Industry news

The bust up at the top of Infosys has come at the worst possible time for the IT outsourcing giant as pressure mounts for a serious change in the business offerings of Indian IT firms. After the resignation of Mr Sikka, following constant harassment from one of the firm's founders, Mr Murthy, questions about the future of Infosys are being raised. Pressure was already mounting on Indian IT outsourcing firms as procurement directors look to nearshoring and in-house IT providers as the cost advantage of India has eroded away. Infosys, like other firms such as Wipro and TCS, are looking to invest in more innovative offerings to clients in an attempt to move away from basic offerings, however the recent management problems may damage Infosys' mainframe-maintenance contracts which act as the firms bulwark in terms of earnings. Infosys, and other Indian firms need to diversify away from the reverence it holds for company founders so as to maintain confidence in their business structure, otherwise their transformation will be short lived.

More from sourcingfocus on Infosys.

The FCA are investigating outsourcing firm Mitie in connection with a profit warning issued last September. Mitie is being investigated on the content and timing of a profit warning issued last year and is "fully co-operating" with the financial regulator. It is more bad news for Mitie who are struggling with the uncertain climate around Brexit and faces another investigation into Deloitte's auditing of Mitie's accounts for the years ending 31 March 2015 and 2016. Mitie employs over 50,000 people in the UK for major clients including the NHS.

More news about the sourcing industry from sourcingfocus: Infosys Disruption Comes at the Wrong Time for IT Giant, Puerto Rico Showing Strong Signs of BPO and ITO Growth

The Philippine BPO sector is not worried about the protectionist rhetoric of foreign markets according to Convergys Asia Pacific president. Despite threats to reduce outsourcing from the likes of President Trump, businesses continue to outsource offshore in the Philippines, so the protectionist environment really has not had the major negative impact on business as expected. Although some clients are moving operations back to the United States, new clients are filling the gaps keeping the business environment strong.

More news from sourcingfocus: Mitie Face FCA Probe Over Profit Warning

The Sri Lanka Association of Software and Service Companies together with ICT Norway kicked off a fresh initiative to empower start-ups in Sri Lanka. SLASSCOM and ICT Norway have come together to offer Sri Lankan start-ups the opportunity to take part in the Oslo Innovation Week. Start-ups across Sri Lanka will be given an opportunity at a pitching event organised by both the Sri Lankan and the Norwegian bodies on 30th August, 2017. The start-ups with the most unique and innovative pitches will be shortlisted and the top three winning companies will be sponsored by ICT Norway to take part in the five-day Oslo Innovation Week in Norway from 25th to 29th September, 2017. The tie up between SLASSCOM and ICT Norway to strengthen Sri Lanka’s ICT sector, is also seen as an effort to further enhance the bilateral relationship between the two countries.

More news about Sri Lanka: Asian Development Bank Supports Sri Lanka with New Funds, Sri Lankan Central Bank to Promote Innovation

A stronger Euro is, thanks to a stronger economic outlook in the Eurozone could lead to parity with the UK Pound. The two currencies are coming closer as the economies of both diverge, meanwhile the US Fed is less likely to raise rates after the events in Texas this week leading to greater strength in the Euro. A stronger European economy is bad for Brexit as negotiations look better for the continental negotiators.

More news from sourcingfocus: Financial Services Boost Sourcing in the UK to Record Period

The Asian Development Bank (ADB) has earmarked up to $ 5 billion to work on a new country partnership strategy (CPS) for 2018-2022, with the Government to address policy reforms and growth-oriented infrastructure as well as strengthen drivers of growth through sustainable, inclusive and environmentally friendly solutions to help Sri Lanka’s transition to upper middle income country status. Under the new five-year CPS, ADB is committing around $ 800 million-$ 1 billion per year, while technical assistance is expected to amount to about $ 8 million a year. In addition, ADB will also increase its private sector operations by expanding into non-finance sectors.

Read more news about Sri Lanka: Sri Lankan Central Bank to Promote Innovation

The Sri Lankan Central Bank yesterday assured it would play a proactive role in promoting the adoption of new technology and innovation in the economy, especially the financial services industry whilst being a regulator. In a globalised world with its continuous race to compete, Sri Lanka should stay focused and keep abreast of the latest technologies the world has to offer, Central Bank Governor Dr. Indrajit Coomaraswamy said while insisting that innovation and localisation in applying new technologies was the key to success. He said the Central Bank had to take regulatory measures to minimise technology risks as well as to ensure economic and price stability as well as financial system stability, while facilitating innovation and the introduction of new technologies.  

Read the full story here.  

Digital transformation is set to see a rise in outsourcing spend in the Philippines according to a recent study. The Philippines is already an establised outsourcing location, however changes in IT procurement and rapidly evolving service delivery models, will drive the Philippines outsourcing market to continue growing. Digitalization has created opportunities for new areas of business and organizational structures. However, as companies increasingly embark on a DX journey, outsourcing has been a way for them to address business challenges, such as growing complexity of ICT, lack of ICT budget, and the need for proper governance. "The Philippines outsourcing market is undergoing a dramatic transformation propelled by the increasing adoption of disruptive technologies,” says Alon Anthony Rejano, Market Analyst for Services, IDC Philippines.

You can read the full report here.

The BPO sector in Puerto Rico is booming with the government reporting growth of 110% in the past four years. According to data provided by the Puerto Rico Industrial Development Company (PRIDCO), the government-owned investment promotion agency, the rapid growth is attributed to the Act 20 law, which offers a 4% income tax rate to companies that export services to mainland US or foreign countries. An increasing number of BPO companies are operating in Puerto Rico alongside a growing ITO sector, leading to an established eco-system of businesses and boosting confidence in the economy.

Read the full story here.

Strong business investment between January and June 2017 saw UK market achieve strongest half-year performance since 2012, according to the Arvato Outsourcing Index. The research, compiled by outsourcing provider Arvato and industry analyst NelsonHall, revealed outsourcing deals worth £5.2 billion were agreed in the first six months of the year, with financial services accounting for 55 per cent of the total contract value at £2.9 billion. The sector’s investment in outsourcing services was behind a steep increase in spending by UK businesses, according to the findings. Companies signed contracts worth £4.5 billion between January and June, representing a 95 per cent year-on-year rise. The latest figures follow a particularly strong first quarter, which saw firms agree deals worth £2.5 billion - the strongest quarterly private sector spend since the last three months of 2011 (£6.4 billion).

You can read the full report here.