Tuesday, September 14, 2010

Offshoring: Reduce Risk When Gov't Threatens Restrictions

By Michael Overly, Matt Karlyn and Julie Kim, CIO
The focus, at all levels of government, on economic recovery and job growth has spurred proposed state and federal legislation that takes aim at offshore outsourcing.

For example, four proposals pending in Congress would define new rules for how companies use outsourcers. Three focus on offshore call centers, while a fourth would discourage offshoring by ending various tax benefits received by companies doing business overseas. Meanwhile, state lawmakers have proposed prohibiting companies that send business out of state or offshore from receiving government contracts and other financial benefits.

While none of the bills seem likely to become law soon, CIOs considering outsourcing business operations such as call centers should anticipate the affect that this type of legislation could have on the costs of outsourcing and include provisions in their outsourcing agreements to address the potential impact.


Source:http://www.networkworld.com/news/2010/091310-offshoring-reduce-risk-when-govt.html?page=3
This story appeared on Network World at
http://www.networkworld.com/news/2010/091310-offshoring-reduce-risk-when-govt.html

Capgemini Survey Reveals Latin America is the Third Most Popular Outsourcing Destination

Executives rank Latin America as attractive outsourcing location based on low-cost, skilled labor; technology and infrastructure capabilities; and economic stability

NEW YORK--(BUSINESS WIRE)--Capgemini, one of the world’s foremost providers of consulting, technology and outsourcing services, today announced the results of the second annual Capgemini Executive Outsourcing Survey, which found that Latin America1 is the third most popular outsourcing destination, with 25 percent of responding companies currently outsourcing to this region. While still perceived by many respondents to be an “emerging” outsourcing destination, this survey revealed that Latin America is not far behind legacy outsourcing destination China, which is ranked second at 27 percent, while India leads with 60 percent of companies outsourcing to this country.

“As the economy rebounds, companies are looking to use outsourcing more strategically as a tool to increase efficiency, yield significant cost savings and drive growth; this includes considering locations beyond India”
The survey, commissioned by Capgemini and conducted online by Harris Interactive, among 300 senior executives at Fortune 1000 companies also identified the top reasons for executives to select Latin America as part of their outsourcing strategy. More than two-thirds (69 percent) of surveyed executives cited cost of labor as the top reason why their company might outsource to Latin America, while other attributes reported included technology and infrastructure capabilities (49 percent), skilled labor (48 percent), and economic stability (44 percent). These attributes are aligned with the key reasons why companies choose to outsource in general suggesting that outsourcing to Latin America will continue to expand.

Other reasons cited as important for selecting Latin America for outsourcing include its proximity to the U.S., time zone alignment and accent neutrality. These attributes are all unique to this region when compared to other outsourcing locations such as China and India.

The Executive Outsourcing Survey findings also revealed that almost half (45 percent) of executives who do not currently outsource to Latin America say their company would be interested in considering the region as a resource for outsourcing in the future.

In addition to uncovering Latin America as a leading outsourcing destination, the survey highlighted the region’s increasing value to the global economy. An overwhelming majority of executives (89 percent) believe that Latin America is an emerging market that will become increasingly important to U.S. businesses, and that there are advantages to doing business in Latin America (83 percent). Further, more than half (56 percent) of executives believe doing business in Latin America is becoming easier than doing business in other parts of the world.

“As the economy rebounds, companies are looking to use outsourcing more strategically as a tool to increase efficiency, yield significant cost savings and drive growth; this includes considering locations beyond India,” said David Poole, Vice President and Head of Americas Business Process Outsourcing, Capgemini. “The expansion of Capgemini’s outsourcing services in Latin America, and our work with Unilever, Coca-Cola Enterprises and other clients in the region underscores our understanding of our clients’ needs and ability to provide the right global delivery model for multinational businesses.”

Other survey highlights include:

The top five factors listed by executives in choosing an outsourcing destination are labor costs (79 percent), technology & infrastructure capabilities (62 percent), skilled labor (61 percent), language proficiency (49 percent) and economic stability (44 percent);
Less important factors listed by executives in choosing an outsourcing location are tax benefits (26 percent) and proximity to the U.S. (3 percent);
Forty-one percent of executives outsourcing to Latin America cited language proficiency as a key reason;
Forty percent of executives cited the average education of the Latin American workforce as a key factor in their decision to outsource in Latin America.
Capgemini’s Business Process Outsourcing organization applies unique business insight, business intelligence tools and deep domain knowledge to help clients transform business operations. As part of its global delivery model, Capgemini has eight outsourcing centers throughout Latin America, including Argentina, Brazil, Chile and Guatemala.
Source: http://www.businesswire.com/news/home/20100913007526/en

Outsourcing ban will impact nation: Rosaiah (Andhra CM)

Andhra Pradesh’s IT hub is getting the jitters after America’s Ohio state decided to ban outsourcing to India. Hyderabad, now the biggest IT hub in the country for government IT and back-office projects, has more than 2,000 software companies dependent on outsourcing from the US and Europe.
While the IT industry is guarded in its response, Chief Minister K Rosaiah has expressed concern saying that it would impact IT industry not only in the state but in the whole country.
Rosaiah had a lengthy discussion about the possible impact of the ban on the state with Advisor, Information Technology, Andhra Pradesh government, C S Rao.
“A majority of the world’s top 500 companies outsource work to India, and a major part of it comes to Hyderabad. The Ohio ban is just the beginning. The US government is likely to cut incentives to companies outsourcing IT projects to India and more states and companies may decide against outsourcing. It would become difficult for the IT industry to survive here if outsourcing is banned,” Rosaiah said.
Source: http://www.indianexpress.com/news/Outsourcing-ban-will-impact-nation--Rosaiah/680828

Monday, September 13, 2010

Infosys BPO to hire 550, to double investment in Poland

By PTI
Infosys BPO is set to increase the total headcount of its Poland operations to 1,500 in next one year.

