India's revenue from back-office outsourcing is expected to surge nearly five-fold to $50 billion by 2012 despite a possible recession in the key United States market, an industry report said on Tuesday.
But a skills shortage, creaky infrastructure in smaller towns and cities and rapidly rising wages are major challenges.
The sector has logged 35 percent annual growth over the last five years to hit annual revenues of about $11 billion, with the bulk coming from exports, said the study by leading IT lobby group Nasscom and consulting firm Everest.
"We have seen that when there are recessions and when there are costs pressures that come in, the companies still want to cut costs," Som Mittal, president of the National Association of Software and Service Companies, or Nasscom, told reporters. India's back-office firms like Infosys BPO, a unit of No. 2 software firm Infosys Technologies (INFY.BO: Quote, Profile, Research), have thrived by providing Western firms with services such as processing insurance claims, managing payrolls and customer support. The boom in business process outsourcing, or BPO, is built on a large, skilled and cheap English-speaking workforce.
The sector employs 700,000 people and is expected to provide direct employment to about 2 million by 2012.
"In spite of all the wage inflation and so on, (India) has still a fairly large cost advantage. I think we are still ahead of the curve, while competition is emerging," Mittal said.
The study said while the United States would continue to be the largest BPO opportunity for India up to 2012, there were significant untapped opportunities in Britain, Europe and Asia Pacific. The domestic market also offers huge potential for BPO companies as banks, retail, insurance, telecom and government departments look to cut costs and boost efficiency, it said.
Thursday, January 31, 2008
India's outsourcing revenue at $50 bln by 2012-study
Outsourcing predictive maintenance brings benefits
According to Stockport based AV Technology, Predictive Maintenance (PM) is far more than just a programme for identifying problems with equipment and machinery before they fail.
AV Technology maintains that PM should be seen as an integral part of plant management and, moreover, part of an all encompassing asset management function. It should certainly not be seen as a necessary or costly evil. A well implemented PM programme engenders a Measure-Assess-Improve regime within a plant, establishing the basis for improving reliability, reducing downtime, improving productivity, meeting relevant legislation and ultimately reducing costs.
The PM techniques employed are well established and include Lubrication Management; vibration analysis and Fault Finding; Thermography; Remote Visual Inspection; Ultrasonic Leak Detection; and Acoustic Emission Monitoring.
However in isolation these techniques may have limited effectiveness and therefore a full plant wide PM programme should be adopted, utilising the technologies as appropriate to provide comprehensive data from plant and machinery.
Exploiting the maximum potential of individual PM techniques is an important factor.
For example, a lubrication management programme can provide a wealth of useful information and can cover aspects including lubrication selection, change out periods and debris analysis, lubricant cleaning as well as lubricant procurement and recycling.
All industries can benefit from predictive maintenance, but in particular the fast paced food and beverage sector is rapidly realising the benefits of structured out-sourced PM programmes.
Outsourcing the predictive maintenance function via an experienced industrial consultancy such as AV Technology (AVT) has a number of clear advantages.
Firstly companies do not have to invest in additional personnel or expensive equipment.
That however is just the start.
Outsourcing gives companies access to a broad range of experience and capabilities and the PM programme should be seen as a working partnership.
Typically the consultancy sets up the PM programme in collaboration with the customer and then day to day measurements can be carried out by either using suitably trained internal capacity or by the outsourcing company.
AVT have extensive hands-on experience in all disciplines relating to outsourced PM.
They recognise that gathering inspection data has traditionally been very laborious and time consuming, with engineers transferring information from trusty clipboards to spread sheets or log books.
However the data needs to be used to its maximum potential and made available to all parties concerned.
To address these important issues they have adopted an integrated Asset Maintenance System known as MAINtelligence.
This powerful plant tool fully integrates asset and maintenance management, condition based maintenance, equipment and basic care inspections and intelligent diagnostic agents using one system and one database.
Wednesday, January 30, 2008
Outsourcing Tsunami: Global economic drivers will accelerate the pace of change
The tsunami of sourcing has only just begun, says outsourcing industry visionary Ben Trowbridge, CEO of outsourcing advisory firm Alsbridge. In his 2008 predictions released this week, Trowbridge believes landslide economic drivers will continue the global redistribution of labor to its natural location and push offshoring and outsourcing to new heights. The speed of this move will be driven by continued high energy costs, the restriction of capital access driven by the sub prime meltdown and low unemployment in technology and accounting.
These forces will drive providers and buyers to evaluate more clearly their options based on the emerging economic facts of 2008. Trowbridge says outsourcing providers and buyers will make strategic decisions in 2008 based on how their business is affected by the sub prime market, oil price increases, offshore wage inflation and the falling value of the U.S. dollar.
“Even though the last few years have seen a strong economy, outsourcing has continued to be a major strategic driver for the top 1000 U.S. companies,” says Trowbridge. “The slowing and changing direction of the economy has caused the boardroom to evaluate yet again steps to control costs and an even greater interest in outsourcing to offshore locations.
Trowbridge predicts the following outsourcing trends for 2008:
Currency issues will plague the entire outsourcing community, lengthening sales cycles and increasing legal debate about price increases. This will drive the need for expanded benchmarking to define the real issues. The weakening dollar will drive companies to evaluate regions that are closer or that have fewer fluctuations in their currency against the dollar. The uniformed that rely on Google facts will worry about labor cost inflation not understanding the true issue.
Access to capital driven by the distress in the sub prime mortgage industry will continue to ripple through business, driving a need to reduce SG&A and improve financial performance.
Outsourcing will increase dramatically in the mid-market which will cause the outsourcing providers to re-think their cost of sale.
TCS arm wins BPO contract from Sun Life Financial
Diligenta has been working with SLF UK as a preferred supplier since October, following a competitive tender which came towards the natural end of SLF UK’s existing outsourcing agreement.
Diligenta, a subsidiary of Tata Consultancy Services (TCS), has won a contract to deliver Business Process Outsourcing (BPO) services to support Sun Life Financial of Canada's UK operations (SLF UK). The services, expected to commence in May are estimated to be worth £100mn (over US$200mn) over the life of the contract.
Diligenta has been working with SLF UK as a preferred supplier since October, following a competitive tender which came towards the natural end of SLF UK’s existing outsourcing agreement. Diligenta will continue to run the operation in Basinystoke where SLF UK's Head Office is based.
“Diligenta and TCS will ensure that Sun Life Financial of Canada continues to receive market leading standards of customer service," said Phiroz Vandrevala, Chairman of Diligenta. "This contract win adds significantly to Diligenta’s reputation as a leading player in the UK Life and Pensions outsourcing market and is proof that the TCS promise of certainty can be translated In the UK life and Pensions market."
"The deal with SLE UK underlines the strength of its’ Diligenta strategy, launched in 2006. Our vision was to establish a centre of excellence in the UK to capitailse on the growing SPO trend and to cultivate new opportunities in this sector," said A.S. Lakshminarayanan, Vice-President and Country Head, TCS UK & Ireland. "With the Sun Life Financial deal, Diligenta is moving into the second phase of its history, expanding Its client base and UK market share and we are confident It heralds further growth for Diligenta."
"We have successfully outsourced Our customer services operations for over five years. In preparation for the natural end of our existing outsourcing agreement, we undertook a detailed and thorough review of the BPO market in the UK and selected Diligenta for its cost guarantees, risk transfer capability and its commitment to match or exceed our service requirements," said Janet Fuller, CEO of SLF UK.
We have confidence that Diligenta will work closely with us and our current provider to transition the services during the second quarter of 2008 — a process which we expect to be transparent to our customers. We are p!eased that IDiligenta will continue to run the services from Basingstoke as we are very happy with the quality of people and services provided from the current site," Fuller added.
