The seven-year IT offshore outsourcing contract with Northrop Grumman’s IT division, based in McLean, Va., would be worth $667 million, said Michael Moore, CIO for San Diego County. The proposed contract also has one five-year option, which would be priced at about $500 million, Moore said.
The initial contract calls for the county to pay Northrop Grumman $93 million annually, plus about $10 million in start-up costs, which will be spread over the life of the project.
The county currently pays CSC of El Segundo, Calif., about $100 million annually to manage its IT services, under a contract awarded in 1999. CSC officials declined to comment on the loss of the contract.
If the proposed contract is approved by the county board on Jan. 24, the deal would be signed the next day and offshore outsourcing software development services would be phased in over the next year. The first phase would transition help desk services, followed by applications support services, desktop support services, network services and then the takeover of the data center.
For more details read here.
The article is sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development.
Saturday, December 31, 2005
Friday, December 30, 2005
ACS Signs IT Outsourcing Contract With Drive Time
It is in news that "Affiliated Computer Services, Inc.”, a premier provider of business process offshore outsourcing and information technology solutions, has announced today that it has been awarded an information technology (IT) outsourcing contract with Drive Time Sales and Finance Corporation, a Drive Time company, who with DT Acceptance Corporation (together, DT) is the nation's largest used automotive sales and financing company for people with credit issues. The five-year contract is valued at $4.8 million.
Buck Consultants will provide actuarial, administrative, and consulting services for all of Genlyte’s U.S. pension and post-retirement medical and life plans. These plans cover more than 4,000 participants. Services range from financial management of the plans to day-to-day benefits administration.
Under the terms of the contract, ACS will be an application service provider for DT, installing and supporting new loan servicing and collection technology. ACS will also convert DT to a new loan accounting system.
For more information read here.
The article is sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development.
Buck Consultants will provide actuarial, administrative, and consulting services for all of Genlyte’s U.S. pension and post-retirement medical and life plans. These plans cover more than 4,000 participants. Services range from financial management of the plans to day-to-day benefits administration.
Under the terms of the contract, ACS will be an application service provider for DT, installing and supporting new loan servicing and collection technology. ACS will also convert DT to a new loan accounting system.
For more information read here.
The article is sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development.
Thursday, December 29, 2005
Offshore Outsourcing: India’s IT Revolution Next New Phase
The year 2005 ends on a highly positive note for India’s information technology sector. IT and electronic majors Microsoft, Intel, Cisco, Motorola and Philips have committed themselves to investing billions of dollars in research and development (R&D) including manufacturing in the sub-continent. Eventually, this means more jobs and jobs and jobs, cheaper electronic goods like mobiles, etc., better product branding leading to Made in India a household name in both domestic and international markets.
But, a Gartner survey reports, India has little opportunity to act smug, it must take strong measures to prevent a looming labour crunch and an increase in industry wages losing it its low cost edge. Keeping the case of Ireland’s off-shoring / outsourcing experience in mind, if India does not want to erode 45% of its market share, it must sit up and take adequate measures to plug the gaps in its dominance of the global BPO / IT market.
Emerging countries like Philippines, Malaysia, Vietnam including East European countries from the former Communist Bloc i.e. Poland, Hungary have watched India effectively change it’s world image from a huge begging bowl to that of a proud, self-sufficient nation, and are keen to replicate it’s success story on their own crumbling shores. They are beginning to challenge India’s leadership in the off-shore / outsourcing industry, making it necessary for India to protect itself by stepping up data security, keeping the BPO / KPO / IT industries free from trade unionism and improving its educational infrastructure to ensure every student graduating is a suitable employee for multinational firms.
Similarly, the mobile revolution of the Indian cellular industry according to Cellular Operators Association of India has the potential to top 200-million by year-end 2007. Contributing Rs. 313-billion to the GDP, Indian consumers are spending almost the same proportion of GDP on mobile services as the entire European Union. But, research shows 53% of that GDP is exported as India lacks national network equipment and terminal manufacturing business. With 3.6-million jobs dependent on the mobile services industry and expected to increase by 30% over the next 12-months, it contributes Rs. 145-billion to the Indian government kitty in the form of taxes levied on the service.
The government’s expected introduction of 3G (wireless technology) by 2006 will further serve to enhance India’s competitiveness in the BPO / ITeS sector. And, as the open source movement gains momentum due to big names like IBM, SUN backing it, India stands to gain 20% of the global software market by 2010 with gaming, blogging, virtualisation, robotics, automated management, voice-over-IP, converged devices, integration platforms, composite applications and Web services all contributing to India’s off-shore / outsourcing industry.
As India establishes itself as the market leader in service providing and knowledge industries, McKinsey – NASSCOM report the Indian IT / BPO industry is growing by leaps and bounds and will have grown tenfold by 2010, read TEN BY TEN: India's IT & BPO Outsourcing - Despite, intense competition from other countries, India with its experience and maturity in the services sector will hold on if not double its 46% share of the global BPO market and 65% of the IT off-shoring / outsourcing market. Innovating to retain its leading grip on a highly lucrative off-shoring / outsourcing market, outsourcing Indian talent abroad is a brand new twist to its service providing saga. A brainchild of the managing director of a marketing solutions agency, in his words: “India is one of the major outsourcing capitals of the world, particularly in … IT... We will deal with outsourcing talent in … filmmaking, radio, processing and printing, and formulating corporate identities for publishing houses. For this, we are building a network around the world, particularly places such as Perth, Sydney, Vancouver, Toronto, New York and Dubai.”
Having taken the world by storm, lifted itself out of Third World company, India is a mature player in the global market with a striking lead having what it takes to deliver the best of the best. Reaping the just rewards of hard work, knowing it can take on the world and beat it in any field, has imbued the country and its denizens with a euphoric self-confidence that is hard to shake. From little JumpStartUPs, several Indian IT companies such as Infosys, Wipro, TCS now figure amongst the cream of Fortune 500 firms. Swift on the uptake, they have begun campus recruiting to train according to company standards to ensure their pool of talent does not dry out and they can continue to provide low cost service.
No, India’s off-shoring / outsourcing industry is not a mere storm in a teacup, it is storm that has shaken and will continue to shake the West out of its complacency and racist thinking. Europe and the America did not pull ahead due to greater intelligence and superiority of race, the world’s history as we know it was not moulded by racial superiority but by geography and bio-geography, as Jared Diamond takes pains to explain in his thought provoking book Guns, Germs and Steel.
Low cost is not the only reason that industries are off-shoring / outsourcing to India, the keen capability of its people, educational and technical skills are bringing the world to its doorstep. And, Deloitte Consultancy is predicting that.
For more read here .
The article is sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development .
But, a Gartner survey reports, India has little opportunity to act smug, it must take strong measures to prevent a looming labour crunch and an increase in industry wages losing it its low cost edge. Keeping the case of Ireland’s off-shoring / outsourcing experience in mind, if India does not want to erode 45% of its market share, it must sit up and take adequate measures to plug the gaps in its dominance of the global BPO / IT market.
Emerging countries like Philippines, Malaysia, Vietnam including East European countries from the former Communist Bloc i.e. Poland, Hungary have watched India effectively change it’s world image from a huge begging bowl to that of a proud, self-sufficient nation, and are keen to replicate it’s success story on their own crumbling shores. They are beginning to challenge India’s leadership in the off-shore / outsourcing industry, making it necessary for India to protect itself by stepping up data security, keeping the BPO / KPO / IT industries free from trade unionism and improving its educational infrastructure to ensure every student graduating is a suitable employee for multinational firms.
Similarly, the mobile revolution of the Indian cellular industry according to Cellular Operators Association of India has the potential to top 200-million by year-end 2007. Contributing Rs. 313-billion to the GDP, Indian consumers are spending almost the same proportion of GDP on mobile services as the entire European Union. But, research shows 53% of that GDP is exported as India lacks national network equipment and terminal manufacturing business. With 3.6-million jobs dependent on the mobile services industry and expected to increase by 30% over the next 12-months, it contributes Rs. 145-billion to the Indian government kitty in the form of taxes levied on the service.
The government’s expected introduction of 3G (wireless technology) by 2006 will further serve to enhance India’s competitiveness in the BPO / ITeS sector. And, as the open source movement gains momentum due to big names like IBM, SUN backing it, India stands to gain 20% of the global software market by 2010 with gaming, blogging, virtualisation, robotics, automated management, voice-over-IP, converged devices, integration platforms, composite applications and Web services all contributing to India’s off-shore / outsourcing industry.
As India establishes itself as the market leader in service providing and knowledge industries, McKinsey – NASSCOM report the Indian IT / BPO industry is growing by leaps and bounds and will have grown tenfold by 2010, read TEN BY TEN: India's IT & BPO Outsourcing - Despite, intense competition from other countries, India with its experience and maturity in the services sector will hold on if not double its 46% share of the global BPO market and 65% of the IT off-shoring / outsourcing market. Innovating to retain its leading grip on a highly lucrative off-shoring / outsourcing market, outsourcing Indian talent abroad is a brand new twist to its service providing saga. A brainchild of the managing director of a marketing solutions agency, in his words: “India is one of the major outsourcing capitals of the world, particularly in … IT... We will deal with outsourcing talent in … filmmaking, radio, processing and printing, and formulating corporate identities for publishing houses. For this, we are building a network around the world, particularly places such as Perth, Sydney, Vancouver, Toronto, New York and Dubai.”
Having taken the world by storm, lifted itself out of Third World company, India is a mature player in the global market with a striking lead having what it takes to deliver the best of the best. Reaping the just rewards of hard work, knowing it can take on the world and beat it in any field, has imbued the country and its denizens with a euphoric self-confidence that is hard to shake. From little JumpStartUPs, several Indian IT companies such as Infosys, Wipro, TCS now figure amongst the cream of Fortune 500 firms. Swift on the uptake, they have begun campus recruiting to train according to company standards to ensure their pool of talent does not dry out and they can continue to provide low cost service.
No, India’s off-shoring / outsourcing industry is not a mere storm in a teacup, it is storm that has shaken and will continue to shake the West out of its complacency and racist thinking. Europe and the America did not pull ahead due to greater intelligence and superiority of race, the world’s history as we know it was not moulded by racial superiority but by geography and bio-geography, as Jared Diamond takes pains to explain in his thought provoking book Guns, Germs and Steel.
Low cost is not the only reason that industries are off-shoring / outsourcing to India, the keen capability of its people, educational and technical skills are bringing the world to its doorstep. And, Deloitte Consultancy is predicting that.
For more read here .
The article is sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development .
Wednesday, December 28, 2005
Offshore Outsourcing Fears: Highly Exaggerated
In favour of free trade, the World Trade Organisation (WTO), and more to the point off-shoring / outsourcing clearly upholds the trend. According to it off-shoring / outsourcing computer and information services (CIS) to low cost, high skilled countries like India. Philippines, Ireland and China is neither heralds high employment levels in undeveloped service providing countries nor of massive job losses in developed countries outsourcing to them.
The annual World Trade Report 2005 states the fears related to the dynamics of off-shoring / outsourcing IT-services are highly exaggerated, and the impact of off-shored / outsourced jobs seems stronger in common perception than on employment, production and trade patterns.
The report emphasises comparative advantage as being the thinking rationale behind off-shoring / outsourcing of IT and IT-related services, in much the same manner as for physical goods and merchandise. It, further, brings out the ambiguity and incompatibility in BPO statistics quoted by global consultants, governments, including India’s National Association of Software & Service Companies (NASSCOM).
The WTO report believes the most forceful element of off-shored services “is not within the high-skill-intensive IT (information technology) sector, but, in the generally low-skilled business services sector.” And, even in the “broadly defined IT sector” (namely, IT services and low-end IT-enabled services i.e. call centres, medical transcription, etc.), it offers less than 0.25 per cent employment to the Indian labour force. However, “there are pockets of relatively high-skilled services being off-shored / outsourced to state-of-the-art firms, for example, in India or South Africa.”