"The company currently employees 950 people, atleast in next twelve months, we should get to a level of around 1,500," Infosys BPO CEO and Managing Director and Dandapani Swaminathan told PTI.

Besides, the company would double the investment in the region (Poland) over the next two years. Swaminathan expects to 'double the investment in the region (Poland) over the next two years, taking base level around $10 million.'

On the issue of attrition, Swaminathan added that at the place like Poland these are manageable.
Asking on the ban by the Ohio government on outsourcing of government IT projects outside the United States he said, 'its not only about shifting jobs its also about driving efficiency. This will be even out as we move forward.'

In the medium to the long term, industry will find solutions to ensure that it will be pain free for everyone.

These are all policies, which keeps on coming in the Asia Pacific and European regions. These issues can have a short term impact in one region and may have a short term spurt in another region, he added.
Source: http://www.siliconindia.com/shownews/Infosys_BPO_to_hire_550_to_double_investment_in_Poland-nid-71533-cid-3.html

Wednesday, July 14, 2010

Offshoring creates good jobs in poor countries: Study

Offshoring and outsourcing in services from call centres to accountancy and medicine have created good jobs in terms of pay and working hours in
developing countries, according to a study published on Monday.
But the International Labour Organization (ILO) study found that improved work practices in the outsourcing industry could reduce excessive rates of staff turnover.
The study gives the lie to claims that outsourcing of such work has created "cyber-coolies" or "electronic sweatshops", said Jon Messenger, an ILO researcher and main editor of the study.
"The jobs being created in offshore business services in developing countries are reasonably good quality jobs by local standards in terms of wages and working conditions," he said.
The book looks at outsourcing in the two biggest markets, India and the Philippines, and two growing Latin American centres, Brazil and Argentina.
A study by the United Nations Conference on Trade and Development (UNCTAD) last year found the global market for information technology-enabled services was about $54 billion in 2008. The industry includes companies such as Infosys Technologies(INFY.BO) and Wipro(WIPR.BO).
100 PC TURNOVER
Wages are below those for similar jobs in rich countries -- one of the main motives for companies to outsource operations -- but average pay in the sector in India is nearly double that in other areas of the formal economy, the ILO study found.
In the Philippines they were typically 53 percent higher.
The study found that average weekly hours were 46-47 hours in India and 45 in the Philippines, whereas one fifth of workers in developing countries work more than 50 hours a week.
But negative factors such as frequent night work to handle customers' different time zones, and demanding targets enforced by electronic monitoring resulting in a low level of worker autonomy, led to extremely high levels of staff turnover.
Sometimes the turnover rate in the typically young and well-educated workforce could exceed 100 percent a year, and rates of 30-40 percent are not unusual.
"A few key changes in policies and practices could actually make these good jobs even better while simultaneously helping to reduce staff turnover which would benefit businesses," Messenger told a briefing.
These could include steps to improve health and safety for night workers, such as regular check-ups, and more flexibility for workers to organise their time and to meet targets.

Naj Ghosheh, an ILO researcher and the other editor of the book, said governments would want the industries to develop and innovate to move up the value chain rather than simply replicating imported processes. They would also want to retain skilled workers at home rather than encouraging them to emigrate.
The industry is highly influenced by language skills, with India and the Philippines serving English-speaking countries, Argentina serving Spain and Mexico building up operations to serve Spanish-speakers in the United States.
Africa is relatively underdeveloped although Nigeria's computer-literate population gives it potential.
Source: Economic Times
http://economictimes.indiatimes.com/articleshow/6160968.cms?overrideredirect=true

Desi BPO on UK co’s radar

UK-based business process outsourcing (BPO) company Vertex is scouting for takeover opportunities in India and has reportedly zeroed in on Spanco BPO — a 6,500-strong outfit.

With revenues of around Rs 75 crore, Spanco’s BPO division has three broad arms — one catering to the domestic market, the second, Spanco Respondez, catering to the UK market and the third, GKS, servicing Qatar-based banking clients. The deal size is said to be in the region of Rs 175 crore.

Spanco BPO’s biggest clients are Reliance Telecom, Videocon Mobile, Citi Financials and Kotak Mahindra.

Though both companies categorically denied that such a deal is on, sources close to the development say that a due diligence has already been done. If the deal goes through, Vertex would get a toehold in the Indian BPO market.
http://timesofindia.indiatimes.com/Tech/News/Outsourcing/Desi-BPO-on-UK-cos-radar-/articleshow/6158555.cms

