GSK IT outsourcing contract reflects trend

According to news "Affiliated Computer Services (ACS), announced today that it has been awarded an additional information technology (IT) outsourcing contract with GlaxoSmithKline (GSK), valued at $100.5 million (€82 million) over five years. "
News of this latest agreement mirrors a deal which saw Pfizer recently set up shop in India, harnessing the country's strong IT resources to focus more on clinical trial and other R&D-related information management.
These deals proves that "India is swiftly being recognised by leading pharmaceutical and biotechnology companies as a key cost-cutting benefit to be harnessed through outsourcing to India"
The pharmaceutical giant's planned expansion of outsourcing investments in India over the past few years has fallen in line with a wider trend that has seen leading international contract research organisations including multinationals such as Eli Lilly, Wyeth and Novo Nordisk outsource clinical trial activities to India as a means of slashing research costs.
The growth of informatics is mainly driven by a number of factors. The never-ending pressure to speed up drug R&D has forced pharma companies to rely on outside vendors for informatics solutions.
There has also been an exponential increase of data in which companies are now increasingly relying upon complex IT infrastructure to manage the growing amounts of data.
IBM Life Sciences and Sun Microsystems' Life Sciences are both predicting a rapid increase in scientific information in the near term. Already data is going from terabytes (a trillion) to petabytes (a quadrillion) sooner than in any other industry.
Because the computational requirements of proteomics are orders of magnitude greater than genomics, installation of architectures scaled to petabytes is predicted within the next two to three years.

The article sponsored by A-1 Technology Inc, dealing in software outsourcing and offshore software development.

CTC to host 'Outsourcing-2005'

From News Today Net

Small Industries Service Institute (SISI) is organizing 'Outsourcing-2005', a National exhibition cum buyer- seller meet especially for Small and Medium level Enterprises(SMEs) on 28 and 29 October at Chennai trade centre (CTC) , Nandambakkam.
Speaking to media persons, G M Ambhore, Director, SISI, Chennai said the main objective of this meet is to provide marketing opportunities for SMEs and to bring SMEs, large industrial houses, government departments and PSUs on a common platform. 'As outsourcing is the order of the time, this meet would serve as a match point for companies to find their perfect pair for growth', he added.
The meet will be inaugurated by Mahabir Prasad, Union Minister for Small Scale Industries. Sivagnanam, Deputy Director, SISI said, this exhibition will be an opening for the cluster groups and the meet is expected to be as successful as that of in 2003. Around 162 companies are expected to participate in the expo. A dedicated portal , 'www.outsourcingsme.com' will also be launched on the occasion.

The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and application development outsourcing.

Evolved Outsourcing for Financial Services

From: destinationcrm

Research presented today at the Gartner Financial Services Technology Summit in New York suggests that financial services providers must take a more strategic approach to outsourcing. Only about 30 percent of them will do so by the end of 2006, according to "Financial Services Outsourcing: Good Alternative or Overhyped Pitfall?" To gain maximum benefit, these businesses need to know when and how to use outsourcing; how to balance onshore, nearshore, and offshore alternatives; and how to choose the best partner for a particular task. "Outsourcing has been evolving for years. It allows us to grow and do things to be more profitable. But on the other side there's lots of negatives we need to be aware of, [including] political backlash involved with offshoring. People are fearful of [the company] eliminating their jobs, and it puts an organization at a heightened risk of privacy and security breaches," said Kimberly Harris-Ferrante, research vice president at Gartner and author of the report.
"Today's outsourcing is very tactical," Harris-Ferrante said. "Most of the tasks are considered ugly--it's out of site, out of mind. Failure to communicate is one of the biggest reasons outsourcing projects fail, along with bad contract management, unrealistic expectations, staff turnover, and incomplete or invalid metrics. Harris-Ferrante explained the three-level outsourcing evolution companies must mature through to differentiate themselves:
 Efficiency--This is the most basic and most common type of outsourcing. It provides organizations with positive benefits targeted at efficiency, productivity, and cost savings. Financial service providers that want to build, maintain, or consolidate systems can benefit at this tactical level, because the tasks aren't key competitive differentiators.
 Enhancement--At this stage the goal is to improve business results or enhance processes and performance to get more value. The projects hit the company's bottom line and could include building core systems, developing a more rules-based architecture; or e-business initiatives.
 Transformational--This is the most advanced level, but also the most risky. The goal is to create new processes or opportunities by changing the core components or structure of the organization and is much more strategic in nature. Projects may include customer-facing BPO application development; joint ventures; or realignment of competencies.
The first step to strategic outsourcing is to build a strategy: Have clear policies and gain support from business management. Next is selecting what to outsource and to whom. Having three to five outsourcing partners allows companies to ensure they have a range of skill sets, global options, and a combination of competition and cooperation, ultimately maximizing results. Third is to have an exit strategy, create a contract management office, and clarify the relationship. Finally, make sure management is a continual process, and look at outsourcing as part of the planning process.

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Offshore Outsourcing : Advantage India (Vs China)

Hitherto much of the growth and news related to developing software overseas has been focused on India where the practice first got started. However, latest researches uphold that companies should plan their offshore outsourcing stratagems to take advantage of China’s budding strength as an outsourcing center, as well as looking for ways to take advantage of the country’s current software strengths. But China, the so called competitor to Indian Offshore Outsourcing industry clearly lacks many advantages that Indians offer to their clients .


The lack of English language skills is one of the first weak spots s that puts the Chinese on the back foot. The lack of proficiency in English – which undoubtedly has the global currency – creates for them (the Chinese) a treacherous void resulting in cultural gap and linguistic miscommunication.

The most cited apprehension with outsourcing to China is the country’s depressing image for protecting intellectual property. Also, country’s strained relations with USA for numerous reasons (like selling Nuclear Technology to Pakistan, its colonization of Tibet, and other political economic, and diplomatic conflicts with USA) act as a fuel in the fire of the overall notoriety of Chinese political and economic system. Overall image of Chinese polity in general is pathetic . This becomes a deterrent in the amount of faith to be posited in the Chinese firms opting for outsourcing.
Communicational Infrastructure is another critical factor when deciding where to outsource., Though China is rapidly developing its voice and data networks inside the country still additional bandwidth is required.
It’s important to keep in mind that China lacks, the most important deciding factors required in identifying an outsourcing provider – i.e. , the appropriate mix of experience, quality and cultural understanding.

