Tuesday, February 28, 2006

Outsourcing Blunders

It was 25 years back when the first corporation thought of this bright idea of farming out part of its IT department to somebody else. They called it time-sharing, and it was supposed to cut costs dramatically. These days, the hot money-saver is off-loading Internet-related functions to application service providers (ASPs) that rent out software applications . Between the two, businesses experimented with giant agreements that saw entire technology operations shift to outside companies.

No matter what the current term, the basic concept is outsourcing . And seeing as we've had a quarter century to work out the kinks, one would think that by now it would be a trouble-free, fill-in-the-blanks process.

But that would be wrong. Outsourcing, it seems, is one place where it's a snap for history to repeat itself—with some calamitous results. While many companies have undoubtedly saved money, several others have seen costs spiral, quality plummet or, worst of all, IT operations crash. Why is it that this seemingly simple idea has spawned so many disaster stories?

The plain truth is that outsourcers commonly repeat a painful learning cycle every time a new technology gets outsourced. Because it can take years for both outsourcers and their customers to learn a technology and understand how best to manage it within the scope of the outsourcing agreement, they often make mistakes that have long-term effects. For example, when technology is new—such as customer relationship management and supply chain management—outsourcers often under price their offerings to such a degree that they either go out of business or are forced to cut back on service. Customers, who mistakenly think that outsourcers are the experts in any technology, often do not know how to protect themselves from bad deals. The importance of Vendor Evaluation can not be overemphasized.

When outsourcers began to offer the maintenance of desktop PCs for the first time, a multitude of outsourcing companies sprang up to meet this demand. Eager for customers, they priced their services too low. A shakeout followed, leaving only a handful of companies and a host of dissatisfied customers. But as both customers and vendors gained experience with how to best structure desktop deals, satisfaction levels rose.

It is noticeable that so far, the ASP phenomenon is following the same trajectory. A year or two ago, new ASPs were appearing overnight. Today, the ASP consolidation is well under way as both businesses and customers get smart about how to handle these new projects. In the meantime, mistakes happen.

Given the high margin for error, why would anyone outsource a new technology? Simply put, you may have no other choice. Cycle times are shorter than ever, money is tight and skilled personnel are hard to find. For many companies, outsourcing offers an attractive path around these constraints. But regardless of why you outsource, mistakes happen—and often enough for us to compile a list of five classic outsourcing blunders. Here's hoping that you can learn from a host of others' missteps.

For details read here .

The article is sponsored by A-1 Technology Inc which is an established Software Development Company and is one of the best Software Development Companies in the era dealing in offshore outsourcing including services like offshore website development and software development .

Monday, February 27, 2006

BusinessWeek - Offshoring: Spread the Gospel

Offshoring : Spreading The Gospel Outsourcing's inner circle has deep roots in GE and McKinsey. Here's how they caught the fever After General Electric Co. (GE ) spun off its outsourcing subsidiary, Genpact, two years ago, Chief Executive Pramod Bhasin figured he wouldn't be seeing much of his erstwhile GE colleagues. But these days, Bhasin sees plenty of the old gang. That's because GE has been so successful with its outsourcing operations that its managers continue to chant the mantra even after they have left the company.

Today, GE veterans are in key positions at Home Depot (HD ), Honeywell International (HON ), Solectron (SLR ), and United Technologies (UTX ), among others, giving Bhasin a huge base of potential customers with a deep understanding of just what his company can do for them. "We go after GE alums," Bhasin says. If GE is the primary source of Bhasin's customers, another outsourcing pioneer, consulting firm McKinsey & Co., has produced many of his potential competitors. Marc Vollenweider, a former partner at McKinsey in New Delhi and London, co-founded Evalueserve Inc., a New Delhi company that provides market research and analyzes data for hedge funds and investment banks. WNS Global Services, a top call center and back-office shop in India, was founded by McKinsey alum Neeraj Bhargava. And Rizwan Koita, an associate with McKinsey in Bombay, left the firm in 1999 at age 29 to found TransWorks Information Services Ltd., which operates call centers and does back-office work for banks and tech companies.

After selling that business in 2003 to Indian conglomerate AV Birla Group, Koita established CitiusTech Inc. to serve health-care technology companies. "We at McKinsey saw the opportunity early," says Koita. Today, veterans of the two companies are powerful evangelists for the benefits of outsourcing .

Like Bhasin, many of these managers are eager to tap into informal alumni networks to expand their own businesses and help drive the trend. While there are no numbers, anecdotal evidence suggests that scores, perhaps hundreds, of former GE and McKinsey executives and consultants play key roles as both suppliers of outsourced services and customers for them. "Every time we have an outsourcing forum , it's like a GE and McKinsey alumni association meeting," says Sunil Mehta, vice-president of NASSCOM, India's software industry association. Of course, lots of companies have seen the opportunities in outsourcing . As early as 1994, American Express Co. (AXP ) and Citibank started hiring Indian accountants and math whizzes in Delhi and Bombay. But neither has spread the gospel the way GE and McKinsey have. Insiders and outsiders say the two are unique in their scale, their ability to attract top performers, their comfort with multiple cultures and languages, and their commitment to outsourcing. Both also view outsourcing more as a tool to increase growth and boost efficiency than as a pure cost savings exercise, a strategic insight most other corporations are only starting to grasp. And managers at both companies practice what they have long preached.

In 1996, GE Capital (GE ) found itself short of the talent it needed to sustain the growth of its mortgage refinance business. So it set up a small support office in Delhi that quickly earned the respect of GE colleagues worldwide. Soon other GE divisions were clamoring for similar help from India. That's when then-Chairman Jack Welch ordered GE divisions across the company to use outsourcing to streamline their operations. That New Delhi office grew into Gecis Global, which last year became Genpact after it was sold to two private equity groups for $500 million.

Genpact now has revenues of almost half a billion and 19,000 employees around the world. McKinsey began its education with a 1995 project on the digital economy's impact on services. The leader of the initiative, Anil Kumar, concluded that plummeting telecommunications rates would create a world of "remote services" whereby providers in far-flung locations such as India and China could work for customers in the U.S.

This led McKinsey to establish what it called a Knowledge Center in New Delhi, where researchers would crunch numbers, analyze trends, and even put together PowerPoint presentations for McKinsey consultants worldwide. The Knowledge Center soon became a model outsourcing operation that McKinsey could show off to clients. "We were the first to legitimize the early thinking," says Kumar. Having seen the benefits of outsourcing up close, ambitious consultants and executives from both companies began jumping ship to start their own businesses. Raman Roy, who helped GE Capital set up Gecis, in 1999 started India's largest independent outsourcer, Spectramind, which he sold to tech giant Wipro Ltd. (WIP ) in 2002. GE, he says, taught him how to seize opportunities, take risks, and make mistakes. "GE is among the best incubators of talent and has a great culture of encouraging entrepreneurship," Roy says. He has clearly absorbed his GE lessons well: Roy is now on another outsourcing startup, AccessIntellect, which does high-end analytics for software companies and others. Manoj S. Jain, a former McKinsey associate in Chicago, runs Pipal Research Corp.

