TelstraClear has confirmed that a total of 120 New Zealand call centre jobs are being considered for relocation to Manila and not 150 as previously specified by early union reports. The confirmation was made during their announcement of a restructuring proposal that would involve jobs at Paraparaumu and Christchurch.

Over the next 8 months the restructuring proposal would see residential inbound calls outsourced to the Philippines to improve customer service and cut costs.

John Kerr of the Engineering, Printing and Manufacturing Union, believes the proposal is detrimental to New Zealand’s contact centres, saying “This is all about accessing cheap labour overseas. A lot of our members are women with young families to support. It does not even make good business sense – there will be huge damage to the brand.“

“At this stage it is still a proposal and we are doing everything we can to persuade TelstraClear to try and keep the jobs in New Zealand.” He also said that 148 call centre jobs will be moved to Manila, and that 80 of these would be jobs from the Paraparaumu call centre.

Allan Freeth, chief executive of TelstraClear, pointed out that the plan is still being proposed, “No decision has been made. We have finished the feasibility study and we will talk to staff about the next steps in the process,” adding that the company would speak with its employees about alternatives.

Industry-wide leadership changes herald a fresh approach for major Indian outsourcing companies as they face up to emerging challenges. Companies such as Infosys, WNS Global Services and Firstsource Solutions are finding they require new skill sets as the industry enters a new stage in the business lifecycle.

K. Sudarshan, managing partner at EMA Partners International comments, “Firstsource was Ananda’s baby. In nine years, he grew it from zilch to about $400 million. There’s a sense of having done something and now you need fresh legs.”

Ananda Mukherji of Firstsource remarked: “It was a start-up industry when I joined. Now it has a certain maturity. This was the right time to move on.”

The Indian BPO sector has moved past the establishment phase and now needs to adopt a different growth model, along with new management skills, to sustain and improve business during the sectors maturity. Zinnov Management Consulting CEO Pari Natarajan says, “It’s difficult for people with 10-12 years of experience in a certain type of growth mode to change gears.”

Indian outsourcing vendors are now challenged by increased competition from new outsourcing destinations [such as Malaysia, the Philippines, and Vietnam] that are snatching up contracts in basic call centre work. Other issues that the industry needs to improve on include: customer relationships, identifying growth areas, and new pricing models.

Third party outsourcing companies such as Firstsource and Genpact also face more competition in companies that offer both business services and technology like Infosys and Wipro. According to Tholons CEO Avinash Vashishta, “BPOs need new CEOs to have increased client experience and primary knowledge of new delivery locations. They want CEOs who can address the competitive threat, both within (in a growing local market) and outside.”

IT Services and offshore software development company, iGate, has announced plans to recruit 500 people in the next six months for its venture into healthcare and financial BPO services.

Phaneesh Murthy, CEO of iGate said, “Most of the 500 people we plan to hire in over the next six months will be in India and some in Mexico and the US. They will be employed in both services in BPO areas.”

“We are aggressively pursuing it… We have $100 million cash on our balance sheet. We are eyeing acquisitions in $30-70 million range and we should finalise it in few months,” he said.

iGate’s net income more than doubled from January to March, registering $11.6 million compared to the $5 million net income in the same period last year. The company ends the first quarter with a total of 7,357 employees, 447 of which are new.

Walgreens, the largest drugstore chain in the United States, finalised a 10-year contract with Indian outsourcing vendor Genpact to handle their accounting processes.

Pramod Bhasin, CEO of Genpact, said, “We are delighted to announce this strategic relationship with Walgreens. This agreement strengthens our ability to deliver end-to-end solutions for the retail and healthcare industries. As leaders in our industry, we are redefining the market by moving beyond just process efficiencies and focusing more on accelerating positive business outcomes for our clients. We believe our domain expertise in finance and accounting, health care, back-office processes, re-engineering and analytics coupled with our heritage of Lean Six Sigma uniquely positions us to support Walgreens growth initiatives”.

“We are definitely seeing a comeback with lot many deals in the pipeline of large value. This is also a large contract considering the number of people involved. We will also keep many jobs onshore and still be able to maintain margins.” He added.

According to the contract, Genpact will acquire Walgreens’ Danville facility in Illinois and manage employment. Approximately 500 accounting employees will be transferred to Genpact payroll in the following months.