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China takes a chip off India mode

From: Chinadaily

Mention software outsourcing and one thinks of Bangalore which has more than 150,000 software engineers. India's Silicon Valley and other well regarded technology hotspots around the country are at the cutting edge because of a highly skilled pool of computer science professionals who have a good command of English. They have made outsourcing software development a viable option for multinationals and overseas businesses.
This was not always the case, but by proving its critics wrong India has made it easy for China to follow suit, says John Cestar, co-founder and co-CEO of Freeborders, which develops outsourced software links on the mainland.
"India is our best ally in this - when India started no one thought it would work," he says. "But now India has already broken through so none of our clients ask themselves should we outsource. The question is rather where we should go and with whom. Because India can do that, you don't have to spend time convincing people that can be done."
While the firm's headquarters are in San Francisco, Freeborders employs just under 500 staff at its facilities in Shenzhen, developing custom software for the financial services, retail, and high-tech/software industries. With a further 120 business experts and analysts based in the US and Europe, the company develops software in China and delivers to a US-based, mostly Fortune 500 clientele.
"The trick to this business is being on both sides of the world. You can't just have a tech team in Shenzhen," notes Cestar.

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Infosys tops client satisfaction in outsourcing: report

From: in news

Infosys Technologies Ltd. has been ranked the highest in client satisfaction in outsourcing services by a survey conducted by Forrester Research Inc., an independent global research firm. The Bangalore-based IT bellwether also ranked third in consulting services among 11 major global IT service providers, according to a company statement here Wednesday.
The survey report pointed out that Infosys was in a position to penetrate the consulting services market, while other offshore majors were expected to focus more on business process outsourcing (BPO) services.
In another report, Forrester said Infosys was making a strategic approach to become a preferred global IT service and consulting firm than being just the largest offshore vendor.
'To avoid being a commodity service provider, Infosys does not bid on deals that are non-strategic. It is one of the few Indian vendors that does not make pure staff augmentation engagements. Instead of being a low-cost bidder, it prefers to differentiate through higher-quality skills, processes and offerings,' the report commented.
'The global delivery model, as pioneered by Infosys, is a true business innovation. It has redefined value for money and demonstrated that the key to growth is scalability and differentiation,' it said.
Offshoring is no longer a function of cost. At Infosys, the differentiation comes from higher quality skills and process-centric delivery excellence, as is seen by more than 95 per cent of repeat business from their clients

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Reasons why outsourcing to India is booming ..

Offshore outsourcing or Offshoring (as it has come to be known) is one of the major sectors of Indian economy now. For the First World countries, especially USA ,Offshore Outsourcing to India is one of the most popular management practices today. Though prompted generally by the cost reduction factor, this is just one of the reasons one should consider offshore outsourcing. Most outsourcing parties are unaware of the fact that Indian Service Providers offer not just cost effective solutions, but also value addition by improving yield and quality.
As per the NASSCOM reports – on www.nasscom.org :
Today, MNCs are rushing into India to stake a claim to the IT outsourcing market. While a large number of companies are outsourcing their software development to Indian companies, others are establishing a presence in India and participating actively in the software export game. The MNC sector emerged as an important segment contributing Rs 9,855 crore of the total exports of Rs 35,600 crore in the year 2001-02, translating into 27% share of the total exports.
IST (Indian Standard Time) is ahead of all the First World Countries (with the possible exception of Japan ) and it is approximately 12 hrs. ahead of the American Standard Time .Which means that the Americans can get their job/s done through Offshore Outsourcing even when their official working hours are over. This way the no. of possible working hours - both for the client as well as the service provider becomes 24 hrs.

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Outsourcing Projects in India's Lap- August 2005

From Outsourcing Pipeline News

IBM Opens Research Center In Bangalore
IBM Corp. opened a new research center here that will focus on developing innovative technologies and solutions, acting as an extension of IBM’s India Research Lab (IRL) in New Delhi. The IRL is one of eight such labs the corporation has worldwide.
Altera Uses Local Firm For Indian R&D
Altera recently tied up with the government-owned Center for Development of Telematics (C-DoT) under the Altera Consultant Alliance Program, enabling C-DoT leverage its IP and system design capability across global customers. It does not plan to enroll any company here under its Megacore Partners Program as it believes the IP companies in India need to develop their infrastructure to support global customers.
Anritsu Opens Up In India
Communications test and measurement company, Anritsu Corp. (Kanagawa, Japan) is opening a sales and marketing office here to cash in on growth in India’s wireless communications industry .

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Cultural training moves offshore

From: ITworld

At a software development facility in Bangalore, trainer Saparna Jain is filming a conversation among Indian software engineers that she will play back to them with tips for improvement.
Although these software professionals have been educated in English, their native tongue still has a strong influence on the way they write and speak English, according to Balakrishna Jayasimha, behavioral consultant and founder of Wynnwood Consultants in Bangalore.
Wynnwood and TrainCraft are two of a growing number of such training outfits in Bangalore. Their key clients are software development and business process outsourcing (BPO) subsidiaries of multinational companies, as well as Indian outsourcing companies whose business comes primarily from the U.S. and Europe.
The training often does not stop at improving communications skills and "neutralizing" Indian accents, but also includes coaching in Western culture and etiquette, which in training industry jargon is called "cross-culture sensitivity."
Indians have very elaborate etiquette codes. But Western etiquette is a mystery to many of Bangalore's workers, who have traditionally preferred to eat with their hands, have avoided formal Western suits as unsuitable for the city's climate and shunned toilet paper as less hygienic than plain water.
The new business in training staff in Western communications skills and etiquette has attracted a number of entrepreneurs, many of them former employees in the hospitality industry.
Software companies with a large number of staff traveling abroad also need to familiarize employees with the culture and etiquette of countries they visit. About 40 percent of the 1,600 staff at the software development and technical support subsidiary in Bangalore of LogicaCMG PLC travel often to the company's key markets in the U.K. and the Netherlands, where they interact with both customers and LogicaCMG staff, said Sameer Khanna, head of training, compensation and special projects at the Bangalore operation of LogicaCMG, which is based in London.
CWSolution focuses on collaboration between software development teams in India and the U.S. The training programs include both Indian and U.S. staff. "It is very important that the American understands that this collaboration is not about re-engineering Indians to become Americans, but about Indians and Americans finding a common platform by which they can extract the maximum benefit," Craig-Jones said.
However, training non-Indians on Indian culture, values and manners is not big business, according to Jayasimha. The culture industry in Bangalore is mainly a one-way street, as most multinationals and Indian outsourcing companies focus only on training Indian staff to be able to operate in a westernized culture, he said.

