Infosys Sets Up a Unit to Operate as BPO for Domestic Clients Only
India’s second largest IT services firm, Infosys Technologies, has set up a separate unit within its business process outsourcing arm (Infosys BPO) to concentrate solely on the domestic BPO market.
The unit has already secured a large deal from the income tax department and the company is due a Letter of Intent from another government deal imminently. Infosys is a laggard in the domestic market compared to other BPO majors like IBM, Tata Consultancy Services (TCS) and Wipro. To address this the company added BPO services onto their IT services domestic business, which was established in October 2008. The opportunity for revenue in the domestic market is significant, but currently India only contributes only about 1.3 % of the company’s revenues.
“We are confident we will continue to make margins even from the domestic market,” Amitabh Chaudhry, CEO and Managing Director, Infosys BPO, said recently. “This year, it (revenue) will be small. It will be only after a year that the real impact will be seen,” he added. The company is targeting verticals like the government, BFSI (banking, financial services and insurance) and the public sector banks.
The $279.5 million turnover company is also collaborating with rural BPOs. Chaudhry believes this will also reduce cost for the company. “We are working with one rural BPO and are in talks with three-four others.”
The domestic BPO market, with a growth rate of 50% over the past five years, grew faster than the exports market and is expected to touch $1.6 billion for the financial year 2008, according to an estimate by Ernst & Young.
