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Anonymous — Sat, 16 Sep 2006 12:33:59 CDT

2006

Sweden's growth paradox

Productivity is rising, but the level of employment among working-age people actually declined from 1992 to 2003. Kalle Bengtsson, Claes Ekström, and Diana Farrell Web exclusive, June 2006 Sweden's economy has made a powerful comeback after decades of steady decline, when it slipped from the ranks of the world's most prosperous nations. Since 1995, the year McKinsey last reported on the country's economic performance, GDP growth has averaged 2.7 percent a year, which is stronger than that of most comparable EU countries. (The full report, Sweden's Economic Performance: Recent Developments, Current Priorities, is available free of charge online.) Per capita GDP has risen to 112 percent of the Organisation for Economic Co-operation and Development (OECD) average, from 104 percent—a notable contrast to the continuing stagnation in France, Germany, and Italy.

How European companies can unlock value from real estate

· In Germany and the United Kingdom, companies whose businesses are unrelated to real estate hold more than €1 trillion worth of property. Such illiquid assets represent an opportunity.
· Newly proposed laws to introduce real estate investment trusts in these countries could allow companies to unlock value from excess real estate. REITs also benefit investors and tax authorities.
· However, a robust market for REITs won't develop unless companies sell their excess property. Here, the proposed laws fall short. Unless lawmakers amend the proposed legislation to remove certain restrictions and disincentives, the market for REITs in Germany and the United Kingdom will be stunted and the promise of REITs unfulfilled.

Using IT to boost call-center performance

Call centers, making targeted improvements involving more cost-effective technologies, are finally saving money and improving revenues with IT. Wayne E. Pietraszek and Adesh Ramchandran Web exclusive, March 2006 Executives who have spent tens of millions of dollars on call-center technologies can be forgiven for being wary of big investments to overhaul their systems if they don't have a clear picture of the expected benefits. They are all too familiar with horror stories about large outlays that have yielded no returns—for instance, the tale of the telecom company that spent more than $50 million on new customer-relationship-management (CRM) technology for its frontline agents but saw no improvements in revenue or customer satisfaction, because those agents ignored the system.

The untapped market for offshore services

· Providers of offshored IT services and business processes have so far captured only 10 percent of a $300 billion opportunity. In the next five years, a study shows, this market will grow by an additional $80 billion.
· Traditionally outsourced IT services, such as hardware and software maintenance—which have seen very little offshoring to date—will probably drive the next wave of growth. Offshoring should increase more rapidly in business processes than in IT services; banking and insurance will likely lead the way. Further growth will come from new "offshore-only" services that go beyond the simple replication of onshore ones.

Outsourced Service Providers

The immense growth in customer service inquiries and the shift to a multi-channel service environment has left many companies grappling with the problems of building and managing contact centers. This paper discusses five tried and tested ways to help you improve service levels and quality for your clients, along with differentiating your service with additional offerings. It also provides a checklist of capabilities to look for in a service management platform for the outsourcing environment.

Real-Time F&A Monitoring Moves Shared Service Centres from Good to Great What if a SSC could immediately identify, prioritize and quantify all errors and accounting exceptions within the financial transactions across multiple financial ERP systems? What if these objectives could be performed on a real-time basis, every two or three minutes, extracting data without degrading the ERP financial system’s performance? The fact is, due to innovative exploitation of existing technology, a monitoring tool and application now exists that accomplishes these goals.

F&A Outsourcing Providers Discover Competitive Advantage with Real-Time Transaction Inspection
Business Process Outsourcing (BPO) service providers specializing in finance and accounting (F&A) see a growing market opportunity but already face increasing price pressures. Advisory firms are commoditizing engagements and defining what service level guarantees should be. In addition, costs keep escalating in offshore locations, diminishing some benefits of labor arbitrage. These market forces are creating immediate cost pressures on providers in the first year of outsourcing relationships. At the same time, providers need to focus on additional ways to increase their margins with existing clients. Due to innovative exploitation of existing technology, Oversight Systems provides a software-based solution that enables providers to meet these objectives with real-time transaction inspection.

Value Added Benefits of Outsourcing
Given the relentless demand by customers for getting more for less, it’s certain that work will increasingly be outsourced to partners around the corner and around the world. As various studies and decades of actual experience have shown, the value added through outsourcing not only benefits the outsourcing provider and customer, but the economy as a whole. Global sourcing is not a zero-sum game.

