A new report from market researcher Gartner says that 41% of organizations that are currently outsourcing IT responsibilities do so “to enhance business outcomes and performance.” That’s only slightly less than the percentage (47%) that outsource to reduce costs and considerably more than said they outsourced for business performance in 2005 (28%).
The trend is a snowball effect. Buyers are outsourcing more because they see an improved base of IT outsourcing providers around the world, says Gartner analyst Allie Young, but the outsourcing providers are driven to improve their operations as more buyers gain confidence.
“Cost issues remain strong, and the shift in buyer expectations toward viewing IT outsourcing as a means to enhance operations is a sign of a maturing market that has higher expectations from IT outsourcing providers,” says Young in the Gartner report. And Dane Anderson, research director at Gartner, points out that “The appetite to outsource is a compelling reason for providers to concentrate on and ensure their current client base is well-served, satisfied and continues to see progress in reaching their outsourcing goals.”
Another report finds that focusing too narrowly on cost and poor planning when outsourcing services like IT can hamper the benefits of outsourcing.
Deloitte surveyed 300 mid- and large-sized corporations and outsourcing service providers found that, while 70% of the executives said they were satisfied or very satisfied, only one-third (34%) of the respondents said they gained important benefits from their outsourcing service providers' innovative ideas or transformation of their operations.
"Survey findings clearly show that there is room for improvement, and that companies should re-evaluate and step up the targets they set for outsourcing projects - looking beyond immediate concerns of cost savings through labour arbitrage or economies of scale," says Gordon Shields, partner in Deloitte's Consulting practice.
Friday, February 29, 2008
IT outsourcing no longer just about costs
Indians To Take Over KeyCorp Jobs In Outsourcing Plan
KeyCorp, owner of KeyBank, is outsourcing from 200 to 400 technology and product-support jobs to India.
Alan Buffington, a Key vice president for enterprise systems development, revealed the plan to employees during an electronic "town meeting" on Friday. According to Timesunion.com, the official said the exact number of jobs to be outsourced will depend on the outcome of the bidding for the outsourcing contract.
Three Indian firms are vying for the contract, each offering a different number of employees who will take over American jobs.
The outsourcing is to be undertaken to save KeyCorp an estimated $10 million annually. Buffington said cost-cutting is necessary in the light of financial problems besetting the financial services industry.
KeyCorp's fourth quarter net income in 2007 was down to $25 million from $146 million in the same period in 2006. It posted a net income of $919 million last year compared to $1.056 billion in 2006.
The company has about 19,000 employees in the U.S.
Thursday, February 28, 2008
The Challenge of Retaining Top Talent Abroad
Mehdi Hassan, blogging for South Asia Biz, recently highlighted a Forrester report on the growing dissatisfaction with IT outsourcing in India. As Hassan points out, firms are struggling with the falling dollar, unrealistic expectations, scalability, possible tax code changes and believe it or not, scarcity of top IT talent.
I couldn’t agree more with the assertion that the correct response to this situation is to reset internal expectations. I would also add that companies should take proactive measures on what they are able to affect. While companies are not able to control or change factors such as the falling dollar and rising costs in the target country, they can do quite a bit to attract and retain top talent - one of the biggest drivers of success in an offshore initiative.
It’s interesting how many organizations overlook the significant impact the human element has on their offshore operations. If we look specifically at the establishment of an International Purchasing Office (IPO), for example, we find that many companies invest their time and efforts into building out a vision, creating a budget, and locating office space. The assumption is that they can then hire experienced professionals and the low cost story proceeds happily forward to its fairy tale ending.
The reality is that there is a lot of competition for talent in not only India, but in all of the traditional low-cost countries of the world. Therefore it’s critical that organizations develop a comprehensive plan that incorporates:
1. A well thought out recruiting framework that includes a planning phase to assess such things as the current job market, acceptable salary levels and cultural nuances (performance bonuses, benefit packages, perception of titles, etc.).
2. A strong organizational design component that provides a clear growth path for individuals and has a well established governance model. This gives new employees a sense of belonging, purpose and pride. It should also clearly outline roles, responsibilities, performance expectations and metrics - and how it all ties back to the overall mission.
3. A thorough plan on how to build out capabilities - in other words, a solid ramp-up and training plan. Most new offshore offices are comprised of >80% new hires. Additionally, a strong training plan enables an organization to hire less experienced, but talented individuals - which is a degree of flexibility that is much needed in many of the tight job markets.
4. The right tools and support network.
The real key is to ensure that you are building out a complete organization, whether it is a call center, purchasing office or something else entirely. This is something organizations can control. At the end of the day, people are people all over the world. So if you build a great organization, you’ll be able to find and, more importantly, keep great talent.
Carol Pilarski is a Consulting Manager in Ariba’s Spend Management Services group. Her current focus is on supporting customers’ LCCS (Low Cost Country Sourcing) initiatives. Carol’s unique background includes eight years with Ariba, a period in Sony Electronics’ Rotational Program, the rank of Captain in the US Army and a degree from West Point.
Legal outsourcing growing fast in India
First there were the common consumer solutions and business processes that were outsourced. Next came research and knowledge, followed by e-learning with the West outsourcing its teaching needs to countries like India.
The latest in line is the Legal Process Outsourcing, a one that is estimated to be a $640 million industry in India by 2010. As many as 1,800 people are involved in legal outsourcing in the country, an industry that is said to be worth $146 million currently.
Clutch Group with 300 plus lawyers involved in litigation support, contract management, real estate legal and legal research all over the world, set up shops in Bangalore a couple of months ago.
Speaking to this website's newspaper, Abhi Shah, CEO of Clutch Group said that the global LPO market is worth $250 billion.
"Of this, 77 per cent is from the US, 18 per cent from the UK and 5 per cent is contributed by the rest of the world. It is also estimated that the top 200 companies in the US spend about $ 120 billion every year on legal services alone, $ 10 billion of which is the outsourcing sector," he said.
Shah, forseeing the potential for the industry in India, further said that well over 70,000 English speaking advocates graduated every year in the country, contributing to the talent pool needed for the industry to grow.
The underlying potential is also estimated to increase India's market share in the global scenario from the present 3-4 percent to 6-7 percent in the next two years. LPO saves up to 70 per cent in legal services cost to the company, say industry experts.
With outsourcing processes taking over in the e-learning, equity research and legal sectors, next in line would be outsourcing of blueprints in the architecture sector.
Global recession slows outsourcing
India and other lowcost labour markets could see growth in outsourcing services slowing down in 2008 due to the looming global recession, a global strategic advisory firm has said. The multinational Hackett Group found that there was still significant longterm opportunity for continued business growth in India, as companies in North America, Europe and industrialised Asian markets struggle to reduce costs and drive higher effectiveness.
This they do by primarily outsourcing various areas of business to Indian and other lowcost labour markets.
But in response to the threat of an economic downturn, many companies are hitting the pause switch on their globalisation efforts, said Hacketts globalisation and outsourcing practice leader Julio Ramirez.
Interest in offshoring is still high, and the best companies are moving forward with projects that combine globalisation with strategic process transformation, he told a news conference.
During recessions, the best companies focus their efforts on rapidly driving higher efficiency in back office processes, freeing up excess working capital, and enhancing their enterprise performance management systems and processes, Ramirez said.
These companies will use the economic slowdown to accelerate their outsourcing initiatives, increase the scope of existing contracts, or in the case of insourcing, push more work to their offshore captives.
However, the study of prior recessions show that as the threat of a recession deepens, many companies will switch their attention to operational and financing challenges, often resorting to simplistic solutions that are not sustainable and may in fact weaken competitive positioning, he said.