Accenture plans to expand in Cebu

CEBU, Philippines - Accenture, a total solutions outsourcing company, expressed interest to expand its operations in Cebu.
Lito Tayag, country managing director of Accenture Delivery Centers in the Philippines said in an interview that the company intends to grow in Cebu, and is now evaluating options on its expansion location.
Accenture-Cebu opened its Global Delivery Center Network for Technology in 2007, and also it opened its BPO arm or call center operations here about two years ago.
Tayag said the company is looking at expanding IT and BPO components here, expressing confidence of the kind of manpower Cebu has.
“Cebu is an attractive place for investment. It has big potential for growth,” Tayag said.
He said the reason why, the company has established a partnership with French NGO to help provide good and highly-skilled manpower pool in Cebu, through scholarship grant.
Accenture Foundations recently awarded Passerelles Numeriques (PN) US$1.26 million or over P58 million funds for the latter‘s Cebu System and Network Administration training initiatives.
The grant, which will be distributed over a four-year period, will be used to help disadvantaged young people from all over the Visayas acquire IT skills.
The Philippines is the second largest hub of the Accenture global operation, next to India, with over 14,000 employees based in its Metro Manila facility. Making India and the Philippines the Accenture's growth engines in the recent years.
Although, the company is also providing service in data and voice like the call center, the company's core business is into providing services of wide range technology application, offering a almost a total outsourcing products to its clients.
Tayag however, refused to divulge the possible number of workforce, the company will be hiring in Cebu expansion in the next few years.
What is certain, he said is the expansion plan for Cebu facility is part of Accenture’s growth strategy.
Accenture is a global management consulting, technology services and outsourcing company, with more than 190 thousand people serving clients in more than 120 countries.
Combining unparalleled experience, comprehensive capabilities, across all industries and business functions and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments.
Philstar.com
http://www.philstar.com/Article.aspx?articleId=592590&publicationSubCategoryId=108

Offshore Outsourcing Picking up After Recession: Everest

The outsourcing market is witnessing an increase in activity as the global economy recovers from the recession of 2009, according to a report by Everest Research Institute.
Offshore outsourcing business that was in the pipeline, but was delayed during the recession for financial reasons or for lack of management focus, is now gathering momentum again, Anand Ramesh [CQ}, research director at Everest, said on Saturday.
More concerned about cost reduction after the recession, customers in the U.S. and other markets are planning to offshore more of the work that was earlier being outsourced to suppliers in their countries, Ramesh said.
Companies that have not sent work offshore so far are also now considering outsourcing to low-cost locations like India and the Philippines, he added. Over a period, the credibility and scale of offshore suppliers in countries like India has also increased, Ramesh said.
Most current buyers plan to expand offshoring and a significant proportion plan to do so aggressively, the Everest report said. Approximately 75 percent of small and medium adopters and 90 percent of large adopters plan to expand their offshore outsourcing by more than 500 FTEs (full time equivalents) over the next two years, it added.
Small adopters are defined by Everest as organizations with already less than 500 FTEs offshore, while medium adopters are organizations with 500 to 2,500 FTEs offshore. Large adopters are organizations that already have more than 2,500 FTEs offshore.
The report surveyed companies that currently send IT services and business process outsourcing (BPO) work to either their own subsidiaries or to third-party suppliers in off-shore locations like India, Mexico, China and the Philippines.
A number of analysts have forecast a pick up in offshore business. A lot of the offshore business that was delayed by the recession is back, said Sudin Apte [CQ], principal analyst at Forrester Research. But there are no large new deals yet, he said.
The improvement in business is also likely to place demands for staff in countries like India, thus pushing up costs. Companies in India, for example, have started hiring again, and staff attrition is likely to go up to over 15 percent in the current quarter, Apte said.

India continues to be the dominant offshore location with more than 70 percent of buyers planning to expand in the country, according to Everest. The Philippines, riding mainly on its strong presence in the BPO business, and China are two other key countries where companies plan to expand.

But the offshore market in China is primarily for work done for neighboring countries like South Korea, and Japan, according to Ramesh. The number of U.S. companies outsourcing to China are few, and the size of their operations are small, he added.
Malaysia, Brazil and Mexico are other locations that figure in companies' plans to expand offshore outsourcing.
Companies are however looking to spread their risks, and may not send all their work to India.
Buyers are increasingly looking at other complementary locations in Asia, Latin and Central America, and Eastern Europe for setting up delivery centers, according to Everest. The drivers of this approach include risk diversification and business continuity, need for specific skills and support in specific languages, regulatory requirements, and time zone coverage requirements, Everest said.
About 60 percent of India's outsourcing business comes from the U.S., followed by the U.K. which accounts for about 15 percent.
Even as companies are planning to expand offshore outsourcing, they are also looking at expanding in near-shore locations, such as Latin America for U.S. companies. The drivers for near-shore outsourcing, such as the need to keep sensitive work closer to home, are different than for off-shore outsourcing which is mainly driven by cost and the ability to scale, Ramesh said. Although it is growing fast, near-shore outsourcing is a smaller market than offshore outsourcing, and will not necessarily compete with the offshore locations for business, he added.
Even as companies expand near-shore and to other locations besides India, they may still turn to Indian service providers to provide services from these new locations, Ramesh said. They may value an existing relationship with an service provider rather than assign the business to a local provider, he added. A number of Indian outsourcers have set up operations in Europe, U.S. and Latin America to target the near-shore and onshore requirements of their customers.
http://www.pcworld.com/businesscenter/article/200888/offshore_outsourcing_picking_up_after_recession_everest.html

Outsourcing Philippines: The Right Causes to Be Engaged

The current global financial predicament motivated quite a few firms to stand back and look at their processes. Though this wouldn't immediately influence them to outsource to the Philippines and other nations around the world, it did show them the necessity to spend less money by dropping the business units that were very important to them but weren't crucial to the key thrust of their enterprise.

This particular phenomenon isn't something different. Outsourcing has long been successful since the late 80s and early 90s, with the term being created in 1989 to explain the tactic itself. However, the process was currently being undertaken by a number of organizations without any experience in a definite facet of business. There were a lot of arguments to outsource, but the most crucial amid them was the necessity to save funds. By way of example, call center outsourcing took place due to the high costs of sustaining a proper customer service division within a specific corporation. During the period of the 2000s, various organizations decided to outsource to the Philippines for their customer care needs. It conserved cash and additional means, enabling them to focus on the main parts of their business.