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Strong Lead for Offshore Outsourcing

From: blackenterprise

THE American Malaysian Chamber of Commerce (Amcham) is bullish about Malaysia's prospects as a business process outsourcing (BPO) and shared services hub for foreign players. Despite the intense competition for BPO and shared services foreign direct investment (FDI) among regional countries such as China, India, and the Philippines, Malaysia is said to be one of the leading candidates, given factors such as ease of doing business. Amcham's president Vince Leusner said Malaysia is an attractive place for foreigners to set up call centres given factors such as its low cost, multi-lingual population, great infrastructure, and political stability. According to Leusner, while manufacturing investment is still an important component of overall American FDI in the country, American companies are increasingly looking at Malaysia and other Asian markets as possible regional/global centres for BPO or shared services investment. The recent Malaysian American Electronic Industry (MAEI) Annual Survey 2005 revealed that a number of American firms have relocated other back- end business functions, including IT support services to Malaysia. Meanwhile, Malaysian Industrial Development Authority (Mida) will continue to promote BPO and shared services within and outside the Multimedia Super Corridor (MSC) to foreign investors, given that the segment is the country's next growth sector. Its Foreign Investment Promotion Division director Yeow Teck Chai said to boost FDI in this area, Mida will continue to provide various incentives to foreign investors such as the 10-year tax exemption. According to Yeow, Mida will also provide creative incentives to foreign investors such as grants, duties exemption as well as expatriate employment and land acquisition benefits. He added that Mida will seek out the foreign investors or they could approach the agency with a wish list.

After China and India, Malaysia has been ranked as the third most attractive destination for BPO and shared services activities in the region. According to analysts, the global IT services market is worth US$580 billion (RM2.09 billion), of which only US$19 billion is outsourced, with India enjoying 80 per cent of the offshore market.

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Outsourcing News: Weekly WrapUp

From Outsourcing Center

NORTEL IN KOREAN JOINT VENTURE...LG Electronics and Nortel will form a joint venture to offer telecom and networking solutions in the wireline, optical, wireless and enterprise areas for South Korean and global customers.
FISERV COMPLETES ACQUISITION...Fiserv, Inc. has completed its previously announced acquisition of BillMatrix Corp., a provider of expedited electronic bill payment services that provides billers with an outsourced payment solution that allows their customers to get immediate credit for bills paid online or over the phone using electronic checks, debit cards or credit cards.
CASH INFUSION FOR CONTENT OUTSOURCING FIRM...American Capital Strategies Ltd. has invested $45 million in the recapitalization of TechBooks Inc., a leading electronic content outsourcing firm.
CLIENTLOGIC GROWS IN LATIN AMERICA...ClientLogic has increased its presence in Latin America with the addition of a new customer care site in Panama and the expansion of an existing site in Mexico.
PRSWEB REPORTS...PFSweb, Inc. announced net revenue in the second quarter totaled $84.9 million compared to $80.0 million in the same period last year, an increase of 6%. Net loss for the quarter was $546,000, or $0.02 per basic and diluted share, compared to net income of $479,000, or $0.02 per basic and diluted share, in the second quarter of 2004.
INDIA IS FOR REAL, KATZENBACK SAYS...New research by consulting firm Katzenbach Partners LLC suggests that a set of India-based information technology and outsourcing companies could ultimately lead on a global basis, potentially unseating such giants as EDS, Computer Sciences Corp., Capgemini, Unisys, Perot Systems, Accenture and BearingPoint.
OUTSOURCING MARKETING OPPORTUNITY..."Best Practices for Managing Outsourcing Relationships," the next Forbes/Outsourcing Center special text/advertising report, will appear in the November 28 issue of Forbes, which reaches 4.5 million decisionmakers. Participating advertisers get an additional free text page to tell their customer success story. For a prospectus and special rates available only to Outsourcing Alert readers, contact Jerry Bowles.

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Managed services boom

Managed services are rapidly becoming a strategic option for IT savvy CIOs in the Middle East and also around the globe. Services vendors are providing discreet outsourced IT functions or a cluster of processes, consolidating execution and supervision of those activities on a turnkey approach by using contingent workers.A managed service provider saves money for its clients and provides expertise in areas of IT that are rapidly changing, but whose internal mastery is not vital to clients. A report from Kelly IT Resources says corporations view this approach as a way to free up resources to devote to their core competencies. The UAE’s spending on IT services rose by 12.7% to US$308.5 million in 2004. According to global research firm IDC, end users in the region are moving away from the basics of implementation and support to customisation and outsourcing.In addition, enterprises are warming to service models because their IT infrastructures are becoming increasingly complex, necessitating highly trained IT specialists and contractors. As a result, IDC expects the region’s IT services market to grow consistently at approximately 12% for the foreseeable future, eventually reaching more than US$535 million by 2009.