Most offshoring projects require an upfront investment for contracting, setup and transition that can result in a neutral to possibly negative impact on shortterm expenses and many companies will choose other tactical moves that provide paybacks over the next 12 to 18 months, he added.
In addition, escalating wages and currency appreciation in India have also generated questions on sustainability of cost savings, adding to the debate on the speed and timing of such strategic moves.
Hackett said that a possible recession would drive greater interest in globalisation by the Global 2000 companies.
However, factors like inflation, wage rate changes and currency movements, upfront project of transaction costs, productivity improvements and attrition might work against greater flow of offshoring to India in the shortterm, Ramirez said.
Wednesday, February 27, 2008
Intetics Announces New Outsourcing Service Initiative for Midsize Companies
“ODT™ (Offshore Dedicated Team) service combined with Onsite Program Manager enables midsize and even smaller clients to realize the benefits of offshore outsourcing,” said Alex Golod, managing partner and vice president of Intetics. “This is an offshore outsourcing startup kit for midsize businesses allowing them to get started without incurring significant investments and risks.”
ODT™ is a totally customized service offering; it delivers ready offshore teams as a true extension of a client’s in-house IT staff with complete offshore infrastructure, management and HR services, legal expertise, ongoing support, and even certified development process.
Large corporations have enjoyed strategic competitive advantages and benefits of global supply chains and offshore outsourcing for several decades, while midsize companies are limited by necessity of making substantial investments and usually lack in-house expertise to set up their own offshore operations.
“While opening their own captive centers offshore is prohibitively expensive for midsize businesses, ODT allows the clients the same advantages, as enjoyed by larger companies, but without huge expenses,” Golod said.
The availability of the Onsite Program Manager component strengthens the offering by providing necessary onsite expertise to define outsourcing goals, optimal combination of onshore and offshore resources, effective team structure, and collaboration processes.
“Onsite Program Manager is a liaison between the client and its team at Intetics, and is instrumental in facilitating project/delivery management activities,” said Golod. “The Onsite Program Manager not only helps build a bridge between teams quickly and efficiently but also assists in assembling the team, provides management consulting and coaching services for the client over the course of the entire project.”
Intetics (www.intetics.com) is a leading global outsourcing company focused on custom software development and offshore staff augmentation services. The company has two ISO 9001 certified development centers in Eastern Europe and is a Microsoft Gold Certified partner. Since 1995, Intetics has completed over 500 projects for about 200 customers in more than 30 countries. The company's innovation and growth achievements are reflected in winning the prestigious Deloitte Technology Fast 50 awards two years in a row. Intetics was ranked second in Top 5 Global Emerging Service Providers by Global Services and was recently included for the second straight year into The Global Outsourcing 100 by the International Association of Outsourcing Professionals (IAOP).
Top Outsourcing Duo Spin out New Enterprise
The successful spin-out of the Global Sourcing Advisory Group (GSAG) from Satellnet is now complete.
Satellnet's former Chairman and CEO John Stacey was the architect of GSAG, which he has grown into a $35million business in the USA and UK. He is now the Chairman and CEO of the new spin-out GSAG and he is joined by David Kinnear as President.
With 28 years of international management experience with Bearing Point, British Telecom (BT) EDS, US West Communications and Peat Marwick, John Stacey will be responsible for North America, China and EMEA.
David Kinnear, with 20 years experience in international management and outsourcing, will cover North America, Asia Pacific and Latin America. Prior to GSAG he was President and CEO of DDC HRO, part of the DDC Group. Both Stacey and Kinnear are of course well known in the outsourcing community as co-architects and founders of the Global Sourcing Council.
Discussing the spin-out, John Stacey said: "We leverage our global knowledge, resources and network of relationships for the economic and socio-economic benefit of all our clients, in both the public and private sectors.
"We bring private sector thinking to the public sector and public sector thinking to the private sector - globally.
"We help the public sector to become increasingly well-positioned and agile and offer help to domestic and foreign governments to enhance local GDP through intelligent partnering with the private sector. This, in turn allows both private and public sector to address the issue of Corporate Social Responsibility and Sustainability at home and abroad.
"We bring highly practical and effective management and strategic advisory services to our private sector clients helping them with the direction of their global growth initiatives."
David Kinnear added: "We do not subscribe to the view that 'one size fits all in outsourcing'. To employ a medical analogy, we are present at conception, birth and infancy guide you through every step."
GSAG already has in place a substantial number of contracts which will contribute to the total 2008 projected revenue.
GSAG has been serving blue chip clients and government organisations for three years now and several of these clients represent long term engagements that roll over year to year.
Tuesday, February 26, 2008
What differentiates knowledge process outsourcing from BPO
Financial services knowledge process outsourcing (KPO) industry is expected to be worth $5 billion by 2010, a study by KPMG said.
Sharing his views on the report, Pradeep Udhas, Global Partner-in-Charge, Sourcing Advisory, KPMG, has said that the success in offshoring business operations has encouraged many multinationals to start outsourcing key business processes and high-end knowledge work. The KPO phenomenon will have far reaching consequences for the global financial services industry over the next three years.
He feels that there is likely to be a significant shift in the boundaries between ‘outsourceable and ‘non-outsourceable activities; offshoring strategies are expected to embrace new locations and most global banks and insurers are expected to adopt KPO strategies, the study says.
Decisions about outsourcing may be accelerated to preserve and increase competitive advantage; boutique providers will leverage KPO to create new services and offerings and more rigorous regulatory and compliance control will likely be demanded as KPO providers deliver more complex services.
India is expected to remain a preferred location for KPO activity but organisations are expected to look for alternative locations for additional delivery centres, both from customer and service provider perspective.
The study also says that there are a few limitations on the potential growth of the KPO industry over the next three years like skill-set shortage, a declining U.S. dollar and compliance and regulatory pressures.
Some of the key challenges that can emerge in the industry are: maintaining high quality standards, investment in KPO infrastructure, lack of talent pool, requirement of higher level of control, confidentiality and enhanced risk management, it points out.
It says that the KPO industry has indeed come off age. Clients are recognising that process complexities, higher billing rates and skilled resources requirements differentiate KPO from BPO.
Next-generation outsourcing should incorporate risk management
Outsourcing in the 21st century is rewarding, but brings with it very specific risk management challenges, a new report contends.
Marsh, an insurance broker and risk adviser, has released a new paper called Risk Management in Next Generation Outsourcing together with Hunton & Williams.
The report asserts that developments in the market include the use of multiple vendors, a closer alignment between the service provider and the customer's firm and a greater likelihood of core business activities being outsourced.
"For those who manage the outsourcing lifestyle effectively, the rewards remain high," says Matthew Elkington, a vice-president in Marsh's Risk Consulting Practice.
He adds that companies with a comprehensive understanding of rosk management at an early stage in the outsourcing process are more likely to receive a return on their investment.
Meanwhile, a recent report from Gartner highlighted the need for online banks to improve their e-contact centre strategies as internet banking becomes a mainstream activity in the UK.
This news feed has been brought to you by Direct Response Limited, the award winners for outsourced call centre services.
Monday, February 25, 2008
R&D offshoring to hit $21.4 bn
The IT R&D offshoring market in India is expected to record a CAGR of 23% to touch $21.4 billion by 2012, according to a study done by Zinnov, a consulting firm. Zinnov said there are around 600 MNC captive centres in India and for 2008, the total revenue is expected to touch $9.4 billion with $5.8 billion going to come from the MNC captive centres rest from the third-party vendors.
