Do Software Development Projects Dispersed Across the Globe Deliver the Goods? - Knowledge@SMU

Source: Do Software Development Projects Dispersed Across the Globe Deliver the Goods? - Knowledge@SMU

Do Software Development Projects Dispersed Across the Globe Deliver the Goods?In today’s world, the international flow of investment, people and ideas are increasingly commonplace. Multi-billion dollar infrastructure projects and complex business-to-business software development are implemented across borders and time zones, spanning the globe. Enterprises seek out cost-effective talent no matter the location. Constantly expanding business networks make higher demands on computer systems and networks, compelling technology companies to assign software development duties across many dispersed centres in the US, India, China and elsewhere.

In actual practice, does this distributed development model work well? Singapore Management University information systems professors Narayan Ramasubbu and Rajesh Krishna Balan examined this question in an award-winning paper, “Globally Distributed Software Development Project Performance: An Empirical Analysis,” presented recently at a joint meeting of the European Software Engineering Conference and the ACM SIGSOFT symposium.

Commenting on the purpose of their research, Ramasubbu said, “For some customers the primary motive for outsourcing is savings because of labour cost differences. For some it is human bodies as they don’t have enough capacity -- more than cost [considerations], they want to get the project done within a tight schedule. And for others it is capability; for example an insurance company’s vendor might have done something for their competitor and the vendor might have some knowledge [they could use]. However, our interest was not primarily about outsourcing but the effects of locating software development projects in multiple sites, across borders and time zones.”

More Time-consuming
Ramasubbu and Balan developed empirical models of software project performance and verified these against data and information gathered from forty two large-scale, real-world projects. The projects were executed by a major software company across two development centres located in India and the US.

Over a two-year period, the authors reviewed both qualitative and quantitative aspects of the company which had attained Level 5 of the Capability Maturity Model (CMM, instituted by the Software Engineering Institute at Carnegie Mellon University), the highest rating possible, indicating mature and well documented processes and structures. The company also implemented uniform human resource practices across its global sites.

CMM is a process model based on software best practices which are effective in large-scale projects. Software code size was measured in terms of function points over the entire project code base. According to the researchers, code size is a widely used control variable for software quality models as it captures bother the magnitude of the project and most of the complexity involved in developing the application.

Measuring Dispersion and Quality Management
The research model the authors used looked at project performance from the perspectives of work dispersion and quality management. They measured work dispersion between the two development centres while quality management was measured along three dimensions - prevention-based, appraisal-based, and failure-based approaches. The prevention-based approach towards quality management looked closely at activities such as training that was carried out primarily to reduce the occurrence of errors. The authors computed a score based on the percentage of total development effort spent on training, project planning and configuration management activities.The appraisal-based approach examined progress assessment, performance and the quality of intermediate artifacts at various stages of development. A score was assigned based on the percentage of the total development effort spent on peer reviews of requirements, design, status reviews and code inspection.Finally, the failure-based approach looked at testing conformity of the product against customer specifications and the subsequent error correction process. A score was assigned based on the percentage of the total development effort spent on unit tests, module integration tests and systems tests.

Beyond the hard data they gathered, the researchers were also present in the field to observe the software development process using an ethnographic observation procedure. As they explained, “To complement our understanding of the software processes and culture at the sites, we conducted structured interviews with two senior business development managers, four project managers, and with ten randomly selected project team members.”A key finding of the study was that dispersion, even in high maturity environments, had a negative impact on productivity. This loss of productivity was further compounded and increased exponentially as dispersion increased. According to the authors, what this means for companies who practise dispersed project development is that the marginal increase in yield is much higher as dispersion increases. “Firms should seriously consider this effect when initiating distributed development and increasing the number of sites,” said Ramasubbu.Mitigating the NegativesThe news isn’t all bad, however. For enterprises engaged in dispersed software development, there are structures and processes they can put in place to mitigate the negative aspects of dispersed software development. From the quality management perspective, the study showed that appraisal-based approaches have the highest positive effect on software development productivity with failure based approaches coming in next. Prevention based approaches seemed to have no statistically significant effect.In terms of conformance to clients’ specifications, the researchers found that failure-based approaches have the largest effect on conformance quality followed by prevention-based approaches. Appraisal-based approaches had no statistically significant effect on conformance quality.Bottom lineOverall, the authors found that no one approach can be a panacea for the problems associated with dispersed software development. The choice of approach would depend heavily on the context of the project as different quality management approaches have significantly different effects on the various dimensions of project performance.

The researchers also caution that even though the study was conducted in a high maturity environment, and data was tracked for a two-year period, not all the subtleties of software development were captured.According to the authors, `internationalising’ a project has many consequences. Dispersed project teams must contend with distance, culture and language differences. In terms of the basic systems development life cycle, internationalised projects tend to consume more time. Behavioural research has also indicated that distributed projects using remote teams, even with the support of advanced communications technology, suffer decreased productivity due to problems with administration and synchronisation.The study findings indicated that the more project sites, the lower the productivity. Firms therefore should seek to mitigate these drawbacks by using structured processes and appropriately balancing their quality management approaches. As more companies outsource scores of functions that make up day-to-day operations in the modern business world, firms need to take a close, hard look at the implications of locating projects across their global locations.Ramasubbu advised, “The bottom line is that firms need to account carefully for the inevitable reduction in productivity and quality when determining whether to move software production to a second or even third location. Firms that institute high standards of software development will have a higher chance of mitigating the effects of dispersion.”
Published: November 3, 2007

India, a Stirring Giant, Is the New Place to See and Be Seen - New York Times

Source: India, a Stirring Giant, Is the New Place to See and Be Seen - New York Times

India, a Stirring Giant, Is the New Place to See and Be SeenIndranil Mukherjee/Agence France-Presse —

HEATHER TIMMONSPublished: December 13, 2007NEW DELHI — If it’s Monday, it must be Romania — and Finland and Minnesota.Skip to next paragraphEnlarge This ImageTiago Petinga/European Pressphoto AgencyJosé Sócrates, right, Portugal’s prime minister, with Peter Mandelson, left, a trade commissioner, and José Manuel Barroso of the European Commission at a ceremony in New Delhi last month.A soaring economy and crumbling trade barriers are making India a “must visit” destination for foreign politicians and executives. The crush of visitors, often first-timers but also companies seeking to expand their existing operations here, lands daily. They all hope to sign deals, find local partners, sell their wares or just soak up the contradictions that characterize the world’s largest democracy, a singular melding of chaos and opportunity.Bald demographics make India impossible to ignore, and the slowdown in the United States economy adds to its appeal. About half of the country’s 1.1 billion people are under 25, and its rapidly expanding middle class is already estimated to be as large as the entire population of the United States.

A rocketing stock market and a fast-growing class of the superrich add to its appeal.Trade experts compare the rising tide of interest to the wave of outsiders who flooded China a few years ago. This year, Felipe Calderón Hinojosa became the first Mexican head of state to visit India in 22 years. Angela Merkel, the chancellor of Germany, President Luiz Inácio Lula da Silva of Brazil, and Henry M. Paulson Jr., the United States Treasury secretary, have all paid their respects.But official delegations are arriving from unexpected corners of the globe, too. On a recent typical Monday in New Delhi, the government played host to Minnesotan businessmen led by Gov. Tim Pawlenty, a Romanian delegation led by the senior counselor in the ministry of small and medium-size companies, and Finns led by the minister of trade and development.Privatization of major industries, a quickly Westernizing, youthful population and the prevalence of English draw a wildly diverse group of prospectors.On a recent visit to Mumbai, Donald Trump Jr. pledged to invest in real estate there, Jägermeister held parties in New Delhi to introduce consumers to its herbal liquor, Prudential Financial partnered with the Indian real estate giant DLF to create an asset management business and Fiat announced tentative plans to import the Alfa Romeo.India is like the “proverbial bus in today’s business world,” said Suhel Seth, managing partner with Counselage India, a New Delhi-based branding consultancy. “No one knows where it is going, no one knows whether there is space on it for them — but no one wants to miss that bus.”Given the vast and varied interest, Indian business leaders can sound overwhelmed. “Iceland is suddenly on our radar screen,” said Supriya Banerji, the deputy director general of the Confederation of Indian Industry, one of the country’s largest trade groups. “Malta is coming in and Cyprus is clamoring for us.” So are Trinidad and Tobago, Uganda, Vietnam, Kazakhstan and Mozambique, all of which have sent delegations.It is too soon to tell what impact the visits will have economically. They rarely yield immediate results, and sometimes they produce negative reactions.

