The Hindu Business Line : Essar plans big foray into engg service offshoring

Transferring operations
Post-transfer, engineering services functions to operate as SBU
Strategic business unit to tie up with design firms for third-party contracts
Company plans to increase headcount from 700 professionals to 1,200

Moumita Bakshi Chatterjee Vishwanath Kulkarni

New Delhi/Bangalore, Aug. 9

Essar Group would soon move its 700 professionals-strong engineering services practice, currently operating under various divisions, to its BPO subsidiary Aegis BPO Services Ltd. The move is aimed at tapping the booming engineering services outsourcing market in the US and Europe.

Following the transfer, the engineering services functions would operate as a strategic business unit (SBU) ‘Aegis ESO’ under Aegis BPO.

“We are planning to carve our engineering services and move it under the BPO company as this will enable us to make a large-scale foray into engineering services outsourcing. The practice currently focuses on in-house Essar work including designing of power plants and plans are afoot to scale up engineering services to 1,200 professionals from the existing 700 people,” Mr Aparup Sengupta, Chief Executive Officer of Aegis BPO Services, said.

The proposed SBU would enter into partnerships with design firms in the US and Europe, to take on third-party contracts.

“The design firms are also looking for such alliances as contracts need rapid scalability. We can take care of the entire back office engineering work,” he said.

Revenue estimates

Mr Sengupta expects engineering services to garner revenues to the tune of $20 million in the next 2-3 years, while Aegis BPO itself is eyeing half a billion dollar by 2009. Aegis clocked revenues of $200 million and a net profit of $30 million last year.

The company garnered revenues of $80 million from the Indian market, while the rest came from the US. It has a headcount of 13,500 people of which 9,000 are based in India and some 4,500 in the US.

Aegis offers the suite of horizontal services such as customer interaction (customer acquisition, customer service), back office (order management and data management) and value-added services (ones that overlay interaction and back office to enhance process efficiency).

These services are offered across verticals such as telecom, retail, financial services, energy, education and logistics. It may be recalled that a study by software association Nasscom and management consulting firm Booz Allen Hamilton last year had estimated an additional $40-billion opportunity for the Indian IT industry by 2020, from offshoring of engineering services alone.

More Stories on : Outsourcing | Human Resources | Engineering

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page