Monday, March 31, 2008

Is IT dead?

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As valuations have factored in the pessimistic market sentiment, large-cap IT stocks appear to be unduly battered now.

It has been a year since the dark clouds around the Indian information technology (IT) industry have been squaring in, and the storm in the form of a US slowdown appears to be knocking at the doors.

Last fiscal, the rupee appreciated nearly 12 per cent. Next fiscal, software companies, which have their facilities located in software technology parks or outside special economic zones (SEZs), will be brought under the tax net – a biting on net margins.

As if this were not enough, the US is facing a slowdown, which many perceive may turn into a recession. Not surprisingly, many investors have already reduced their exposure to IT stocks, and valuations of software companies are close to the lower-end of their historical price-earnings multiples.

Although it appears rational to expect IT budget cuts and a slowdown in Indian IT-companies' order flows, there is a strong view from the other side of the argument.

Fortunately, the trend emerging from the guidance of global IT companies supports the more optimistic argument that a slowdown will prompt greater outsourcing, and in turn, higher volumes for large software companies.

Examples include good results in technology consulting by Accenture, strong international growth guidance by IBM and Cognizant for 2008 of achieving 'at least 38 per cent' revenue growth.

All these signs, put together, hint at a lesser than estimated fundamental deterioration of the sector.

According to a Forrester Research market sizing forecast titled “Global IT 2008 Market Outlook”, the US market is likely to be the laggard in the purchase of IT goods and services in 2008, while the Asia-Pacific will be the pacesetter.

Forrester estimates the global IT purchases to equal $ 1.7 trillion in 2008, growing by 6 per cent, after a 12 per cent increase in 2007.

Of this spending, nearly $380 billion is likely to go toward purchases of software products and services – an area where Indian IT companies are strong.

The growth in budgets for software products is pegged at 8 per cent for 2008, down slightly from 11 per cent in 2007. The decline of the dollar is factored in, in these forecasts.

Forrester expects Asia-Pacific, and the oil exporting area of Eastern Europe, Middle East, and Africa to be the main engines of growth in IT purchases this year.

In a more recent report titled “European IT 2008 market outlook”, Forrester suggests that the European IT market will grow faster than its US counterpart, with stronger investments in software than purchases of computer and communications equipment.

The European IT spends is likely to grow 3.5 per cent in euro terms in 2008 – higher than the US growth of 2.8 per cent in dollars. Measured in dollars, this growth will be amplified further.

Now, going by the logic spelled out by economists, analysts, and company managements alike, a slowdown in the US would translate into the need to cut costs. This in turn, will fuel outsourcing, which will rather benefit the Indian software players than causing a negative impact.

Therefore, even though there may be a slowdown in overall IT spending, large Indian IT companies may not lose too much of ground, given their dominant positions in the market as well as their global presence.

Outsource IT?

“The secular offshoring trend remains intact, although there could be some challenging times in the short-term on account of the US slowdown,” says Atul Penkar, an IT fund manager at Birla Sun Life.

“However, business is likely to pick up in the medium- to long-term as cost pressures on US companies lead to more offshoring,” he adds.

Analysts sound unanimous about the volume growth holding steady in the coming year for Indian IT majors. This is likely for one more reason that the Indian software companies have a proven execution model for managing costs competitively, which will come handy for the US clients during a recession.

Besides, to counter the cost pressures, most Indian software outfits have managed price-hikes in the range of 5-7 per cent for new contracts and 1-3 per cent for renewals, over the past year due to dollar depreciation. The only risk that may now hold is that of a freeze on pricing going forward.

Value picks
Among the Indian IT pack, it is mainly the large-cap companies, which can boast of a diverse global presence and a varied client mix, which could help them weather any slowdown in demand for IT services.

Thus, Infosys, Tata Consultancy Services (TCS), Satyam, Wipro and HCL Technologies remain the top picks. After a hefty beating over the past few months, their valuations are down to the lowest range of the respective historical price-earnings multiple bands.

This means that most of the bad news surrounding the prospects of these companies has already been factored in. The companies indicate a cautious stance, in their top and bottom line guidance going forward.

However, except for TCS, no other company has mentioned any budget cut or revenue loss from their clients so far. Indications of further worsening, if any and which is not yet discounted in the share price, will perhaps be visible in the fourth quarter results of software companies by early next month.

On the banking and financial services front, there may be some risk of demand slowdown, but Indian software firms are rapidly scaling up their abilities in other verticals to keep the ball rolling. Wage inflation, on the other hand is likely to be countered by some short-term measures toward salary hikes in addition to improving utilisation levels and tackling attrition.

To sum it up all, Indian IT players may not be entirely helpless in case the US demand slows down significantly. However, mid- and small-cap software outfits are likely to be swept astray due to higher tax burden and the lack of proper risk management systems to manage foreign exchange risks.

Consequently, investors with a slightly longer term perspective and a little risk appetite can place their bets on large-cap Indian software companies to be able to reap decent rewards.

Saturday, March 29, 2008

IT Offshore Outsourcing Takes a Toll on University IT Enrollment

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In recent years, there has been an increase in information system-related jobs outsourced to overseas countries. Knowledge of this trend in the business world has resulted in many students questioning their likelihood of post-graduate career success in the field of information technology.

The newly released issue of the Journal of Information Technology Research features articles by international experts in the fields of outsourcing and the IS curriculum. The article titled "Information Systems, Offshore Outsourcing, and Relevancy in the Business School Curriculum" -- authored by William J. Tastle, University of Iceland and Ithaca College, USA, Bruce A. White, Quinnipiac University, USA, Ársæll Valfells, University of Iceland, Iceland, and Peter Shackleton, Victoria University, Australia ­addresses future prospects for the field information technology within a university environment.

"The long-term future for IS education seems bleak at best unless the IS curriculum is reoriented to address these critical issues that are also apparently neglected by some businesses, and our instruction is modified to make IS graduates more appealing and productive to business," the authors write. "Outsourcing of IT functions is not a new reality for many organizations in the United States. However, what originated as a domestic approach to business management has increasingly been refocused to explore the cost savings in outsourcing overseas.

"Certainly, there will always be a set of small- to medium-sized companies that cannot or will not engage in offshoring, and those companies will require graduates with the current skill set," write the authors. "But even in companies that do not use offshoring, the softer skills of contract law, contract management and negotiation will grow with the increasing complexity of information systems. Even small- and medium-sized enterprises will be contracting for services and purchasing software package solutions."

Friday, March 28, 2008

Intrinsyc Software Announces New Soleus Design Win

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Intrinsyc Software International (Toronto:ICS.TO) today announced the signing of an agreement under which an existing Soleus licensee will develop its third Soleus-based product. This Original Equipment Manufacturer (OEM), a leading global handset producer, originally signed an agreement to license the Soleus software platform in March 2007 for the development of a GPS-enabled handset, and signed an additional agreement in October 2007 to see Soleus used in a Personal Navigation Device (PND) with mobile phone capabilities. This OEM has now launched development of a third connected device to be based on Soleus. This agreement marks Intrinsyc's fifth Soleus design win, in addition to its two silicon platform wins.

"With seven product development efforts, including the recently launched MSI 5608 at CES 2008, the momentum for Intrinsyc and our Soleus software platform is growing," said Glenda Dorchak, Chairman and CEO, Intrinsyc Software. "As our focus for this year is to not only close additional design wins, but to enable our customers to bring their Soleus-based products to market, we anticipate additional customer product launches in the coming months. Today's announcement confirms that Soleus provides OEMs with lower development costs and improved time-to-market, such that they benefit from developing multiple products on the Soleus platform."

The OEM's third Soleus-based product is a sleek next-generation PND slated to go beyond point-to-point navigation, offering real-time search capabilities and a customizable navigation experience for leisure or business and daily commute-type travel. The PND also leverages gpsOne technology, currently used by over 300 million GPS units for positioning capabilities. Development on this OEM's third Soleus-based product is already underway, and upon its commercial release Intrinsyc will be entitled to receive royalty revenues. The timeline for the release of the device and financial terms of the agreement were not disclosed.

Soleus is a comprehensive handheld software solution, with pre-certified telephony and a large application portfolio, which enables handset manufacturers to rapidly develop and deploy an array of wireless consumer devices. Built on Windows® Embedded CE, the flexible Soleus software platform allows numerous feature-set variations to meet the requirements of multiple handset designs and form factors.

