Sutherland Global Services is heading deeper into the Asian, African and Middle Eastern markets with its takeover of another business process outsourcing company.
Sutherland, with 2,000 employees in the Rochester area, closed the deal on the New York City company for an undisclosed amount.
"We felt given our size the environment was right," Sutherland CEO Dilip Vellodi said. "Their strategy is very much in alignment with ours. They've taken the same approach and they're very strong in some of the areas we play in, such as banking and financial services. They happen to be in the airline and transportation industry, which is another we've targeted. They're very strong when it comes to business research and analytics.
"That's where the alignment and coming together makes a lot of sense."
Revenue at the privately held company will top $500 million this year, Vellodi said. Adventity is expected to generate about $50 million in revenue over the next 12 months, he said.
Between the Adventity acquisition and a new push Sutherland is making to land government clients, the company's North American employee base should grow about 10 percent over the next six months, Vellodi said.
Business process outsourcing — with companies handling back-office and customer service functions for other companies and organizations — has become a sizable part of the Rochester-area economy.
Payroll and human resource provider Paychex Inc. employs 3,300 locally.
And Xerox Corp. made a $6.4 billion investment in the industry earlier this year with its acquisition of Affiliated Computer Services of Dallas.
The growth of the outsourcing industry has been pushed by technology, which has made it easier for companies to handle back-office operations for other firms and focus their energies on core operations, said Ron Hira, assistant professor of public policy at Rochester Institute of Technology and an expert on outsourcing.
Another factor, he said, is that many companies see the growth of shareholder value eclipsing workers as a top business priority,
"One of the downsides of all this is (loss of) managerial control," Hira said.
Globally, the business process outsourcing market is estimated to be worth as much as $175 billion, though it was stagnant in 2009 as the global recession had companies postponing decisions including outsourcing, Vellodi said.
But industry experts expect the industry to grow, on average, by 7 percent a year through 2013.
"As the economy picks up, these decisions on spending from our potential client base will start to ease up and we expect the growth to continue," Vellodi said.