The Chicago outsourcing firm has quadrupled its sales in the past two years and now has more than 100 researchers in India and China doing work for banks, law firms, and others. Jain credits his former employer with being an "idea lab and opportunity shop." Having McKinsey on your résumé doesn't hurt, either. "Clients are willing to give us the benefit of the doubt," he says.

AN EAGER BASE As other GE and McKinsey alums have moved on to new jobs, they have started to form an eager customer base for outsourcers. Home Depot Inc. CEO Robert L. Nardelli, once a contender for the top job at GE, has hired India's Tata Consultancy Services Ltd. to do call center work and back-office jobs in finance and merchandising and is now trying to create a clone of Genpact for Home Depot. Gunjan Kedia was a partner at McKinsey in Pittsburgh when Mellon Financial Corp. hired her as executive director ...

For details read here .

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

Saturday, February 25, 2006

Outsourcing: The Japanese Are Coming

Who would have thought it, but Japanese firms are keenly adopting the trend by outsourcing services to India. The newest convert to outsourcing to India movement is Japan’s Hitachi Ltd., who is in the midst of collaborating with Satyam, a business house based in Secunderabad, India and Intelligroup, a US company whose owner is from India. Together, they plan to open software development and systems maintenance centres in the Indian cities of Bangalore and Hyderabad.

Planning to expand its current workforce numbers in India from 200 to 1,000 in two years, Hitachi’s Indian centres will focus on US and Europe based Japanese firms, providing software and engineering support to clients.

Expanding its outsourcing operations as a strategic step for its overseas business, Hitachi hopes to boost revenue from foreign operations by 40% of its information and communications business by 2007.

And, before Hitachi decided to jump on the outsourcing bandwagon, October last i.e. 2005, Nippon Yusen KK outsourced a part of an ocean liner business system development to Tata Consultancy Services (TCS), the technical arm of India’s Tata Group.

The placing of the order by NYK Systems Research Institute (NSRI), Nippon Yusen’s information technology subsidiary handling systems development, calls for 25 to 30-TCS engineers to join NSRI’s US-operation in New Jersey, while assigning work to around 10-engineers in New Delhi. Overall, TCS will be handling 10 to 20% of the project work.

Slated to begin operating in April 2006, the project entails building of a large-scale system that will oversee all aspects of the ocean liner business, from negotiating with clients to issuing cargo bonds and settling payments.

With Japan joining America and Europe in outsourcing information technology and business processing systems from India, India’s outsourcing bandwagon, certainly, gets a tremendous boost. No one can deny the country has worked hard to prove it self capable of providing top quality work in record time, albeit cost effectively. Impressed, from the wary French to the hard working Japanese, everyone is keen to outsource to India.

While, the developed countries off-shore to the sub-continent, the undeveloped nations want to emulate its success story. Once again, India assumes its rightful place as the role model for the universal world. As French philosopher Pierre Sonnerat wrote: “Ancient India gave to the world its religions and philosophies: Egypt and Greece owe India their wisdom, and it is known that Pythagoras went to India to study under Brahmins, who were the most enlightened of human beings.”

Indeed, the people of the sub-continent who have worked hard for India’s place in the sun deserve a standing ovation! As India assumes its rightful place in the world order, and becomes a truly global nation, it is to be hoped it does not lose sight of its historic and culturally rich ancient past, its rituals, its traditions, its innate spirituality that more than anything typifies the essence of India and its people.

For details read here.

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

Thursday, February 23, 2006

BT to raise India outsourcing, plans research centre

Britain's top fixed line telecoms firm the BT Group is planning to increase its outsourcing to India and may set up a research and development centre in the country, a top company official said on Thursday.

Group Strategy Director Clive Ansell told Reuters on the sidelines of a software industry conference in Mumbai that BT was looking at investing more in India, attracted by the skill sets of its workforce.

"Given the skill base it makes real sense to look at India very seriously to do some of our research," he said.

He said BT spends about $450 million on off-shoring in India and that was going to rise: "It clearly will go up, it will go up fairly significantly, but it will be on a growth curve."

"The average skill set per dollar outsourced is rising all the time and at the moment, India seems able to deal with that."

The company also has technical support centres in some east European countries.

"However, the bulk of the software required to upgrade our existing fixed line network in the UK will be developed in India," Ansell said.

The proposed research centre will initially be a small one involving an investment of under $10 million, he said.

The BT Group spends $50 million in pure research every year and around $250 million on development.

For details read here .

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

Wednesday, February 22, 2006

Outsourcing: The Next Big IT Wave Slams India

So successful has India been in its stellar performance of off-shored / outsourced business processes, call centre functions and software development, that a number of the world’s top corporations have outsourced their entire IT infrastructure i.e. networks, data centres, storage to desktops for remote management from India.

With huge potential, the trend for off-shoring / outsourcing remote infrastructure management services has picked up over the past two years, and according to Gartner, a tech research firm it is “the next big wave” of Indian off-shoring / outsourcing deals . And, over the next few years, Deutsche Bank believes it will be the engine responsible for growth of Indian IT service companies.

NASSCOM estimates global IT infrastructure management service (IMS) market to be between $86-150 billion, with 60% of overall IMS projects being delivered via the “global delivery” off-shore model , which means the current market potential for remote information management (RIM) will constitute no less than $55-billion. Last year, India exported IT IMS-related services worth $300-million which translated into only 1% penetration of the market leaving a huge potential waiting to be exploited. NASSCOM expects project exports to grow in double or triple high digits in the next few years, while Deustche Bank places it at 50% over the next 3 to 4-years.

The question is: “What makes Indian vendors hot contenders for a bigger slice of the market, and why do top international corporations prefer the RIM off-shore delivery model.” It is not a new trend in whole, as global IT service giants IBM and EDS have been outsourcing infrastructure management since the 1970’s and 1980’s, and EDS, IBM, CSC and HP have dominated the market. Following their example, mid-sized players Unisys and Perot have established a strong presence, as well. Following the traditional business model, these companies either take over or buy into client IT assets i.e. networking equipment, storage and servers, signing them on for long-term maintenance contracts and taking care of entire client IT requirements i.e. total off-shored / outsourced IT infrastructure.