Zinnov CEO Pari Natarajan said, despite this growth in the R&D offshoring market in India there is a dearth of required talent pool. For example, it is estimated that there are only 800 IT product managers in the country. At the same time, the salary costs of these professionals are also increasing questioning the business viability of these captives.
Mr Natarajan said, salaries constitute around 70-75% of an R&D companys operations and this was also impacting the productivity of these companies.
He said, MNC firms in the revenue range of $100-200 million are the most hard hit in getting the right quality people. This growth in R&D offshoring is primarily driven by the MNCs captives, though at the same it is also seeing the increasing presence of third party vendors, especially the Indian players.
Sunday, February 24, 2008
CoroWare Launches Near-Shore Outsourcing Practice
CoroWare, an Innova Robotics & Automation company (OTCBB: INRA), today announced the establishment of its near-shore outsourcing practice.
In today's increasingly competitive global economy, companies are constantly seeking new ways to reduce costs, stay ahead of competition and enhance profits. Outsourcing solutions are considered "near-shore" when they are in close geographic proximity to North America and share similar time zones.
"CoroWare is committed to offering its customers, whether in Redmond or New York, the freedom to choose high value engineering and IT professional services from near-shore in Latin America, on-shore in Redmond, WA or a combination of both," said Lloyd Spencer, CEO of CoroWare. "By taking advantage of advanced collaboration technologies and tools, CoroWare is already delivering these services through its employee base and strategic long-term partnerships in both Latin America and North America."
CoroWare's near-shore outsourcing practice is already helping its customers dedicate internal resources to other purposes while maintaining control of outsourced offshore projects during standard North American business hours. In addition, CoroWare can provide its customers with the flexibility required to succeed in a wide variety of project types and sizes.
"CoroWare offers a distinctive suite of innovative services and enterprise solutions that bring value to Microsoft," said David Hayes, director of the Microsoft Partner Solutions Center at Microsoft. "We believe that CoroWare's near-shore outsourcing practice will help the company continue to deliver high quality services at competitive prices."
CoroWare's near-shore outsourcing resources include architects, developers and testers with experience in software application development, software application integration, web site design including Microsoft Silverlight and other rich internet applications (RIAs), service oriented architecture (SOA), collaboration portals, IT infrastructure, and Quality Assurance and Testing.
"Enterprises are continually looking for ways to focus on their core competencies and work with capable systems integrators who can affordably deliver high quality services," said Susan Eustis, president of Wintergreen Research. "By launching a near-shore outsourcing practice with workers in close geographic proximity to North America, teams located remotely can share similar time zones. I believe this favorably positions CoroWare to deliver high quality services at very competitive prices."
About CoroWare
CoroWare, an Innova Robotics & Automation company, is a software and software professional services provider and mobile robotics integrator that delivers high value services and innovative solutions to maximize technology investments and achieve customer goals. CoroWare has depth of knowledge and breadth of experience in developing software and solutions for mobile service robotics and business automation through products that include the CoroBot product line. For more information, please visit www.coroware.com.
About Innova Robotics & Automation, Inc.
Fort Myers, Fla.-based Innova Robotics & Automation (OTCBB: INRA) pioneers innovative solutions for customers in the software, aerospace, research, and service industries. The Company is chartered to continue expanding its growing suite of technologies through acquisitions and organic growth.
Tuesday, February 19, 2008
India and Egypt forming IT partnership
The Egyptian session, held on the second day of the forum, was not only a chance to illuminate the countrys growing potential, but also witnessed a testimonial from an Indian businessman who emphasized Egypts keenness to attract Foreign Direct Investments (FDI). Ajay Shinkar, president of Srishti Indian Company, answered a question posed by one of his countrymen on how hospitable Egypt is to medium sized companies, by saying that ,what I saw during a visit to Egypt was really amazing.
Shinkar lauded the energetic atmosphere in which Egyptian engineers work, their tendency to innovate, and the astounding government support to companies expressing willingness to invest in Egypt. He added that his Egyptian partner is doing his utmost to fulfill his obligations and to provide an exceptional service in the field of medical outsourcing.
During the session, Dr. Hazem Abdel Azim, CEO of the Information Technology Industry Development Agency (ITIDA) and head of the Egyptian delegation, presented the true face of the Egyptian ICT industry and invited Indian and multinational companies to seize what the country has to offer.
The Egyptian delegation had three days of diversified networking and answered had answers to questions posed by international peers who had their hands full of fresh and updated information on the ICT sector in the country. The Ministry of Communications and Information Technology and ITIDA have joined hands to stress the need for an IndianEgyptian partnership in the IT field.
The Ministry of Communications and Information Technology and ITIDA are currently spearheading an effort to increase IT and ITES exports through a strategy formulated in a manner that reflects the publicprivate partnership which is one of the distinctive traits of the sector. The strategy pays special attention to enhancing the capacities of Egyptian ICT companies and professionals with special emphasis on cooperation with NGOs to reach various layers of targeted groups.
Egypt hosts various international companies like Microsoft, Oracle, Valeo, IBM, Satyam, Wipro, SQS, Teleperformance, Orange France Telecom, Vodafone, and HSBC. Choosing Egypt as an offshoring location stems from unique privileges bestowed on the country. Egypt is favored with a geographical location that allows the country to serve various time zones, availability of engineers and IT graduates, and abundance of manpower capable of conversing in various languages with an accentfree manner.
A.T. Kearney consultancy firm puts Egypt in the 13th position on its Global Services Location Index 2007, while the Yankee Group issued a report in May 2007 predicting that Egypt would be the India of the Middle East provided that the country stays the current course.
Monday, February 18, 2008
Indian IT beats slowdown
Source : www.offshoringtimes.com
Client mining, or cross-selling more services to existing customers, is helping Indian software services vendors such as Tata Consultancy Services Ltd (TCS), Infosys Technologies Ltd and Wipro Ltd earn more revenues even as mega deals evaporate from the outsourcing landscape and competition intensifies from global firms.
TCS has tripled its number of customers giving $100 million (Rs394 crore) in annualized revenues over the past 12 months, while Infosys and HCL Technologies Ltd have more than doubled them, even though they haven’t won as many large deals.
TCS currently has seven large clients from whom it earns more than $100 million annually from two such clients a year ago, while Infosys has five such accounts that generate more than $100 million in revenues. The largest customer for Infosys provides more than $200 million in revenues, accounting for 9.5% of total company revenue.
Repeat business due to effective client mining provides stability and predictability in revenues, which is extremely important for the vendors, says Harit Shah, equity analyst at Angel Broking Ltd, a Mumbai-based brokerage firm. For Indian vendors, repeat business traditionally accounts for more than 95% of their revenues.
“The outsourcing deals landscape is redefined today as there are no more multi-billion, multi-year deals as clients are breaking up those deals and giving them to best of breed vendors, says V. Balakrishnan, chief financial officer, Infosys Technologies.
Even the $100-200 million deals are not many. There are a lot of $30-50 million deals spread over two-three years, which is the sweet spot for Indian companies, and everyone is winning there, Balakrishnan said.
Infosys typically enters into a relationship with clients selling a service and over a period, manages to cross-sell more services and grow with them. When you add a client, you have to make sure that it gives at least $1 million in revenue over first 12-18 months, otherwise we drop them, says Balakrishnan.
The challenge he goes on to add, is to grow $1 million client to $5 million and $5 million into a $10 million client. The effort, adds Balakrishnan, is to broad-base the client base to improve the pyramid
For Indian information technology (IT) vendors, the current exposure to the IT budgets of large Fortune 500 firms is very small.With the concept of offshoring already proven, there is scope to get a larger share of the client IT wallet by offering the expanded portfolio of services,Shah said.
