Source:inhome.rediff.com
India's leading IT services provider, Tata Consultancy Services [Get Quote], is closer to getting an approximately $1.5 billion (around Rs 6,000 crore) outsourcing contract with the UK-based Prudential Insurance.
If successful, this will the IT major's second biggest win in the insurance space. TCS had earlier bagged a $800 million deal from the UK-based Pearl Group -- considered the single biggest in the Indian financial outsourcing segment. When contacted, a TCS spokesperson declined to comment.
The deal structure is expected to be similar to the Infosys [Get Quote] recent announcement of acquiring three global offshore centres from Philips along with getting an outsourcing deal.
Prudential Insurance is one of the leading life and pensions provider in the UK and services over seven million customers.
The company also owns a subsidiary in the US -- Jackson National Life -- and has over three million policies and contracts in force.
The company has offshore centres in UK, Ireland, Scotland and India
Saturday, August 18, 2007
Outsourcing - A Step Towards Success
Outsourcing commonly refers to the transfer of the provision of services previously completed by in-house persons to an external organization, usually under a contract with agreed standards, costs, and conditions. Areas traditionally outsourced include legal services, transport, catering, and security. An increasing variety of activities, like IT services, training, and public relations etc have also stepped into this field.
Outsourcing involves special relationships between IT and external organizations that provide services that critical business processes often depend upon. Successful CIO's must therefore ensure that these special relationships are properly managed and controlled, and need to understand the different types of outsourcing.
The important thing to remember about outsourcing is that it is a part of the bigger picture of working “On” the business rather than “In” the business. Therefore, the goal is always to be working in the highest capacity and to make that shift as quickly as possible. At first, you may have to do everything, but outsourcing can be seen as an incremental process.
Outsourcing giants that permanently provide inspiration by imposing global trends constitute a benefit to the entire outsourcing market. However, clients' needs are very specific to their own organizations; their search for cost optimization or very specific skills generates new outsourcing demands every day. Although India is the main service provider in USA - the biggest outsourcing market, companies are already looking for alternative suppliers in trying to overcome the challenges of today's market offer.
It is important to understand about the fact that the outsourcing process requires some time and investment to find the right vendor, building a working relationship, and allowing your employees to adjust is very important in order to be successful in outsourcing field.
A successful relationship is the one that lowers your costs, increases your service levels and improves satisfaction among your constituency - enables you to have wining feeling for yourself and your most valuable contacts, your customers! Mostly outsourcing is able to take you a step closer to success.
Outsourcing involves special relationships between IT and external organizations that provide services that critical business processes often depend upon. Successful CIO's must therefore ensure that these special relationships are properly managed and controlled, and need to understand the different types of outsourcing.
The important thing to remember about outsourcing is that it is a part of the bigger picture of working “On” the business rather than “In” the business. Therefore, the goal is always to be working in the highest capacity and to make that shift as quickly as possible. At first, you may have to do everything, but outsourcing can be seen as an incremental process.
Outsourcing giants that permanently provide inspiration by imposing global trends constitute a benefit to the entire outsourcing market. However, clients' needs are very specific to their own organizations; their search for cost optimization or very specific skills generates new outsourcing demands every day. Although India is the main service provider in USA - the biggest outsourcing market, companies are already looking for alternative suppliers in trying to overcome the challenges of today's market offer.
It is important to understand about the fact that the outsourcing process requires some time and investment to find the right vendor, building a working relationship, and allowing your employees to adjust is very important in order to be successful in outsourcing field.
A successful relationship is the one that lowers your costs, increases your service levels and improves satisfaction among your constituency - enables you to have wining feeling for yourself and your most valuable contacts, your customers! Mostly outsourcing is able to take you a step closer to success.
Friday, August 17, 2007
TPI Forecasts Steady Growth in Knowledge Process Offshoring
Source:home.businesswire.com
Interest in knowledge process offshoring (KPO) is growing and steadily accelerating in India, according to a research report by TPI, the leading sourcing advisory firm. The comprehensive report — Knowledge Process Offshoring: A Balanced View of An Emerging Market — was conducted by TPI through primary and secondary research between January and April 2007 based on a review of 73 service providers and 45 captive centers in India performing business process outsourcing (BPO) or KPO activities.