A total solution for IT needs, this approach allows high credit risk clients with weak account balances to transfer their assets to an off-shore / outsource service provider , thereby rebalancing their books and achieving a low credit risk status.

But, Sunil Mehta, Vice President - Nasscom, states: “Recent trends indicate a distinct shift from total outsourcing to ‘selective outsourcing’ (the model generally followed by Indian vendors offering RIM services), which has been more successful than full IT outsourcing contracts.”

Venkataraman, General Manager - Managed Services, Wipro Technologies, “Many customers want to control the destiny of IT in their organisation. They see IT as a differentiator for business and, thus, do not want others to take over their IT architecture or controls. But then, there are others too who do not want focus much on their non-core competency, and they prefer total outsourcing.”

Further, analysts are of the opinion that RIM is a better off-shore / outsource model than total off-shoring which provides little flexibility due to long-term contracts and fixed pricing. HCL Commnet, a part of the HCL Group, and Wipro, two of the early movers and shakers in RIM services; began offering RIM services five years ago. Currently, Wipro boasts 165 accounts from G7 countries, managed by 7,000 employees, while HCL has over 20 Fortune 500 clients and 2,200 employees. Significant domestic business in RIM continues to make both companies benefit for a successful off-shoring / outsourcing service model. Other major players in RIM are Infosys, Tata Consultancy Services (TCS), Satyam and Patni.

Having gained expertise in the managed services / network management much before the boom in applications development market, TCS has been offering IMS to domestic clients since 1980, these companies have matured, and have the skills and necessary talent, and customers continue to gain confidence in not only the off-shore / outsource model but other models, as well.
The many client benefits from RIM off-shoring / outsourcing are as follows:
Transparency and flexibility of measurable services.
Client awareness of all processes and methodologies with tools to monitor functions.
Integrated monitoring and management tools help resolve problems in a quick, structured manner reducing business losses.
24 / 7 x 365 monitoring of infrastructure performance across different time zones with problems fixed before the next working day.
Head count reduction by eliminating under-utilised resources, improving operations leads to cost reduction.
Standard industry process compliance by off-shore / outsourcing service providers for security.

A study by Forester, a tech research firm reveals, opting for selective off-shoring (breaking IT functions and outsourcing to different service providers based on skill and competencies) has a proven track record of 77%, while total off-shoring / outsourcing stands at a 33% success rate. The choice is yours depending on how much your company budget has shrunk, whether you are looking to off-shore / outsource non-core functions to focus on core operations or to reduce costs, off-shoring / outsourcing to skilled, talented countries like India with the expertise to manage your entire range of services, benefits not only the outsourcer but the provider, as well.

For details read here .
The article is sponsored by A-1 Technology Inc, dealing in offshore website development , offshore outsourcing and offshore software development .

DocuData Solutions acquires Walker Imaging Corp. located in Austin

DocuData Solutions, a leading provider of Document Imaging Outsourcing services and solutions , today announces the acquisition of Walker Imaging Corp. located in Austin, Texas.

DocuData Solutions will increase its ability to provide more advanced document imaging services and document management technology to its customer base as a result of this transaction.

Since 2001, Walker Imaging has provided document imaging services, software, and document management consulting for Texas businesses. Walker Imaging's staff brings almost 10 years of document imaging technology experience to DocuData Solutions. The two companies will now collaborate to make additional advancements in document imaging and business process outsourcing .

DocuData Solutions is committed to making its transition as seamless as possible for all Walker Imaging customers. Integration efforts are underway and will continue to be top priorities during the coming months. "Walker Imaging is thrilled for what this means for combined future growth. Customers will see enhanced value with DocuData's unique business process outsourcing model and comprehensive document imaging services," said Kevin Knebel, President of Walker Imaging.

DocuData Solutions and Walker Imaging Corp. are privately owned companies and terms of the acquisition were not disclosed.

For details read here .
The article is sponsored by
A-1 Technology Inc , dealing in offshore website development , offshore outsourcing and offshore software development .

Tuesday, February 21, 2006

Outsourcing : Credit Suisse, Will It, Won't It ? It Will !

In the unwillingness of Swiss investment bank, Credit Suisse to confirm the move of 1,000 British and American jobs to India later this year, it is a sign that even after 3-years of an outsourcing boom, western businesses are still charily wary about announcing plans to off-shore / outsource operations to India.

In yet, another morale boosting vote of commercial confidence in India’s huge pool of educated English speaking workforce, the 1,000 technical jobs coming to India are expected to be filled mainly by Indian graduates.

As the Swiss investment bank amongst others, joins the exodus to the sub-continent, the move is bound to excite and swell European emotions of economic patriotism, even as they are responding with a churlish lack of fair play to Lakshmi Mittal’s bid for Arcelor.

The British press reports that the Swiss investment firm has all but decided to cut costs, by booking A Passage to India. Previously, the Swiss Bank had off-shored jobs to Asia, more specifically to Singapore, but financial results show the net profit of Swiss franc 1.1-billion has been viewed at the lower end of analyst expectations.

Refusing to comment of any specific plans for India, a Credit Suisse spokesperson said: “Credit Suisse operates in a highly competitive industry. As part of our commitment to our clients and shareholders, we constantly explore new innovative sourcing opportunities through the Bank. We review opportunities, particularly those that will allow us to continue to provide superior service to our clients, while driving cost savings for our shareholders.” She further declined to confirm whispers that said the bank was masterminding the move to India as a part of its wider strategy to weld together, investment banking and wealth management.

Business experts believe big western companies continue to show a reluctance to confirm
off-shore / outsourcing drives to India, due to the sensitive issues that surround the trend. A financial services source states: “The trade unions still get agitated, governments come under pressure, the media whips up emotions.” and, that is why any move to off-shore / outsource to India is kept under wraps until the move has been effected, too late for trade unions to rake up trouble and media to whip up emotions of anger.

Though that is the case, India continues to rejoice, as with shareholders in mind, western businesses continue to move operations to the sub-continent for top quality work that allows them to net mega profits. India instead of Singapore once again, is relevant as Credit Suisse did not make the profits it was looking for in its Singapore operations. Someone else’s loss is India’s gain!

For details read
here .
The article is sponsored by
A-1 Technology Inc , dealing in offshore website development , offshore outsourcing and offshore software development .

Monday, February 20, 2006

Outsourcing: 500 Indians for French Orange

As sceptical French companies realise they are losing out on a most lucrative trend, slowly they are reconciling themselves to the fact that if profits are to be made, they have to off-shore / outsource to cut costs. And, several of them are almost there, firming up their plans to off-shore / outsource to India, while CapGemini and Atos Origin clients of Indian firms, are already experiencing the delights of cost reduction and high quality.