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Multisourcing Best Practices

From: eWeek

Sound outsourcing management is multiplied in importance when several outsourcing partners are chosen. Here are some best practices for managing multiple outsourcers:
Market forces matter, but relationships are still important. Dealing with multiple outsourcers with the goal of reducing outsourcing services to the level of commodities might appear to be a valid cost-cutting strategy, but doing so ignores the ever-present requirements of competent vendor management. Taking the time to develop each relationship in a multisourcing arrangement is important and can pay off in smoother communication, better execution and avoidance of unnecessary expenses
Think ahead about possible conflicts. The biggest single mistake in multisource is that companies don't take into account how the vendors will have to work together.For example, if one vendor is running operations and another vendor is responsible for applications, the operations provider, with responsibility for hardware, may stand to gain a bonus if hardware usage is minimized. However, the application provider may be deploying a new application that requires faster processing and twice the disk space.
Develop a standard worldwide contract. Working with a variety of contracts can soak up costly legal fees for little in return. Refining a single standard contract can create an airtight deal, as holes are discovered and eliminated over time.In any outsourcing contract, the parts covering SLAs (service-level agreements) are probably the most important. Make sure these parts are well-crafted and are clearly understood by both the providers and the customer.
Use accurate measurement tools. Methods such as the Balanced Scorecard should be used to evaluate the outsourcers' performance. In measuring cost, strive to establish a unit-based price, said Tim Murtha, a self-employed consultant with Infrastructure Transformation Visioning & Execution, but, until recently, manager of IT infrastructure services at Philadelphia-based Sunoco Inc. This will be helpful in discussing continued IT investment with corporate executives, Murtha said.
Whatever management techniques are employed, users must take care not to let their management costs spiral out of control. Although the right spending level may differ for every customer, the cost of managing any outsourcing contract is 3 to 6 percent of its value.
However, there is no fixed rule, and companies may measure their management budgets in different ways, creating apples-to-oranges comparisons.

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UK-Firm Ventura Sets Up Offshore Centre In Pune, India

From:au news

MUMBAI, Aug 18 Asia Pulse - UK-based customer management outsourcing company Ventura has opened a 2,000 seat offshore center in Pune at an investment of 10 million pounds (US$18 million).
The company's first Indian arm, Ventura (India) Private Ltd, is located in Kalyani Nagar, Pune spread over 1.30 lakh sq ft area, Ventura said in a release here Wednesday.
This facility would handle services towards leisure sectors in the initial phase and would also handle services including back office collections, application processing, payment processing and data management, it added.


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Software Outsourcing- A Boon or Bane for Americans!!

“People who work sitting down get paid more than people who work standing up.”
- By Ogden Nash.

According to PTI, combined India and China amounted to just 1.6 per cent of the total employment of US multinationals. American companies have benefited from outsourcing. Outsourcing jobs to India have helped US companies to compete with their competitors better.

Since this being a popular belief that all the jobs form US are being shifted to India and other parts of the world, there are evidences that support how Software Outsourcing is a boon for Americans. It’s the US citizens who need to realize this real fact and take advantage of the right opportunities. Overall job employment in IT service outsourcing is rising, not falling.

Workers have been freed up from routine tasks by outsourcing work to India. They are often redeployed within the organization to higher paying jobs\projects generating greater value-added services or products. This will yield even stronger job demand in the United States for workers with IT proficiency and skills. The U.S. Department of Commerce reports that, in 2003, the United States bought $77.38 billion in services from foreign countries and sold $131.01 billion to them. Thus, we exported nearly $54 billion more in services — including legal work, computer programming, telecommunications, banking and engineering — than we imported.
For instance if one carefully realizes the fact that real estate cannot be imported but most of the building technology and many products are imported by India and other parts of the world. There are appliances, equipments, technology etc required to furnish houses are exported to U.S. The cars and their accessories are mostly imported.
People from India and other countries prefer consumption of these American products. They are hooked to financial services like American Express, entertainment from Walt Disney, and among others include brands like Colgate-Palmolive, Gillette or cosmetic products from L'Oreal to name a few. And have you ever realized that from where these Hollywood movies come from in India. And where from is this movie-making technology in Bollywood movies come from? Of course, from US only. The technicians are educated and trained in the US.
There’s a craze among students for education from American Universities. Even it is these high-salaried Indians who eat McDonald's food, drink Coca Cola or Pepsi and order pizza from Domino's or Pizza Hut. Isn’t this like being addicted to something that doesn’t really carry a stamp “MADE IN INDIA”?
Have the Americans ever realized that how all this trade and business is going to facilitate quite a lot of consumer good industries that have reached market saturation in the US and find new markets to grow, without which they would not have otherwise survived.
IF ALL THIS DOES NOT GENERATES ADDITIONAL EMPLOYMENT OPPORTUNITIES BACK IN THE US, WHAT WILL?

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Outsourcing helpful to banks—how?

From Outsourcing Financial Services

Banks are among the main participants of the financial system all over the world. Banking offers several facilities & Opportunities. The big banks are getting bigger, smaller banks are becoming acquisition candidates. Acquisition is Obtaining control of another corporation by purchasing all or a majority of its outstanding shares, or by purchasing its assets.
Outsourcing by banks has increased rapidly in the past decade as communications and information technology has evolved and improved. Outsourcing is one way for banks to cut costs and become more competitive, says Alfred Ricci, of Union Bank of California's sourcing management office.
Ricci. Says that outsourcing ensures the bank receives higher quality, better on-time delivery, access to world class skills, fast project start-up, banking industry best practices, and even benchmarking information about similar financial institutions, while allowing it to focus resources on its core business. All this translates into lower costs and higher quality, which will make the bank more competitive.
The bank wants to do well by its stockholders and customers. A strategic reason for banks to outsource is to achieve a higher stock price by lowering cost structure. Customers benefit because the bank's cost of funding is lower with a higher stock price. "The bank gets more money for the same amount of stock, which allows us to offer more competitive rates to our customers.

The evolution of IT services outsourcing in the Indian banks has presently moved on to the level of Facilities Management. Banks now looking at business process management to increase returns on investment, improve customer relationship management and employee productivity.

