hotel, restaurant, shared ownership, gaming, and leisure industries. According to a release, the alliance will leverage HVS International’s consulting expertise and market reach in the hospitality industry and the process outsourcing capabilities of Infosys BPO to develop and execute domain-specific, predictable, and process centric solutions to improve productivity and optimise costs for companies in the global hospitality industry. The full story here …

Cobra Legal Solutions enters into Chennai

The entry of Cobra Legal Solutions (CLS) into Chennai, is expected to mark the rush of many legal firms, vying for a share of the $ 250 billion global LPO pie. CLS, principally-owned by senior partners in major US law firms, has retained Ma Foi Management Consultants, as recruiters. It is looking for legal specialists (litigation) and legal support professionals. Specialists need to have global client servicing experience and ability to use Lexis/Nexis and Westlaw and other resource databases. Graduates with strong English skills and computer proficiency fit the legal support profile.  The full story here …

Transfer Pricing Debacle continues - Revenue officials should refrain from targeting captive BPOs

The transfer pricing (TP) audits for the third year have just concluded. One of the soft targets of the revenue authorities in the TP audits has been captive IT & BPO companies of foreign MNCs. Indian economy’s phenomenal growth in the recent past has been primarily fuelled by the services sector comprising mainly of IT & BPO companies. Several of the captive IT/ITeS companies are leaders in the contribution they make to the revenues of the Indian industry. Majority of the captive IT & BPO companies function as low or stripped risk service providers, with the major market, product, credit, capacity and other associated risks vesting with the parent or principal companies abroad. The captive subsidiaries generally maintain the dedicated workforce & infrastructure, through which, seamless delivery of services are ensured. Thus, the captive & BPO units at the most carry only the functions and risks of delivery, though the ultimate liability and quality control of the deliverables are also retained at the parent and principal levels in most cases. The full story here …

Rakesh Jhunjhunwala picks up stake in Inventurus

Rakesh Jhunjhunwala has picked up a stake in the Mumbai-based Inventurus Knowledge Solutions for $5.5 million. Inventurus is a start-up BPO company, focusing on healthcare and legal process outsourcing. The company was founded by Nitin Gupta, Sachin Gupta and Joe Benardello. Jeffrey P Freimark, EVP and CFO of Intelsat has joined the company as non-executive chairman. Jeffrey Freimark says, “Both Nitin and Sachin have worked for me in outsourcing contract and they did a good job of managing it. Now, that they are venturing out on their own, I have decided to help them.” The full story here …

Healthcare outsourcing now $300m biz, growing at 150%

Outsourcing in the healthcare sector has come a long way — from low-end claims processing and medical transcription to medical analytics and clinical processing. The US healthcare industry outsources to India not only its medical billing and insurance processes, but also data analysis and software development. Though, at present, only a small percentage of such work is being outsourced to India , medical services outsourcing from the US has seen a CAGR of 150% in the last two years. The bulk of outsourcing is from the US while some work comes also from the UK and the Middle East. “Healthcare BPO is still not very large in India . The industry is estimated at about $300 million now. But it has immense potential and is a very attractive space to be in,” says Divya Sehgal, CEO, Apollo Health Street. The full story here …

Aviva to bring 5,000 BPO staff into its fold

The UK-based insurance major Aviva plans to transfer about 5,000 employees of third-party BPO vendors to its own offshore division Aviva Global Services (AGS) in India . The company has so far transferred 1,600 employees from Aviva-24/7 Customer in Bangalore this month, while the rest will be moved during this calendar year. Aviva has 6,200 employees on the BPO side with its three partners — 24/7 Customer, EXL and WNS. It employs 1,600 BPO executives in Bangalore ; 2,600 in Pune; 600 in Chennai; 300 in Colombo and 1,100 in Noida. The full story here …

Virtual Call Center and Online Mortgage Broker finish among “Eight Great” business plans Annual Challenge by Knowledge@Wharton

Home-Base
Many military spouses are frustrated in their professional lives: They have to move often, and that hampers their careers. In the minds of the creators of Home-Base, that makes them perfect employees. Home-Base would hire military spouses to staff "virtual call centers" in which the agents work from home, rather than in big, costly offices. The company would then compete in the market for outsourced business services. The Internet enables the creation of this kind of call center, and JetBlue Airways already employs its reservation agents this way. When you buy one of its tickets by phone, you could be speaking with someone working in his or her bathrobe. Home-Base figures that combining a staff of military spouses with the virtual call center setup would provide a devoted workforce and public-relations edge over call centers abroad. What's more, many government agencies require that their contractors be located in the United States . Home-Base therefore would target government agencies as a key early market.

