IBM picks up No 1 kid on BPO block

Cheered by the industry, the move proves two things, analysts said. US firms are looking at India to provide low-cost high-value input into their business uncaring of the political debate there and that Indian companies have made it big on the global business charts.

While it’s too early to say how the debate over outsourcing will pan out, one thing is clear — it is advantage India as far as the value of the Indian brand ITES (IT enabling services) are concerned.

As The Financial Times said, this acquisition could be just the beginning as ‘‘this initiative could trigger similar mergers and acquisitions as foreign technology companies seek to acquire low-cost service bases in India.’’

Although IBM did not reveal the deal size, industry sources said it could be somewhere between Rs 700 to Rs 750 crore. So far, the largest deal was that of Wipro’s acquisition of Spectramind for Rs 470 crore in 2002.

‘‘It’s great news for India but it also means that Indian companies have to look at areas other than just call centres and IT outsourcing— areas such as legal outsourcing, accountancy, architecture, contract research,’’ said IT and Telecom Minister Arun Shourie. ‘‘Having 60 per cent of your business coming from one source is not good news as one will suffer from these threats and other threats like political pressures at some time and recession at others.’’

The next step: ‘‘India should set up companies in NAFTA (North Americal Free Trade Area), Canada and Mexico, employ their people if required alongwith other Indians and remit profits to India,’’says Shourie.

Says Kiran Karnik, President NASSCOM: ‘‘We think the deal is excellent. It’s good news for the IT/BPO industry—in fact exactly the kind of mega deals that we want to see in future for this sector. While Wipro and Infosys did deal with international clients and partnered abroad, Daksh is different because it is a BPO. This is a fresh start for Indian outsourcing companies.’’

As a result of this agreement, IBM Business Consulting Services will acquire key Asian business transformation practices and local skill sets, is what IBM had to say about its takeover of Daksh. According to IBM India, it will gain in areas such as customer relationship management, financial management services in industries like banking, insurance, retail, technology, telecommunications, and travel and transportation.

‘‘India is one of the fastest growing economies in the world and an important marketplace for IBM. This investment is indicative of our commitment to supporting our clients in this region and leveraging local capabilities to extend our leadership position in the business transformation services marketplace,’’ Abraham Thomas, GM, IBM India, said.

‘‘Daksh e—services has made its mark rapidly in the global business sevices market by providing clients not just with cost efficiencies but also with significant improvement in the way they run their business,’’ Daksh eServices CEO Sanjeev Aggarwal stated.