The report goes on to say the relatively miniscule number of high skilled jobs being off-shored / outsourced to developing nations will have a negligibly negative impact on white collar jobs in developed countries. It is rising wages and need for personal customer contact in several services that will be responsible for placing a check on off-shoring / outsourcing of certain services. Further, if developed countries increase service import, it will lead to a weakening of domestic currencies, thus countering the unbridled growth of off-shoring / outsourcing. Poor legal frame-work and infrastructure are other risks that drive off-shored / outsourced jobs to middle-income countries like India, Ireland, China, Philippines, rather than least developed nations.
The WTO report states while UK and USA are leading the off-shoring / outsourcing trend, an English-speaking workforce is partially responsible for India and Ireland attracting a major portion of the off-shoring / outsourcing business. Other leading industrial countries off-shore / outsource work to a lesser extent, and restrict the trend to countries geographically and culturally closer to home. For example, a major part of German off-shoring / outsourcing contracts go to Central Europe, while Spain sends the bulk of its contracts to Latin American countries.
Applauding the supportive role played the Indian government in creating Software Technology Parks of India Ltd. (STPI), putting up quality infrastructure, giving tax sops and foreign direct investment (FDI) friendly regulations, WTO says this alone is not the reason for India’s success in IT and IT-enable service industries. It is the ability of service providing Indian companies to provide managerial skills that have helped the country take advantage of low cost labour and new market opportunities.
For more information read here.
The article is sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development.
The annual World Trade Report 2005 states the fears related to the dynamics of off-shoring / outsourcing IT-services are highly exaggerated, and the impact of off-shored / outsourced jobs seems stronger in common perception than on employment, production and trade patterns.
The report emphasises comparative advantage as being the thinking rationale behind off-shoring / outsourcing of IT and IT-related services, in much the same manner as for physical goods and merchandise. It, further, brings out the ambiguity and incompatibility in BPO statistics quoted by global consultants, governments, including India’s National Association of Software & Service Companies (NASSCOM).
The WTO report believes the most forceful element of off-shored services “is not within the high-skill-intensive IT (information technology) sector, but, in the generally low-skilled business services sector.” And, even in the “broadly defined IT sector” (namely, IT services and low-end IT-enabled services i.e. call centres, medical transcription, etc.), it offers less than 0.25 per cent employment to the Indian labour force. However, “there are pockets of relatively high-skilled services being off-shored / outsourced to state-of-the-art firms, for example, in India or South Africa.”
The report goes on to say the relatively miniscule number of high skilled jobs being off-shored / outsourced to developing nations will have a negligibly negative impact on white collar jobs in developed countries. It is rising wages and need for personal customer contact in several services that will be responsible for placing a check on off-shoring / outsourcing of certain services. Further, if developed countries increase service import, it will lead to a weakening of domestic currencies, thus countering the unbridled growth of off-shoring / outsourcing. Poor legal frame-work and infrastructure are other risks that drive off-shored / outsourced jobs to middle-income countries like India, Ireland, China, Philippines, rather than least developed nations.
The WTO report states while UK and USA are leading the off-shoring / outsourcing trend, an English-speaking workforce is partially responsible for India and Ireland attracting a major portion of the off-shoring / outsourcing business. Other leading industrial countries off-shore / outsource work to a lesser extent, and restrict the trend to countries geographically and culturally closer to home. For example, a major part of German off-shoring / outsourcing contracts go to Central Europe, while Spain sends the bulk of its contracts to Latin American countries.
Applauding the supportive role played the Indian government in creating Software Technology Parks of India Ltd. (STPI), putting up quality infrastructure, giving tax sops and foreign direct investment (FDI) friendly regulations, WTO says this alone is not the reason for India’s success in IT and IT-enable service industries. It is the ability of service providing Indian companies to provide managerial skills that have helped the country take advantage of low cost labour and new market opportunities.
For more information read here.
The article is sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development.
Tuesday, December 27, 2005
Offshore Outsourcing “not delivering” the benefits: A Survey
Every few days there comes along a survey saying outsourcing is not working. We will continue to faithfully report them, leaving you to make up your mind.
Nearly two-thirds of UK companies believe their outsourcing contracts are "not delivering" the benefits they had hoped for.
A survey of 100 companies by law firm Denton Wilde Sapte has found nine out of 10 outsource some aspect of their business - generally IT support or call centre functions but also business process operations such as human resources or accounting.
But 61 per cent said their outsourcing is not delivering - and nearly three-quarters (72 per cent) are concerned about the flexibility of their current deal.The head of the firm's technology, media and telecoms sector, John Worthy, said: "This should provide a wake up call to outsourcing service providers.
For further details read here.
The article is sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development.
Nearly two-thirds of UK companies believe their outsourcing contracts are "not delivering" the benefits they had hoped for.
A survey of 100 companies by law firm Denton Wilde Sapte has found nine out of 10 outsource some aspect of their business - generally IT support or call centre functions but also business process operations such as human resources or accounting.
But 61 per cent said their outsourcing is not delivering - and nearly three-quarters (72 per cent) are concerned about the flexibility of their current deal.The head of the firm's technology, media and telecoms sector, John Worthy, said: "This should provide a wake up call to outsourcing service providers.
For further details read here.
The article is sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development.
Monday, December 26, 2005
Off-shoring / Outsourcing
In a surprising new twist to the off-shoring / outsourcing saga, the impossible has happened with Japan offshore outsourcing to USA companies. In the news recently, California’s Advanced Inter-connect Technologies (AIT) and Japan’s Nakaya Micro-devices Corp, semi-conduction assembly and test house companies announced a joint venture for providing sub-contract assembly and test services that will target the Japanese semi-conductor market and help leverage AIT facilities in Hong Kong and Indonesia. It is the first of moves intended to capitalise on the growing interest in off-shoring / outsourcing by leading Japanese system and semi-conductor manufacturers.
Headquartered in Singapore, AIT VP and general manager of the joint venture confirms: “The software development outsourcing trend has been increasing in Japan.” In the manner of European and North American device and system manufactures before them, the Japanese are seeking to off-shore / outsource production and assembly to lower cost locales. From in-house, to affiliated companies, the Japanese are now hiring independent contractors and showing an increasing willingness to look outside Japan, as they accept the fact quality products can be manufactured outside of their organisations and Japan.
Always ready to take advantage of an opportunistic trend, many American companies such as Amkor Technology have been making considerable inroads with new customers in Japan. And, as Japanese companies begin to off-shore / outsource packaging and testing in a big way, two out of three of Amkor’s packaging and testing customers are from Japan.
AIT Nakaya Singapore PTE Ltd., the new joint venture is gearing to channel Japanese IDMs assembly and test demands to low-cost, high-volume facilities in Indonesia and Hong Kong. Ultimately, that might prove to be the new turning point in the off-shoring / outsourcing trend as America off-shores / outsource to India, China, Canada, Philippines et al while receiving off-shored / outsourced work from other developed nations.
Everyone involved is happy as benefits of off-shoring / outsourcing accrue and there are rich profits for all concerned.
For a detailed study read here.
The article is sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development.
Headquartered in Singapore, AIT VP and general manager of the joint venture confirms: “The software development outsourcing trend has been increasing in Japan.” In the manner of European and North American device and system manufactures before them, the Japanese are seeking to off-shore / outsource production and assembly to lower cost locales. From in-house, to affiliated companies, the Japanese are now hiring independent contractors and showing an increasing willingness to look outside Japan, as they accept the fact quality products can be manufactured outside of their organisations and Japan.
Always ready to take advantage of an opportunistic trend, many American companies such as Amkor Technology have been making considerable inroads with new customers in Japan. And, as Japanese companies begin to off-shore / outsource packaging and testing in a big way, two out of three of Amkor’s packaging and testing customers are from Japan.
AIT Nakaya Singapore PTE Ltd., the new joint venture is gearing to channel Japanese IDMs assembly and test demands to low-cost, high-volume facilities in Indonesia and Hong Kong. Ultimately, that might prove to be the new turning point in the off-shoring / outsourcing trend as America off-shores / outsource to India, China, Canada, Philippines et al while receiving off-shored / outsourced work from other developed nations.
Everyone involved is happy as benefits of off-shoring / outsourcing accrue and there are rich profits for all concerned.
For a detailed study read here.
The article is sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development.
Friday, December 02, 2005
Off-shoring / Outsourcing: Living under India’s Shadow
The newest entrant in the world of off-shore / outsource providers is Dubai, a United Arab Emirates city state. Using the unusual pitch: “India is a tough place to live.” Dubai is pursuing companies to off-shore / outsource work to the region. Kick-starting an operation for landing a slice of the outsourcing pie, it is determined to grab some of the work being off-shored / outsourced to low labour cost countries, mainly India and China. A David facing battle with two Goliaths, the city state is hesitant to compete in a head to head tussle with the two off-shore / outsourcing giants. But, it is subtly positioning itself as the headquarters of senior or more qualified employees who do not wish to live in Mumbai or Bangalore.
Ironically, it is a plan that has managed to appeal to at least one Indian firm. Dubai Outsource Zone (DOZ), the government agency responsible for the free trade zone project, only recently signed a MOU with a large Indian off-shoring / outsourcing company to bring work to DubaiCity.
Employees of the Indian off-shoring / outsourcing firm with a couple of years work time in the company will be qualified for the move to Dubai. Dangling the carrot of a work transfer is bound to scale down employee attrition rates, a major problem faced by Indian off-shoring / outsourcing companies. It, also, ensures continued company loyalty, as quitting the job will result in the loss of their job permit, end result - deportation.
DubaiCity may be 30% more expensive, but it is possible to get more productivity from the employees, and there will be few who will refuse a transfer to the city state. With potential to become a centre for services e.g. tele-medicine, Western doctors will be able to pass on work to doctors in low labour cost countries.
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development
Ironically, it is a plan that has managed to appeal to at least one Indian firm. Dubai Outsource Zone (DOZ), the government agency responsible for the free trade zone project, only recently signed a MOU with a large Indian off-shoring / outsourcing company to bring work to DubaiCity.
Employees of the Indian off-shoring / outsourcing firm with a couple of years work time in the company will be qualified for the move to Dubai. Dangling the carrot of a work transfer is bound to scale down employee attrition rates, a major problem faced by Indian off-shoring / outsourcing companies. It, also, ensures continued company loyalty, as quitting the job will result in the loss of their job permit, end result - deportation.
DubaiCity may be 30% more expensive, but it is possible to get more productivity from the employees, and there will be few who will refuse a transfer to the city state. With potential to become a centre for services e.g. tele-medicine, Western doctors will be able to pass on work to doctors in low labour cost countries.
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development
Thursday, December 01, 2005
To Off-shore or Not to Outsource
Off-shoring / Outsourcing is an in the face reality of the 21st century, but fewer than 200,000 American jobs lost to India in a presidential election year experiencing a low job growth has proven highly controversial. Yet, more and more stock market analysis to computer software development and troubleshooting service jobs are being off-shored / outsourced by US companies to India and other low-wage countries. Clearly, it makes economic sense to pay middle-class salaries rangingfrom $2,000 to $7,000 a year in these countries, opposed to paying the same amount per month for the same work in USA.
Responding to Colin Powell’s speech pressurisingIndiato open its markets to American goods, a thank-you for the off-shoring / outsourcing work it receives from American companies, Hari Singh, an Indian student retorted sharply: “Off-shoring / Outsourcing benefits the US as well since$1 outsourced here gives $1.40 back to the U.S. economy. We use U.S. computers to do the work, and we're drinking Coke and Pepsi. Every damn thing comes from the United States.” A statement confirmed by the numerous American survey companies hired to find out whether off-shoring / outsourcing was responsible for loss of American jobs and sluggish economy.
In perspective, off-shoring / outsourcing benefits both the outsourcer and the provider. Outsourcing benefits include:
Increased Productivity.
