Minting public money as their own - IT frauds

In June quarter 2019, the combined top line of the top five IT services companies -- TCS, Infosys, HCL, Wipro and Tech Mahindra -- stood at Rs 99,800 crore, just Rs 200 crore shy of the Rs 1 lakh crore mark.  These companies have hired more than 1M+ people recently. The top companies TCS & Infosys have combined destroyed multiple state ecosystems while creating highly paid zero R&D & zero applied solutions to the IT market. Most of their work has been focused on writing custom solutions that are specified by their clients, which in most cases are big institutional MNCs or National firms that were assigned by their govt to give work to these body shoppers.

TCS has destroyed the R&D infrastructure of Tata companies in Automobile & Iron/Steel by placing govt educated (IIT, NIT, govt engg, Central Univs) post graduates meant for these long term positions into quick money producing body shopper low level Programmer/Tester/Analyst positions all over the world while taking a huge cut of salary for their fake management consisting of few privileged sub-caste members. These directors have demonstrated their fraud capacity by forming profit cartels in collision with vocal minority groups/movements in US and also have formed world wide profit cartels to skim the money out of system.

Likewise, Infosys has formed multiple fake delivery centers in US & research institutes to maintain a highly paid group of managers who are mostly linked to the management as nepotism. These delivery centers are mostly local political stunt to create image of big company among the newly hired junior Programmer/Analysts to work 24/7 using Software downloaded from Internet while the management using most advanced financial methods to skim the system and move the money out to few sub-caste cartels that are spread out in urban ghettos world wide.

In addition these top IT body shoppers are skimming the system by giving back lakhs of Crores of money to their holders in the form of stock buyback. This is like highway robbery of public money given in the form of contracts making their way to the private profit oriented investors. Even though they have huge cash in hand, the R&D efforts of these companies don't go beyond few related directors kin getting into elite western arts universities all within few sub-caste living in their fantasy urban ghettos. In addition these kin have created huge ecosystem at the management level in US & Europe eg. Sundar Pichai etc.. getting 100s of crores per year as salary for just attending board meetings and signing papers.

These highly entitled top managers formed a cartel and exploiting poor people of their sub-castes to make work unnecessary hours to sustain their network. End level employees died by hundreds due to work burnout and social pressures caused by these fraudulent managers playing with government money

Bibilography
https://www.deccanherald.com/business/economy-business/indias-top-5-it-firms-stare-at-historic-revenue-mark-766973.html
https://timesofindia.indiatimes.com/business/india-business/tcs-to-spend-rs-16000-crore-on-share-buyback/articleshow/64608787.cms

Will Robots spell trouble for the BPO industry

Introduction

Robotic Process Automation (RPA) is the new technology driven business process automation set to take over the Business Process Outsourcing (BPO). The saying on the streets is, if a BPO provider is embracing the benefits of RPA or other transformative technology in the next year, they’re going to have plenty of business.  Providers who refuse to innovate may find themselves in the dust. RPA can help BPO providers get up to speed and offer great new services to their existing clients.  Traditional outsourcing won’t disappear overnight, but RPA can take those relationships to a new level today.

RPA

The current sophistication of the technology is still at beginner level for integration in the process pipeline. The impact on process automation is estimated at 20-40% only of the overall customer requirements, however with the increased Artificial Intelligence research and IoT technology improvements there is a huge scope in future for this number to increase. Today's emerging RPA tools, such as Automation Anywhere, Blue Prism and UiPath, would cost around one ninth of a Full Time Equivalent (FTE) person working in, say, the UK or US, or a third of the cost of an FTE working offshore (say India) and could replace up to 20 FTE after process re-engineering. What RPA does is completely skew the business case dynamics of outsourcing: large, global organisations, such as Infosys, Wipro, TCS, Capgemini, Capita, etc, who have built their business model around employing more and more people, will now have to completely change their whole mindset to cope with the opportunities and threats that RPA brings. [Andrew Burgess, 2016] A recent CIO Journal article noted that the market for RPA is expected to jump from $183 million in 2013 to $4.98 billion by 2020. Further, The Age of Smart Process Automation (SPA) that uses AI with machine-learning capabilities just is around the corner. The outsourcing global organizations are investing heavily in this technology, For example, Cognizant acquired Trizetto; Wipro has created an AI platform called Holmes; TCS is working on an AI platform called Ignio; and Infosys has announced a major investment in automated capabilities. While RPA is likely to cannibalise existing revenue streams of the BPO players to an extent, BPO players can offset this by adopting an annuity-based business model where the players generate revenues by selling robotic software and also by managing every robot that they operate for their clients.