Intrinsyc will be attending CTIA Wireless 2008 in Las Vegas, April 1-3, 2008, and will be demonstrating its latest software solutions for wireless high level operating systems (HLOS). Demonstrations will include Personal Navigation Devices, the Soleus(TM)-based MSI 5608 MDTV mobile phone and the latest touch-enabled prototypes. Intrinsyc technology and expertise will be on display in booth 6505-3D in the Canada Pavilion, Hall N2/N1 in the Las Vegas Convention Center. Intrinsyc management will also be available for one-on-one interviews and discussions. To arrange a specific time to meet with a member of the Intrinsyc management team, please contact

About Intrinsyc Software International, Inc.

Intrinsyc provides wireless software solutions that enable next-generation handheld products, including mobile handsets, smartphones and converged devices. The company's software products, engineering services, and years of expertise help device makers, service providers, and silicon providers deliver compelling wireless products with faster time-to-market and improved development cost. Intrinsyc is the licensor of the Soleus(TM) software platform based on Windows® Embedded CE for consumer handset development. Intrinsyc is a Microsoft® Windows® Embedded Gold Partner, the 2007 Windows Embedded Excellence Award winner for System Integrator, and a Symbian Platinum Partner. Intrinsyc is publicly traded on the Toronto Stock Exchange (symbol: ICS) and headquartered in Vancouver, Canada with offices in the United States, United Kingdom, Taiwan and Barbados.

® Intrinsyc, Soleus and their respective logos are trademarks, registered and otherwise, of Intrinsyc Software International, Inc. in Canada, European Union, Taiwan, U.S.A. and other jurisdictions. Other products and services mentioned in this document are identified by the trademarks or service marks of their respective companies or organizations.

Forward-Looking Statements

This press release contains statements, which to the extent that they are not recitations of historical fact, may constitute forward-looking information. Such forward-looking statements may include financial and other projections as well as statements regarding the Company's future plans, objectives, performance, revenues, growth, profits, operating expenses or the Company's underlying assumptions. Forward-looking statements are frequently, but not always, identified by words such as "expects", "anticipates", "believes", "intends", "estimates", "predicts", "potential", "targeted", "plans", "possible" and similar expressions, or statements that events, conditions or results "will", "may", "could" or "should" occur or be achieved. These forward-looking statements include, without limitation, statements about the Company's market opportunities, strategies, competition, expected activities and expenditures as the Company pursues its business plan, the adequacy of the Company's available cash resources and other statements about events, conditions or results that may occur in the future. Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, such as business and economic risks and uncertainties, including the risks and uncertainties set out in the Company's Annual Information Form. The Company's forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made, and the Company does not assume any obligation to update forward-looking statements if circumstances or management's beliefs, expectations or opinions should change, except as required by law. For the reasons set forth above, persons reading this press release should not place undue reliance on forward-looking statements.

Thursday, March 27, 2008

Dutton Associates Announces Investment Opinion: American Software Strong Buy Rating In Update Coverage By Dutton Associates

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Dutton Associates continues its coverage of American Software maintaining a Strong Buy rating and a $8.40 price target. The 10-page report by Dutton senior analyst David P. Soetebier, CFA is available at as well as from First Call, Bloomberg, Zacks, Reuters, Knobias, and other leading financial portals.

American Software Inc. is a leading supplier of enterprise management software and services. Through the 88%-owned Logility (NASDAQ: LGTY) the Company is a leader in Supply Chain Management (SCM) software. A key strength is the Company´s strong market share position in the growing demand for SCM software. We expect the demand for SCM software to become even more important as major companies increasingly outsource production driving the need to optimally manage their supply chains as the long supply line amplifies mistakes. In addition to its internal strengths, the Company´s strong balance sheet allows it to take advantage of growth opportunities either internally or through acquisitions. Our current estimate for the April 2009 year is now FD EPS of $0.42, (down from earlier estimate of $0.48) on revenue growth of 15% to $104.1 million (down from $111.8 million). In addition to providing investors with longer-term growth potential, the Company currently pays a cash dividend of $0.09 per share per quarter.

About Dutton Associates

Dutton Associates is one of the largest independent investment research firms in the U.S. Its 30 senior analysts are primarily CFAs and have expertise in many industries. Dutton & Associates provides continuing analyst coverage of over 140 enrolled companies, and its research, estimates, and ratings are carried in all the major databases serving institutions and online investors.

The cost of enrollment in our one-year continuing research program is US $35,000 prepaid for 4 Research Reports, typically published quarterly, and requisite Research Notes. Dutton Associates received $74,000 from the Company for 11 Research Reports with coverage commencing on 1/03/2005. We do not accept payment of our fees in company stock. Our principals and analysts are prohibited from owning or trading in securities of covered companies. The views expressed in this research report accurately reflect the analyst´s personal views about the subject securities or issuer. Neither the analyst´s compensation nor the compensation received by us is in any way related to the specific ratings or views contained in this research report or note. Please read full disclosures and analyst background at before investing.

Wednesday, March 26, 2008

Indian IT services market to grow at 18.6%

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Indian information technology (IT) services market will remain the fastest growing in the Asia Pacific region, with a compounded annual growth rate of 18.6 per cent, according to the ‘Asia Pacific IT Services Market and Forecast, 2006-2011’ report by Springboard Research. The report projects the IT services market in the Asia Pacific region to grow to $55.9 billion by 2011.

China will, however, offer the largest market opportunity in dollar terms at the end of the forecast period, says the report. Phil Hassey, vice president-services Research at Springboard Research says, “Although in some quarters it could be expected that the Indian market would grow even more rapidly, it is still fragmented and a long way from maturity.”

“Most local services providers, aside from the worthy headline grabbers such as Tata, IBM and Wipro are based within a city or state with a narrow capability range. National coverage is limited, and typically the engagement cost and contract value pales in comparison on a 'per capita' basis when compared with Australia, Hong Kong or Singapore,” he adds.

The report further shows that application hosting will grow at 19.5 per cent a year between 2007 and 2011 to register the fastest growth during the forecast period. Meanwhile, enterprise application integration at $7.8 billion will continue to be the largest component of the market by 2011. However, according to the study enterprise IT outsourcing, which was the largest market in 2007, will reduce its relative size and weighting in the market by 2011.

BT says to hire up to 300 in India centre

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NEW DELHI (Reuters) - British telecoms firm BT Group Plc said on Tuesday it would hire up to 300 people in a global operation centre in India, as it aims to outsource more operations to emerging markets to keep costs lower.

The new facility at Gurgaon will support BT's procurement, legal, finance and human resource operations, the company said in a statement.

"We have been working successfully in India for many years with partners who handle some of our non-core but mission critical activities," Chief Executive Ben Verwaayen said in the statement.

BT said it contributed 2 percent to India's $50 billion software services exports, and planned to step up outsourcing to India. The company has also built operation centres in Hungary, Brazil and China.

Tuesday, March 25, 2008

AKT Tech`s new software

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Nashik-based software company, AKT Technologies Limited, has launched a new software ‘AKT Freedom’, a combination of nine modules – accounts, inventory, payroll, time office, attendance, recruitment, online test, share bazaar and family manager.

The company has set up a 24x7 call centre to give pre-sales enquiry and post-sales support for its products and services to help its dealers in their operations and to meet their needs in real time.

The company is also looking forward to outsourcing the business process of other companies.

Hence, it is standing by to accept the voice-based outsourcing obligations wherein it will accommodate the entire responsibility of its operation. AKT Technologies, established in 2005, currently has 200 employees.

Outsourcing security tasks brings controversy

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Outsourcing security gives in-house IT staff a chance to be freed up from mundane tasks, but not everyone likes it

When it comes to outsourcing security functions, skepticism still rules the day for many users. The idea of handing over control of network security to an outside firm paid to maintain gear, monitor for attacks, perform scans, collect logs or update security software for employees is, to say the least, controversial.

Security managers are split on the issue, arguing it's either a boon or bane for the company. According to advocates, outsourcing security gives in-house IT staff a chance to be freed up from mundane tasks to deal with more strategic matters without having to take on additional staff. The naysayers worry that outsourcing means losing sight of security risks because outsiders will mechanically follow a contract without thinking critically enough. Whether outsourcing is cost-effective is part of the debate, too, but the central question of control stirs the greater emotion.

Those bullish on security outsourcing say it's a way to move their in-house security specialists, already in short supply, into more strategic jobs while making sure everyday tasks get done.

"We either have to bring in more internal IT people or get other people through outsourcing security services," says Andre Gold, lead, IT risk management in the North American arm of ING, the Holland-based global financial services firm.

