Global-O&O

SOURCE: Business Week
DATE: March 4th, 2010

Convergys Corp., a business services outsourcing provider, said Thursday that it agreed to sell its human resources business to a British outsourcing services company for $100 million.

Convergys said the transaction would allow it to focus on its customer management and information management businesses.

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SOURCE: EconomicTimes
DATE: Feb 18th, 2010

Actis, a Private equity firm invests $50 million in Integreon, a BPO firm for 30% of the stake.  Integreon provides Legal Process Outsourcing (LPO), Knowledge Process Outsourcing (KPO) services and is majority owned by Ayala Corporation, A Philippines based firm.

Integreon has gone the acquisition route to build their capabilities in KPO and LPO. They had recently acquired
Grail Research from the Monitor Group.

Integreon revenue run rate – $89 million end of Dec 2009.

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SOURCE: Press Release
DATE: Feb 3rd, 2010

The firm Symphony Marketing Solutions is a firm spun of by Romesh Wadhwani, who has been on the forbes richest 400 list and made his fortune selling Aspect Software to i2 which went through a major downturn during the tech bubble crash. He invests in multiple firms and Symphony Marketing solutions is one of them. With an employee base of 1,200 it will potentially add analytics capability to Genpact offerings and also provide small revenue growth.

Genpact has been doing analytics work for GE and similar firms via it Bangalore center for a while but has not grown that business significantly.  Looks like Genpact continues to grow their footprint in the BPO space without acquiring any IT related firms or ERP firms.

Genpact continues to do small deals which may not signficantly move the needle in terms of growth opportunities for the firm.

Genpact Limited (NYSE: G), a leader in managing business processes for companies around the world, today announced the acquisition of Symphony Marketing Solutions, Inc. (SMS), a leading provider of analytics and data management services with expertise in the retail, pharmaceutical and consumer packaged goods industries. SMS has more than 1,200 employees in India and the United States. Concurrently with the closing of the SMS acquisition, Information Resources, Inc. (IRI), one of the world’s leading providers of enterprise market information solutions and services and a strategic client of SMS, has executed an eight-year contract under which SMS will provide end-to-end data management and analytics services to IRI.

Genpact was one of the first companies to offer high-end analytics services from delivery centers in India and today is one of the largest global providers of the full spectrum of analytics services. The acquisition of SMS expands Genpact’s scale and depth in the retail, pharmaceutical and consumer packaged goods industries and reinforces Genpact’s leadership position in the knowledge process outsourcing industry.

Customer transactions are generating billions of data points a year, but the skills required to effectively manage, integrate, and analyze the massive quantities of data are beyond the core competencies of many companies. Genpact has developed modular analytics processes that can be easily embedded in a client’s information management systems to convert this data into insights. Combined with our rigorously scientific Smart Enterprise Processes (SEPSM), Genpact uses these insights to help companies increase sales, reduce costs and improve business effectiveness.

“This acquisition allows both companies to combine expertise and significantly enhance the value we bring to our clients,” said Pramod Bhasin, president and CEO of Genpact. “SMS has a strong client-centric and performance driven culture that aligns very well with Genpact. SMS brings deep domain expertise in the retail, pharmaceutical and consumer packaged goods verticals. This expertise will not only allow us to offer a broader range of services ranging from core finance and accounting, procurement and supply chain to data management and advanced analytics solutions, but will also enhance our Smart Enterprise Processes (SEPSM) in these verticals by leveraging strong insights to deliver accelerated business impact to clients worldwide.”

“As SMS and its parent company Symphony Technology Group (STG) assessed ways to build leadership in the data management and marketing operations space, we realized the need to have critical mass in terms of size, scale and client relationships to significantly accelerate our growth and to enable IRI and other clients to offer even more value to their end-customers,” said Dr. Romesh Wadhwani, STG’s founder, chairman and CEO. “The combination of SMS’s domain expertise and capabilities in the retail, pharmaceutical and consumer packaged goods verticals with Genpact’s scale, breadth of services, global delivery footprint, Lean Six Sigma approach, and unparalleled process expertise, creates a compelling value proposition for our clients and employees to drive growth,” he added.

About Genpact

Genpact is a leader in managing business processes, offering a broad portfolio of enterprise and industry-specific services. The company manages over 3,000 processes for more than 175 clients worldwide. Putting process in the forefront, Genpact couples its deep process knowledge and insights with focused IT capabilities, targeted analytics and pragmatic reengineering to deliver comprehensive solutions for clients. Lean and Six Sigma are ingrained in the company’s culture, which views the management of business processes as a science. Genpact has developed Smart Enterprise Processes (SEPSM), a groundbreaking, rigorously scientific methodology for managing business processes, which focuses on optimizing process effectiveness in addition to efficiency to deliver superior business outcomes. Services are seamlessly delivered from a global network of centers to meet a client’s business objectives, cultural and language needs and cost reduction goals. Learn more at www.genpact.com.

