Saturday, May 31, 2008

Better services deals in the offing

Source : Click

Delegates at the Gartner Outsourcing and IT Services Summit taking place in London next week will be told to expect more for less when it comes to negotiating outsourcing deals.

Speaking ahead of the event, Gartner research vice president Claudio Da Rold said that business leaders could take advantage of turbulence in the outsourcing market to wring better deals out of suppliers.

He added that clients are already becoming more outcome driven when negotiating contracts, and the global economic slowdown, coupled with rising energy prices, was driving IT chiefs to demand higher-value outsourcing deals for lower costs.

A new Gartner survey of 316 European professionals involved in outsourcing found that 65 per cent of respondents believe managing the performance of their service providers is their most critical management issue. It also revealed that 44 per cent of respondents were considering changing outsourcing providers indicating the pressure that suppliers will be under.

Cost cutting remains the primary driver for outsourcing for 53 per cent of respondents. This focus is also persuading businesses to explore alternative delivery models, including software as a service and cloud computing, said Da Rold.

He cited the example of hosted email services as indicative of the change under way in outsourcing. While the average price for a corporate hosted email account on [Microsoft] Exchange is about £3, Google charges only £2, and other firms are investing heavily to find a way to deliver email for only £1, said Da Rold.

Business leaders are becoming less concerned about getting customised services if they can get generic alternatives delivered at much-reduced rates, he added.

Friday, May 30, 2008

Beyond Outsourcing, to Worldsourcing

Source : Click

We are now in the era of Global 2.0, where successful companies know how to harness ideas and innovations from the fast-growing emerging markets

Over the next several years, virtually any global company's success will depend on its willingness to reorient its view of the world map. This attitudinal—and longitudinal—shift will have enormous ramifications for business leaders, employees, and customers alike. Here's one perspective on ways to prepare and put yourself in the best position to succeed in this new environment.

For some five decades, multinationals have been living in an era I call "Global 1.0." From this predominantly Western vantage point, many emerging markets are perceived as sitting at the map's outer edges. They're seen primarily as sources of cheap labor to mass-produce inexpensive consumer goods and, secondarily, as fertile markets for expansion and growth.

Through such a lens, the design of goods and services is guided by a minority of the world's citizens: those in the West. Business ideas and innovations come solely from the developed world and flow in one direction toward the developing world. This built-in bias thwarts companies from discovering creativity, culture, content, and ideas from the developing world that can create value—and command market premiums.

Global 2.0

Any company that clings to this Global 1.0 paradigm is in for a rude surprise. We're not just nearing the end of that era; I believe we're past it. We've now entered the early stages of "Global 2.0," an era where the most successful companies will look for ideas and innovation anywhere to meet customer needs everywhere. Only the organizations that adopt a flexible "worldsourcing" approach to their business models will survive.

Today, there are some 4 billion people, mostly Asians, who don't yet participate fully in the global economy. But they already are a crucial part of the economic equation and are fast exerting their influence through their market demands, as well as the ideas and innovations that emanate from their unique cultures. The upward mobility of Chinese, Indians, and other Asians into the middle class—an estimated 200 million to 300 million people have made this climb since the turn of the 21st century—is driving demand for all kinds of goods, including food, steel, concrete, energy, fuel, cars, and electronics.

Those who refuse to believe that the developing world is redefining the marketplace are shortsighted, bordering on arrogant. Adding these billions of voices to the global marketplace can't help but reshape the economic order. As evidence, look no further than Tata's $2,500 car, or Bollywood's movies, or the inexpensive TV-based computing device we at Lenovo launched for rural China.

So how do you put yourself and your company in the best position to succeed? Let's take a look at it in the context of three groups of readers.

Owners and Executives: Business leaders should start looking in emerging markets for answers if they hope to find the "secret sauce" needed to harness the economic explosion in this new world order. They need to spin the map around and look at it from a Pacific-centric view. This is where worldsourcing plays a role. A distributed global management approach is required to make a company nimble enough to reconfigure its resources and talent in real time so it can respond to rapid shifts in local market demand. You can't get a feel for such shifts from an isolated corporate HQ. To truly grasp the nuance of local market dynamics, you need operational staff who know the cultures and norms. In addition to ensuring that your supply chain remains efficient, this will help you gauge and respond to cultural shifts that portend market demand changes.

Employees: Globalization, as represented by Global 1.0 in the 1970s and 1980s, holds a stigma from the very real dislocations it wrought in manufacturing and local economies. Global 2.0, by contrast, is about inclusion. It turns strategies such as outsourcing and offshoring on their heads; it's about embracing and enfranchising local talent in markets everywhere to capitalize on the best ideas from all pockets of a company. No doubt, globalization has consequences in terms of job movement, but that's inevitable in a highly competitive world economy. If you're working for a multinational company, you're competing against skill sets in countries around the world, but your job aptitude and career choices will no longer be limited by your geographic location. Employees who embrace this movement and look for ways to collaborate and contribute their best thinking, thereby driving and fostering innovation and better ways of doing business, will put themselves in career-growth situations—the antithesis of career stagnation.

Customers and Consumers: Customers of multinationals, in general, stand to gain the most from Global 2.0, as they will benefit from new goods and services that represent the best value from brands they trust. Since worldsourcing pulls new thinking and new products from every corner of the globe, the ultimate result is better, advanced goods at the most cost-competitive prices. As companies compete with one another to be the first to market with innovative ideas, consumers will benefit from an ever more rapid evolution and commercialization of new thinking.

Worldsourcing, in short, means understanding and engaging with an array of cultures—and leveraging the unique ideas that emanate from a diversity of thinking. Global 2.0 has arrived and is here to stay. Many predict that worldsourcing will be the dominant business model by 2015. So it's time to rethink that world map…or think about a new career.

Thursday, May 29, 2008

DataArt Secures Private Equity Investment

Source : Click

DataArt, a New York-based high-end software outsourcing provider with development centers in Russia and the Ukraine, secured a $4 million private equity investment round, and is aiming to close an additional $2 million in the near future.

The first outside capital investment DataArt has taken since the company's inception in 1997 will be used to strengthen sales and marketing efforts in high-end applications development and to support geographic expansion of DataArt's delivery capabilities in Eastern Europe.