India’s mix of poverty and areas where vast, fetid slums edge newly refurbished international airports and barefoot children beg outside of $500-a-night hotels, has left more than one Western visitor aghast.The realities of India often surprise even first-time visitors who have studied the country. Signs of social upheaval — strikes, dangerous roads and electricity that flickers off even in the most luxurious hotels — are common. One recent morning in a five-star New Delhi hotel, bleary-eyed Minnesota executives puzzled out a scene from the night before. As they had returned from a visit to the Taj Mahal, thousands of protesters blocked the road, police conspicuously absent. The Americans did not make it back to New Delhi until after midnight.“We learned a lot,” said Jonathan B. Farber, president of global underwriting for Travelers, the insurance company, picking his words. It was interesting to see “how the logistics worked themselves out,” he said, recalling that as protesters laid down in one lane of the highway, two-way traffic seemed to intuitively share the other lane.In spite of such hiccups, most visitors are optimistic about India’s future and the opportunities it offers their companies. To date, “trade has been rather modest,” acknowledged Asko Numminen, the Finnish ambassador, tall and blue-eyed, in an understated gray suit that complemented his embassy’s clean Nordic lines. In a nod to his host country, his tie depicted a field of elephants.In Finland, Mr. Numminen said, “we are speaking about the ‘India phenomena.’” He said companies, universities and research centers were looking toward India because it had the “biggest pool of human resources in the world.” Since the beginning of September, Mr. Numminen has traveled twice to Chennai to open factories for Finnish companies, and Finnair now has 12 direct flights a week from Helsinki to India.Members of foreign royalty are also making official visits to India — even royalty whose ancestors were involved in colonization of the subcontinent centuries ago. Queen Beatrix of the Netherlands arrived in October, with eight of her country’s most important chief executives, on her second visit to India.Warner Rootliep, general manager for the Air France-KLM Group in the region, said the trip allowed the executives a “great opportunity to raise some questions directly to the prime minister and other ministers present.”Showing off a knowledge of India is often de rigueur on the visits. When Gov. Jon Huntsman Jr. of Utah came in October with university administrators and biotechnology executives to pitch business opportunities with Utah, he boasted over lunch with Indian industrialists that he had celebrated Diwali, the most important Hindu festival, at the governor’s mansion back home.Grinning, he said the relationship between the United States and India had “gone from being flat as a chapati to sweet as gulab jamun,” referring to a flatbread and a local dessert.Mr. Pawlenty of Minnesota started his speech in New Delhi with “namaste,” the Hindi greeting, though he was quick to address the obvious question: What could a group of Minnesotan and Indian businessmen have in common?He said Indians tended to like spicy food, while some Minnesotans considered milk spicy, and called the contrasting weather a clear divide. But Mr. Pawlenty noted similarities too: both Minnesota and India broke away from Great Britain, both play forms of hockey, and rural life and farming are a backbone of each.To be sure, India remains in China’s shadow. Because of weak infrastructure, a fractious political climate and other hurdles, India’s foreign trade and investment figures are dwarfed by China’s, where foreign direct investment was nearly $70 billion in 2006. But many foreign companies and governments increasingly equate the two when they talk about the growth markets of the future.The government here expects foreign direct investment to grow rapidly next year, to some $30 billion, from $19.5 billion, and the economy to grow at 9 percent for the third year in a row.And India definitely tops China on one front. Because of increasing business travel demand, American Express predicts, hotel room rates here will increase more than anywhere else in the world in 2008: 34 to 38 percent for midrange hotels and 38 to 41 percent for the best hotels.

India top location for offshore services: Report-India Business-Business-The Times of India

Source: India top location for offshore services: Report-India Business-Business-The Times of India

NEW DELHI: India continues to be the undisputed leader in offshore services but countries like China, Russia and Brazil are fast catching up, according to a report.The offshoring spending is expected to grow 60 per cent in Europe and 40 per cent in the US in 2008, according to the report by Gartner.Gartner analysed 30 countries across the world and used criteria including language, government support, labour pool, infrastructure and educational system among other factors to assess the locations."India remains the undisputed leader in offshore services, but increasingly, countries such as China, Russia and Brazil are providing credible alternatives," the report said.Although positioned as India's greatest challenger in terms of its potential scale, China fared poorly on language skills. China, India and Singapore all demonstrated strong government support for the promotion of their country as an offshore services location in the Asia Pacific region.However, Gartner said the aim of the study was not to rank each country but to help sourcing managers determine which locations are right for their organisations.

Outsourcing trends

Source : Click here

Outsourcing exists on a fairly simple premise, If you can do something, there must be someone else out there capable of performing that same task , only cheaper. With VoIP and the Internet, almost anything can be outsourced with some time and consideration. Let us look at five unusual trends in outsourcing, all of which are likely to become the norm. Outsourcing is poised to grow exponentially as more entrepreneurial minds check out the tasks on the worlds todo list and figure out who can best provide those services for the least amount of money.

1. Getting personal. Outsourcing usually brings to mind business tasks, whether that means customerservice calls offshored to India or dataentry work farmed out to a virtual assistant. But why leave it at that. Why not outsource the design of your personal Web site, the building of your deck or reservations for your vacation.

DoMyStuff.com is a stateside service that allows people to put their tasks up for bid , anything from raking leaves to installing software. Right now, this idea is really in its infancy, says David Davin, COO and cofounder of DoMyStuff. But this is where the Internet has been heading all along. We all have specialized skills. The Internet brings us to one place where we can exchange those skills.

The ptop offshoring industry is just beginning, but research firm Evalueserve predicts that by 2015, consumer and smallbusiness offshored services will grow to more than USD2 billion, from only USD250 million in 2006.

2. Outsourcing the outsourcing. With success comes competition. While India is synonymous with outsourcing, its also facing competition from other nations looking for a piece of the pie.

Indias economy is in an upswing, and wages are rising quickly. According to a report by Gartner, Indian software engineers will be earning 40 percent to 50 percent of Silicon Valley wages next year, and the difference will continue to diminish, as will the savings American companies get from outsourcing.

At the same time, other countries are looking to India as a model of economic growth. A recent trade event in New York City, OutsourceWorld, boasted representatives from nations as diverse as Mauritius, Costa Rica, Canada, Malaysia, Romania, Malta and the Ukraine.

Indian outsourcing firms are preemptively opening offices all over the world to compete. Infosys, a USD3.1 billion leading provider of outsourced services, has 75,000 employees in India, but also has offices in several countries, including Mexico, the Czech Republic, Thailand, China, Poland and the Philippines.

Its quite likely that the next time you outsource a task to India, the person actually completing that work may live in another country , and youll probably never realize it.

3. Tutoring a world away. Tutoring can be expensive, but parents will pay to help get their kids into the best college , a goal thats fueling the USD4.5 billion tutoring industry at a 12 percent to 15 percent growth rate, according to Eduventures, an education research firm. But not all parents can afford the hourly rates at centers like Sylvan. So theyre turning to services like TutorVista, an online tutoring service based in Bangalore, India.

Founded by Krishnan Ganesh, the service offers a USD99 per month flat rate for tutoring; kids communicate with their Indian tutors via voice chat, IM and a digital tablet.

Ganesh has received USD15 million in venture funding and hired U.S. tutoring industry vet John Stuppy , Sylvan, The Princeton Review and Educational Testing Service , as his companys president. As of September, TutorVista had attracted 10,000 subscribers in the U.S. alone and was planning on doubling its staff of 600 tutors.

4. Automating the drivethru. When you place your burger order at a drivethru speaker, you expect that the person taking your order will also be taking your money at the window in about 30 seconds. Not so with Exit 41s solution.

To speed things up, the company has callcenter employees take orders using VoIP; the orders are then sent realtime to a monitor in the kitchen so that in the few seconds it takes you to reach the window, your steaming food is awaiting your arrival.

In Lexington, Kentucky, a Wendys master franchisee has installed the system in 16 stores and acts as a call center for other Wendys franchises on the East Coast. One highvolume store has shaved off five seconds from order time and doubled its capacity by adding a second drivethru lane.

Joe Gagnon, CEO of the Andover, Massachusettsbased firm, says he believes Exit 41s solution will become more common. Not only does it help increase drive thru capacity, but it also allows for the use of operators in lessexpensive areas , for example, a state with a lower minimum wage or even Mexico.