Dillgenta is a UK-based, FSA regulated subsidiary of TCS. Since 2006, Diligenta has provided BPO services for the Pearl Group under a 12-year, £486 million contract to consolidate 11 financial and administrative systems onto a single platform.
Tuesday, January 29, 2008
Wipro ranks high in UK outsourcing service provider performance study
IT Major emerges as top global outsourcer delivering "Quality" and "Flexibility" in IT outsourcing contracts in a study by leading independent sourcing advisory firm, Equaterra incorporating Morgan Chambers.
Wipro Technologies has topped key areas in the UK Outsourcing Service Provider Performance Study 2007 undertaken by Equaterra, an independent sourcing advisory firm. According to the study, quality and flexibility emerged as the two most important attributes influencing customer satisfaction in IT outsourcing, and the study shows the Wipro Technologies top the rankings in both these parameters, ahead of other global and Indian counterparts.
Wipro has also shown the highest level of quality improvement and greater flexibility in contracts as compared to 2006. Wipro also ranks second in overall satisfaction levels, ahead of industry peers.
The survey also mentions that more than 90% of Wipro's customers would recommend Wipro as a partner for outsourcing, based on their current experience with the IT major.
The study, undertaken annually, evaluates £34 billion worth of UK IT sourcing contracts. This is equivalent to three -- quarters of the total current UK IT sourcing market and covers more than 110 unique client-provider relationships and twenty service providers.
The Outsourcing Service Provider Performance Study 2007, researched 320 of the top IT spending organizations in the UK and explored their perceptions of their outsourcing providers, their satisfaction with performance and their plans for future contracts. Study participants were senior level representatives (CFO, CIO or their direct report) within client companies, who outsource all or part of their IT functions and processes.
Though the study does indicate that the proportion of budget spent on outsourcing remain consistent with 2006, Equaterra predicts the market has major growth potential with 54% of organizations indicating that they are looking to outsource more in future and 13% of organizations indicating they will start outsourcing.
This report further supports the 2006-07 survey findings by Equaterra, which indicated that Indian Service Providers are steadily increasing their profile and popularity amongst UK IT decision makers. The latest research shows that they have made even greater strides in the past twelve months, establishing themselves as very serious competitors for the major US and European Outsourcing providers, with four out of the top five service providers ranked in client satisfaction, being Indian-based companies.
LogicaCMG Opens New Outsourcing Division
IT consultancy firm, LogicaCMG has announced plans to create a new outsourcing division in the aftermath of an executive shakeup.
LogicaCMG has been facing some tougher times of late, with falling profits and a change of its executive lineup to compensate. Despite this, the company has announced the opening of a brand new outsourcing division, which will be lead by the outgoing chief operating officer, Jim Mckenna.
“This is the first result of LogicaCMG taking a long, hard look at its business with the arrival of its new CEO, Andy Green. Around a third of LogicaCMG's revenues come from outsourcing and under the previous regime the vendor had a target of '30-40 percent' of revenues from outsourcing. While it achieved its target, there were some discrepancies between the achievements in different countries, ranging from the low teens in the Netherlands to 40% of revenue in the UK.” said Ian Brown, senior analyst, Ovum.
Brown believes that LogicaCMG wants to boost outsourcing revenues across Europe to match the level of those in the UK. This could be brought about by increased scaling, such as hauling more business out of Germany. There’s also the fact that several of the company’s recent acquisitions are yet to be fully integrated, such as Unilog and WM-Data, which will now doubt provide a substantial boost once they’re completely brought into the fold.
“There are numerous synergies that can come from sharing expertise, skills and go-to-market capabilities across geographies. LogicaCMG already manages its vertical-industry lines of business 'internationally' so that it can identify similar opportunities across geographies and ensure that knowledge and skills are shared rather than duplicated. It seems to us to make a lot of sense to run the outsourcing business in a similar fashion.” said Brown.
According to Ovum, LogicaCMG’s competitors are thinking along the same lines, with major threats such as Capgemini already co-ordinating their outsourcing business on a global basis.
“To some extent, LogicaCMG's move could be seen as falling in line with industry norms. Lastly, an international Outsourcing Services division should enable LogicaCMG to go after more pan-European and international outsourcing deals. All in all, then, we see this as a positive move.” said Brown.
Monday, January 28, 2008
Infy BPO to ink 4 deals worth USD 50-150 mn each
Infosys BPO, a subsidiary of IT major Infosys, on Wednesday said the company expects to bag around four outsourcing deals worth 50-150 million dollar each, across various sectors in the next 3-6 months.
The deals would range from various sectors such as telecom, banking and others, Infosys BPO Chief Executive Officer and MD Amitabh Chaudhry told reporters declining to divulge further details.
"We have recently signed small deals worth 5-7 million dollar each and are hopeful of signing 3-4 more deals worth 50-150 dollar in the next 3-6 months," he said.
The firm is also eyeing a revenue of 250 million dollar for the fiscal year 2007-08, he said. It has already recorded revenues of about 176 million dollar in first nine months of FY08.
He said, the company is securing 15-25 per cent on renewed contracts. The company started working on integrating the IT-BPO solutions for the last 12-18 months, he said.
Infosys BPO is also betting big on the potential of the knowledge services industry in India, which is fast moving up in the value chain. Besides, it has also started legal process outsourcing.
The effect of the sub-prime crisis in the market will be "positive" for Infosys BPO in the long term, Chaudhry said adding, however, for the short term there could be a possibility of a partial delay in outsourcing.
Friday, January 25, 2008
India Moves from BPO to KPO
Outsourcing companies, including WNS, Genpact, Cognizant Technology Solutions, and Infosys Technologies, are rapidly moving up the value chain from business process outsourcing (BPO) to knowledge processing outsourcing (KPO).
Most segments in the KPO market space, such as legal, publishing, media services, analytics and engineering services, are growing at anywhere between 30 to 40 percent per annum. Within a few years of takeoff, the KPO industry is rapidly moving towards more innovative business models and showing signs of growing maturity.
The Indian KPO sector has been largely ignored by the investor community due to the lower scale of operations when compared to BPO companies. However, concerns about a less than rewarding exit from the KPO sector have been put to rest over the last few months due to the attractive valuations of firms such as Inductis, Marketics and marketRx.
Recent instances of funding show that the KPO sector is gaining more and more prominence:
- Sequoia Capital invested US $25 million in pharmaceutical and biotech research company GVK Biosciences in November 2007.
- Kubera Cross Border Fund invested US $17 million in Ocimum Biosolutions, a genomics outsourcing company.
- Helion Venture Partners invested US $5.1 million in Hurix Systems, an e-learning solutions, knowledge management, and publishing services company in October 2007.
- Helion also has invested in Mindworks Global, a KPO, which provides media outsourcing and custom publishing services.
- In July 2007, legal KPO Pangea3 completed a US $7 million in Series C funding by Sequoia Capital India. The company plans to utilize the funds towards recruitments, expanding its service offerings and increasing sales and marketing.
Media hype and high returns for industry pioneers have led to an explosion of service providers, and those ready to provide funds to them. Infosys BPO has recently announced its entry in the legal services outsourcing space.
Apart from lending more credibility to the legal services industry, this is likely to provide additional strength to the growth plans of several large, mid-size and small companies. With the acquisition of marketRx, Cognizant looks to strengthen its KPO practice, and increase focus on the life sciences market.
The industry has its set of challenges: rising wages, training and depreciating dollar revenues in India. However, the most important challenge at this point seems to lie in addressing a shortage of trained professionals. In fact, advisory firm TPI suggests that there is reason to be cautious about any growth rate predictions on account of shortage of trained Indian professionals and IP concerns.