The deal was lead by London-based Tower Gate Capital, known for its investments into high growth technology-centric businesses. CEO Michael C. Wright went on the due diligence trip to St. Petersburg and Voronezh R&D centers and was impressed with the established operation. "It was a definite investment opportunity that clearly fell within our investment banks' objectives and focus. The management team is exceedingly strong, with the business servicing an impressive client list notably in the financial and travel sector," Wright said. "We were happy to close off the investment round, and look forward to working with the management going forward."

TGC was joined by one of the top Russian hedge funds and by New York-based Third Millennium Russia Fund. John Connor, the fund's manager and the author of the book, "OUT OF THE RED: Investment and Capitalism in Russia" was also an investor in, the largest Web portal in Eastern Europe with 50+ million users, originally developed by DataArt. "Third Millennium Russia Fund assesses DataArt to be a very promising play, giving it exposure to the Russian IT sector, which is dynamic and growing," Connor said. "Finding investments in the IT sector in Russia is not that easy, but Russians tend to do very high-end programming work, and DataArt has great access to intellectual talent."

"Raising money took away many of the barriers a company like this has for expansion," said Eugene Goland, President of DataArt. "There has been a limit to how fast we can grow, and we are going to scale up and invest in the brand reputation while expanding into other areas, including media and publishing, telecommunications services and online travel."

DataArt has been experiencing strong demand for its services, which include developing bespoke software applications for customers in knowledge-intensive industries, specifically in financial services including asset management and hedge fund administration. Among DataArt's clients are Standard & Poor's, BNP Paribas, HedgeSpeed Technology and Misys.

Wednesday, May 28, 2008

How to Outsource Your Applications: A Nine-Point Checklist

Source : Click

Each year, corporations globally outsource an increasing number of complex types of IT engagements. While global IT outsourcing is a reality, achieving significant gains comes with one major limitation: Not every application is a fit. But making the decision about which application to outsource can be challenging. The human ownership component (i.e.: "My application is too critical to outsource. Use another department's")—can complicate critical and objective analysis of the decision.

Both experienced CIOs and outsourcing firms rely on scorecards and other tools to rate every IT application's suitability. A scorecard approach helps organizations gain a better glimpse into which applications make sense to outsource and which do not.

Below is a nine-point "outsourcing candidate" analysis based on Syntel's "Health Check Indicator Scorecard." To use this analysis, each factor should be assigned a level of importance based upon an objective measure of the IT department's goals, budgets, staffing and other resources. Analysis of each factor should also include a short explanation providing appropriate context.

Factor No. 1: Size of the Application

Larger applications are better suited than those which require less than two FTEs (full-time equivalents). This is especially true for applications intended for use in an on-site/offshore mix of resources.

Factor No. 2: Technology Platform

Applications that require a special technology skill, or those that stand alone within a portfolio, are harder to outsource. This is because of the higher costs required to provide back up resources and the effect on an on-site/offshore mix. This factor gains importance when you're grouping applications to reach a critical mass for outsourcing.

Factor No. 3: Stability of the Application

Stable applications (that is, those with fewer software problems) are easier to maintain and support than those that have a significant amount of problem tickets over a set period of time. The time to repair, conduct root-cause analysis and improve overall performance is directly proportional to the amount of support time required.

Factor No. 4: Volatility of the Application

This refers to the amount of change to the application over some set period of time. Applications that are highly volatile have a much greater chance for swings in the number of error conditions that must be addressed.

Factor No. 5: Candidate for Retirement

Applications scheduled for retirement in less than a year combine a high investment in knowledge acquisition and transition with a low return value. These are not good outsourcing candidates.

Factor No. 6: Required Business Knowledge

All applications require some business knowledge to ensure high productivity of support. However, some require a detailed understanding of the business rules and the complexity of the business process. Beware: Existing owners place a high value on this requirement—making this item one of the most difficult to quantify.

Factor No. 7: Complexity of the Application

This measures the relative complexity of the application including (but not limited to) complexity in processing logic, a high number of interfaces and multiple support platforms.

Factor No. 8: Development Phase

This metric defines whether the application is under development or enhancement, or whether or not it is nearing a milestone or cutover phase. An application in the final stages of testing would not be a good candidate.

Factor No. 9: Service-Level Requirements

The service-level requirement indicates how critical the application is for the operations of the business and what impact a problem would have on it. Very tight service-level agreements point to mission-critical requirements.

Categorizing the Applications

Based on the analysis, applications are placed in the following four categories:

Category No. 1: An immediate candidate with a 30-day transition to outsourcing.

Category No. 2: A good candidate with a 60-day transition to outsourcing.

Category No. 3: A long-term candidate with a 90-day transition to outsourcing.

Category No. 4: Not a candidate currently, but can be monitored to identify changes that may alter its viability for outsourcing.

The results can be the basis for further analysis by skilled IT professionals and consultants to determine how to group applications being outsourced—or those remaining in-house—for additional gains in productivity. By assessing each application in a company's portfolio with an easy-to-use tool, IT organizations can gain a head start on making the choices and building the case for the work that goes global—and the work that stays at home.

Tuesday, May 27, 2008

USA Continues to Harness the Power of Offshore IT Outsourcing to India

Harnessing the Power of Offshore IT Outsourcing requires focused expertise, which abounds in India, the world leading provider in the field of Offshore Outsourcing, and IT Outsourcing in particular. Expertise in outsourced product development and custom enterprise application development services, a collaborative approach perfected over the years of working closely with US companies, helping them leverage the power of web-based technologies, has placed India at the top spot, unrivaled by any other Outsourcing services providing country.

The IT outsourcing relationship between India and the US has increasingly emerged as a key strategic tool in achieving cost reduction, quality and delivery improvement, cycle time reduction, and improved responsiveness to customer, competitive, and financial market demands. While cost savings has been the predominant motive for these outsourcing efforts, other strategic drivers have been access to superior quality of goods, services, and labor; improved flexibility with respect to ‘lean’ production cycles; quickness in response times; and the ability to focus on a core set of activities and increased responsiveness to market changes.

IT Outsourcing to India benefits US Economy

Contrary to common perception, information technology outsourcing to India benefits the US economy by increasing the number of US jobs, improving real wages for American workers, and pushing the US economy to perform at a higher level, according to a new study. "Global sourcing continues to be a net positive for American workers and the US economy," said Harris N. Miller, president of Information Technology Association of America, the leading trade association for the IT industry.

