TCS has entered into late-stage discussions with Pearl Group to establish a BPO subsidiary.
TCS is one of the largest vendors within the booming Indian services sector and the provider’s origins, along with the broad scope of the services and the number of employees transferring, make this the first outsourcing uptake of its kind in the UK.
TCS will establish a new subsidiary company, with Pearl as a minority stakeholder, which will take on 950 of Pearl Group’s 1,100 staff, as well as leasing buildings at the insurer’s existing site in Peterborough, UK.TCS plans to establish a business process outsourcing (BPO) center of excellence at this site with the capability to cater for further closed book business, and the space to accommodate more employees.
The prospects of business expansion seem realistic: many companies that are actively selling new insurance are looking to divest policies that are static, as they represent an overhead in terms of the cost of extra systems and business administration required. Another insurer, Swiss Re, set up a subsidiary around eight years ago to buy such policies, and that company now manages over 80 times the number of policies it first administered.
The effect that Indian vendors have had on the overall services market was highlighted by the latest analysis from TPI, the sourcing advisory company. Presenting its view of the market at the end of the year’s third quarter, TPI predicted that the total global spend this year on ITO and BPO will be 10%-15% less than in 2004. The company’s analysis finds that a major factor in this reduction is the lower prices that offshore delivery has made possible, especially as the major, multi-national service providers now also leverage this advantage.
Rather than submit to increased competition on their home territory, the largest Indian companies now have sufficient scale and reach to base the next stage of their development directly in the ‘onshore’ market in Europe and the US. They have long since transcended the stereotype of Indian services businesses, and will continue to disrupt the market, addressing increasingly high levels of value delivery.
Source: OpinionWire by Butler Group (www.butlergroup.com)
