An article at Business-Standard.com discusses a recent purchase by Indian BPO company Cognizant.  Cognizant recently purchased the India-based captive service unit of UBS.  As part of the deal, Cognizant and UBS entered into a 5-year service agreement to support UBS' back-office processes.  Estimated revenue over the 5-year period is $442 million USD.

From Cognizant's perspective, this purchase expands their BPO capabilities while providing a guaranteed revenue stream.  According to the the article, "The acquisition will deepen Cognizant’s financial services’ domain knowledge and enhance its capabilities to provide integrated services across consulting and technology."

From UBS' perspective, the deal frees UBS from managing processes that they believe can be better managed by a 3rd party.  According to the article, "For UBS, the sale of the India Service Centre marks the next stage in the development of the UBS offshoring and outsourcing strategy. In recent years, the availability and maturity of third-party outsourced services has grown significantly. UBS has therefore decided to adopt a buy rather than a build strategy for its outsourcing needs, said the company in a statement. This will take advantage of the scale and expertise of third parties to improve efficiency, while reducing costs and increasing flexibility."

An interesting note is that UBS' India Service Center provided traditional support activities such as IT, but it also provided capabilities around research and analysis, something that has traditionally been held onshore but is increasingly seen as an appropriate function to offshore or even outsource.

Here's the link to the full article:

http://www.business-standard.com/india/news/cognizant-buys-ubs-captive-unit-for-75-mn/373422/