IT cos with BPO arms to steal show

Having won more than half of large BPO contracts announced during past one year, leading software services firms with back-office arm
s are set to become bigger players in the BPO market, according to research firm Datamonitor.

Companies such as Tata Consultancy Services (TCS) and Cognizant also accounted for almost 80 per cent of the total value of large BPO contracts awarded in the past one year.

According to Datamonitor, 54.3 per cent of all large BPO deals were signed by IT services vendors having BPO arms, and not specialist BPO firms. “While the BPO players did account for 44.7 per cent of all announced deals, their cumulative contract value reflects only 19.5 per cent of overall deal value,” said Vamshi Krishna Mokshagundam, analyst with Datamonitor India. “BPO services are being increasingly signed on as part of a bigger IT services contract.”

The largest BPO deal announced in recent times, amidst a period of financial turmoil and instability, was Citigroup’s $ 2.5 billion contract to TCS following its acquisition of Citi’s BPO arm in India.

The deal is noteworthy from the point that a multi-billion dollar BPO deal went to an IT services player and also that TCS was keen on acquiring the asset despite questions surrounding Citigroup’s own financial stability.

BPO deals are also coming to IT players as part of larger integrated contracts. TCS itself won a BPO piece to handle finance and human resource processes for AC Neilsen as part of a larger $1.2-billion contract to handle its IT and operations functions.

Similarly, Cognizant Technology Solutions , which has traditionally been strong in healthcare and life sciences, has won a $ 95 million deal for clinical data management from Astra Zeneca -- probably the largest publicly announced deal in knowledge process outsourcing.

http://infotech.indiatimes.com/Outsourcing/IT_cos_with_BPO

Business Financial Services

IT cos with BPO arms to steal show