5. Power from the people. Crowdsourcing takes a task and unleashes it to the world. Think Wikipedia, the bypopularvote Tshirt designs on Threadless.com, or Amazons Mechanical Turk service, in which people take on fairly simple chores, such as summarizing a paragraph of text, for pennies a task. Google cleverly crowdsourced image tagging by turning it into a game, bypassing the need to pay for the task.

Indian Economy Overheats - Hiring Becomes Harder

We hire in India and are aware that hiring is an important issue and hiring the right talent can be hard sometime. New Research from Mckinsey points out this very fact with data:

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• Research conducted by The McKinsey Quarterly over the past four years finds that executives in India are much more optimistic than those in the rest of the world.
• The surging Indian economy, which grew at 9.4 percent in the most recent fiscal year, and the rapidly expanding middle class are two elements fueling such optimism.
• The confidence of these executives is demonstrated in their plans to increase their workforce abroad.

http://www.mckinseyquarterly.com/Indias_executives_Confident_in_their_economy_and_eager_to_hire_2059_abstract
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[tags]India,Mckinsey[/tags]

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See the Growth With Accounting Outsourcing Services

Source : Click here

The very existence of an organization is determined by the profit and loss that the organization incurs. A known fact in the corporate world is that however big or small an organization is, one of the most important targets of that organization is to be able to manage the finances with suaveness and do all the calculations perfectly. The more the involvement of finances, the more becomes the responsibility of the professionals working in the accountancy department of the organization. With the constant rise in competition, every businessperson thrives to make his or her business one of the best businesses in their domain. This is not at all a wrong thought and it is this very thought that makes people working in an organization give their best shot in everything they do. The accounts department of any business, be it small, medium or large-size business, is considered to be one of the most efficient teams, and why not, they help to determine the future of the organization. However, at times it becomes difficult to handover all the work to the in-house department, which leads to many problems. However, taking the help of accounting outsourcing services from any accountancy firm that outsource services can prove to an advantageous and a profitable move.

In fact, we can say that accounting-outsourcing services can actually turn out to be one of the most dexterous ways of handling and managing the accounts of any given organization. Well, when you hire the services, you must be aware that there are some techniques and strategies that these firms follow and these strategies generally differ according to the nature of the business. However, there are certain basic strategies that these accounting outsourcing firms follow. These strategies include the maintenance and managing of the book records of any firm for a particular financial year and they make sure to include each transaction that has taken place in that financial year.

Moreover, a known fact is that accounting needs loads of patience and at the same time, the person has to be very careful while entering any financial data because one mistake can lead to many problems. However, if you take the help of accounting outsourcing services from any accounting firm, you will not have to worry about these factors, as these professionals know how to take care of all the aspects. In fact, any firm that provides accounting outsourcing services has n numbers of accounting professionals who are thorough with their work and can execute their work at the command of their fingertips. Therefore, there is nothing you will have to worry when you hire the service.

However, you too will have to give some inputs like explain the professional the nature of your business and give him or her detailed accounting record of your firm. Once these are done, you can be rest assured to get the best accounting outsourcing services. However, you must a constant eye on the person and make sure that he updates you about all the work that he is doing. This will also help you.

The Advantage of Offshore Financial Outsourcing

Source : Click here

The trend for outsourcing lower level IT functions, requiring generic and easily acquired (and replaced) skills, has been sustained and popular with financial companies. Offshore destinations such as India offer scalability because their working population is significantly larger than the domestic market. They also provide a pool of skilled graduates, as well as impressive language capabilities, and a compatible culture.

Initially big business took the plunge and directed IT functions offshore, but today even smaller companies with a turnover of less than £5 million and/or less than 100 employees are happy to outsource. This reflects the growing trend for a wide range of companies to outsource all manner of business to offshore destinations. Even the smallest start-up will look east if they have a suitable project in hand and an eye turned to the best deal.

India is the most mature offshore destination, closely followed by Sri Lanka. The Far East and South East Asia are alternative destinations, although not as popular. Another emerging trend is for IT functions to be outsourced to nearshore destinations like Russia, the Czech Republic and Poland, where security might be tighter and management-time can be more effectively utilised.

However, the market trend for finance companies to outsource relatively simple IT functions to Sub Continental Asia is being superseded by a growing desire for suppliers to build systems and applications that supersede anything that they could build in-house. From wanting 'yes men' companies are now keen to engage with suppliers who will bring their own skills sets and help improve the quality of the project.

According to a 2006 National Outsourcing Association research report, 73.3% of respondents outsourced application development. The second most popular function was application re-engineering and migration at 36.7% . The study attracted seventy-six responses from outsourcing decision makers within financial organisations throughout the UK.

This trend for outsourcing increasingly complex projects perhaps isn't so surprising. Most finance companies that outsource IT functions prioritise fluid communication, domain and technology expertise and security, with cost perhaps fourth on the list – important, but of no real use without the other three. Without expertise or good communication skills, a supplier could take up valuable management time. At worst, miscommunication can be disastrous.

Businesses should carefully consider the full advantages (as well as potential disadvantages) of offshore financial outsourcing, before committing to a supplier. India has experienced wage inflation because of competition in the market – the ITO skills pool is finite. So if labour costs rise, it makes sense to outsource higher end projects, if that is both possible and desirable.

Whether a project can be outsourced still depends on its complexity and size, as well on management time, security and adherence to regulation, but there seems to be an increased belief that offshore suppliers can enhance the value of a project, rather than simply completing a given project in an unimaginative fashion.

Accounting Outsourcing Can be your Business’s Pillar of Strength

Source : Click here

It takes a lot to run a business successfully and as an owner, you have to ensure that all departments of your firm are in perfect working condition. Each department, be it marketing, human resource or finance, have their own contribution towards the profitability of the company. In this context, one of the major aspects of any business is its accounting division. Each income or expenditure that the business incurs can make a major impact on the financial standing of the business. An efficient accounting division should maintain all the records in journals, profit and loss statements and balance sheets to reflect an accurate status of the business. However at times, it becomes difficult for a company to sustain a full-fledged accounts division to maintain its records on a daily basis and this is where accounting outsourcing can make a difference.

Many companies are opting for the convenient and safe option of getting accounting outsourcing done for their business from a third party vendor. The vendor in turn hires efficient accounting personnel who competently maintain the financial records of the clients. Accounting outsourcing ensures that the client has instant access to his financial records as and when the need arises. The regularly updated accounts provided by the outsourced vendor benefit the company by presenting accurate image of the company standing to the shareholders, investors, creditors and the public in general. This increases the credit worthiness and credibility of the organization in the market. Another advantage of having accurately maintained accounts is that the dealings of the company remain above board at all times and no embezzling of funds can take place.

Accounting outsourcing services of a reputable vendor ensures that the financial records of the business are available at a short notice hence there is no mad scrambling to adjust accounts once the tax season approaches. Payment of taxes is an important duty of every business and the scrutiny of tax officials is very detailed. In such a scenario, having accurately maintained accounts of every business transaction creates a positive impression of the company on the tax officials. In addition, the instant accessibility of the records enables the company's senior officials to take decisions regarding the future growth of the business. Any expansion or diversification can be planned only when you know you actual standing in the market and the accounts are the only source for such information.

However, when you are trying to hire a vendor to handle all your accounting outsourcing work, it is advisable to do a little background research on the vendors before you finalize such a deal. The financial records of any company are highly confidential and the security provided by the vendor should be your utmost priority. Also, ensure that the accounting professionals working for the vendor, who will be handling your accounts, are well acquainted with the latest accounting softwares available in the market. A past reference from other companies is also helpful in selecting the right vendor. Once you have handed over your accounting work to the right vendor you can then rest easy regarding the maintenance of company records.

Pharmaceutical outsourcing: people on the move

Source: Outsourcing-pharma.com

AstraZeneca, Encorium, Icon and Eden Biodesign have all had people on the move in the world of pharmaceutical outsourcing.

As of January 1 next year AstraZeneca will have a new regional supply VP for the Americas, this week naming Kenneth Murtha as the new post holder.

In his expanded role, Murtha will oversee distribution in Latin America, and supply sites in Argentina, Brazil, Puerto Rico and Mexico in addition to his North America responsibilities.

On of three regional supply VPs, Murtha will serve on the company's worldwide operation team to help drive improvements in productivity and optimise the end-to-end supply chain.