By driving down the costs associated with computer software and services and by opening more overseas markets to US competition, global sourcing sharpens America's competitive edge at home and abroad. The result is more American jobs, higher wages and a faster growing economy overall. The study, conducted by Global Insight, found that worldwide sourcing of IT services and software generated an additional 257,042 net new US jobs in 2005, a number that is expected to rise to 337,625 by 2010. With low inflation and high productivity, global sourcing also increased real hourly wages in the US by $0.06 in 2005.

The report added that worldwide sourcing contributed $68.7 billion in real US GDP.

Spending for global sourcing of computer software and services will grow at a compound annual rate of 20 per cent, from approximately $15.2 billion in 2005 to $38.2 billion in 2010.

The total cost savings from outsourcing of computer software and services will grow from $8.7 billion in 2005 to $20.4 billion in 2010, much of which will be reinvested in the US.

Global sourcing contributed $5.1 billion to US exports in 2005 and is expected to grow to $9.7 billion by 2010. The benefits of free trade clearly provide a boost to the US economy.

Using offshore resources creates additional jobs, increases efficiency, reduces costs, dampens inflation, lowers interest rates, and increases spending. The challenge is to help transition of displaced workers to other productive activities.

The study found that raising barriers to worldwide sourcing would adversely impact US workers and US firms. If all global sourcing of software and IT services terminated completely, the impact would slow the US economy and actually reduce the number of new jobs available to American workers.

There can be no doubt about India’s importance as an emerging center for outsourcing service type activities with a special emphasis on IT. A joint study conducted by McKinsey & Co. and Nasscom, an Indian software association, predicted that by 2008, India will generate $57 billion in revenues from IT work and other service related exports.

Read more Here...

Monday, May 26, 2008

Cloud Computing: So You Don’t Have to Stand Still

Source : Click

CLOUD computing is the jargon of the moment in the technology industry. Google, I.B.M., Microsoft and Yahoo are just some of the big companies talking up the cloud, and a bunch of smaller ones are, too.

What, you may be thinking, is cloud computing? Basically, it means obtaining computing resources — processing, storage, messaging, databases and so on — from someplace outside your own four walls, and paying only for what you use.

It’s a mushy term that is being applied loosely to many things on the Web. is now called a cloud application — after all, companies let it store their sales data, rather than running it on their own systems. Facebook, too, is a cloud platform, because software developers write applications for it and distribute them on it.

Then there’s the infrastructure cloud, where companies offer up their servers, storage and other technology to anyone who can pay. Previously, that was called grid or utility computing, because you tap into it as you need it, as you would with the power grid, and pay only for what you use. In the early days of computing, it was called time-sharing.

Thus, the concepts themselves aren’t new. “It’s true that we did not invent storage, databases, computers or database functionality,” says Andy Jassy, senior vice president of Amazon Web Services, a unit of that started in 2006 and was a pioneer in this new round of pay-as-you-go infrastructure cloud services. Amazon, though, does not call its cloud a cloud, except for one service called the Elastic Compute Cloud.

What looks to be new is the way high-speed Internet access and almost limitless supplies of storage and processing power can now be pulled together.

A vivid example of cloud power comes from Animoto, an 18-month-old start-up in New York that lets customers upload images and music and automatically creates customized Web-based video presentations from them; many people then share them with friends. Animoto gives a free video presentation to anyone who signs up for its service, and earlier this spring about 5,000 people a day were trying it.

Then, in mid-April, Facebook users went into a small frenzy over the application, and Animoto had nearly 750,000 people sign up in three days. At the peak, almost 25,000 people tried Animoto in a single hour.

To satisfy that leap in demand with servers, the company would have needed to multiply its server capacity nearly 100-fold, says Stevie Clifton, 30, a co-founder of Animoto and the chief technology officer. But Mr. Clifton and the other co-founders had neither the money to build significant server capacity nor the skills — and interest — to manage it.

Instead, they had already worked with RightScale, a cloud services firm in Santa Barbara, Calif., to design their application for Amazon’s cloud. That paid off during the three-day surge in growth, when Animoto did not buy or configure a single new server. It added capacity on Amazon, at the cost of about 10 cents a server per hour, as well as some marginal expenses for bandwidth, storage and some related services.

While there were hiccups — it was a huge spike, even for Amazon — none of them were major. And when demand slowed, Animoto automatically lowered its server use, and its bill. Animoto also received an unforeseen benefit: in May, decided to invest in it.

Combining the ability to rapidly shift capacity with a new distribution and marketing channel like Facebook is what makes the cloud exciting for software entrepreneurs, says Simeon Simeonov, technology partner at Polaris Venture Partners, a venture capital firm in Waltham, Mass. He says that anyone who works with software can use a cloud service to test an idea cheaply and quickly to see if it works.

That’s even true for companies that aren’t in the software business. Mr. Simeonov says he knows an executive at a financial services firm who has used a cloud computing service to test a concept that wasn’t given resources by his company’s information technology department.

Traditional companies are also beginning to adapt their computing infrastructure to the cloud. Reuven Cohen is founder and chief technologist at Enomaly, a software firm in Etobicoke, Ontario, that helps companies do just that. While most of its clients are technology businesses, Mr. Cohen says Enomaly is working with a New York-based bank that uses cloud computing to develop and test applications. He says that another customer is a large media business that uses the cloud to process video.

He sees this kind of need-driven use as a “fundamental change in how we manage technology.”

In fact, cloud computing is poised to do for technology what the electrical grid did for power, says Nicholas Carr, author of “The Big Switch,” which compares the rise of the cloud to the rise of electric utilities. The electrical grid streamlined operations for companies; when every home had cheap power and outlets, “you had incredible innovation in how to put all that cheap power to use,” Mr. Carr says. He thinks that cloud computing will prompt a similar cycle over the next decade.

There are practical problems that could turn the cloud into a thunderhead. The technology is still emerging: Amazon’s Simple Storage Service (S3) went offline for a couple of hours in February.

Peter O’Kelly, an analyst at the Burton Group, a technology research firm, says he thinks that many established companies will not save money by moving to the cloud. And Alistair Croll, a partner at Bitcurrent, a consulting firm that specializes in Web and cloud technologies, says companies will not be able to put data willy-nilly into the cloud because of security concerns.