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Indian tech majors to top outsourcing

From Gulf times

Indian tech majors like Wipro, Tata Consultancy services and Infosys Technologies are set to dominate the global outsourcing business in the coming years and unseat existing giants, predicts a new study.“The Indian companies are evolving into truly global players, going beyond India and developing their international strategies by recruiting high-value talent in new markets like China and Russia,” says consultancy major Katzenbach Partners.“India-based IT and outsourcing companies could ultimately lead on a global basis, potentially unseating such giants as EDS, Computer Sciences, Capgemini, Unisys, Perot Systems, Accenture and BearingPoint.”Katzenbach Partners have used a new corporate performance parameter called the “relative value of growth” to determine the degree to which a firm is rewarded – in terms of market capitalisation – for growth and improvement of margins.A company with high relative value of growth tends to be rewarded handsomely for achieving high growth and also generally reports strong profit margins, says the study conducted among others by in-house analysts like Roopa Unnikrishnan.A company rewarded by margin improvement tends to have an inferior profit margin and may realise less pronounced gains in shareholder value, due mainly to the difficulties of trying for cost improvements to retain long-running customers.In analysing IT and outsourcing firms, the study finds Indian players to have a high relative value of growth rating. They are highly motivated to grow and the marketplace recognises its quality of their operations, cash flow and prospects.But American and European companies have much lower relative value of growth rating, meaning their main incentive is to build value by cutting costs.“The best of the Indian outsourcing companies derive 80-85% of their market capitalisation from investor growth expectations,” said Nathaniel J Mass, a senior fellow with the New York-based Katzenbach Partners.“So we expect that they’ll continue to invest in growth, invest in people and invest in client retention,” said Mass. – Indo-Asian News Service

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Challenge to Indian outsourcing - Indian Rupee moving higher – much higher against US Dollar

From: outsource360

Indian Rupee is moving higher against US Dollar. The plan is to provide a level plain field for US corporations compared to Indian companies. The Reserve Bank of India is going to allow the rise of Indian Rupee. It is now called a silent revaluation with calling it a revaluation. Bush Administration wants a two way trade with India and China. Both Chinese and Indian currencies are on their way up.
This is the real challenge for “easy money making” Indian software oligarchs. Can the call centers and IT companies survive? Experts say, the Indian IT companies and call centers for the first time will learn to compete in fair play ground and those who are really efficient will survive. Most of Indian IT and Call center companies survive by unfairly taking advantage of artificial currency differential between US Dollar and Indian Rupees. That is what is going to come to an end.
According to media reports, the Rupee on Friday rallied smartly against the US currency due to strong exporter dollar sales and unwinding of long dollar positions by banks ahead of the extended holiday weekend even as the interbank foreign exchange (forex) market braced up to the soaring oil prices.
Despite a sustained surge in global crude oil prices to record peaks of over 66 dollars a barrel, the Rupee rebounded smartly on the back of robust exporter dollar sales, a lingering weak dollar overseas and offloading of dollar position ahead of the long holiday weekend, dealers said.
Oil prices continued a relentless rise above 66 dollars a barrel in Asian trading on Friday as the global appetite showed no signs of waning and US refineries struggled to keep pace with demand.
New York's main contract, light sweet crude for September delivery struck a new high of 66.11 dollars a barrel.

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Offshore outsourcing: Should we or shouldn’t we???

Offshore outsourcing. Should we or shouldn’t we??? There has already been a great debate over it. But the need of the hour is to decide that what services should be outsourced. IT outsourcing solutions include Business Process Automation, ERP software solution, Knowledge management, Quality Assurance, Software Development, Website Development and Wireless and Mobile solutions.
The companies must consider various qualitative factors like application stability, knowledge transfer index, minimal employee backlash; technical factors like application environment, hardware etc.; quantitative factors like technology platform, time limit etc. before deciding for offshore outsourcing. Many fortune 500 companies like Microsoft, Oracle, Citibank, Morgan Stanley, Wal-Mart, AT&T, General Electric, Reebok, General Motors, Sony, Boeing, Coca-cola, Pepsi, Swissair, United Airlines, Philips, IBM, Lucas and British Aerospace beneficiaries are some of the big names to mention that are currently engaged in offshore outsourcing.

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Flextronics and Raymarine Enter Into Five Year Outsourcing Relationship

From Prnewswire

The value of the agreement is estimated at approximately US$ 500 million over a five-year period.
Flextronics , a global leading Electronics Manufacturing Services (EMS) provider and Raymarine, one of the world's largest suppliers of marine electronic products to the leisure boating market, today announced an agreement whereby Flextronics will provide vertically integrated manufacturing services to Raymarine.
The services, which will be provided initially through Flextronics'Hungary facility, will include printed circuit board assembly, box build, plastics, metals, printed circuit board, logistics, and test engineering services. The value of the agreement is estimated at approximately US$ 500 million over a five-year period. Flextronics will not assume any Raymarine buildings or assets, and no employees of Raymarine will be transferred to Flextronics.

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India to lead outsourcing bandwagon: TPI

From Sify.com

Offshore outsourcing is set for increased growth and India will continue to be the leading destination on the back of good quality and first mover advantage, according to the latest research by sourcing advisory firm TPI.
The research, based on a survey of 100 senior UK executives responsible for outsourcing within large companies, reveals that 81 per cent plan to increase their offshore outsourcing over the next 2 to 3 years, while only 4 per cent expect to decrease it.
While India continues to enjoy its first mover advantage, being used by 75 per cent of survey respondents, there is close competition for second place, between Central and Eastern Europe (28 per cent) and China (25 per cent), according to the study.
China is seen as an immature outsourcing market and lacks English language skills. However, TPI reports that many large companies are establishing captive operations there, attracted by government support and a huge potential domestic market.
The study also reveals that Indian providers rival Western firms on quality. About 60 per cent of those that have had any significant exposure to Indian outsourcing providers believe they offer a service to rival Western providers irrespective of any cost savings.
Failure rates, says the study, in outsourcing dramatically is overstated. Only 4 per cent of UK outsourcing buyers are dissatisfied with their outsourcing arrangements, while 42 per cent are ''very satisfied''.
Despite this predicted growth in outsourcing, the study reveals that large companies choosing to ''offshore'' their information technology (IT) and business processes to low-cost locations, such as India and China, are increasingly doing so through wholly-owned subsidiaries (captives) rather than external service providers.
The development is just one of numerous trends, including the relocation of some offshored services and a greater diversity in viable offshore locations, which signify increasing maturity in the offshore outsourcing market.

Contact A-1 Technology, Inc, for the best offshore software development services and software development outsourcing.A-1 Technology, Inc, is an offshore outsourcing company.