Gold says tasks such as patch and vulnerability management tasks or antivirus support are consuming a lot of staff time that might be better used in strategic risk-management operations for online business goals with partners and customers, for instance.

"I'd rather push the ING people up the ladder," Gold says, noting that next month ING expects to select at least one security outsourcing provider -- it may be offshore in India or elsewhere -- for large, multiyear contracts to handle a wide variety of data and network-security management remotely.

"I call it security right-sourcing," Gold says, adding that ING already outsources some IT maintenance and application development. Consequently, advocating security outsourcing was not a culture shock at the company. Gold says he expects security outsourcing to prove cost-effective over adding in-house staff, but he says in this case, it's not the primary motivator for doing it.

Monday, March 24, 2008

RP software industry forms group for global marketing

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The Philippine Software Industry Association (PSIA) is forming a consortium that will market Philippine-made software overseas.

Industry officials said the consortium is going to an outsourcing forum in New York this July with hopes of making some deals.

"This is a coming together of software companies to form a consortium of smaller software developers in the country so they can sell bigger," said Ma. Rosario Gruet, a PSIA director.

"We are building an inventory of skills that we can showcase abroad. We want to work together instead of compete with one another," she said.

Gruet said PSIA is working closely with the Department of Trade and Industry to sell Filipino software initially as a service, especially with the popularity of offshoring and outsourcing (O&O).

Blast Asia president and chief executive Arup Maity estimated the PSIA's combined revenues at about $300 million in 2007. The group has 110 members at present.

According to a report by the Business Process Association of the Philippines, the software development industry is one of the top earners in the O&O sector, raking in revenues of $423 million last year, up 56 percent from 2006.

This was largely accounted for by key players Accenture, Headstrong, Microsoft, IBM Solutions, Jupiter Systems, Oracle, ADTX Solutions, TrendMicro, Gurango, Intel, etc.

There are 120 software development companies in the country that employ nearly 30,000 IT professionals.

For 2007, the O&O sector recorded a total of $4.88 billion in revenues, higher than the $3.3 billion it had in 2006.

It is on track to reaching its goal of $13 billion in revenues by 2010.

Officials mum on status of Development Park business

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SafeHarbor Technology is still trying to figure out how to make its operation work amid a steady stream of layoffs and outsourcing, including the closure of its signature call center at its offices in the Satsop Development Park.

But company officials are a bit quiet about what exactly is going on at the Web-based customer support company. They won’t even say how many employees currently work for SafeHarbor.

Four years ago, the call center boasted more than 60 people, but as SafeHarbor continues to change its focus, more and more of those jobs are being outsourced.

Once a quintessential 1990s tech company, SafeHarbor may also be closing or at least negotiating new terms with its small Seattle office and may be looking at other ways to save money, including outsourcing server space.

The five or so remaining employees in the call center were let go recently, confirmed SafeHarbor spokesman Harry Thomas. The actual offices at Satsop will remain open.

“As you probably know, we used to be primarily a call center operation and now we’re primarily focusing on web services,” Thomas said. “We outsource for what we consider to be our non-core or non-critical parts of our business.”

Asked if the call center duties were shipped overseas or to Canada, Thomas replied, “That’s between us and our clients. It’s based on what the clients’ needs are. We’ll place the calls where we feel it’s appropriate.”

Thomas said the company still counts American Airlines, T Mobile and Washington Mutual among its roster of clients.

“We may take calls, we may take e-mails … we may do chat sessions online,” Thomas said. “And when we do that, it’s really to better analyze what (our clients) could be doing more online so that they will have less volume to use live humans for.”

Thomas declined to say how many employees worked at Satsop or its offices in Seattle.

“That’s something between the company, the investors and the clients,” Thomas said. “Given our relationship with our landlords and clients, that’s something we’re going to keep as personal,” he added.

Former SafeHarbor employees estimated to The Daily World that the company has about 30 total employees. In 2001, SafeHarbor had about 200 employees. And as recently as 2005, there were 140 employees.

Former employees also told The Daily World that the technology company was considering closing its Seattle office at the end of the month.

Thomas declined to say whether the Seattle office’s lease is up for negotiation or whether it faces closure.

“That’s a lease situation and we’re not going to get into those kinds of details,” he said. “Satsop is our headquarters. And we only have a few people in Seattle. That’s not a major part of our operations. It’s just how do we accommodate the situation given the market in Seattle right now, given the workforce and all of that.”

Besides laying off its call center employees, a number of SafeHarbor’s information technology employees, including a key manager are no longer with the company or are about to leave, Thomas confirmed.

“Some people have been laid off and some people have chosen to leave voluntarily,” Thomas said.

Those layoffs and resignations follow a string of employees and managers leaving the company, including former chief executive officer Annette Jacobs, who resigned last July.

Brian Vincent, a former managing director of software for Vulcan Capital, was brought in to act as interim CEO.

Thomas said Vincent’s title has since been changed to interim chairman. He said the company still does not have a new CEO and he wasn’t sure if the company’s board was even still looking. “They don’t necessarily call me up to let me know the status of what’s happening,” Thomas said.

Still, Thomas said he remains optimistic about the future of the company.

“We’ve signed a couple of clients that I won’t talk about because I haven’t cleared it with them,” he said.

“We have a very good renewal rate with our clients. We really feel the underlying business structure is great. What we need to do is match our cost structure with that business. And what that means, in some cases, is outsourcing so that we can match the variable nature of the type of work with the variable nature of the revenue that comes in.”

Wednesday, March 19, 2008

Wipro plans to boost outsourcing to US

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Wipro plans to open more centres in the US in a continuing trend of "reverse outsourcing", as Indian information technology outsourcing companies recruit in the US and Europe.

Azim Premji, chairman of Wipro, India's third-largest information technology outsourcing company, this week said it aimed to hire more than 1,000 people in the US to staff two new software development centres in Michigan and Atlanta.

The recruits for Wipro's centres in Atlanta and Troy, Michigan, would be trained for three months in India before returning to the US for jobs in software development and project management.

Wipro also wants to ex-pand in Europe through acquisition, especially in Germany where Wipro has earmarked as much as $250m for a possible purchase.

"We would like to make an acquisition in Germany," Mr Premji said this week. "Hopefully the shake-out in the market will make prices more reasonable."

Having a presence in Europe is key to Wipro's strategy to diversify away from its core US technology services business. It already employs nearly 7,000 people in Europe, about a quarter of whom are local recruits.

Wipro is scouting for sites in the US in low-cost areas such as those close to universities, or with concentrations of former US military personnel.

Opening the US centres is also an alternative to getting visas for workers, Mr Premji said. Obtaining a short-term visa for skilled foreign workers in the US is highly competitive.

Integr8 IT, IBM's Outsourcing Service Delivery Partner of 2008

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Integr8 IT, South Africa's largest privately owned national BEE ICT network integration and infrastructure management specialist, has won the Outsource Services Delivery Partner of 2008 award at the annual IBM Awards held recently in Ball Room at Monte Casino.

The event is organised and hosted by IBM to recognise business partners that have excelled in their respective fields of operation and core business offerings.

"We are focused on clients that continue to uphold IBM's standard of delivery excellence within the IT sector. This is based on a combination of factors, but is inextricably linked to innovation. Our clients look to us to improve services, reduce costs and consistently drive high levels of innovation," says Mteto Nyati, Director of Global Technology Services, IBM South Africa.

"Integr8 IT has been an effective and reliable service provider and trusted IBM outsource partner with the knowledge and expertise to consistently add value to our growing client base."

Integr8 IT has conceptualised and established a Nerve Centre through which it continues to successfully engage with its local and international client base.

This multi-level IT service pod is designed to provide the company's Nerve Centre agents with an in-depth analysis of every aspect of the company's clients.

The Nerve Centre call co-coordinators, first line, second line technical teams are backed up by Integr8 Consulting Services, with direct dedicated lines into Microsoft (Redmond) USA for premier support services as well as direct channels into its other core global partners.

The infrastructure allows for a complete overview of the client's technology, projects, account details and various other aspects of the account. These are displayed, monitored and supported by a fully manned team on a 24/7/365 basis

"Through this multimillion-rand investment, and collective knowledge consolidation Integr8 IT has managed to proudly represent South Africa and prove local ability on a global standard, in Africa, Europe and the United States," explains Robert Sussman, joint-MD of Integr8 IT. "This ensures that we have a key position through which we can add value to our existing partnerships with leading global technology vendors and service providers."

The company is currently supporting and providing value-add IT managed services to a number of renowned and established local and international giants and industry leaders.