Cost Reduction without compromising overall benefit goals.
Reduced Employee Headcount.
Access to sophisticated technologies, and latest call centre facilities without buying them.
Tailored Vendor Offerings for Client Specific Needs.
Higher service level provisions to their employees.
Companies lacking infrastructure and staff with little or no interest in investing time and resources to build in-house capability find off-shoring / outsourcing is the right choice, a smart choice! The benefits of off-shoring / outsourcing have immense long-term benefits if one has the foresight and patience to invest in future paybacks. All said and done, off-shoring / outsourcing is part of the new wave, the new world order, the sooner one accepts it, the better!
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development
Responding to Colin Powell’s speech pressurisingIndiato open its markets to American goods, a thank-you for the off-shoring / outsourcing work it receives from American companies, Hari Singh, an Indian student retorted sharply: “Off-shoring / Outsourcing benefits the US as well since$1 outsourced here gives $1.40 back to the U.S. economy. We use U.S. computers to do the work, and we're drinking Coke and Pepsi. Every damn thing comes from the United States.” A statement confirmed by the numerous American survey companies hired to find out whether off-shoring / outsourcing was responsible for loss of American jobs and sluggish economy.
In perspective, off-shoring / outsourcing benefits both the outsourcer and the provider. Outsourcing benefits include:
Increased Productivity.
Cost Reduction without compromising overall benefit goals.
Reduced Employee Headcount.
Access to sophisticated technologies, and latest call centre facilities without buying them.
Tailored Vendor Offerings for Client Specific Needs.
Higher service level provisions to their employees.
Companies lacking infrastructure and staff with little or no interest in investing time and resources to build in-house capability find off-shoring / outsourcing is the right choice, a smart choice! The benefits of off-shoring / outsourcing have immense long-term benefits if one has the foresight and patience to invest in future paybacks. All said and done, off-shoring / outsourcing is part of the new wave, the new world order, the sooner one accepts it, the better!
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development
Wednesday, November 16, 2005
India could get 79,000 jobs in legal outsourcing by 2015: Study
From Deccan Herald
India has huge potential in legal outsourcing, with the number of jobs in the field increasing to 79,000 by 2015, a study by an American research firm has said. Though India had earned over over $6.7 billion in US-based outsourcing services such as software and call centres till March 2005, the field of legal outsourcing was largely untapped, the study conducted by Forrester said. The study estimated that jobs in the field which was poised to increase dramatically from about $80 million annually to approximately $4 billion, would grow to 29,000 in 2008, 35,000 by 2010, and 79,000 by 2015.
Outsourcing would reduce costs for US customers as the the rates for Indian legal workers were about 10 to 20 per cent of their American counterparts. "Indian outsourcing offers the following economic advantages: A significant wage differential with Indian firms report paying legal researchers around $12,000 per year. There are also savings in perks, overhead, and working conditions," the study said adding time zone differences allowed for overnight and 24x7 operations. So far, the legal services work consisted of paralegal, secretarial, and litigation support. However, according to the financial consulting firm, Fulcrum Financial Inquiry, Indian firms now offered more valuable services, including contract review and monitoring, document review for due diligence, patent drafting, simple filings and legal research. However, the study said these advantages were not without challenges, but none insurmountable. The most important challenges to legal outsourcing to India included concerns about data security, conflict of interest rules, and the need for Indian lawyers to pass US bar examinations. Interestingly, the need for India-based lawyers was being addressed through American law schools and immigration policies. Legal talent was being schooled in the US, but American education visas allowed these students to stay in the country for only a short time after graduation. Many who studied in the US came back to work for legal outsourcers, the study said. It said more than 200,000 Indians graduate from law schools each year, five times more than in the US. Participants in the study included law firms, in-house law departments of multinational firms like GE, Bayer and outsourcers having a legal group. At present the number of jobs in legal outsourcing in India stood less than 12,000, it said.
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development
Wednesday, November 09, 2005
IBM moves toward software outsourcing
IBM is in news as "IBM Launched software-outsourcing base, located in China's Optical Valley in Wuhan, the capital city of China's central Hubei Province.
The first phase of the base is the software outsourcing management center for IBM’s international purchasing department, which is also IBM’s first software outsourcing center in China. At present, local companies such as Wuhan KM Soft and Wistron have received orders for software from the center.
The second phase for the base will be a software factory with a budget investment of US$20 million and construction will start at the end of 2005.
The first phase of the base is the software outsourcing management center for IBM’s international purchasing department, which is also IBM’s first software outsourcing center in China. At present, local companies such as Wuhan KM Soft and Wistron have received orders for software from the center.
The second phase for the base will be a software factory with a budget investment of US$20 million and construction will start at the end of 2005.
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development
Tuesday, November 08, 2005
India-China Cross-Border Trade on the Rise
When we think of offshore outsourcing, we tend to think of it in terms of a developed country trading with a developing country, mostly on the basis of cost considerations. However, as China and India benefit from the offshoring boom -- the former in manufactures, the latter in computer-based services -- cross-border trade between the two countries is starting to boom. India-China trade reached $13.6 billion last year, which is a sevenfold increase from 1998. Writes Howard French of the International Herald Tribune/New York Times: "Companies in each country have explained their new investments as critical strategic moves aimed at profiting from each other's rapid rise." As wages in the Indian IT services sector continue to rise and top-notch talent is getting scarce (or at least scarcer than before), companies like Infosys, Tata Consultancy Services, Wipro, Satyam Computer Services have all begun to invest heavily in China. Infosys, for one, recently announced "plans to invest $65 million to expand its business in China, where it will hire 2,000 computer experts over the next two years and build large new corporate campuses in Shanghai and Hangzhou able to accommodate thousands more workers." Huawei Technologies, on the Chinese side, recently hired 700 software experts in Bangalore. "Chinese officials have also been beating a path to India in search of training and investment opportunities there. Infosys, for one, has recently accepted 100 Chinese interns at a corporate campus it maintains in the Indian city of Mysore. The Chinese province of Jiangsu also recently announced plans to recruit as many as 400 Indian software engineers to help it energize its provincial information technology sector."And the trend show no sign of abating. The full article is available here.
The article sponsored by A-1 Technology Inc, dealing in software outsourcing and application development outsourcing
Monday, November 07, 2005
Product Engineering Services Outsourcing: The Imminent Rumble in KPO
Not a long while back, many companies did not believe in outsourcing their engineering activities as conformist acumen deems engineering to be a core technology that should remain in-house. But today, product engineering is well on its way to becoming a mature industry, akin to civil engineering and architectural services. Biz wizards are naming engineering as “the last frontier of business-process outsourcing” and expect the market to accomplish $19.5 billion mark by 2008, up from $4 billion two years ago. From design to production and maintenance, most engineering functions can be outsourced successfully. It's the hottest trend in business-process outsourcing, and for excellent rationale.
As per a Nasscom study, PES (Product Engineering Services) outsourcing, which encompasses implanted software and offshore product development, is anticipated to be an approximately $8-11 billion industry by 2008. PES is defined as services, which are linked with the creation of a new product, and it helps in optimizing the productivity and duration of a product. PES outsourcing was earlier clubbed with IT services as research and development or with IT-enabled services-business process outsourcing as engineering BPO. However, increasing consumer demand for electronic products, shorter time-to-market cycles and competitive pressures propelled PES, to emerge a standalone segment. So much so that the segment posted $2.3 billion during the last year. The importance of PES can be gauged from the fact that to meet the requirements of this business, Wipro puts over 10,000 employees on its payroll, while PCS boasts of a staff of 1,600 dedicated engineers.
India, extolled as the optimum outsourcing destination of the world, is on the brink of proving its grit in the budding vertical of offshore outsourcing – PES (product engineering services outsourcing). Though in its infancy, PES has jammed the admiration of Indian information technology majors like Patni Computer Services, Tata Consultancy Services and Wipro Ltd, among others. The sector is hovering to scrape in returns of over $11 billion in the next three years.
General enterprise management applications and technology platforms have driven information integration to include engineering of products and production facilities, and efficient management of capital assets and production. "In addition to consumer electronics, which is traditionally known to be a high adopter of embedded technologies, there are significant opportunities in verticals like automotive, medical electronics and computing that are driving the growth of PES outsourcing", believed Ajay Chamania, vice-president and head-embedded technology solutions, PCS, , he further held that the semiconductor chip market, in which software design is playing an increasingly crucial role, is also a sector where PES is set to play an active part. Ravi Gopinath, vice-president and head-engineering and industrial services, TCS, said due to a rise in the digitization levels in enterprises, the domain of engineering has become tightly linked to the territory of business information management.
A major emphasis is laid by Wipro on its innovation programme that helps build intellectual property block and solutions for the above segments. According to a company spokesperson, Wipro owns intellectual properties in many applications and solutions areas, and is rather serious in its approach to PES outsourcing.
India’s advantage lies in its knack to deliver technology services to global customers at enormous value and speed. India also has a inestimable sea of engineering and scientific talents, which can be exploited for the intensification of the sector.
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development
As per a Nasscom study, PES (Product Engineering Services) outsourcing, which encompasses implanted software and offshore product development, is anticipated to be an approximately $8-11 billion industry by 2008. PES is defined as services, which are linked with the creation of a new product, and it helps in optimizing the productivity and duration of a product. PES outsourcing was earlier clubbed with IT services as research and development or with IT-enabled services-business process outsourcing as engineering BPO. However, increasing consumer demand for electronic products, shorter time-to-market cycles and competitive pressures propelled PES, to emerge a standalone segment. So much so that the segment posted $2.3 billion during the last year. The importance of PES can be gauged from the fact that to meet the requirements of this business, Wipro puts over 10,000 employees on its payroll, while PCS boasts of a staff of 1,600 dedicated engineers.
India, extolled as the optimum outsourcing destination of the world, is on the brink of proving its grit in the budding vertical of offshore outsourcing – PES (product engineering services outsourcing). Though in its infancy, PES has jammed the admiration of Indian information technology majors like Patni Computer Services, Tata Consultancy Services and Wipro Ltd, among others. The sector is hovering to scrape in returns of over $11 billion in the next three years.
General enterprise management applications and technology platforms have driven information integration to include engineering of products and production facilities, and efficient management of capital assets and production. "In addition to consumer electronics, which is traditionally known to be a high adopter of embedded technologies, there are significant opportunities in verticals like automotive, medical electronics and computing that are driving the growth of PES outsourcing", believed Ajay Chamania, vice-president and head-embedded technology solutions, PCS, , he further held that the semiconductor chip market, in which software design is playing an increasingly crucial role, is also a sector where PES is set to play an active part. Ravi Gopinath, vice-president and head-engineering and industrial services, TCS, said due to a rise in the digitization levels in enterprises, the domain of engineering has become tightly linked to the territory of business information management.
A major emphasis is laid by Wipro on its innovation programme that helps build intellectual property block and solutions for the above segments. According to a company spokesperson, Wipro owns intellectual properties in many applications and solutions areas, and is rather serious in its approach to PES outsourcing.
India’s advantage lies in its knack to deliver technology services to global customers at enormous value and speed. India also has a inestimable sea of engineering and scientific talents, which can be exploited for the intensification of the sector.
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development
Friday, November 04, 2005
Offshore outsourcing creates jobs
From InfoWorld
The economic benefits from offshore outsourcing will create more than 337,000 jobs by 2010, on top of jobs lost through outsourcing, according to the study, by economic analyst Global Insight Inc. ITAA called offshore outsourcing a "net positive for American workers and the U.S. economy."
But the Institute of Electrical and Electronics Engineers-USA (IEEE-USA), representing U.S. IT workers, disputed the study, saying Global Insight failed to factor in concerns about outsourcing such as national security and the future IT innovation in the U.S. Both national security and the future of innovation will be at risk if the U.S. continues to export high-tech jobs and lose expertise in creating new defense systems and new IT products, said Ron Hira, chairman of the IEEE-USA's research and development policy committee.