At the same time, Mr. Croll says the cloud is here to stay. “The Web has become the interface” for computing, “the 110 AC outlet,” he says. That is a fundamental shift that could power a new cycle of technological innovation.

Wednesday, May 21, 2008

Software Development Firm Advocate Offshoring for Rapid Growth

Source : Click

Outsourcing "waste of resources" say company whose investment in Offshoring has seen 10x growth in total revenue over recent years. Backbone IT Group say that as well as saving money, establishing offshore operations has opened up new business opportunities and fuelled job growth at home.

An IT company is leading calls for Western firms to abandon plans for overseas outsourcing and instead consider a more lucrative solution: investing in their own offshore operations.

Backbone IT Group, a software development company based in the UK, has bucked the current trend for outsourcing IT by opting instead to set up its own wholly owned offices in China - and is reporting great success. The move has sparked an unprecedented period of growth, with the firm experiencing a 10-fold increase in revenue in just a few years.

Since establishing an office in Nanjing, China in 2004, the company has achieved cost benefits comparable with outsourcing, without the associated problems.

"We would certainly recommend investing in an overseas operation. Our Chinese office has proved an excellent asset to the business," explains Andrew Clarke, co-director at Backbone IT Group.

IT analyst Garner has stated that the spread of outsourcing could lead to a 'borderless state' by 2015, with those companies not taking advantage of low-cost, highly skilled labour in countries such as China and India losing out. According to China's Ministry of Commerce, increased levels of outsourcing contributed to the value of the country's IT industry climbing to 580 billion Yuan ($83 billion) in 2007.

"We have been able to put together a great development team in a market that allows us to keep costs down, while avoiding any potential miscommunication, quality or project management pitfalls," continues Andrew, who runs the company's Nanjing operation.

Many companies taking the foreign outsourcing option have reported unexpectedly high costs and unforeseen delays caused by language and cultural barriers. Extra expenses such as unavoidable overseas travel and the need to employ dedicated engagement managers to act as intermediaries between firms are other factors commonly highlighted as pushing up the initial cost of outsourcing.

In addition to competitive development costs, Backbone IT Group's Chinese presence has also brought the company other unexpected advantages.

"Having our Nanjing office has allowed us to expand and create more jobs at our UK headquarters," says co-director Richard Unwin.

Since establishing a legal base in China, the company has also been able to offer its services to Chinese firms and provide search engine optimization both for Western companies seeking to promote themselves in the Chinese market and Chinese businesses targeting the West.

"Investing in our own Chinese office has given us far greater control of development than we could ever have achieved through outsourcing and has secured jobs both in the UK and China." concludes Richard.

Tuesday, May 20, 2008

First Data to cut 400 programming jobs

Source : Click

About 400 highly paid Omaha programmers will lose their jobs this year when First Data Corp. outsources some of its software programming work, probably to Argentina and Brazil.

Several employees said the reductions were announced last week. They spoke only on the condition they not be named, because they could lose their severance pay or lose their jobs immediately.

Officials at First Data, which went from a publicly traded company to a private company in a buyout last year, declined to comment on specifics of the layoffs, including the number of people affected.

The employees said they were told that 80 percent of the people in production programming stood to lose their jobs, which the workers said would be about 400. The first may be gone by the end of July; all probably will lose their jobs by the end of 2008.

Each is to work at what was called "knowledge transfer'' -- training others how to do the job -- for about two months as a condition of receiving severance pay, said the employees.

"You train someone to take your job,'' one person said.

Severance pay will be based on salary and years of service, workers said. For example, someone getting $60,000 a year with five years at the company would get six months pay and benefits. Somebody making $120,000 and with five years at the company would get a year's salary and benefits.

Another 50 or 60 people will be shifted from First Data's payroll to that of Accenture, an international consulting company First Data has hired to manage the outsourced work.

First Data is a third-party processor, meaning it does credit card and other electronic payment processing for cardissuers such as banks and retailers.

The production programming unit codes and maintains the software that controls the processing of financial transactions, that updates cardholder records and that prints and mails cardholders' bills, as well as prints and embosses the cards themselves.

First Data confirmed in a statement that it would cut jobs. Employees affected will be considered for other jobs in the company, the statement said.

The company said last year it would outsource some of its information technology work as a way to reduce costs. The announcement came with the purchase of First Data, then a publicly traded company, by Kohlberg Kravis Roberts & Co., a New York investment group.

Other parts of the companywide cost-saving initiative include consolidating 12 U.S. data centers into three. Omaha already has one and would get another in the restructuring.

First Data is taking a number of "technology initiatives,'' the company said, referring to the development of new products and services.

One example: Being able to walk into a Starbucks and touch a code on your cell phone to order and pay for your usual morning order.

First Data has met with stiff competition in recent years from other third-party processing companies and a shift by major card-issuers, such as the country's biggest banks, to do their own processing.

The coders who face losing their jobs to outscourcing said that sort of innovation was laid out in last week's meeting.

Friday, May 16, 2008

Software Outsourcing ; Efficient and Cost Effective

Source : Click

Software outsourcing is a new concept which has seen a huge boom in recent years. Software outsourcing refers to a process in which some part of the work is outsourced to other organizations on contractual basis. The rapid growth in the need of automation, perfection and quick work output has given a new dimension to software development.

Software outsourcing is a new concept which has seen a huge boom in recent years.

Software outsourcing refers to a process in which some part of the work is outsourced to other organizations on contractual basis. The rapid growth in the need of automation, perfection and quick work output has given a new dimension to software development. Daily, the software development processes are getting refined with the blend of old and advanced technologies. This enormous demand in perfection has led many companies to opt for software outsourcing to meet their required business targets. Undoubtedly, outsourcing is delivering world class quality work, on time, at affordable prices.

Software development has sped up the pace of the corporate environment and Software outsourcing helps companies to get optimum quality work inclusive of high end professionalism and security, on time and at affordable price. Realizing all these aspects and the value benefits of outsourcing, many companies have started outsourcing their peripheral tasks to offshore companies.

Depending upon the complexity of the project, Outsourcing can be done either by individual or by a firm. If the project is of high priority, the first choice naturally becomes to hire an outsourcing company who can outperform the task as per the requirement. Suppose your business is new and have started very recently then you will consider an individual for your task. This will be a cost-effective business strategy for your business to achieve results.