And, recently Orange, a French-owned mobile company took the plunge hiring an extra 500-staff in India, in addition to the thousands the company employs in Great Britain, including 5,500 at call centres in Peterlee, North Tyneside and Darlington. But, Orange refused to commit whether it would not recruit more staff in India.

In a sort of test drive, in 2005 the French company hired 200 employees for two of its India-based call centres. Apparently, the success of that initial trial with the Indian BPO firms Convergys and Vertex convinced Orange to increase its Indian workforce to 750. Called upon by the trade union, Amicus to make a full statement about its off-shore working, so that its British employees were clear about the company’s intentions, Orange refused to elaborate on a statement detailing the hiring of new workers in India.

The Orange statement, simply said: “As previously announced, Orange has been working with two companies to assess the feasibility of outsourcing some of its call handling to call centres based in India. This trial came to an end last year and was a success, reaching the projected figure of 750 call handlers by the end of 2005, and handling specific types of calls for Orange pre-pay and contract customers. Orange can’t confirm any future plans regarding the possible expansion of this programme. Orange remains committed to handling the majority of calls through its UK communications centres and will continue to have a significant presence in the North-East and South-West. There are no plans to reduce Orange's UK staffing levels as a result of these developments.”

Mike Hughes, customer service director for Orange, said: “Our main objective is to provide the best service for our customers. Whether, it’s from a call centre in the UK or in India, our main concern is that customers get the levels of service they need and expect from Orange.” The company added that recruitment in its British call centres was ongoing “where and when it is required.”

Davey Hall, Amicus’s regional secretary said: “I believe there is an onus and a responsibility on Orange to divulge to their workforce their exact plans for India, and any impact there will be on jobs in the UK.”

If the sceptical French are being lured into outsourcing to India, after first testing the waters, it is proof positive that the whole venture of outsourcing has immense value for companies who wish to retain quality while reducing costs. The British set the ball rolling for Europe, and it is only a matter of time before other European countries will follow the Brits and the French to the sub-continent to bring back the gleam to the lack lustre performance of their home-based operations. India has once again proven it has what it takes to deliver the goods, even to the most demanding and exacting customer.

For details read here.
The article is sponsored by A-1 Technology Inc, dealing in offshore website development, offshore outsourcing and offshore software development.

Saturday, February 18, 2006


Buyers that seek the services of an offshore programmers or developers and other outsourcing services will generally be one of two types: Small Businesses or Medium-to-Large Businesses. As an outsourcing service provider it is important to understand the differences of the these two types so you can conduct business with them more effectively.

Small Business
These can be single-employee home-based based businesses, or companies with a small number of employees, that need specific help in developing a web site, a shopping-cart application, or business management software. Low cost is a primary objective for any development work since most companies of this type are working with limited funds.
The scope of work that small companies might require can be anything from simple code maintenance, optimization, and problem repair to full-scale applications requiring skills in database design, content management, security techniques, and business process implementation.

In many cases, the reason that a company might be considering outsourcing is that the particular skills and experience that are required simply can’t be found locally. It might be a unique programming language, a new development technology, an unusual kind of application, or an international multi-language user interface.

Companies in this category can’t usually afford to have a full-time software or Internet development staff. When they need design and development work to be done, they must outsource that work in the most cost-effective way. A short-term project can’t justify the hiring of new employees to do the work. Obviously, temporary low-cost offshore talent is very attractive to this type of company.

Conducting business with small companies or individuals is often very informal and uncomplicated. There are usually no contracts or formal agreements other than a mutual acceptance of the terms of the customer’s requirements and the developer’s proposal.

Since most small companies will prefer an informal, personal type of relationship with companies they do business with, offshore companies should make sure they quickly assess the kind of business relationship their customers want. Successful offshore companies will learn to do business in the way that their customers want to do business.

Medium-to-Large Business
These are established companies who might have full-time programming and development employees but are lacking in specific skills or resources for short-term jobs. It isn’t cost effective for them to hire a staff to do such work.

“ ISO 9000 is rapidly becoming the most popular quality standard in the world. Thousands of organizations have already adopted this important standard, and many more are in the process of doing so. ” These companies may also be down-sizing their development staffs to reduce costs, and prefer to outsource new development work – or move existing work from in-house to outside resources.

Doing business with large companies can often be more lucrative that with smaller companies, but often at a cost.

Larger companies can be more demanding, more formal, and require more time. There may be legal contracts such as non-disclosure agreements, service-level agreements, right-of-ownership agreements, and work-for-hire agreements.

There can also be project management requirements, reporting schedules, quality verification, testing procedures, and delivery specifications. Some large companies may require proof of ISO 9000 conformance.

Again, offshore companies who want to be successful in working for medium-to-large U.S. companies should attempt to assess the kind of working relationship that each company prefers. This can often be a problem in the middle or late phases of a project when this information was not properly revealed at project start.

Many large companies may assume that offshore developers already understand how they want do business. Unless the developer asks up front, this can lead to serious misunderstandings and even project cancellation. It is best if this information is documented and agreed to before the project begins.
For details read here.

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

Friday, February 17, 2006

Outsourcing from Europe looks strong

Mumbai: Large outsourcing opportunities are opening up in Continental Europe in areas such as infrastructure management, business process outsourcing and the public sector, says Dominique Raviart, Senior Analyst, Ovum
Speaking at a CEO panel discussion at Nasscom 2006 titled `Europe: The next big opportunity', he added that the European market for IT services remains fragmented, and user spends have been smaller in the application services area as compared to infrastructure support or BPO.

As there is no typical European user, the challenge for India-based players will be to compete with several international, regional and local players such as Capgemini, Logica CMG or Atos Origin with a broadbased set of service offerings.

The Indian vendors will have to choose their verticals carefully, with manufacturing opening up in France, financial services/public sector in the UK and automotive/retail/transport in Germany, he added.

According to N. Chandrasekaran, Executive Vice-President & Head, Global Operations, Tata Consultancy Services, trend of outsourcing deals from Europe had been quite strong, with over 40 of the top 100 outsourcing deals coming from that region in 2004. He added that "the three key challenges facing Indian vendors are labour cost structure, complexity of assignments and the need to create a reference-able set of customers."

Highlighting the complexity in assignments, he says that a simple BPO assignment in finance and accounting in the US will be focused on US GAAP, but in Europe this multiplies into 20 different accounting standards.

Reinforcing the opportunity landscape in the UK, David Leigh, Commercial and Strategy Director, Xansa Plc, said that the opportunities from the public sector were three to four times higher than from the private sector.