Wipro Technologies, the global IT arm of software-to-soap maker Wipro Ltd, reported its first client accounting for a run rate of $100 million in the December quarter.
The company has sharpened its focus on client mining and has classified customers as Mega accounts that have potential to yield $100 million, and Gama accounts that have potential to give $50 million and is investing in building them further.
We have identified about 10-odd Mega accounts and 25-odd Gama accounts and are focusing on them,says Rajesh Ramaiah, corporate treasurer at Wipro, adding that the company strategy fits well in terms of client mining.
Avinash Vashistha, chief executive officer of Tholons, an offshore advisory and consulting firm, says companies such as TCS and Infosys are aiming at getting more return from their selling, general and administrative budgets.
Indian IT vendors plan to do this by leveraging existing relationships and mining the accounts deeper and broader.
Offering services such as application development and maintenance, infrastructure managed services, business process outsourcing and customer care enable the tier I firms to get more from existing clients, while the mid-tier firms find it difficult to offer integrated services, adds Vashistha.
Client mining helps reduce the sales and marketing expenses for existing clients resulting in improved operating margins, says Balakrishnan. However, Shah argues that contribution from large clients to margins itself was debatable as there could be pressure on billing rates since customers tend to demand volume discount from the vendors.As a possible slowdown looms large, vendors will look to mining existing clients more. Vashistha says this is because they can realize more for every dollar spent on sales and marketing.
Further, it will help them to maintain the profits in spite of a slower rate of growth in revenue. This is because for existing customers, the sales lead time is lower and the vendor has a better knowledge of available budgets through their strong relationship, he adds.
Wipro inks outsourcing contract with Pantaloon
IT giant Wipro Ltd has signed an outsourcing contract with India's leading retailer Pantaloon Retail Ltd, which wants to increase its outlets from the existing 1,000 to 2,500 in the next five years. Wipro in the comprehensive outsourcing contract will streamline the IT operations comprising infrastructure management, application support services, managed security services and data centre hosting.
Pantaloon at present is planning to bring about changes in its retailing formats and differentiated private labels.
Suresh Vaswani, president Wipro Infotech & Global IT Practices, in a statement Friday said, "Our main task is to deliver IT transformation for Pantaloon by creating scalable and agile operations so that it will help in its expansion."
Thursday, February 14, 2008
Employment in Legal Process Outsourcing
Research and Markets has announced the addition of Top Legal Process Outsourcing Vendors, Black Book Survey 2007 Results to their offering.
Legal Process Outsourcing is projected to be the second fastest growing segment of the global BPO industry, estimated to increase dramatically from about $80 million in 2006 to approximately $4 billion by 2010. Employment in LPOs is also projected to grow to 32,000 next year, 40,000 by 2010, and 82,000 by 2015.
2007 Full Service LPO Rankings and Results Includes:
Part One: Core Legal Services Outsourcing
- Legal Research
- Discovery & Litigation Support
- Legal Analytics & Due Diligence
- Contract & Document Review
Part Two: Legal Support Services Outsourcing
- Paralegal Support
- Transcription & Document Management Services
At present the number of jobs in legal outsourcing in India stood less than 12,000, with a new hire explosion of over 20,000 new positions within twelve months. Outsourcing would reduce costs for US customers as the rates for Indian legal workers were about 18.0 – 26.5% per cent of their average American and UK counterparts.
The cost advantage is not without challenges, but none are insurmountable, particularly with 200,000 Indians graduating from law schools each year, five times more than in the US.
Several top LPOs have already been formed and have established reference client bases, huge savings and the ability for many law firms and corporate law divisions to transform their activities to focusing on core functions, as well as expanding into new revenue producing and top line initiatives.
Brown-Wilson Group and their research division, The Outsourcing Management Institute strongly advises investment in Legal Process Outsourcing firms who have developed internally strong management practices and high levels of customer satisfaction, manifested by high client scores and outcomes through 2008.
Over 160 Legal Process Outsourcing suppliers globally were included in the Black Book client survey process from 8 countries.
THE TOP SURVEY-QUALIFIED LPO VENDORS, 2007 (in Alphabetical Order): AtlasLegal, Bodhi Global, Centric LPO/Hinduja TMT, Clairvolex, Cobra Legal Solutions, Fusion, iDiligence, Integreon, Intrust Global, Inventurus, Ius Juris, Law Wave, Law-Scribe, Lexecute, Lexidigm, LexSphere, Mindcrest, NeoWorth LPO, Pangea3 and QuisLex.
The Black Book of Outsourcing research service titled TOP LEGAL PROCESS OUTSOURCING VENDORS 2007 provides an in-depth competitive analysis of the highest 20 ranked legal services suppliers globally, including India. The study examines the customer responses and satisfaction scores on eighteen specific criteria within the LPO market space and details each positioned vendor in several major functional areas. An analysis of key competitors provides the reader with in-depth market information.
Key Benefits:
Determine how your current LPO vendor is performing in other vendor engagements, and inspect the performance of legal process outsourcing suppliers pre-RFP, as benchmarking outcomes, setting SLAs, and/or pre-contract renegotiation.
Content Outline:
1. Executive Summary
1- Top 20 LPO Vendors, Final Rankings
2. Survey Results: SENIOR MANAGEMENT SCORING (“BEST MANAGED LPOs”)
3. Survey Results: Summary of Raw Scores and Means, Top Twenty LPO Vendors
2 – In-depth Analysis of Vendors by Criteria
1 - Vendor Overall Preference /Vertical Industry Recommendations
2 - Innovation
3 - Training
4 - Client Relationships
5 - Trust
6 - Breadth of Offerings, Client Types, Delivery Excellence
7 - Deployment and Outsourcing Implementation
8 - Customizations
9 - Integration & Interfaces
10 - Scalability, Client Adaptability, Flexible Pricing
11 - Compensation and Employee Performance
12 – Reliability
13 - Brand Image and Marketing Communications
14 – Marginal Value Adds
15 – Reliability
16 - Data Security and Backup Services
17- Support and Customer Care
18 - Best of Breed Technology and Process Improvement
Wednesday, February 13, 2008
LG looking to increase on outsourcing
South Korea's LG Electronics plans to outsource some more handset production in 2008 due to the rapid sales growth that the company is going through.
"Starting this year, we will take outsourcing more seriously", Chang Ma, LG's vice president for marketing strategy said.
Like its rival Samsung Electronics, LG has retained a vast share of its production, according to Reuters. Some of the European and US based cell phone makers have outsourced more than half of their production to EMS Companies such as Flextronics, Foxconn and Elcoteq, Reuters reports. According to Mr. Ma the company has no intention to enter the ultra low-end of the market for phones which today sells for less than €30.
DisplaySearch also reported strong consumer demand for 1080p LCD TV products throughout 2007 contributed to a strong year overall, despite sluggish consumer take-up in the final weeks of 2007. Demand for notebook PC displays was also strong in 2007. Annual shipments for portable computer applications rose 43% in 2007, and Q4'07 demand grew 45% Y/Y for a strong finish.
Some panels designed for PC monitor applications found their way into the LCD TV market, so annual growth of 31% for monitor panels overstates the actual demand for desktop displays. DisplaySearch expects buyers will prefer notebook PC products over desktop PC products for several years to come. Demand for flat-screen TV and portable PC products worldwide drove total large-area TFT LCD panel (10" or larger) shipment growth of 4% Q/Q and 40% Y/Y in Q4'07. Total large-area LCD shipments rose 40% in 2007.
