Monday, June 30, 2008

Card trick: Startup sees traction with e-business cards

Source : Click

Whether it all displace the B-to-B networking staple is anyone as guess

When Dan Kuperstein is at an event he likes to hand out his business card. Usually, though, he does not deliver it with a handshake, but via cell phone.

Kuperstein, an executive vice president of business development at Argentinian software development outsourcing company Globants office in Hopkinton, no longer uses traditional paper business cards. Rather he prefers the immediacy of sending electronic cards directly to mobile phones, tapping into a service being offered by startup 211Me Inc.

What I like about it is when you are meeting folks or speaking at an event, instead of giving them a card, this is a little sticky for them, he said. It stands out.

Robert DeFranco, a co-founder and CEO of 211Me, expects others will feel the same way. The Westborough-based startup is aiming to replace the ubiquitous paper business card with easy-to-assemble electronic cards, which users can distribute through cell phones or e-mail.

Friday, June 27, 2008

Software & Information Industry Association spent $227,866 to lobby in first quarter

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The Software & Information Industry Association spent $227,866 in the first quarter to lobby on trade measures, outsourcing and other issues, according to a recent disclosure form.

The trade group, whose members include Adobe Systems Inc., McAfee Inc. and Intel Corp., also lobbied on bills to protect copyright and intellectual property, as well as proposals to overhaul the U.S. patent system.

In addition, the group lobbied on data security measures and legislation to crack down on identity theft, bills to promote math and science education, immigration matters and more, according to a disclosure form filed with the House clerk's office on April 21.

Besides Congress, the Software & Information Industry Association lobbied the Department of Education, the Federal Trade Commission and the Commerce Department, among other government agencies.

Among those registered to lobby for the group in the first three months of year was Mark Bohannon, former chief technology counsel at the Commerce Department.

Thursday, June 26, 2008

India's RIM deals gather pace amid slowdown

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INDIA--As companies become more cost-conscious, CIOs worldwide are increasingly feeling the need to outsource infrastructure management remotely to locations such as India. For local companies such as TCS, Infosys, HCL and Patni, remote infrastructure management (RIM) is becoming yet another fast-growing revenue stream.

"We created a separate business unit for RIM in 2004 to give it increased focus," P. R. Krishnan, vice president and global head IT infrastructure services at Tata Consultancy Services (TCS), said in a phone interview. "Since then, our revenues from RIM have grown ten-folds, from around US$40 million to US$400 million today."

TCS is now targeting its RIM business to account for US$1 billion of its US$5.7 billion revenues. "Revenues of US$1 billion for RIM appear achievable today," Krishnan said.

RIM essentially refers to the monitoring and management of a company's IT infrastructure components, such as data centers, servers, laptops and desktops, from a remote location on a 24 by 7 basis.

"Around 80 percent of problems related to infrastructure can be offshored," Anant Gupta, president or HCL Comnet Systems & Serviced told ZDNetAsia in an interview. For the remaining problems, such as those pertaining to hardware, these Indian IT companies have onsite staff or partnerships with local companies that can address such problems. For instance, HCL Comnet--a subsidiary of HCL Technologies--has around 25 partners worldwide.

Downturn drives RIM
With the economic slowdown, more companies are making RIM part of their strategy.

"RIM means keeping the lights on," Ajay Soni, vice president of infrastructure management services at Patni Computer Systems, said in an e-mail interview. He explained that the slowdown is compelling companies to lower budgets, thereby increasing the need for efficiency in traditional datacenter and infrastructure management.

According to Soni, Patni's RIM business has been growing at around 30 percent over the last five years.

Concurred Krishnan: "Data centers, desktops, servers, and so on, are cost centers for CIOs and, therefore, a new lever for companies to reduce costs."

Gupta said: "In the last six months, we have seen a huge increase in the levels of enquires. RIM has become more acceptable." In the last one year, HCL Comnet added 45 new customers, taking its RIM customer base to over 80, he said.

Similarly, TCS added 75 new global clients in the last 18 months, bringing its total RIM clients to 225.

Gupta added: "Today, there is a 0.7 probability that every global company will go through RIM." He noted that overall cost savings Indian RIM players are able to offer their clients are in the range of 20 percent to 25 percent for a full outsourcing deal, which includes RIM and onsite support. For a RIM standalone deal, the savings are around 30 percent to 35 percent, he said.

According to a recent study by McKinsey and Nasscom, India's trade body and chamber of commerce for the IT-BPO industry, RIM could prove to be India's next big offshore opportunity for India, after application development and maintenance (ADM) and business process outsourcing (BPO).

The report indicated that India is strongly positioned to capture US$13 billion to US$15 billion of the global RIM market by 2013, creating 325,000 to 375,000 jobs in the sector. At present, RIM services revenue for India stands at between US$3.2 billion and US$3.6 billion, while the global RIM market is around US$7 billion.

Krishnan said: "Earlier, complete infrastructure management deals were more popular, wherein companies would outsource their entire requirement for assets [such as workstations and datacenters] to companies like IBM and EDS.

However, he noted that such deals--also described as being "asset-heavy"--had several limitations, he noted. For instance, each time the customer wants to make a change to its network topology or server configuration, the contract would have to be renegotiated. With technology cycles shortening, this was becoming more of an administrative hassle for companies.

"Even today, asset-heavy deals are more popular than RIM, though RIM is growing very fast," Krishnan added.

RIM deals give clients the flexibility of choosing services based on their individual needs, Gupta said. It also brings in transparency, providing companies insights into how many CPUs and servers are being used and to what extent.

This opens opportunities for RIM players to offer value-added services, such as new virtualization technologies to help their clients better utilize their servers and IT advisory services.

Soni said: "Some of the services, like datacenter operations and virtualization, are the need of the hour."