Despite the challenges, the race to acquire capabilities and clients will trigger several inorganic growth actions by ambitious vendors. Over time, India will see more of the large multi-service BPOs acquiring capacity and capability, and also international firms looking for India capacity.
Is outsourcing too risky?
Before an organisation decides to follow the outsourcing trend, attention must be paid to the many risks involved in this way of doing business, says Anthony Plewes.
No matter what the reason is for outsourcing key IT processes, there's always an element of risk. Will the supplier deliver? Was the contract appropriately scoped? Are the business objectives truly being fulfilled? These issues shouldn't be left to chance.
Anyone considering the outsourcing route must take deliberate, methodical steps to mitigate the potentially high risks involved.
Here are the areas you should be sure are covered thoroughly.
Due diligence
The first step in risk mitigation is to carry out due diligence on the outsourcing service provider. Amongst other information, this will help identify whether the outsourcer has the capacity to carry out the work and whether it will be sufficiently financially stable to service the contract for its entire length.
The continued importance of offshore outsourcing means the outsourcers' business continuity planning also needs to be robust to cope with any shaky infrastructure and outages.
Internal audit
Before assessing the outsourcer's capabilities, you need to work out exactly what is being outsourced. If you cannot accurately identify the current state, it's not possible for you and the outsourcer to agree the scope of the contract, costs and service levels involved. Scoping the current state will help prevent the risk of poor performance, future disagreements and the cost and disruption of renegotiating the contract.
"There is no substitute for doing an internal audit on your organisation," says Kit Burden, partner and outsourcing specialist at law firm DLA Piper. "It is vital to accurately define the outsourcing service scope, because the 'your mess for less' approach is a recipe for disaster. The customer needs to spend enough time with its internal people to find out exactly what it is they do."
A business impact analysis will also identify exactly what processes are important and will help companies set relevant service level agreements (SLA).
Many disputes between customer and outsourcer are sparked by a disconnect between what the client is expecting and what the outsourcer thinks it should be delivering. For example, a 2007 report from outsourcing analysts TPI found unrealistic expectations on behalf of the customer were a problem in more than half of all outsourcing contracts, forcing many companies to restructure their agreements within as little as 18 months.
It is also essential to build flexibility into the contract because it's inevitable that your requirements will change over the lifetime of the relationship. One way of mitigating the risk of change is to have shorter contract lengths but even then it is essential to have a clear governance structure that sets out a procedure to cope with any changes.
The most common change is in volumes of transactions and this can be easily accommodated by having some form of utility pricing that allows them to be scaled up or down.
Ongoing management
Once the contract has been signed, the focus must be shifted to managing the relationship with the supplier. Just because a company is outsourcing a function doesn't mean they can no longer pay attention to the area.
"Outsourcing can be very effective in transferring risk, especially in pricing and operational risk, but supplier management is absolutely crucial to make it a success and some companies don't put enough emphasis on it," warns Susan MacLean, a member of law firm Morrison & Foerster's Global Sourcing group.
Thursday, January 24, 2008
Offshore investments rise
More than 1.3 billion rand was invested in offshore collective investments in the December quarter ahead of the 1 billion rand inflow in the previous quarter, the Association of Collective Investments (ACI) said.
It said that this reflected a heightened interest from both institutional and retail investors.
The chief executive of ACI, Di Turpin, said that retail inflows were 803 million rand while institutions invested 500 million rand offshore.
"There has been more interest in investing offshore which is in line with the local industry figures where foreign rand denominated funds have been attracting more flows than usual. In the past quarter these foreign funds inflows were 14 percent of the total domestic figure," she said.
Turpin added that the bulk of the funds went into fixed interest investments, with 1.3 billion rand from the institutions and 394 million rand from retail investors.
She said that while retail investors channelled 246 million rand to equity funds there were outflows of some 926 million rand by institutions on profit taking.
"In the previous quarter both institutions and retail each invested just over 400 million rand for a 889 million rand total inflow into equity funds," she said, adding that the inflows into asset allocation funds were 293 million rand - as against the previous quarter’s 107 million rand outflow.
ACI figures show that nearly a net 1.5 billion rand was invested offshore last year, which was well down on 2006’s 6.9 billion rand.
Retail investors have 46.4 billion rand offshore while the institutions’ total is 61.5 billion. There were 365 foreign currency denominated funds at the end of December, compared to 343 in the previous quarter.
Offshore outsourcing not suited to small shops
Outsourcing IT jobs to offshore locations doesn't always deliver the cost-savings and management benefits it promises, especially for smaller companies.
About 94% of CIOs polled by the IT staffing and consulting company said they do not outsource jobs to locations outside of the United States, while 5% said they do. Just 7% of the total surveyed reported that they plan to increase the level of offshoring they do in the next two years. Eighty-six percent of all those polled said they expect no change in the amount of offshoring they do and about 4% said they can foresee decreasing the amount of work they outsource to countries such as India, China or Mexico.
The IT staffing and consulting company polled some 1,400 CIOs, many of which worked at companies with less than 500 employees. Katherine Spencer Lee, executive director of Robert Half Technology, explained in a statement that the smaller the firm, the less likely it would reap the promised benefits of outsourcing.
"Smaller companies, in particular may lack the resources to commit to an effective long-term offshoring strategy," Lee said in a statement.
For instance, 11% of those companies polled that had more than 1,000 employees and another 11% of those with between 500 and 999 employees currently outsource jobs to other countries -- compared with the total 5% that said they offshore. And of those currently offshoring, 43% said they expect to increase services in the next two years, while 13% expect to cut back on offshoring.
Yet 8% of companies with 250 to 499 employees use offshoring and 3% of companies with between 100 and 249 employees said they send outsourcing jobs outside of the United States. Reasons cited for not offshoring include challenges managing offshore outsourcers and unrealized cost savings.
Wednesday, January 23, 2008
Electronic Manufacturing Services: A New Dimension in Outsourcing Industry
The electronics manufacturing services (EMS) industry has begun to equip itself to move beyond being a mere outsourced entity of the semiconductor industry. The semiconductor original equipment manufacturers (OEMs) have consistently focused on cost savings, reduced time-to-market, reduced time-to-volume, quality and flexibility in their process of advanced technology evolution. In this manner, EMS providers play a critical role of supporting the semiconductor OEMs in their product development process to perform effectively in all of these aspects through its services and strategic business solutions. Given the changing market scenarios, especially in the consumer electronics sector, original equipment manufacturers (OEMs) increasingly depend on electronics manufacturing service (EMS) providers to deliver high-quality products to their customers at the right time and volume.
While EMS providers have created strong footprints in the consumer electronics, communication and automotive industries, they will gradually penetrate into markets such as medical, industrial, retail stores as well as aerospace and defense by proving their capabilities and creating differentiation. Over the years, EMS providers have specialized in enabling the establishment of manufacturing processes in a most efficient way by supporting technology developers and OEMs to reap the fruits of all their development efforts effectively.
This briefing will benefit electronic contract manufacturers, semiconductor OEMs, original design manufacturers (ODMs), integrated device manufacturers (IDMs) and end-users/application developers, who wish to track the trends in the industry and extend their capabilities.
Highlights of the briefing will include emerging trends in the EMS industry. It highlights the trends in the EMS industry from capabilities to market segment, and also from a geographical perspective, examining the factors that influence the growth and market potential of the EMS industry.
"EMS providers greatly depend on OEMs for outsourcing and the increasing competition in the EMS market is driving the EMS providers to provide distinctive value-added services and portray global competence in terms of being able to adapt to dynamic market characteristics," notesFrost & SullivanAnalyst Kasthuri Jagadeesan.
"EMS providers should also focus on understanding the needs of the customers and the business models of their customers or OEMs in order to achieve profit margins, market share and successful end-products, and when they move towards higher levels of integration, they should offer flexibility in their solutions," addsFrost & Sullivananalyst Krishnakumar Srinivasan.
