iGate plans Indian BPO foray with $40 M investment

Tuesday, 26 November 2002, 08:00 Hrs
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iGate Corporation, a U.S.-based IT solutions major, plans to enter India's booming business process outsourcing (BPO) industry by end of the current fiscal year with an investment of $40 million.

NEW DELHI: Nasdaq-listed iGate has decided to launch BPO operations through its majority owned unit Mascot Systems, one of India's leading software services companies, said Sunil Wadhwani, CEO of iGate Corporation.

"We are planning to launch BPO services either through the acquisition route or by setting up our own unit. At the moment, we are seriously pursuing both the options and a final decision will be taken in the next couple of months," Wadhwani told IANS.

BPO refers to delegating IT-enabled business process of a company to a third party who owns, administers and manages a wide range of processes such as human resources, finance and accounting, supply chain management and customer care.

Lured by the emerging opportunities in the sector, a host of India's top software companies such as Infosys Technologies and Satyam Computer have made a foray into BPO to offset the impact of revenue slowdown from software services.

IT consultancy firm Gartner has predicted that worldwide BPO services will grow from $119 billion in 2000 to $234 billion in 2005. Some Asia Pacific countries, especially India and the Philippines, are well placed to capitalise on the opportunities, it says.

Wadhwani said his company was looking at offering high-end services through its BPO arm that would help firms from a wide spectrum of industries cut operational costs.

"We are not just looking at offering call centre services. Our offerings will include process management and procurement management solutions. We are looking at an investment of $40 million for a multi-location presence in the country."

Wadhwani said Mascot Systems' business would witness a strong growth after it completes the process of acquisition of two mid-size software solutions companies in the next couple of weeks.

The acquisition proposal is currently awaiting regulatory approval. Mascot had earlier announced its proposal to acquire U.S.-based eJiva and Aqua Regia, a Hyderabad-based technology services and consulting company.

"Mascot and eJiva's offerings will include a wide range of specialised offshore services that will differentiate them from the competition.

"eJiva also brings strong expertise in areas such as enterprise applications services and business intelligence," said Wadhwani, adding that after the acquisition the combined entity will have more diversified portfolio of customers.

Mascot Systems has operations in the U.S., Britain, Germany, the Netherlands, Japan, China and Singapore, besides India.

The company employs about 1,600 people and has offshore development centres in Bangalore and Chennai. It focuses on the manufacturing, finance and banking, retail and distribution, telecommunications and service industries.

Mascot currently contributes 45 percent of iGate's annual revenue, Wadhwani said, adding that the Indian arm's contribution will rise significantly in the next fiscal year on increased outsourcing of software services.
Source: IANS

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