Indian offshore outsourcing boosting offshore and nearshore outsourcing delivery

From: business wire

Research and Markets has announced the addition of The Offshore and Nearshore Outsourcing Outlook: Key Locations, Outsourcing Models and the Leading Players to their offering The success of the Indian offshore outsourcing market over the past five years has proven that regardless of location, IT services providers can sell world-class services to major companies across the globe. As a result, there has been a boom in offshore and nearshore outsourcing delivery. Identify the key revenue opportunities for service providers, systems integrators and consultants, and the most effective location and route for CIOs considering near or offshore outsourcing.
Examining the key issues
Offshore vs. Nearshore. While offshore locations still offer great cost savings, in terms of labour and infrastructure, nearshore locations can in certain circumstances provide a more appropriate solution.
Build vs. Buy. Building offshore capabilities allows organizations to retain greater control over the outsourced function or project. How does this compare to the advantages of buying services from a thirdparty offshore provider and why is the Build-Operate-Transfer model one of the most successful?
Fear of offshoring. Learn how to minimise the fears of both employees and customers around offshore outsourcing.

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Telecom Industry Leads the Outsourcing Surge

From: destinationcrm

The telecommunications sector will lead all other verticals in outsourcing engagements with a 10.7 percent compounded annual growth rate (CAGR) over the next five years, according to a recent IDC study. IDC's Industry-Based Services Forecasts, a set of studies designed to measure the causes of industry trends among IT services, forecasts the growth rate of outsourcing engagements in 16 vertical industries from 2005 to 2009.
Following the telecom industry's up tick in outsourcing are discrete manufacturing (automotive and aerospace firms), banking, and the government sector, all of which will show a CAGR of 10.5 percent in its outsourcing engagements over the five-year period.
Discrete manufacturing and the government sector continue to utilize outsourcing to handle important, but not critical, business processes. Those industries least utilizing outsourcing include financial services, wholesale, personal services, education, and the resource and construction industries. In general, overall outsourcing is expected to enjoy a 9.3 percent CAGR over the five-year period, with transportation, utilities, retail, banking, healthcare, and government experiencing the highest growth rates. Healthcare will have an above average CAGR, an estimated 9.5 percent from 2005 to 2009. Driving this growth will be the increased need to utilize project-based services to gain advice, education, and implementation solutions to maximize the healthcare industry's investments in new technology and process management, according to the study.
As for the companies providing these services, Spaulding stresses that success will ride on their ability to comprehend how hardware, software, and solutions spending priorities differ by industry, as well as understanding how firms in select industries can deploy and benefit from their services.

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Outsourcing: Not a threat to US IT jobs

I was taken aback by the statement “I don't want to wake up one day and find that American IT has disappeared.”—FORTUNE 100 CIO WHO IS CONCERNED THAT OFFSHORE OUTSOURCING COULD SABOTAGE THE U.S. TECHNOLOGICAL EDGE while browsing the net. While the fact is that, despite the intense level of oratory over outsourcing, the extent of jobs exaggerated by outsourcing in U.S. financial system appears quite reserved. Besides this, number of states like New Jersey, Connecticut, Missouri, and Maryland etc. are already thinking to put a curb on outsourcing. Secondly, the smaller companies have also withdrawn themselves from outsourcing because of the risks involved. Offshore outsourcing is just to take an advantage of lower-cost labor in other countries. It must not be altogether viewed as a threat to IT jobs. One must remember that the parent companies are still in much profit today and almost all those parent companies belong to America. So, according to me, this is just a very dim-witted reason against offshore outsourcing compared against the turnovers involved.

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How France can win from offshoring

From Mckinsy Quarterly

France is relatively new to offshoring, but the trend will probably accelerate as French companies try to keep pace with foreign competitors that increasingly send service jobs to countries with low-cost labor.
Resisting the offshoring trend would be counterproductive over the long term. Offshoring helps companies to reduce costs, thereby freeing resources for development and ultimately creating more jobs, both at home and abroad.
France could gain from offshoring, but to do so the country must create more jobs, encourage innovation, and make the job market more flexible so that laid-off workers can find new employment quickly.

To ease the plight of displaced workers, some of the cost savings from offshoring could finance income protection and other assistance programs

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Software Outsourcing India.....WHY?

What is remarkable in India is the caliber of the computer engineers.
The world is discovering the fact that India is a super power when it comes to developing IT solutions. Swept by the current of the latest trend "IT outsourcing to India", we find many fortune 500 companies like Microsoft, Oracle, Citibank, Morgan Stanley, Wal-Mart, AT&T, General Electric, Reebok, General Motors, Sony, Boeing, Coca-cola, Pepsi, Swissair, United Airlines, Philips, IBM, Lucas and British Aerospace beneficiaries.
India's technologies offer excellent software solutions. The applications include E-commerce, Business Process re-engineering, System Migration, Maintaining Legacy system, System integration etc. India prides in outsourcing facilities that are required to compete with others; which is yet another reason as to why the world prefers It outsourcing to India.
Excellent telecom, ISP, and cellular networks are available in all cities & towns in the country. India prides in the reliable satellite and submarine communication links that facilitate good band connectivity with the rest of the world. Thus companies engaged in IT outsourcing to India, can be in touch with the vendors without any connection hurdles. This plays a significant role in determining the success of offshore IT outsourcing to India.
Yet another prominent reason behind Indias glittering success in the global IT market is the maintenance of quality. In the recent years, India has been able to offer IT software products and services, which match global standards of quality.
Firms equipped in IT outsourcing to India have their own unique strengths and capabilities. Indian outsourcing firms look at their businesses differently, behave differently, and do different things from that of the past. Maximise on the benefits of outsourcing with IT Outsourcing India, the team prepared to confront challenges from any part of the globe.
Software services from India are furnished by a pool of skilled and dedicated programmers so quality and speed is assured in software development in India.

The article is sponsored by A-1 Technology, Inc, an offshore outsourcing company.