Developing countries have become the most sought after destination for software outsourcing, the main reason for this software outsourcing trend being the quality of output provided by the highly experienced and skilled team of IT professionals in these countries . Outsourcing has been benefited software companies with a whole new world of opportunities and huge profits for the companies involved. Software outsourcing is beneficial to the foreign companies as well. Outsourcing helps to cut down costs drastically.

Software outsourcing ensures a high quality output with timely submissions and at a fraction of the cost that they would actually incur. Thus, it definitely helps to make a huge savings for the company that is outsourcing the work. Outsourcing can be carried out either personally by hiring professionals in the field or through agencies who undertake such work. Most of the developing countries like China and India have a huge pool of experienced, talented and skilled personnel that has already proved to the best. They have the capability to undertake highly complex projects and understand the significance of meeting deadlines - all at very attractive rates.

India offers various services that are not restricted to the field of software outsourcing alone. Major US companies are the main clients that the Indian IT firms cater for. European Nations such as the UK, Germany, France and several other developed nations are among the countries that find India to be a very attractive destination when it comes to custom software development outsourcing. Cost factor is a major attraction that Foreign companies take into account when they choose Indian firms for outsourcing. By making a huge savings in terms of cost, the foreign companies stand to gain by having additional funds available for investing elsewhere which would be helpful in furthering their business prospects.

Before actually making the decision to make the outsourcing deal and signing on the dotted line there are several factors that must be considered and evaluated. The company outsourcing work should first take into account the expertise and experience of the software company to which the work is being outsourced. The history and performance of the company in the field and the skill that they have for taking up the assignment must be properly studied. The credibility of the company in the particular field must be considered before handing over the work. Most IT consulting companies in the field are working towards getting certifications like ISO that are accepted internationally and itself speak for their quality and competence. All aspects of the company taking the work must be considered and proper evaluation of their services, the infrastructure available, the experience and the capability of the company to actually undertake the project must be carried out before outsourcing the work.

Thursday, May 15, 2008

Africa Has Outsourcing in Its Sights

Source : Click

Like many parts of the developing world, Africa wants a piece of the IT outsourcing market, and while problems in India have opened the way for that to happen, challenges stand in the way of a big breakthrough.

Egypt, Ghana, Nigeria, Senegal and South Africa are all becoming increasingly aggressive in their push to compete with India in outsourcing, as well as with other parts of the world.

"There is an opportunity, India is going to remain the offshore outsourcing leader probably forever, but you never know, and they are losing ground. That market is in trouble because of attrition, companies are plagued by it," said Mindy Blodgett, analyst, enterprise research, business process outsourcing strategies, at Yankee Group, speaking Wednesday at ITU Africa.

Prices are also going up in India, which is a good thing for Africa, and many countries have a time-zone benefit when dealing with European customers.

Several African countries have had some victories in attracting outsourcing business, but to succeed on a larger scale they need to develop a larger, better-educated workforce. If they don't, the large outsourcing companies are not going to want to set up in those countries, according to Blodgett.

Problems with power grids, telecommunications infrastructure, transport infrastructure and unstable governments also must be addressed to varying degrees.

"These are challenges that can't be glossed over," Blodgett said.

International capacity, a talent pool -- both technical and soft skills -- and a good environment for investments, with tax incentives, favorable labor laws, and economic and political stability, sum up the things that Orange Business Services looks for in a country. Orange Business Services has a presence in Egypt.

"Once you get that, the business will come and the customers will come and the money will follow. The demand is much higher than the available resources," said Yasser Radwan, vice president, Customer Services and Operations, Orange, Egypt.

And there is reason for Egypt and other countries to be interested in IT and business process outsourcing, according to Blodgett.

"These are good jobs, these are jobs that often require college education, some kind of training, some kind of certification, they tend to pay well, and it lifts an economy," she said.

Wednesday, May 14, 2008

KPMG eyes auditing services, to double outsourcing

Source : Click

KPMG, the $20-billion global advisory and audit firm, is set to broaden its basket of operations in India as it sees annual growth of 40 per cent in the coming years as well.

Michael Wareing, international chief executive officer of KPMG, in an interview with Business Standard, said: "The Indian operations have been delivering successfully. The education system and work ethics in India are particularly high and positive. In addition to offering direct services to clients, we see enormous opportunities to leverage the resources India offers."

At present, a significant chunk of KPMG's global client service support is being outsourced to Outsource Partners International, a strategic partner, in India. Going forward, the outsourcing volumes are expected to double.

"In fact, our own half-yearly results for our global operations were prepared in Bangalore," Wareing said. In addition to outsourcing these knowledge processes' from its own stable and clients, KPMG has contracted a major portion of its IT applications to two Bangalore-based software services firm.

KPMG is witnessing a significant growth in the tax and advisory practices business and is eyeing the mid-market mergers and acquisitions space. According to Indian regulations, non-Indian firms cannot offer auditing services. KPMG operates in this space through BSR & Co, a member firm, which adopts the same practices as KPMG.

KPMG is keen to offer its direct services in India as and when regulations ease, especially in India post the upcoming WTO talks at Doha. "It's a national regulatory issue. We are keen to offer our direct services to clients here and we are in talks with our peers to make that clear," he noted.

KPMG is also actively scouting the Indian market place for 'bolt-on' acquisitions to widen its presence. "It's a people intensive business. We will look at organisations and at people who can increase the depth of our practices to deliver more value to our clients," Wareing noted.

Tuesday, May 13, 2008

Staying Competitive in the Global Software Industry

Source : Click

New Guide Educates Students, Practitioners About How to Maximize Results

Outsourcing jobs in the technical arena was once seen as a way to save companies money and, although the trend continues, many organizations could use a wake-up call when it comes to getting the most from their software talent pool, says Matthew D. Edwards. His new book, "Becoming Globally Competitive in Software: The Fundamentals for Regular People" (now available through AuthorHouse), is designed to educate people about what skills are truly necessary to be competitive in this industry.

"People want to understand why their software jobs seem to be going overseas ... This book will teach you, the software student, practitioner and/or manager, how to become competitive in the global resource pool in which we reside," Edwards explains.

