COVERING BASES Infosys makes pitch for Aviva’s offshoring centres
INFOSYS, India’s second-largest software and services firm, is learnt to be eyeing UK’s largest insurance provider Aviva’s offshoring centres in Bangalore and Colombo as well as its two Pune facilities that are currently operated by WNS and EXL under the build-operate-transfer (BOT) model. The deal is expected to be in the range of $75-80 million. The Colombo and Bangalore units are now run by Aviva Global Services (AGS)— the global BPO arm of Aviva. The two Pune facilities were to be transferred to AGS in January 2008. The insurer recently deferred its decision to take back its Pune BOT centres operated by EXL and WNS by a quarter to April 2008. “We can confirm that we have decided to defer the transfer of Pune by three months and we are taking the opportunity to thoroughly review the options available to us around our offshoring capabilities. Aviva continues to remain fully committed to maintaining its offshore operations and is proud of what has been achieved. Aviva Global Services will continue to play a key role in supporting the UK businesses,” said an Aviva spokesperson. “We would not like to comment on market rumours,” said an Infosys spokesperson. While WNS, EXL and 24X7 Customer have been touted to be in the race to acquire the centres, Infosys is learnt to be interested as it wants to strengthen its capabilities in the insurance vertical through the acquisition. In addition to Bangalore and Colombo, AGS operates captive centres in Norwich and York in the UK. Apart from Pune , EXL and 24X7 Customer manage BOT centres for Aviva in Noida and Chennai respectively. “The ability of captives to grow beyond a point is limited. Parent companies are increasingly realising the value creation in selling a captive to a third-party vendor. Apart from earning from the sale proceeds, they get cost-efficient services. Data confidentiality fears have been assuaged to some extent as Indian companies have proved their mettle,” said Ernst & Young India partner (transaction advisory services) Ashish Basil. In July this year, Infosys signed a $250-million outsourcing contract with consumer electronics firm Royal Phillips that included a $28-million sale of the Dutch company’s outsourcing centres in Poland, India and Thailand.