Samsung Electronics captured the greatest share of TV panel revenues with sales of $8.6B in 2007 according to DisplaySearch findings. This 26% revenue share and was followed by LG.Philips LCD with a 22% sales share of TV panels. AU Optronics finished strong and increased its TV panel sales 126% Y/Y in Q4'07. For the year, AU Optronics had a 19% sales share. These three suppliers shipped 80% of all notebook PC panels in 2007, which DisplaySearch believes improved their operating performance.
Outsourcing, Good and Bad.
In all walks of life services are being sold out to private contractors, IT support is outsourced, customer service is taken out of the country on a regular basis and taken on by call centres in parts of the world where they have probably never seen the products they support or understand the culture of the people who use them.
Our local council outsourced its refuse collection service in a bid to save money. I am bemused how a costly service can be put out to tender to an organisation whose primary role is to make money. I can't see how they can offer a good standard of service for less than the local council can and make money at the same time.
IT support that is outsourced becomes just another job for the company taking on the role. They don't have the same level of involvement that a primary supporter would have.
In British National Health hospitals cleaning services have been outsourced to private contractors. In order to make money these companies have to set near impossible work schedules and pay rock bottom wages, as a result the work is often shoddy.
When a company contracts out their helpdesk support the first line first time fix becomes a thing of the past.
Helpdesks are often reduced to the level of call takers; the people work from scripts and seldom if ever resolve an issue on the first call. To me, the prime reason for helpdesks is to get people working again as quickly as possible, in order to keep people productive. The helpdesk shields the more technical departments from constant interruptions so that they can get things done.
They are also a filter, keeping the trivial and easy to answer questions away from the other departments. I've said before that when I worked the helpdesk we had a first call resolution rate of over 95%. We did the password resets every Monday morning, for those people who had hurriedly changed theirs as they left the building on Friday afternoon, then promptly forgotten them.
We collated all the messages about network problems and passed just one call to the network team, then fended off further questions. Now it seems that every call is logged and passed through so that the network team has to fix the fault then spend the rest of the day closing off all the other tickets, not a great use of anybody's time.
Yes, outsourcing can save money at a superficial level, but I don't believe that it is an efficient way of solving problems and the hidden costs should be more than enough to persuade the powers that be that they should seriously consider going back to the old ways.
Tuesday, February 12, 2008
Accounting Outsourcing Can Lend Credence to your Business
Any business runs on the basis of important contributions from various divisions such as marketing, human resource, information technology, administration and of course finance and accounting. The business undertakes multiple transactions in a single day and it becomes crucial to maintain accurate records of each transaction to arrive at a proper picture of the entity's financial standing in the market. The records such as the journal, cash books, balance sheets, profit and loss accounts are all various accounts that help the accounts division keep track of the business's income and expenditure. However, if your business is a start up or perhaps has a small entity then it might get difficult to devote an entire division to maintaining the accounts then perhaps accounting outsourcing is the best option for you. More and more businesses, whether big or small, are going in for this method of maintaining their financial records and the popularity of the process speaks about its success.
Accounting outsourcing is the process of handing over the accounting work of a business to a third party vendor in another country, who handles the accounting work on the behalf of your business. Many countries such as India are offering such accounting outsourcing services to the western countries and that too at a much lesser cost. The economic value of the service is a major advantage for the companies opting for such third party accounting. The professionals hired by the vendor taking the responsibility of your financial records are well qualified to handle such work with great competency and accuracy. As a business owner you can safely entrust your financial records to the vendor and rest assured that the accounts will be maintained in an accurate and efficient manner.
Accounting outsourcing not only saves the business the hassle of regular account maintenance but is also much cheaper for the business. The salary that the business would otherwise have to pay to its in-house employees for maintaining the accounts would be much higher than what the vendor charges for providing such service in an accurate and confidential manner. However, before you hand over the job to any vendor make sure that you have carried out a thorough background research on the reputation of the outsourcing company and the jobs handled by them in the past. A reference from one of their existing or past client is the best ways to select a reliable vendor. As the financial data of any company is highly confidential and can be detrimental to the company if placed in the wrong hands, an accounting vendor needs to be chosen with great care.
When the financial records of your business are being maintained through accounting outsourcing, you can have easy and instant access to them at a short notice. This is immensely beneficial while paying the taxes or filing returns. Also, having up-to-date and accurate accounting records earns a good name for the business in the eyes of its shareholders, creditors, vendors, customers and the public in general. So, opt for outsourcing your accounts and ensure the smooth progress of your business.
Outsourcing analytics helps provide a high level of expertise
Marketing has to be able to show it knows the customer better than anyone. It's a new measure of marketing, centered on customer affinity and individual life cycle marketing, which is all database-driven. It's the whole issue of retention, targeting, segmenting and investing in customer data integration. But marketers by and large are flying blind. They cook up these campaigns but are not using customer data to make smarter decisions. They don't know who their most profitable customers are, so they need help.
Today, you can go to a company like Mu Sigma and outsource all your analytics to India, gaining insights from hundreds of mathematicians. Compared to database maintenance, analytics requires a higher level of expertise, where you're crunching a lot of data and extracting correlations, running models, simulations, scenarios and predictive models. Not all marketing departments can afford that, so it's a big opportunity for outsourcing companies.
If marketers invest in acquiring the data and unifying them, in having the tools to gain extra knowledge, they'll be far more equipped to make the argument for what should be done. They can say, "This is what the data are showing us. We need to add support here, modify our products there, change prices over there." That is a big shift; companies are becoming very focused on marketing performance management. Further, the joy of digital marketing programs is that you can constantly recalibrate and adjust.
What's happening is the dollars are moving agency expenditures to new hybrid hosted-solution providers. There's off-the-shelf middleware that helps integrate database mining, provided by people like SAS, SAP, Oracle and lots of niche providers. And of course you can outsource this expertise as well.
Monday, February 11, 2008
Developing Killer Content on a Beer Budget
I would like to direct your attention to the section on Craig's List called "Gigs," which can be a gold mine of resources for an e-business owner on a beer budget. Gigs are simply postings of help-wanted ads. You can post advertisments for help in areas where you might need it to grow your e-business. Because the jobs are usually project-based and short-term, you will be able to avoid hiring full-time employees and also pay discounted rates to the contractors you engage who value their flexibility, are unemployed, or who live in lower-cost cities in the United States and other Countries.
Computer Gigs is the most useful category for finding e-business help, although Creative Gigs and Writing Gigs may all be useful for your e-business. I recentely posted an ad looking for someone to create a Web site banner for me, and I quickly began receiving dozens of e-mail response within 30 minutes of posting the ad. I received a ton of e-mails from college students and people located in India. If you are clear in your ad about what you are willing to pay and what you need, you will be able to quickly find cheap help for almost anything. I paid $15 for the banner and received it 2 days later. Do you realize how much I would have paid for that banner if I had hired a professional?
This advice is true even if you do not live in a large city covered by Craig's List, as long as you are in need of services where the results can be delivered electronically via some type of digital file that can be sent to you by e-mail or FTP or downloaded from a Web page. Copywriting, web design, and research services all quality.
As one of my e-business pal says: "Don't think you can do it all. In a small business, if you inisist on doing everything yourself, you are going to run out of hours in the day and your business will suffer."
Get the Right Solutions With Bookkeeping Outsourcing
Bookkeeping is one of the most vital aspects of any business. This is indeed that one department of any business that has the capability of converting a loss making firm into a profit making firm and vice versa. Seeing these probabilities, it is necessary to hire the right kind of people for this department because only a competent person can handle all the responsibilities that are associated with this department. However, not many times can a person get lucky and business being a dicey thing, it is quite acceptable if a person gets the wrong person to do the work. Moreover, the work that is related to this department is humongous and therefore, getting the entire work done by some in-house people might not turn out to be profitable and therefore, in such circumstances or the other, it is always good to take the help of bookkeeping outsourcing.
