Infosys BPO to expand in China

Last Updated: Wed, Dec 28, 2011 05:16 hrs

Infosys BPO, the business processing outsourcing arm of Infosys, the country's second-largest exporter of information technology services, is setting up a new centre in Dalian, China, with a 500-person capacity, Swaminathan D, the managing director and CEO of Infosys BPO told Business Standard.

Infosys established its first BPO centre in China in 2006. Located in Hangzhou, it employs 1,000 people. "We plan to offer back office support from Dalian as an additional location in China. We believe it is easy to get enough talents in Dalian who are good at managing the Japanese and Korean processes, other than Chinese and English," said Swaminathan.

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He says a reason Infosys is seeing a lot more BPO opportunities in China is that a large number of global clients are having operations in the country. "Thus, we look at locations which provide strategic and competitive advantage to our clients as a part of our location strategy. Besides, it enables us to extend or expand our talent pool," he added.

Infosys, the parent company, is already establishing its own campus in Shanghai, with a proposed investment of $125-150 million. Its first outside of India, the proposed centre is to be located at Zizhu Science and Technology Park and can accommodate about 8,000 employees. Infosys presently employs 3,300 people in China.

"China offers a compelling regional language advantage and cost arbitrage, and is thus best leveraged to serve the Asia region, which accounts for about 60 per cent of China's global sourcing revenues," said Amneet Singh, vice-president, global sourcing, Everest Group.

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He said the lack of clear costs and English language skills translate to a limited competitive advantage over India and the Philippines for work exported to North America and Europe, but "these regions still account for about 40 per cent of China's global sourcing exports".

At least 15 delivery centres were established by IT and BPO companies across tier-I and tier-II cities in China during the past 12 months.

Other than China, Infosys BPO is looking at setting up a centre in Manila, Philippines. This is expected to add about 700 people to the 1,000 in China, said Swaminathan. The centre is expected to be operational towards February. The MD said the Philippines was predominantly focused on customer services (voice-based BPO) but was also slowly moving into high-value back office works in areas like finance and accounting (F&A).

"Today, for instance, F&A talents are available in India. But when I look for larger numbers, it becomes challenging. Now I am able to do that in Manila as well, as it has got over 100,000 certified accountants. I can hire them at will," said Swaminathan.

Adding, however, that in terms of intensity of works and other quality parameters, the Philippines is still far away from India's.

Infosys BPO employs about 20,600 people across 12 centres, including seven outside India. In the year ended March 31, 2011, it BPO closed with revenue of $427 million.

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