Besides cost savings and flexibility, scarcity of skills in countries such as the United States and Europe--especially in the IT industry--the need for 24 by 7 IT support, and the call for consolidation and standardization across global markets, are the other growth drivers for RIM.

Even Indian companies are going in for RIM deals.

Gupta said: "Indian companies that are going global are required to meet global service benchmarks and regulations. RIM deals help them achieve that."

For Patni Computers, North America is the major contributor to RIM services, followed by Europe. Soni said: "For us, banking and financial services is the largest segment active in RIM global sourcing, followed by products companies.

According to Krishnan , today, RIM is the fastest growing business for TCS. He believes that this business will continue to grow at around 70 percent to 80 percent per annum.

By 2011, he added, some 8 percent to 10 percent of TCS' total revenues should come from RIM.

The McKinsey-Nasscom study estimated that the total size of the infrastructure management services (IMS) industry, which encompasses core IT systems, including hardware, software, connectivity and people, at around US$524 billion. After discounting for infrastructure management spend in low-cost countries, defense and government budgets, spend in small enterprises, services that cannot be offshored and value captured by customers, the study estimated the addressable market for RIM to be US$96 billion to US$104 billion.

Wednesday, June 25, 2008

Information Services Group Announces TPI Named Top Full Service Outsourcing/Offshoring Advisor

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Well Known Black Book of Outsourcing Makes Selection 30,000 Outsourcing Decision Makers Surveyed TPI Also Named # 1 ITO and HRO Advisor

Information Services Group, Inc. an industry-leading, information-based services company, today announced that TPI, the largest sourcing data and advisory firm in the world and a unit of ISG, has been named the top full service outsourcing and offshoring advisor by The Black Book of Outsourcing's 2008 "Top Outsourcing Advisors" list.

TPI, founded in 1989, established the sourcing advisory industry. It was also named number one in two of the full service advisory categories: Information Technology Outsourcing (ITO) and Human Resources Outsourcing (HRO). In addition the firm received high rankings for its work in two other categories: Finance and Accounting Outsourcing (FAO) and Business Process Outsourcing (BPO).

The Black Book surveys nearly 30,000 outsourcing decision makers, users and C-level officers to gain a buy-side decision maker perspective on the global services industry.

"We are extremely pleased to be recognized by our clients and the broader industry as the number one offshoring and outsourcing advisor," said Michael P. Connors, Chairman and Chief Executive Officer of ISG and TPI. "We remain focused on providing real-time market information and expert advice on sourcing strategy, assessments of our clients market position, transaction management and governance services to help our clients become more competitive in their markets."

The fifth annual Black Book survey was distributed electronically to clients, buyers, contractors and users world-wide, and is available at The research mission of the survey was to offer balanced, objective and unbiased results to help organizations maximize significance, increase speed-to-results, and mitigate risk in outsourcing/sourcing initiatives. It is designed to give users the ability to achieve and sustain significant improvements in their outsourcing decisions by aligning client experience research and strategies.

Tuesday, June 24, 2008

Plateau Announces Industry's First Talent Management Outsourcing Services

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Plateau's Comprehensive Services Includes New Talent Management Process Outsourcing and Support Services to Facilitate Administration of Talent Management Lifecycle

Plateau Systems, a leading provider of talent management software, services and solutions, today introduced its Talent Management Outsourcing suite of services, comprised of two new service offerings: Talent Management Process Outsourcing and Talent Management Support Services. As the industry's first and only service offering of its kind, Plateau Talent Management Outsourcing ensures that customers' talent management systems and processes are always available, properly administered and effectively supported to increase employee and business productivity and performance.

Driven by a slowing economy and rising costs across the board, organizations are being forced to focus their resources on maximizing productivity. Faced with reduced budgets, limited resources and increased responsibility, HR professionals are finding it especially difficult to effectively roll-out and manage talent management processes and applications across their organizations.

"Companies are discovering that outsourcing can help them implement an infrastructure that reaches more employees at far lower costs and allows staff to focus on company-specific needs and performance consulting," said Josh Bersin, President of Bersin & Associates, a leading research and advisory firm focused on enterprise learning and talent management research. "Plateau's Talent Management Outsourcing services certainly address some of the major pains facing organizations and can help reduce the heavy administrative burden being shouldered by many of today's HR professionals."

Utilizing Plateau Talent Management Outsourcing, organizations can achieve significant time and cost savings while freeing up HR and IT resources to focus on other critical initiatives within their organizations. By offloading the administrative burden associated with managing their talent management infrastructure to Plateau experts, organizations can significantly reduce or eliminate the need for dedicated infrastructure resources. Ideal for small organizations and large enterprises across all industries, Plateau Talent Management Outsourcing provides guaranteed support uptime and availability to ensure expedient issue resolution. And, because most companies have unique organizational and industry-specific requirements, Plateau's new service offering allows customers to deploy talent management best practices tailored to fit their needs.

Talent Management Process Outsourcing

Plateau Talent Management Process Outsourcing is the industry's first and only service that allows organizations to completely outsource all administrative user tasks to Plateau experts. Because any administrative task can be scoped in, customers determine which tasks they wish to outsource according to their specific business needs. To take advantage of this service, customers need only complete a simple, customizable online form detailing the tasks they wish to outsource.

Available immediately for Plateau's Learning and Performance modules, Plateau Talent Management Process Outsourcing reduces administrator staffing and overhead costs while expediting tangible business results. Highly seasonal or cyclical business processes like performance reviews can be managed without having to retrain or add staff. Plateau Talent Management Process Outsourcing provides a one-stop shop for support and administration across all of Plateau's application functions and is especially ideal for SaaS, and iContent customers.