Outsourcing EMEA outpaces Americas
New data from outsourcing advisory firm TPI offers more evidence that the economic winds have shifted. The Woodlands, Texas-based firm, which helps companies structure large outsourcing deals, reported Wednesday that the total value of outsourcing contracts declined 5% in 2007 as compared with 2006 -- the lowest level in five years.
In addition, for the first year on record, Europe, the Middle East and Africa (EMEA) outpaced the Americas in outsourcing activity, both in total contract value and in the number of contracts awarded, TPI said in a conference call with reporters and investors.
Indeed, for the first time, the EMEA countries account for more than half the global outsourcing contract value tracked by TPI.
The firm's latest numbers are based on contracts of $25 million or more, as opposed to its previous cutoff of $50 million. The move reflects the growing number of contracts falling in the $25 million to $49 million range.
The numbers
Despite a strong fourth quarter, the total value of outsourcing contracts in 2007 dropped 5% year over year, to $80.4 billion in 2007 from $84.7 billion in 2006.
TPI President Scott Gildner said that for the "first time in a long time," the absolute number of contracts awarded also declined year over year, from 556 contracts in 2006 to 487 contracts in 2007 -- a 12.4% drop.
The firm, however, cautioned market watchers not to read too much into the lower numbers.
On the basis of annualized revenue, 2007 "fared all right," said Peter Allen, chief marketing officer at TPI. Annualized revenue, as measured by TPI, represents the dollars that go into the pockets of service providers from all active contracts, factoring in prior awards and any known terminations of contracts. At the end of 2007, TPI identified about 2,700 active contracts in the marketplace delivering almost $79 billion in revenue to providers. That marked a growth rate of about 7%, "well above" the five-year compound annual growth rate of 5.3%, said Allen, who gave his take on the numbers in his blog.
Tuesday, January 22, 2008
Outsourcing industry rebounds
Despite fear of a recession in the U.S., jitters on virtually all major stock exchanges worldwide and widespread cut-backs in corporate spending, EquaTerra's 4Q07 Pulse surveys revealed that outsourcing demand is rebounding, with continued strong growth in EMEA and a substantial increase in North America. In fact, 70 percent of EquaTerra advisors cited increased demand levels for Information Technology (IT) and business process outsourcing in 4Q07, with demand up 19 percent over 3Q07, up 24 percent over 4Q06, and at the highest level recorded since 2Q05. Further, 59 percent of service providers cited new deal pipeline growth in 4Q07, and 57 percent expect demand to increase in 1Q08. EquaTerra attributes the increase in outsourcing demand levels to a variety of factors including: Weak economic indicators: Although expense reduction isn't the only driver for outsourcing, many organizations are reemphasizing outsourcing to increase their bottom line; New functions outsourced: Buyers are focusing on new and growing areas like legal and knowledge process outsourcing, document and electronic records management, industry specific offerings and knowledge intensive services; Service provider readiness: EquaTerra advisors are seeing some improvements in overall service provider capacity, in part driven by improved pricing and contracting terms; Smaller, more numerous deals: The outsourcing market continues to evolve with more but smaller deals spread across a greater number of service providers and delivered on a more global basis.
Said Stan Lepeak, EquaTerra's Managing Director of Research, "While the current state of the economy is forcing Western commercial enterprises to cut budgets for capital investments and many types of discretionary business and IT services, the projection for outsourcing investments remains positive and is improving. This highlights the importance of outsourcing as a tool for cost reduction and avoidance, as well as the ongoing broadening of the outsourcing footprint beyond traditional BPO and ITO areas. Although the outsourcing market will remain choppy over the next two to three quarters at the individual buyer and service provider level, demand growth will increase at the macro level. It is important to note, however, that the outsourcing demand improvements we saw in 4Q07 will for the most part not result in new deal closings until late 2008 and into 2009."
Based on the 4Q07 Pulse Surveys, several EquaTerra research studies and client interaction, following are some anticipated 2008 trends: Outsourcing will continue to be recession-proof; Public sector demand will continue to grow, and shared services and internal transformation in this sector will get stronger; Recent turmoil in credit markets will selectively slow outsourcing in the financial services sector in the short term but drive more ITO in the long term.
I&IT considers email outsource
As some universities have begun to use outsource their e-mail providers to hosts such as Goggle, Yahoo and MSN the CSU's may follow their lead.
Cal Poly has kept tabs on the feasibilities of such an opportunity but has held back due to potential issues that can result from using outsourcing e-mails, according to Debra Brum, vice president of Instructional & Information Technology.
"Vendors would sell to advertisers and it's not appropriate to put students at risk," said Brum. "We also have two concerns: whether the product can be accessible to students with disabilities and that teachers or staff can't create groups for courses, majors and/or honor programs."
There are certain concerns on whether it is safe to outsource due to privacy reasons.
Some outsourced e-mails make money by scanning private e-mail for keywords, and making their advertising to users, according to the Brown Daily Herald. Another issue is the possibility of an outside server going out of business and causing users to lose all their stored e-mails.
"I'd rather not outsource for security reasons," said Kristina Nguyen, a second-year computer science student. "I'm pretty content using the school's e-mail for work and archives. It's more personal in my opinion."
However, there are price incentives in switching providers. According to U.S. News and World Report, both Northwestern and the University of Pennsylvania saved about $1 million in technology support costs by outsourcing their e-mail services in the first year alone.
Cal Poly did make e-mail provider changes last year when it switched from Web mail to Microsoft Exchange. In 2006, the Education Center for Applied Research conducted a survey asking the satisfaction and use of Web mail, which did not prove to be meeting expectations.
Only 21 percent of freshman and 35 percent of seniors preferred using campus e-mail. After the switch to Exchange, student use improved: 66 percent of freshmen and 77 percent of seniors prefer using campus e-mail instead of their personal e-mail for university business.
Monday, January 21, 2008
Offshore nations may keep U.S. tech firms in the black
Emerging markets boost IBM, but will they recession-proof other U.S. firms?
IBM's third quarter earning statement wasn't just about numbers. It was also a defense of globalization, with the company describing the opportunities in emerging markets as equivalent to the "California Gold Rush."
And Mark Loughridge, IBM's chief financial officer, made sure that no one missed his point in the company's fourth quarter earnings call Thusday. He used the term "gold rush" three different times, adding in "virtual gold rush" and the "gold rush of the 21st Century" by countires anxious to build out their infrastructures with modern technologies. This is spending from the same countries that have also been getting U.S. tech jobs thanks to offshore outsourcing.
IBM backed its assertions with numbers, showing that 65% of its business is now overseas with emerging markets growing by double digits. In the 2006 calendar year, IBM's non-U.S. operations accounted for 60% of its revenue; IBM signed $1.4 billion in services deals last quarter in India alone. The company's fourth-quarter revenue was $28.9 billion, a 10% increase from the year ago quarter.
But will these emerging markets continue to grow, and will they avoid being dragged down by the U.S. in a downturn here? Based on its forecasts, IBM is confident of their success, and it will exceed analysts' expectation into 2010. That confidence is due to a broad range of countries such as Malaysia, Poland, South Africa, Ecuador "and dozens more around the world, with insatiable demands created by a growing middle class for public and private infrastructures to support explosive economic growth," said Loughridge on the earnings call.
In India last week, Sebastian Teunissen, adjunct professor and executive director of the Clausen Center for International Business and Policy Haas School of Business University of California, Berkeley, saw for himself the economic activity and described it in astonishing terms. Teunissen took a group of students to Bangalore and Mumbai for two weeks to expose them to that country. "I've been doing this for a number of years and I'm still blown away," he said of his annual student trips.