"It should also weigh out the costs and the downside," Hira said of the study. "They ignore national security and technological innovations in these studies."
While the study seems to assume that displaced IT workers will quickly find jobs, that's often not the case, added Hira, a professor of public policy at the Rochester Institute of Technology. A U.S. Bureau of Labor Statistics survey, released in July 2004, found that of the 5.3 million U.S. workers who lost their jobs between January 2001 and December 2003, 35 percent had not found jobs by January 2004, Hira noted.
Combined with a push by the ITAA and many tech vendors for the U.S. to increase the number of foreign workers allowed under H-1B visas, offshore outsourcing hurts many workers, Hira said. "The bottom line result from the simulation is that U.S. software workers are losers," he said. "And ITAA continues to undercut U.S. software workers by arguing for more H-1Bs."
But Global Insight and outsourcing provider Sierra Atlantic Inc. defended the study, saying the economic benefits of offshore outsourcing are real. Large companies outsourcing their IT support and maintenance functions can eventually expect cost savings of 30 to 50 percent, while companies outsourcing portions of their new IT projects can expect savings of up to 40 percent, said G.K. Murthy, vice president of enterprise solutions at Sierra Atlantic.
The study links those savings with benefits to the overall economy. Currently, about a third of Sierra Atlantic customers tell Murthy they plan to hire additional workers with the savings they achieved with outsourcing, Murthy said.
"In some cases, they actually go and hire new people to launch a new initiative," Murthy said.
Offshore outsourcing, or "global sourcing," as the study calls it, helps raise U.S wages and raises the nation's gross domestic product. Offshore outsourcing will contribute to a US$0.06 increase in U.S. hourly wages in 2005, climbing to $0.12 in 2010, the study says.
At the same time, spending on offshore outsourcing of computer software and services will grow from about $15.2 billion in 2005 to $38.2 billion in 2010, according to the study. During the same time period, total cost savings from offshore outsourcing of computer software and services will grow from $8.7 billion in 2005 to $20.4 billion in 2010, with much of those savings reinvested in the U.S., the study said.
Offshore outsourcing can cause lower wages in the outsourced industries, but the cost savings create other economic benefits, said Nariman Behravesh, Global Insight's chief economist. "[Wage increases] don't necessarily occur in the IT sector, but it does happen in other parts of the economy," he said. "You can see the pain; it's a bit tougher to see the gain, but it's there."
Addressing concerns about national security and IT innovation, Behravesh said national security could be a concern in the long term. "We have to be very careful of the national security concern," he said. "Having said that, national security is often the last refuge of protectionists."
IEEE-USA's Hira questioned the objectivity of the study's authors, saying the study is more of an advocacy document than an unbiased research report. This is the second year ITAA has worked with Global Insight on a study about the benefits of offshore outsourcing. "Running a computer simulation is just an exercise when you've set up the exercise to get the results you want," he said.
Behravesh acknowledged that the study makes several policy recommendations, including more assistance for displaced U.S. workers and a bigger government focus on research and development. "We wouldn't do it from an advocacy standpoint unless it makes sense," he said.
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development
Thursday, November 03, 2005
To Offshore or Not to Offshore
Offshore outsourcing is a reality of the 21st century; however, the loss of fewer than 200,000 American jobs to India in a presidential election year experiencing low job growth proved to be a highly controversial issue. Yet, more and more service jobs – from stock market analysis to computer software development and troubleshooting – are being off-shored by US companies to India and other low-wage countries. Clearly, it makes economic sense to pay middle-class salaries ranging from $2,000 to $7,000 a year in these countries, opposed to paying the almost five times as much for the same work in the U.S.
In response to a speech by former Secretary of State Colin Powell, in which he encouraged India to open its markets to American goods – a thank-you for the offshored work it receives from American companies, Hari Singh, an Indian student retorted sharply: “Off-shoring / Outsourcing benefits the US as well since $1 outsourced here gives $1.40 back to the U.S. economy. We use U.S. computers to do the work, and we're drinking Coke and Pepsi. Every damn thing comes from the United States.”
In perspective, it is becoming more apparent that offshoring benefits both the outsourcer and the provider. Outsourcing benefits include:
1. Increased productivity
2. Cost reduction without compromising overall benefit goals.
3. Reduced employee headcount.
4. Access to sophisticated technologies, such as the latest call centre facilities without having to buy them.
5. Tailored vendor offerings for client specific needs.
6. Higher service level provisions to their employees.
Increasingly, companies lacking infrastructure and staff with little or no interest in investing time and resources to build in-house capability find offshoring the right choice, a smart choice. The long-term benefits of offshoring are immense provided one has the foresight and patience to invest in future paybacks. All said and done, offshore outsourcing is part of the new wave, the new world order, the sooner one accepts it, the better.
In response to a speech by former Secretary of State Colin Powell, in which he encouraged India to open its markets to American goods – a thank-you for the offshored work it receives from American companies, Hari Singh, an Indian student retorted sharply: “Off-shoring / Outsourcing benefits the US as well since $1 outsourced here gives $1.40 back to the U.S. economy. We use U.S. computers to do the work, and we're drinking Coke and Pepsi. Every damn thing comes from the United States.”
In perspective, it is becoming more apparent that offshoring benefits both the outsourcer and the provider. Outsourcing benefits include:
1. Increased productivity
2. Cost reduction without compromising overall benefit goals.
3. Reduced employee headcount.
4. Access to sophisticated technologies, such as the latest call centre facilities without having to buy them.
5. Tailored vendor offerings for client specific needs.
6. Higher service level provisions to their employees.
Increasingly, companies lacking infrastructure and staff with little or no interest in investing time and resources to build in-house capability find offshoring the right choice, a smart choice. The long-term benefits of offshoring are immense provided one has the foresight and patience to invest in future paybacks. All said and done, offshore outsourcing is part of the new wave, the new world order, the sooner one accepts it, the better.
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development
Wednesday, November 02, 2005
Study on outsourcing finds net gains for US economy
From Manorma Online
The outsourcing of technology jobs to low-wage countries like India will provide a US$68.7billion benefit to the US economy in 2005, said a study, challenging key assumptions about shifting work offshore. The study, updating a report released in 2004 drawing the same conclusion, was commissioned by the Information Technology Association of America, a high-tech industry group, and conducted by research firm Global Insight. The report released yesterday concluded that despite the loss of some jobs to low-wage countries such as India, that worldwide sourcing of IT services and software generated 257,042 net new US jobs in 2005."No one is denying that there are job losses, but the net effect is that you create more jobs than you lose" in the overall economy, said Nariman Behravesh, chief economist at Global Insight.The benefits come from lower inflation, higher productivity and lower interest rates that increase economic activity, the report concludes. The researchers calculated this provided a net benefit to real US gross domestic product of $68.7billion in 2005, and that this would rise by 2010 to $147.4billion compared with a situation without any offshore sourcing.In terms of jobs, the report concluded that offshore outsourcing led to the creation of more than 419,000 jobs, more than offsetting the 162,000 technology jobs displaced by the shift.
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development
Tuesday, October 25, 2005
Outsourcing: And, the Winner Is
Economic History shows that liberalised countries with receptiveness to global trading perform well on the economic scale as compared to those that shut the rest of the world out. The end of World War II saw America and other developed nations champion the cause of trade liberalisation having seen the deleterious results of trade protectionism during inter-war years. The opening of markets to free trade of goods and services spurred growth that saw America and Asian Tigers comprising of Japan, Singapore, Taiwan, S. Korea and Hong Kong emerge as economic powerhouses. Take a look at China, a country that owes its economic prosperity to western investment by way of opening its markets to the goods and services offered.
Similarly, by off-shoring and outsourcing to countries that can do what they do best at cost effective prices means people can buy goods and services far cheaper than domestically. This allows incomes to stretch further improving the buying power of people who can now purchase more goods and services due to the cost effectiveness of outsourcing or off-shoring. And, outsourcing enables freeing up of labour and capital for high-end work by off-shoring data management, accounting, back office operations and call centres to countries like India that do an excellent job for less than half the cost of what these operations cost in USA or the EU.
An assessment of the reciprocal benefits of outsourcing indicates that:
EU / American consumers profit from outsourcing through gains in consumption,
Leaner budgets give American producers a globally competitive edge,
More employment opportunities are created at home,
Outsourcing / off-shoring allows redundant employees to advance careers by honing skills or changing jobs,
A strategic solution to diminishing resources i.e.
- aging workforce,
- insufficient people going in for higher education e.g. doctors, scientists, IT professionals, nurses, teachers, etc.
Off-shoring / outsourcing work due to diminishing resources allows us to provide services for which we have the resources. By capitalising on the opportunities provided by outsourcing or off-shoring, and avoiding its pitfalls, we can make it work to the common advantage of all involved. Outsourcing or Off-shoring is the byword of the 21st century, a trend that will prove to be a mutually satisfying experience for all concerned!
The article sponsored by A-1 Technology Inc, dealing in software outsourcing and application development outsourcing
Similarly, by off-shoring and outsourcing to countries that can do what they do best at cost effective prices means people can buy goods and services far cheaper than domestically. This allows incomes to stretch further improving the buying power of people who can now purchase more goods and services due to the cost effectiveness of outsourcing or off-shoring. And, outsourcing enables freeing up of labour and capital for high-end work by off-shoring data management, accounting, back office operations and call centres to countries like India that do an excellent job for less than half the cost of what these operations cost in USA or the EU.
An assessment of the reciprocal benefits of outsourcing indicates that:
EU / American consumers profit from outsourcing through gains in consumption,
Leaner budgets give American producers a globally competitive edge,
More employment opportunities are created at home,
Outsourcing / off-shoring allows redundant employees to advance careers by honing skills or changing jobs,
A strategic solution to diminishing resources i.e.
- aging workforce,
- insufficient people going in for higher education e.g. doctors, scientists, IT professionals, nurses, teachers, etc.
Off-shoring / outsourcing work due to diminishing resources allows us to provide services for which we have the resources. By capitalising on the opportunities provided by outsourcing or off-shoring, and avoiding its pitfalls, we can make it work to the common advantage of all involved. Outsourcing or Off-shoring is the byword of the 21st century, a trend that will prove to be a mutually satisfying experience for all concerned!
The article sponsored by A-1 Technology Inc, dealing in software outsourcing and application development outsourcing
ADVANTAGES OF OFFSHORE OUTSOURCING
Offshore outsourcing is the practice of hiring an external organization to perform some or all business functions in a country other than the one where the product will be sold or consumed. The biggest advantage that can be derived from Offshore Outsourcing is drastic cut in costs while simultaneously retaining the quality. The criteria generally considered for a job to be offshore-able is:
•The job does not require direct customer interaction;
•the job can be telework;
•The work has a high information content;
•The work is easy to set up;
•There is a high wage difference between the original and offshore countries;
•The work is repeatable.
Benefits of Outsourcing
Diminish outlay, free up assets
Shun capital expenditure
Perk up effectiveness
Divest non-core functions (menial jobs like data entry, telecalling, etc.)
Get admittance to specific expert skills
Accumulate on manpower and training costs
Trim down operating overheads
institute lasting, tactical associations with outstanding service providers.
Divide and spread your risks
Evade the charge of chasing technology
Control the supplier’s far-reaching investments in technology, methodologies and HR
Gain from the source’s proficiency in resolving problems for a multiplicity of clients with like necessities.
Acquire needed project management and execution consulting expertise, along with access to best practices and verified methodologies
Keep pace and minimize the impact of rapid changes in applications and standards
Reduce the overall IT management burden while retaining control of strategic decision making. Diminish the peril of technological obsolescence and increase efficiency by consolidating and centralizing purpose
Alacrity to deploy technology solutions
By bumping up your business with selective skills or professionals in remote locations, technology solutions are implemented faster.
You grasp your benefits earlier.
Primary reason for choosing offshore option
–expenses diminution: 53%
–HR limitation: 22%
–Time to market: 16%
–Particular skill know-how: 7%
–Others: 2%
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development.