Achieve Measurable Results

Achieving real results from information technology outsourcing depends on a variety of factors. Understanding the advantages of outsourcing and identifying business functions with the greatest potential to benefit is fundamental. Defining an outsourcing strategy that aligns with business

goals and effectively managing the outsourcing relationship are essential. Finally, setting standards for improvement and evaluating key performance indicators can help ensure long-term, business-building results.

Smart source: Do More with Less
Can the seemingly contradictory mandates of cost cutting and innovation be integrated? The view presented in this white paper contends that they must be integrated through the use of an innovative strategy called smart sourcing, which leverages the competencies of service providers in order to achieve a significant increase in total innovative capacity.

Longitudinal Convergence
Aligning Business and Outsourcing Objectives in Mid-Market Companies
Ram Iyer
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Shared Services in Government
Turning private-sector lessons into public-sector best practices
AT Kearney
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Avoiding Blind Spots in ERP
Infocrossing
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Email Defense
Managing the Skyrocketing Costs of Email Security
(i)Structure
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Outsourcing, As Sweet As Candy
Learn how Duane Hurley, CIO of Farley‘s & Sathers used outsourcing to overcome a merger, three acquisitions, IT transitions, and new implementations.
Outsourcing Venture
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How to Outsource
Four Simple Steps to Success
Syntel
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Eleven Steps to Success in Data Warehousing
Syntel
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Optimizing Application Management Outsourcing
Best Practices to Reduce TCO and Increase Business Value
Syntel
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Succeeding with Business Process Outsourcing
Syntel
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Understanding the RFP Process
Outsourcing Venture
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Expert Sourcing
SpectrumHR
You may get a case of the chills, shivers, and a headache when management tells you it is planning to outsource a certain area of your job. Why? Because the word outsource has a negative connotation associated with it.

Outsourcing Frontier: Yanks Need Apply
John P. Mello Jr., CFO.com
Not content with siphoning jobs from the United States, India has started cherry-picking its worker pool, too. The market for expatriates in India has heated up appreciably in the last three months or so, says Art Flew, CEO of Hyderabad-based business process outsourcing company Karvy Global Services.

Evaluating HRO Providers by a Detailed RFP
Marc S. Miller
By now you know that there are nearly three dozen HRO/BPO providers vying for your business.
They are all very different from each other. Their differences become evident when you examine such characteristics as their market share, target market/account, visibility, the HR functionality they deliver, the HR technology they utilize to provide the functionality and their pricing and staffing model.

Finance & Accounting Outsourcing Market Overview and Analysis of Leading Service Providers, 2006

Finance & Accounting Basics

Accounting is an information system that measures, processes and communicates financial information about an economic entity, like a business, hospital or governmental body. The same basic accounting principles apply not only to profit-oriented ventures but also to government and not-for-profit organizations (like hospitals, universities, professional organizations and charities). Financial statements are the primary means of communicating important accounting information to users.

Finance to go

Ben McLannahan
Call it a sign of the times. In late 2003, GlaxoSmithKline (GSK), the £20 billion ($35 billion) U.K.-based pharmaceuticals company, began a project to uproot its U.K. financial shared services centre and move it to India. In August this year, it agreed to hand over the running of the offshore operations — including processes such as accounts payable, inter-company and financial reporting, payroll, and travel expenses — to Genpact, GE's business process outsourcing (BPO) unit. "The decision was taken after a full review. We decided that these services could be provided at a lower cost, while maintaining our current service standards," says David Mawdsley, a GSK spokesman.

Most Companies Happy with HR Outsourcing

Stephen Taub
Most large companies have embraced human resources outsourcing, according to a survey by Hewitt Associates of 129 large businesses representing nearly two million employees.
Hewitt, which provides outsourcing and consulting services, found that 94 percent of respondents outsource at least one HR function, either partially or fully, 89 percent are satisfied with their outsourcing arrangement, and 85 percent said they achieved hoped-for benefits.

Gillette Deal Gets Nicked

CFO Magazine

Gillette Corp. markets its shaving products, as "the best a man can get," but is its planned sale to consumer-products giant Procter & Gamble the best deal it can get? Regulators in Gillette's home state of Massachusetts don't think so.
Secretary of State William Galvin has launched an investigation into the terms of the deal that is testing the limits of how far regulators can go to protect shareholders and the public interest when an out-of-state suitor pursues a large company.

Simple Successful Outsourcing

Stephanie Overby

You've heard the tales of outsourcing gloom and doom and read about the staggering percentages of outsourcing failure. Now consider these three CIOs' experiences:

Five years ago, a business unit at energy giant Cinergy Corp. outsourced database administration services, with no plan to extend the contract to any other part of the business. But when Cinergy centralized IT two years later, CIO Bennett Gaines called on the outsourcer to provide database administration services enterprisewide. Since then, the outsourcer has proved instrumental in a major technology shift—from data marts to an enterprise data warehouse.