In addition to Talent Management Process Outsourcing services, Plateau unveiled comprehensive Talent Management Support Services focused on providing enhanced end-user support and advanced administrator support:

-- Tier 1 End-User support provides customers with phone access to a central Plateau support desk to resolve simple "how-to" support issues, such as login and password resets. Having access to this type of service allows customers eliminate the time and resource costs associated with establishing and facilitating their own internal talent management help desk. Organizations utilizing Plateau's outsourcing support services can also reduce costs by eliminating the training and communication that is required to provide quality support for end-users. By assuming the help desk responsibility, Plateau experts can ensure the highest level of support from version to version and minimize lapses in support that can occur when administrators and help desk staff are completing training for upgrades and new product versions. This service is especially valuable for organizations that require additional support to manage volume spikes that often result during large and complex implementations. Plateau's Tier-1 End-User support outsourcing tracks key metrics and can provide administrators with trend information and details around software adoption and usage rates.

Tier-1 End User Support also includes Over-Flow support. This flexible service offering is available for customers whose Plateau talent management solutions are supported in-house, but who may require back-up assistance during usage spikes or high volume occasions. Over-flow support is offered in the Standard Tier 1 support level and can be purchased on a per incident basis or in incident blocks.

-- Advanced Admin Support saves customers time and money by giving administrators the option to work directly with Plateau's "Just-in-Time" administrator experts for immediate answers to and guidance on issues related to their Plateau deployment. Through this service, administrators have access to product and subject matter experts who know the products and can advise on best practices and specific use cases. Available for Learning and/or Performance modules, advanced admin support provides a cost-effective alternative to training, reduces the impact of administrator turnover and eliminates the need for large or decentralized organizations to have "super-administrators" who support other, part-time administrators. This offering allows customers to control costs by allowing them to determine response levels and thus, control Plateau's level of effort on a case-by-case basis.

"With talent management fast becoming a strategic, C-level priority, demand for software and solutions that help organizations manage and optimize their talent is rising. Unfortunately, as these initiatives grow and expand, organizations are discovering that administering and managing their talent management solutions and infrastructure is overloading their internal resources," said Shelly Heiden, EVP Global Operations, Plateau Systems. "Plateau Talent Management Outsourcing leverages the knowledge and experience of Plateau experts to help customers build and maintain their talent management system faster, more cost-effectively and with zero risk. Adding Plateau Talent Management Outsourcing to our already comprehensive Global Services offerings, allows us to offer our customers a full cycle of talent management services from strategic planning, to getting started, to maintaining, to simply getting the most out of their talent management systems."

Monday, June 23, 2008

Saudi firm gives software solution order to Bangalore developer

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Saudi Arabia's leading point-of-sales (PoS) solutions provider Intersoft will outsource its retail software solution to Bangalore-based Taranag Software to ensure secure payment transactions.

Tarang's retail software will enable Intersoft to achieve the Europay Mastercard Visa (EMV) integrated chip card standard, which is mandatory for any payment application on PoS/ATM, the companies said in a joint statement here Saturday.

Intersoft has also partnered with Tarang to develop and certify Span II application, the latest specification to implement EMV level two in Saudi Arabia.

'We found Tarang as our right outsourcing partner in the PoS and payments' space. We will leverage its domain expertise to sustain our leadership in the Gulf region,' Intersoft founder Ammar Al-Qadi said in the statement.

The Riyadh-based international firm specialises in retail, hospitality and banking PoS systems. It has built a strong clientele in the Saudi kingdom and the United Arab Emirates (UAE) by delivering customised electronic banking solutions.

The 17-year-old Intersoft was the first to introduce smart cards in Saudi Arabia by using SIM (subscriber identity module) in PoS terminals.

The $5-million Tarang is a leader in the electronics transactions (payments) domain, offering end-to-end business solutions, including PoS applications, payment gateways, mobile payment, contact-less payment interfaces, EMV and fraud management.

'The Intersoft contract reaffirms our leadership in payment technologies. EMV is the way to go for PoS solutions across the Gulf, India and Europe,' Tarang CEO V. Rama Kumar said.

Fortune 500 firms such as Verisign, Payment Data Systems, Card Services International and First Data Corp partner with Tarang for developing and deploying electronic payment and PoS systems for retail customers worldwide.

Saturday, June 21, 2008

Neusoft opens new software park

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Neusoft, a provider of offshore software and service outsourcing in China, has inaugurated its second software park at the Dalian High-tech Industrial Zone to expand its operations.

Neusoft has said that the facility may house 10,000 engineers and will become, combined with the previous one, a software and service global delivery center to facilitate its offshore-outsourcing operations.

Positioned to offer IT outsourcing and BPO services to Europe, America, Japan, and Korea, the new park will also include Neusoft's business units for telecom, electric power, and finance, as well as its car electronics R&D center and leadership development center.

Liu Jiren, chairman and CEO of Neusoft, has said that the concept and construction of the new park is based on Neusoft's future strategy and business growth.

Friday, June 20, 2008

Thinking about outsourcing some IT functions? SaaS is a big option.

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CHARLOTTE, N.C. – So is contracting for outside applications such as e-mail, data management and sales through software as a service the right decision for your company?

Gary Griffiths, former president of WebEx which is now part of Cisco, offers succinct advice in answering that question – with a couple of key questions of his own:

“What is your company’s key competencies?

“What do you need to do in order to succeed?

“Once we’ve answered those questions, then let’s talk about how to off-load some of your distractions.”

Griffiths led a panel discussion Wednesday about SaaS in the second of two programs put on by WRAL Local Tech Wire in partnership with the Carolina SaaS Users Group. Against the backdrop of the field at Bank of America Stadium, Griffiths and representatives of five SaaS providers explained to a crowd of nearly 200 people the risks and rewards of outsourcing IT functions.

In addition to letting another firm managed “distractions,” be it sales force management or e-mail, Griffiths noted that executives also must deal with control issues.

