In meltdown, 2 big BPO deals cheer India
Outsourcing fights back and lives to see another day. While
everybody was rushing to write off the industry in the wake of Barack Obama's
election and the global economic slowdown, two major outsourcing deals in the
hospitality and the pharma sectors have been signed which should bring hope and
cheer for the Indian BPO sector.
The world's premier hotel company, Chicago-based Global Hyatt Corporation, has
outsourced part of its financial and accounting transaction services to
In the other major deal, the $30-billion global pharma giant AstraZeneca has
outsourced its end-to-end maintenance services for a variety of corporate
services (such as human relations, finance) to Bangalore-based Infosys. While
the values of the two deals have not been disclosed yet, both envisage
increasing the scope of the work over time.
The Hyatt Corporation chain - which manages over 365 hotels and resorts
worldwide under a variety of brands, such as Hyatt, Hyatt Regency, Grand Hyatt,
Hyatt Summerfield Suites and Andaz-has awarded a five-year contract to Genpact,
covering its North American hotels.
Without getting into the value of deal, Harmit Singh, CFO, Global Hyatt
Corporation said: "We have a contract with Genpact for handling the
accounting transaction services for some of our North American portfolio, which
would be expanded moving forward." From an initial nine hotels, Genpact's
An industry observer said that sooner or later other global hospitality chains
are likely to replicate Hyatt's business outsourcing model. Says Siddharth
Thaker, associate director of HVS International, a global hotel consultancy
firm: "It makes business sense for many
The hospitality industry follows an asset light strategy. Translated, this
means that not all hotel properties are owned by the brand name on the marquee.
Most properties are operated and managed, and not necessarily owned, by hotel
chains like Starwood, Marriott, Hyatt and Carlson Hospitality (owner of
Radisson, Regent brands) which put their name on the shingle. There are also
instances where the chains own a stake in the property. So, in an outsourcing
deal, irrespective of who owns the property, it is the hotel chain's processes
that are awarded to third-party BPO companies.
Hyatt has five properties in
Companies across sectors-from Unilever to British Telecom, from General
Electric to
Citigroup sold its BPO to Tata Consultancy Services. Both these deals came with
committed multi-year contracts to the acquirer. US-based asset management firm
Fidelity is also said to be exploring a sale of its
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