•The job does not require direct customer interaction;
•the job can be telework;
•The work has a high information content;
•The work is easy to set up;
•There is a high wage difference between the original and offshore countries;
•The work is repeatable.
Benefits of Outsourcing
Diminish outlay, free up assets
Shun capital expenditure
Perk up effectiveness
Divest non-core functions (menial jobs like data entry, telecalling, etc.)
Get admittance to specific expert skills
Accumulate on manpower and training costs
Trim down operating overheads
institute lasting, tactical associations with outstanding service providers.
Divide and spread your risks
Evade the charge of chasing technology
Control the supplier’s far-reaching investments in technology, methodologies and HR
Gain from the source’s proficiency in resolving problems for a multiplicity of clients with like necessities.
Acquire needed project management and execution consulting expertise, along with access to best practices and verified methodologies
Keep pace and minimize the impact of rapid changes in applications and standards
Reduce the overall IT management burden while retaining control of strategic decision making. Diminish the peril of technological obsolescence and increase efficiency by consolidating and centralizing purpose
Alacrity to deploy technology solutions
By bumping up your business with selective skills or professionals in remote locations, technology solutions are implemented faster.
You grasp your benefits earlier.
Primary reason for choosing offshore option
–expenses diminution: 53%
–HR limitation: 22%
–Time to market: 16%
–Particular skill know-how: 7%
–Others: 2%
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development.
Wednesday, October 19, 2005
Indian Outsourcing Firms Grow Strong
From NewsFactor
The two largest Indian outsourcingcompanies, Tata Consultancy Services and Infosys Technologies, announced healthy earnings growth on Tuesday, indicating that Western corporations continue to look to India when outsourcing technology and back-office operations.
The $17.2 billion Indian outsourcing industry is flourishing as companies hire skilled yet inexpensive English-speaking programmers and call center employees to work on technology projects and provide customer support for their American and European clients.
Tata Consultancy, the top software services exporter in the country, announced that its quarterly profit rose 20.5 percent, while its closest rival Infosys said its quarterly net profit rose 36 percent.
In results announced this week, even smaller outsourcing companies like iGATE Global Solutions and Aztec Software said they had nearly or more than doubled their quarterly profits.
Tata Consultancy, which is based in Mumbai, said Tuesday that its profit for the quarter ending Sept. 30 rose to 6.94 billion rupees ($155 million) from 5.76 billion rupees a year earlier as revenue gained 23 percent to 29.83 billion rupees ($664 million).
Infosys said its net profit for the quarter rose to 6.06 billion rupees ($134 million) from 4.47 billion rupees a year earlier. Revenue rose to 22.94 billion rupees ($511 million) from 17.5 billion rupees.
The chief executive of Infosys, Nandan Nilekani, said in a statement that the company had seen robust growth in the quarter because of its focus on offering a broad array of services to its customers.
"It took us the whole of fiscal 2004 to reach a revenue of $1 billion; we reached the same level in the first six months of this year," Nilekani said.
Infosys also forecast that its revenue for the year ending in March 2006 would increase by more than 31 percent, a full five percentage points above its previous forecast.
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development.
Monday, October 17, 2005
Future of Offshore Outsourcing
Offshore Outsourcing provides the ability to hold skilled overseas staff at a small part of the laborcost which is exhilarating to several entrepreneurs. The vistas in which Offshoring can be utilizedespecially in: accounting, advertising, animation, Human Resource Management and Development, health care-related jobs, IT projects, financial investment and consultancy, legal services, and network security.
The concept of Offshore Outsourcing is couple of centuries old when the colonial powers started taking raw materials from their respective colonies and then selling them after processing them into manufactured commodities. In 19th century the Britishers (and other imperialist/colonial powers), because of industrial revolution, rampaged the small-scale and cottage scale industries in India (and other respective colonies) by selling processed goods to the natives having a better quality. Now in 21st century the tables seem to have turned on the colonizers (or neo-colonizers). Taking advantage of the cheap labour in developing countries, many MNCs have set up subsidiaries in India and in other places (like China, Canada, South America, Africa, Israel, Ireland, Russia). In the past decade, US companies alone have invested $7 billion in their subsidiaries in India, picking a net saving of more than $26 billion. Telstra, an Australian telecom company, for instance, saved more than $75 million a year by outsourcing many jobs to Indian enterprises.
Latest modifications in the way U.S. companies are using Offshore Outsourcing Industry have generated heated controversy, which is comprehensible considering that jobs are at hazard in an already tense economy. But whereas it may be human temperament to adhere to the status quo, the software industry will be better off in acclimatizing to these changes and allowing innovation to thrive. Detractors have fated offshore development as everything from shortsighted to un-American--but it may well conclude salvaging the U.S. software industry. For staying competitive in the global market, U.S. software companies must persist in driving innovation. Nevertheless, innovation today is being choked through deficient R&D budgets on the company side and an overspending menace on the customer side. Offshore development can help on both sides. In fact, as pointed out in a recent report by the US Chamber of Commerce, the main cause of increased unemployment in the US, Britain and other developed countries is the enhancement in productivity due to continuing advancements leading to massive unemployment; and, two, that it has not contributed to unemployment, as is sought to be made out. Here are the reasons:
For a mature software company, expending on proper product innovation is much less than what you might think. It by and large accounts for less than 30 percent of the R&D budget. This small piece of the pie is being further clutched from two directions. First, overall R&D spending by public U.S. software companies is lessening. In fact, in 2002 it fell by 2 percent, after having consistently grown at 15 percent annually since 1998.
Most of these cuts are captivating a bite out of new product development. Second, R&D budgets are being consumed by ever-increasing maintenance-related activities, such as bug-fixing, upgrades and minor enrichments. Maintenance agreements with a huge customer base mount up over the years mandate this support.
With such restricted resources accessible, software companies can't successfully produce real advance. Instead, many of finest and brightest are jammed down in what amounts to software maintenance tasks. The irony is that many of these developers would be happier with--and better suited for--truly pioneering work. But companies have painted themselves into a corner. This is where offshore development can facilitate.
In most cases, a well-executed offshore development program can help release an added 20 percent of the R&D budget for new innovation while continuing to meet the maintenance obligations of mature companies.
The concept of Offshore Outsourcing is couple of centuries old when the colonial powers started taking raw materials from their respective colonies and then selling them after processing them into manufactured commodities. In 19th century the Britishers (and other imperialist/colonial powers), because of industrial revolution, rampaged the small-scale and cottage scale industries in India (and other respective colonies) by selling processed goods to the natives having a better quality. Now in 21st century the tables seem to have turned on the colonizers (or neo-colonizers). Taking advantage of the cheap labour in developing countries, many MNCs have set up subsidiaries in India and in other places (like China, Canada, South America, Africa, Israel, Ireland, Russia). In the past decade, US companies alone have invested $7 billion in their subsidiaries in India, picking a net saving of more than $26 billion. Telstra, an Australian telecom company, for instance, saved more than $75 million a year by outsourcing many jobs to Indian enterprises.
Latest modifications in the way U.S. companies are using Offshore Outsourcing Industry have generated heated controversy, which is comprehensible considering that jobs are at hazard in an already tense economy. But whereas it may be human temperament to adhere to the status quo, the software industry will be better off in acclimatizing to these changes and allowing innovation to thrive. Detractors have fated offshore development as everything from shortsighted to un-American--but it may well conclude salvaging the U.S. software industry. For staying competitive in the global market, U.S. software companies must persist in driving innovation. Nevertheless, innovation today is being choked through deficient R&D budgets on the company side and an overspending menace on the customer side. Offshore development can help on both sides. In fact, as pointed out in a recent report by the US Chamber of Commerce, the main cause of increased unemployment in the US, Britain and other developed countries is the enhancement in productivity due to continuing advancements leading to massive unemployment; and, two, that it has not contributed to unemployment, as is sought to be made out. Here are the reasons:
For a mature software company, expending on proper product innovation is much less than what you might think. It by and large accounts for less than 30 percent of the R&D budget. This small piece of the pie is being further clutched from two directions. First, overall R&D spending by public U.S. software companies is lessening. In fact, in 2002 it fell by 2 percent, after having consistently grown at 15 percent annually since 1998.
Most of these cuts are captivating a bite out of new product development. Second, R&D budgets are being consumed by ever-increasing maintenance-related activities, such as bug-fixing, upgrades and minor enrichments. Maintenance agreements with a huge customer base mount up over the years mandate this support.
With such restricted resources accessible, software companies can't successfully produce real advance. Instead, many of finest and brightest are jammed down in what amounts to software maintenance tasks. The irony is that many of these developers would be happier with--and better suited for--truly pioneering work. But companies have painted themselves into a corner. This is where offshore development can facilitate.
In most cases, a well-executed offshore development program can help release an added 20 percent of the R&D budget for new innovation while continuing to meet the maintenance obligations of mature companies.
For further information on offshore outsourcing and offshore software development, please visit http://www.a1technology.com
Friday, October 14, 2005
Why executives prefer to outsource???
From Unameits
In a recent Accenture survey of more than 800 health, manufacturing, retail and travel executives in the US and Europe, 86% said outsourcing gives them more control over business results in a variety of critical areas, the most important being the ability to plan. While cost-cutting is among these key areas, the executives also reported equal levels of control in reliability, cost variability improvements and effective implementation of ideas.
Information technology is the most common at 43%, followed by supply chain (36%), learning/training (31%), human resources (25%), finance and accounting (21%) and customer relationship management (13%).
Here are some of the reasons why outsourcing is a better choice for managing the IT department, rather than maintaining IT internally.
Outsourced services are utilized as needed, and organizations pay only for what services are actually used
An outsourced IT department can reduce costs by utilizing its extensive knowledge base of various IT specialists, as opposed to an organization maintaining a comprehensive in-house staff
Outsourced companies make performance reports and measurements available to their clients
Outsourced companies can provide 24x7 support at a fraction of the cost
Staffing levels can be adapted quickly to client requirements, thereby avoiding gaps due to attrition, business growth or economic downturns
IT consultants are fully trained on the latest technologies
Outsourced services use established standards for equipment and software requirements, saving time and money
Client management can concentrate on core competencies and revenue generating activities, while leaving technology management to IT professionals
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development.
Thursday, October 13, 2005
Software Outsourcing and Benefits
From Tatvasoft
In a recent survey by diamondcluster international, there is a high increase in the premature termination of the offshore outsourcing software development contracts. Number of satisfied buyers have decreased from 79% to 62%. According to Tom Weakland, it is not right to blame only offshore software development service provider. Although, many buyers are outsourcing their software development work, they still lack quality to get maximum benefits of outsourcing.
This was the third annual study by DiamondCluster and first of its kind where buyers mentioned they are planning to reduce their software outsourcing.
Software outsourcing benefits
To consider the biggest benefit of software outsourcing, companies mentioned reallocation of internal resources to more critical functions. Also, cost saving was another primary reason but it was second in consideration.
Report also mentioned that, companies are learning that, there is no tremendous cost savings. As attrition rate is high in countries like India, companies are also learning cost of losing good people and cost of losing people with specific knowledge.
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development.
Tuesday, October 11, 2005
Rationale behind opting to Offshore Outsourcing
Courtsey Nasscom.org
The foremost rationale behind opting to Offshore Outsourcing today by an average software development and/or web development company is expenditure diminution and progression. This lets them focus on the core actions and enlarge the competitive capacity of their business. Businesses usually prefer to keep network and database administration in house and to outsource such projects that would allow them to concentrate on their core activities.
Indian Software Outsourcing industry has accomplished superlative levels of excellence and constancy of yield. Besides savings Software Outsourcing to India bequeaths its clientele with software development process improvements that translate into ongoing upgrading in custom software cycle times, economic viability, and class. Though Indians are facing stiff competition from MNCs and local players athwart the world but Indian software product companies are working hard to make India a world class IT destination offering not just software services but also premier software products.