“There is a fear of letting go,” Griffiths said of customers whose IT departments or c-level leaders. “The decision often comes down to control. Every SaaS vendor has faced that challenge to varying degrees, and there’s no question that these are relevant concerns.”

SaaS vendors don’t have all the answers, he added. In fact, to make a sale SaaS vendors must do their homework on potential clients then work with the buyer “to articulate what their needs are. Successful SaaS providers can put to rest customers; concerns.”

Both the customer and the SaaS provider also need to acknowledge a key fact if a relationship is to succeed, Griffiths added.

“You are buying a relationship, a partner” he said. “Typically, there is a long sales cycle for a SaaS customer, and a good part of that time should be spent on building that relationship.”

Panelists included Jane LeClair, a former director of Wachovia’s human resources support center, Igor Jablokov, CEO of voice-to-text technology startup Yap, Scott Schubert, CEO at AMT direct, Pete Mann, senior vice president at Authoria, and Corey Burnett, vice president of business development at Biopop.

Burnett echoed many of the points made by Griffiths. Biopop focuses on targeted bi-directional mass messaging, such as emergency alerts. Since the Georgia-based firm deals with life-and-death information, Burnett said client concerns about security and reliability have to be addressed in addition to control.

“You do see people who want their hands on everything,” he said. To help address those concerns, Biopop developed a service that includes locating gear at a customer premise.

Once concerns are dealt with, a SaaS provider then can drive home a sales closer: price.

“When a customer sees the costs involved with a SaaS project,” Burnett said, “the argument often turns in our favor.”

Thursday, June 19, 2008

Neusoft opens new software park

Source : Click

Neusoft, a provider of offshore software and service outsourcing in China, has inaugurated its second software park at the Dalian High-tech Industrial Zone to expand its operations.

Neusoft has said that the facility may house 10,000 engineers and will become, combined with the previous one, a software and service global delivery center to facilitate its offshore-outsourcing operations.

Positioned to offer IT outsourcing and BPO services to Europe, America, Japan, and Korea, the new park will also include Neusoft's business units for telecom, electric power, and finance, as well as its car electronics R&D center and leadership development center.

Liu Jiren, chairman and CEO of Neusoft, has said that the concept and construction of the new park is based on Neusoft's future strategy and business growth.

Wednesday, June 18, 2008

TCS sees India outsourcing rev growth softening

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SEOUL--Tata Consultancy Services Ltd., India's top software services exporter, expects a slight slowdown in revenue growth in India's outsourcing industry this year but sees opportunities in sectors such as government and utilities.

India's outsourcing industry is expected to show 20-22 percent revenue growth in the current fiscal year ending in March, 2009, compared with growth of about 25 percent in the previous year, TCS CEO S. Ramadorai told reporters on the sidelines of the OECD Ministerial Meeting on the Future of the Internet Economy.

Tata Consultancy, which got half its revenue from the United States in the March quarter, has said it would boost growth in new markets such as the Asia-Pacific region.

Monday, June 16, 2008

Wipro sees revival in outsourcing business

Source : click

software-services exporter, is seeing a revival in the flow of outsourcing deals as the turmoil in the global financial industry eases a bit, two senior executives said yesterday.
Still, Wipro was cautious about the next two quarters, expecting business to accelerate towards the end of 2008/09 year in March, Girish Paranjpe and Suresh Vaswani, the joint chief executives of Wipro’s IT business, said in an interview.
“Relative to how it was in the first quarter of this (calendar) year, there was a feeling that things are almost frozen, I think things are beginning to come back to normal,” Paranjpe said.
“The good news is that there have been no casualties after Bear Stearns. Whatever management changes had to happen has taken place in many of the big companies.”
India’s export-driven outsourcing firms get the bulk of their revenue from the banking and financial sectors, which have been battered by the turmoil in global financial markets.
Low-cost outsourcers such as Wipro and its bigger rivals Tata Consultancy Services and Infosys Technologies have thrived on winning deals from overseas clients.
But their profit growth has slowed as the impact of the subprime crisis has spread through the US economy, where the Indian firms earn the majority of their income, and beyond.
In April, Wipro, whose services include software application development and back-office services, reported its slowest quarterly earnings growth in about five years.
However, Paranjpe said that New York-listed Wipro had not faced any pressure from its customers to lower prices. Instead, it had been able to get increases of 3 to 5% above the average billing rate on new deals.
“In fact, in January this year, when many of the contracts came up for renewals, we were able to get price increases on many of those contracts,” he said.
Shares in Wipro, majority owned by its billionaire chairman, Azim Premji, ended down 1.1% in a Mumbai market that fell 0.4%. The stock is down 9% in 2008, as against a drop of 25% in the benchmark index
Wipro expects India and the Middle East would account for a “significantly bigger” part of its IT business revenue this fiscal year as it sharpens its focus on the emerging markets to boost growth, Vaswani said.
The Bangalore-based company, which counts Cisco, Nortel and Credit Suisse among its clients, earned 20% of its more than $4bn of IT business revenue from India and the Middle East in the year to March 2008.
“The new action is in emerging markets. Now, whether that’s in Africa or whether that’s in Latin America, we will find ways of addressing that,” Vaswani said. “But in terms of thrust, it is India and the Middle East.”
In January, Wipro’s joint venture in Saudi Arabia won a $100mn five-year contract from Saudi Arabian Airlines. The following month, Wipro bagged a $50mn five-year outsourcing deal from an Indian retailer.
Spending on information technology in Asia-Pacific, Latin America, the Middle East, Africa and Eastern Europe is forecast to hit $1.1tn this year, up from $964bn in 2007, according to research and advisory firm Gartner. – Reuters

Friday, June 13, 2008

AstraZeneca announces outsourcing in two departments

Source: Click

AstraZeneca PLC inked two outsourcing contracts this week, including one with a Swedish information technology company that will take on duties at the company's U.S. headquarters in Fairfax.
The other contract continues a collaboration with a Chinese company to produce thousands of compounds for testing as potential drug candidates.