In sometimes humorous, always straightforward conversation, he discusses topics such as serving the customer and learning to discern what really matters along the way by exploring what he calls "some difficult and often unpopular subjects." Among them are notions like these:

-- The professional software talent pool is truly global, and each
individual is only a grain of sand on a world beach;
-- There is more value in seeing the forest than in worshipping the tree;
-- Know when to solve a problem, when to simplify and when to be quiet;
-- Delivering a technical solution is a social problem;
-- Overpay the right people for the right reasons; and
-- Serve the customer and provide immediate value, or someone else will.

"Software jobs have been and will continue to be outsourced and off-shored, [but] there is a way to stall and reverse the tide," Edwards says. "It has everything to do with the tenacity and choices of each individual technologist."

It is the responsibility of all those who touch, breathe upon, construct, deliver and facilitate software system solutions to change the game, says Edwards.

"Today, if you want to be employed, have a career and make some money in the global software industry, you absolutely must know the fundamental skills and attitudes necessary to add value to a customer's life."

Edwards is the co-founder of Ajilus, an Iowa-based software company. He has worked in various capacities throughout the end-to-end software development and delivery life cycles, and he holds several technical certifications.

Monday, May 12, 2008

Next generation of business software could get more fun

Source : Click

Once upon a time, people bonded with their co-workers on office softball teams and traded gossip at the watercooler.

OK, so those days aren't gone yet. But as big companies parcel Information Age work to people in widely dispersed locations, it's getting harder for colleagues to develop the camaraderie that comes from being in the same place. Beyond making work less fun, feeling disconnected from comrades might be a drag on productivity.

Now technology researchers are trying to replicate old-fashioned office interactions by transforming everyday business software for the new era of work. The historically dry-as-sawdust products are borrowing elements from video games and social-networking Web sites.

You can tell just from looking at the Beehive program under development at IBM Corp. that something is different. Beehive's color scheme is bright yellow, not IBM's standard blue. The cheerfulness reflects the fact that Beehive is meant to encourage far-flung co-workers to like each other more.

Beehive is an online portal for employees to describe their expertise, so valuable knowledge doesn't get lost inside the bureaucracy. Those kinds of tools are common, but Beehive adds an unusual dose of Facebook or MySpace. The 27,000 IBMers using Beehive can post pictures, video and one-sentence updates about themselves. They can share lists of "things I can't live without."

Such personal touches often are missing when people work at a distance from one another, says Joan Morris DiMicco, an IBM researcher developing Beehive. Co-workers in different locales can't wander into each other's offices and see family pictures on the desk. They don't shop at the same places or have children in the same schools.

These tidbits, DiMicco believes, help people understand each other better. And the usual communication tools like e-mail, instant messaging, phones and even videoconferencing do only so much to fill the gap.

This problem isn't confined to IBM, whose 386,000 employees often find themselves working with people from Boston to Bangalore to Beijing. It affects any company where telecommuting, outsourcing and globalization have spread the staff across cultures and time zones.

At Intel Corp., for example, many project teams have at least one person who has yet to meet the group's boss face-to-face.

Recently, Intel tried to improve the situation by testing a "visual business card" system. Participants could not only list standard information about their location and job title, but they also could post pictures, brief biographies and things they like.

Now Intel is exploring whether virtual-world software, which can show graphically rich, 3-D representations of meeting rooms, auditoriums, factory floors -- you name it -- will make it more natural for groups to collaborate. Intel's initial efforts are focused on such tasks as monitoring computer centers, designing products and training staff.

Other companies are already using virtual worlds for certain events, allowing people to maneuver graphical representations of themselves, known as "avatars," through online trade shows and product demos.

When CDC Software recently staged parts of an annual sales kickoff event in a virtual world created by Unisfair Inc., it included an online version of the golf outings that commonly accompany such affairs. It held tournaments in baseball and golf video games -- and gave real trophies to the champions, said Julian Hannabuss, a CDC sales director.

In the coming years, more aspects of everyday working life could include virtual interactions that resemble games but are plenty serious.

One reason is that the technology is getting more sophisticated. For instance, if my avatar appears to be sitting to your left in a meeting, what I say into my computer microphone can come through your left computer speaker. And I'd hear you on the right.

Soon such meetings will be able to incorporate images from Web cameras that capture gestures and face movements -- so your avatar can reflect your nonverbal communication cues, crossing its legs or frowning when you do so in real life.

"Those kinds of things make you forget there's an interface mediating you and the other people at all," said Greg Nuyens, CEO of virtual-world creator Qwaq Inc., whose clients include the energy company BP Group PLC. "You'll just be in a room with them."

Eyeing that same future, IBM researchers are exploring whether groups of people in different locations can bond by playing collaborative virtual-world games, like solving puzzles together. IBM calls the effort "Inward Bound," a nod to the Outward Bound wilderness exercises.

And an IBM project called Bluegrass is testing how software programmers in different locations can organize their work in a virtual landscape. People traversing this virtual world appear as the pictures they posted of themselves in Beehive. IBM researcher Steven Rohall hopes to enable people engaged in solitary, "heads down" work at computers to get the kind of "heads up" interactions that come from walking down the hall in an office.

Put more simply, perhaps: "We can make work suck less," says Reuben Steiger, CEO of virtual-world creator Millions of Us.

Steiger predicts that office politics will be transformed as virtual interactions replace or augment in-person connections, because the technology often liberates wallflowers to act more aggressively.

Cindy Pickering, the engineer overseeing Intel's internal virtual-world efforts, says younger employees will be key to quickly advancing socially oriented workplace software. They're already used to chatting and playing online, whether in networking sites or complex video games.

Still, one big question is just how many plane trips for actual meetings can be realistically replaced by software.

"I don't think we'll ever completely replace the human interaction element," Pickering says. "Instead of us going out and playing softball together, now we'll just go play an (online) game? I don't know how satisfying I would find that."

Another question is whether getting distant co-workers to enjoy each other more will actually improve workplace productivity. Research on the subject indicates that a much bigger factor is whether people trust their colleagues to do their parts.

Friday, May 09, 2008

Customer Satisfaction is Key When Determining Offshore Outsourcing Options

Source : Click

Outsourcing help desk services to an offshore location may yield as much as 30 to 40 percent cost savings, but customer satisfaction must be a key factor when making this decision, according to Gartner, Inc.