Now you must be wondering what this entire concept of bookkeeping outsourcing is. Well, firstly, outsourcing is a very old concept and today, it has become a prevalent thing in the business world. Bookkeeping outsourcing is nothing but outsourcing one’s firm’s accountancy related jobs from some other firm that specializes in the domain. Well, the professionals who work in these firms are dedicated accounts professionals and have thorough knowledge about all the aspects that are related to this work. Moreover, these are professionals are CPAs and have full knowledge about the various things that are associated with this particular field of any business.
There are many firms that provide bookkeeping outsourcing services to all kinds of businesses. Therefore, it would not be difficult for any business owner to locate a firm that provides this service to a business. Since, there are many such firms, it is very important to select the right kind of firm for your business. Moreover, one thing that needs to be understood by any business owner is that each business is different from the other and therefore, it is very important to get hold of a firm that suits the needs and the requirements of your business. Once the firm from whom the services would be outsourced, it is very important to make the professional know and understand the nature of your business and the requirements of your business. One thing that is needed to be understood is that accounting is a huge aspect and involves many things like maintaining ledger books, journals, balance sheets, tallying various accounts. Moreover, as these professionals know all about the various aspects of this huge and important department of a business, they know that a small mistake can lead to a huge blunder later. Therefore, they make sure that they enter all the entries carefully and therefore, there are no mistakes in the work that they do.
Taking the help of bookkeeping outsourcing is probably one of the most intelligent moves by any business owner. Therefore, it is always a good thing to take the help of this service, as it provides one with better solutions and helps them to expand their business in the right way.
Saturday, February 09, 2008
Consolidation in Eastern Europe: Who is Still in the Outsourcing Game?
For a long time the management of EPAM Systems, Eastern Europe’s largest software development company, was looking to enter the Russian outsourcing market. At the same time the labor market in Belarus, with a population of nearly 10 million and EPAM’s first offshore location, began heating up. So the need for new resources became more urgent.
EPAM management selected Vested Development (VDI), a Russian software development company headquartered in Burlington, Massachusetts. "We looked at a number of companies, but with VDI we knew each other for many years and there was a strong level of comfort" says Arkady Dobkin, CEO of EPAM. VDI, founded in 1993, began life as an offshore software development company. However, since the beginning of 2000, the company has placed a strong focus on the Russian market.
Such is the picture across Russia: many software development companies have seen more success on the local IT market than abroad. The Russian economy, rich in natural resources, finally showed a need for the talented engineers back home. Besides, unlike publicly-listed Western companies looking to squeeze every cent of efficiency out of their outsourcing business case, privately-owned Russian businesses pay well to keep the best suppliers delivering the best results.
The growth of the IT industry in Russia has been remarkable. According to the estimates of Russian information agency RosBalt, in 2007 the IT market in Russia grew by 25 percent compared to the previous year; the market has maintained that growth rate for a number of years in the past. The increasing local market need for IT professionals, exceeding existing supply, resulted in the first signs of the industry consolidation.
Thus in 2007 one of the largest Russian system integrators, IBS Group, completed an acquisition of Borlas, a consultancy and IT services company. At the end of the year the company employed 6,000 people. Also, last year Systematica acquired systems integrator TopS BI. In the meantime Verysell, which employed 750 employees in 2007 and was valued at $300 million by Troika Dialog, raised $50 million to acquire an IT services company in preparation for an IPO.
Across other eastern European countries the fight for IT resources gets tougher. In Poland, the third largest country in the region after Russia and Ukraine, there are only a few large specialized offshore outsourcing service providers. In 2007, the total IT outsourcing market volume was 750 mln PLN (3.5 PLN = 1 Euro). Most of the key players, though, offer software development services to their international customers, accounting for approximately 45 percent of their revenue, although there is no firm statistical data, according to Andrzej Horodeñski, the spokesman of the Polish Chamber of Information Technology and Telecommunications.
"The Polish IT labor pool is close to being exhausted" he says. "The basic reason for that is not labor migration, but mainly the internal IT industry growth" Here IT companies merge to survive fierce competitions from the international giants such as IBM and HP. In 2007 Computerland merged with Emax to form 3000-people-strong Sygnity Group, and at the end of the year Asseco merged with Prokom, creating Poland’s largest IT company.
In Romania, where the country entered the EU on the first of January 2007, its outsourcing industry was simply sold out. U.S.-based Techteam acquired Akela, one of the oldest Romanian outsourcing companies; UK-based Endava acquired AGS; and Adecco bought IP Devel to expand its embedded development team. U.S.-based Computer Generated Solutions bought EasyCall, the largest Romanian call center operator, with 600 employees and Euro 1.8M revenue.
Also, in 2006 Adobe bought the Dreamweaver development experts InterAKT. Now, according to Vasile Baltac, the president of ATIC - Romanian IT association, there are few small outsourcing companies with Romanian capital left. Branches of ICT multinationals or joint ventures where the main shareholder is a foreign company produce 80 to 90 percent of the industry turnover" he says. "All the big names are present in Romania now: Oracle, HP, IBM, Alcatel, and Siemens. Large multinationals number about 3,000 people, and they are very aggressive on the local IT market too"
In Bulgaria the demand for software developers exceeds supply, and the local providers are fighting with Coca Cola, HP, SAP, and Siemens for the talent. VMware solved the problem with resources fairly easily. In 2007 it simply acquired its outsourcing supplier Sciant, a Bulgarian software development company with a lower-cost subsidiary in Vietnam; so Sciant clients had to look elsewhere to set up their operations from scratch.
Acquisitions of outsourcing companies have been happening across Eastern Europe. Exigen, the U.S. outsourcer, has been buying companies in Eastern Europe for a while. In its portfolio, for example, is Dati Gruppa, a Latvian IT company, and Starsoft, a Ukrainian company.
In Ukraine, acquisitions also started to take place although the country has still over a hundred small and medium-size players, with only a handful of them employing over 200 people. For example, Global Logic whose resources are based in India and the U.S., merged with Bonus Technologies, whilst Kharkiv-based Telesens was sold for $2.7 million to NASDAQ-listed TTI Telecom in December 2007. The purpose of the latter deal was to open up markets for both companies, rather than simply secure a resource base.
Tom Scharning, the Vice President of Business Development at EDB, a Scandinavian IT company, has conducted extensive research looking for infrastructure outsourcing capabilities in Eastern Europe. "We looked at both outsourcing and acquisition options. However, we didn’t find sufficient level of expertise in infrastructure management, only some rudimentary skills" he says. So the company decided to acquire a company in the region and train specialists in house.
"We looked at many Eastern European countries such as Russia, Bulgaria, Poland, Belarus, Ukraine, Romania, and Baltic States. We found that only Russia and Ukraine fit the bill. We feared that Belarus, Bulgaria, and Romania will follow the steps of the Baltic countries where the resources became drained quickly and the prices reached those of Finland" Eventually, EDB bought a majority stake in two companies in Ukraine.
"We had a long list of about 40 Ukrainian companies, some of which had high expectations of their valuation" says Sharning. "So finally we made a deal with Infopulse and Miratech, which are now part of the EDB global operation"
In defining its Eastern European strategy, EDB looked not only just at low-cost resources, but it has also followed the steps of its clients. "Scandinavian banks are the key EDB customers. They are moving eastwards towards Russia and Ukraine" adds Scharning, so the company looked for the resource base nearby to continue supporting its clients worldwide.