Technically, Indian Software products can be compared to the best in the world but poor marketing is the dampener. Whatever product is selling today, whether it is in the storage space or security or any other, chances are that India has got a similar product with more features at lesser costs. Scores of firms are working with NASSCOM to make software product development further popular with the Indian software companies. For instance, iFlex has joined hands with NASSCOM in creating awareness through NASSCOM's product forum about the potential of product development in India. Other players perhaps need to enlist this kind of local endorsement.
The further test is to encourage national and worldwide customers of the trustworthiness of products with the 'Made in India' tag, as customers overseas are enticed to use products offered by big MNCs. We need to communicate to the world that Indian products stand for quality, excellence. Wipro was one of the first few companies in the world to get a PCMM level 5 certification. How many people know about GE's research arm in India, Intel's IP creation in India or even AP's state transports' radical use of telematics? Problem is that we are not telling the product story of Indian IT. There were other cheaper sources available for IT but India won because of the superior education levels, the numbers and their single-minded focus on quality, and innovative spirit of the Indian people.
Indian IT companies have strong domain knowledge, global exposure and also brand equity worldwide in the software services sector. Also, Indian software and services companies have strong value proposition - low development cost, high skilled manpower and competitive billing. Indian companies are now capitalising on the strong domain knowledge and global exposure in developing software products and NASSCOM has already noted a 30% to 40% increase in the number of companies that are involved in the product space in the last couple of years. This is evident from the fact that the Indian IT industry's export revenues from product and technology services has grown from Rs 5100 crores in 2001-02 to Rs 6600 crores in 02-03 registering a growth of 29.4%. This now needs to be communicated.
For selecting an OSP for a Software Outsourcing project, you may ask for code samples and have them reviewed by specialists. After making your choice, chat about coding standards with the purveyor, determine the apt necessities, and include them in the copy of the agreement. Building mock-ups of the system and/or UI prototypes at the specification phase is one of the most important features of efficient software development. Any OSP is supposed to have a routine procedure of using a bug tracking system to manage bug reports. If they do, you should have access to the bug reports related to your project. If they don't, you might consider creatingyour own one and providing the vendor with access to the appropriate bug reports.
The article sponsored by A-1 Technology Inc,dealing in offshore outsourcing and software development outsourcing
Monday, October 10, 2005
Outsourcing Product Development (OPD) next wave in IT for India
From Webindia123 News
The emerging Outsourcing Product Development (OPD) sector will trigger the next Information Technology wave in India with already a handful of companies carving a niche in the world.
Aiming to put India high in the IT value chain in the Information Technology services that had already earned the country a reputation, OPD would be India centric over the next few years as none of the emerging IT markets such as China or East European countries able to emulate the indian experience in the field, according to IT experts here.
OPD by definition is building consumer products for vendors and taking up responsibility of all aspects of the product lifecycle including R and D, prototyping, development testing and maintenance support.
According to various estimates the market size of OPD in India is around US dollars three billion and was expected to grow to US dollars 11 billion by 2008. The global market for product and technology services was set to a whopping US dollar eight-11 billion by 2008, according to a Nasscom-McKinsey report.
Nasscom says that Indian IT industry export revenues from the Product and Technology Services have grown from Rs 5,100 crore ($1.08 billion) to Rs 6,600 crore ($1.40 billion) during financial year 2002-03, registering a growth of 29.4 per cent.
The article sponsored by A-1 Technology Inc,dealing in offshore outsourcing and software development outsourcing.
Friday, October 07, 2005
3i Infotech Ltd acquired the US-based Innovative Business Solutions Inc.
From Infotech Indiatimes
3i Infotech Ltd., an Indian software services company, said Tuesday it has acquired the US-based Innovative Business Solutions Inc. for $3.6 million as part of its overseas expansion strategy.
Set up in 1994, the niche IT consulting services firm Innovative Business Solutions is a profitable company with annual revenues of $7.2 million, said a 3i Infotech statement issued here.
The US-based company, which has some 75 employees, provides services in growth segments like enterprise application integration, business intelligence and IT security, added the statement.
"We believe the acquisition brings in lot of value to our organisation by augmenting our geographic reach and customer base in the US," said V. Srinivasan, managing director and CEO of 3i Infotech.
The article sponsored by A-1 Technology Inc, dealing in software outsourcing and software development outsourcing.
Thursday, October 06, 2005
India’s Largest Financial Services Company Launches BPO and KPO Subsidiary KARVY Global Services
Hyderabad, India and New York, NY (OPENPRESS) -- KARVY, India’s largest non-bank financial institution, today announced the launch of its Business Process Outsourcing (BPO) and Knowledge Process Outsourcing (KPO) subsidiary, KARVY Global Services, Limited (KGS). KARVY services over 350 corporations and 20 million individual investors and is ranked among the top five in all of its business segments. Building on KARVY’s heritage as an accounting firm to start, KGS will focus on providing a full range of Finance and Accounting services including:• High volume transaction processing (accounts receivables and payables processing, fixed assets including depreciation, calculation, etc., general accounting, expenses accounting and account reconciliation)• Financial reporting (financial accounting, general accounting, general ledger, consolidation financial reporting and filings)• Analysis (transaction analysis, finance planning and analysis, marketing decision support and report generation)• Financial management functions (investment analysis, shareholder services, cash management)• Taxation and audit servicesLed by BPO veteran and KGS CEO ARthur Flew, KGS’ management team has combined experience from a range of industries including outsourcing working for companies such as Aetna, Blue Cross Blue Shield, Citigroup, Ernst and Young, HSBC, GE Capital, GSK, New York Life, Putnam Investments, State Street Research, among others. “KGS’ key business lies in providing outsourcing services for high level business functions that build off KARVY’s core lines of business,” said ARthur Flew, CEO of KARVY Global Services. “With today’s sensitivities around outsourcing, it is important to partner with an experienced, proven company. With close to three decades of financial services experience, KGS is able to provide its clients with local knowledge, established resources and global reach.” About KARVY Global ServicesKARVY Global Services Limited is the Business Process and Knowledge Process Outsourcing subsidiary, of KARVY, the largest non-bank financial institution in India. KARVY is ranked in India as the number one registrar, the number two depository participant, one of the top five brokers and the number five investment bank. With a combined capacity of 3200 seats, KGS provides a full range of Finance and Accounting outsourcing services and also offers capabilities in the areas of Transaction Processing (back office processing for a range of industries including Insurance and Health Care), Knowledge Process Outsourcing (KPO - Research and Analytics), Human Resources Outsourcing (HRO), voice and CRM (Customer Relationship Management) and Information Technology (including helpdesk support, integration solutions and technology development). KGS has three centers in Hyderabad, India, headquarters in Hyderabad, India and US headquarters in New York City with additional offices in India, Los Angeles, London and Toronto.
The article sponsored by A-1 Technology Inc, dealing in software outsourcing and software development outsourcing.
Wednesday, October 05, 2005
Finance and Accounting Outsourcing expanding at rapid rate: Study
From GG2.net
FINANCE and Accounting Outsourcing (FAO), which is estimated to have a total contract value of $12bn at present, is on a similar growth pattern as Human Resource (HR) outsourcing, a recent study claims.
Approximately 70 per cent of 108 multi-process FAO contracts have been signed since 2001 and it has reached a rapid growth stage, the report, prepared by Everest Research Institute at Houston, said.
"While much attention in the BPO marketplace has been given to HR outsourcing, FAO, which has been experiencing a similar growth pattern is quietly evolving regarding how Chief Financial Officers (CFO) manage the finance function," said Michel Janssen, Managing Research Director of Everest Research Institute. "This is not a market of high-profile deals and game-changing technology. FAO has been, and continues to be, primarily focused on labour cost arbitrage, as CFOs seek to move transactional processing out of their organisation," Janssen added.
He said this has led to a situation where off-shoring has become a key component of the majority of FAO contracts, which has "opened the door to a large number of suppliers, especially those that missed windows of opportunity in HR outsourcing".
"CFOs are doing their fair share of cost-cutting by using outsourcing to drive down the transaction processing costs of the corporate finance function," Joe Fernandes, Managing Research Director at the Institute, said.
"Unlike other areas of outsourcing, CFOs are not engaging in FAO relationships to gain access to advanced technology," he observed. "Rather, they are leveraging outsourcing`s ability to deliver significant cost savings and improvements in the area of compliance -- and it is the largest companies with the most complex corporate structures that are leading the way," Joe said.
The article sponsored by A-1 Technology Inc, dealing in software outsourcing and software development outsourcing.
Tuesday, October 04, 2005
Satyam Computer Services Limited announced the strategic acquisition of Citisoft
From FSOutsourcing News
Satyam Computer Services Limited announced the strategic acquisition of Citisoft, a specialist business and systems consulting firm for the investment management community. The deal was for $23.2 million, with an additional performance-based payment of up to 15.5 million to be paid over three years.
In announcing the acquisition, Satyams founder and chairman B. Ramalinga Raju said the acquisition of Citisoft, founded in London with offices in New York and Boston, would help the Hyderabad-based IT solutions provider build a unique position and global footprint in the Financial Services sector.
Clearly, in the case to Satyam-Citisoft, location was only one factor. Anil Kumar, senior vice president and head of the Satyams financial services group noted that Citisoft has significant domain experience, strong risk management expertise, and has established itself with an impressive list of clients in the specialized investment management community.
When you combine their domain expertise with the technological breadth we bring to the table its really a compelling proposition, Kumar said.
Yet the acquisition highlights a pattern that has begun to form, in which offshore firms, once viewed as outsiders, are acquiring companies with more established local presences in the markets they serve.
This isnt the first offshore-onshore marriage in which the offshore firm was doing the courting. Back in December of 2003, Mumbai-based i-flex acquired SuperSolutions Corporation, a US-based specialized consumer lending software providers in an all-cash deal for $11.5 million. However, i-flex has a unique history, having gotten its start in 1985 as a division of Citicorp, which decided at the time that it needed a base of highly skilled technology workers in India to support and maintain smaller projects for overseas operations. Citigroup spun off the business in 1992 and currently owns about one third of it, according to analysts.
The list of companies acquired by Bangalore-based BPO firm Wipro in its first wave of acquisitions included Spectramind (aquired piece by piece, starting with a 24 percent stake in 2001 for $10 million), American Management Systems (also known as AMS, for more than $26 million in 2002), and NerveWire Inc. (for 18.7 million in 2003). NerveWire and AMS in particular gave Wipro the opportunity to seek high-end consulting assignments while bidding on large outsourcing deals, Indian technology industry writer Pankaj Mishra wrote in 2003. They also increased clients comfort factor with Wipro, he wrote. As for Spectramind, 10 percent of its revenue was already coming from Wipro clients as of as of 2003 and that number was expected that number to grow. Today, speculation abounds that the firm is on the verge of another acquisition spree, and chief executive Azim Premji confirmed in an interview with SiliconIndia in June that a number of acquisitions are in the pipeline.
In Satyam-Citisofts case, the two firms were introduced through mutual clients of Citisoft and Satyams Financial Services Group, the division into which Citisoft will now be included, and Bear Stearns Asset Management was a mutual client quoted in the release announcing the acquisition.
While on the surface these types of moves appear particularly strategic for the aquirer, Dan Houlihan, Citisofts managing director of US operations, said the deal held advantages for the acquired as well. Prior to the acquisition talks, Citisoft had identified outsourcing as one of the specific threats to its business.
Many investment management clients have outsourced key functions, and much of the work we do onsite could be done elsewhere, he said. Through the merger, he added, the two firms could provide very complementary services, pairing Citisofts expertise from its on-site consulting experience with Satyams technology and offshore capabilities.
The article sponsored by A-1 Technology Inc, dealing in software outsourcing and software development outsourcing.