Sussman says the company continues to follow a deliberate strategy to lead the market, with innovation and unique customised services, well ahead of the local trends.

"We are delighted to have received this award. It inspires us to continue to expand the business across existing and emerging frontiers of technology-based trade and industry. IBM is a trusted partner and we are honoured to continue to provide effective, proactive services for the benefit of its prestigious clientele," adds Sussman.

Tuesday, March 18, 2008

Investors must give offshore account details

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Thousands of UK investors identified as having money hidden in offshore accounts have been sent letters asking them to provide details of their finances.

Revenue & Customs has contacted 5,000 British investors requesting a formal declaration of their overseas income and investments.

Not all of those contacted will be liable for a tax charge, but holders of undisclosed offshore accounts who knowingly avoid disclosing information could face a 100 per cent tax penalty on top of payment of tax and interest owed.

Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants, said that co-operation would be taken into account when penalties were determined.

A recently released paper from the Revenue estimated that unpaid tax from money abroad totalled £1.5bn in 2005. Most of the money hidden in tax havens is thought to be held in the Channel Islands and Isle of Man.

The Revenue has been tightening its net around offshore account holders following a legal ruling that forced high street banks to disclose information on clients' offshore accounts. A plan to extend this information request to foreign banks has been mooted.

Last year the Revenue held a partial amnesty for British investors with undisclosed offshore accounts, which allowed them the chance to pay the tax and interest they owed plus a reduced penalty of 10 per cent. By the time the amnesty had closed about 60,000 account holders had come forward, and £400m in tax owed had been paid by 45,000 investors.

Gary Ashford, tax investigations director at Grant Thornton, said the Revenue's approach towards offshore account holders was indicative of the increased powers announced in last week's Budget to carry out compliance checks. "Tax evaders had their chance to come clean and pay reduced penalties of 10 per cent last year," he said. "Now, HMRC is playing hardball and will be taking no prisoners."

Monday, March 17, 2008

Iterative Software Lifecycle Methodology

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Managing complex software development projects is about efficient utilization of resources, risk management, accurate estimation of budgets and timelines, experienced selection of appropriate technologies, and scheduling feature development to meet time-to-market requirements. Risk is a reality in every project; ISHIR's iterative methodology for software development is designed specifically to mitigate risk.

The most important question to answer before starting product development is: Why is this product needed in the marketplace? The answer to this question constitute the business objectives of the product that should drive its entire lifecycle. A software product's development lifecycle is comprised of four facets:

1. Requirements: What features will the product have?
2. Design: How will the product offer these features?
3. Coding: How will the features be coded and unit tested?
4. Testing and delivery: How will the product be tested and delivered to customers?

These four facets are managed by a project plan that determines when the software product will offer the required features.

In a traditional Waterfall lifecycle model, the project plan organizes the four phases in a strict serial order. A lot of time is spent up front to define and analyze requirements and to complete the design of the target system before a line of code is written. This model does not handle changes in requirements or design well. In addition, it creates an artificial separation between business analysts, architects, designers, and programmers, leading to the risk of miscommunication and divergence between the business objectives and vision of a software product and its implementation.

Using an Iterative lifecycle model, the four facets of a software product are integrated so that business objectives drive the entire process, and the requirements and design are continuously refined while the code evolves. The project plan arranges the development into small releases, and mandates continuing integration of all coded components, incremental builds, and periodic validation of refined requirements and design. By doing so, it encourages a shared ownership of the product among business analysts, software architects, designer, programmers, and testers; this shared ownership reduces the risk of miscommunication and divergence. It also enables continuing refinement and integration to avoid any unpleasant surprises just before the delivery date.

The Benefits of ISHIR's Iterative Methodology are the following:

* Quick feedback loop from business stakeholders to engineering back to business stakeholders
* Rapid software product conceptualization and materialization through prototyping
* Ability to refine requirements and design, and handle changes in both in the early phases of a product lifecycle
* Focus on getting the highest priority features and the highest risk features implemented as fast as possible
* Ability to validate pieces of design incrementally, providing continuous analysis and mitigating the risks

Friday, March 14, 2008

Indian offshoring firm eyes buys in US and Europe

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Sonata Software, Bangalore based, midtier IT services firm, is actively looking at acquisitions overseas to accelerate its growth trajectory. Sonata would be looking at companies across Europe and the US for domain expertise as well as market reach.

Sonata managing director B Ramaswamy said, it would be looking at acquiring companies in the range of USD30 to 50 million and these would be funded through a combination of debt and internal accruals. He added that it would be looking very strongly at Sweden, where, it feels; there is a strong opportunity of offshoring and outsourcing of IT services.

At the same time, Sonata which has a strong presence in the domestic market, would be looking at companies in the Indian market. These acquisition plans of Sonata comes on the back of the experience it has had in picking up majority stake in Germanys TUI InfoTec.

Sonata acquired 50.1 percent stake in TUI InfoTec, the in house IT arm of TUI in September, 2006 for Euro 18 million and this gave it a foothold in the German market. Mr. Ramaswamy said, despite the initial hiccups it has managed to successfully transfer the remote infrastructure management and IT services activity of TUI from Germany into India.

Now, it is looking at using TUI InfoTec to get a larger access into the German market. It would primarily look at SMBs from the verticals of manufacturing, insurance and CPG. The Sonata MD said it would also be looking at other German speaking regions like Austria and Switzerland.

Sonata Software is present in two business segments, outsourced product development and enterprise solutions. Its primary region of operations are in the US, Europe and India.

Software Development Outsourcing

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Delivery of projects on time and within budgets is the essential requirement for project management. By outsourcing a development segment to a outsourcing partner, customers gain flexibility, this reduces the development costs, decreases time to market and of course provides wide range of choice for products. Software development outsourcing may be for delivery of partial and full life cycle projects.

By outsourcing development segments to India and neighboring countries like China, Russia, etc. big companies can concentrate on the core in-house activities. Indian companies provide software development outsourcing services, (software development life cycle)SDLC includes:

Requirements analysis: India as a outsourcing centre during this phase, team of professionals sit together gather basic information, for the target products customer requirement gathered, conduct market and technology research; finally at the end of this phase optimal solution is derived to meet product requirement for relaibility and product performance. Indian IT consultants will help draw a productive product function.

Architecture Design: To achieve product performance goal to pitch the market, product design is most crucial factor and roadmap to success for commercial market. Product design should be interactive and should be user friendly.

Project Planing, Risk Assessment: Project management, a comprehensive project management scheme, all risk involved in project management; this will help to complete project within the time constraints and within the specified budget.

Development: Our project developers are highly skilled and are aware of all the latest tools and technologies that will help them move ahead at faster pace.

Quality Assurance (QA) and Testing: To ensure that your product is flawless, Rigid Testing is carried out. It is carried to check that the product works without hindrance in different environment. Performance testing includes scalability and capacity testing under a particular environment. Usability testing includes responsiveness.

Maintenance and Technical Support: After product market deployment, technical support is available all time to assist you. This helps to server customers located at different locations and across different time zone.

Product Enhancement and Service Release Management: Upgradation, enhancement is continuous on-going process based on real world figures, feedback and comments collected from its users. Product enhancement, fixing problems if any arises, migration, adding new functionalities; release of new version needs product re-engineering.

major areas of software development outsourcing are mobile applications, web-enabled solutions, web development, web promotion, offshore product development, Microsoft .Net development, ERP Implementation India, SAP software solutions, Microsoft Dynamics NAV solutions India, outsourcing PHP India, Joomla development India, Drupal solutions India, sugarCRM development India.

Thursday, March 13, 2008

Better Requirements Management Means Better Business

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Successfully addressing requirements management from a more iterative approach requires aligning business with IT; open communication is key

The process of capturing and tracking project requirements for application development projects directly affects the success of those projects. With better project management and better understanding of projects than ever before, only about 18 percent of projects fail today, according to The Standish Group International, which has been tracking the reasons behind project failure for more than 20 years. Requirements management tools have evolved, and the industry is much healthier today. Indeed, the key to more successful projects is aligning IT and business goals through business requirements management.

It wasn’t that long ago that the waterfall method of application development was believed to be the best way to develop applications — with very detailed, deep requirements that were frozen in place so engineers could work on achieving them. But by the time software engineers presented their results, 18 months or so later, the requirements would have changed, and the new product invariably needed an immediate upgrade.

In the past five years or so, the waterfall method has given way to more agile development methods — smaller development teams and shorter project timeframes, for instance, not to mention capturing requirements and getting them to engineering more quickly, building prototypes, and changing requirements as necessary throughout the process.