About Symphony Marketing Solutions

Founded as part of the Symphony Technology Group family of companies, Symphony Marketing Solutions (SMS) is now the gold standard for creation of both market and customer insights. This is made possible by our globally sourced data management and analytical services, deep Sales and Marketing expertise, and a services organization that executes with uncompromising attention to quality and security. Employing over 1,200 data, analytics and sales/marketing experts worldwide, SMS leverages a multi-shore delivery model to provide rapid, responsive and results-driven solutions to savvy marketers in key industries. Symphony Marketing Solutions is the preferred alternative for many of the world’s strongest brands. More information is available at www.symphonyms.com.

DATE: Nov 12th, 2009

Infosys BPO has made it’s first acquisition, although a small one when it bought the US based McCamish Systems. McCamish provides insurance industry outsourcing. The  deal is worth $38 million upfront payment and $20 million based on meeting certain financial targets.

Infosys BPO revenue for this quarter was 71.3 million, with an employee strength of around 16,000. Still a small player in BPO compared to some of the pure play BPO providers in India like Genpact, WNS etc..

Client base for McCamish includes – Nolan Financials, Swiss Re, Newport Group, Heritage Union.

SOURCE: TechGoss
Date: Oct 15th, 2009

Looks like the sources at TechGoss had the scoop when they confirmed early Oct  that Cognizant was the front runner in buying UBS operations in India.

http://www.techgoss.com/Story/268S11-Techgoss-prediction-true–nbsp–Cognizant-buys-UBS.aspx

Cognizant is getting another chance to start their BPO business with acquisition of a captive. Interestingly as per some earlier news sources both the Poland and Indian captive centers of UBS were in play but Cognizant has acquired only the Hyderabad, India center.   Though this acquisition is not as large as TCS buying the Citi captive in India but it provides Cognizant a firm footing in the marketplace for BPO, KPO Operations. Cognizant has a large footprint in IT services for financial services and should be able to leverage their acquisition to get deeper into existing clients and offer a broader set of services.

The time span from captive to third party vendor seems to be shrinking as more firms are looking to get out of running captives in India.  It was mid 2006 when UBS had announced setting up their captive in India  ( UBS to set up captive in India ) and in less than 3 year span have managed to  Build, Operate and Sell (BOS). If the original investment UBS made in Hyderabad was around 50 million franc as the article mentions, a 3 year sale price of $75 million dollars is not a bad return for UBS. Cognizant is guaranteed a $442 million contract over five years.

The acquisitions of captives by large third party Indian vendors has been a market driven need of the US firms looking to reduce cost but also speaks to the maturity of the Indian vendors in doing such deals and providing services which were considered too proprietary or confidential to source to third parties. 

These transitions are never easy and moving a captive mindset to a customer oriented, third party vendor mindset is a challenging task both for the seller and buyer. A number of BOS deals after a couple of years they were announced still continue to face integration challenges.

Interestingly one of the few outliers in captive operations seems  to be Wells Fargo. Recently remember reading a quote from Wells where their senior executives were looking to expand their captive center in Hyderabad. Wells has never gone around doing offshoring in a large way but with the acquisition of Wachovia last year , they acquired the Wachovia-Genpact relationship.

This deal is good for Cognizant and makes the market for integrated players (IT, BPO services) more competitive. This does put pressure on pure play BPO providers like WNS, EXL and Genpact to figure out their growth strategies.  There is already a lot of activity and noise in Pure play BPO provider space with investors looking to sell their shares or looking for partners in the IT space.

From a customer perspective having an integrated service provider is a positive if the provider is truely integrated. A number of the large integrated service providers still continue to operate as separate units ( IT, BPO, Infrastructure services) but seem to be listening to the marketplace and working towards an integrated delivery model.

As the famous Black Eye Peas lyrics go  ’ You so 2000 and late’ , that is what captive operations have to be thinking now!

Mohit Sharma is the CEO of Corrystone Global Partners. Corrystone is an outsourcing consulting firm providing benchmarking, operational risk compliance, operational audit and transition management services to companies with operations in US and India. We work with firms which are exploring India or low cost US locations for IT, Business Process work and or have established IT/operations in India and US and are looking at ways to further optimize cost and manage operational risk.

Date: May 15th, 2009

Aegis communication an Essar group BPO firm has agreed to buy UCMS Group, an Australian outsourcing firm for around $36 million USD. Aegis has continues to grow inorganically and over the past year has acquired AOL support center in India, Peoplesupport for $250 million.

Aegis employee strength: 32,000

In a recent interview , Aegis  CEO Aparup Sengupta mentioned that the firm has acquired 11 companies during the last four years. Revenues of $500, million.

The CEO credit’s their merger success to the five 9’s.  We complete the integration process in 9 hours, 9 days, 9 weeks and 99 days!!

The new organisational strategy is charted out in 9 hours. In 9 days, we roll out the key performing indicators for both the teams. We complete the entire integration process in 99 days. In 9 weeks, we run the business operating metrics. The process helps to integrate, involve and inspire the workforce after a merger.