Precisely how do these businesses conserve cash? The quick answer to this question is that they do not need to shell out money on a division, which really needs supplies, manpower, and establishments in which to run. Rather than investing an enormous amount , quite a few companies try an outsourcing company. The Philippines is a prime niche for this, for numerous factors. The income for the labor force here is substantially reduced than the expenditures for related jobs in the United States รข€”only 12 to 16 percent that of American jobs. With a monetary viewpoint, the selection to outsource to the Philippines would make great business sense.

Outsourcing firms save funds in an additional means: lower operational costs. Due to the lower rental prices in the land, organizations in the Philippines conserve cash on features and servicing. Electric and telephone bills are also comparatively lower, permitting the organization to zero in its finances on developing their core expertise.

Nonetheless, money is not the only rationale that every company ought to outsource to the Philippines. You will find many proficient personnel in the Philippines, and many of them are college or university-educated. Close to 500,000 people graduate on a yearly basis, with 50 % of them acquiring business, engineering, or information technology qualifications. Companies needing particular abilities can utilize this talent pool.

That extremely qualified employed pool is bolstered by the truth that a large majority of them speak excellent English. Given that the land was a colony of the United States for much of the first half of the 20th century, the English language became prominent in business and education and learning in the nation. In addition to the lower labor fee, this is a primary rationale why BPO outsourcing, SEO outsourcing, and call center outsourcing are growing sectors. The companies that outsource to the Philippines understand this too, and they adjust their business designs as a result. This English-speaking capacity is specially critical for the call center outsourcing area, which calls for superior conversation competencies.
Source : http://www.articleonlinedirectory.com/
Link : http://www.articleonlinedirectory.com/Art/401024/24/outsourcing-philippines-the-right-causes-to-be-engaged.html
Within the Philippines, outsourcing is an evergrowing business industry. Corporations understand the various benefits that the country provides in relation to smaller salaries and far more skilled employees. That's an offer that several business leaders find remarkable, which is why some choose to outsource to the Philippines. The selection of outsourcing companies online makes this approach less difficult, and any businessperson can obtain them on the internet to get the best offer.

Drishti powers voice BPO initiative for Rural Shores

Drishti-Soft Solutions becomes technology partners to Rural Shores, Bangalore. The latter is a Rural BPO firm that aims to promote rural-shoring of BPO operations by setting up business process outsourcing units and business centers across smaller towns and villages in India. Drishti’s multi-award winning customer interaction management suite - Ameyo becomes the preferred technology by Rural Shores for building voice capability into their highly successful BPO operations.
As the whopping 15 billion USD Indian BPO industry steps ahead, it is challenged by tough competition from rivals such as Philippines. With the BPO firms losing some two-thirds of their incremental voice based business to the south-east Asian countries, there is a dire need to create another delivery layer and bring down the costs of operations for a better value proposition.
The current BPO scene has 60% of the 'skill factory' coming from Tier 1 and 2 regions. Taking a closer look at the industry stats, the picture says that the Indian BPO industry is slated to rise to 220-280 Billion USD by 2012 generating around 2 million direct jobs. This creates enough room for the rural regions to tap their share of contribution to the BPO 'skill factory' and creates substantial opportunity for firms like Rural Shores.
Source: Financial Express
http://www.financialexpress.com/news/drishti-powers-voice-bpo-initiative-for-rural-shores/642908/

Saturday, July 10, 2010

PwC to set up new KPO in Kolkata

Pricewaterhouse Cooper in India, Australia, Canada, UK and USA today announced formation of a new entity to conduct select back-office operation of their activities in Kolkata.
PricewaterhouseCoopers Service Delivery Centre (Kolkata) is a joint venture formed by the PwC set-ups of these countries which has begun operation since July 1, PwC India director Ambarish Dasgupta said here today.
The delivery centre currently employs 600 professionals and the proposals are to increase the employee strength to 2000 by the end of 2012, if everything runs smooth, the JV CEO Sumanth Prakash said.
Mukherjee said the centre will execute analytical work in finance, common in all these countries.
Source: express india
Full article: http://www.expressindia.com/latest-news/PwC-to-set-up-new-KPO-in-Kolkata/644369/

Friday, July 9, 2010

Netscribes Raises Second Round of Funding; Plans Inorganic Growth

Netscribes has also acquired Inrea Research, a niche patent research and analytics market player.

Netscribes, Inc., a company offering research & analytics solutions, has raised a second round of growth capital from Basil Growth Corporation, a Mauritius-based venture capital firm. The company already has New York‐based Insight Venture Partners as its investor from its first round of funding.
The funds would be used by Netscribes to rapidly expand its operations across US, Europe and Asia‐Pac regions. Netscribes is in the process of expanding its service offerings across research and market intelligence to strengthen its position as a leading knowledge services provider. The company has most of its operations in India with 4 delivery centres across the country (Mumbai, Kolkata, Pune and Delhi) and offices across the globe. The funds will be raised in expanding the work force and also pursue acquisitions.
The KPO firm had also raised money from Connect Capital in its initial days – an early stage venture capital firm floated by Ramanan Ranghavendran, the present Managing Partner at Kubera Partners.
The global knowledge solutions firm, also announced the 100% acquisition of Inrea Research, a dynamic player in the niche patent research and analytics market, through a cashcum‐stock deal. Founded by a team of IIT alumni, Nalin Agrawal, Navendu Agarwal and Saurabh Shekhar, Inrea Research has a team of techno‐legal professionals and patent analytics systems.