The IT company Sigma AB will manage data from the drugmaker's clinical trials. AstraZeneca spokeswoman Laura Woodin said she didn't know what effect the contract would have on the local staff, but the company's information services department would be trimmed as part of an effort to cut 1,800 such jobs across the company.

"I think it's fair to say locally within our IS department, there are job eliminations as part of this overall effort to enhance productivity," Woodin said.

Information technology was just one area AstraZeneca targeted for cuts in a restructuring plan announced in July. In all, the company said it was planning to cut 7,600 jobs globally over a three-year period. The plan, expected to cost $1.6 billion, called for cutting 3,300 positions in the company's global supply chain, 1,800 positions in sales and marketing positions in Europe, and 700 positions in research and development.

AstraZeneca, one of Delaware's largest employers with about 4,500 workers, would not detail any local job cuts.

"We continue to carry out plans announced last year to increase efficiency and reduce positions globally over a three-year period," Woodin said.

As part of the effort to increase efficiency, AstraZeneca has farmed out an increasing amount of its work to outside companies. Last year, the company signed a seven-year, $1.4 billion deal with IBM to run its information technology infrastructure in 60 countries.

In a deal announced earlier this week, Shanghai-based WuXi Pharma-Tech said it signed a three-year agreement with AstraZeneca, following a two-year, $14 million collaboration in which WuXi delivered more than 100,000 chemical compounds to AstraZeneca for testing.

At a recent presentation, Karen Gotting-Smith, an AstraZeneca vice president, said the company has more than 18,000 such collaborative agreements with institutes, universities or other pharmaceutical or biotechnology companies.

In April, AstraZeneca announced an agreement with India-based Ranbaxy Laboratories Ltd. to outsource production of the active pharmaceutical ingredient in its best-seller Nexium, as well as finished doses of the heartburn drug. Chief executive David Brennan said at the time that AstraZeneca planned to outsource the manufacturing of all its active pharmaceutical ingredients in the next five to 10 years.

AstraZeneca is one of a handful of companies that announced plans to outsource manufacturing "on a previously unheard-of scale," according to a recent report from health care information firm IMS Health.

The emphasis on outsourcing stems from a cost-cutting mentality among drugmakers, prompted by slowing sales growth , according to the report.

"This shift in thinking has been brought about by a need to look at every item on the balance sheet -- no matter how small a fraction of overall costs -- to find savings," the report states.

Thursday, June 12, 2008

A Plan For Offshore Development

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Florida should quickly follow Massachusetts by designing and adopting a plan to guide and manage development off the state's coastlines.

Not subdivision or strip-mall development, but pipelines and - perhaps eventually - energy-generating windmills.

An ocean-planning law - the first in the nation - was signed late last month by Massachusetts Gov. Deval Patrick.

"A 17-member advisory commission will help state officials craft a management plan by the end of 2009, and all development within 3 miles of the state's coastline will have to abide by its rules," the Boston Globe reported.

Florida need not follow the exact model provided by Massachusetts, but a comprehensive ocean-management law is needed for two main reasons:

The Florida Coastal Management Program is based on a network of agencies implementing not one comprehensive law, but 23 different statutes.

The goal of the program is worthwhile - to coordinate local, state and federal agency activities using existing laws - but it's time that Florida re-examine whether the status quo statutes can adapt adequately to rapidly changing conditions.


Federal and state regulators review offshore development proposals on many levels and coordinate a lot of their efforts; for example, the Florida State Clearinghouse is the "single point of contact for the receipt of federal activities that require inter-agency review, which includes activities subject to consistency review under the Florida Coastal Management Program."

But the state laws are still myriad and the process doesn't bring local governments into the loop early enough and fails to clearly guide offshore development where it will do the least harm.

For example:

A $1 billion gas pipeline has been proposed off Anna Maria Island in Manatee County. A company wants to build a port about 30 miles offshore to unload liquefied natural gas from tanker ships arriving from foreign ports, according to a recent report in The Sarasota Herald-Tribune. The natural gas would be turned back into gaseous form and sent through more than 40 miles of submerged pipes and into Port Manatee. Two proposed pipeline routes would travel through sand deposits in the Gulf of Mexico, off Anna Maria Island.

Such pipelines typically require buffers of up to 3,000 feet, making much of that high-quality sand off-limits to dredging operations. That sand is used to re-nourish and rebuild local beaches. Sarasota County officials are concerned that the proposed routes would make it more expensive to get good sand for beach re-nourishment projects. The county commissioners have already sent a protest letter to federal regulators.FLORIDA HAS 1,197 MILES OF COASTLINEA suitable solution might eventually be found. But, if Florida had a comprehensive ocean-planning law in place, this type of protest might be avoided.

Plus, a proactive planning law could help federal, state and local governments - and private companies - direct facilities where they would do the most good and least harm.

Controversy is bound to arise whenever anyone wants to make use of the oceans off Florida, which has 1,197 statue miles of coastline. Even under existing laws, shipping companies, energy developers, commercial fishermen, tourism officials, coastal residents and environmentalists might increasingly find themselves butting heads over the use of offshore waters.

The potential for offshore wind power will be discussed June 25-28 when Gov. Charlie Crist holds a 2008 Climate Change Summit in Miami.

Big, offshore windmills have generated opposition when proposed elsewhere. If an ocean-management plan is pulled together soon by Florida, the offshore aspects of the state's development of sorely needed alternative energy supplies could proceed with a thoughtful, organized approach rather than incrementally.