This iterative approach to software development focuses on a feedback group and the chunking of larger projects into smaller pieces. Organizations generally don’t want to be as document-intensive as they once were. As a result, they have become more user-centric.

“Rather than create a specification that’s 3,000 pages long, [organizations] want to sit down with businesspeople and find out what they want the process to do,” explains Mike Burba, founder and CEO of Software as a Service (SaaS) startup DevHive, and former head of marketing for Compuware’s application development tool line. Companies are looking to do things in a more structured way. And requirements management tools offer a feasible way to do exactly that.

“Managing requirements is a big part of successful projects,” notes Jim Johnson, chairman of The Standish Group. But, he cautions, “Just keeping track of requirements doesn’t make you a successful project.”

Making Decisions

Take this example, for instance: Your company has 4,000 different feature requests for one product. You keep those feature requests in approximately 55 Microsoft Excel spreadsheets. Some features are difficult. Some take more work than others. Some could take a year to complete. Customers call every morning to see if you’re going to include their particular requirements. What do you do?

It’s impossible to please everyone, so how do you determine whose requirements to include and whose to put off? One of the most significant causes of project failure is poor coordination between business requirements identified by the business and what’s understood by development teams creating the software, according to Melinda Ballou, a program director for research firm IDC.

Unfortunately, traditional requirements management tools don’t guarantee that the requirements you wanted going into a project are what you really need. That reality has given rise to requirements definition tools, or requirements development tools, such as those from iRise, Blueprint Software Systems, Axure Software Solutions, Compuware, and Serena Software, that offer visualization and simulation of requirements so developers have something physical and visual to point to.

“In the new requirements management world, these tools are not only making sure that what’s specified is delivered, but on the front end are making sure that you specify the right thing,” explains Rene Bellei, president of Ryma Technology Solutions.

Validating that a requirement is valid is of utter importance. “If requirements management tools want to help organizations reach their highest level — which is anticipating future requirements — then these tools need to be able to validate all the inputs in a way that helps an organization anticipate what future requirements are going to be needed,” Bellei says. “These tools need to have strong information distribution mechanisms and collaboration mechanisms.”

Aligning Business and IT

“We’re seeing a great deal more interaction between IT and business,” DevHive’s Burba notes. “The idea is the tools facilitate the process of capturing requirements in a user-centric way.”

Story boards and use cases, for example, are some modern ways for businesspeople to write and talk about a process in a structured way. “That structure is important to make sure there are no misunderstandings, omissions, and so forth,” Burba adds.

The key here is the process of getting the requirements in line with both the business and IT. “If you can maintain a small scope and inner process, you have a much better chance of success,” notes The Standish Group’s Johnson.

Requirements management tools don’t directly help projects succeed, but they do facilitate the requirements gathering process and make it more effective. These tools, for example, capture the business processes that need to be automated and then provide for writing something that can be picked up by a developer and referenced as the software is being developed.

Changing Roles

“Products that allow for communication between business analysts and IT that in fact let them see what is being generated are quite alluring, and there tends to be better uptake for that,” IDC’s Ballou notes. “There has to be better communication and collaboration between business and technologists who create the software.”

In addition, the role of the business analyst needs to be elevated. “Sometimes people put in those roles are the ones that didn’t cut it as developers,” says DevHive’s Burba. “Companies that do well (with requirements management) make that role of business analyst a prestigious role.” The business analyst should act as a guardian of the requirements throughout a project, staying involved from conception to completion.

It comes down to this: Who’s managing the requirements — product management or software engineering? Traditionally, requirements management has been viewed as a software engineering job. “For companies wanting to be agile, product management has to have the bigger role,” notes Dave McCann, CEO of startup company Electronic Evidence Discovery (EED) Inc.

Ryma Technology Solutions offers a requirements management tool for product managers that helps organizations anticipate requirements instead of simply react to them. The company’s flagship product, FeaturePlan, captures market feedback and tracks it through the requirements management process. It lists new requirements as they’re entered, existing requirements as they’re changed, and estimates for market requirements as they’re requested from development.

Ranking Requirements

McCann turned to FeaturePlan while serving as senior vice president of FileNet Corp. (which IBM acquired in October 2006), when he realized that the organization’s requirements process was out of date. “We were using a 1990s process in the Internet world,” he notes.

Since McCann joined FileNet from Telelogic, he assumed his team would choose Telelogic DOORS for the company’s requirements management needs. After scanning the marketplace, however, his team determined that DOORS and IBM Rational RequisitePro had been surpassed, and that nothing could beat FeaturePlan, he says. “It’s a much better and modern offering for requirements management in the Internet era.”

Because FileNet’s customers were requesting requirements on a faster basis and using e-mail to bring those requirements in to the company, “FeaturePlan won hands down,” McCann says, largely because of the product’s more modern, lightweight, easy-to-use, intuitive model. “FeaturePlan spans both the want-to-use-it-once-in-awhile user and the product manager, helping you do feature ranking.” Once that’s done, the product allows for feeding the resulting data back into the engineering group.

One feature that stood out for McCann is the product’s capability to apply a sales flag to the features his development team is not going to include in the next product release. Customers want to be kept abreast of what the company is and is not going to include in the next release of a product. FeaturePlan, McCann explains, has “some good ranking abilities that are useful for allowing us to do ranking and then to publish the status of the features we’re not doing and what we are doing in this release.” This way, he adds, “we can give the customer a straight answer.”

The key here is communication. Not only can poor communication cost hours of time, but it can also be expensive — $5 to $10 million a year, McCann says. When he was at FileNet, McCann had 55 product managers and product staff, as well as 150 staff in the field — all of whom wanted to have input into requirements. The company was spending $80 million a year on development and $20 million a year on marketing and was looking to gain a 2- to 3-percent increase on efficiency on that. By improving communication through the use of FeaturePlan, “we gained way more,” McCann notes.

Having some kind of requirements rating system is vital to managing requirements so they make sense, according to The Standish Group’s Johnson. A rating system will help an organization determine if a certain requirement is risky or not and whether or not it offers business gain.

Accept Software and Telelogic offer products with capabilities similar to those of FeaturePlan. Accept 360 degrees’° Ideation module lets users capture, evaluate, and prioritize ideas and product requirements in a single system that can link ideas to business strategies. Telelogic DOORS, through integration with its Focal Point Web-based decision-making tool, provides for prioritization, decision-making and visualization of requirements. Although Telelogic’s user interface for some of its requirements management products is a bit dated, the company intends to address that in upcoming product releases, according to research firm Butler Group.

Taking Steps

To stay competitive, other software vendors are going to have to make similar moves. “Society is moving at such a fast pace with technology that it shifts rapidly every five to seven years,” EED’s McCann says. Some of the requirements management tools out there haven’t changed much in the past 14 years.

“We’re delivering products faster and faster,” says The Standish Group’s Johnson. “We’ve created a velocity like we’ve never seen before… because we’ve learned how to do it better.”

Despite that, Ryma’s Bellei points out, “It’s not about doing more projects faster and better; it’s about doing the right projects.” He encourages organizations to “focus on a smaller amount of projects that bring a higher return on investment.”

Other steps organizations can take to better their requirements management initiatives include understanding requirements in the context of quality, evaluating and adopting business requirements tools that map to the need of an IT organization, and ensuring that key business stakeholders are available to communicate requirements. “It’s impossible to generate requirements if key stakeholders aren’t around to communicate that and people have to engage in guesswork,” IDC’s Ballou points out.

Looking Ahead

The next thing that’s going to happen, according to DevHive’s Burba, is that requirements will become the foundation of project management. “We’re already seeing a move toward this,” he says. “What they don’t do is start with requirements or link back to requirements that were driving the project … . One of the real problems of projects is getting early warning indicators. If you’re not tracking the amount of requirements that are getting done, you don’t really know.”

Another important aspect that needs to be addressed is security. “There is a pressing need for effective processes that encompass areas like security up front, because of vulnerabilities and the impact on businesses of better practices, from a performance perspective,” Ballou says.

She expects to see a convergence of virtualization and more graphical and intuitive gathering of requirements. In addition, she believes developers will start to tap into social networking — something along the lines of MySpace or Google Groups — to improve communication. “I think [social networking] can play a role in IT and development to increase collaboration,” she explains. She also anticipates closer integration and leverage between requirements and other lifecycle management phases, such as testing.