Monday, October 03, 2005
Future of Offshore Outsourcing
Offshore Outsourcing provides the ability to hold skilled overseas staff at a small part of the laborcost which is exhilarating to several entrepreneurs. The vistas in which Offshoring can be utilizedespecially in: accounting, advertising, animation, Human Resource Management and Development, health care-related jobs, IT projects, financial investment and consultancy, legal services, and network security.
The concept of Offshore Outsourcing is couple of centuries old when the colonial powers started taking raw materials from their respective colonies and then selling them after processing them into manufactured commodities. In 19th century the Britishers (and other imperialist/colonial powers), because of industrial revolution, rampaged the small-scale and cottage scale industries in India (and other respective colonies) by selling processed goods to the natives having a better quality. Now in 21st century the tables seem to have turned on the colonizers (or neo-colonizers). Taking advantage of the cheap labour in developing countries, many MNCs have set up subsidiaries in India and in other places (like China, Canada, South America, Africa, Israel, Ireland, Russia). In the past decade, US companies alone have invested $7 billion in their subsidiaries in India, picking a net saving of more than $26 billion. Telstra, an Australian telecom company, for instance, saved more than $75 million a year by outsourcing many jobs to Indian enterprises.
Latest modifications in the way U.S. companies are using Offshore Outsourcing Industry have generated heated controversy, which is comprehensible considering that jobs are at hazard in an already tense economy. But whereas it may be human temperament to adhere to the status quo, the software industry will be better off in acclimatizing to these changes and allowing innovation to thrive. Detractors have fated offshore development as everything from shortsighted to un-American--but it may well conclude salvaging the U.S. software industry. For staying competitive in the global market, U.S. software companies must persist in driving innovation. Nevertheless, innovation today is being choked through deficient R&D budgets on the company side and an overspending menace on the customer side. Offshore development can help on both sides. In fact, as pointed out in a recent report by the US Chamber of Commerce, the main cause of increased unemployment in the US, Britain and other developed countries is the enhancement in productivity due to continuing advancements leading to massive unemployment; and, two, that it has not contributed to unemployment, as is sought to be made out. Here are the reasons:
For a mature software company, expending on proper product innovation is much less than what you might think. It by and large accounts for less than 30 percent of the R&D budget. This small piece of the pie is being further clutched from two directions. First, overall R&D spending by public U.S. software companies is lessening. In fact, in 2002 it fell by 2 percent, after having consistently grown at 15 percent annually since 1998.
Most of these cuts are captivating a bite out of new product development. Second, R&D budgets are being consumed by ever-increasing maintenance-related activities, such as bug-fixing, upgrades and minor enrichments. Maintenance agreements with a huge customer base mount up over the years mandate this support.
With such restricted resources accessible, software companies can't successfully produce real advance. Instead, many of finest and brightest are jammed down in what amounts to software maintenance tasks. The irony is that many of these developers would be happier with--and better suited for--truly pioneering work. But companies have painted themselves into a corner. This is where offshore development can facilitate.
In most cases, a well-executed offshore development program can help release an added 20 percent of the R&D budget for new innovation while continuing to meet the maintenance obligations of mature companies.
The article sponsored by A-1 Technology Inc, dealing in software outsourcing and software development outsourcing.
The concept of Offshore Outsourcing is couple of centuries old when the colonial powers started taking raw materials from their respective colonies and then selling them after processing them into manufactured commodities. In 19th century the Britishers (and other imperialist/colonial powers), because of industrial revolution, rampaged the small-scale and cottage scale industries in India (and other respective colonies) by selling processed goods to the natives having a better quality. Now in 21st century the tables seem to have turned on the colonizers (or neo-colonizers). Taking advantage of the cheap labour in developing countries, many MNCs have set up subsidiaries in India and in other places (like China, Canada, South America, Africa, Israel, Ireland, Russia). In the past decade, US companies alone have invested $7 billion in their subsidiaries in India, picking a net saving of more than $26 billion. Telstra, an Australian telecom company, for instance, saved more than $75 million a year by outsourcing many jobs to Indian enterprises.
Latest modifications in the way U.S. companies are using Offshore Outsourcing Industry have generated heated controversy, which is comprehensible considering that jobs are at hazard in an already tense economy. But whereas it may be human temperament to adhere to the status quo, the software industry will be better off in acclimatizing to these changes and allowing innovation to thrive. Detractors have fated offshore development as everything from shortsighted to un-American--but it may well conclude salvaging the U.S. software industry. For staying competitive in the global market, U.S. software companies must persist in driving innovation. Nevertheless, innovation today is being choked through deficient R&D budgets on the company side and an overspending menace on the customer side. Offshore development can help on both sides. In fact, as pointed out in a recent report by the US Chamber of Commerce, the main cause of increased unemployment in the US, Britain and other developed countries is the enhancement in productivity due to continuing advancements leading to massive unemployment; and, two, that it has not contributed to unemployment, as is sought to be made out. Here are the reasons:
For a mature software company, expending on proper product innovation is much less than what you might think. It by and large accounts for less than 30 percent of the R&D budget. This small piece of the pie is being further clutched from two directions. First, overall R&D spending by public U.S. software companies is lessening. In fact, in 2002 it fell by 2 percent, after having consistently grown at 15 percent annually since 1998.
Most of these cuts are captivating a bite out of new product development. Second, R&D budgets are being consumed by ever-increasing maintenance-related activities, such as bug-fixing, upgrades and minor enrichments. Maintenance agreements with a huge customer base mount up over the years mandate this support.
With such restricted resources accessible, software companies can't successfully produce real advance. Instead, many of finest and brightest are jammed down in what amounts to software maintenance tasks. The irony is that many of these developers would be happier with--and better suited for--truly pioneering work. But companies have painted themselves into a corner. This is where offshore development can facilitate.
In most cases, a well-executed offshore development program can help release an added 20 percent of the R&D budget for new innovation while continuing to meet the maintenance obligations of mature companies.
The article sponsored by A-1 Technology Inc, dealing in software outsourcing and software development outsourcing.
Friday, September 30, 2005
Offshore Outsourcing: The Statistics
Offshore Outsourcing nonetheless has also truncated millions of job opportunities in the respective home countries. Over 2.2 million people in the US alone lost their jobs in the preceding four years.
US Senate is contemplating to ban Offshore Outsourcing of government contracts. This posits an ironic premise US, in theory, stalwartly campaigns for global acceptance of free trade practices, but in practice it mulls over legal restraints to offshore outsourcing from foreign lands. But the recoil may be puffed up. One of the hottest studies designates that the trend may actually be creating more jobs.
In the past decade, US companies single-handedly have devoted $7 billion in their ancillary operations in India, garnering a profit in excess of $26 billion. Telstra, an Australian telecom company, for instance, accumulated more than $75 million a year by outsourcing several assignments to Indian ventures proving an apparent clue that, notwithstanding separated outlooks in the US, Britain, France, Germany, and other first world countries, corporate administrations will persist favoring offshore outsourcing. On the employment side, there are two standpoints: first, deeming that outsourcing creates massive joblessness; and, second, contrariwise. Indeed, as pointed out in a report by the US Chamber of Commerce, the main reason of increased unemployment in the US, Britain and other developed countries is the augmentation in yield due to continuing advancements in technology. Quoting the instance of GM (General Motors) in USA three decades ago the report says that it used to engage larger than 4,50,000 workers to produce five million automobiles / year, and now it utilizes under 1,18,000 hands to manufacture the same number of vehicles. This reduction is attributable to the advancement of designing, mechanization, assembling and testing gizmology together with robotics.
US Senate is contemplating to ban Offshore Outsourcing of government contracts. This posits an ironic premise US, in theory, stalwartly campaigns for global acceptance of free trade practices, but in practice it mulls over legal restraints to offshore outsourcing from foreign lands. But the recoil may be puffed up. One of the hottest studies designates that the trend may actually be creating more jobs.
In the past decade, US companies single-handedly have devoted $7 billion in their ancillary operations in India, garnering a profit in excess of $26 billion. Telstra, an Australian telecom company, for instance, accumulated more than $75 million a year by outsourcing several assignments to Indian ventures proving an apparent clue that, notwithstanding separated outlooks in the US, Britain, France, Germany, and other first world countries, corporate administrations will persist favoring offshore outsourcing. On the employment side, there are two standpoints: first, deeming that outsourcing creates massive joblessness; and, second, contrariwise. Indeed, as pointed out in a report by the US Chamber of Commerce, the main reason of increased unemployment in the US, Britain and other developed countries is the augmentation in yield due to continuing advancements in technology. Quoting the instance of GM (General Motors) in USA three decades ago the report says that it used to engage larger than 4,50,000 workers to produce five million automobiles / year, and now it utilizes under 1,18,000 hands to manufacture the same number of vehicles. This reduction is attributable to the advancement of designing, mechanization, assembling and testing gizmology together with robotics.
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and application development outsourcing.
Offshore Outsourcing : An All Win Premise
The advent of internet, globalization, free marketing, and liberalization has turned the world into a small global village consequently destroying all trade barriers. The awareness that outsourcing can boost productivity sans forfeit of class has impelled MNC’s, in all segments, to endorse this loom. A good number of major IT companies do most of their business overseas and obviously want to have some of their employees in those markets. Lower wages in some countries are also a huge incentive to move operations, especially since high-speed communication removes many of the barriers to dealing with U.S.-based colleagues and customers. Therefore, numerous MNCs in USA, Europe, Australia, and Japan have initiated IPOs (International Procurement Organizations) in developing third world countries particlulary India, China, Mexico and Brazil.
Offshore Outsourcing ensues largely in the IT sector, followed by medical transcription and other health care-related jobs, automotive spares/components, engineering segment, and business processing, accounting, advertising, , Human Resource Management and Development, , financial investment and consultancy, legal services, and network security.
The theory of outsourcing is also technology- motivated anchored in the principle that one must outsource low-tech data entry jobs requiring more of manual labour and focus on central activities, exploration and advance of innovative gizmologies. While the proceeds generated from Offshoring be utilized for further expansion and technology innovation and specialization thus engendering fresh and superior employment openings.
An account primed by McKinsey Global Institute for the US Chamber of Commerce has avowed that: "A US company earns on an average a net profit of $1.12 to $1.14 by outsourcing work for which it pays $1.0 abroad." It additionally acknowledged that by offshoring low paid jobs abroad, US capital, fiscal or intellectual, can be exploiedt to spawn more lucrative and superior revenue generating jobs. The report also affirmed that by outsourcing assignments to India and other developing countries, many US / European companies are also establishing new markets in such countries. Call centers so grounded in India or other developing countries are being fundamentally outfitted with US or European gizmos like Compaq / HP Computers, Microsoft software, Lucent phones and Carrier air conditioners.
Offshore Outsourcing ensues largely in the IT sector, followed by medical transcription and other health care-related jobs, automotive spares/components, engineering segment, and business processing, accounting, advertising, , Human Resource Management and Development, , financial investment and consultancy, legal services, and network security.
The theory of outsourcing is also technology- motivated anchored in the principle that one must outsource low-tech data entry jobs requiring more of manual labour and focus on central activities, exploration and advance of innovative gizmologies. While the proceeds generated from Offshoring be utilized for further expansion and technology innovation and specialization thus engendering fresh and superior employment openings.
An account primed by McKinsey Global Institute for the US Chamber of Commerce has avowed that: "A US company earns on an average a net profit of $1.12 to $1.14 by outsourcing work for which it pays $1.0 abroad." It additionally acknowledged that by offshoring low paid jobs abroad, US capital, fiscal or intellectual, can be exploiedt to spawn more lucrative and superior revenue generating jobs. The report also affirmed that by outsourcing assignments to India and other developing countries, many US / European companies are also establishing new markets in such countries. Call centers so grounded in India or other developing countries are being fundamentally outfitted with US or European gizmos like Compaq / HP Computers, Microsoft software, Lucent phones and Carrier air conditioners.
The article sponsored by A-1 Technology Inc, dealing in software outsourcing and software development outsourcing.