Massachusetts is far from completing a comprehensive ocean-management plan, but it's ahead of other states with the new law and a timetable for crafting a plan.

The need for such a strategy in Massachusetts was first identified 15 years ago, the Globe reported.

In that case, Florida, time is wasting.

Wednesday, June 11, 2008

How outsourcing saved Zurich's failing IT

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one of the world's largest insurers, has revealed how outsourcing helped turn around its failing IT department and a $3.4bn loss.

In 2003 Zurich Financial Service's sprawling IT department consisted of more than 7,500 employees and 30 CIOs separately servicing different parts of the business. Combined with that Zurich had posted a record loss of $3.4bn the year before.

Zurich CIO Michael Paravicini said that there was no global IT strategy and that its outdated infrastructure relied on too many data centres and incompatible software platforms, with 30 different claim systems in place.

Paravicini said: "Our operations were ineffective and we did not function as a group, we were more like a portfolio of hundreds of independent businesses."

Today the Swiss insurer outsources nearly half of its IT work, some managed application services are run by Accenture, CSC and Wipro, its network and telephony services by Orange Business Services (OBS) and managed desktop services by IBM.

Tuesday, June 10, 2008

Software services jobs are on the upswing

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Fast Web connections and robust computer networks mean more than quick downloads from YouTube or iTunes. Robust networks are reshaping the distribution and use of software responsible for many businesses' crucial tasks.

Known as software services, the concept is broad and fast-changing, with many companies designing custom software to meet specific demands, both those of clients and in-house.

Examples include hotel reservation systems, software to track and coordinate deliveries, online tools to help a person choose the correct life insurance and remote management of desktop computers.

As a result, software services represents one of the fastest-growing job markets in the technology industry. In 2007, the sector added 82,600 jobs, and similar growth is expected for 2008, according to a report this year by the AeA (formerly the American Electronics Association).

Not only is continued job growth anticipated, but so is the need to shift existing workers into the field.

"It's interesting in whether we look at job growth or job shift," said Steve Lapekas, chief technology officer for Dallas-based Pegasus Solutions Inc.

"For example, IT operations that once housed large financial systems may now source them through software as a service, and they don't have a need for the in-house resources anymore."

It's a change for companies that once developed custom software tools, housed the tools on company-operated servers and maintained the entire system. For workers who managed these operations, it's possible to use many of the same skills when developing software services, Mr. Lapekas said.

Pegasus, with 336 employees in software development, focuses on the hospitality industry. Services include managing hotel reservations, a digital switch handling 2 billion transactions monthly, and a system capable of juggling multiple forms of currency to help reconcile payment.

Job titles within the development structure largely mirror those of traditional software production houses, with responsibilities such as business analyst, software designer and software developer.

"The most desirable skills are initially the technical skills surrounding an application," he said. "Where it does get a little more diverse is that you've put some mechanism of communication between the network and software. Once the server might have been right under your desk, but now it might be 2,000 miles away."

Understanding this difference, and possessing the technical ability to allow for managing these widely distributed networks, is essential, Mr. Lapekas said.

Custom creations

And while many workers might transition from traditional information technology jobs, the sector offers room for job creation, said Bruce Ballengee, chief executive of Pariveda Solutions in Dallas.

The 5-year-old company creates custom software, mostly for business-to-business transactions. A typical product might be an online tool to help independent insurance brokers find the best product for clients, Mr. Ballengee said.

One innovative effort took an artificial intelligence system from a computer game, using it as the core of a networked scheduling and tracking system for a company running a fleet of small fuel tankers.

Compared with traditional information technology jobs, which might use the same skills, the pace at companies such as Pariveda is very different and often beneficial to technology workers just beginning their careers.

"In corporate IT, you tend to do the same thing over and over," Mr. Ballengee said. Someone might build a software tool, deploy it and manage it for as long as four or five years.

But in companies such as Pariveda, which serves a variety of clients, the pace is much faster. Projects typically last six to 18 months. People in software services often develop a broader technical knowledge at a faster pace, said Mr. Ballengee, whose company employs 110 consultants working with clients.

He often recruits from college campuses, seeking those with majors in areas such computer engineering, electrical engineering and computer science. "For someone young in their career, this is a very compelling way to start," he said.

Communication skills

With a focus on creating products suited for a client's specific needs, communication skills are essential for anyone working in the job sector, Mr. Ballengee said.

"That's where the growth of our industry is," said Clare Freeman, executive director of the Texas Council of the AeA. "If you have experience working with customers, that really makes you a desirable candidate for the software services sector."

Many businesses also recognize the need to focus efforts on software as a service, including giants such as Dell and Hewlett-Packard, Ms. Freeman said.

"All of the old-line manufacturing companies are now making profits from software services," she said.

Dell, based in Round Rock, Texas, is emphasizing software services such as remote management of desktop business computers and e-mail. Similarly, Hewlett-Packard is spending $13.9 billion to acquire Plano-based Electronic Data Systems Corp., one of the earliest and most established players in software services and technology outsourcing.

Whether international behemoths or midsize players, the emphasis on software services means jobs, Ms. Freeman said.

In the 2008 Cyberstate report released by the AeA, job projections for software services rely on the Bureau of Labor Statistics' broad definition of the category, which includes software publishers, computer systems design, programming services and facilities management.

And Texas – ranked second overall behind California in high-tech employment – ranked high in many software services categories. Within software publishing, Texas, with 17,376 jobs, was behind only Massachusetts, California and Washington. In computer system design and related systems, the state, with 84,431 jobs, was third behind California and Virginia.

According to this report, software services employees earned higher average wages – $87,800 – than their counterparts in tech manufacturing, whose average earnings were $82,500.

Saturday, June 07, 2008

Outsourcing: Is India Losing Its Competitive Edge?

