5/30/2007

Effort BPO to set up call centre in China

Mumbai based domestic call centre Effort BPO Ltd on Wednesday announced that the company has entered into a joint venture with China-based firm Asia Star and Hong Kong based Triple Three to establish a domestic call centre in China. The three partners will initially invest $1 million and will increase this to $ 6 million over a period of two years.

“Effort BPO will be holding 51% equity stake while Asia Star will own 24% and Triple Three 25%,” said Akshay Chabra, MD of Effort BPO.






The new venture will target about 1,000 seats and will take over Asia Star’s call centre business in Shanghai. The partners are looking at raising the employee strength to over 5000 over a period of three years. Triple Three will contribute its expertise in the financial, administrative and local understanding of the Chinese market. The JV will also add new facilities in the special economic zones (SEZs) in China, apart from the present one in Shanghai.

“With the present facilities in Delhi, Indore, Pune and Mumbai and with a total of 1,045 employees, Effort BPO plans to add 2,000 seats in Mumbai and Delhi and would target around 6,000 seats by March, 2009,” said Chabra.

He further revealed, “Apart from China the company is also looking at setting up a call centre facility in Vietnam and is scouting for partners for the JV. Moreover, we also have plans to go public in 2009,” he added.

Global BPO biz may slow to 2% growth

CHENNAI: Global business process outsourcing sector is likely to see only a modest growth of 2% in 2007, after growing at a compounded annual rate of 14% during the last five years, going by some of the recent indicators, according to a senior industry observer.

Mr Indraneel Banerjee, project director, Technology Partners International, a sourcing advisory firm, said the first quarter of 2007 saw the lowest number of contracts signed since the first quarter of 2003. The contract value was also the lowest since the third quarter of 2002.

There was also a shift away from large multi-process BPO agreements to single function contracts of a smaller size, he said. He was speaking at a seminar “The Changing BPO Landscape: Can India become a knowledge services hub?” organised by Nasscom on Wednesday in Chennai.

While TPI saw a softening of growth in BPO globally, it was positive about the potential of knowledge services outsourcing in India. Mr Banerjee said, “Contrary to the first wave of outsourcing, which was based on data transactions, the focus now is adding business value to a client, to enable their entry into new markets. Innovation is the key factor in knowledge-centric outsourcing”

Mr Lakshmi Narayanan, chairman, Nasscom, and vice-chairman, Cognizant Technology Solutions said that often BPO companies move up the value-chain driven by demand that comes from customers. In response, they build the capabilities to service those demands. BPOs also move up the value-chain by proactively coming up with solutions.

In a customer-driven model, pricing is usually based on (full time employees) dedicated to the project. In the competence-driven model, BPOs had a greater flexibility in pricing. Here, pricing could be based on the value added to the business, he said.

The seminar witnessed participation from offshoring companies like HP BPO, Ajuba Solutions India, Scope International and Pangea3 Legal Database Systems. The speakers contended that though the KPOs offer immense potential for India in the out-sourcing industry, this innovation-driven model would require a high degree of investment in domain and process capability and also employees with specialised skill-sets.

Also, the pricing model would move from being resource-based to value-based. The KPO sector also faces challenges like security, innovation and attrition. Security was especially a matter for concern among players in healthcare and the legal outsourcing arena.

Mr Devendra Saharia, president, Ajuba Solutions said, “Apart from financial data, we also deal with patient details, which is highly sensitive. In healthcare, R & D productivity is the key rather than the earlier phase where it was only claims processing.”

Nasscom has chalked out initiatives to help IT/ITES tackle. Mr Lakshmi Narayanan said, “We encourage educational institutions and industries to develop a finishing school-oriented programme. Apart from encouraging entrepreneurial activity, this would also act as an effective interface between the academia and industry.”

Mumbai firm to train Chinese staff on BPO ops

MUMBAI: First, it was the software companies; now, it is the turn of BPOs to set up shop in China. Effort BPO, based in Mumbai, has been roped in by Asia Star, a private Chinese telecom services company, and Triple Three, the investment arm of Hong Kong-based export company Mulitex, to set up domestic BPO operations in Shanghai.

Effort will partner with Asia Star and Triple Three to set up a 1,000-seater BPO operation catering to domestic companies in China. The yet-to-be named new venture would see an initial investment of $ 1 million, with another $ 6 million to be invested in the company over the next two years, according Gene Chu, CEO, Asia Star. Effort will hold 51% equity in the venture while Asia Star and Triple Three will hold 24% and 25% respectively.

“China lacks trained manpower for telemarketing. Call centres and BPOs are really the missing link in the value chain for the growing service industry in the country; hence, with this new entity, we would look to have a first-mover advantage in the space in China,” Mr Chu added.

Effort will train the Chinese speaking staff in the newly-formed BPO on running operations. “Effort would bring in the technology and domain expertise in running a BPO, while Asia Star would leverage its expertise in the telecom space, infrastructure and local knowledge,” Effort’s director-sales and marketing Rajnish Sarna told ET. HSBC, Reliance Telecom and Tata Indicom are its clients.

Effort is also aiming to scale up headcount in the new operations to nearly 5,000 in the next three years, he said. In India, the firm has operations in Mumbai, Indore, Delhi and Pune with about 2,000 employees.

Mr Sarna added that the new venture would also take over Asia Star’s existing 100-seater call centre in Shanghai. He added that the synergies with Asia Star were obvious since it is one of the only four companies in China to have a government licence to run a BPO/call centre.