Meanwhile, Dr Linda Nardone has been appointed as the new chief operating officer (COO) of US-based contract research organization (CRO) Encorium Group, and will report directly to Kenneth Borow, company president and CEO.

Prior to joining the firm, Dr Nardone was working as General Manager for Zila Biotechnology and has a total of 20 years of clinical trial management experience at a range of firms.

Dr. Borow said: "…we sought an individual who could contribute significantly to our senior management team while leading our Global Operations and Regulatory Affairs groups".

Ireland's Icon Clinical Research has brought two new staff members on board in its Medical Imaging division. Dr James Conklin is now the senior vice president of Medical & Scientific Affairs and will oversee regulatory, medical and scientific issues worldwide and provide client support in designing strategies for medical imaging analysis.

Outsourcing for Business Growth

Source: Cxotoday.com

Infrastructure Management Outsourcing (IMO) has gained impetus in today's business scenario as CXOs want to keep their workforce agile and focus on their core business competencies and business strategy. By exercising this option, the total Cost of Ownership (TCO) is optimized while managing the complexities of today's diverse IT environment. It also helps in providing flexibility to transition and transform to the next generation of infrastructure and applications without investing in retraining or expensive skill upgrade.

"Although initially it was mostly the non-IT companies which opted for IMO as they lacked the competencies in managing a growing IT infrastructure, today even large IT companies opt for this business model as they believe in concentrating on their core objective of delivering value to their clients, rather than spending additional effort in maintaining a growingly complex IT infrastructure," said Kaushik Chandra, CTO, PricewaterhouseCooper.

KNK Venkataraman, vice president (global delivery) for technology infrastructure services at Wipro Technologies says that independent research firms estimate the worldwide IT infrastructure and applications outsourcing business to be now worth about USD 120 Billion per year, and Wipro's revenue for FY 06-07 stands at USD 657 Million.

Right from data centre management to the entire IT infrastructure management comes under the ambit of IMO. Desktop management, server management, help desk or level 0 database management, as well as network management are some of the services provided under it.

Few law firms in Canada are outsourcing legal work to India

Source: Lawyersweekly

It’s already happened for a variety of manufacturing, accounting and information technology companies who seek cost advantages that Canadian industry can’t match. How easily could legal services follow suit offshore?

Offshoring, a form of outsourcing, initially attracts interest because it’s cost-competitive. Service providers work on different continents where labour costs are substantially lower.
Knowledge process offshoring became practical only recently. According to Thomas Friedman’s tome The World is Flat, a trillion dollars of broadband capacity was strewn all over the globe during the Information Superhighway 1990s.

When the dot-com bubble popped, opportunistic service providers acquired the wires at fire sale prices, and today they deal with far lower overhead than that which plagued their predecessors. Connect highly commoditized computing capacity and advanced workflow software to those fast wires and you have the express lanes that permit internationally dispersed teams to collaboratively drive a project.

The cost advantage Indian knowledge process outsourcers enjoy doesn’t seem set to disappear anytime soon. Consider: widely quoted statistics put the number of lawyers in India at one million, and Indian law schools graduate another 80,000 each year. Economics 101 dictates that wherever supply outstrips demand, prices fall or, at worst, stay stable. All things being equal, India’s legal industry should continue to reap huge crops of talent from which KPOs can pick the cream.

RIL buys copters for offshore work

Source: Economictimes

Reliance Industries will begin operating its own helicopters in its hunt for oil from next month. The company will take deliveries of two Bell 412 machines in the second week of December. RIL has increased its oil exploration acreage over the years and is now prospecting for oil as well as developing oilfields on both coasts of India.

The Indian oil major joins several global majors like Shell and Qatar Petroleum who have their own aviation operations for offshore support. ONGC is the other Indian oil major that has made the backward integration into helicopters through its stake in Pawan Hans.

RIL’s fleet is likely to go up in the future as offshore activities grow. The company now relies on machines chartered from other operators. Helicopters are used extensively in offshore oil exploration primarily to move men and material.

RIL has floated a tender inviting bids to operate and maintain the machines. The two helicopters will be maintained by a third-party operator in the initial period, it is learnt.

Finding pilots and engineers to maintain aircraft has become very difficult because of the huge growth in oil exploration activity.

Sources in the helicopter charter business say high oil prices have led to increased mobilisation in the Gulf region as well as countries like Nigeria and Indonesia. Like most other oilfield services, helicopter charter rates too have shot up as a result and so have crew salaries. Indian offshore operators like Global Vectra have recently begun employing expat helicopter pilots.

Managing compliance in an outsourced world

Source: Modplas.com


In light of well-publicized recent problems and product recalls, it’s evident that even the biggest and best OEMs can stumble in their offshoring attempts. Here are some pitfalls for which a processor should prepare. Outsourcing has been getting a lot of attention recently, almost all of it negative, with millions of dollars in product recalls and untold damage to some leading brand names. “Despite the significant benefits that come with outsourcing, there are also risks and challenges for OEMs to consider,” said Mark Holman, senior vice president of operations for Arena Solutions (Foster City, CA), a provider of on-demand product lifecycle management (PLM) programs for manufacturers. “Outsourcing, by definition, leads to a loss of control. Done properly however, outsourcing is a good strategy, but don’t confuse outsourcing with offshoring.” Arena recently published a white paper on potential pitfalls when outsourcing manufacturing.

The first pitfall to avoid involves selecting the wrong contract manufacturer (CM). But how do you identify the right CM? If a processor or OEM and a CM are separated by 10 time zones, it’s easy to lose control of standards and specifications. Plus, if the only criteria for outsourcing is to make products as cheaply as possible, it is easy to see how corners could be cut by CMs keen for new business, but interested in their own profit.

According to Holman, “Working with the wrong contract manufacturer is the root of many problems that we observe in outsourcing. An OEM selects a handful of contract manufacturers—or worse yet, a single CM—and starts discussing business without having a clear understanding of the appropriate selection criteria.” He says selecting the right CM has two key elements: first, select one that is in alignment with your needs, size, and stature. “We work primarily with mid-sized manufacturers. If some of these work with the very large CMs, they get lost in the machine,” Holman explains.

A little OEM won’t get the attention of a large CM, and a big OEM will overwhelm a small CM. Second, find a company that has the skills you need. Understand that their procurement policies should match your policies. “When you outsource you’d better put your ‘A’ team on the outsourcing project or you’ll lose your competence,” Holman cautions.

Outsource for strategy not just savings

Source: Computerweekly.com

Businesses are increasingly considering IT outsourcing for strategic benefits and not just as a means of cutting operational costs, according to the latest survey from Harvey Nash.

In its ninth annual outsourcing survey, which questioned 650 senior IT professionals, the IT outsourcing consultancy found that outsourcing is booming as businesses recognise its strategic benefit.

The research also found that businesses are gaining access to specialisations in a number of countries by multishoring. "If companies are outsourcing IT support to India and admin tasks to the Philippines, this allows them to make use of each countries strongest skills," said the report.

It added that with half of CIOs expecting their IT budget to grow next year and planning to spend more than 10% on IT outsourcing programmes, the outsourcing industry will continue to grow.

The National Outsourcing Association said, "It is about time businesses realise that there is more to outsourcing than just operational cost savings. The specialisation that outsourcing brings can deliver a number of strategic benefits such as responsiveness and flexibility, as outlined by Harvey Nash."

"Although companies are focusing their outsourcing strategy on non-cost related issues, it is important not to dismiss the cost element. Cost is still a key driver when companies make the decision to outsource."

HMRC to launch a second offshore disclosure facility

Source: Moneymarketing

HMRC is planning to introduce a second offshore disclosure facility in an effort to catch tax dodgers with offshore accounts. An HMRC spokesperson has confirmed that plans are being put in place to repeat the ‘amnesty’ that was carried out earlier in the year.

She says: “Yes there will be another facility but we’re not sure when or how that will operate.”

Grant Thornton tax investigations director Gary Ashford says a second disclosure facility is unlikely to generate much additional revenue for the Treasury, as the first hasn’t been as successful as HMRC expected.

He adds it is likely there will be a late influx of payments under the first ‘amnesty’ before the November 26 deadline. But says that HMRC will still be somewhat disappointed with the amount of revenue generated.

He says: “It was initially thought billions could be recovered. It's now likely to be more like millions that will surface. It may even be a case of HMRC having overestimated how many people hold undisclosed offshore accounts.

