Infosys BPO, the business process outsourcing subsidiary of Infosys Technologies, has begun offshoring its own offshore work.
BANGALORE: Infosys BPO, the business process outsourcing subsidiary of software major Infosys Technologies, has begun offshoring its own offshore work. It is working with Philippine Long Distance Telephone Company (PLTD) to offer voice-based services to its American clients from Manila.
Around 200 people on the rolls of Ventus, a unit of PLDT, are servicing US customers of Infosys in the Philippines, the first experiment of an Indian IT services firm farming out work to a local company to service its customers. PLDT employs over 4,500 people and aims to reach a workforce of 6,000 by next year.
“Philippines is the only country where we work with a partner. It has been on for the past one year following client requests to provide call centre operations out of Philippines,” an Infosys BPO spokesman told DNA Money.
Moves like these reinforce Infosys’ image as an innovative company. Susquehanna Financial, a research brokerage in the US, has recommended Infosys to investors “despite a bullish run that has seen the stock travel to $47 from a split-adjusted price of $33.” Susquehanna says that it likes Infy’s “ahead-of-the-curve innovation” in training and developing people. Offshore IT core competencies boil down to head count acquisition and training, and Infosys is arguably the best on this dimension.
Analysts say that Philippines is one of the “best” destinations for call centres to service the US market due to the strong English language skills of Filipinos who are traditionally comfortable with the American accent. Philippines employs over two lakh people in the BPO sector, which clocked revenues of $ 2.1 billion in 2005. The Business Processes Association of Philippines estimates the industry to grow to $ 4.9 billion by 2007, but the country faces a challenge due to high attrition, which is comparable to India, while not being as cost competitive.
“The Philippines market is overheated. It makes sense for multinational companies to go for partnerships with local firms due to the high attrition,” Avinash Vashista, CEO of Tholons, an IT offshore advisory firm, says.
An alliance with PLDT will help Infosys meet client requirements of diversifying risks by spreading the location of the Indian company’s call centres outside its home country, Edgar Bancod, head of research at ATR Kim Eng Securities in Manila, was quoted by Bloomberg as saying.
Infosys BPO, with first quarter revenues of Rs 127 crore, employs over 8,500 people in centres in India, the Czech Republic and China and services over 20 clients, including mortgage firm Greenpoint and British Telecom.
Ventus president Rose Montenegro said: “This is a very strategic partnership that will enable both companies to reach additional markets and offer expanded services to customers.”
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