Source: VC Circle
Full Article: http://www.vccircle.com/500/news/netscribes-raises-second-round-funding-plans-inorganic-growth

GE looks to cut the percentage of IT work it sends to India

GE is looking to significantly cut the percentage of IT work it sends to India. Said a GE India spokeswoman: “While India continues to be the main delivery location, there is an increased focus on multi-location/country delivery centres, both from a business continuity and an in-country support perspective.”
According to experts tracking the sector and officials at vendors serving GE, India’s share in the company’s offshoring pie could fall from around 70% currently to about 50% over the next few years.

GE’s decision to diversify geographically seems to be dictated as much by business considerations as by realpolitik. “For GE, the priority is about markets and countries where it can sell more. And above all, it’s about creating jobs in the US,” says a US-based outsourcing expert who had advised GE on offshoring to newer locations around a year ago.
The world’s largest manufacturer of aircraft engines, lighting and other appliances is looking to shed its image of an American firm shipping the maximum number of jobs to India. As a result, it is taking a hard look at its India-centric offshoring model and developing alternate offshoring hubs. GE has already started working with new IT firms in Brazil, Mexico, Morocco and China. It is piloting projects with Brazil-based CPM Braxis, and is the top customer for Chinese IT vendor HiSoft.
Source: The Economic Times
Full article: http://www.gsmlaborcouncil.org/node/5573

ITeS hiring on an uptrend in Chennai

The improving business sentiment among recruiters coupled with growing market optimism has moved up Naukri JobSpeak index for Chennai to 866 in June 2010 from 853 in May. On a year-on-year comparison, the job index for Chennai moved up by 19 per cent in June 2010 compared to June 2009.
One of the key industry sectors in Chennai, ITeS has been bullish on hiring as the sector registered a growth rate of 25 per cent in June 2010 over the May 2010.
Key industry sectors like ITeS, telecom and banking witnessed an uptrend in hiring with the index moving up by 25 per cent, 13 per cent and 11 per cent in June 2010 over May. The IT-hardware sector witnessed a nine per cent increase in hiring activity, while the IT-software and auto sectors witnessed a stable hiring scenario. Thus, key sectors in Chennai -- IT, ITeS, banking and financial services -- all seem to be on a positive path.
A month-on-month growth analysis of the functional areas shows that professionals in ITeS and BPO sectors were much in demand as the index moved up by 22 per cent.
Source: Business Standard
Full Article: http://www.business-standard.com/india/news/ites-hiringan-uptrend-in-chennai/400707/

Forget India, outsource to Arkansas

As the national unemployment rate hovers near 10%, some companies are starting to eye job-hungry areas of the country as prime candidates for the kind of outsourced work that once would have gone overseas.
Dubbed "ruralsourcing," "rural outsourcing" and "onshoring," the practice relies on two simple premises: Smaller towns need jobs, and they offer a cheaper cost of living than urban centers. So businesses that outsource work to these areas can expect to pay less -- rates are often as much as 25% to 50% lower -- than if they were hiring urbanites with comparable skills.
In response, a new crop of outsourcing startups are popping up with development centers in places like Joplin, Mo., and Eveleth, Minn., where hundreds of employees crank out software code or offer IT support for large corporate clients.
"It's extremely timely given our economic climate," says Mary Lacity, an information systems professor at the University of Missouri-St. Louis who has written 12 books on outsourcing. "And I think there's a demand for it."
Compared with the estimated $60-billion-a-year offshoring industry, rural outsourcing remains just a blip on the radar. Yet the strategy is becoming a more popular option for businesses that are trying to stretch their budgets.
Source: CNN Money
Full article: http://money.cnn.com/2010/07/08/smallbusiness/rural_onshoring/

Wednesday, July 7, 2010

European Market Gets Worse for Indian Outsourcers

Europe outsourcing market reportedly worsened this year for the Indian players because of a weak euro and tighter IT budgets in Europe, according to Forrester Research.
Large Indian outsourcers currently earn less than 30% percent of their revenue in Europe. The figure is far lower if the U.K., which has been faster in adopting offshore outsourcing, is excluded. The U.K. accounted for 16.2% of the revenue of Tata Consultancy Services (TCS), India's largest outsourcer, in the Indian fiscal year to March 31, 2010. The share of its revenue from the rest of Europe was far lower at 10.5%
In some countries in Europe, the labor laws set limits on what can be outsourced by companies, Siddharth Pai, a partner at outsourcing consultancy Technology Partners International (TPI), said on Tuesday.
Cultural and language differences, and discomfort with sending work far away, have also made many European companies avoid offshoring to India, Pai said. These companies would prefer to outsource to European services firms like Capgemini and T-Systems, or to large multinational services companies like IBM and Accenture that have large operations in Europe, he said.
The ongoing debt crisis in Europe, and its impact on the euro and the economy, may now make the continent less interesting for Indian outsourcers, said Sudin Apte, principal analyst at Forrester.
The European market for corporate IT products and services fell by 6.3 percent in 2009, when measured in euros, according to Forrester. The recovery in the European IT market is likely to be slow this year with the IT market growing at 4 percent over last year, which means that European firms will continue to face budget cuts in 2010 and possibly even beyond, Forrester said.
The debt crisis could have a longer-term effect on IT spending in Europe as public-sector organizations try to balance budgets and shed debt, activities that would in turn have an effect on private businesses by a "ripple effect," Gartner said this month. Offshore outsourcing business from Europe has slowed down after the debt crisis, according to TPI's Pai. Even some deals that seemed close to closure 18 months ago are now delayed, he added.
Indian outsourcers that are targeting European IT markets are also hit by the falling value of the euro, Apte said. Between Jan. 1 to June 30 this year the euro depreciated by over 15 percent against the Indian Rupee, which meant that there were fewer rupees available to outsourcers to meet costs in India.
Source: PC World
Full article: http://www.pcworld.com/businesscenter/article/200613/european_market_gets_worse_for_indian_outsourcers.html