TCS, TTSL in $250 m outsourcing deal
From Financial Express
Tata Consultancy Services (TCS) and Tata Teleservices (TTSL) have announced a $250 million outsourcing deal. As per the terms, TTSL and Tata Teleservice, Maharashtra will outsource their entire IT infrastructure management to TCS. The sum will be paid to TCS over a period of five years.
"The engagement with TTSL is another sign of the growing importance of the Indian market. TCS's knowledge of the telecom domain and its ability to provide best-in-class solutions will help TTSL sustain and grow its competitive advantage and deliver greater value to its stakeholders. TCS is committed to delivering world-class solutions for TTSL," TCS CEO and MD S Ramadorai said.
The scope of the engagement includes management of all IT-related activities including implementation, application development and maintenance as well as change management across the enterprise. TCS will also be responsible for the management of data centres, information security management, training end users on new applications and disaster recovery .
"The engagement with TTSL is another sign of the growing importance of the Indian market. TCS's knowledge of the telecom domain and its ability to provide best-in-class solutions will help TTSL sustain and grow its competitive advantage and deliver greater value to its stakeholders. TCS is committed to delivering world-class solutions for TTSL," TCS CEO and MD S Ramadorai said.
The scope of the engagement includes management of all IT-related activities including implementation, application development and maintenance as well as change management across the enterprise. TCS will also be responsible for the management of data centres, information security management, training end users on new applications and disaster recovery .
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and application development outsourcing.
Why you should outsource to India
The greatest benefits of offshore outsourcing to India are the significant savings and rapid results.
In India multi-lingual project managers and programmers, saves you from language and culture difficulties, not to mention global time differences unlike China.
By outsourcing projects you can save up to 30 to 40 % in the project cost. You can also have access to proven and standard quality of web and software solution.
By outsourcing the project to offshore outsourcing center, you don't need to spend your resources and can concentrate on the core development of the business.
By outsourcing projects you reduce investment for resources and their maintenance cost. There will be significant reduction in operating cost and project overheads.
In India multi-lingual project managers and programmers, saves you from language and culture difficulties, not to mention global time differences unlike China.
By outsourcing projects you can save up to 30 to 40 % in the project cost. You can also have access to proven and standard quality of web and software solution.
By outsourcing the project to offshore outsourcing center, you don't need to spend your resources and can concentrate on the core development of the business.
By outsourcing projects you reduce investment for resources and their maintenance cost. There will be significant reduction in operating cost and project overheads.
A-1 Technology ,an Offshore Outsourcing provides offshore software and application development outsourcing services for companies across the globe from it's software outsourcing center in India; where we are specifically focused in the fields of Web Design and Development, PHP Programming,.Net , E commerce Solutions, Web Application Development, Database Integration, Flash Development, Search Engine Optimization and Software Development Services.
Thursday, September 29, 2005
Bangalore Outsourcing Revenue Increases
From: Washingtonpost
India's technology hub Bangalore experienced a 20 percent growth to 90 billion rupees ($2.05 billion) in its software and back-office outsourcing exports in the April-September half-year period, an official said Wednesday.
Also, 57 foreign companies opened offices in the city and had invested a total of 9.2 billion rupees ($209 million) through Sept. 27, when the figures were calculated, B. V. Naidu, director of the federal government body Software Technology Parks of India told reporters.
Naidu expected full year revenues to be at least $8.7 billion, or 30 percent higher than the last year's figure of $6.7 billion.
Industry leaders had feared that Bangalore's outsourcing revenue growth may slow down due to the city's sagging infrastructure and resistance from U.S. labor groups. But the latest growth figures suggest there has been no decrease in Western outsourcing.
Western companies save costs by farming out software development, engineering design and back-office functions to India and other countries where wages are low and skilled workers are plentiful.
Many of the world's largest technology companies including Microsoft Corp., Intel Corp., Oracle Inc., and Google Inc., have their offices in Bangalore. But many complain that the city's potholed roads, congested traffic, frequent power shortage, inadequate public transport and a cramped airport threaten their growth.
Labor groups in the U.S. and Europe have protested the practice of outsourcing, claiming it leads to job losses. But such protests have eased in recent months.
India's revenue from Western outsourcing was $17.2 billion in the fiscal year ended March 2005. It expects a growth of at least 30 percent in the current year.
Miscellanies
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and software development outsourcing.
Wednesday, September 28, 2005
India is the best bet for offshore IT outsourcing, advises Gartner
From: computerweekly.com
India offers significant advantages in terms of IT skills and infrastructure over other countries that provide offshore outsourcing, according to industry analyst Gartner.
India is "head and shoulders above the competition", said Gartner, which predicts worldwide spending on offshore IT will reach £27.6bn by 2007.
In terms of size and number of IT professionals, only China comes close to India in offshoring potential, said Gartner, pointing out that strong government support was playing a key role in boosting China's offshore IT capabilities.
But Ian Marriott, research vice-president at Gartner, sounded a note of caution about the strong interest in "nearshore" options from Western user organisations.
"Some Eastern European countries, particularly ones that are now in the European Union, are attracting attention," he said.
"However, the choice of local providers is limited. This may change as these countries become more mature members of the international business community.
"In the meantime, multi-national and leading Indian providers are establishing a presence there, mainly as nearshore locations for Western Europe."
India's success had also prompted a scramble by English-speaking countries to join the offshore IT market, said Marriott. "Although some of these countries seem promising on paper, Gartner advises companies to be extremely cautious during evaluation, paying special attention to the historical track record of these nations: specifically, low socio-political turbulence, physical and cyber security, and enforcement of intellectual property (IP) and patent law," he said.
Businesses selecting offshore service suppliers should look at factors such as the level of government support, English language skills, infrastructure and political and economic stability, as well as cost, in countries where they are considering outsourcing, Gartner recommended.
Although labour costs may be low, there were additional risks associated with offshoring, he warned. "Although infrastructure, process, project management and security risks are normal in any external service provider relationship, human capital consistency, socio-political bias or legal jurisdiction are not typically included in the due diligence process for vendor selection," said Marriott.
Offshore checklist
In selecting an offshore IT provider, users should investigate the following factors:
Government support
English language skills
Infrastructure
Educational system
Cost
Political and economic stability
Globalisation maturity (including legal system)
Labour pool
Security and privacy
Cultural compatibility
Miscellanies
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and software development outsourcing.
India offers significant advantages in terms of IT skills and infrastructure over other countries that provide offshore outsourcing, according to industry analyst Gartner.
India is "head and shoulders above the competition", said Gartner, which predicts worldwide spending on offshore IT will reach £27.6bn by 2007.
In terms of size and number of IT professionals, only China comes close to India in offshoring potential, said Gartner, pointing out that strong government support was playing a key role in boosting China's offshore IT capabilities.
But Ian Marriott, research vice-president at Gartner, sounded a note of caution about the strong interest in "nearshore" options from Western user organisations.
"Some Eastern European countries, particularly ones that are now in the European Union, are attracting attention," he said.
"However, the choice of local providers is limited. This may change as these countries become more mature members of the international business community.
"In the meantime, multi-national and leading Indian providers are establishing a presence there, mainly as nearshore locations for Western Europe."
India's success had also prompted a scramble by English-speaking countries to join the offshore IT market, said Marriott. "Although some of these countries seem promising on paper, Gartner advises companies to be extremely cautious during evaluation, paying special attention to the historical track record of these nations: specifically, low socio-political turbulence, physical and cyber security, and enforcement of intellectual property (IP) and patent law," he said.
Businesses selecting offshore service suppliers should look at factors such as the level of government support, English language skills, infrastructure and political and economic stability, as well as cost, in countries where they are considering outsourcing, Gartner recommended.
Although labour costs may be low, there were additional risks associated with offshoring, he warned. "Although infrastructure, process, project management and security risks are normal in any external service provider relationship, human capital consistency, socio-political bias or legal jurisdiction are not typically included in the due diligence process for vendor selection," said Marriott.
Offshore checklist
In selecting an offshore IT provider, users should investigate the following factors:
Government support
English language skills
Infrastructure
Educational system
Cost
Political and economic stability
Globalisation maturity (including legal system)
Labour pool
Security and privacy
Cultural compatibility
Miscellanies
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and software development outsourcing.
Monday, September 26, 2005
Reuters on Indian call centre helps Texans deal with Rita
It is interestingly unique story that outsourcing critics like to ignore.
A call centre in Gujarat has been fielding scores of distress calls from Texas residents about Hurricane Rita, the unit's director said on Sunday.
The call centre run by Effective Teleservices is informing affected Texas residents about safer locations, evacuation and relief operations.
The call centre located in Gujarat's capital, Gandhinagar, started fielding around 20 calls an hour after the U.S.-based firm's two call centres in Texas were temporarily shut down due to fear that they could suffer damage from Hurricane Rita.
"I received a frantic call from Robert Hurst, a senior judge in Texas on Friday night," Jim Iyoob, the centre's director in Gujarat and a resident of Texas.
"He requested me to set up a helpline at the Business Process Outsourcing centre to help evacuees in Texas find a temporary shelter from the hurricane."
The officials immediately started the helpline with nearly a dozen agents providing information sourced from the Internet.
"All calls from our Texas office are being diverted to India," says Iyoob who is helping anxious callers and updating them on the situation by monitoring various Web sites and maps.
Hurricane Rita left the U.S. Gulf Coast, reeling from two powerful storms in less than a month, with renewed flooding in New Orleans, widespread power outages and hundreds of miles of roads closed by debris.
Helped by cheap telecoms and English speakers working for a fifth of Western wages, India's back-office services industry employed 348,000 employees at the end of March and posted revenue of $5.2 billion in the year to March 2005.
The article sponsored by A-1 Technology Inc, dealing in offshore software development and software outsourcing.
Saturday, September 24, 2005
Thailand Taps the Minds of Indian Knowledge Workers
An interesting article from Asia Pulse discusses Thailand’s recent interest in recruiting experienced Indian knowledge workers to help jump-start the country’s outsourcing industry. This would also further deepen the Indo-Thai relationship under the FTA.
From the article:
"We want knowledge workers from India. We want them to train our people in IT and other knowledge-based skills...we wanted multinational companies to use Thailand as a hub for their R&D activities," Prachuab Chaiyasarn, Thailand Trade Representative and Head of Thai Negotiating Team on Indo-Thai Free Trade Area (FTA), told a seminar here…He said Thailand was keen on "importing brain workers" from India to educate its people, especially on IT skills.”
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development.
From the article:
"We want knowledge workers from India. We want them to train our people in IT and other knowledge-based skills...we wanted multinational companies to use Thailand as a hub for their R&D activities," Prachuab Chaiyasarn, Thailand Trade Representative and Head of Thai Negotiating Team on Indo-Thai Free Trade Area (FTA), told a seminar here…He said Thailand was keen on "importing brain workers" from India to educate its people, especially on IT skills.”
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development.
UP gets North India's largest technology park
From: hindustantimes
As India leads the trail in becoming the best global outsourcing hub, Information Technology knows no bounds in this part of the world. The latest being the setting up of software technology parks (STP) across the country.
The state of Uttar Pradesh is fast growing as an IT hub, with the mushrooming of BPO and ITeS centres. The recent addition is the upcoming Logix Techno Park in sector 127 of Noida city. This is the largest STP in whole of North India, covering the total area of six lakh sq ft. The projected cost to design this park is 75 crores with 50 crores already invested.
The place will be used by 5000 IT professionals and will be inaugurated by President APJ Abdul Kalam in first week of October.Blue-chip companies like HCL {NEC}, Mentor Graphics, Patni, Citi.fifteen have already moved in, occupying 75 per cent of the site even before its completion.
The Park aims to provide world class infrastructure to small, medium and big size companies and at the same time promoting UP as an IT hub, says Managing Director Logix Techno Park, Shakti Nath.
The article sponsored by A-1 Technology Inc, dealing in application development outsourcing and software outsourcing.
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