iBroker
If you have bought a home, a mortgage broker may have ripped you off. At least that's what the team behind iBroker believes. That's why it wants to create "the Expedia of the mortgage industry," says team leader James Thottam, a Wharton MBA student. Expedia is a popular online broker of airline tickets and other travel services. Numerous websites link borrowers and lenders. But despite what their ads may imply, they don't necessarily give consumers the best deal, Thottam says. Some sell only their own loans. Others act as referral networks and simply pass customers' names to brokers or lenders for a fee. And the typical broker "has complete discretionary power to choose what rate to quote the consumer, earning a higher 'commission' for a higher rate," iBroker points out in its plan summary. iBroker would submit its customers' credit information to the same loan clearinghouses that most brokers use to generate mortgage quotes. But instead of selectively disclosing fees and terms, it would lay out all loan quotes and their costs, rates and points. "We are talking about bypassing the broker and linking the lenders directly to the consumer," Thottam adds. "You would be able to do your own loan online."

$5.2 Million Bank Fraud Conspiracy in US - Originator Gets 24 Year Sentence

A federal judge has ordered 293 months of prison time -- more than 24 years -- for a former loan officer who was found guilty by a jury of all eight counts of an Indictment charging conspiracy, bank fraud, wire fraud, and money laundering. Hall and others targeted Washington , D.C. homes for "flip sales" or quick resales at fraudulently inflated prices. Hall recruited people to act as the "straw buyers," people who would have the property in their names, but would not pay the down payments or the mortgages. Hall worked as a loan officer for Guaranty Residential Lending (GRL), and through this position he submitted loan applications for these straw buyers seeking approximately $14 million in loans to purchase the properties; these loan applications falsely listed the straw buyers' assets, income, and other information. The complete story here …

$426,782 civil penalty for DNC violation

Calling Leads Lands Mortgage Company in Hot Water. $426,782 civil penalty against Maryland based USA Home Loans Inc. and its owner, David Vach. The complete story here …

DNC Scam Alert - Answering the Phone May Cost You Big

One self-proclaimed “consumer rights advocate” who is well versed in the specifics of these state and national Do Not Call regulations is now utilizing the laws for his own profit. Therefore, if anyone demands a copy of your do not call policy, deliver it promptly. If you do not have a policy, confirm that your company never contacts any prospect by telephone, because that might be your only defense. Click here for more …

DNC India style: TRAI stops telemarketing calls when you are abroad

Next time when you are holidaying abroad, chances are that you will not be disturbed by telemarketing calls. The Telecom Regulatory Authority of India (TRAI) has asked all cellphone service providers to offer a facility to subscribers that would help avoid unwanted calls while they are on international roaming. TRAI has asked service providers to inform it about the compliance status within 15 days. Click here for the complete story …

European Insurers See BPO as Vital

Despite myriad challenges for insurers and service providers, BPO in Europe is on the rise.

It's the same old adage: a penny saved is a penny earned. For many insurers, that means a boost in 2007 outsourced services. But for an up-and-coming group of carriers, that penny translates to a one-pence, kroner, deutsche mark or Euro. "Increased cost pressure in most European markets is putting BPO ever more on the map," says Matthew Whittall, chief operating officer based in Germany at United Kingdom-based Innovation Group, a provider of specialized outsourcing services to the UK and Germany. The full story here . . .

Assocham asks for Rs 100 cr fund for BPO, KPO

Industry body Assocham has demanded creation of a Rs 100 crore Venture Capital Fund to enable various domestic outsourcing industries to take on global giants and retain their strength in the global market. The full story here . . .

Taiwan quake causes tremors in Indian BPOs, companies not shaken

The strong earthquake in Taiwan on Tuesday night that cut undersea cables, telephone lines and internet pipes, has put the BPO industry in India on a 'sporadic mode'. A few crucial lines are completely down and therefore the call traffic is definitely hit. However, no significant outage (break in workflow) is reported yet, although it may happen later, said industry sources on Wednesday. The full story on The Times of India . . .

Talent crunch could put brakes on BPO success story, may need to rethink location strategy

Mushrooming offshoring companies are quickly absorbing the once unemployed army of educated young people, driving up salary levels and demand for space. Now, the runaway growth is threatening to become the biggest risk to the industry as companies, pressured by spiraling costs in these regions, begin to explore alternative low-cost destinations.