Teunissen visited a number of Indian firms and saw U.S.-branded tech products, PCs in particular. "There are an awful lot of people there who are really, really hungry for technology," he said. IDC numbers seem to back that. One market research firm recently reported that in last year's third quarter, the India PC market grew 25% in that quarter, with 1.8 million shipments total. Worldwide, nearly 270 million PCs were shipped for the entire year of 2007.
Scottish Widows’chief sees scope for more outsourcing
Scottish Widows chief executive Archie Kane has pledged to retain customer service roles in the UK, but signalled that the company could still send more jobs abroad as he oversees continued reform at the Lloyds TSB-owned insurer.
Kane has presided over a turnaround in the fortunes of Widows but is adamant that there will be further improvements at the Edinburgh-based business.
When he took over in October 2003, Widows was reeling from the fall-out from the mis-selling of precipice bonds and, like virtually every other life company, had to devise an alternative product range when customers turned their backs on with-profits after the post-millennium stock market crash.
A measure of Kane's success in streamlining the business is that it has been able to repatriate around £3.6bn of capital to its Lloyds TSB parent company in the last three years.
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This has been aided by a focus on simpler and less capital-intensive products and a move to cut excess costs from the business.
But Kane, 55, who oversaw IT and operations at parent company Lloyds TSB before taking on Widows, continues to style himself as a driver of change. One element of that is an ongoing search for ways to cut costs through outsourcing.
He said: "We look at it from the point of view - does it make commercial sense and does it make operational sense to do these things?"
Among the changes wrought by Kane was the transfer two years ago of some data processing jobs to India. Also, State Street now handles much of the behind-the-scenes work at Scottish Widows Investment Partnership.
Widows employs around 4000 staff in the UK but Kane is adamant that while there could be scope for further outsourcing or offshoring, there will be no repeat of Lloyds TSB's aborted attempt to move some call-centre functions overseas.
"What we will not do is outsource consumer contact," he said. "We own the contact with our customers, we have to stand and communicate face-to-face or via the telephone with our customers.
"But things like medical underwriting or administrative processing that goes on behind the scenes, and if it makes commercial sense to do it, then we will avail ourselves of the opportunity to do so like any sensible firm."
Saturday, January 19, 2008
Outsourcing for the Permanent Recruitment Industry
Does a full RPO Solution seem a leap of faith? Are you interested in outsourcing some parts of recruitment process but want to maintain control of key elements like your employee brand?
According to the latest industry figures, outsourcing is on the up, with the number of companies outsourcing critical business functions rising year on year. A recent survey of some 3,500 procurement, supply chain and finance professionals worldwide revealed that 95% of firms want to use procurement outsourcing to improve their sourcing strategy.
Along with key findings from the Recruitment and Employment Confederation highlighting recruitment to be the primary problem for more than half of all UK companies, ahead of business strategy or management, it is not surprising that more UK companies are turning to RO (Recruitment Outsourcing).
Some companies are, however, reluctant to use the services of specialist recruitment outsource providers to outsource elements of their business. At the yearly CIPD event in Harrogate last September, HR Directors were surveyed about their attitudes to RO. The results showed that although 60% of respondents are frustrated that it takes between three and five months to fill a management position, 56% feel outsourcing recruitment is a risk to their organisation.
The search for a suitable RO provider can be confusing because suppliers come from various backgrounds and bring different skills. Some firms were born out of executive search companies while others are recruiters who have relabeled their staffing business as RO so they can offer a fully managed service. There are also software companies that have developed online recruitment tools and are moving into the service sector.
One of the more recent arrivals in the permanent recruitment outsourcing sector is de Poel Consulting. Although they have been in operation since 2001 their focus has been predominantly within the temporary labour industry working successfully with clients such as Sainsbury’s, Royal Mail, TNT, Eddie Stobart, MFI and the Co-op. Since moving into the permanent sector a year ago de Poel can boast a similar success story. Their permanent recruitment service has attracted the attention of existing clients, as well as triggering interest from several new sectors, including a very prominent broadcasting station.
Friday, January 18, 2008
How to Implement Agile Offshore Development
Development of software is always a team effort and is best accomplished with the teams working close to each other. The discussions that take place amongst the teams in real time, moves the project forward to its implementation. However, the practice of relying on Agile offshore development has brought about a powerful marriage between the repeated rapid processes, and multiple offshore engineering teams, the combination of which is marked with improvement of market response, its trends, and customer requirements. In here, there are suggestions as to how you can manage this collaborative process across the length and breadth of 8,000 miles that separates the Scrum teams of the multiple shores.
Agile methodologies such as XP, Scrum and DSDM have been adapted by the extended teams of successful global organizations, thus improving their customer needs and time to market. In the process, the organizations gain faster experience of transfer, training, transition planning, goal setting, governance, including the method of reviews which are necessary to achieve results.
Agile methodologies are a new process adapted in today’s software development processes and practices, which introduce the changes in requirements by delivering the software in small releases. This has kept high the customers’ confidence, who can now relate their business requirement changes much faster. Agile methodologies have introduced a new set of software development processes and practices, which provide requirements change through delivery of the software in multiple modular releases.
In an offshore development process it is not necessary for the offshore and onshore developers to be in constant touch and communicate regarding the progress of the development of the project, and its specific feature or function. To give you an example, it is a waste of time for the onshore and offshore developers to check the same codes in the same section of the code repository, and eventually affect the work by checking each other’s code.
The important thing in any team work is the interpersonal relationships within that team. With the Scrum teams distributed throughout the US, and the offshore locations, there are few interpersonal working understandings between the teams with few or none live contacts between them. This can invariably affect the software development progress in the quality of its production, and there could be questionable deliverables. To solve this situation, basic team building exercises need to be taken up. In doing this, the offshore Scrum team could be sent to the US for few weeks, where they can observe the dynamics and other typical working characteristics of the US teams situated at different places, and this could help in building the much wanted working relationship between the Scrum teams.
Outsourcing market has mega comeback
The global outsourcing market bounced back after a shaky start last year thanks to a spate of mega-deals and continued double-digit growth among Indian companies.
Despite a drop of 12 per cent in the number of providers winning contracts and the total contract value (TCV) falling to a five-year low, the TPI Index report is optimistic about prospects for this year.
The index analyses outsourcing contracts worldwide that have a value more than $25m.
A resurgence during the fourth quarter saw a TCV of $27bn, the highest since the first quarter of 2006, and the biggest actualised contract value - the amount of the deal actually drawn down by the provider - during a quarter in 11 years.
TPI estimates there were 2,700 active contracts, yielding approximately $79bn in annualised revenue at the end of 2007.
Duncan Aitchison, partner and MD for Europe at TPI, said: "The record of outsourcing growth exceeded seven per cent, we anticipate we could have seven to eight per cent through 2008."
The year saw the Americas fall behind Europe, the Middle East and Africa in the number and value of outsourcing contracts for the first time.
India saw strong growth in companies both buying and providing outsourcing, with India-heritage service providers experiencing 40 per cent growth year-over-year and Indian companies topping the list of buyers outsourcing in the Pacific.
Companies in China signed several large outsourcing contracts as well in 2007.
Fuelling the end of year recovery was a sharp rise in mega-deals - contracts worth several hundred million dollars.
Business Process Outsourcing (BPO) experienced a resurgence after a lacklustre performance in preceding quarters.
The fourth quarter saw the highest TCV for BPO contracts since the fourth quarter of 2005 and the highest actualised contract value since the second quarter of 2004.
Thursday, January 17, 2008
France To Outsource Port Operations To Private Sector
The French government on Tuesday announced that it would privatize the operations of the country's nine major ports in an effort to increase cargo handling productivity, triple container traffic by 2015 and create 30,000 jobs.