Source : Click

Act, which its president approved on May 10, will greatly impact U.S. tech companies with outsourced operations in the country. For instance, an increase in excise tax is included in the Act, and the short-term capital gain rate has been increased from 10 percent to 15 percent.

India has historically been regarded as a favorable country to outsource skilled services such as manufacturing, IT, programming, research and development, distribution and call centers. The declining strength of the dollar, rising wages and bottlenecks in urban infrastructure no doubt will aggravate existing outsourcing Latest News about Outsourcing arrangements. However, another factor is starting to cause U.S. technology companies to rethink their strategies for outsourcing skilled services to India: taxation.

Over the past several years, India has been enacting and enforcing new, more aggressive tax laws and enforcing them. Among the areas of taxation attracting significant attention from the India Department of Revenue are inter-company transfer pricing, income tax treaties and permanent establishment. In addition, the new 2008 Finance Act, which received approval from the president of India on May 10, also contains new laws that will impact U.S. technology companies with operations in India.

Friday, June 06, 2008

Blogging Infosys Style

Source : Click

Gopalakrishnan took over as chief executive of the outsourcing giant with $4.2 billion in revenue, Infosys Technologies, last June. Since then, the company has been rocked by the softening economy: Its stock hit a 52-week low of $32.65 on March 17. Profits for the quarter ending in March fell shy of analysts' expectations. But the company's 12-month outlook boosted investors' confidence, and Infosys has been rising, closing on Wednesday at $46.69. Gopalakrishnan visited to share his views on the economy, on doing business in China and on why an Indian company is providing financial support to U.S. universities. What did you see happening in the business environment in March?

Gopalakrishnan: In every quarter, we do a thorough analysis of our top 100 clients. We found 76% said that this year's [information technology] budget will be flat or down. But most also said that they will increase global outsourcing because it's beneficial for them. But will they do it immediately or later? In the past, there's typically a lag [between plans and increased outsourcing]. So we gave a guidance of 19% to 21% revenue growth compared to a 36% increase last year. It was reassurance that there is still growth.

Has your business grown a lot in China?

Growth has been slower in China and outside China. Both have taken longer than we liked. In China, for potential Chinese clients, the brand is not there. It takes more time to develop the market. Outside of China, too, customers' use of our Chinese development center has been slower than we expected. We thought the pickup would've been much faster, but clients saw it differently. They felt it would be one more location we need to audit, one more location to certify. We have about 15 global clients we support out of China.

How difficult is it to do business in China?

We are finding it difficult to expand in the Chinese market. The business environment, and the standards and processes are different. It's a learning process. The second challenge is getting accustomed to how Chinese companies do business with each other and what are the usual expectations. For instance, typically when you work globally, you receive payment in 30 or 60 days. In China, the norm is 270 days.

Is Infosys expanding beyond services to build products?
We have a product for the banking industry--Finacle--that we'll continue to invest in. And there are two past instances where we have spun out two ideas into separate companies--Yantra, acquired by Sterling Commerce in 2005, and OnMobile, which went public in India in January. As part of our services, we deliver software as a service to our clients. And an emerging business opportunity for us is "social commerce."

What do you mean by social commerce?

There are two aspects: There's the customer facing part where you have a product you may sell to businesses or consumers and you want to get feedback on how those products or services should evolve or what it should feature. That feedback will have an impact on your research and development. And you want to engage with your employees within the enterprise. Dell has done this with "IdeaStorm." We are piloting such software with some of our customers.

Most corporate employees now have a presence on Facebook or MySpace. If you can create a space where you allow them to blog and they have their own social networks within the company, it creates dynamic groups. We developed for Infosys the equivalent of Facebook. That's been live for about a year now. [Infosys highlights its blogs on its Web site].

How many Infosys employees are blogging?

I don't know. I've been blogging, but in a very different way, for six months. [The blog is behind a company firewall.] We call it "Ask Kris." In the past three months, I've received 6,500 queries. It is a way to connect with employees. I select some and reply personally, but someone else reads and replies to the rest.

Are you twittering?

No. [Gopalakrishnan smiles]. I do use instant messaging and SMS.

What's the biggest takeaway with the queries and engagement with employees?

People are passionate about our company. This is a powerful mechanism for interesting ideas coming from the grassroots level. For instance, we have a robust Linux users group at the grassroots level. We're developing a grid computing product using an open-source model. It's not been a company sponsored project [but we're embracing it.]

Thursday, June 05, 2008

Demand for product engg services to grow

Source : Click

In India, where the domestic market for software product has just started warming up, industry expects the demand for outsourcing partner to pick up in a big way in the next 5-7 years.

Over the last two years, over 500 software product companies have started their operations in India focussing on sectors like mobile, Internet, digital entertainment, travel and retail. Industry sources say that most of these companies, owing to their lesser known brand name in attracting the talents to set up their own team of developers, are considering to outsource software development works to local partners.

"We had two options when we started the company in May 2007. Either to build a team of software developers by ourselves, or to outsource to a local partner. We preferred the second option since it was difficult for a small company like ours with a little known brand name to build a team of engineers and manage them," said Deepak Ramesh, co-founder of Mango DVM, a Chennai-based firm that sells digital music through its network of digital vending machines.

Many of the outsourced product development firms including Persistent Systems, Symphony Services and Aspire Systems are optimistic that as the Indian product companies grow in size and scale, with the rise in domestic demand for their products, the demand for outsourcing partners will get a boost.

"Local market will be a growth driver for OPD companies although, as of now, that market is in its novice stage. For the coming years, we would be bidding on larger domestic deals, which include defense tenders," opines Anand Deshpande, CMD Persistent Systems.