In an effort to understand the growing rate of adoption of KPO and its true potential, TPI executed an extensive research exercise to develop an objective and balanced analysis of the KPO market in India. The report, which focuses on the offshoring of skills-intensive work processes through either outsourcing or captive operations, reveals that the growth rate is likely to yield annual levels of spend of US$10 billion - $12 billion in India by 2010. Factors that most significantly influence the rate of growth include availability of trained workers, complexity of services, intellectual property concerns and security issues. The report also provides a clear definition of the parameters of KPO — addressing the marketplace definitions about what exactly constitutes KPO; critical success factors in offshoring knowledge work; current market dynamics for KPO; KPO service providers; and the key factors affecting the growth of the KPO industry, among other key considerations.
“TPI believes that the demand growth path for KPO services will be similar to that of the outsourcing domains for information technology (IT) and other business processes, fueled by Global 2000 firms that form the bulk of offshoring buyers of outsourcing,” said Indy Banerjee, project director, TPI. “Global corporations are increasingly looking to incorporate offshoring as part of their forward-looking strategies rather than employing it as a reaction to cost pressures, and as such we have seen the rise in interest of KPO as a viable and obtainable sourcing solution.”
Report Conclusions
KPO is distinct from information technology outsourcing (ITO) and business process outsourcing (BPO) as it involves more high-level, value-added work, often relying upon subjective analysis and interpretation for successful performance. Typically, outsourced work processes are highly standardized, dependent upon automation and delivered in quantity. KPO functions, such as investment research and prototype development, are people-intensive, and the end product is arrived at through rigorous methodologies.
Due to the fact that KPO requires a sophisticated level of judgment, subjective analysis and interpretation, the end result can vary for each client, as opposed to BPO, where a similar output is generally garnered each time. Also, unlike BPO, where an entire process is often offshored, KPO entails offshoring part of a larger process such as financial research and analysis, engineering and design services and pharmaceutical research outsourcing.
As organizations determine which of their critical and strategic functions can be performed in an offshore environment, a number of factors will influence their experience with KPO. These factors include the ability to divide knowledge work into smaller, more manageable segments, to locate available talent with domain knowledge, specialized educational background and differentiated skills (that aren’t already being used by their own domestic markets), and to account for security concerns such as legal issues and protecting intellectual property rights (IPR). Traditional barriers to entry employed by professions such as medicine, law and accounting limit the extent of services that can be offshored, as there could be licensing implications to processes being offshored.
The goal of KPO goes beyond simply cost savings – although the projected savings could total a significant 40 percent to 70 percent – to more global implications enabling clients to obtain access to world-class talent around the globe. The research concludes that the triumvirate of cost, quality and capacity are the decision drivers for a KPO strategy.
Currently, India-based workers perform the widest range of KPO activity, especially in the areas of finance and accounting, and this work comprises 80 percent of KPO performed worldwide. The financial services industry is responsible for more than 60 percent of the KPO performed in India, and KPO services, although in the beginning stages, have expanded to other industries such as pharmaceuticals, marketing and research, and legal services. The report reveals that firms in the financial, banking and insurance industries were early adopters of KPO (going back about five years), for high-end analytical work.
Based on prevailing security concerns, many companies prefer to keep knowledge processes that include core intellectual property and sensitive data in-house rather than outsourcing those functions to a third-party provider. Therefore, most knowledge processing leads to captive, or company-owned, offshore operations or the in-house offshore development center of a company, as opposed to utilizing third-party vendors, because they potentially provide enhanced competitive advantage protection and help build institutional knowledge for future expansion. In addition to captives, pure-play KPO firms and established IT/BPO players that are expanding their offerings to include KPO make up the KPO industry today.
Interest in knowledge process offshoring (KPO) is growing and steadily accelerating in India, according to a research report by TPI, the leading sourcing advisory firm. The comprehensive report — Knowledge Process Offshoring: A Balanced View of An Emerging Market — was conducted by TPI through primary and secondary research between January and April 2007 based on a review of 73 service providers and 45 captive centers in India performing business process outsourcing (BPO) or KPO activities.