French Prime Minister François Fillon said that the country's ports have deteriorated in terms of competitiveness and facilities. Fillon tasked French Transport Secretary Dominque Bussereau to ready a port reform plan for legislation after France's municipal elections. The plan is expected to be approved in spring.
Fillon eyes increased capacity in French ports from its current 3.5 million TEUs (twenty foot equivalent units) to 10 million TEUs by 2015. "We have lost half of our market share in container traffic during the last 20 years, while the market has seen growth of over five percent annually," Thomson Financial quoted Fillon.
French ports lost significant amounts of cargo due to operational inefficiencies, low productivity and poor infrastructure. Shipping lines have diverted containers to ports such as Zeebrugge and Antwerp in Belgium, and Rotterdam in the Netherlands.
Problems will be discussed "port by port" to take into consideration particular solutions for each port.
The reform plan is also seen to raise France's port activity to "the highest levels in Europe and in the world". This will bring the country's ports closer to the global practice of port privatization, where port assets are owned by port authorities and privately owned terminal operators rent port facilities and employ their own staff.
Fillon added that the reform would be handled through a transparent public international tender and would involve discussions with all port players. "We will pay special attention to port workers," he added.
CSC eyes mid-market outsourcing
OUTSOURCER CSC has moved to head off competition from Indian software services players with a specialist business unit designed to counter the tactics of firms such as Satyam, Infosys and Tata Consultancy Services.
The creation of the unit coincides with CSC's push into mid-market technology outsourcing, which is being made as part of the company's Project Accelerate restructuring program.
The move has CSC more aggressively targeting US and European deals worth between $US50 million ($56.8 million) and $US350 million - a market that is hotly contested by India's IT outsourcing companies.
CSC has typically focused on US and European contracts worth more than $US1 billion.
"What we've done as part of our strategic initiative is we've elected to compete directly with the Indian pure plays," CSC president and chief executive officer Mike Laphen said.
"What they attempt to do is get in the door and maybe its 10 people, but then to try to go to 100 people and 500 people and so forth in those smaller increments.
"So we have a business unit now that competes at that level and will go in and compete for those projects with the Satyams and others," he said.
Like its rivals, CSC also hopes to turn 10-person projects into deals worth more than $US50 million and Mr Laphen said that the economics of outsourcing meant that the company would not move wholesale into targeting small US and European deals.
"I don't see the scope of work we're doing in the $50 million to $350 million range getting smaller. I think that's kind of bottomed out as to what makes sense in scale," he said.
Wednesday, January 16, 2008
Thirst for outsourcing fuelling product recalls
Product recalls in the UK due to health and safety concerns have shot up to their highest level, with the rise in outsourcing to China fingerpointed for much of the blame.
In the past year, sourcing products from a "poorly controlled" Chinese manufacturing and supply chain has proved to have a "sting in its tail", according to London-based law firm Reynolds Porter Chamberlain (RPC) who recently released their annual report on the issue.
The situation is concerning, especially considering that in the past year the majority of top tier pharma firms have pledged their resolve to increase outsourcing to Asia.
In 2007, 192 product lines were recalled in th UK - a jump of 22 per cent over the 179 withdrawn in 2006. The firm's historical data reveals a clear upward trend, with 165 products recalled in 2005 and 143 the year prior to that.
The figures refer to, but are not specific to, pharmaceutical products, among other products ranging from food and drink to personal care products and toys.
Last year China admitted that almost a fifth of products - including fake human blood protein - made for domestic consumption were substandard and naturally some of the problem is filtering through to products for export. The British Commissioner of the European Union for Trade, Peter Mandelson, has said that around half the counterfeit goods found in the EU originate in China.
"We have been warning for years of the risks in uncontrolled outsourcing to China and other developing countries," said Mark Kendall, Partner, of RPC.
Many companies need the cost savings from outsourcing to China to drive their earnings but the statistics show that putting in place proper quality control procedures to protect their customers is easier said than done".
In July last year, the largest counterfeit drugs conspiracy ever to be encountered in the UK was exposed following Operation Stormgrand, an investigation stretching back several years and culminating in the seizure of over £1.5m (€2.2m) of fake medicines.
The men under investigation were part of the UK distribution arm of a global counterfeiting ring, with operations stretching from China, India and Pakistan to the Caribbean, the US and the UK.
Comerica Awards Procurement Services Contract to Accenture
Comerica Incorporated announced it has awarded a procurement services contract to Accenture. Financial terms of the seven-year business process outsourcing agreement were not disclosed. The agreement is designed to reduce Comerica's costs for purchased goods and services through improvements to supplier relationships, procurement operations and technology, and spend management.
"We believe this agreement will reduce our operating expense base, enhance our current procurement capabilities, and enable more efficient growth," said Elizabeth S. Acton, executive vice president and chief financial officer.
Under the agreement, Accenture will provide Comerica with a full range of source-to-pay capabilities, including strategic sourcing and category management, requisition-to-purchase-order processing, invoice processing, and travel and expense processing. These capabilities will be supported by Accenture's source-to-pay technology platform.
The initiative will be managed under the leadership of David Bennett, senior vice president and chief procurement officer, who said, "This agreement will bring further expertise and capability that will accelerate the execution of our procurement strategy and provide an operating model that fits well with our Comerica culture."
Accenture is a global management consulting, technology services and outsourcing company with $19.7 billion in net revenues for its fiscal year ended August 31, 2007.
About Comerica
Comerica Bank is a subsidiary of Comerica Incorporated, a financial services company headquartered in Dallas, Texas and strategically aligned into three major business segments: the Business Bank, the Retail Bank, and Wealth& Institutional Management. Comerica focuses on relationships and helping businesses and people to be successful. In addition to Dallas, Houston and Austin, Texas, Comerica Bank locations can be found in Michigan, California, Florida and Arizona, with select businesses operating in several other states, and Canada and Mexico.
Tuesday, January 15, 2008
Outsourcing to grow in life sciences industry
The life sciences industry will see much more outsourcing overseas and domestically in 2008 as it focuses on reducing expenses to keep expanding, according to a new report.
Both pharmaceutical giants and emerging biotechnology companies will likely rely on the practice for everything from research and development to clinical trials and manufacturing, according to IDC's Health Industry Insights in Framingham, Mass. The conclusion is one of the firm's many predictions for the industry in 2008.
Singapore is among ideal places for outsourcing, according to the report, because the country has strong intellectual property protections and has dedicated significant investment into creating a large biotechnology industry presence.
India is also seen as an increasingly viable alternative for research and development outsourcing through lower-cost resources and trained researchers who could work in the country at a fraction of the cost.
China has been slow to attract life sciences investment due to concerns about intellectual property, according to the report, but the company has attracted many international companies seeking to outsource clinical trials or take advantage of the company's emerging domestic market.
Indian software CEO to speak in Manila about outsourcing
The head of one India's biggest companies will speak in an e-services expo to be held in Manila next month.
T.K. Kurien, chief executive of Bangalore-based Wipro Technologies, will take part in the CEO forum in the annual business process outsourcing (BPO) gathering.
Joining him are Abhay Havaldar, General Atlantic managing director, and Edward Caso, managing partner at Wachovia Capital Markets LLC. Both speakers come from global investment firms.
This year's e-Services is also marked by the participation of global outsourcing advisory firm Tholons, working with event organizers Department of Trade and Industry (DTI) and the Business Process Association of the Philippines (BPAP).
The entry of Tholons is expected to bring in more industry players from abroad to Manila next month.
According to the DTI, eServices attracts no less than 2,000 conference participants annually, including industry representatives from the United States, Europe and the Asia Pacific.
Last year's e-Services helped generate an estimated $22 million worth of contracts among industry players, according to DTI.
Representatives from emerging global sourcing sites around the world have been invited to report on developments in their markets and industry trends. Indian companies are likewise expected to visit Manila following the entry of Wipro in the country.