Because IT organizations are growing and not shrinking, they are having to consider more stakeholders. “The amount of requirements and the amount of information that these organizations will have to deal with is phenomenal. Without proper tools, it cannot be done effectively,” says Ryma’s Bellei.

He further believes that the future will be driven by the requirements of IT organizations. “The needs and problems are going to become more and more complex because of the size and distributed trend that this comes with,” he explains. “Requirements management tools will have to evolve to help companies manage the amount of projects.”

One of the keys moving forward, according to The Standish Group’s Johnson, is not to be afraid of failure, because failure in software content really promotes changes that are good. “Unless you have a number of failures,” he says, “you’re not going to have any successes.” As Thomas Edison said, “Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time.”

IBM’s acquisition of Telelogic last year is just one interesting development in the requirements management realm. Now, IBM owns Telelogic DOORS as well as Rational RequisitePro — two major contenders that have been vying for market leadership. “The irony is that the No. 1 and No. 2 players have both been acquired by IBM, and there’s a lot of overlap between products,” notes EED’s McCann. Watch what happens there, and keep an eye open to see if Microsoft makes a move into the requirements management arena

Wednesday, March 12, 2008

What's Next For India?

Source : Click Here

India's IT industry wants to be known foremost for innovation, not low costs. It's still got a long way to go.

Gail Farnsley knows in her gut that better online collaboration tools will help Cummins build better truck engines. But gut feelings don't deliver ROI, so this CIO hasn't been lobbying for a big budget to implement them.

Instead, she's talking with IT outsourcing partners in India, including IBM, Tata Consultancy Services, and its own IT joint venture, KPIT Cummins, about what they have going in this area. Do they have collaboration tools that they hope to sell to other companies, where Cummins could be a test site for little or no cost?

This is the next frontier for offshore outsourcing--innovation and new technologies. You say you can cut some costs shipping IT work to India? That's old news. Top-flight IT teams are using cost-cutting relationships they've built over the past few years to take the next step and tap outsourcers to make their companies run better. Call it innovation from outsourcing.

Easy to say, but make no mistake: It's extremely difficult, even for experienced outsourcing buyers, to get breakthrough ideas out of their IT service providers. "We're to blame as customers," says Ajit Naidu, a Merrill Lynch managing director in charge of technology for global equity markets and services, speaking at last month's Nasscom conference in Mumbai, India. "We don't give enough big-picture exposure. We do piecemeal projects. We don't provide enough understanding of the whole business problem."

chart -- Improvement Trend: Where have the Indian IT outsourcers you work with improved in the last two years?
But don't let the outsourcers off the hook, because they aren't delivering on the innovation front. In our survey of 430 IT pros who work with Indian IT service providers, just 10% cite "innovative ideas" as one of the most significant benefits that would prompt them to use such services again; 72% cite lower costs.

Indian outsourcers aren't built--culturally or structurally --to ooze innovation. Culturally, India's IT services business boomed by delivering what customers ask for, not by telling clients that there's a better way to do something. And structurally, with high turnover and a constant need to promote people, Indian IT companies' front-line staffers often don't have the business knowledge to push an innovation agenda.

Indian IT companies are taking some promising steps to deliver more innovation (see "Can India's Outsourcers Step Up?"), and just as important, buyers are starting to demand that. More companies are tying outsourcer pay to business goals (see "More Deals Tie Pay To Results"), and more are working on projects jointly.

"I'm seeing a lot more willingness from all my partners to invest together," says Farnsley, who after five years as Cummins' CIO is leaving this month to create an IT research institute at Purdue University. For example, if Cummins wants to put a new technology to use in its environment, and KPIT Cummins sees that technology as a growth business, they split the cost of training KPIT staff on it.

Cummins' internal IT staff is good at spotting problems and areas for improvement and "escalating" those to decision makers, Farnsley says. Cummins is now demanding more of that from its service providers. Farnsley put it to them this way: "One of your responsibilities is to make sure I'm not being stupid."

Remember all the hard knocks companies took when they raced to offshore IT work earlier this decade and saw the supposed savings shrivel because their people didn't have the skills to manage offshore projects? That only gets more difficult when the goal is innovation. Robert Willett, CIO of Best Buy and CEO of its international group, knows he and his team need to get better at accepting ideas from partners. "We're still struggling with that," Willett says. "We need to be more on receive than transmit."

Often the outsourcers get to know a process or technology better than any staffer, and improvements need to spring from those everyday interactions. "I can't pay anyone as a job to be innovative," Suren Gupta, CIO of Wells Fargo consumer lending, said at Nasscom.

Innovation from outsourcing may be the new Holy Grail, but it's still out of reach for most. Just 12% of customers of Indian IT service providers say their "delivering innovative ideas" has improved significantly in the last two years. And 31% say it has gotten significantly worse.

The evidence suggests that innovation from outsourcing is hard to do. Which means CIOs who get this right could give their companies a competitive advantage that's hard to match.

Thursday, March 06, 2008

BancTec Acquires Regional Business Process Outsourcing (BPO) Leader DocuData Solutions

Source : Click here

BancTec, a global provider of advanced, high volume document and payment processing solutions and services, has acquired DocuData Solutions, an imaging, content management and media storage business process outsourcing (BPO) services provider with operations centers throughout Texas. The acquisition supports BancTec's strategy to expand its BPO business worldwide, adding 3 Texas processing centers to its 4 existing U.S. sites and 11 European sites.

"DocuData's long history of providing BPO services for an impressive set of clients, coupled with the reach and resources of BancTec, will enable us to expand our outsource offerings and provide a higher level of service to our clients," said J. Coley Clark, BancTec chairman and chief executive officer. "We look forward to leveraging our joint capabilities and previous success as business partners to grow our BPO businesses."

"This agreement enables DocuData to become part of a global, $380 million company that has more than three decades of document processing experience. While our day-to-day work on behalf of clients will not change, the opportunities we can pursue and the solutions we can deliver will expand significantly," said Brian L. Rathe, president of DocuData Solutions. "I look forward to becoming part of the BancTec family and finding new ways to take advantage of our joint technology, solutions and BPO offerings."

DocuData's BPO services center around digital imaging and vault storage for critical business media. The company currently operates three secure, state-of-the-art production facilities in Dallas, Houston, and Austin, Texas, where it converts and manages more than 250 million images annually. While DocuData provides customized solutions for many industries, it has built particular expertise in serving clients in healthcare, government, energy, mortgage and general commercial segments of the market.

DocuData has been a BancTec client for several years, and in June of 2007 the two firms partnered to increase the efficiency of DocuData's BPO platform by deploying BancTec's image capture and management platform, IntelliScan, in its processing centers. The partnership proved vital to the success of DocuData's recent client acquisitions and has fueled the company's growth and created a competitive advantage.

DocuData will operate as a division of BancTec and will continue to be known as DocuData Solutions. Brian Rathe will remain with DocuData, reporting to Michael D. Fallin, senior vice president and president, Americas and Emerging Markets.

  Financial terms of the transaction were not announced.

About BancTec

BancTec helps clients around the world simplify the process of managing their information. Founded in 1972, the company provides a wide range of solutions for automating complex, high-volume and data-intensive business processes for clients in the financial services, healthcare, manufacturing, government, services and utilities industries. BancTec's offerings include business solutions, business process outsourcing, and infrastructure services. With headquarters in Dallas, BancTec serves clients in 50 countries. For more information on how BancTec can help you optimize information management, visit or call 1-800-BANCTEC.

PAC Outsourcing Study Is Not Really a Knock on India

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I've seen two recent reports that were pretty quick — too quick, in my mind — to question India's status as a favored offshore destination.

The headline on an story: "India Losing Luster as Offshore Site." ZDNet India at least places a question mark at the end of its similar headline: India Losing Status as Offshore King?

Both articles cite research from French consulting firm Pierre Audoin Consultants (PAC) that found that just two of 21 offshore delivery centers established in the last year by service providers like IBM and Accenture were located in India. Four of the centers are in China, and three each were launched in Morocco and Eastern Europe.

While these companies were almost certainly influenced by India's fast-growing wages, shrinking talent pool and rising value of the rupee, it seems just as likely that they want to diversify and appeal to a wider variety of outsourcing clients, especially those based in Europe. Says a senior PAC consultant:

… what we are seeing is vendors looking to reduce their reliability on India's heated labor market, while adding non-English language skills to support clients in regions such as Central Europe.

It's interesting that the PAC report mentions Morocco, for instance. In a July blog on the increasing number of offshore options, I noted that the country was popular among companies looking for French speakers to staff call centers. Given the growing popularity of outsourcing in Europe, it makes perfect sense for service providers to establish nearshore alternatives for their European clients.