“Although offshoring an IT help desk may produce significant cost savings, IT management needs to determine whether that decision is right for the enterprise,” said Richard Matlus, research vice president for Gartner. “For most IT organizations, the help desk is the primary end-user-facing organization, so if end users are not satisfied with it, then it will have a negative effect on the IT organization.”

Based on informal client interviews, Gartner analysts found that offshore help desk service voice support services have experienced problems, particularly those located in India. The problems are focused on poor quality that can lead to significant customer dissatisfaction.

Four factors have been identified as the main contributors to the customer dissatisfaction:

* Client knowledge – When a help desk is internal, the client has its own employees supporting the help desk. These employees have access to internal communications which enable them to clearly understand their business and, therefore, support end users. When the help desk is outsourced, the service provider tries to capture the information into a knowledge database, but the information is not always kept up to date or easily understood.

* High turnover – A recent Gartner survey for all IT services showed that the worldwide attrition rate was 14.7 percent and offshore it was 22.1 percent. Although this can be a problem anywhere in the world, it can be extremely prevalent in low-cost countries where many IT job opportunities exist and many IT help desk agents will switch jobs for a small salary increase.

* Cultural differences – If a client has a problem, he or she will relate the problem over the phone, but because of cultural differences, the help desk agent may not interpret the problem and react in the most appropriate manner. For example, a client employee may have a problem on a PC and want to know how to fix it. Instead of explaining how to fix the problem, the offshore agent may take control of the employee’s PC and change the image without explaining how this was accomplished because the agent doesn’t want to insult the client. However, the client employee may be dissatisfied because he or she doesn’t learn what was wrong or how to fix the problem resulting in a need to call the help desk again in the future.

* Language dialects – Although Indian-based providers’ agents speak English, they are generally trained in U.K. English and may use British words or a more formal context, format, tone and enunciation. Because many clients are from North America, this adds to oral communication problems. This can cause frustration for the client and the agent, and lead to dissatisfaction with the help desk experience. However, when a help desk problem is sent via e-mail or on a Web chat site, this language problem is not a factor, and customer satisfaction is positive.

“Although quality in the first year of offshoring is likely to be poorer than domestic help desk solutions, if an enterprise can be patient, quality and customer satisfaction can reach acceptable levels that are on par with domestic service,” said Mr. Matlus. “This occurs more rapidly with global clients that have a multinational presence. If a client has perseverance and end users are tolerant, then an offshore help desk can be successful.”

Gartner offered key recommendations for enterprises to help ensure the success of an offshore help desk service:

* Assess and validate whether the offshore provider’s services can meet requirements.

* Review the service provider’s offshore practice for building and updating its knowledge database.

* Review the provider’s offshore service for cultural understanding, language proficiencies and employee turnover ratios.

* Talk to references using offshore help desk resources and ask what issues they may have encountered.

* Understand that the help desk may be the first line of IT support to your end users, so offshoring should
not just be a cost decision.

* Evaluate low-cost onshore alternatives as well. The savings available from low-cost onshore and
“nearshore” alternatives may negate the desire to go offshore.

Thursday, May 08, 2008

India to create 8m outsourcing jobs in next decade

Source : Click

India will gain about eight million outsourcing jobs over the next decade as the industry booms in smaller cities, according to official forecasts.

Minor cities in India will snap up about two million of these jobs, according to a report of India's top 50 cities for IT and business process outsourcing (ITO and BPO) by industry association Nasscom.

Currently 90 percent of the industry's workforce is based in India's top seven ITO and BPO cities, but the report states this will drop to 75 percent over the next decade as employers turn to smaller alternatives.

Overburdened roads and oversubscribed universities in the seven key centres, such as Bangalore, Chennai and Hyderabad, mean the industry needs to develop smaller cities such as Ahmedabad, Coimbatore and Visakhapatnam, the report states.

These smaller "tier two and three cities" will be needed to provide about 50 percent of the required skills in both ITO and BPO, where talent shortage remains a large constraint, according to the report.

But the report claims the government needs to begin building infrastructure and education facilities in the smaller cities to underpin this future growth.

Dr Ganesh Natarajan, chairman of Nasscom, said in a statement: "We now see the time as being right to spread this development to a new set of locations, provided the requirements of the industry can be met."

In a statement, Nasscom president Som Mittal said: "The development of only a few select sets of cities has put severe pressure on the infrastructure, costs and also increased migration of resources."

"We see immense potential in the next set of locations if the right steps are taken now," Mittal said.

The government recently backed a one-year extension of a tax break for software companies and Mittal said he hoped the government would create more special economic zones, where companies enjoy other tax benefits.

The study looked at 100 metrics, such as business environment, government support, infrastructure, knowledge pool and skill-set availability, operating cost and social and living environment in the 50 Indian cities.

Wednesday, May 07, 2008

20 Indian firms among world's top 100 in outsourcing

Source : Click

Reflecting strong growth of the Indian industry, 20 Indian firms have successfully made it to the list of top 100 outsourcing companies in the world.

The latest '2008 Global Outsourcing 100', compiled by the International Association of Outsourcing Professionals (IAOP) that features 20 Indian firms has five of them - Infosys (ranked 3), TCS (6), Wipro (7), Genpact (9) and Tech Mahindra (10) among the top 10. All five are leading software service providers.

In the list, Accenture is on the top slot and IBM comes second. Companies on the list averaged $1.7 billion in annual sales and engaged 27,000 employees across the world.

Other Indian companies in the list are HCL Technology (11) Mastek (16), WNS Global Services (19), Hexaware (22), ExlService (26), 24/7 Customer (28), Cambridge (36), ITC Infotech (40), KPIT Cummins (42), Patni (46), Zensar (53), MindTree (54), Mphasis (56), Aditya Birla Minacs (62), FirstSource Solutions (73) and VCustomer (84).

According to IAOP, the key strength of Wipro and TCS is their 'employee management' while 'executive leadership' is cited as the strong point of Infosys and Genpact.

On the other hand, 'outsourcing experience' is attributed as the main strength of Tech Mahindra and HCL Technologies.

Tuesday, May 06, 2008

Outsourcing to prop up IT services, claims IDC

Source : Click

Set to overtake project-based services in 2008 as credit crunch hits home

The growth of outsourcing is shoring up the western European IT services market in difficult economic waters, an IDC report has asserted. The credit crunch will lead to reduced growth in project services, but will have little or no impact on the outsourcing segment, according to the research house. This will lead outsourcing to overtake project services as the largest IT service sub-sector this year.