Wipro, India's third-largest software company, recently announced it is setting up a customer support facility in Cebu City looking to hire at least 900 workers.
Monday, January 14, 2008
Mid-size BPO firms to rise in RP
An international business process outsourcing (BPO) executive said the Philippines BPO industry could benefit from the softening of the US economy and could spur the rise of medium-sized BPO firms.
Companies in recession in the US are now considering outsourcing as a way to save money, said SupportSave Solutions Inc. president Chris Johns.
He said small and medium companies in the US have decided to follow multinational firms when it comes to outsourcing their back-end operations.
This, he said, could put Cebu and the entire Philippines at an advantage, considering the large talent pool available here and the proficiency of most Filipinos in the English language, among others.
Johns expressed optimism in the countrys BPO industry whose growth is not only evident in the entry and expansion of more multinational players, but also the rise of small and medium BPO companies.
These small and medium US firms are growing. They are the under-served segment of the market, he said.
Since these firms make up the bulk of the US economy, he said their plan to venture into outsourcing will certainly uplift Cebus position as the next outsourcing capital of the world.
A recent survey conducted by industry publication Global Services and investment advisory firm Tholons named Cebu as the fourth emerging outsourcing destination for global companies.
Cebus potential in the BPO industry is huge. In Manila, the market is more saturated because of many big companies. But Cebu, other than having a huge talent pool, is more hospitable, said Johns.
SupportSave, a pioneer low-cost BPO company founded by Johns in 2004 which was incorporated last May 2007, has been operating in Cebu since November 2006 with 326 available seats.
Johns said initial capitalization for the Cebu operations was approximately 220,000 US dollars.
The firm offers 65 percent voice call services and 35 percent non-voice call services. It caters to clients in various fields, such as medical, software, insurance, e-commerce, publishing and financial services.
Johns said because SupportSave targets only mid-size US clients, their call center agents feel less stressed, although they get a middle-income salary.
We have no fancy technology but our working environment is more relaxed, he said, adding that the company processes 30 to 50 applicants per day.
While other outsourcing firms offer scholarship loans to their employees, SupportSave gives its workers the option to own shares in the company.
SupportSave is a publicly traded company in the US with 12 million shares selling at 0.77 centavos per share, Johns said.
GAIL, ONGC teaming up for Mumbai offshore gas
GAIL (India) Ltd and ONGC are working out a commercial arrangement to market gas from the latter’s marginal field in Mumbai offshore. GAIL expects to get an additional 3-4 million standard cubic metre per day (mmscmd) of gas at a market-related price.
A senior ONGC official told Business Line, “Discussions are on with GAIL for marketing 3.2 mmscmd of gas from C-series field. The gas will be made available to GAIL at a market-related price.”
The market price normally depends on demand, industry sources said, adding that at present the market-related price was around $4.75 per mBtu. The market price is at least 40-45 per cent higher than the administered price decided by the Government.
Since 2006-07, GAIL has been getting 4.8 mmscmd of gas from Panna-Mukta-Tapti field — produced by the joint venture between Reliance Industries Ltd, ONGC and BG — at $4.75 per mBtu. However, from the next financial year, GAIL will get the entire PMT output of 17 mmscmd at a higher price ($5.7 per mBtu).
“This gas from ONGC would help GAIL partially meet the deficit in demand and enhance the revenue of GAIL,” Mr U.D. Choubey, GAIL Chairman and Managing Director, said. At present, gas demand in the country is about 150-160 mmscmd, while supply is about 96-100 mmscmd. The gas from C-series field, located 60 km west of Daman in the Tapti Daman block of Mumbai offshore, will be available post-monsoon (October-November) this year.
The fields are estimated to hold in-place reserves of 15.54 billion cubic metre of gas and 4.46 mcm of condensate. The development of the first phase is expected to be completed by December 2008. The estimated gas production from the field is more than 3 mmscmd.
Saturday, January 12, 2008
Marsh & Capita Announce Outsourcing Partnership
Insurance broker Marsh has today announced that it has selected Capita to provide its outsourced back office support systems for the next decade, following a widespread procurement programme designed to find a suitable facilitator for the £200 million contract.
As part of the deal, Marsh will provide Capita with access to 650 staff in order to manage the back-end service requirements, with the contract set to run for ten years as of finalisation of the exact terms.
Martin South at Marsh said that Capita was a natural choice, based on its strong history of delivery within the financial and insurance markets, and proven competence in back-end support across service industries.
“We have selected Capita as our preferred partner due to its excellent track record of service transformation and delivery in the insurance and wider financial services markets.”
Meanwhile, Paul Pindar of Capita said that the group were positive about the contract and the prospect of working with Marsh with a view to providing long term value on both sides of the table.
“Our service re-engineering expertise combined with our extensive London insurance market knowledge will enable us to enhance the competitiveness of Marsh in the UK and global insurance markets.”
Outsourcing B2B Telemarketing Services
There is no better source for telemarketing services than the B2B environment. According to recent statistics published by the DMA, B2B companies spend 27.9 billion in telemarketing services. In addition, the 2006 DMA Response Rate Study found that Telemarketing in the B2B environment has a response rate of 9.11 percent.
B2B telemarketing is more than just the process of having a room full of agents making calls. In fact many organizations have sales agents making calls during the daytime. This is commonly construed as something other than telemarketing services. However, nothing could be further from the truth. No matter what size the sales force, if they are making outbound calls to prospects then they are telemarketing. It is important to have the legal requirements for this process as well as the technology to supportFCC regulations. Most of the sales force process can be handled by telemarketing agents and the data can be better processed and follow-up calls better organized. In the face of data requirements and federal regulations, outsourcing B2B telemarketing services has become one of the most effective telesales options.
One of the major advantages when outsourcing your sales force is to consider the technology involved with a telemarketing operation. Telemarketing centers have dialer systems that can allow telemarketing agents to do in a day, what an agent with a manual dialing agent would take a week to do. More and more companies have utilized telemarketing services for their B2B calling because it is simply more effective and significantly more affordable.
In addition to direct sales, the DMA has found that 17.5 billion is spent generating sales leads and there is no indication that this spending will decrease. Despite new practices in lead generation telemarketing leads still convert faster and more effectively. In addition, any respected telemarketing center houses lead recordings and has a quality assurance department verifying each lead. Telemarketing agents generating leads can often ask questions and essentially warm up a lead for sales agents and keep them nurtured throughout the sales process.
Friday, January 11, 2008
UBICS Announces ISO 9001:2000 and ISO 27001:2005 Certification for Its India Development Center
UBICS, Inc. (www.ubics.com) (Pink Sheets: UBIX), a global professional IT services organization, announced today that its India Development Center (UBICS Technologies Pvt. Ltd., India) has been awarded the ISO 9001:2000 and ISO 27001:2005 certifications by German Society for the Certification of Management Systems (DQS).
Dr. Vijay Mallya, Chairman and CEO of UBICS said "Achieving the milestones of ISO 9001:2000 and ISO 27001:2005 have proven, yet again, UBICS' commitment to deliver software & services at the highest global standards, to its customers worldwide".
The ISO 27001 and ISO 9001:2000 Certification is awarded to UBICS after detailed evaluation by DQS GmbH and ensuring that UBICS' Information Security Management Systems and Quality Management System conform to the specified global standards of software development and support. These systems are used in UBICS Design, Development, Maintenance and Service of software applications and IT enabled business process outsourcing (BPO).
Sunil Patil, President, UBICS said, "The attainment of this certification confirms the maturity and robustness of the Software & BPO delivery processes developed by UBICS over last 2 years." "The successful ISO certification now effectively positions UBICS amongst the leading IT & BPO outsourcing companies operating globally," added Mr. Patil.
