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Outsourcing Companies Proceed With Expansion Plans

|Includes: G, INFY, PHI, TeleTech Holdings, Inc. (TTEC), XRX

By Jamee C.

Despite the news that Teletech (NASDAQ:TTEC) has recently reduced its manpower in an office in Amherst, Nova Scotia, it seems that the business process outsourcing industry is still booming with expansion plans. The global industry expansion is already moving forward and the key industry players have also been taking advantage of the global economy’s recovery.

Just before the month of October ended, Genpact (NYSE:G), a provider of business process and technology management, released a statement that they are now expanding in Wilkes-Barre, Pennsylvania. “When we invest our resources wisely, we attract private dollars that might otherwise go elsewhere. As in this case, for every dollar we spend, the company is putting up at least one other dollar. In return, we’re securing more than 450 jobs and a stronger economy,” said Governor Ed Rendell. Clearly, the Pennsylvania Governor is talking about making sound investments with the company’s resources as the main reason as to how Genpact was able to push through with the expansion. This expansion by Genpact may be a lot smaller than the expansion being planned by Tata Consulting Services (NSE:TCS), the largest software firm in India, but it still adds value to the industry’s growth. Tata Consultancy Services is targeting to add 20,000 employees to their growing company before the fiscal year of 2010-2011 ends. Initially, the company planned on hiring 30,000 for the whole fiscal year but they were already hitting their target just before the first quarter of FY2010-2011 ended. It is not only TCS who is mass hiring but Infosys (NASDAQ:INFY) as well. This could be very well connected to the fact that global players minimized hiring efforts because of the economic decline.

A massive increase in manpower is not the only criterion in determining a company’s expansion. There are also the number of services offered and the acquisition of a new company to take into consideration. A company under Xerox (NYSE:XRX) can attest to these two criteria since despite having numerous services including customer care, finance and accounting outsourcing, and document and data management services, they have added another service to their list as well as acquired a new company. ACS, which is considered to be the largest provider of transportation technology services in the world, has expanded their services after acquiring United Kingdom’s leading provider of computer software, Spur Information Solutions..

In the Philippines, a Filipino-owned business process outsourcing firm under the Philippine Long Distance Telephone (PLDT) company (NYSE:PHI), SPi Global, announced that is planning an expansion of its healthcare department. The services to be added will now go beyond medical transcription because medical companies are now looking to outsource billing security and medical claims handling. Mike Beninato, SPi Global’s CEO for its healthcare arm, said that this was a result of a growing demand for healthcare-related work in the United States, especially that the “hospitals in the United States look for ways to cut costs without compromising quality.”

These are only a few examples showing that the outsourcing industry is moving forward, especially now that the global economy is getting back in shape.

Disclosure: "No positions"