Tuesday, July 6, 2010

Mahindra Satyam BPO in deal with African firm

Mahindra Satyam, formerly Satyam Computer Services, on Wednesday said that its business process outsourcing (BPO) unit has entered into a partnership with Africa’s Direct Channel Holding Ltd. The financial terms of the partnership were not announced.
Under the alliance, Mahindra Satyam BPO will help Direct Channel Holding expand its services in Africa, the company said in a statement.
Direct Channel Holding, a Johannesburg-based BPO, has centres in Durban, Cape Town, Nairobi and Lagos.
Source: Stockmarkettoday
Full Article: http://stockmarkettoday.in/2010/07/02/mahindra-satyam-bpo-in-deal-with-african-firm/

GlobeOp Confirms Contract With European Credit Management

GlobeOp Financial Services SA (GO.LN) Thursday confirmed it will outsource middle- and back-office services for Wells Fargo & Co.'s (WFC) European Credit Management Ltd. unit, a major contract win for the hedge fund administrator.
Source: Wall Street Journal
Full article: http://online.wsj.com/article/BT-CO-20100701-702468.html

API Outsourcing and AOi Announce Strategic Partnership

API Outsourcing, Inc., a leading provider of Finance and Accounting Outsourcing services (FAO), has announced a strategic partnering agreement with the Accounting Outsource Inc. (AOi), a leading FAO provider for the restaurant industry. The focus on this partnership will be to drive even greater levels of back office automation into the restaurants, moving to an eventual "paperless restaurant," to improve operations and reduce costs.
API's automated Accounts Payable Services has been integrated with AOi's accounting services to provide restaurant accounting customers with a streamlined electronic invoice process. This change has resulted in reduced processing time, errors, labor and capital requirements and overall costs, while providing improved access to information maintained in a secure central document repository.
Source: PRWeb
Full article: http://www.prweb.com/releases/AOi/Paperless_Restaurant/prweb4204574.htm

Egypt Named Offshoring Destination of the Year at the Inaugural European Outsourcing Association Awards

Egypt was awarded the prestigious title of Offshoring Destination of the Year at the 2010 European Outsourcing Association Awards held in Brussels last night, beating rivals Philippines, Colombia and Sri Lanka to the accolade.
Commenting on this achievement, H.E. Dr. Tarek Kamel, Minister of Communications and Information Technology said: "This award recognizes the outstanding progress Egypt has made in the last year as a global outsourcing destination. The country's credibility is going from strength to strength amongst European companies and has put its mark on the map of favored global services locations. We recognize the increasing role that Egypt can play in the fast-paced global ICT industry and we are advancing steadily on the way to position the country as a hub for IT innovation and entrepreneurship."
The awards recognize the success of organizations in outsourcing projects and raise awareness of the importance of best practice in outsourcing.
Commenting on Egypt's success at the awards, Martyn Hart, EOA Chairman said: "Egypt stood out for its multilingual capabilities and developments made to its infrastructure. It has proven itself to be both a strong player for European outsourcers and a gateway to the Middle East and Africa."
Through the support of ITIDA and the Ministry of Communications and Information Technology (MCIT), Egypt has shown ongoing improvement in the ICT sector.
The results of these developments have been reflected through numerous reports, with Egypt most recently being ranked sixth most attractive offshoring destination worldwide and number one in EMEA according to the A.T. Kearney Global Services Location Index™.
Source: PR Newswire
Full article: http://www.prnewswire.com/news-releases/egypt-named-offshoring-destination-of-the-year-at-the-inaugural-european-outsourcing-association-awards-97399109.html

Forrester downplays impact of proposed anti-outsourcing laws in US

The recent spate of anti-outsourcing legislations proposed in the US, like Senator Schumer's Bill to tax American companies that route customer calls overseas, will not impact business decisions related to offshoring, according to Forrester Research Vice-President and Principal Analyst, Mr John McCarthy.
His comments come at a time when the buzz around anti-outsourcing has been growing strong in the Capitol Hill. The House passed ‘American Jobs and Closing Tax Loopholes Act' in May and a month later US Senator Charles Schumer announced plans to introduce a Bill that seeks to impose 25 cents excise tax on any customer service call that originates within the US and gets transferred to an overseas call centre. The proposed legislation, if it materialises, would require US companies to also notify their customers when their calls are handled by an overseas location.
Source: Hindu Business Line
Full article: http://www.thehindubusinessline.com/2010/06/29/stories/2010062953240700.htm

The Growth of Legal Outsourcing: Passage to India

India’s legal-process outsourcing industry is still small but is growing fast. In a recent report, ValueNotes, an Indian consultancy, estimated that India’s LPO revenues will grow from $146m in 2006 to $440m this year and $1.1 billion in 2014. The number of Indian firms offering LPO services has swelled from 50 in 2005 to more than 140 today. Investors have spotted the potential. In February, Actis, a British private-equity outfit that specialises in emerging markets, invested $50m in Integreon. Intermediate Capital Group, also based in Britain, has bought an undisclosed chunk of CPA Global.
A lawyer with similar experience at a London law firm might charge up to $400 an hour for the sort of work that a lawyer does in India for $50 an hour. As law firms and corporate legal departments face mounting pressure to cut costs, an increasing number are choosing the Indian option.

Source: Global Services Media
Full article: http://www.globalservicesmedia.com/BPO/Knowledge-process-Outsourcing/The-Growth-of-Legal-Outsourcing:-Passage-to-India/23/12/9767/GS100625308499

Monday, June 28, 2010

Sykes to open center in Romania

US-based BPO provider Sykes Enterprises announced it has opened a new contact center in Cluj, Romania to support an existing global consumer product/technology client.