About UBICS, Inc.
Founded in 1993, UBICS is an affiliate of the UB Company, a $2 billion multinational group of companies headquartered in India. UBICS, with business operations in the United States, United Kingdom and India, provides IT Services, IT Solutions and IT Products. A leader in the IT space, UBICS' successes include projects spanning major sectors such as airlines, manufacturing, processing, banking/finance, retail, automotive, insurance, transportation, telecommunications, public utilities, entertainment, and consumer goods.
Outsourcing provides new business opportunities
Electronics outsourcing and manufacturing specialist Exception is investing heavily in new products and services for its electronics offshore solutions (EOS) division in Malaysia
Exception is investing heavily in new products and services for its electronics offshore solutions (EOS) division in Malaysia. The UK-based company is seeing increased customer demand for offshore volume production of other products, according to Chief Executive Craig Wright. Products other than PCBs represented 7.5% of the company's imports last year, with a value of US $4m.
Wright predicts that the figure will reach US $10m in 2008, demonstrating the increasingly versatile approach that OEMs are looking for from their outsourced providers such as Exception.
Craig Wright said: 'As an established supplier with a long manufacturing history in the region, Exception is ideally placed to assist its customers with the sourcing and production of complementary products'.
'This co-ordinated approach allows our customers to benefit from a number of efficiencies and enables them to consolidate the production of PCBs and other components into the hands of a single, trusted supplier'.
'This service is one that we currently provide to our clients in the automotive, consumer electronics and medical sectors'.
'However, as techniques become more sophisticated, it is likely to be extended to more specialist markets, such as the aerospace, exploration and defence sectors'.
Thursday, January 10, 2008
Indian High Commission outsource visa service to VFS Global
The opening of customer friendly and easily accessible VFS Global visa, passport and OCI application centres (V&PSC) in Australia, will ensure efficient visa, passport and OCI services.
To improve the service delivery of the visa, passport and OCI application processes, the High Commission and the Consulate Generals of India have decided to outsource these services in Australia to VFS Global Services, the specialist visa facilitation partner for diplomatic missions worldwide and part of the Zurich based Kuoni Travel Group. VFS Global is the first Indian company to be awarded the contract for Consular Outsourcing Service by the Indian High Commission in Australia.
The opening of customer friendly and easily accessible VFS Global visa, passport and OCI application centres (V&PSC) in Australia, will ensure efficient visa, passport and OCI services. The Centres will also offer prompt and efficient responses to all queries including telephone and e-mail queries relating to these services. In addition, the Centres would accept fees in cash, drafts / money orders, and also through credit card / debit card starting from May 2008. The VFS Global centres in Australia will also be open without break for longer consular hours – from 8:30 AM to 3:00 PM – on all working days.
Currently the visa application procedures for India in Australia are as follows:
1) Passport and OCI applications in respect of the areas covered by Consulate General of India in Melbourne, i.e., Victoria and Tasmania, will continue to be received by the High Commission of India, Canberra till the opening of V&PSC in Melbourne.
2) Passport, Visa and OCI applications in respect of South Australia will continue to be received by the Consulate General of India in Sydney until 20 February, 2008. From 21 February, 2008, applications from South Australia will have to be forwarded to the V&PSC Centre in Sydney, until the opening of a separate V&PSC Centre in Adelaide on 18 April, 2008. Thereafter, applications from South Australia will be dealt with by the V&PSC Centre in Adelaide.
More Dental Labs Outsourcing Custom Crown and Bridge Production
According to Millennium Research Group's Global Markets for Dental CAD/CAM Systems 2008 report, US and European dental labs are increasingly outsourcing crown and bridge computer-aided
design/computer-aided manufacturing (CAD/CAM) production to milling centers. Accordingly, in the US, unit growth for scanners used in the outsourcing process will reach nearly 20% annually over the next five years. In Europe,this annual unit growth will exceed 20%.
Many laboratories outsource CAD/CAM crown and bridge production in order to keep up with demand for CAD/CAM restorations. Outsourcing only requires laboratories to invest in a scanner, the cost of which is sometimes as low as 25% that of a complete CAD/CAM system. Accordingly, many labs view outsourcing as a more viable and profitable option than purchasing milling equipment. As
this trend continues, the volume of scanners sold will grow across both the US and Europe.
"The more labs that can offer CAD/CAM restoration, the better" says Chris Shutsa, Senior Analyst at Millennium Research Group. "This will allow more dentists to meet the increasing patient demand for custom-milled crowns and bridges." The Global Markets for Dental CAD/CAM Systems 2008 report includes coverage on US, Europe, and Japan. Coverage of industry competitors includes
Sirona, Dentsply, Wieland Dental Systems, KaVo, 3M ESPE, etkon, 3Shape, Nobel Biocare, GC, WOL-DENT, and U-Best Dental Technology Inc.
About the CAD/CAM Production Process
To create CAD/CAM crowns and bridges, dentists create an impression of the site to be restored. The mold of the site is then sent to a lab, where a technician digitally scans the model. Using computer-aided design software, the technician will design a 3D model of the restoration. Using the digitized 3D model and CAD/CAM technology, the technician will mill the restoration
directly in the laboratory or send the data to a production center for milling. The latter method is commonly referred to as outsourcing.
Wednesday, January 09, 2008
Outsourcing Market Will Remain Robust in 2008
IT outsourcing deals don't garner the splashy headlines they did just two or three years ago, but that doesn't mean enterprise customers are suddenly averse to turning to outside providers for help with their most important technology projects.
In fact, according to Gartner, worldwide outsourcing spending will grow about 8.1 percent this year to $441 billion, up from $408 billion in 2007.
But rather than locking themselves into multi-year contracts with one vendor like IBM, Accenture or EDS, more and more CIOs are taking a buffet approach, signing several smaller-sized deals with multiple providers that can deliver specialized products and services that address specific business objectives.
The emergence of the software-as-a-service model (SaaS) (define) is also playing a pivotal role in changing the way companies evaluate their sourcing needs, giving companies a viable alternative to traditional outsourcing providers and forcing these same vendors to either partner with or develop their own on-demand delivery model.
"SaaS is still in its infancy but it's fast becoming a viable option for a portfolio of services and software people are using," Kurt Potter, an analyst at Gartner, said in an interview with InternetNews.com. "We're finding that many companies are looking to SaaS options to minimize the customization that traditional outsourcing vendors and projects typically require. They're testing and adopting it in areas that don't conflict with other core architecture areas."
IT outsourcing market to hit $11b
Australia's technology outsourcing market will swell almost 5 per cent to $10.9 billion this year, market researcher Gartner has reported.
But vendors and customers alike will struggle with skills shortages and local outsourcing market growth will be substantially slower than the 8.1 per cent increase tipped for IT outsourcing worldwide.
Similarly, India is set to face increased competition as a low-cost outsourcing destination as staff attrition and rising salaries erode the country's competitive advantage.
"Global companies continue to accelerate their demands for a presence in countries other than India, and providers are seeking to expand their geographic footprint of delivery centres accordingly," Gartner research vice president Ian Marriott said.
"Although India's offshore revenue will continue to grow, the country's share of total offshore spending will decline slightly in 2008."
Gartner also tipped a shakeout in multi-sourcing practices this year with early adopters of the strategy expected to cull the number of suppliers they work with while maintaining a diverse stable.
The move to a smaller number of suppliers designed to reduce handoff points between vendors and vendor management is also being strengthened, Gartner reported.
In Australia, multi-sourcing continued to gain momentum during 2007 and interest in business process outsourcing was also building, Gartner research vice president Jim Longwood said.
Mr Longwood noted that as customers moved from single supplier to multi-supplier outsourcing they tended to retain incumbents for infrastructure services and engage specialists for services outside mainframes.