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Indian BPOs buying foreign firms

November 09, 2004 14:34 IST

Indian business process outsourcing companies, which have been clinching outsourcing contracts from developed markets, are now acquiring BPO units overseas to gain business from firms that are reluctant to outsource business to an offshore location.

In the recent months, at least 4-5 Indian BPO companies have acquired majority stakes in overseas BPO firms and the trend is likely to continue as the Indian units anticipate more business from the 'onshore outsourcing' model, industry officials said in Chennai.

Some of the recent deals include the takeover of EmpactEBS, a New Jersey-based benefits processing firm by Secova eServices, the first Indian human resource BPO; ICICI OneSource's 51 per cent acquisition of Pipal Research, an Illinois-based outsourcing firm and OfficeTiger's (which has a big presence in India) acquisition of a London-based recruiting and outsourcing concern Devonshire Group.

ICICI OneSource has also completed the takeover of Account Solutions Group, a New York-based consumer collections agency.

"The acquisition of EmpactEBS will help us to enhance our overall value to the customer by being competitive and equipped to offer best-in-class onshore and offshore service," said Venkat Tadanti, co-founder and CEO of Secova eServices.

Perhaps the first Indian company to identify the advantage of overseas operations was HCL BPO, when it took over the BPO operations of British Telecom in Belfast, Ireland, in 2001, retaining the entire 290 employees of the unit.

"Our Belfast revenues have grown to 20 million this year from 16 million pounds last year," said N Ranjit, chief operating officer, HCL BPO.

After taking over BT's BPO unit, HCL BPO was able to clinch many outsourcing deals in Europe and has ramped up the Belfast operations to employ over 1,100 people.

"We now plan to make the Belfast operations a hub for our European operations," Ranjit, who was here recently, said.

However, India is still considered a low-cost and high-quality destination for many MNCs to outsource call centre jobs and BPO business.

Another reason for the recent acquisitions is the 'furthering of the reach' across a spectrum of industries in various markets by Indian BPOs.

"Just like offshore outsourcing, there is a vast opportunity in the onshore outsourcing model as well. This is more relevant in the wake of protests against outsourcing to offshore locations like India," said an official in a Chennai-based BPO.

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