Simon Fanning, Strategic Sourcing Programme Director, Deutsche Bank, however stated that language and employment legislation would remain significant barriers for Indian vendors vying for a European foothold.

Debating the merits of direct entry into Europe vis-à-vis sub-contracting from other international vendors, Arvind Thakur, Chief Executive Officer, NIIT Technologies, said that acquisition could be a good entry strategy.

Chandrasekaran added that a direct regional presence with a strong India back-end would be an ideal growth route for large India-based vendors.

For details read here.

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

Thursday, February 16, 2006

MTN Group signs groundbreaking outsourcing agreement with Belgacom International Carrier Services

The MTN Group has signed an agreement to outsource its international voice and data traffic to preferred partners, Belgacom International Carrier Services (Belgacom ICS), a global carrier telecom company.

The agreement, which follows a four-year relationship between the two companies, is effective across the MTN Group’s 11 operations in Africa and the Middle East .

It provides MTN with access to Belgacom ICS’ expertise in managing a profitable carrier business. The agreement will also facilitate cost savings in the range of $10 million, through network optimisation, economies of scale and efficiency gains, benefits that MTN hopes to pass on to its customers.

By entrusting its international voice and data traffic to Belgacom ICS, the MTN Group gains a competitive edge built around:
  • Secure and maximum interconnect revenue through systematic detection and removal of bypasses and other non-performing traffic interconnections
  • Outsourcing of all interconnection matters from technical implementation, operation and management of associated commercial agreements
  • Cost-savings through economies of scale and efficiency gains as can be expected of an established global carrier like Belgacom ICS

Bridget P. Cosgrave, CEO of Belgacom ICS added: Belgacom ICS and MTN Group have shared goals for this partnership: MTN Group’s primary concern of improving the mobile subscriber’s experience, while maximising interconnect revenue is achieved while generating cost savings by outsourcing a non-core activity to Belgacom ICS. This is an excellent example of the Belgacom ICS strategic objective to strengthen its market leadership through insourcing of termination of voice and data traffic for our mobile operator customers.

For details read here.

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

Wednesday, February 15, 2006


As debates rage on across the globe on the economics of offshoring work to India in the IT & ITES space (BPO), it is time to view outsourcing from the right perspectives. The cost perspective is often harped upon by both Indian companies and their offshoring clients. However the root of Indian competitiveness in this space is not often discussed. This article only offers that historical perspective on why India is suited to be BPO hub of the world.

"Offshoring" is the system of packaging a set of your organization's tasks and hiring another company situated in another country to perform these tasks for you as a billable service. The service providing company provides you a dedicated workforce to perform these tasks for mutually agreed cost and quality terms.

Why India?

The crux of "offshoring" is "cost" and better operating margins for the companies' offshoring to India, China or any other country. But "cost" and "predictable & consistent quality" would be more like it.

India has an edge because you have decent quality English speaking people who are willing to do routine work ("grunt work") at a highly competitive price. As long as it maintains that edge, remains consistent and predictable, India has a place as the software backyard and the backoffice of the world. A large IT manpower pool and dominance of English in higher education system only helps to build India as a preferred choice for "offshoring".

The reason why India is able to have such consistent IT & ITES workforce has nothing to do with India becoming a big power in the IT space or brilliance of Indian programmers or the fantastic engineers of our IITs. It is a consequence of our McCaulay system of education which over 170 years old .

McCaulay & India

Thomas Babington McCaulay (1800-1859) was posted in India in the first half of the 19th century (1835 -1837) under Governor General William Bentick when India was just brought fully under the control of the British Empire. The British throne exercised control on India through its agency the British "East India Company". The company waged bloody battles for most part of the 18th century in India to control political power and every possible resource in India. From 1784 onwards there was a "Board of Control" with members from the House of Commons which defined the relations between the Crown and the Directors of the East India Company.

Coming back to McCaulay; Thomas Babington McCaulay, a master of English prose and literature, was elected twice as the member of the House of Commons, and served as one of the commissioners of the Board of Control for 18 months (1831-1832) whereon he got involved in Indian affairs. The British crown wanted to appoint a person who was not in the offices of the East India Company as a member of the Supreme Council in India. In 1833 McCaulay was appointed to the Supreme Council of India and traveled to India. By the time he sailed backed in 1837, he laid the foundation for two of the most important systems which would change India as a country - the Indian Penal Code and the education system.

The Foundation for English Education

In one of his speeches to the House of Commons in 1833 before coming to India, McCaulay outlined his plan for perpetuation of British governance in India through representative institutions of the government similar to the European model of governance. This institutional framework designed to manage the British supremacy required to be staffed with people who understood the language and the systems. So came up the need for training Indians to occupy these positions. McCaulay was of the opinion that Indians were perfectly in position to be trained to staff a new system of governance. To quote McCaulay "That the average of intelligence and virtue is very high in this country is matter for honest exultation. But it is no reason for employing average men where you can obtain superior men. Consider too, Sir, how rapidly the public mind in India is advancing, how much attention is already paid by the higher classes of the natives to those intellectual pursuits on the cultivation of which the superiority of the European race to the rest of mankind principally depends...". This observation made 172 years back is relevant even today and will find a familiar echo with many supporters of offshoring to India.

McCaulay outlaid the plans for Indian Education System in the McCaulay' Minute of Education which was reviewed and passed by Governor General William Bentick in 1835. William Bentick agreeing to McCaulay's view concurred that the true objective of the British government should be the promotion of European literature and culture in India thus laying the foundation for a permanent position for use of English language in Indian education. Today English has come to stay in free India. Whether the supporters of Indian languages like it or not, it is impossible to replace English as the medium of instruction in higher education, language of governance and the language of technology long after McCaulay and the British have gone. The medium of instruction in Colleges and Universities across India is English and will remain so for a long time in future.

It is this very foundation of English based education rooted in history that makes it easier for Indians to be a preferred choice for BPOs and offshoring work from US other English speaking countries.

Tuesday, February 14, 2006

Accenture to win Unilever outsourcing deal

Anglo-Dutch consumer goods group Unilever PLC is poised to award a 500 mln stg outsourcing contract to Accenture, the management consultancy, the Times reported.

The paper said Unilever yesterday confirmed that Accenture was the front runner to win the contract, which covers the back-office functions for Unilever's human resources, learning and procurement operations.

If Unilever decides to proceed with Accenture, the deal is likely to be announced in mid-March, the Times said.
For details read here.