IDC's study reveals that the total IT services market exceeded expectations in 2007, showing 6.4% growth, and was worth $192.3 billion (€125 billion). Market growth is expected to slow to 4.6% this year and will stay at a similar rate for the next few years, swelling the market to $242.8 billion (€158 billion) by 2012.

Laura Converso, research manager for IDC's European Services Research, said: "As the European economy cools down, the outsourcing segment continues to be the growth engine."

Julian Laister, marketing director of managed service provider Nscglobal, said "There is a willingness and acceptance of the use of external parties. Companies are consolidating their infrastructure and have to get more from their budget," he said.

Friday, May 02, 2008

Filipino software companies eye Japan as market for IT outsourcing

Source : Click

Philippine software companies are looking at Japan’s fast-growing information technology (IT) services industry as a strategic market for IT outsourcing despite an expected slowdown in the US economy.

The Japanese IT market is considered the second largest market in IT services industry. Japan’s IT market is expected to turn in 2.3 trillion yen in revenues this year, which would grow to 5.5 trillion yen or billion by 2010. The market has been maintaining rapid growth since 1990.

Local IT companies are now eager to tap this huge IT market, as Japanese firms, such as Fujitsu, Canon, Epson, Denso Techno, System Yoshiii, and NEC Telecom, have already outsourced some of their services in the Philippines.

Industry statistics show that some 4,500 Filipino software engineers are already servicing the Japanese market.

On May 14 to 16, eight Philippine companies will be joining the Philippine participation in the 17th Software Development Expo and Conference (SODEC) at the Tokyo Big Sight. These are: Advanced World Systems Inc.; Alliance Software, Inc.; Astra (Philippines), Inc.; Ayala Systems Technology, Inc.; Imperium Technology, Inc.; N-PAX Cebu Corporation; Tsukiden Software Philippines Group; and WeServe Systems International, Inc.

SODEC is recognized as one of the most important trade exhibitions for software development engineers and designers in Japan. This year, it will feature 1,800 exhibitors and is expected to generate 125, 000 trade visitors.

"Japan is the world’s second largest economy and the leader in technological innovation. IT will always be part of Japan’s pursuit for innovation and economic growth," said Robert Cheng, president of Alliance Software. The company will bring their application development outsourcing services in Japan specifically open source development technologies and wireless/mobile applications.

"What Filipino software companies can offer to the Japanese software sector is reliable partnership with strong adherence to quality, cost effectiveness, language skills, and high technological competence," he added.

Organized by the Department of Trade and Industry’s Center for International Trade Expositions and Missions (CITEM) in coordination with the Philippine Software Industry Association (PSIA), the Philippine participation to SODEC aims to provide a venue for Philippine software, BPO companies, and application developers to meet and network with targeted Japanese clients. The participation also aims to introduce local IT companies to the Japanese market and update them with industry trends and technology developments.

Aside from the exhibition, the Philippines will also organize business seminars at the Center of the International Cooperation for Computerization (CICC) on May 13 and at the Philippine Booth on May 15.

"Japanese companies know that IT outsourcing is not just about cutting cost but also a strategy that can help companies push their innovation strategies," added Cheng.

In fact, some of the Japanese companies already resort to local IT firms for critical IT solutions like ATM system management and other banking and finance functions. Industry statistics show that there are 4,500 Filipino software engineers servicing the Japanese market.

Some of the major Japanese companies in IT outsourcing that are in the Philippines are Fujitsu, Canon, Epson, Denso Techno, System Yoshiii, and NEC Telecom among others. (AMM)

Thursday, May 01, 2008

Successful offshore software development must meet three conditions

Source : Click

He was commenting on the recent experiences of Australian companies using offshore software development resources.

“Over the past year we have had an increase in the number of new clients who have used outsourcing services but who, confidentially, would admit to one or more mistakes that can be made about outsourcing.

“Time and distance will magnify the potentially detrimental effects of a failure of client and service provider to meet three conditions,” Mr. Page said.

These are to ensure, language and time zones contribute to effective communications between client and outsourced services provider, that the software development team has a full understanding of the project’s requirements and, that the client becomes involved in the project.

Mr. Page says there should be at least half a working day overlap in the respective time zones to raise and address issues and questions. The English language skills of the outsourced services provider should be a certain minimum standard.

“Each and every Mitrais staff member, regardless of their position, must achieve English language skills of 6 on a scale of 10, in which 10 is the most skilled. Because of this standard, every member of the software development team in Bali can talk with any or all client staff members in Australia.”

The second condition, to ensure that the software development team has a full understanding of the project’s requirements, is the responsibility of both parties.

“Client should ask themselves: do I understand the project’s requirements and does the outsourced team understand what is expected of it.”

Mr. Page says the first five percent of the time of a project will typically determine its success.

“Projects can be put at risk by short-cutting the analysis phase,” he says.

To minimise that risk Mitrais uses a two phase bidding methodology. In the first phase which may typically be between 5 and 15 percent of the project (depending on whether formal prototyping is required by the client), the company bids to develop a full requirements specification. This specification is designed to ensure the alignment of client and developer expectations.

Third, but by no means least, clients must become involved in their projects says Mr. Page.

“Problems may start if a client abrogates this responsibility. Involvement initially may be small to confirm expectations, growing as the project calls for user acceptance testing.”

Against the background of these conditions, Mr. Page says ‘eyes open’ is an apt description of outsourcing because it’s all about risk management. The person who owns the project must own the risk.

This is especially highlighted in those outsourcing relationships in which Mitrais develops and refines a client’s applications on an ongoing basis.

“Such clients may brief us on a product roadmap once or twice a year thereby reducing the subsequent directions briefing required of our developers,” Mr. Page

Mr. Page says Australia faces a growing shortage of certain types of IT skills and many organisations want to elevate staff from code-cutters to more challenging systems analysis and architectural roles. A decade ago companies began to outsource simply as a means of replacing higher cost staff with lower cost off-shore developers.

“While the impetus for outsourcing may have change, the guidelines to successfully taking advantage of the skills and costs of offshore developers remain the same,” Mr. Page said.