In an effort to understand the growing rate of adoption of KPO and its true potential, TPI executed an extensive research exercise to develop an objective and balanced analysis of the KPO market in India. The report, which focuses on the offshoring of skills-intensive work processes through either outsourcing or captive operations, reveals that the growth rate is likely to yield annual levels of spend of US$10 billion - $12 billion in India by 2010. Factors that most significantly influence the rate of growth include availability of trained workers, complexity of services, intellectual property concerns and security issues. The report also provides a clear definition of the parameters of KPO — addressing the marketplace definitions about what exactly constitutes KPO; critical success factors in offshoring knowledge work; current market dynamics for KPO; KPO service providers; and the key factors affecting the growth of the KPO industry, among other key considerations.
“TPI believes that the demand growth path for KPO services will be similar to that of the outsourcing domains for information technology (IT) and other business processes, fueled by Global 2000 firms that form the bulk of offshoring buyers of outsourcing,” said Indy Banerjee, project director, TPI. “Global corporations are increasingly looking to incorporate offshoring as part of their forward-looking strategies rather than employing it as a reaction to cost pressures, and as such we have seen the rise in interest of KPO as a viable and obtainable sourcing solution.”
Report Conclusions
KPO is distinct from information technology outsourcing (ITO) and business process outsourcing (BPO) as it involves more high-level, value-added work, often relying upon subjective analysis and interpretation for successful performance. Typically, outsourced work processes are highly standardized, dependent upon automation and delivered in quantity. KPO functions, such as investment research and prototype development, are people-intensive, and the end product is arrived at through rigorous methodologies.
Due to the fact that KPO requires a sophisticated level of judgment, subjective analysis and interpretation, the end result can vary for each client, as opposed to BPO, where a similar output is generally garnered each time. Also, unlike BPO, where an entire process is often offshored, KPO entails offshoring part of a larger process such as financial research and analysis, engineering and design services and pharmaceutical research outsourcing.
As organizations determine which of their critical and strategic functions can be performed in an offshore environment, a number of factors will influence their experience with KPO. These factors include the ability to divide knowledge work into smaller, more manageable segments, to locate available talent with domain knowledge, specialized educational background and differentiated skills (that aren’t already being used by their own domestic markets), and to account for security concerns such as legal issues and protecting intellectual property rights (IPR). Traditional barriers to entry employed by professions such as medicine, law and accounting limit the extent of services that can be offshored, as there could be licensing implications to processes being offshored.
The goal of KPO goes beyond simply cost savings – although the projected savings could total a significant 40 percent to 70 percent – to more global implications enabling clients to obtain access to world-class talent around the globe. The research concludes that the triumvirate of cost, quality and capacity are the decision drivers for a KPO strategy.
Currently, India-based workers perform the widest range of KPO activity, especially in the areas of finance and accounting, and this work comprises 80 percent of KPO performed worldwide. The financial services industry is responsible for more than 60 percent of the KPO performed in India, and KPO services, although in the beginning stages, have expanded to other industries such as pharmaceuticals, marketing and research, and legal services. The report reveals that firms in the financial, banking and insurance industries were early adopters of KPO (going back about five years), for high-end analytical work.
Based on prevailing security concerns, many companies prefer to keep knowledge processes that include core intellectual property and sensitive data in-house rather than outsourcing those functions to a third-party provider. Therefore, most knowledge processing leads to captive, or company-owned, offshore operations or the in-house offshore development center of a company, as opposed to utilizing third-party vendors, because they potentially provide enhanced competitive advantage protection and help build institutional knowledge for future expansion. In addition to captives, pure-play KPO firms and established IT/BPO players that are expanding their offerings to include KPO make up the KPO industry today.
Cost keeps firms from outsourcing IT
Source:www.contractoruk.com
A potential plan B for IT contractors has arrived in the form of new research showing there is no dominant supplier of IT services to small and medium-sized firms in the UK.
When asked by Datamonitor to name their preferred supplier for network services, 500 small or mid-sized firms with a technology focus listed over 100 different vendors.