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

Friday, February 10, 2006

The 2006 Outsourcing World Summit

According to the news acquired by Offshoreoutsourcingworld from outsourcingprofessional.org, the 2006 Outsourcing World Summit is dedicated to this fundamental idea – leadership – leadership in outsourcing, leadership by design.

Headlining this year's program are:
Business process management guru, Tom Davenport

Pramod Bhasin, President and CEO of Gecis Global, GE's recently spun-out BPO industry giant

and legendary leadership expert, Oren Harari

For details read here.

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

India's outsourcing industry to grow by 32 percent

As per a write-up on Computer Partners "India's software and services exports are estimated to grow by 32 percent to US$23.4 billion" in the fiscal year ending March 31, according to data released Thursday by the National Association of Software and Service Companies (NASSCOM).

IT services, including software development, are expected to contribute $13.2 billion to exports in the current fiscal year, while business process outsourcing (BPO) and call centers are likely to contribute $6.3 billion, according to NASSCOM in Delhi. Engineering services, research and development (R&D) services, and product development work are expected to contribute another $3.9 billion.

The total Indian software and services industry, including sales to the domestic market, is estimated to grow during the fiscal year by about 31 percent to US$29.5 billion.
Employment in the country's software and services sector is likely to reach 1.3 million by March 31, according to NASSCOM, of which about 922,000 are employed in the export sector.

India's outsourcing industry is riding a boom in outsourcing. A report released in December by management consulting firm McKinsey & Co. and NASSCOM was upbeat about the prospects for India's outsourcing industry. India can sustain its global leadership position in offshoring, and grow its IT and BPO industries at an annual rate of over 25 percent to generate export revenues of about $60 billion in 2010, the report said.
For details read here.

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

Thursday, February 09, 2006

Ford Motor Company to outsource to India

In a bid to cut costs, Ford Motor Company (FMC), the world’s third largest car maker, is planning to step up outsourcing of components, engineering services and IT related services from India.

Sources in the automobile industry said, Ford could increase purchasing of components from the domestic market from around $80 million now to $500 million in three years.

Dharuhera (Haryana)-based Rico Auto Industries Ltd is among the several component makers in the country vying for fresh orders from Ford Motors.

The company’s managing director, Arvind Kapur, who was recently in Cologne, Germany and in UK to discuss deals with Ford Motor’s representatives, said that though talks were on, his company was bound by confidentiality agreements and would not be able to discuss specific details.

On January 23, Ford Motor Company had announced its ‘way forward’ plan to restructure its operations that will see net material cost reductions of at least $6 billion by 2010 and reduction in plant-related employment by 25,000-30,000 in the 2006- 2012 time period.

The company will also adopt a lean and flexible manufacturing system, resulting in capacity reduction by 1.2 million units or 26 per cent by 2008.
For details read here.

Wednesday, February 08, 2006

A New Trend: Early Outsourcing by Start-up Firms

Intense competition and pressure from investors with a stake in start-ups is compelling the latter to off-shore / outsource work much earlier than expected. T.M. Ravi had an outsourcing game plan in place even before his Silicon Valley firm cashed its first venture financing cheque. When, he founded Mimosa Systems in December 2003, he immediately followed up the opening by ensuring he had an off-shore operation in Pune, India. And, Mr. Ravi firmly believes, if he did not have that back office in Pune, chances are his fledgling e-mail data management firm might not have survived to live another day.

While, it is quite the norm to see an IBM, a Microsoft, or an Oracle sends various company operations overseas, off-shoring / outsourcing by newly sprung up start-ups is the rule i.e. a rare occurrence. But, the 2000 tech bust up that turned Silicon Valley, California boom times upside down, made the software sector slowly realise the benefits of early outsourcing. Advising software companies to outsource product development at an early stage, Mark Sherman, a general partner in Venture Capital firm Battery Ventures says, at least 3-firms in Battery’s portfolio outsourced product development as soon as they launched themselves.

And, Battery is not alone, as many venture capital firms ask companies seeking funding about their off-shore / outsourcing strategies from the start: “I have seen a clear trend in the market where venture capital firms, as part of the term sheet want to know what the off-shore strategy is. For small and medium enterprises, their entry into the game in terms of funding is dependent on having an off-shore model.” says David Carpini, Vice president of Commercial and Software Solutions at Symphony Services, a company that helps independent software vendors outsource product development.

According to Mr. Carpini, there have been many instances when his clients signed funding papers and the Symphony contract within 30-minutes of each other. Mimosa Systems was one such company. With its head-quarters in Santa Clara, California, half of Mimosa’s employees are based in Pune, a city 110-miles from Mumbai. Investors in Mr. Ravi’s Mimosa encouraged him to seek help with product development right from the inception stage of his start-up. With that in mind, Mr. Ravi hired Symphony to work on a ‘build, operate, transfer’ basis, leading to Symphony’s India-based unit to work for Mimosa, and gradually become its back office in India.

While, Symphony performs similar services for big league companies such as Hyperion, Siebel, Manugistics and AutoDesk, a third of the California-based company’s comes from small start-ups like Mimosa. And, according to Symphony, the number of small companies seeking its help in outsourcing grows each quarter. “One of the advantages of having an offshore operation is you can chase the sun, reducing the product development time fairly significantly. Another, big advantage is that there is a very rich talent pool available in India, so we are able to quickly build a very strong team.” Says Mr. Ravi.

India is the top destination for outsourced product development for software start-ups, but other emerging outsourcing hotspots include China and Eastern Europe, says Eugene Kublanov, Vice President for corporate development at NeoIT, an off shoring consultancy in San Ramon, California.

Can Soon be Too Soon?
Early state outsourcing can harm a company, says Mr. Sherman of Battery. “In the early, early stage it doesn’t make sense, when the development information is more in PowerPoint than development tools.” he says. He believes companies with less than 20-employees should keep most development in-house. “When, the outsourcing does well is, when some of the volatility is taken out of the system, and that tends to be when the product starts to have maturity.” says Mr. Sherman.

There are cases when outsourced product development goes awry, mostly when people working on the project lack domain expertise, or if the outsourcer is not devoting enough management oversight to ensure project success, or there are significant changes in the product plan or a lack of direction.

Sham Chotai, Vice President of Engineering and the co-founder of DecisionView, a San Francisco based company that makes business intelligence software, specifically for the pharmaceutical industry believes the process works when companies can get past cultural barrier and define lines of communication. DecisionView took the decision to outsource product development to Pune based Persistent Systems, barely 18-months after its launch, at a time when it had only five employees.

