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Progeon strikes $30-m deal with GreenPoint Mortgage

Fakir Chand in Bangalore

Progeon Ltd, formed recently by the Bangalore-based Infosys as its Indian subsidiary to foray into the emerging multi-billion dollar business process management, has struck a $30-million deal with the US-based GreenPoint Mortgage to provide certain back office services.

Stated to be the first major client for Progeon, set-up with an initial investment of $25 million, including a strategic stake of $20-million by Citigroup Investments, the $26-billion GreenPoint is the sixth largest US wholesale mortgage leader.

Announcing the deal, spread over the next five years, Progeon chairman and Infosys director Phaneesh Murthy disclosed in Bangalore on Monday that the company had established an extended process operations center dedicated to GreenPoint in the Infosys campus.

"We have so far recruited about 120 professionals to provide business process services, and will be ramping up the strength to about 300 by the current fiscal year-end (2002-03) so as to provide similar services to another US-based customer with which we are in the process of finalizing a BPM deal," Murthy declared, but did not name the latter.

Basically a client of Infosys, the California-headquartered GreenPoint has started the process of migrating functions to the Progeon center. The contract between the two will build on the relationship the mortgage firm has with Infosys, which has been providing business and technology consulting services to GreenPoint during the last two years.

"By contracting our new activities to Progeon, we will be able to increase our capacity and growth potential on a more cost-effective basis. We will also be able to maintain a certain high level of service to our customers," GreenPoint President and CEO S A Ibrahim stated.

As a leading national lender in non-conforming residential mortgages, specialising in 'Alternative A' mortgage loans, GreenPoint is also a full service lender offering agency, catering to Jumbo, First, Second and HELOC mortgages.

"Multiple market forces such as globalisation, technological innovations, and increasing competition are compelling organisations to manage their operations in a more efficient and cost-effective way. As a result, managing business processes by outsourcing them to an external entity are emerging as a key strategic imperative," Murthy affirmed.

For instance, GreenPoint will enhance the effectiveness of its business processes by focusing on three of its key areas, vis, labor cost reduction, process redesign and technology-led automation.

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