Although BT led the pack, satisfaction for the provider’s dominant business – mobile and telecoms services – was low enough to suggest some providers have become ‘complacent.’
The analyst firm added this has come about because the market for small firms’ mobile and telecoms solutions is populated by a narrow band of players, feeling on top of their game.
These findings were part of the analyst house’s wider study into IT outsourcing, which despite the hype, emerged as a business process that only one in four firms had taken up.
If they do opt for external management of their ICT needs, firms are most likely to select e-mail or security – a trend the analyst attributed to owners’ fear of internet-borne threats.
And when shopping around for an IT vendor, firms are most likely to choose a big name brand or ISP, at the expense of local or specialist providers.
Datamonitor said: “This is because they may have less time to research the different options and feel they can trust these national providers to be reliable.”
But 60% of small or mid-sized firms running ICT might not ever take these decisions: they said they can never envisage a day when they will fully outsource their IT function.
When asked why, the two overriding factors were cost, the biggest deterrent, and loss of control over a core business function.
The analyst said that when combined, these two factors explain why the “the majority of SMBs in the UK are reluctant to become reliant on someone else managing their IT issues.”
The opportunity for IT suppliers or solution providers appears, therefore, to be “limited,” Datamonitor said.
But it did add that a “highly targeted marketing” campaign that includes “tailored solutions” for prospective clients may induce a higher uptake of outsourcing IT in the future.
In the study, 17% of small and medium-sized businesses emerged as not knowing that outsourcing the management of their servers is an option.
Study author Aphrodite Brinsmead said it is understandable that the cost of outsourcing their servers deters smaller businesses. Loss of control was the other off-putting factor.
Not only are their budgets finite, Brinsmead said, but they are less aware of how outsourcing can make them more profitable, such as by freeing them up to focus on their core business.
ICT vendors that have previously overlooked the SMB market may be to blame for firms not knowing the outsourcing options available today, the analyst said.
A potential plan B for IT contractors has arrived in the form of new research showing there is no dominant supplier of IT services to small and medium-sized firms in the UK.
When asked by Datamonitor to name their preferred supplier for network services, 500 small or mid-sized firms with a technology focus listed over 100 different vendors.
Although BT led the pack, satisfaction for the provider’s dominant business – mobile and telecoms services – was low enough to suggest some providers have become ‘complacent.’
The analyst firm added this has come about because the market for small firms’ mobile and telecoms solutions is populated by a narrow band of players, feeling on top of their game.
These findings were part of the analyst house’s wider study into IT outsourcing, which despite the hype, emerged as a business process that only one in four firms had taken up.
If they do opt for external management of their ICT needs, firms are most likely to select e-mail or security – a trend the analyst attributed to owners’ fear of internet-borne threats.
And when shopping around for an IT vendor, firms are most likely to choose a big name brand or ISP, at the expense of local or specialist providers.
Datamonitor said: “This is because they may have less time to research the different options and feel they can trust these national providers to be reliable.”
But 60% of small or mid-sized firms running ICT might not ever take these decisions: they said they can never envisage a day when they will fully outsource their IT function.
When asked why, the two overriding factors were cost, the biggest deterrent, and loss of control over a core business function.
The analyst said that when combined, these two factors explain why the “the majority of SMBs in the UK are reluctant to become reliant on someone else managing their IT issues.”
The opportunity for IT suppliers or solution providers appears, therefore, to be “limited,” Datamonitor said.
But it did add that a “highly targeted marketing” campaign that includes “tailored solutions” for prospective clients may induce a higher uptake of outsourcing IT in the future.
In the study, 17% of small and medium-sized businesses emerged as not knowing that outsourcing the management of their servers is an option.
Study author Aphrodite Brinsmead said it is understandable that the cost of outsourcing their servers deters smaller businesses. Loss of control was the other off-putting factor.
Not only are their budgets finite, Brinsmead said, but they are less aware of how outsourcing can make them more profitable, such as by freeing them up to focus on their core business.
ICT vendors that have previously overlooked the SMB market may be to blame for firms not knowing the outsourcing options available today, the analyst said.
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