Full text of the report here . . .

BTO Size Estimated At $ 680 Billion By 2009

M arket potential for Business Transformation Outsourcing (BTO) is expected to be around $ 680 billion towards the end of March 2009, according to Secretary, Information Technology, Mr. Jainder Singh. Speaking on the occasion well known BPO expert, Mr. Raman Roy, CMD, Quatrro BPO Solution said that the IT and ITES business transactions would touch $ 173 billion by 2007 globally of which USA will have the largest component in it with approx. 40% share.  India ’s contribution to the projected target will be to the extent of 4%.  Mr. Roy wondered that with 4% penetration, how the BPO industry has come to saturation and projected that this industry will remain a lead player and contribute a great deal to the national GDP if harnessed properly.

Releasing ASSOCHAM Study on Business Transformation Outsourcing (BTO): Third Generation Outsourcing at ASSOCHAM organized Summit on BPO/ITES here today, Mr. Singh that IT and ITES which grew at CAGR rate of 28% in the last 5 years, creating employment for 12.87 lakhs of skilled people will attain a growth rate of over 35% in next few years.

The full story here . . .

STPI sops beyond 2009

Nasscom has made a strong pitch for extending the scheme and the Minister for IT seems to have backed them up with full strength. The association representing who’s who in the IT world wants the scheme to be extended by another 10 years, and STPI may just get the extension.

Read the story here as reported in The Economic Times . . .

BPO offers Indian warmth to the US Hospitality Industry

There is recent murmur about how Infosys BPO is poised to make millions by extending its BPO services to yet another sector - the Hospitality Vertical. According to some Media Reports the BPO company has agreed to an alliance with New York-based hospitality consultancy major HVS International. Under the said agreement, the two companies shall work on a profit-sharing mode.

To read the story, follow the The Economic Times

Nipuna Services bags $25m deal from 4K Animation

Animation is getting hotter, this time by over $25m according to recent reports on Nipuna. 4K Animation, a UK-based animation and special effects house has outsourced animation work that will be delivered from Nipuna’s state-of-the-art studio in Chennai. .

Nipuna will work with the 4K Animation team for 18 months on two European animation projects. More than 120 Nipuna professionals will produce and deliver animation services for the projects. This deal is rumored to the largest of its kind, as reported by RTTNews.

To read the full story, go to RTTNews.

SME BPOs in non-metros devoid of glamour - are all about gut, grit and survival

Ahmedabad has many BPO stories to tell. Global firms have swanky offices which accommodate a few thousand people. These lifestyle centers offer possibly the best that there may be on offer for BPO employees anywhere in the world. But when it comes to non-metros and SMEs the story is not all that glamorous. It is the mundane tale of sweat, grit and guts. There are many failures for each success. Read how Vikram Gehlot stuck out till he succeeded.

The story featured in The Economic Times . . .

‘Love thy neighbour’ takes on a new meaning in BPO clusters - now Hewitt feels the heat

In a bizarre turn of events, BPOs are adding to their own woes by poaching on their neighbours. As clusters of BPO emerge across India this trend continues to grow to alarming proportions. As reported in Economic Times this time around Hewitt faces the heat. Its not so friendly neighbours Bank of America BPO centre and Dell are forcing it to hike compensation to keep its flock together. What is alarming is that there is an element of moment of groups of skilled & trained manpower which hits companies both ways.

To read the full story, go to The Economic Times . . .

SC issues notices to I-T Department in Morgan BPO case

The Supreme Court on Monday issued notices to the income tax department in the Morgan Stanley BPO case. A decision by the court, either way, will decide whether income tax authorities will have the right to tax BPOs of multi-national companies. Experts note that this ruling will have far reaching implications for the fledging BPO Industry. The full story reported here . . .

Indian Outsourcing Firms Downplay Fraud Concerns

News of recent incidents of fraud is unfairly damaging India's reputation as a highly-skilled, low-cost location. "India is not immune but fraud here is limited. Less than 10 cases of security breaches have been reported so far. India's US$23.6 billion outsourcing industry has a lot at stake. It is growing at an annual pace of more than 30 percent, and back-office services like call centers and online technology support made $6.3 billion last year. That figure is forecast to grow to $8.5 billion this year. Read the full text as reported by CRMBuyer . . .