“However, it looks like HMRC are about to embark on a second amnesty. They are already targeting another group of around 150 financial institutions in a bid to gain customer details. Given the existing legal rulings on the large banks it seems likely that HMRC will be successful in obtaining customer information relatively quickly. HMRC is determined to make examples of tax dodgers but will be looking to encourage them to disclose as they did with the Offshore Disclosure Initiative.”

Bio-informatics Outsourcing to India to Grow at 25% CAGR Despite Critical Challenges

Source: Newswiretoday

Indian vendors have a huge emerging opportunity in bioinformatics services from pharmaceutical companies in customization of existing products and creation, licensing and manipulation of databases.

Contract research assignments usually generate large amounts of data, leading to problems in data storage, management, retrieval, and analysis. The application of IT to the life sciences sector - bioinformatics, assumes increasingly higher significance as the use of bioinformatics tools lower costs, improve efficiency and reduce development-to-launch timelines.

Indian vendors have a huge emerging opportunity in bioinformatics services, customization of existing products and creation, licensing and manipulation of databases. However, they face certain critical challenges like the lack of standardization in service platforms and modular systems, problem of market / data heterogeneity, and an acute shortage of qualified manpower. They would also need to find a niche focus, in order to move higher up the value chain of services.

However, Indian bioinformatics vendors are aware of these challenges, and have started improving their processes to succeed as preferred outsourcing partners to global research clients. They have enhanced investments in innovation and are also forging partnerships with reputed academic institutes to ensure a healthy flow of employees. Poonam Bhana, analyst at ValueNotes, estimates that “the bioinformatics outsourcing services sector in India will grow at 25% CAGR over the period 2007-2010.”

ValueNotes has launched “CRAMS Insights” - a bimonthly newsletter as an update to the report “Pharma Outsourcing in Drug Discovery & Development: Contract Research Opportunity in India”. The newsletter focuses on shifts in business models, M & A trends, emerging technology platforms, service capabilities of vendors, and a macro level view of the Indian pharmaceutical business against a global backdrop.

Medical OEMs see outsourcing as lifesaver

Source: Purchasing.com

Under pressure to cut costs and get to market faster, medical device makers are slowly overcoming their doubts and turning to electronics manufacturing services providers.

Medical-equipment manufacturers are notoriously skittish about outsourcing the building of their products. But indications are that they are getting more comfortable with the idea. The reason: Like manufacturers in other fields they are under pressure to cut costs, avoid capital investment and bring products to market sooner. Enter electronics manufacturing services (EMS) providers.

Only about 10% of electronics in medical equipment is outsourced now, but that percentage will grow over the next five years, according to medical OEMs and EMS providers. In fact, the medical EMS market will more than double from $3.3 billion in 2006 to $7.4 billion in 2011, according to researcher Technology Forecasters. And much of that outsourcing will be for entire systems rather than just printed circuit boards. In addition, the OEMs will look to their EMS providers to help them design products.

The nervousness many medical OEMs have felt about outsourcing relates to the special requirements their products have to meet, and the applications they are used in.

Medical equipment design issues are often different than the issues with computers or telecom equipment. Failure of medical equipment could be catastrophic. That's why U. S. Food and Drug Administration (FDA) regulations govern medical-equipment products. "With medical equipment you are not just building a box, you are building something that can save a life or take a life if it is not done right," says Andy Hyatt, vice president of Plexus' Medical Sector in Neenah, Wis. "When the FDA issues a consent degree that shuts down shipment of a given medical product, that gets a whole lot of attention," he says.

As a result medical OEMs have traditionally felt no one can build a piece of medical equipment as well as they can, Hyatt says. In some cases, they're right. Not all EMS providers have expertise in medical equipment manufacturing. Many EMS providers are good at high-volume, low-mix products such as computer and cell phones, but aren't as proficient at low-volume, high-mix products such as magnetic resonance imaging (MRI) systems or computed aided tomography (CAT) scanners.

Medical OEMs are slowly gaining more trust that EMS companies are capable of building higher and higher levels of their products, says Hyatt. "However, the acceptance rate is much less than more mature and established outsourcing arrangements in networking and computing," he says.

C4 looks to outsource operations

Source: C21media.net

UK pubcaster Channel 4 is looking to outsource a range of its broadcast and production services to Red Bee Media.

The proposal affects more than 100 staff in the network's broadcast engineering and transmission teams, as well as post-production, library services and on-air graphics, in C4's operations and 124 Facilities divisions.

It would also deliver annual savings of 10-15% on the channel's current operations budget.

The deal is aimed at giving C4 access to flexible, purpose-built facilities, with staff working in the affected areas expected to transfer from its headquarters in London's Horseferry Road to Red Bee Media's broadcast centre in White City over 12 months from the second quarter next year.

Those working in post-production and on-air graphics will remain at Horseferry Road, in Red Bee Media’s employment.

And under the new contract, Red Bee will also make a significant capital investment in new state-of-the-art facilities at White City.

The proposal is subject to contract completion as well as consultation with staff over how their terms and conditions of employment will be affected.

C4's group finance director Anne Bulford said the board decided there were "significant" benefits to be made after its extensive review of the service.

"Making our unique public service content available across new digital platforms is placing considerable financial and technological demands on the channel," she said. "Outsourcing these functions will allow us to tap into the more considerable and flexible resources of a big, specialist provider and help us stay competitive in the face of rapid technological change."

Red Bee Media's CEO Pam Masters said the company would welcome C4's staff, having been part of the original C4 team and instrumental in setting up the channel 25 years ago.

Some Evils of Outsourcing

Source: Compositesworld

About 15 years ago, aircraft companies hired business school graduates (MBAs) to gain fresh insight into the best business practices taught in our American institutions of higher learning, such as Harvard, Wharton and Stanford. The then-current thinking was that the costs associated with operating and maintaining factories in the U.S. were excessive and that OEMs could save money and increase profits by jobbing out fabrication and assembly work. Because labor was a large part of the cost of production in U.S. facilities, a key part of the revised business plan involved moving production to Mexico or “offshore” to locations in Eastern Europe, China and India.

As U.S. shops closed, workers were laid off and equipment was sold off. The capabilities to build in-house diminished or vanished entirely, but outsourcing did reduce the OEM’s capital expenditures to modernize shops with new equipment and train replacement shop technicians. And in the short term, profits certainly increased.

What wasn’t factored into the outsourcing equation, however, was the inevitable loss of a critically important com-ponent of any manufacturing process — design expertise — the cost of which is not easily quantified. When engineers design and shops build products in-house, there is a feedback between the two departments that are generally located in the same facility. Designers can easily walk down to the fab shops whenever a problem arises to see the effects of their design and to immediately propose a corrective action to a problem. And the engineers receive a definite advantage in recognizing faults/weaknesses in their designs by seeing the tangible results of their ideas. During the fabrication and assembly of the DC-XA reusable rocket in 1996 during my tenure at McDonnell Douglas (Huntington Beach, Calif.), the designers actually were located on the shop floors to expedite immediate solutions to problems and to keep the work flowing. When a part interfered with another during assembly, the remedy involved a quick walk to the shop to see and redline a drawing for an immediate fix, followed by a design change the next day.

This system worked very well for 80 years, and the close rapport established with the shop technicians who physically built aircraft produced some of the best aerospace designs and products in the world. This exchange was absolutely necessary when doing development work on new programs where new technology was being generated each day.

DMS India Launches Online Outsourcing Projects Marketplace

Source: Pr-usa.net

DMS India launched the "Online Marketplace" to provide all businesses a single point where they can post their projects onto an open online marketplace and invite RFPs from various service providers or suppliers in a reverse auction real-world environment. The Online Marketplace aims at helping micro, small and medium sized enterprises take advantage of the benefits of outsourcing and showcasing their skills to larger firms who are streamlining the way they manage the services spend.

DMS India online outsourcing system will bring in a pool of all kinds of projects of any size from various countries, taking advantage of e-world and e-working brought about by Internet technologies. Companies will be able to post projects and access to projects which will include tenders, contracts and trade leads from all business industries. The Online Marketplace will not just concentrate on IT projects outsourcing but all industries including home decorations.