Growing HR Outsourcing

One out of 10 companies has done some HR outsourcing, but only about half of those companies have outsourced everything, estimated Michael Cornetto, a consultant at Watson Wyatt & Co. in Arlington, Va. But he said the market for total HR outsourcing is growing 30% per year.
Late last month, Whirlpool Corp. signed a 10-year deal to outsource HR business processes for 68,000 employees to Convergys Corp. in Cincinnati. A major reason was the need to improve HR technology, said Abby Luersman, vice president for HR solutions at Benton Harbor, Mich.-based Whirlpool.
Whirlpool was underinvesting in IT and needed "better decision-making with better data," Luersman said.
Whirl Pool is not alone, Technology Partners International Inc. (TPI), an outsourcing consultancy in The Woodlands, Texas, reported that so far this year, 14 companies with more than 10,000 employees have outsourced workforce administration.

The article is sponsored by A-1 Technology, Inc, an offshore outsourcing company. Also contact for software outsourcing and offshoring services like offshore software development and software development outsourcing

Is Outsourcing really causing problems?

One of the most common reasons, other than security, loss of workforce etc., given against offshore outsourcing is that it is difficult to persuade the clients that their information is safe with a company thousands of miles away with the country having different policies, regulations, strategies, tradition etc. So it is natural that the clients might fear of losing the important information but this is not an issue that needs to be highlighted much. This information revealing risk can be minimized by encrypting the important data. Also the work to be sent offshore can be broken into chunks while transferring it and then can be re-assembled again at the destination. Secondly, if the company is really a big name in itself, it can also open its own offshore center having local staff made available by the second party. The other solution is to outsource to a large number of vendors and to the vendors having a good reputation. Thus, according to me there is no point in making a hue and cry regarding this problem as numerous solutions are available…and of course, advantages weigh more in front of the disadvantages of offshore outsourcing.

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Outsourcing of U.S. jobs extending to the legal field

By Tom Mcghee From Azcentral

In the latest example of job outsourcing, lawyers and legal assistants across the world are now doing routine legal work originating from the United States."There are no more boundaries," said John Tredennick, CEO and founder of Denver-based CaseShare Systems. "That doesn't mean walking into the courtroom, but beyond that, there isn't anything that can't be done with the Internet."Among other things, Tredennick's company manages electronic documents for the legal industry and partners with others to outsource work formerly done in this country by paralegals and junior attorneys. They are sending the work to India, New Zealand, Australia and South Korea.
Legal firms are motivated by the same drive for lower costs that has sent manufacturing and customer service jobs overseas. Foreign workers can perform the tasks for up to 80 percent less than their U.S. counterparts, Tredennick said.The trend is relatively new and may have limited impact on U.S. jobs. Lawyers who aren't licensed in this country can't give legal advice on American law.

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8 out of 10 UK companies to boost outsourcing: study

From: bloomberg

Eight out of 10 ``large'' U.K. companies plan to boost offshore outsourcing to cut costs, as the process matures, according to a survey by TPI, the largest outsourcing adviser.
Eighty one of the 100 executives questioned for London-based TPI's survey will shift business to countries including India and China in the next two to three years. Central and Eastern Europe are also popular with outsourcers. Only 4 percent intend to decrease it, TPI said.
Companies are likely to continue to use India to a greater extent than Central and Eastern Europe, according to TPI.
India, as the longest established country for offshoring, provides an indication of how trends may develop globally. About 75 percent of the executives questioned use India as an offshore destination, 28 percent use Central and Eastern Europe and a quarter use China, according to the report.
Accenture Ltd. and International Business Machines Corp. are among the world's biggest outsourcing firms. Indian rivals are merging, and will challenge global companies if the trend continues. Companies are also using subsidiaries instead of outside consultants for their information technology outsourcing, the report said. Research company Simpson Carpenter carried out the TPI survey. The executives polled in the research are responsible for outsourcing at 100 different companies with an average of 5,000 employees and average annual revenue of 85 million pounds ($151 million).

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Euronet drives ATM outsourcing with NCR deal

From: banking technology

Euronet, the largest independent pan-European ATM operator, is hoping to grow its ATM outsourcing business across central and Eastern Europe after signing a four-year global agreement for NCR's Aptra software and professional services. The deal initially covers software licenses for some 3,000 ATMS as well as professional services to develop and install a multivendor ATM software platform across the region.
The deal means Euronet will be able to migrate its software to a single platform which should reduce costs and allow it to expand its ATM network and develop new services for banks more quickly.
Euronet has already switched multi-vendor ATMS in the Czech Republic to NCR's Aptra Advance NDC software, which is EMC compliant, and its ATM networks in Poland and Hungary are due to be migrated to the Aptra platform later this year. Euronet has the option of more software licenses and services support as it expands its business in Asia and Latin America.
According to NCR, more than 70 per cent of all multivendor application migrations taking place globally are using its Aptra platform

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Global Outsourcing: Changing trends

From: cio-today

In a twist on global outsourcing, Indian-based software firm Infosys Technologies is setting up development centers in China. The firm will invest US$65 million over a five-year period and will hire some 6,000 engineers there, a dramatic increase from the 250 employees it has in China already.
The new centers will be located in Shanghai and Hangzhou and will focus on software development and I.T. services as well as training and research. Both centers are slated to have projects started by early 2006.
India and China have come to be seen as competitors for information services, as U.S. and European companies look to those countries for programming talent, customer service and other outsourced work.
But leading Indian companies like Infosys, now eyeing China as a partner, have been expanding into that region to tap into local talent and to cozy up to Western companies that have a presence there. The planned centers should help Infosys garner more outsourcing orders from Japan and Southeast Asian countries, which hitherto have not used many Indian firms for such work.