Symphony Services, who had been working as an outsourcing partner for many global software majors who have operations in India, is also actively pursuing for opportunities in India. Said Ajay Kela, COO, Global Operations, Symphony Services, "I do believe that the domestic product market to open up, and a lot of domestic companies especially in Internet, travel portals, mobile and retail space, will look at working with product development services specialist firms like us."

Aspire Systems, a Chennai-based OPD firm has already signed couple of contracts from Indian companies who focus on digital entertainment and financial software. The company has set a target to sign at least six contracts from Indian product companies in the current fiscal.

"It will be a growing trend going forward. Because, the newer generation of Indian entrepreneurs want to build software products; but its very challenging for them to establish a team of engineers. The best way to do it in the most cost-effective way, is to outsource the works to specialist product development companies like us," added Kela.

The spurt in product businesses in India began in 2004-05 when VC funding was accessible and the domestic market need for software product grew. Analysts are of the opinion that going forward VCs will be instrumental in persuading their portfolio companies to outsource product engineering works to OPD partners.

"When exiting from the venture, investor would look for best possible valuation. By detaching the non-core activities like product development, company can enhance its bottom-line. In addition, setting up of dedicated product development center would not be economical considering the substantially lower volume and frequency of work," said Milan Sheth, Partner, Outsourcing Advisory, Ernst & Young.

According to a study by Nasscom-Booz Allen Hamilton, the total offshore engineering spend is expected to grow from about $15 billion in 2005 to about $225 billion by 2020.

The share of Indian companies in the offshored engineering services market, which is about 12 per cent now is expected to reach 30 per cent by 2020.

The Indian product engineering services companies, based on their long experience in working with global players in releasing thousands of products from concept to delivery, are all set to tap the huge opportunities in this space.

"Service providers have grown high up the value chain to provide concept, design services to global clients. Offshoring experience from MNCs has built in the required capability and know-hows for Indian service providers to fully co-operate and support the domestic product businesses," said Chandramouli CS, Engagement Manager - Advisory Services, Zinnov Consulting.

Wednesday, June 04, 2008

Ciba outsourcing saves $15 million a year

Source : Click

Global chemical company Ciba has cut its IT costs by over $15m a year after moving away from producing all IT services internally to using a number of sources.

The savings from the Ciba's first foray into outsourcing - which took 24 months to complete - equate to about 20% of the costs of the outsourced services.

Erwin Becher, CIO at the company, said Ciba has moved to a model that mixes internal and external support from different suppliers.

"We made the decision to implement a sourcing mix and move from internal delivery to selective sourcing," he said.

The company, which employs 13,000 people in 120 countries, identified non-core activities to hand over to external suppliers.

It uses Unisys to provide and suppport its SAP-based IT infrastructure, BT for its telecommunications, a mix of internal resources and outsourcer Satyam for its application development. It works with Dell, Microsoft, SAP and IBM for hardware and software services.

Ciba transfered 120 people to the service providers. The company now has 16 people dedicated to managing the outsourcer relationships. The retained staff spend half their time managing contracts.

Becher said that, although it was disappointing it took Ciba 24 months to move to a mixed sourcing model, the project now provides better IT services as well as the cost savings. "We have made the right decision in defining the sourcing strategy and choosing the suppliers," he said.

It took 18 months to transfer the communications services to BT and eight months to move application support to Unisys.

Some parts of the project suffered because the company did not always use a sourcing adviser, said Brecher.

He warned businesses doing this type of project to make sure they carry out and complete good due dilligence on suppliers and to avoid having too many subcontractors.

"The ideal is for the outsourcer to have no or very few subcontractors. "We want to check out every subcontractor," he said.

Tuesday, June 03, 2008

Five Indians among seven outsourcing billionaires: Forbes

Source : Click

In a clear indication that India dominates the outsourcing business in the world, a Forbes magazine survey says that five of the seven billionaires whose primary source of wealth is outsourcing are Indians.

Three of the five - N.R. Narayana Murthy, Nandan Nilekani and Senapathy Gopalakrishnan - are from Infosys Technologies. The others are Azim Premji of Wipro and Shiv Nadar of HCL Technologies.

Forbes notes that all of these five made their billions through providing global software and IT services. In contrast, the other two outsourcing billionaires, Terry Gou and Barry Lam, both of Taiwan, run companies specialising in contract manufacturing in the electronics sector.

Premji tops the list of outsourcing billionaires with a net worth of $12.7 billion. He is the chairman of Wipro, provider of integrated business, technology and process solutions. The software services outsourcing company acquired a business process outsourcing arm in 2002, the business magazine said.

Nadar's net worth is $3.9 billion and HCL Technologies, co-founded by him, is an outsourcing electronics, computing and IT software company.

"With clients like Cisco, Boeing and IBM, HCL is one of India's leading global IT services companies that emphasises 'transformational outsourcing', or working with clients to re-define the cores of their businesses," Forbes wrote.

Sunday, June 01, 2008

India Still Rules Outsourcing - Forbes

A number of commentators
have indicated recently that the tremendous success of the Indian
outsourcing industry is about to come to an end. It is said that the
growth experienced by companies such as Wipro, Infosys Technologies, Tata Consultancy Services and others is about to stall at best, and come to a crashing halt at worst, as issues such as wage inflation, shrinking profit margins and high attrition rates lead customers to source services from other locations, such as China or Eastern Europe, or perhaps even closer to home.

However, as an experienced lawyer and adviser to both vendors and
customers on outsourcing deals, I consider it unlikely that there is
about to be any significant downturn in the Indian outsourcing
industry. Certainly recent results from leading IT vendor
(nasdaq: INFY -news-people),

which had a profit growth of almost 21% for the first quarter of 2008
over a year earlier, suggest there is little to worry about.

More generally, software and services exports from India are expected to touch the $40-billion mark in fiscal 2008, according to the Strategic Review 2008 by Indian trade association Nasscom (National Association of Software and Service Companies).