“It is a evolutionally way of doing modern business by companies who would like to stand tall and keep themselves afloat in this global economy where the challenges of survival and satisfying shareholders are enormous,” said DMS spokesman. “If you don’t outsource to reap the benefits, then your competitor will to sink your business. Service spend account over 50% of Fortune 1000 purchasing budgets, and all what we are saying is save at least 15% to 50% of those hard cost by using our Online Marketplace, where the small businesses would be able to do those projects.”

The recent global economy trends has been "outsourcing" where firms want to hire the services of an outsider to provide project-based work. Analyst reveal the need to maximize shareholder values, the forces of the need to survive in a global marketplace, high cost savings and the ability to access unique skills not readily at home as primary drivers of this trend. Outsourcing was initially thought to be for large corporations but now micro, small and medium sized enterprises are joining to fully discover and enjoy its benefits.

India, China Look to Collaborate on Software

China is captivating the worlds largest population that makes out to be a huge workforce. China outsourcing has soon come up as a strong gesture in the Asian outsourcing market. China is rapidly emerging as one of the World's leading suppliers of Offshore Software Outsourcing Services due to its incredible development rate. With the wages being cheaper than that of India, China Outsourcing is drawing attention of a lot of investing organizations.

Recently the steps taken by the Chinese Government to open up and collaborate in terms of economy has resulted in a comparatively transparent situation which has certainly encouraged China's Outsourcing environment.

With a vast force of computer literate waiting to explore and earn, China Outsourcing is all set to get into competition with its neighboring Indian market. The main reason for the development of China Outsourcing stands to be the cost factor.

China has recently set up a special division to lure the major Indian software firms. It is manned by Chinese officials who will work with Indian companies to understand their needs in order to get them to set up new centers in China.

Moreover a leading company based in Pune in India has signed a pact according to which the company will be training about thousand software project managers in India. It has been found that the project management skills are quite scarce in China and they are facing difficulties to get there programmers well trained.

The training would also include the communication and negotiation skills and work with the Zensar for its clients in eastern Europe and U.S.

Most large Indian software firms have small development centers in China and now determining whether the decision will make long-term business sense.

As per the planning the Chinese government is thinking to add another $100 million companies to train people with best skills in next three years.

Offshore Software Outsourcing Risk

Source: Prurgent.com

Differing Internal Processes - The vendor's processes sometimes could be a lot different from what Client is using for executing their internal projects. If these differences are not discussed beforhand, they could become a risk and cause project delays.

Differing Internal Processes - The vendor's processes sometimes could be a lot different from what Client is using for executing their internal projects. If these differences are not discussed beforhand, they could become a risk and cause project delays.

Each vendor will have somewhat unique processes and methodologies that they follow when developing a project. It is important to evaluate how this differs from your in-house processes, and how the two differing approaches can best be “meshed” together during a development project.

It is best if a development project is guided by a well-defined, common software development and project management methodology. The best vendors follow industry standards, such as CMMI and ISO 9001 QMS. This common methodology should cover libraries, tools used, version control and quality assurance processes, as well as security metrics for each project.

Once the process is agreed upon and established, it is equally important that monitoring is in place, to ensure that these processes are being properly followed. Clients should have each project milestone clearly defined, including what deliverables are planned during each phase, with specific deadlines for the completion of each. The client should also have a clear understanding of what their obligations are in regards to reviewing and approving each delivered product, including the requirements documentation, the system design, test cases, and any test issues that arise.

In general, the more involved your company is with the project, the more smoothly the project will go. This is why it is important to have a designated contact within your firm, whose role is to communicate with the vendor project manager and/or development teams.

Outsourcing Giant EDS Makes Big Push into China

Source: Itbusinessedge

We have speculated more than once about when China might become “the next India.” (We aren’t the only ones. IDC recently went on record with a prediction that China would become a more desirable offshore location than India by 2011.)

One company that appears convinced of this is EDS. The outsourcing giant is following its recent purchase of a majority stake in an Indian software firm and nudging of American workers into early retirement with moves to multiply its current Chinese work force six times over by 2010, reports the International Herald Tribune.

EDS employs 750 workers in China now, but expects that number to increase to 5,000 by 2010 and to 10,000 “eventually,” according to the head of its operations in China, South Korea, Hong Kong and Taiwan. The EDS exec notes that China “will become or is becoming one of the two dominant players” in outsourcing.

An IDC analyst tells the International Herald Tribune that EDS won’t be the only company shifting software outsourcing work from India as wages there continue to increase. “…Wages in smaller Chinese cities are still relatively low,” the analyst says. Indian companies themselves are taking advantage of this trend, as evidenced by Tata Consultancy Services’ recent expansion of operations in China.

Biomedical engineering is the new wave of outsourcing from India – can India catch up?

Source: Indiadaily.com

Many Mechanical Engineering infrastructures are getting retooled in America to serve the biomedical engineering sector. As the baby boomers age in America, the demographic shift is causing a massive demand for better medical attention.

The baby boomers are flushed with cash. The research grant in biomedical engineering is astronomical in size. The opportunity resembles IT sector in 1980s.

The next wave of outsourcing will come from the biomedical engineering areas. The cardiovascular engineering, fluid mechanics, artificial self contained hearts, artificial optic nerves and brain cells are the name of the game in the next several years.

Can India catch up and provide the necessary support mechanism in the form outsourcing services that mainstream America will not like to perform?

Some say, India will exceed the expectations. In IT, Indian software engineers have performed superbly in performing reengineering of legacy systems that the western software engineers preferred not to work on. The same can follow in biomedical engineering.

BPO vista set to expand in Kenya

Source: Bdafrica.com

Starting a business venture is a daunting task requiring innovative ideas especially if it has no known related feature or information on risk and opportunities in the wider market.

Business Process Outsourcing and Call Centres are turning to be some of the innovative ways to do business. There are signs that if tapped and well marketed, the industry can create employment and wealth in the country.

“Kenya can take advantage of the rising wage costs in India, the top BPO destination at the moment” said Dr Bitange Ndemo, the Permanent Secretary, Ministry of Communications and Information.

BPO involves handling of various aspects of a business on behalf of a local or international client using information communication tools such as computers installed with special software, high speed Internet connection and trained personnel who have excellent command of language of trade. Legally, one will get a licence from the telecommunication regulator, the Communications Commission of Kenya.

Most local and international companies are turning to outsourcing their non-core functions to concentrate on their core business and reduce the cost of labour.

Call Centre operations differ from data entry as regards the of mode of communication of transactions and the hefty capital.

While Call Centre business is mainly done real time through voice communication, data entry is not and requires less capital expenditure.

In addition to this, in the Call Centre, an investor needs to have qualified staff by training and ability to handle the work. This type of investment also requires larger amount of money but one can either start small or partner with other players who have already invested in infrastructure and also offer training opportunities to the clerks at a fee.

Other than starting big, an investor can opt to start small by first engaging in data entry where the proprietor will require computers and Internet connection though not necessarily high speed and an office space.

Businessmen already doing cyber café business are at a high advantage of maximising on their existing investment. As it is today where most cyber cafe operate only during the day, the premises could be turned into data entry centres at night to maximise the use of the equipment, office space and, as is expected, generate more cash and earn higher profits.

Customers Looking Beyond India for Outsourcing

Source: Pcworld.com

Troubled by high staff attrition in India, which often disrupts work on projects, customers in the U.S. are increasingly looking for alternative countries for their outsourcing projects, industry analysts say.

The move by customers comes as Indian outsourcers are aggressively cutting costs. Some of the cost-cutting could impact quality of service, giving customers another incentive to take outsourcing projects elsewhere.

The frequent staffing changes caused by attrition, combined with increased staff costs, have lowered customer satisfaction with outsourcing to India, said Sudin Apte, senior analyst and country head for India with Forrester Research. For the first time, some customers are making a concerted effort to find alternative locations, he said.

The pressure to reduce costs comes from several fronts, notably the strengthening rupee against the U.S. dollar, rising salary costs in India, and the need to spend on new service centers around the world to serve customers locally and compete with multinationals.

The rupee has appreciated by about 12 percent against the dollar since the beginning of the year. The appreciation pushes down the revenue in rupees earned in the U.S. by Indian companies, even as staff costs in India rise. The U.S. is the largest market for Indian outsourcers, accounting for about two-thirds of revenue earned abroad.

Rising costs force India to shift focus to partnerships

Source: Vnunet.com

India's outsourcing industry has moved on from being a low-cost provider and is keen to enter the realm of partnership.

