IT analyst firm, Gartner has raised a red flag where the business process outsourcing operations of Infosys, TCS, Satyam and HCL are concerned.

Clearly not impressed with the BPO forays of established software service players, the firm has given these companies' BPO efforts a 'caution' rating.

A 'caution' rating translates to "facing challenges in one or more areas."

The rating comes despite HCL and Infosys recently bagging a $160 million British Telecom BPO contract.

While Infosys, Wipro, TCS and Satyam received a "strong positive" for their application development and application management practices, none of these companies have impressed Gartner with their efforts in the BPO space.

On the IT services sector Gartner had bracketed TCS, Infosys, Wipro and Cognizant as overall 'positive,' the highest rating awarded to Indian players.

This was for the first time that Gartner had come out with such ratings for Indian players.

Apart form rating these companies on an overall basis, Gartner had rated these companies at the 'corporate' level against parameters such as strategy, financials, and marketing and at the 'services' level against parameters such as application development, application maintenance, BPO and enterprise applications.

Says Partha Iyengar, vice president, Gartner India, "What a caution rating means to clients is telling them that they need to conduct proper due diligence, tread with caution and not to confuse or equate successful practices in the software services arena with those in the BPO space."

"Clients need to partner these companies after a due diligence and then only will they reap true benefits of migrating work to an offshore destination like India. Most importantly, BPO is only in its infancy in India and customers need to remember that," Iyengar said.

Wipro and Covansys are the only companies that have got a "promising" rating while other companies that have a BPO outfit, namely, Infosys - Progeon, TCS -Intelenet Global Services, Satyam - Nipuna, HCL - e-Serve have got a 'caution' rating.

According to Gartner, 'promising' means 'showing potential in specific areas but the initiative or vendor has not fully evolved or matured.'

On Wipro, Gartner says: "Wipro was one of the first large Indian external service providers (ESPs) to foray into business process outsourcing as it acquired Spectramind. Specifically, Wipro would like to build additional outsourcing offerings in BPO. The most significant challenge is that Wipro has a limited amount of depth in specific industry domains and process skills."

According to Devasish Ghosh, chief operating officer Wipro Spectramind," The rating is a vindication of how well we are prepared from the point of being able to service the customer through mature practices, and the right investments in both technology and people processes."