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Security slips out of top-5 IT priorities ranking

From: zdnetblog

August’s IT priorities data reveals a reshuffling of the most important projects as reported by IT pros. Security dropped from the fourth position down to six, opening the door for the first time for both Web technology and IT management to secure spots in the top-5 list.
At the top of the list are wired and wireless, software infrastructure, and hardware upgrades. VoIP continues its reign as both the number one overall initiative and the most talked about technology in the tech media it seems (or at least on our site). Respondents also listed ERP, server upgrades, e-commerce, and regulatory issues as their current top priorities.
August IT Priorities of large organizations:
Wired and wireless: networking projects are the number one ongoing initiative for over two years running.
Software infrastructure comes in at second place as companies upgrade their ERP applications and weigh in on software designed for verticals.
Hardware upgrades remains the number three top priority as organizations continue to upgrade and consolidate their IT infrastructure.
At number four is Web technology, with renewed interest in e-commerce and Web services that underpin the looming world of SOAs (Service-oriented Architectures).
IT management rounds out the top-5 list this month as IT managers grapple with regulatory issues and begin to see through the short term hype of outsourcing to weigh in on the long term impact.
Security, which dropped to sixth place this month, is mainly about filtering out spyware these days.
Data management is the next priority as companies work to get the most intelligence out of their data warehouses.
OS migration is the eighth priority with many organizations migrating to Windows 2003 and Linux.
The final priority, application development, rounds out the list according to our data as companies reap the benefits of integration

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Successful outsourcing is 80% prep work

From: InformationWeek

Outsourcing isn't just an option for large companies, but it sure can seem that way to smaller businesses that have neither the staff nor budget to navigate. Among the smaller fish pioneering successfully in the outsourcing pool are software companies, who presumably know something about building applications. One generally accepted statistic holds that offshore outsourcing runs 40% to 60% less than domestic projects. Offshoring is also said to provide smaller businesses with access to big business concepts, such as time-to-market, agile platforms, and high-velocity turnaround.
How to get started? Finding a reputable contractor is critical, obviously. While smaller businesses lack the budget and staff to devote to outsourcing, creative IT departments can find resources, if they are willing to look and to stretch a little. Informal networking is free, and more valuable than you think. For example, Gartner advises these companies to participate in user groups and to mine word of mouth aggressively via small business associations.
Resources are not the only hurdle facing small and mid-size businesses interested in outsourcing. But this doesn't mean smaller businesses shouldn't venture into the outsourcing pool. It just means they have to do so much more carefully, and with a lot more forethought going in. An outsourcing prenup agreement is an especially good idea - especially since it can help ensure an exit strategy. Background checks matter even more when your business partner and employees are overseas.
The upshot? Offshoring can definitely pay off for smaller companies, particularly in terms of helping to stretch limited budgets and personnel. Stay alert, be prepared, and savings could be yours.

For the best offshore outsourcing services, offshore software development and software development outsourcing, contact A-1 Technology Inc, an offshore outsourcing company.

India’s IT sector records boost

From: newsindpress

According to Gartner, while India has established as a leading destination for offshore IT and BPO (business process outsourcing) services through the last 10 years, the domestic market demand started picking growth very recently. The Indian IT industry's growth is having a significant multiplier effect on Asia's fourth-largest economy with the emergence of a rising class of younger consumers with high disposable incomes. With the IT industry becoming one of the biggest employment generators in the country, it has spawned a number of ancillary businesses such as transportation, real estate and catering. In the fiscal year 2004-05, the Indian IT and ITES industries are estimated to have created the demand for nearly 12,500 passenger cars, over 80,000 two-wheelers and 150,000 mobile phone subscriptions. The sector currently accounts for six to seven percent of the incremental demand in the real estate and construction services. China, which outstrips India in almost every sphere of business except software, is racing to take on India, the world's second-largest software exporter after the US, by unveiling new policies and offering incentives to the companies. China attracts a bigger chunk of foreign investment and its share of world exports, whether textiles or toys, is far larger. In IT, however, India takes pride in outdoing its rival, industry experts said. Compared with $17.2 billion in IT products and services exports for India in the fiscal year ended March 31, China sold just $2.5 billion worth of software globally last year. No major Chinese software companies are globally important whereas Indian firms like Infosys Technologies, Satyam Computer Services, and Wipro are favourites of investors both in Mumbai and in New York. In an AT Kearney survey comparing alternative destinations for outsourcing of IT services, India leads the pack, driven by cost competitiveness, rich experience in offshore outsourcing and a large labour force second only to China.

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India's IT sector shines brighter despite challenges

From: newsindpress

In the 'flat world', with all-round level-playing field created by technology, India has emerged as a global brand name in providing cheaper and high-quality information technology services that rakes in billions of dollars from major global giants like General Electric, Boeing and Citibank. As many as 50 percent of Fortune 500 companies are clients of Indian IT firms and over 200 of these global majors are currently outsourcing their support services to India, according to a Deutsche Bank study. India's leadership over other competing outsourcing destinations is driven by strong fundamentals such as a large pool of qualified, English-speaking manpower and an emphasis on delivering quality at a significant cost arbitrage. Experts say with the protests in the West against the shipping of tech jobs to low cost economies slowly waning with greater realization about its advantages, more and more local companies are likely to reap the benefits of providing services to overseas clients. A great example of this is Indian IT powerhouse Infosys, which created a wholly owned US-based subsidiary called Infosys Consulting last year, which is changing the face of the global consulting business. The Infosys Consulting business model is based on providing customers far greater value for money compared to traditional consulting firms based on its experience.The Indian IT and IT-enabled services (ITES) industry recorded 34.5 percent growth in exports, touching $17.2 billion in 2004-05 that ended March 31, says the National Association of Software and Service Companies (Nasscom). The IT industry employee base in India crossed the one million mark in the fiscal year ended March 31, 2005. Indirect employment attributed to the IT-ITES sector was 2.5 million in fiscal 2004-05. While the US and Britain still remain the dominant markets, Indian companies are gaining traction in newer geographies like Japan and Singapore. In Europe, Britain, Germany and France are the top three markets for the Indian technology outsourcing companies. Other important export destinations include Italy, Finland, Sweden, the Netherlands and Switzerland. For companies like TCS, Europe is one of the main strategic growth markets and the company has 19 offices across 11 countries in the European Union, employing over 700 people. Enthused by the growth opportunities in India, a slew of global technology majors are rushing to set up shop or increase their presence in India. US tech giant IBM reportedly plans to increase its headcount in India by 14,000 workers this year even as it retrenches up to 13,000 jobs in Europe and the US. This will see IBM's Indian workforce rising to 38,196 professionals in 2005 from 24,150 in 2004. IBM India has seen double-digit growth in the last five years. Similarly, leading business software solutions provider SAP said in July it planned to double its headcount in India to 4,000 by the end of next year. SAP Labs India has the largest development facility of the company outside Germany.

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