Saturday, December 8

Infosys makes $80 mn pitch for Aviva's BPO units

NEW DELHI: IT major Infosys is learnt to be eyeing UK-based Aviva’s offshoring centres in Bangalore and Colombo as well as its two Pune facilities that are currently operated by WNS and EXL under the build-operate-transfer (BOT) model. The deal is expected to be in the range of $75-80 million. The Colombo and Bangalore units are now run by Aviva Global Services (AGS)—Aviva’s global BPO and IT offshoring arm. The two Pune facilities were to be transferred to AGS in January 2008. But Aviva, UK’s largest insurance provider, recently deferred its decision to repossess the centres by a quarter to April 2008. “We can confirm that we have decided to defer the transfer of Pune by three months and we are taking the opportunity to thoroughly review the options available to us around our offshoring capabilities. Aviva continues to remain fully committed to maintaining its offshore operations and is proud of what has been achieved. Aviva Global Services will continue to play a key role in supporting the UK businesses,” said an Aviva spokesperson. An Infosys spokesperson said, “We would not like to comment on market rumours.” Besides Infosys, WNS, EXL and 24X7 Customer are reportedly in the race to acquire the centres. But Infosys’ (India’s second-largest software and services firm) interest stems from its strategy to strengthen its capabilities in the insurance vertical. This July, Infosys signed a $250-million outsourcing contract with consumer electronics company Royal Phillips. This included a $28-million sale of the Dutch company’s outsourcing centres in Poland, India and Thailand. Incidentally, AGS also operates centres in Norwich and York in the UK. EXL and 24X7 Customer are expected to manage BOT centres for Aviva in Noida and Chennai respectively till 2008. AGS and the BOT units together employ about 8,700 people in India and Sri Lanka. “The ability of captives to grow beyond a point is limited. Parent companies are increasingly realising the value creation in selling a captive to a third-party vendor. Apart from earning from the sale proceeds, they get cost-efficient services. Data confidentiality fears have been assuaged to some extent as Indian companies have proved their mettle,” said Ernst & Young India partner (transaction advisory services) Ashish Basil. Aviva took over the operations of the 24X7 Customer BOT centre in Bangalore, which employed around 1,600 employees, in the beginning of this year. In July, it took over the 300-people Colombo centre managed by WNS. The banking, financial services and insurance (BFSI) vertical contributes over 40% to Indian BPO firms’ revenue. Revenue from offshore insurance BPO services alone is slated to rise to about $2 billion by 2010.

Source: http://economictimes.indiatimes.com/Infy_makes_80_mn_pitch_for_Avivas_BPO_units/articleshow/2605817.cms

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