In fact, according to an August story in The Economic Times, Indian service providers are angling to use some of their ample cash reserves to acquire European service providers.

It's worth noting that, according to an EquaTerra report released just last month, all UK companies that offshore all or part of their IT functions send at least some of the work to India and plan to continue to do so. Echoing the PAC report, EquaTerra found that the number of UK companies outsourcing to Eastern Europe grew from 17 percent in 2006 to 25 percent in 2007.

World Bank Gives Loan for Outsourcing

Source : Click here

The World Bank has approved a $200-million loan to support the Housing Utilities Reform project and the development of a competitive mechanism for housing utilities reform in ten cities within five years. Only cities that actively use market mechanisms will receive the money and 90 percent of the buildings in winning cities should be managed by private companies and 70 percent of the investment in housing utilities should be from private funds.

The government program for housing utilities reform is worth $10 billion, most of which will be used for investment in housing and infrastructure construction. The effectiveness of the program leaves something to be desired, however. "Our function is not simply to give $200 million to support housing utilities reform, but to outsource the reform," Russian World Bank representative Samir Suleimanov told Kommersant. That is the largest investment in the reform so far.

The money will be used for capital repairs to reduce operating costs (the reduction of operational losses from their current 60 percent to 10 percent), losses from systems failures and water leakage. Cities with populations between 90,000 and 600,000 are eligible to participate, if their reform programs are 80 percent complete, with legislation and market mechanisms already in place. Utility companies should cover 90 percent of their costs through utilities payments and there are a number of financial parameters that are necessary as well.

After five years, the effectiveness of the program will be judged by a commission from Washington and members of an interagency commission made up of officials from the Ministry of Economic Development and Trade, the Ministry of Regional Development and Rosstroi.

Wednesday, March 05, 2008

Data Security and Outsourcing: Oxymoron?

Source : Click here

Business Process Outsourcing (BPO) is a common practice these days. From front office to back office, HR to accounting, offshore to near shore; BPO comes in many different flavors—all of which provide an upside on the cost savings front.


But with the benefits of reduced cost, improved efficiency – and, in some cases, the increased expertise of outsourcing – comes a need to provide outsourcers with access to some of our most sensitive corporate data assets. So, along with the benefits of BPO comes an increased risk to data.

Data risks are an inherent problem for companies that outsource. Whether they take the form of compliance issues, legal liability, brand risk or customer concern, companies that choose to employ BPO must handle the security challenges that are inevitable whenever they move business processes outside of the confines of the company.

That said, the data risk problem is a "Catch 22:" If you cannot protect your data, you put your business at risk. But if you constrain the use of data too much, you can paralyze the outsourcing effort – and your business.

So how do you align your outsourcing effort with business goals while protecting the data?

Successful outsourcing requires successful risk management. It also requires a new view of data security.

Tipping the Benefits/Risk Scale

A certain amount of risk is a natural part of doing business. But when it comes to data, many companies have been forced to accept more risk than they might otherwise be comfortable with because the bottom line benefits of outsourcing outweighed the risks. That tide is now turning and it is turning for a number of reasons.

First, increased risk to data, in the form of mass data breaches (a product of the increasing sophistication and motivation of data thieves) has heaped pressure on corporations that store and use sensitive data. There is not a business in existence that does not want to avoid becoming the star of the next data-breach drama.

And the fallout from data breaches does not stop at brand-busting (bad) PR. Fines and legal issues resulting from data breaches have become more complicated and much more costly. Regulatory compliance is also a major driver when it comes to the need for data risk mitigation.

Fortunately, where once there was a dearth of remedies for swiftly detecting malicious activity with data, now there are literally dozens of new technologies designed to address this very problem. These new technologies are helping to tip the risk vs. benefits scale to the point where enterprises with outsourcing projects underway are taking a second look at their BPO data risk mitigation techniques. Likewise, enterprises considering BPO in the future are building data security into their outsourcing strategies.

One of the biggest issues when it comes to mitigating outsourced data risk is that it is a close cousin to the insider threat that enterprises have been struggling with for many years. This has been a tough problem to solve.

How do you mitigate data risk and detect malicious activity when the users are trusted employees, are authorized to use the data and need access to data in order to do their job?

When it comes to outsourcing, this problem is magnified by the fact that the users accessing the data are not inside of your organization and may well be on the other side of the globe. This is where a new view of data security comes into play.

The "Inside-Out" Threat

Traditional data security is a methodology based on controlling access to data. The idea is to maintain tight control over who has access to data via various credentials based on job function and/or security clearance – the data equivalent of a "need to know" strategy.

Access control still is an important component of an effective data security program, but it does not address outsourcing data security issues, or any insider threat to data – because it cannot detect malicious activity by authorized users (or apparently authorized users) at core data servers. The users who pose the greatest threat to data are those who have the credentials to access the depths of the data center where all of the critical data assets are stored. This could be an employee, an outsourced partner or a data thief masquerading as one of the above. Whoever they are, they have the keys to the data kingdom. This is the "Inside-Out" Threat.

The logical and simple thing to do in order to mitigate risk to data by insiders would be to watch what they are doing with data.

Some organizations use database logs to assess user data activity, but sifting through logs is a highly manual, time-consuming process. Picture a needle in a very large haystack—and an after-the-fact solution. Ideally, you need to "see" what users are doing with data as they are doing it, to be able to discern the difference between business as usual and suspicious activity, and to sound a warning bell in time to avert the data disaster. This "deal with it as it is happening" notion of data security is anathema to many security practitioners, but it's catching on in the form of new database/data activity monitors (DAM), sometimes referred to as enterprise data auditing and real-time protection.

The Tao of Data Security for Outsourcing

Martial Art students are taught to watch carefully and take action based on the threat that materializes. This saves a lot of wasted energy flailing around in response to your best guess about what someone might do next.

This is precisely what the new intelligent data-monitoring technologies do. They watch what is happening to data in real-time and analyze what the activity means in relation to a pre-defined set of potential risks and past behavior of the users in question. The beauty of the 'innocent until proven guilty' approach is that it enables a relatively free flow of data for business outsourcing activities but provides a window into those activities that gives you control over data assets when necessary. Thus, by giving up the illusion of control, you gain real control  over what is happening to your data.

Another popular analogy for DAM is the security camera in the data center. You provide access and then watch what is going on. The problem with a security camera is that it is not automated and it lacks intelligence — so it can't tell the difference between bad behavior and good behavior. Database activity monitoring tools can, however, tell the difference.

Monitoring Outsourced Data Activity for Risk Mitigation

As the saying goes, "you can outsource anything except for your liability." BPO providers are increasingly putting checks in place to prevent misuse of sensitive client data, but effective data security and compliance requirements still call for the enterprise to know what's going on with outsourced data. This means closely monitoring the use of data by outsourcers.


The first step in securing outsourced, or any critical data for that matter, is data discovery. Knowing where specific data assets reside and who is accessing them will provide the basis for an effective monitoring program. Data discovery locates and monitors unstructured data assets (data in file servers) as well as structured data (data in databases) and legacy applications as well as open systems. Ideally, you should be able to identify specific types of data in these applications such as Social Security numbers or credit card numbers.


Once a benchmark for data location and access has been established, policies for monitoring, alerting and reporting can be created. The main goal of monitoring is to provide detailed information on how, from where, when and by whom data is being accessed and then to have the ability to analyze that data against policies related to compliance regulations, data protection/data breach detection and corporate data governance programs.

Policies for compliance are among the easiest to create. Some auditing/monitoring solutions come with pre-defined policies covering the major regulations such as SOX and PCI.

The second step is compliance. Despite the fact that these regulations look complicated, the auditing requirements are very straightforward. Actions such as alerting and pre-scheduled reporting can be written into policies to automate the monitoring process even further.


Creating policies for data theft is also fairly straightforward. There are definite signatures for theft—such as: highly sensitive data accessed, data accessed at odd times, unusually large downloads or, more importantly, certain combinations of these--that can easily be captured in policies. However, detecting data theft requires more than just the right policies; it requires sophisticated analytics that can look at specific behavioral characteristics against history and then factor this data into the determination of data risk. This intelligence is what makes DAM solutions more than surveillance cameras for watching outsourced data activity.


DAM solutions can be delivered in several ways. Some are delivered as appliances that sit in front of data servers and capture network traffic. Others are delivered via software agents. Still others offer a combination of both.