Admitting there can be management challenges in the first six to eight months of an outsourced project, Mr. Chotai says things become smoother over time. “Our ability to make an enterprise application, within a year serves as testament to that. In the initial months, problems can include setting up the team structure, understanding the processes, recognizing the culture, and building trust between the two companies.” he says. For DecisionView, the greatest advantage in outsourcing product development is the flexible scalability: “You can grow and shrink your team as you grow or shrink your business.” says Mr. Chotai.

And, a decided plus for DecisionView is to have a dedicated 25-person outsourcing force working on product development in India, without putting them on the company payroll. At Pune’s Persistent Systems, all employees wear DecisionView t’shirts and there is a DecisionView sign at the entrance. “They’re an extension of our team.” says Mr. Chotai, whose DecisionView boasts of only 15-employees.
For details read here.

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

Tuesday, February 07, 2006

Upcoming IT Outsourcing Services

Pakistan gearing up to be major destination for outsourcing of IT services...

Prime Minister Shaukat Aziz yesterday said that Pakistan by focusing on development of human capital, better infrastructure and an enabling environment for investors, is gearing up to be a major destination for outsourcing of IT enabled services.

He was talking to W Lance Anderson, President and CEO, Nova Star Financial and Tom Slone, Chairman and CEO, Touchstone Communications, who called on him along with a delegation at the Prime Minister House here.
The Prime Minister said as a result of economic reforms introduced by the government, investment friendly polices and availability of human capital, the cost of doing business in Pakistan has been reduced and more investors are attracted to Pakistan, says a press release.

The Prime Minister said that privatisation and opening of the telecommunication sector to the private sector has stimulated phenomenal growth and the number of cellular phone users has risen form 2.5 million to 20 million users in a period of three years.

The Prime Minister said the policies of liberalisation, deregulation, and privatisation in the telecom sector have already attracted an investment of over two billion US dollars, created over 10,000 jobs. Pakistan is expecting an investment of about $ 4-5 billion in the next five years, he added. The Prime Minister said that with the establishment of SEMEWE 4, Pakistan now has better international connectivity and redundancy will provide enhanced potential for outsourcing of Information Technology (IT) enable services which has further improved the prospects of local and foreign investment in IT and Telecom sector.

He said that connectivity, access, content, and application are all vital to the future of the Information Society and the government intends to keep pursuing an aggressive policy to put together these components for provision of a composite information infrastructure.

The Prime Minster indicated that government would set up a national body to prove vision and policy and overview the development of IT & Telecom sector in Pakistan. The Prime Minster will head the body. The Prime Minster appreciated the performance of Touchstone Communication and said such companies are government's strategic partners" in the growth of IT & Telecom sector and government will take all steps to facilitate their business in Pakistan.
For details read here.

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

Monday, February 06, 2006

Dell Affirms India is the Best Service Providing & Manufacturing Base

Last month-end, Texas-based Dell, only the world’s largest computer maker said it would be setting up its fourth call centre on the Indian sub-continent, and is scouting for suitable land for a manufacturing plant in Asia’s third-largest economy.

With 10,000-employees on its payroll in India, Dell along with compatriots like General Electric have set up huge business process outsourcing units on the sub-continent, home to a vast pool of low cost English speaking workforce. Companies like Dell, which develops software in India and Nokia are all geared up to set up Indian manufacturing bases, that will fuel the local market demand in India’s $700-billion economy with an 8% growth forecast for 2006.

India is not only a resource base for talent, but is now also a market space.” Kevin Rollins, Dell’s chief executive, told reporters. “Our intent is to be here for the long term. The time is right to consider setting up a manufacturing site in India.

And, India’s telecommunications and information technology ministry expects planned foreign investment in its booming sectors to double to $22-billion in 2006, as global firms establish bases here. Also, in the pipeline are Dell’s plans to double the number of the 300-product development engineers, it currently employs in India by 2008.

Presently, with only a miniscule share in India’s exploding market, Rollins in a meeting with the Indian Prime Minister Manmohan Singh did not disclose any figure amount for his company’s planned investment, the timing or the probable site for the proposed manufacturing plant. “We have a 3 to 4 percent market share in India.” said Rollins, adding Dell’s target was to raise it, initially to the 10 percent, the company enjoys in much of the rest of Asia. According to his estimate, the next 3 to 5-years will see India with a purchasing power to buy 10-million desktops a year, up from 4-million units, currently. “India is a huge market in its own right.” said he.

But, Dell will have to compete with global players such as Hewlett Packard, International Machines, including local giants HCL Infosystems and Wipro. Still, commercial demand for computers in India is soaring as the Indian government and thousands of companies computerise their processes. Cheaper finance, rising salaries and falling prices, a direct fall out of competition is fuelling retail demand for desktops.

With call centres in Bangalore, India’s answer to California’s Silicon Valley, the southern city of Hyderabad and the northern city of Mohali, Dell’s fourth call centre unit will be situated in the tech hub of Gurgaon, on the outskirts of Delhi, and will add 1,000 more employees to Dell’s India payroll by end-2006. India will be the only country in Dell’s 30-site contact network that supports customers in all geographic regions.

According to Romi Malhotra, Managing Director of Dell’s Indian operations, the company will raise its head count to 15,000 employees in the next couple of years. India’s information technology and call centre industry directly employ 1-million people, and indirectly three times that number in jobs that range widely from transport and security to catering and housekeeping.

McKinsey, a consultancy firm co-authored a report in December 2005, that forecasts India’s business services and information technology exports to surge by more than 25% a year, totalling $60-billion by 2010. Worldwide demand for outsourcing services such as insurance claims and payroll processing has helped India’s off-shoring / outsourcing industry to grow at a compounded annual rate of 56% since 2000. “Our teams in India have integrated well with Dell's operations.” Rollins said, adding he expected the firm’s global sales growth to exceed industry growth during 2006.

No doubt, that should put a cork in the mouth of all the naysayers who continue to prophesise that off-shoring / outsourcing to India is not to the advantage of the American economy. If Dell from a miniscule 3 to 4% is planning to up its ante by 10% and more, does that not prove it has found its Indian based operations to be functioning better than envisioned. Young Indians have shown the Doubting Thomases of the world, they have it in them to put their country on the fast track to continued and steady growth. Whereas, the British Raj left the sub-continent an emptied husk, new growth and offshoots are raising their heads to the sun, as the world salivates and hungers for a taste of them. The young Turks, the young guns of India are working to fill its empty and stolen coffers, they have wiped the sneer off the faces of those that dared. More power to them, may the force be with them. Not only have they removed India from the map of the Hippie Trail, once again, they have put it on the map of the world.

India, is no longer The Jewel in the British Empire’s Crown, it is the most coveted jewel of the Global Crown.
For details read here.