Four years ago, Summit Information Systems, a software developer for credit unions, outsourced…..

Outsource, Don't Abdicate

Ben Gomes-Casseres
My favorite post-Enron cartoon, by Dan Wasserman, has two captains of industry discussing what to do about the fallout from corporate scandals. "We are seen as ethical disasters," says one of them. "How are we going to rebuild public trust?" In a flash of brilliance, the other answers: "We could outsource it!"

Backsourcing Pain

Stephanie Overby

When David Rosario got the official notice at the end of 2002 that his job would be outsourced to IBM, he was not surprised.

Rumors had been circulating for months at JPMorgan Chase, where he had worked as a network engineer since 2001, that the company would be signing away much of IT to an external services company.

Outsourced Service Providers: 5 Ways to Differentiate Your Service Offering
This paper contains 5 simple ways to enhance the outsourced service offerings. These suggestions will help to improve service levels and quality for the clients, along with differentiating the service with additional offerings. The paper also provides a checklist of capabilities to look for in a service management platform for the outsourcing environment.

Managing the Complexity of Network Convergence Through Outsourcing
The convergence of voice, video and data networks, along with wired and wireless environments, brings unprecedented opportunities for a business that can capitalize on change. When managed correctly, network convergence can enable companies to operate more efficiently, increase returns on technology investments and realize other business benefits. Yet despite these potential gains, network convergence remains a complex undertaking that creates new technical, operational and managerial challenges. Faced with these challenges, enterprises are increasingly turning to outsourcing service providers. The extensive infrastructure, expertise and services of an outsourcing service provider can help an organization overcome the complexity of bringing together diverse networks.

Effective Outsource Management: Preventing Customer Churn and Unforeseen Costs
Outsourcing all or part of a company's customer service operation has the potential to lower costs, better focus in-house resources, and even improve customer relationships - but entrusting customers to an outside vendor also creates a service "Gap" that can jeopardize those customer relationships. Executives who hire an outsourcer to make customer service problems "Go away" often find that the projected cost savings are quickly swamped by increased customer dissatisfaction and expensive customer attrition. Effective outsourcing means eliminating the service gap by intelligently and actively managing outsourcing relationships.

2006 Global Outsourcing Guide
Stephanie Overby
In all the discussion about outsourcing, one simple fact sometimes gets lost: Nobody beats the United States when it comes to people with IT skills. Taking into account the size and availability of the labor force, their education, relevant experience, language skills and turnover rates, A.T. Kearney ranked America tops in this area on its 2005 Global Services Location Index.
But labor arbitrage-cutting costs by exploiting the availability of lower-wage workers-remains the name of the game in IT sourcing. CIOs continue to seek savings through offshore outsourcing, and the Everest Research Institute predicts those savings will continue to drive sourcing offshore for the next 30 years. Today, 73% of Fortune 2000 companies say offshoring is an important part of their overall growth strategy, according to the 2005 Duke University CIBER_Archstone Consulting study. And Gartner predics worldwide offshore spending will reach $50 billion next year.

In this, CIO's third global outsourcing guide, we observe how the offshoring world has changed.

Is Offshoring Coding Yesterday’s Fad?

Outsourcing your code development makes a lot less sense with the radical changes in the way innovators now create software

BY MICHAEL SCHRAGE

Over brunch in a cheap Brooklyn restaurant, a longtime MIT friend proudly demonstrated his latest startup's software. The idea is clever, and its beta implementation is sweet. I liked it; usually the stuff I see turns my stomach. So I'm pleased that Hans Peter Brondmo's Web-based "personal information organizer" has technical chops and global business potential.

Next Stop, New Delhi

The strategic debate over offshoring is over. Offshoring has won. Now the discussion moves on to tactics.

BY DAVID ROSENBAUM
Christmas came early to India this year.
Just before the holiday, several big American companies were competing to see which one could invest more money in the subcontinent.
Intel was first out of the gate, saying it would spend a billion during the next five years. The following day, JPMorgan Chase said it planned to double its Indian workforce. And then Bill Gates, visiting New Delhi, announced that his feisty little software outfit planned to invest $1.7 billion (take that, Intel!) and hire 3,000 new people in India during the next four years.

Big Deals, Big Savings, Big Problems

Large-scale outsourcing deals promise big savings, but they fail half the time. Here's how to make them work for you.