Walgreens executive vice president and CFO Wade Miquelon said, “Genpact’s proven ability to bring efficiency to finance and accounting processes and its commitment to our Danville employees were key factors in our decision to forge this agreement. The deal will help us improve cost productivity and facilitate our growth strategy, while maintaining an agile and service-focused organisation.”

The partnership between Walgreens and Genpact will affect accounting employees at Walgreens offices in Deerfield, Danville, and nine smaller accounting sites in the United States.

EquaTerra’s latest Advisor and Business/IT Service Provider Pulse Survey declares that buyers of BPO services are “slow, deliberate and risk averse.” According to the report, even though new outsourcing contracts have increased by 44 percent in the latter part of 2009, a good percentage of these contracts have not been implemented yet due to uncertainty. Contracts that involve a large initial investment are placed on the backburner in favour of contracts that will help businesses cut costs.

Stan Lepeak, global research managing director of EquaTerra, says, “Currently more outsourcing deals are stuck in the pipeline as buyers wrestle with uncertainty. They understand the problems and are painstakingly sorting through solutions and weighing options.”

Ovum senior analyst Patrick O’Brien expects that there will be an increase in outsourcing IT processes as industries recover from the global recession.

Malaysia Airlines has selected Tata Consultancy Services (TCS), India’s largest software vendor, for their IT outsourcing program. The airline aims to improve internal customer experience by transforming its IT operations.

Faridal Abdul Rahman, Chief Information Officer of Malaysia Airlines said, “This is in line, with BTP2 to align the role of IT to the airlines P&L. One of the key initiatives includes fine-tuning our IT outsourcing strategy to deliver the required business results at a lower cost. At the same time, we will continue to work with our key vendors to maximise service delivery and to proactively address other business requirements.”

Tata Consultancy Services APAC head Vish Iyer said, “We are delighted to partner with Malaysia Airlines and will leverage our expertise and best practices to help them achieve their strategic business transformation objectives, enabling them to capture the growth in the global aviation market.”

The contract requires TCS to take charge of IT infrastructure management of the airline’s data centres, IT networks, and IT security. TCS will also set up an ITIL V3 compliant service management organisation under a unique build, operate and transfer methodology for Malaysia Airlines.

Walden International, Olympus Capital, and other investors have pump primed Quatrro BPO Solutions, which employs 3,000 people and has established its presence in India, China, Sri Lanka, and the United States in anticipation of a growth spurt in the Business Process Outsourcing industry worldwide. The initial trench is US$13 million.

Founder Raman Roy says, “The additional funding gives us dry powder to work on deals.” The company aims to implement its organic and inorganic growth strategy through its newly acquired venture capital.

Walden India managing director Rajesh Subramanium says, “We are backing best in breed companies that don’t play in a cluttered segment. The Quatrro model presents the next generation of the BPO wave. Quattro BPO Solutions is their first investment in an outsourcing company in India.

“The client engagement model of Quatrro is outcome based. There is non-linear growth opportunity here unlike in several BPOs where revenue growth is in sync with manpower growth. Hence we see a better realisation opportunity in Quatrro.”

Quatrro BPO Solutions focuses on SMEs, and has already made six investments such as in Auxicogent, gaming business Babel, Flexitronics BPO, and Scope eKnowledge, to name some.

Japanese internet bank SBI Sumishin Net Bank (SSNB) announced it has entered into an agreement with Business Process Outsourcing provider Total System Services International (TSYS) to be implemented later this month. Under the agreement, TSYS will handle payment processing for 750,000 accounts, and back-office operation services such as distributing retail membership cards, association-branded credit cards, and a proprietary private label credit card to customers.

“The dependability of TSYS’ processing platform will enable us to concentrate on new cardholder acquisition and new program introduction, and we look forward to calling on TSYS for its extensive knowledge and expertise in day-to-day operational matters including call center operations,” said Tohru Nitadori, SSNB general manager of card business.

The managing director of TSYS Japan, Hitoshi Kondo, said “We believe the value of outsourcing has been proven time and time again in the Japanese card industry. We are strongly committed to our Japanese team and support its mission to meet the increased needs and expectation of clients.”

“SBI Sumishin Net Bank leads the Japanese internet banking market with its innovative products and services. TSYS is delighted to offer a full range of support for SSNB’s entry into the card business, in both system processing and back-office operations,” said TYSYS International president, Gaylon Jowers.