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

Friday, February 03, 2006

Wipro says GM contract worth about US$300mln

Software services provider Wipro said on Thursday its share of the information technology outsourcing contract announced by General Motors was estimated at US$300 million over five years.

On Thursday General Motors said it had awarded about US$7.5 billion worth of business from the US$15 billion it expects to spend over the next five years on IT to a clutch of technology companies including Wipro.
The others are Electronic Data Systems, International Business Machines, Hewlett-Packard, Cap Gemini and the Compuware Covisint unit of Compuware Corp.

Sudip Banerjee, Wipro's President, Enterprise Solutions, told a news conference in the southern Indian city of Bangalore that Wipro would be involved in the development and maintenence of middleware — software that helps a variety of applications work together as if they were a single system.

The additional revenue will start flowing in from the second quarter of the next financial year, which ends in March 2007, he said. He did not indicate how the revenue flow would be spread over the period of the contract.

Wipro, which already works with GM on some projects, will double the number of people working for GM to 1000 from the second quarter, he said.
Some 40-60 percent of the work in the latest contract will be done from India, he said.

Indian companies are increasingly joining the ranks of global technology companies winning parts of such large multi-year, outsourcing contracts.

Wipro was the only Indian company to be awarded any work in the latest GM contract.
Last year, Tata Consultancy Services and Infosys Technologies were among five firms in the US$2.2 billion IT outsourcing deal awarded by ABN AMRO.
For details read here.

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

Outsourcing becoming knowledge outsourcing

Embracing technology as a driving force, knowledge and transaction outsourcing is changing the way businesses conduct themselves in the global marketplace.

"KPO (knowledge process outsourcing) allows organizations to do fairly complex operations and get the benefit of time to market," said Ritesh Idnani, head of global sales at Progeon, a business process outsourcing subsidiary of InfoSys Technologies based in Bridgewater, N.J. "(It allows firms) to derive operation efficiency where they do the task while transforming the way the do the task itself."
"Knowledge services is an area where we are seeing a lot of demand and continuous growth," Idnani said.

KPO services are much more research and analytical intensive, he added. For example, unlike traditional outsourcing, KPO focuses on research for front-office type activities such as financial planning, credit, quantitative and fixed-income research, Idnani told UPI.
This is where KPO differs from traditional BPO (business process outsourcing) and is driving the outsourcing business to higher levels of technology. BPO is very transaction-focused. BPO focuses on such back-office tasks as customer service (call centers), financial or accounting services and financial underwriting.

"KPO, simply put, is BPO but at a higher level in the intellectual value chain," writes Sangita Joshi, co-founder of the KPO consulting firm EmPower research in the Deccan Herald, an Indian daily newspaper. "The crux of KPO is to provide value to the client primarily in business critical and strategic decision making processes."
Joshi noted "the constantly higher need for flexibility, drastic reduction in time required to 'go to the market,' increased competition in the global arena, and of course, cost pressures have all been driving forces of KPO."

He added the healthcare, pharmaceutical, biotechnology and intellectual-property rights industries achieve greater efficiency through the use of KPO. In comparison to the industries touched by BPO, those working in the KPO field typically require a higher level of education to complete these more difficult tasks.

Another area to benefit from the offshoring boom is with firms who use patents. George Sawyer, client executive for Evalueserve, a global professional services' firm in Silicon Valley, Calif., predicted a shortage of U.S. patent attorneys would face technology companies. This is due to the rise in research-and-development facilities in places such as China and India, he added.

According to a recent article by Evalueserve Chairman Alok Aggarwal, approximately 30,000 attorneys and agents are registered with the United States Patent and Trademark Office. This number will need to rise to more than 38,000 by 2010 in order to keep pace with increased demand brought on by research-and-development facilities outsourced to China and India.

Sawyer noted this shortage comes about due to the process necessary to obtain a U.S. patent. A U.S.-based firm may offshore each step in the patent process from searching for prior art up to preparing drawings of the patent; however, the final review and filing of the patent must be performed by a registered USPTO attorney based in the United States.

Despite the final product needing approval by an USPTO-sanctioned attorney, firms that offshore for all other aspects of the patent approval process save on direct labor costs, added Sawyer. This helps start-ups in particular as completing the patent process through U.S.-based attorneys proves too costly for firms low on capital and it also frees up workers based in the United States to continue pushing the envelope forward on the technology front.

"Offshoring is like delegating a project," said Sawyer. "It's the simplest work. The work that's left behind in the United States is the most interesting."
The technology and the higher-educated workforce both should contribute to a continue expansion of KPO in the coming years.

While Sawyer asserts India is still the undisputed leader in outsourcing, many countries are up and coming in the business. He looks to Russia to begin to provide its pool of underemployed scientists and engineers from the Cold War days along with Croatia and Latin American countries such as Brazil to pick up off shoring activities in the near future.

Looking ahead, Idnani offered up an optimistic view on how KPO and other technically advanced outsourcing activities can positively affect the U.S. economy.

"The U.S. economy has always been fueled on innovation," said Idnani. KPO will provide new avenues to create further jobs in the United States and other more critical and strategic tasks.
For details reah here.

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

Thursday, February 02, 2006

India: An Off-shoring / Outsourcing Success Story

Impressed by India’s success in IT off-shoring / outsourcing industry, quoting unknown sources, Business Standard writes, Intel Corp., only the world’s largest chip maker has plans to make a $500-million investment in its Indian operations. Not yet official, the news will be announced during the visit of Craig Barrett, Chairman of the California based company while on a business visit to India next week.

Although, the company’s spokesperson has declined to comment, Business Standard maintains, half of $500-million is intended for Intel’s research lab and marketing division, while the other half will be used for joint development of a personal computer.

Designing and developing software to power chips for computers and high-end networks for internet based applications at its development centre in Bangalore, India’s very own Silicon Valley, Intel is in tough competition with its smaller arch rival Advanced Micro Devices Inc. (AMD). Stealing a march on Intel, already AMD has a signed agreement with consortium SemIndia for supplying technology for, yet, in the pipeline, $3-billion chip-making factory in India. A direct reminder that off-shored / outsourced dollars come back to USA as Indian service providers buy American products for offices and production units.
For details read here.

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

Wednesday, February 01, 2006

Offshore outsourcing: US dominates in India

The UK's percentage share of the outsourcing pie in India has grown markedly in the past 18 months with a number of high-profile financial institutions moving their call center operations into the country.

As pressure mounts on executives in domestic markets to deliver further cost-savings, so that share is set to increase.

Nevertheless, the vast majority of firms outsourcing to India going forward will still be US based, although there is evidence that the Philippines will prove to be a significant competitor to India for US outsourcing work.

For details read here.