"Given the long-term growth opportunity in the customer contact management industry, the expansion into Cluj, Romania, builds on our initial beach-head in Eastern Europe going back more than a decade and further strengthens our low-cost near-shore delivery capability for the European continent", said Chuck Sykes, President and CEO, in a statement.

"With a deep and highly educated pool of labor, a competitive wage structure, a robust commercial infrastructure and an accommodative investment climate, Cluj is expected to serve Sykes' multinational clients looking to further diversify their service delivery strategy.
Source: CallcenterInternational
Full article: http://www.call-center-international.com/News/Industrynews/385/15054/Sykes-to-open-center-in-Romania.html

Domestic cloud computing mkt may cross $1 bn by 2015

The domestic cloud computing market is expected to touch $ 1.08 billion by 2015 from $ 110 million currently, research firm Zinnov said.

Cloud computing refers to a pay-per-use model of computing where applications and software are accessed over the Internet and not owned by users. IT companies can save huge costs on these products as they would not have to invest in purchasing them, resulting in reduced IT costs.

Sectors like banking and financial services, telecom, manufacturing and government would drive cloud adoption.

The global cloud computing market is expected to grow to $ 70 billion by 2015 from $ 20 billion now. The adoption of cloud computing is being led by the small and medium businesses.

Source: Economic Times
Full article: http://economictimes.indiatimes.com/articleshow/6075815.cms?prtpage=1

Hinduja Global Buys UK based Careline Services

Hinduja Global Solutions, a provider of outsourcing solutions, said its European subsidiary has acquired the UK-based customer relationship management company Careline Services.

‘Our acquisition of Careline Services is a continuation of our endeavour to expand the global footprint of HGSL. This acquisition provides us entry into the European market which offers great promise for the future and we are looking at expanding our presence here at a fast pace,’ HGSL CEO Partha Sarkar said in a statement.

The company did not disclose the financial details of the deal.

This is HGSL’s first acquisition in the UK.

Source: indlawnews.com
Source: global services media
http://www.globalservicesmedia.com/News/Home/Hinduja-Global-Buys-UK-based-Careline-Services/21/27/0/GS100622728489

WNS says closing in on domestic BPO deals

Keshav Murugesh has won investor confidence within the first 100 days in office as group CEO of WNS, as the rumours of stake sale have died down. In a conversation with DNA, Murugesh shared his roadmap for WNS, while maintaining that even the best of ideas in the world needs to be marketed.Excerpts:

At the recent Nasscom BPO Summit many executives were talking about talent crunch. What is it all about? Why all of a sudden?
It’s not actually talent crunch. In terms of actual numbers India produces enough graduates. If you see the statistics, India produces 3.5 to 4 million graduates, 10% of these graduates are engaged in this business. The crunch is in employable numbers. Of the 4 million graduates we are getting 10%, that’s a huge number. Every company will tell you — we interviewed 100 people and got only one person. That means 99% did not make the cut. We are worried about that.

BPO jobs have become quite a craze among students and unskilled graduates who have a grip on spoken English. So what talent are we talking about?
India is past that stage now when we said we just want some basic qualification to wow the world. Now it’s different. So what do we need in terms of talent? First is good spoken English. Second is the person has to have good presentation skills. Third thing is he must be commercially savvy, that is he must understand what I am doing and how is it impacting my clients’ client. Fourth is some amount of strategic orientation. In addition to these, if we can get people who understand business domains that would be very useful because BPO today is no longer about just reducing somebody’s cost.

We had of course started with that objective, but now and especially since the downturn clients asking us to lead their business. See every one is talking about stress, Europe is in stress, North America still has not emerged from recession, and India we are talking about talent crunch. It is counter intuitive. Everyone in the world is now saying that talent is required to reduce cost, to come with game changing ideas that ensure revenue continuity. They want to be led now. They are no longer interested in giving you the next work order. They want people who tell them these are three things that you do and your cost is down by this percentage and topline is up by this percentage.

So are you looking at consulting projects?
To some extent yes, actually all of us are to some extent working like consultants. We have to be that way. And this has to increase. If you look at the headroom for BPO business, the addressable market is $300 billion and what are we offering now, roughly $30 billion. There is that huge gap. So there is some reason why we are at that stage. We have to broaden our offerings.

But that seems to be quite far as at present your voice business is very high…
True and now process business also brings considerable percentage of revenue. But the most exciting part of WNS is that most of my clients are so under penetrated which means we have such huge scope to grow.But we need people who can lead the customer. We need people who can cross-sell, who can take part in the client’s strategic planning session and tell them that your business is stretched and these are the things you should do. If you have people like that then this industry’s potential is beyond imagination.

So at the ground level you have to position yourself as a consulting firm…
We are using the consulting word may be a bit more frequently here. That may not be our focus. Our focus is to deliver greater value and lead the customer. To do that I have to be like a consultant, I have to be like a BPO, I have to be like a service provider, whatever it takes. So you need to have learning and development processes in place, you need to have business domain skills in place, you need to have tremendous functional capabilities in place etc. So if you are looking at 20,000-25000 people in an organisation then may be about 1,000 think like this. I am saying what if I have 15,000 such people then the ability to penetrate existing clients increase.

So are you investing in creating new capabilities?
From a WNS perspective we are focusing on our existing businesses. Insurance travel, banking and financial services we are very strong. We are looking to see what are the new offerings we can add. We are introducing thought leadership in our horizontal offerings like research analytics, accounting, etc. Then we are looking at investing in new spaces where we should be in. There are two or three logical businesses that need help during recession. There are huge customer bases that they handle.