In Finance and Accounting, many deals are mature and rooted in legacy models, the work is highly transactional, and buyers have been stuck with the same FTE loads for years (or decades). But the real reason why F&A is starting to deliver real potential for R-BPO is the simple lack of widely accepted enterprise F&A SaaS which can fix the dysfunction of a process, with a broad-brush implementation and hefty license fee. We are seeing it in pockets with SaaS solutions such as Workday FM, Netsuite and even FinancialForce, but it's the ultimate failure of F&A to over-rely on legacy technology, maintain strict controls that defy collaboration, and keep bloated numbers of people to deliver legacy processes that is creating a huge potential new market for robotic-led processing and human augmentation. [Phil Fersht, 2016] Forrester estimates that RPA and machine learning will cause the number of U.S. “cubicle workers” to decrease by 16%, or 12 million workers, by 2025. KPMG suggests the worldwide total could be as much as 100 million jobs. “In the next 15 years, it’s likely that 45 percent, and maybe up to 75 percent, of existing offshore jobs in the financial services sector will be performed by robots, or more precisely, robotic process automation (RPA),” stated Cliff Justice, KPMG LLP (KPMG) Advisory principal.
“That should translate into enormous costs savings of up to 75 percent for firms that get on board.” [KPMG]

To imagine the scale of potential impact on the current industry, the BPO sector globally is currently worth over $300bn. In India alone, more than 3 million people are employed doing BPO work; in the Philippines there are another million. Across Europe and the US millions more workers earn their living through BPO. RPA will have the potential to impact every single one of those jobs. The Indian BPO industry had revenues of Rs 1.86 lakh crore in financial year 2016, according to Nasscom. It employs 1.1 million people exclusively for outsourcing business. India’s share of the global BPO sourcing market is around 38 per cent. However, apart from Governance issues , pursuing arbitrage in established outsourcing destinations such as India, Philippines & China is becoming less desirable due to rising commodity and living costs. Moreover, outsourcing of labor intensive and rules-based processes leads to human-errors and makes the business vulnerable to security breaches and fraud. Replacing with RPA from the perspective of enterprises or end clients, can lead to significant benefits such as improved efficiency, reduction in the number of FTEs required to handle a process, cost savings, and improved ability to reach meet the SLA targets and KPIs. In some of the traditional markets there will be no significant change likely in the approach of large US companies until the new administration settles in and drafts new laws to deal with these newer technologies and the offshore industry.

Offshore Regulations

But there is no specific law in India that regulates outsourcing transactions except in relation to telecommunication services. Most Indian BPO companies follow the global standards of certification. However, data privacy and integrity concerns related to outsourcing have emerged as the biggest concerns for the clients of Indian BPOs. Nasscom is in talks with the government to set up a nodal agency to monitor, collate and disseminate information on international IT frauds involving Indian entities.

Frauds

There were many instances of fraud in the offshore industry particularly the IRS telephone impersonation scam.  There were instances where victims in the US were threatened with tax investigation by call centre executives of these firms pretending to be officials from the IRS. Software industry experts and officials from enforcement agencies in the country feel that absence of regulations to monitor BPOs, high unemployment rate and slow conviction in criminal cases have together made India a hub for such activity.

The Treasury Inspector General for Tax Administration (TIGTA) has only seen a rise in the IRS impersonation scam in the US with an average loss of more than $5,700 per taxpayer. “The Treasury Inspector General for Tax Administration, or TIGTA, has received reports of more than one million contacts since October 2013. TIGTA is also aware of more than 6,700 victims who have collectively reported over $38 million (Rs 253 crore) in financial losses as a result of tax scams,” a July 2016 release of TIGTA stated. As a part of its consumer awareness and protection program, TIGTA released several alerts and YouTube videos explaining the modus operandi of IRS impersonators. “TIGTA is concerned that the recent arrests in India will not bring a total halt to the IRS telephone impersonation scams,” said J Russell George, Treasury Inspector General for Tax Administration, in an email response to The Sunday Express. “Members of the public cannot and must not let their guard down,” he added.

Regarding incident where BPO employees allegedly duped over 6,000 US citizens of at least Rs 500 crore, “This particular incident is not much of a BPO issue. We should not call them (Thane call centres) BPOs. These are companies run by criminals to commit fraud. Having said that, we have recognised the issue and are closely working with law enforcement agencies,” R Chandrasekhar, president of Nasscom, said. “We are ready to provide whatever help possible to the police to get to the bottom of such cases. We are committed to make India safer,” he said.

Conclusion

Notwithstanding some frauds, Since the reality is that India brings a great advantage to the IT and BPM (Business Process Management) industry through low-cost and simplicity, there is a great chance that the indian players will have a slice of the RPA in the long run.

References

1. How robotics is changing the face of Business Process Outsourcing, Robohub, Andrew Burgess, 2016.
2. Why it's time for Robotic-BPO to break the mold of legacy F&A engagements, HorsesforSources, Phil Fersht, 2016.
3. Rise of the robots, KPMG Report.