Oracle to cash in on PeopleSoft's Indian alliances

Oracle's successful bid to acquire PeopleSoft is expected to accelerate adoption of large-scale business process outsourcing (BPO) deals for human resources (HR) services globally.

A direct consequence of this will be Oracle forging BPO partnerships with Indian BPO providers in an attempt to retain the huge PeopleSoft base.

PeopleSoft has been in India since 1999 and operates two centres in partnership with Hexaware Technologies and Covansys. The two companies have been acting as implementation partners for Peoplesoft.

Research and consulting firm Forrester Research points out that even as Oracle's attempt to acquire PeopleSoft is cleared, the clouds over the future of the PeopleSoft Suite are causing enterprises to reassess their HR strategies, which in some cases means looking out for alternatives including including BPO services.

Enterprises today are demonstrating their willingness to outsource non-core HR processes such as payroll and benefits, and this segment of the outsourcing market already boasts a number of mature service providers. PeopleSoft holds a significant share in the market for human resources management solutions.

Due to uncertainty of PeopleSoft's future, during the next 18 months, and huge efforts required to upgrade to new Oracle products, both the companies will evaluate the option of outsourcing their HR to BPO firms with HR skills.

While this will result in significant acceleration of the HR BPO market, its immediate consequence is Oracle forging collaboration with BPO providers.

Forrester states that Oracle cannot afford to alienate the large PeopleSoft implementation partners by taking on the BPO opportunity too directly.

In addition to HR, PeopleSoft is widely used as a platform for accounting. The same uncertainty will also increase interest in finance and accounting BPO services.

However, the market for finance and accounting BPO is less mature, but even still the firm expects to see the same finance and accounting interest as that market matures during the next 24 to 36 months.