So you will take those customer database and do research and analytics?
Yes there are so many things that you can offer. After retail logistics and transportation is another area. There is huge scope for offering new services. Third is all governments are under public debt. They are looking at ways to reduce cost without compromising services to citizens.

Are you looking at the domestic BPO market?
Yes we are looking at it. We have not given any shape to it. We are talking for some potential deals. We will have some strategic planning discussion in July and will take some decisions relating to India. But the way of delivery and operation in India will be different.
Source: DNA
http://www.dnaindia.com/money/interview_wns-says-closing-in-on-domestic-bpo-deals_1396493

TransGenez all set to tap the rural BPO market

Bangalore: TransGenez plans to establish Business process Outsourcing(BPO) units in rural areas. The company has already established BPOs in two villages in North India and is now intending to set up their BPOs in tier 2 and tier 3 cities of Karnataka like Hassan, Hubli and Dharwad.

"We would definitely face problems in dealing with issues like electrification, poor bandwidth and management of human resources, but we see huge potential in the rural market and are quite hopeful that it will pick up the trend soon,said Dhaval Kumar Gat, CEO, TransGenez.

They would be concentrating on areas related to live education, data entry jobs and other voice based activities.

Source: Silicon india
http://www.siliconindia.com/shownews/TransGenez_all_set_to_tap_the_rural_BPO_market-nid-69115-cid-3.html

Thursday, June 24, 2010

Cebu sets off to develop high-level outsourcing

Source: China Sourcing
http://en.chinasourcing.org.cn/content2.jsp?id=4881

Information technology consultancy firm Tholons, Inc. has partnered with the Cebu Investment Promotions Center (CIPC) in crafting a road map that will enable Cebu to graduate from being a voice-based outsourcing site into a knowledge process outsourcing (KPO) hub.
A memorandum of understanding between CIPC and Tholons was signed during the Cebu ICT and BPO Conference yesterday to launch the conduct of the study.
KPO services refer to knowledge-intensive work carried out by one company for another that require skills more sophisticated than speech, including research, analytical, financial, legal and engineering services.
"Cebu is basically ripe for this (KPO). It has all the requisites needed for a city to become a KPO hub," Jonathan D. de Luzuriaga, Tholons managing director for Southeast Asia, told BusinessWorld on the sidelines of the annual meeting here.
These requisites include a track record in outsourcing, talent availability and strong support structure, among others. Part of the study would be the conduct of online tests to determine skills available in Cebu and suitability of these talents to KPO.
"We would be needing professionals who would do legal research, analytical services, financial accounting, engineering services and others," said Mr. de Luzuriaga.
The study is estimated to cost over P2 million, which will be financed from various sources, and is targeted to be completed in September this year. By then, industry stakeholders in Cebu will be brought together to form a group that will oversee implementation of the road map.
Joel Mari S. Yu, CIPC managing director, said such a road map would define Cebu’s niche in the KPO industry and match its talent capability with opportunities in the market.
"We need to know exactly what kind of skills are needed, what quantities are required and what the competition is doing," Mr. Yu added.
Cebu, currently the top emerging business process outsourcing (BPO) destination in the world based on Tholons’ survey last year, is expected to join the ranks of emerged outsourcing destinations this year.
Going into KPO services is the next logical step to push the outsourcing sector in Cebu forward, Mr. de Luzuriaga said.
"The global trend is going towards KPO. As technology advances, the need for low-end BPO decreases," he added.
Tholons earlier projected that the KPO market is poised to grow to $17 billion by 2010 from last year’s $3.7 billion, with India capturing the bulk of the market.
Other countries with growing KPO sectors are Northern Ireland and China.
Cebu’s outsourcing sector currently has around 40,000 employees and over 100 locators, about 70% of which are based at Asiatown IT Park.

KPO industry to sort out regulatory issues, says Genpact

Source: Hindu Busniess Line
http://www.thehindubusinessline.com/2010/06/23/stories/2010062353100700.htm

Leading knowledge process outsourcing (KPO) firm Genpact says the KPO industry will reconfigure itself and sort out regulatory issues as it increasingly adopts the charge-per-use cloud model.

Mr Pankaj Kulshreshtha, Senior Vice-President, Analytics and Research, Genpact, says: “While the industry is still trying to understand the cloud (which offers a shared service platform with end-to-end offerings without the need for a hosted environment), the future potential of KPO on the cloud is huge, especially in research and analytics.”

Genpact launched the ‘smart enterprise approach' earlier this year in an attempt to move towards a more end-to-end outcome; part of this will be delivered on the cloud. The company is currently working with an airport developer in the country to offer shared infrastructure and get paid based on transactions. It is also doing a few smaller experimental projects on the cloud. But data privacy issues and compliance requirements have to be worked out, as security about data is a big concern for customers on the cloud

. “But the industry will change and reconfigure itself for the cloud. Regulatory issues will be understood and taken into account while configuring solutions on the cloud,” says Mr Kulshreshtha.

Web analytics

Apart from the cloud, Genpact also sees lot of potential in Web analytics, which tracks the way consumers interact online. “Internet penetration and adoption is increasing… It is now possible to do secure transactions on the Net. The amount of information online is huge and the prominence of the Internet channel (in analytics) will increase and become more important of what we do in the future.”

Genpact is working with an online retailer in India to optimise its Web traffic and help get incremental revenues by targeting customers better.

There is also a lot of interest around social media. Genpact has done projects tracking user opinions and sensibilities on Twitter for retailers globally. It has also done some work using profiles on the professional networking site LinkedIn.