The strongest impression at Indian outsourcer HCL’s New Delhi conference last week was of the offshoring sector trying to reposition itself as a corporate partnership option rather than just a cut-price commodity provider.

As the sub-continent’s economy continues its explosive growth, the price advantage that its businesses exploit is eroding. And Indian suppliers are increasingly facing the same issues as top-tier technology consultancies across the world.

Some big-name HCL customers are already endorsing the shift in focus.

Carphone Warehouse operations director Pete Schofield said major organisations are already looking at their outsourcing deals as an opportunity for innovation as well as expenditure reduction.

“Our contract with HCL has been an initiative to improve our IT capability rather than just strip cost,” he said.

For Deutsche Bank, the offshoring decision was largely the result of the availability of appropriate skills, according to global head of investment banking Tony McCarthy.

“We have expanded in India because it is the largest resource pool in the world,” said McCarthy.

“And forces such as power consumption and the sub-prime mortgage crisis have made us look at collaboration to minimise the disruption of these events,” he said.

The fact is, Indian outsourcers are no longer the new kids on the block. According to Forrester Research, the biggest players are now “leaders”, still behind giants such as EDS and IBM, but ahead of global names such as LogicaCMG and Atos Origin.

And the trend shows little sign of slowing as customer requirements increasingly dovetail with outsourcers’ core capabilities. Remote infrastructure management (Rim) contracts, for example ­ where hardware remains in the client’s data centre but is operated remotely by the service provider ­ are up by 30 per cent in the past year.

Offshore Outsourcing will remain strong in 2008

Source: Tmcnet.com

Outsourcing will remain strong in 2008, with HR outsourcing contracts worth $1.1 billion and finance & accounting outsourcing (FAO) contracts worth $600 million coming up for renewal, according to off shoring advisory firm Everest Research Institute.

In its study 2008 Market Predictions, the firm said that demand for FAO services will continue to be strong in the next 12-18 months, as large buyers in the exploratory phase begin to initiate actual engagements. On the supplier side, battle for market share will intensify.

In 2008, captive units, niche BPO players and technology providers would be prime acquisition targets. Some captives, particularly in the financial services space, would see change in ownership and become third-party suppliers, the off shoring advisory firm has predicted.

Outsourcing activities are helpful in bringing out more flexible, more dynamic, and better able to change themselves to meet the changing opportunities. It is also useful in protecting huge investments coverage on investment. Professional Expertise Outsourcing of work helps in bringing professional expertise. Transferring your work to an expert helps in delivering better results and greater satisfaction to clients. Correctness giving the work to a professional staff also brings correctness in the work.

In order to provide excellent work, proper computer validation has been undertaken. Full accuracy and safety of data is also considered as an ensuring quality of the product convenience. Outsourcing the work also leads to greater convenience for any party. Putting your work in expert hands is rather considered useful to provide more usefulness in your work.

In conclusion, we will see a major influx of in-house call centers move to developing locations such as India, The Philippines and South Africa. During this time period, we will also start to see the early stages of consolidation in the industry.

ASX eyes offshore merger

Source: Businessspectator

The Australian Stock Exchange is considering the possibility of merging with another bourse as international share markets continue to expand, The Australianreports.
ASX chief executive Robert Elstone told The Australianthat the merger topic was one of the major issues that company is presently discussing.

Mr Elstone said that the business models of stock exchanges in Hong Kong, Singapore and Germany were the most similar to ASX's model.

Mr Elstone told the newspaper that there was no deal underway at the present time. Mr Elstone's comments come after ASX chairman Maurice Newman drew shareholders' attention to the deals between other international bourses at the company's annual general meeting.

However, political hurdles needed to ensure that any merger deal between the ASX and an overseas bourse did not lower regulatory standards in Australia, Mr Elstone said.

Mr Elstone said the ASX had been approached by NASDAQ about acquiring its 30 per cent stake in the London Stock Exchange but added that the company would not buy a minority stake unless it paved the way for the ASX to acquire a controlling share of a particular bourse.

XMG estimates 2007 global outsourcing market at US $297 billion

Source: Services.tekrati.com

The global outsourcing market will finish 2007 at US $297 billion, with an estimated growth rate of 19.31 percent, according to an independent market forecast by XMG. The forecast includes IT, BPO and call center services, and the onshore and offshore delivery of outsourcing services. The study shows offshoring beating market expectations. XMG analysts predict strong growth and turbulent conditions for global outsourcing through 2010.

XMG forecasts the total outsourcing market to reach US $450 billion by 2010.

"While it is no surprise that India and China continue to lead amongst the offshore countries, our study also showed a noteworthy insight to those following the growth of other offshore countries in Asia," said Lauro Vives, Founding President and Chief Analyst of XMG. "The Philippines is experiencing an unprecedented growth rate of 62% CAGR and will surpass Malaysia in 2007."

In 2006, Malaysia and the Philippines were neck-and-neck with 1.04% and 1.02% respectively of the share of the global revenue.

Additional highlights from the study on the performance of the top 4 Asian offshore countries include:

* India is estimated to capture US $34.1 billion in total revenue by year end 2007 at 29.5% CAGR. India will claim an estimated 11.5% share of the global market. XMG estimates India will continue to lead the offshore segment through 2010 with at least 15% share.
* China is estimated at US $13.1 billion by year end, growing at 47.9% CAGR. China is on track to have a 4.4% share of the global market, based on 2007 total revenue figures forecasted.
* The Philippines is expected to grow to almost US $4.1 billion, and 1.4% of the global market share.
* Malaysia is estimated to finish the year at US $3.6 billion, achieving 1.2% of the global market share.

Even with Malaysia’s 38% growth, the report showed that other countries are outpacing Malaysia primarily due to the country’s lack of available manpower to sustain the growth of its offshore and outsourcing industry.

"Locators are turning to other countries where there is headroom for further growth and expansion," said Vives. "This continues to show that the strategy for expanding offshore rests on the availability of manpower in that country. Our competitor intelligence report shows that the typical profile of offshore locators, whether service providers or captives, is to have the foresight that they can grow anywhere from 60% to 90% year on year unabated over the next two to three years."

Outsourcing of HR Functions to Regain

Source: Ad-hoc-news



Outsourcing of HR Functions to Regain Momentum in 2008, According to Everest Research InstituteDALLASTX-EVEREST-RESEARCH

Outsourcing of human resource functions ? including the most commonly outsourced functions of payroll, benefits, employee data management, information systems, and contact centers -- is expected to increase in 2008 after remaining relatively flat since 2005, according to the Everest Research Institute. While all market segments present significant growth potential, the Institute?s annual Human Resources Outsourcing (HRO) market study predicts mid-sized, North American and European companies will spark the growth. The Institute will hold a Webinar on November 6 at 9 a.m.

According to the Institute, the cumulative total contract value of human resources outsourcing transactions reached US $21.2 billion in 2006 and is expected to be US $25.4 billion by the end of this year. The Institute?s study, Human Resources Outsourcing (HRO) Annual Report: November 2007, attributes Future HRO growth to existing suppliers that have decreased transition costs and timeframes and are promoting standardized offerings. With the current penetration level of HRO being low in all market segments and across geographies, suppliers are focusing on the largely underserved mid-market and are offering compelling price points. According to the study, North American buyers account for more than 70 percent of HRO transactions, but Europe has seen increased deal signings over the past three years. Manufacturing, financial services and high-tech and telecom are the leading buyers of HRO overall.

Over the last three years, we?ve seen a flat market in terms of the number of global HRO deals made due to the limited capacity of suppliers; however, the share of regional transactions has increased, especially for mid-sized companies of 3,000 to 15,000 employees,? said Monica Barron, Vice President, Everest Research Institute. ?Existing suppliers are building capability and new suppliers are entering the market, indicating continued market evolution and growth. We?ve seen a definitive move away from the ?lift-shift? model, where the supplier takes over the buyer?s existing staff, processes, and technologies largely ?as-is? to provide outsourcing services. Buyers are leveraging a transformation-transfer model in which standardized processes and technologies are implemented and provided by the supplier.?

Another growth driver is a ?componentized? HRO model where buyers uncomfortable with full-scope, large scale transformation are signing contracts with suppliers who break up the outsourcing engagement into components and outsource them in phases.

?As buyers are deciding to move toward a componentized route, either in terms of scope of process or geographic scope, suppliers must have flexible offerings and contract terms to meet their requirements,? said Rajesh Ranjan, an Everest Research Institute Senior Research Analyst and co-author of the report. ?At the same time, suppliers will need to ensure that their offering is scalable so as to be the supplier of choice when buyers decide to expand their scope of outsourcing.?