The consolidation of the offshore outsourcing industry in Eastern Europe has become a reality, which demonstrates both the high demand for the local professionals, located close to the Western European markets, and the bottleneck of the labor supply. As for EPAM Systems, the acquisition was a success; it completed the post-merger integration in 2007. "As a result of the merger we’ve got interesting CIS clients, and now 50 percent of our resources are in Russia and Ukraine" concludes Arkadiy Dobkin.
Link Partners
- Offshore IT outsourcing services.Offshore software development.QArea
- Custom software development, offshore software development compan ..
- Software development company,SAP Business One Solutions provider...
- London IT Support :: Acorn Networks
- Web Design Services by accesstechnologyindia
- Offshore Software Development Offshore Application Development Consulting
- Point of sale (POS) and back office systems
- software outsourcing china---IT outsourcing
- Offshore Software Development,Offshore Software Product Development...
- AADT Inc. Custom software development, computer programming...
- Website Design and Web Development at Great Prices: Panacea Infotech Pvt Ltd.
- Web Design India, web design outsourcing India, web design delhi...
- Offshore Software Development Outsourcing Programming IT Services Russia
- SAP Business One | Software Services | Outsourcing Services
- Software Solution
- Web Development India
- IT Support
- ScienceSoft - Offshore Software Development Outsourcing
- Offshore Software Development Outsourcing IT Services Programming India
- Itransition - Offshore Software Development Company
- Download Freeware And Shareware Software
- Outsourcing software development
- Software Development India
- Real Profit Solutions Inc. All-In-One Professional Business Services...
- Affordable web design - web development, custom web site design company...
- #1 Free Link Exchange Directory On The Web - Link Market
- Offshore Software Development Company India..
- Custom Software Development, Application development Services...
- Offshore IT Outsourcing, Software Development, Web Site Development
- e-Zest: Outsourced Software Product Development...
- Outsourcing Community
- Outsourcing Management Services, L.L.C.
- Offshore outsourcing
- Business Card Maker
- Logo Maker
- Software Support
- eLeaP™
Learning Management System - Headhunters
- Free Reciprocal Link Exchange Software
- Logiccode's Mobile Softwares
- United Net - Free PHP Hosting, No Ads
- Financial Consultant, Investment, Loans.
- MindGems Inc - Offers free software downloads that provide security, privacy and productivity for your computer system
- Colasoft Capsa - Expert Packet Sniffer
- Web Hosting
- Infine Software
- MouseTrial: Fun animated software to help kids with autism
- Audio Grabbers Software
- AccountingSoftware411.com
- Kookaburra Software
- Textrush
- Button Maker
- Insert Link Code
- Willems Soft Software
- Shareware download Freeware Download adware download For Windows Macintosh Palm Win CE Linux Unix
- Web site tweaking software
- Website log analyzer
- Tibo Software - Download action and puzzle games including the super jigsaw puzzle game!
- Create your own Personalized gifts
- Directory for computer
- Lumber Software and Inventory Systems
- Note Buyer and Note Investing Software
- Software Directory
- SpywareGuide.com- Inform Yourself
- FindMIDIs.com - Download your favorite songs for free!
- Ask Felgall - Computer Help from Felgall Pty Ltd
- Evrsoft - Makers of 1st Page HTML Editor
- HostProfessor.com
- Cpanel Webhosting
- Anagram Systems Limited
- SigmaPlot Software, SigmaStat Software
- Send Mass Group Prospect Mail - Fast, Powerful, Anonymous.
- Screen Capture Software
- Logo Design Software
- Internet Filter
- Timesheet Software Solutions
- On-Demand Customer Support and Help Desk Software - Parature.com
- Inflatables
- Web Hosting with TotalChoice
- HolHost.com - Cheap Web Hosting
- UsanaCar Hosting
- WebGripeSites.com
- Web Promotion and Internet Marketing Software
- Free Hosting Guru
- Indian Offshore Outsourcing Company
Friday, February 08, 2008
More schools outsourcing financial management
In a time of tight resources and limited experienced professionals, a handful of smaller school districts and charter schools in Minnesota are outsourcing all or some of their financial management work to a private firm.
"Financially, it's one of the smartest things we've done," said Keith Lester, who became head of Brooklyn Center, Minn., schools in 2005. "We're getting more than our money's worth."
School Management Services, based in Rochester, took over Brooklyn Center's finances in March 2006. While the former in-house business manager -- who retired -- had cost the district about $120,000 in salary and benefits, School Management Services costs about $62,000 for the same work, including payroll, budgeting, accounting, enrollment projections, and negotiation and supervision of benefits.
School Management Services might have found a niche -- as baby boomers retire and as school finance specialists become more in-demand and harder for small school districts to retain, said Sue Crockett, executive director of the Minnesota Association of School Business Professionals.
"It's hard to attract someone to a smaller district when they can make more money in other districts," she said. "So I think they (School Management) do fill that need."
School Management Services is run by Todd Netzke, who managed finances for Red Wing schools but around 2005 began thinking about how he could expand a school management business.
Since taking on Brooklyn Center Schools, Netzke's company has grown by nine full- and part-time school finance professionals, who work with 20 traditional K-12 school districts and three charter schools. His largest district is Fridley. His smallest is Grand Meadow in south-central Minnesota with about 360 kids.
Stewartville schools, one of Netzke's clients, recently was honored with a School Finance Award, a state award for districts exhibiting sound fiscal health.
In Fridley, Superintendent Mark Robertson had an accountant and a business manager both leave within a month of each other. He had heard about School Business Management from Lester.
"We wanted stability," he said. "I did not want to start over and retrain someone from the get-go."
School Management does not seek to replace current staff members, said Don Kreye, School Management's director of business development. Usually, a full-time staffer leaves, or districts find they need extra help.
"This is a really new way of thinking about school finance," he said. "Schools outsource transportation, they outsource food service, they outsource copying services. Schools are already doing a lot of outsourcing. We're providing a service to school districts that allow(s) smaller districts to have an expertise they never thought possible at a cost they can afford. That's the bottom line."
Growth in IT outsourcing creates market opportunities
Gartner predicts that the worldwide outsourcing market will continue to grow with a forecast growth rate of 8.1 percent in 2008. Australia is also expected to see this field strengthen by 4.7 percent to reach $10.9 million in 2008. While it may appear to be a positive outlook, Gartner maintains that these predictions do not imply that businesses won’t be faced with challenges.
“Although organisations often have fundamentally sound procurement departments to initiate outsourcing contracts, for many, their IT sourcing strategies and governance structures are still immature, lacking altogether, or misaligned with enterprise objectives,” said Kurt Potter, research director at Gartner.
Specifically, Potter claimed that many companies lack the basic building blocks to achieve successful vendor management, expected cost savings and other benefits of outsourcing. According to Potter, in extreme cases the lack of needed trust and control to optimise the outsourcing relationship results in deal failure.
Gartner found that last year organisations had changed their focus and were no longer purely concentrating on saving money when considering outsourcing.
“In 2007, organisations focused less on outsourcing for cost savings than in previous years and more on using providers’ global delivery models to access the right skills at a reasonable price, wherever they are,” said Potter.
There were some sectors including publicly reported IT outsourcing (ITO) and business process outsourcing (BPO) whose contract values decreased overall by 50 percent worldwide in 2007. According to Gartner, as outsourcing becomes more commonplace and the market matures, there is less publicity of deals. Essentially, organisations are outsourcing more, but electing to use a multi-power strategy and more small deals that are not significant enough to report in the media.