Determining the right solution for your organization depends on a number of factors including how many data servers you need to monitor, how much traffic flies over your network and what type of output you require from the system — types of reports, workflow features, alerts, etc. In any case, once your monitoring program is in place, it can be fine-tuned as you "learn" more about how data is being used (or abused). But even before you have the perfect monitoring program in place, you will have orders of magnitude more insight into what outsourcers are doing with your data than you had previously and this insight will be available in real-time.


So there is a way to have your outsourcing cost savings and data security, too. But it requires a slightly new way of looking at data security — that is, from the data core out and as a problem of insiders that need to be monitored.

Tips for Outsourcing Success

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Outsourcing programs are too often hampered by poor planning and a narrow, short-sighted view. Companies that implement outsourcing programs with proper methodologies and strategies can overcome many of these shortcomings.

"Outsourcing" used to be such a dirty word. Despite occasional reports to the contrary, though, it is now a given that outsourcing — not to be confused with offshoring — helps companies save money. A new Deloitte report claims to confirm this, with 83 percent of the companies surveyed saying they achieved ROI of at least 25 percent on their outsourcing initiatives.

However, the same Deloitte study, Why Settle for Less: 2008 Outsourcing Report, also indicates that more than one in three executives said they wished their companies had spent more time on vendor evaluation and selection. One-half of respondents said that if they could go back and do something differently, they would define service levels that aligned better with their companies' business goals at the beginning of the project.

Among those in Deloitte's survey who said they were dissatisfied with their outsourcing relationships, common reasons included underestimating the project's scope, higher-than-expected costs and poor-quality communications, service and reporting from their service providers.

In other words, outsourcing programs are too often hampered by poor planning, narrow focus on cost savings and an altogether short-sighted view of their outsourcing contracts.

Based on analysis of the survey, it seems companies that implement outsourcing programs with proper financial analyses, methodologies and governance strategies can overcome many of the shortcomings identified.

Deloitte and others offer the following suggestions.

Define a Clear Strategy
Companies must ask themselves if they are outsourcing the right things for the right reasons. "Transferring a dysfunctional operation to a vendor in hopes of saving costs through economies of scale or arbitrage can be a case of 'your mess for less,'" says Deloitte.

Begin by defining, in clear terms, the strengths and weaknesses of your business. Consider keeping your strengths in-house and farming out your weaknesses. Then, break down business projects into sub-projects.

Have a Solid Foundation
Companies should ask if they have defined and quantified what they expect from outsourcing. The creation of a business case and the establishment of effective service level agreements (SLAs) should not be given short shrift; in practice, however, this is too common.

SLAs "can't be too explicit," according to Avnet CIO Steve Phillips, who offered his own tips for outsourcing success at InformationWeek in November. "The more detailed and measurable they are, the easier it will be to define success. You should also make sure they map to business objectives as well as IT metrics."

Select the Right Service Provider
Selecting a vendor is hard enough for both large companies and entrepreneurial startups. Companies need to select a service provider that is capable of delivering strategic process improvements as well as cost reductions, says Deloitte. "When things do not go well in outsourcing, most companies automatically scrutinize the service provider, but do not recognize that their decision to select a vendor on cost alone may be the actual root of their problems."

Craft a Sound Contract
Contract negotiation is a pivotal point in the outsourcing process, says Deloitte, so companies must ask if their contracting process is "mutual and flexible." When drafting a contract, clarify not only the specific services you expect to receive but the quality of the delivery, as well.

"In the business of outsourcing," according to Phillips, "the individuals assigned to your account matter. You are, of course, buying a proven methodology and service, but the quality of people providing that service can make all the difference between success and failure."

Signing an outsourcing contract is not the culmination of the outsourcing process. In reality, says Deloitte, "effective performance management, especially the insistence that service providers actively search for, develop and implement strategic improvements, is the crowning component of an effective outsourcing initiative."

After the deal is signed, continue to ask if you are getting what you paid for.

Phillips suggested using an independent company to perform quality assessments:

If you've negotiated your contract in good faith, you already should be clear on how you have defined success. By mandating that a third-party perform quality assessments, you're building some healthy tension into the relationship and creating an independent view into the work provided. If you've established bonuses for over-performing, these independent parties can be honest brokers in the evaluation process.

Using third-party quality assessments in an outsource relationship ensures an unbiased view of how both the in-house and outsourcing teams are operating together, and to motivate the outsourcing partner to get things right the first time.

Many organizations continue to fail in their outsourcing initiatives. Often, this is due to being short-sighted. Sending a function or business process to another location — whether to the edge of town or to another continent — can prove to be a complex, frustrating and time-consuming venture. Outsourcing often brings enormous and painful change, but leveraging that opportunity to achieve much more value than just cost savings is both practical and beneficial. Realizing the various ways in which this can be accomplished can be highly empowering.

On the other hand, success stories prevail that show while outsourcing is often viewed as a way to reduce costs, the most successful companies focus less on saving money and more on improving performance. Patience and thoroughness win in the end.

Tuesday, March 04, 2008

Indian offshoring company Satyam opens up in Egypt

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Satyam Computer Services Ltd., a leading global consulting and informationtechnology services company, has announced the launch of its Global DevelopmentCentre GDC in Smart Village in Giza, following a visit to the companys Hyderabadheadquarters by officials from the Government of Egypt to strengthen the agreementbetween the two parties. As the first Indian company to establish its presence inEgypt, Satyam has achieved another important step towards its globalisation plansand its aim to leverage the current boom in the region, which saw the total IT spendfor the MEA region touch USD 35 billion in 2007. The move is also a testament to theemergence of Egypt as an IT hub with the IT Services market in the country projectedto reach USD 163 million in 2007.

The GDC in Egypt will train and deploy about 300 personnel, majority of which arelocals, to handle customer engagements and serve as a major technologicaldevelopment and software support group for Satyams customers in the Middle East.Fuelled by the growth of the IT services market and the growing demand foroutsourcing, Satyam has set up the stateoftheart GDC in a bid to offer regionalcustomers access to the global service standards of Satyam at local prices.Throughout the project, the company has worked closely with the Government of Egypt,which aims to ensure the development of local talent by involving reputed expatriateprofessionals with Egyptian nationals in a bid to deliver highend projects acrossthe region.

As we approach an era of convergence between strategic business operations andinformation technology, we recognise Egypt as one among the countries in the regionthat are steadily moving towards the global IT market spotlight in terms of thematurity of its software offshoring industry. This has prompted us to establish astrong presence in Egypt through our partnership with the government to establishthe Global Development Centre, which will aid in building a reputation for Egypt asa global software offshoring resource hub, said Virender Aggarwal, Director and Sr.Vice President, Satyam AsiaPacific, Middle East and Africa. With the success ofthis venture, we are looking forward to adding value due to the proximity to ourcustomers and contributing to the growth of the outsourcing industry in the region. Satyam has pioneered the virtually integrated delivery model 2.0 VIGDM, whichrenders services from multiple locations across the globe in real time. Further, thecompanys strategy to leverage the local advantage that each region provides interms of a resourcebase and business opportunities, has been evident in its globaldelivery campuses in China and Malaysia and now in Egypt, along with the opening ofits regional offices in Kuwait, Bahrain, Qatar, Oman, KSA and Jordan. The GlobalDevelopment Center in Egypt is the first phase of expansion planned by Satyam in theMiddle East, with the company also looking at Saudi Arabia as a viable market for asecond GDC in the region.

Satyams growth in the regional and global market reflects the effectiveness of thestrategic expansion plans, which we have implemented to address the growingrequirements of businesses to reach their own markets. In our commitment towardsrevolutionizing traditional outsourcing practices by developing effectivemethodologies, we have developed our multicountry model, which offers the mostconvenient customised business solutions in the market today. The establishment ofthe Global Development Centre in Egypt takes us one step closer towards successfullytaking our established industry standards to the next level, which we are lookingforward to perfect for the benefit of the our clients and the whole industry aswell, concluded Aggarwal.

Prior to the launch of the GDC, Satyams presence in the Egypt market had been highlighted by a banking solutions event, which it organised in partnership with Oracle. With aims of driving its firm commitment to the Egypt market by increasingbusiness opportunities in the banking sector, Satyam and Oracles initiativeattracted over 50 delegates from 15 locally based banks who discussed their businesschallenges and gained significant information on the wide spectrum of Satyamsolutions. The event, which was opened by Donald Thomas, WITS Alliance Director,Oracle Corporation MEA, featured interactive discussions on the companys offerings,thereby reaffirming Satyams commitment to Egypt and the Middle East region.