In Offshore Outsourcing, China's A Different Ball Game

Source: Informationweek.com

China is like no other country on the offshore outsourcing landscape.

It has a rapidly growing base of low-cost IT pros, but other dynamics dominate the picture. With economic growth of more than 11% a year, China's poised to become the world's third-largest economy, and many CIOs think they need a presence in the country. Call it the "just gotta be in China" syndrome. Yet the last decade of offshoring has taught them the risks--like not getting the right talent for projects--of jumping into a hot market.

British telecom provider BT Wholesale has established a small IT center in China and a relationship with an IT services provider there. "Our philosophy is not to study it to death, but to get in there with a relatively modest approach and see what results we can deliver," says CIO Clive Selley. "It's a massively important, vast population with a fast-growing economy, and we need to be able to understand the marketplace."

Tata Consultancy Services plans to hire slowly in China so it can focus on keeping those it recruits. "We would like to go from the 1,000 people we have in China now to 20,000 or 30,000, but in a way that the attrition rate is low," says N. Chandrasekaran, chief operating officer at TCS.

Companies specializing in China-based IT outsourcing include ChinaSoft, DarwinSuzsoft, NewSoft, Symbio, and WorkSoft. In August, private equity firm Francisco Partners invested $48 million in DarwinSuzsoft, a U.S. company that employs 800 Chinese engineers, and Sierra Atlantic, a U.S. company with 1,100 developers in Hyderabad, India, acquired ArrAy, which has 200 technologists in Guangzhou and Shanghai. Challenges include a much lower rate of English competency than India has and looming risks of inflation from an overheated economy.

Five years ago, would-be customers focused on the security of their data and intellectual property in China, says Dean Stevens, general manager at Symbio, which has offices in China and Maryland. He rarely hears that concern today; now the focus is on how China will avoid India's dilemma. "The No. 1 concern I hear is, 'Can you get the engineers and resources I need to get my job done, and what's your retention like?'" Stevens says. "They'll often say, 'The problem I ran into in India was availability of resources and attrition, and don't give me that same problem.'"

Low cost outsourcing model is not sustainable

Source: Indiantelevision.com

Demand for animation content is rising and the sector is expected to grow 30 per cent annually over the next three years, from its current size of $550 million.

"There is also scope for animation companies to exploit from the gaming industry. Besides outsourcing, we are also seeing a surge in domestic demand from kids TV channels and film producers," said DQ Entertainment Tapaas Chakravarti while speaking at Nasscom Animation & Gaming India 2007.

Animation companies in India will have to focus on quality and scalability, other speakers said in a session on "Outsourcing from India.".

"The low-cost model is not sustainable. It is quality that will drive outsourcing in the long term rather than cost," said Paprikas CEO Nandish Domlur.

The animation industry also faces the challenge of creating a large talent pool and needs to transition to IP-driven models over a period of time. There is also a lack of experience in digital product pipelines and project management.

"The services legacy has provided exposure to work flow and processes in the global arena. The hybrid service model should grow into a more matured engagement on co-productions," said Domlur.

Reduce the risk when outsourcing your next digital media project

Source: Bizcommunity.com

Outsourcing allows companies to focus on their core business, and increase competitiveness. It offers a cost-effective solution, especially when companies have insufficient or inexperienced in-house resources available.

That being said, companies simply do not have the time to spend hours on the Internet filtering through lists of supplier websites with no indication of their track record.

The solution to this problem came in the form of South Africa's own online supplier systems called Digital Supplier.

Digital Supplier connects companies with reputable digital suppliers throughout South Africa. This service is free of charge to companies.

Clients registered on www.digitalsupplier.co.za can post jobs online to automatically receive three quotes within a specified time period. On receipt of each quote, the client is able to view the supplier's job history and average rating.

On job completion, the client is asked to rate the supplier's services. This aims to assist any future clients wishing to employ this supplier's services.

The Digital Supplier system has been designed specifically to favour suppliers with high ratings. Suppliers delivering sub-standard work will eventually be removed from the database to be replaced by new suppliers.

Diamond Offshore Drilling: Undiscovered By Individual Investors

Source: Seekingalpha.com

Diamond Offshore Drilling (DO) appears to have a promising future which institutions have recognized. They own almost 96% of the stock. Individual investors, however, are yet to spot the company.

Diamond Offshore is an oil and gas contract driller with a worldwide operation. It focuses on deepwater drilling and has equipment located in the Gulf of Mexico, North Sea, Africa, South America, Southeast Asia and Australia. The company is currently upgrading its equipment, particularly its deepwater semi-submersibles. In January of this year its equipment inventory included 44 mobile offshore drilling rigs, 30 semi-submersible rigs, 13 jackup rigs and a drill ship. All of this type of equipment is currently in demand for oil exploration.

With sales growth of 28.9% a year (vs. the industry average of 17.8%), annual income growth of 40.4% (vs. the industry average of 14.9%) and a Return on Equity of 36.9%, Diamond Offshore is well ahead of its competition. It's one year forward looking price to earning ratio [PE] of 9.44 and an impressive price to earnings growth ratio [PEG] of 0.78 (five year expected) add to its desirability.

Clearly, the oil and gas drilling industry has risks. Crude prices are volatile. Drillers must contend with both unstable governments and miscreant local populations. Natural disasters always pose a hazard. During Hurricane Katrina Diamond Offshore lost a $14 million (book value) jack up rig, the Ocean Warwick.

Nevertheless, the industry is currently attractive. The demand for oil is increasing at a faster rate than the discovery of new reserves.

Firms may go offshore

Source: Stuff.co.nz



More Canterbury manufacturers are looking at shifting parts of their production offshore, according to the Canterbury Manufacturers Association.

Manufacturers were being forced to change business models to cope with the pressures of a high kiwi dollar, the Canterbury Manufacturers' Association chief executive John Walley said.

Walley said the CMA September survey of manufacturers, released yesterday, showed "anyone with a substantial sales volume in US dollars is still suffering".

The pressure on "bigger player" exporters to switch manufacturing activity was high.

"For example there's the process (high-tech electronics firm) Dynamic Controls are going through – that is moving their production offshore and we (predict) it's not long before marketing and development follows it.

"Others (companies) which I can't really name are seriously now shifting or planning to shift activity away."

There was also a negative knock-on impact to domestic suppliers to these exporters.

When too many firms shifted offshore the result would be a one dimensional export sector in Christchurch without critical mass, Walley said.

"Once the capability evaporates, we collectively lose our ability to respond to future opportunities and, over time, the sophistication of our exports will be eroded, along with our living standards," he said.

The survey indicates those exporting to Australia have more favourable conditions than those exporting in US dollars.

The sentiment surrounding the latest survey was that manufacturers were getting on with the job despite difficulties presented by the kiwi dollar's continued strength against the greenback.

Siemens IT Solutions and Services Operates IT for Evonik Industries in the US

Source: Money.cnn.com



Effective immediately, Siemens IT Solutions and Services will operate large parts of the local IT and telecommunications infrastructure for the industrial company Evonik at all its sites in the US. The corresponding outsourcing contract will run for four years and is worth around $42 million USD.

Evonik Industries is an international industrial company with the business areas of chemicals, energy and real estate. The contract just signed is part of a global framework agreement for IT services with Evonik Industries and governs the long-term collaboration between the two companies. The Siemens subsidiary Services for Business IT Ruhr GmbH (SBI Ruhr) played a significant role in the contract negotiations with Evonik Industries. Under this contract, Siemens IT Solutions and Services will operate large parts of the IT and telecommunications infrastructure for Evonik Degussa Corp., the US subsidiary of Evonik, at all of its US sites. This includes two computer centers, servers, telephone systems and all PCs.

Siemens IT Solutions and Services is thus successfully continuing its strategy of cooperating more closely with the other Siemens Groups and expanding its business in those areas in which, for example, the industrial sectors are strong.

About Siemens IT Solutions and Services

Siemens IT Solutions and Services, Inc. is one of Siemens operating companies in the United States. Siemens IT Solutions and Services is an internationally leading provider of IT solutions and services. With its comprehensive know-how and specific sector knowledge, this division of Siemens offers solutions and services from a single source - from consulting to systems integration to software development and management of IT infrastructures.