“In 2008, we expect to see some early adopters of multisourcing to consolidate around fewer providers to reduce their service integration costs and harvest the benefits of better relationship management with fewer strategic suppliers,” said Potter. “Because of multisourcing complexities often associated with handoff points between competing providers and unclarified vendor management processes, some organisations will consider prime-contractor outsourcing models or the appointment of new vendor management roles in their retained organisations.”
Last year, Australia reaped the benefits of outsourcing business growth for the many multinational and local as well as offshore service providers, according to Gartner research vice president Jim Longwood. The only concern for the future of this market is that the local workforce will not be able to handle the increased demand for outsourced projects.
“Australia is a mature market in terms of outsourcing, where enterprises are now signing second- and third-generation deals,” said Longwood. “Staff shortages for internal and outsourced projects are a growing problem in Australia and in most other countries in the Asia Pacific region including India, New Zealand, Thailand and even China for some specialised skills and experienced staff.”
Market opportunities are opening up in other countries as buyers are moving work to lower-cost, offshore delivery centres. Cost remains the key driver in the development of global delivery models; however there are users that are more concerned with better supporting their business needs.
Saturday, February 02, 2008
Outsourcing LAN Management
A new approach that many organizations are exploring is to outsource day-to-day LAN management. The idea is to engage a service provider to take care of the routine tasks of LAN management, while using in-house staff or LAN experts for more complex tasks. Appia’s LANCare service, for example, takes over the day-to-day maintenance of PCs and servers, freeing IT staff to focus on more mission-critical projects.
For most companies and organizations, managing a Local Area Network (LAN) is a balancing act. On the one hand, LANs are indispensible to any organization’s operations. On the other hand, LANs are costly to manage and require skills that many organizations cannot afford.
Organizations tend to follow two directions in regard to LAN management. One is to hire in-house staff. This approach makes sense for larger organizations, but is beyond the reach of most small to mid-sized organizations. The other approach is to call on the services of local LAN experts. This approach is effective but can be costly for the routine PC and server support.
A new approach that many organizations are exploring is to outsource day-to-day LAN management. The idea is to engage a service provider to take care of the routine tasks of LAN management, while using in-house staff or LAN experts for more complex tasks.
Appia’s LANCare service, for example, takes over the day-to-day maintenance of PCs and servers, freeing IT staff to focus on more mission-critical projects.
To implement LANCare, an agent is installed on each desktop or server. According to a predetermined schedule the agent automatically defragments hard drives if needed, and downloads and installs software updates, including Symantec and Spyware. LANCare can also provide proactive alerts for CPU, memory and hard drive capacity.
Even complex and time-consuming tasks like software deployment can be handled by LANCare. The software is simply added to the list of approved applications, uploaded to a network server, and downloaded automatically to each device. LANCare can also be used for device, system, and software inventories.
LANCare costs $15 per month per PC and $150 per month per server – far less than the other approaches organizations typically use. And LANCare is proactive, which means less downtime and greater staff productivity.
About Appia Communications
Appia Communications is a leading provider of managed IT and telecommunications services. Our mission is to enable small and mid-sized companies and organizations to realize the benefits of Internet Protocol (IP) technology. Our managed solutions help our customers reduce costs, enhance employee productivity, improve customer care, and compete more effectively against much larger enterprises.
Northern Offshore wins three year contract for Energy Driller
Northern Offshore Ltd. says that Oil and Natural Gas Corporation Limited ("ONGC") Drilling Services, Mumbai region, has awarded its wholly owned affiliate Jet Drilling (S) Pte.Ltd.a three-year contract for the semi-submersible rig Energy Driller for operations offshore India.
The contract, which is subject to final execution, is expected to commence during the second quarter 2008, following a shipyard program and subsequent mobilization from Singapore to India. Revenues that could be generated over the three-year contract, total approximately $257 million. The estimate excludes revenues for mobilization, demobilization, and customer reimbursables.
The Energy Driller is a conventionally moored semi-submersible rig currently equipped to operate in up to 600 feet of water, however the rig will be upgraded to work in up to 1000 feet of water as part of this contract assignment. The shipyard program includes a regulatory survey and maintenance program already planned, along with the upgrade of the rig’s water depth capability
"The three year contract for the Energy Driller continues to indicate strong business fundamentals for the floater market," said Northern Offshore’s CEO Marion Woolie. The upgrade of the Energy Driller demonstrates our willingness to enhance our fleet when the appropriate opportunities arise."
Friday, February 01, 2008
Outsourcing data centers
The operational costs of Indian data centers are increasing and businesses are facing power, cooling and security issues which are leading them to outsource their data center requirements.
Mumbai based managed service provider, NetMagic Solutions has specialized in managed hosting and remote infrastructure management services. The company manages data centers for businesses that want to reduce their data center operations costs and free up their internal resources. This trend has helped NetMagic Solutions to quickly ramp up its customer list in the recent past.
Its 400 odd customers include big names such as Moneycontrol, IBN Live, Johnson Tiles, World Space Radio, and Indiainfoline, Telco, Travel Guru and Yatra and many more. Shard Sanghi, Group CEO, NetMagic Solutions, said, “We ensure high availability, seamless performance and security of a customer’s mission critical hosted applications. These are being delivered through efficient Internet data and network operation centers in India and the US.”
The company was founded in July 1998 and it initially focused on offering network-design and implementation-related professional services to Indian ISPs and large corporate clients. NetMagic transformed into a leading managed hosting service provider in November 2000 by setting up its first Internet data center in Mumbai.
Today the company has three data centers, two located in Mumbai and one at Bangalore. Sanghi said, “We have over 3,000 servers hosted at our data centers in India and virtual data center in the US and a development center in Pune where we focus on the development of monitoring tools that can be used as third-party solutions.”
Observer will outsource some ad design
U.S. papers trim costs by sending work abroad
The Charlotte Observer said Wednesday it will cut 25 of 41 jobs in its ad design group as it sends the work abroad, joining other large companies using foreign outsourcing to trim costs.
The newspaper has been testing outsourcing options for the work since last summer and chose Affinity Express, an Illinois company with facilities in the Philippines and India.
Employees, who have known layoffs were coming, received official notice Wednesday. They can apply for the 16 remaining jobs as artists, designers and "traffic coordinators" working with their overseas counterparts to complete ads, said Observer Publisher Ann Caulkins. Some people also may take positions elsewhere at the paper, which has about 1,000 workers.
Caulkins called the job-cutting discussions "brutal."
"It's a hard conversation to have," she said.
The deal is expected to save 35 to 40 percent on labor for the work, Caulkins said. She wouldn't give a specific figure. The paper also gains access to more sophisticated technology without the need for investment. The transition is expected to be complete by May 31.
Workers losing jobs will receive severance packages based on years of service.
Affinity, one of three companies tested, has been providing similar services for a sister paper, The State in Columbia, since November, Caulkins said. Observer management was able to visit and see firsthand how the system worked.
"We had to be convinced the service would be superior," Caulkins said. "We would not have done this if we thought it would affect customers one bit."
Customers will work only with Observer employees, not Affinity personnel, she said. Some companies that outsource have had complaints from customers, who objected to dealing with workers overseas.
The Observer, like newspapers nationwide, has struggled for years with declining circulation. Last year, the industry's auditors began measuring the reach of newspapers through readership and their quickly growing Web sites. Readership rates take into account that newspapers are passed around, read by several people in offices, restaurants and elsewhere.
Publishers use those figures to set rates and sell ads.
The Observer's Web site, Charlotte.com, which has been a big help in building readership, has seen its audience grow 25 to 30 percent a year for several years, Caulkins said.