BY STEPHANIE OVERBY

When Campbell Soup CIO Doreen Wright was trying to cut costs to fund a multimillion-dollar global investment in SAP, she found help from what many might view as an unlikely ally—her outsourcing vendor. Without being asked, IBM reexamined the outsourcing contract and identified several million in services it was providing that could be cut with minimal pain to Campbell. Recognizing the financial hurt that move might cause her partner, Wright took the sting out of it by working with IBM to identify new outsourcing services (which, by the way, would also further reduce her IT operating budget) and awarded the vendor several other projects in the following months. "They were very forward-thinking, and there was a tremendous amount of teamwork involved," says Wright. Bottom line: Campbell cut its IT costs and was able to go ahead with the SAP project, while IBM actually saw its revenue increase.

Hidden Costs Come Home to Roost

The savings that companies reap from offshoring come with a risk. And risk always has a price.

BY DAVID ROSENBAUM

As the new year began, the news was full of American companies expanding their outsourcing investments in India, China and elsewhere. Cheap materials and cheaper labor make offshoring a no-brainer for everyone from service providers to manufacturers. And so CIOs have had to think about readying their enterprise infrastructures to make the most of those opportunities.

How to Ease the Pain of Globalization

While the trend toward making hardware and software overseas has boosted the U.S. economy, an increasing number of U.S. jobs are falling through the cracks

BY CATHERINE L. MANN

Not a week goes by without an article in the press about the offshoring of information technology—whether it's the production of hardware, call center and programming jobs, or even research and development activities. Media pundits and politicians have seized on these reports as auguries of America's demise. But are things really that bad? Is there nothing positive about moving some of America's IT activities abroad? More importantly, what specific strategies can U.S. policymakers implement to maximize the gain and minimize the pain associated with these rapid changes?

Ignoring Business Strategy Makes for Weak Outsourcing Efforts
With Christopher D. Jones, principal strategy consultant for Source Renaissance, a sourcing and IT strategy consultancy.

Question: Source Renaissance (www.sourcerenaissance.com) has just published a white paper entitled, "Sourcing Strategy: Knowing When to Outsource." During the research for this white paper, what did you find were the biggest mistakes that companies are making when approaching an outsourcing solution?
Jones: What seems to be missing most often is a linkage to business strategy. Behind that it's having insufficient data to build a solid business case, meaning assumptions are driving decisions rather than facts. These two factors alone — lack of strategy and data — can be highly destructive to the cause. And sadly, the tests are simple ones: Why are you outsourcing? Does it make sense in the context of your other business strategies? What returns are expected, and will your suppliers have a contractual stake in achieving them? What are the capabilities and possibilities within the current organization? If you don't have a handle on key drivers like these, it will be difficult to achieve a favorable result.

Outsourcing Strategy Shift
How Western and Eastern IT and BPO players are converging on a single model; the challenge for India
by Demir Barlas, Line56

Monday, March 20, 2006
In the world of IT and business process outsourcing (BPO), one fact is currently indisputable: the biggest pool of available, and low-cost, talent is in India.That granted, different vendors can profit from this fact. Certainly IBM, with its promise of ramping up to an Indian workforce of 50,000 employees, has done so. So has Capgemini, which recently announced the creation of its third Indian center (in Kolkata) and its plans to expand from 4,000 Indian employees to 10,000 by 2007.

Utility Companies Turn to Onshore IT
TAKEAWAY: Utility companies in the UK are spending more on IT than most, according to ComputerWeekly.com. This trend is being led by a rise in IT outsourcing, and utility companies are finding success in shipping IT functions out of house. But out of house doesn't necessarily mean offshore. Instead, companies in the UK are turning more towards onshore options, favouring national options that focus on increasing key business strategies rather than merely lowering costs.

Dissatisfaction with Outsourcing Is Greater with Onshore Deals
TAKEAWAY: Forty-seven percent of companies have prematurely terminated at least one outsourcing contract in the previous 12 months, according to a Diamond Cluster International study, with the percentage higher for onshore contracts (42 percent) than for offshore deals (28 percent). Poor performance was cited by 53 percent of the companies as the reason for cancellation. Companies are beginning to favour offshore providers over onshore vendors, says a Diamond Cluster executive, largely because offshore providers increasingly offer certifications such as CMMI, along with significantly lower costs. Though the increase in overall negative reactions to outsourcing increased when compared to earlier Diamond Cluster surveys, the exec says IT managers are beginning to utilize outsourcing as a comprehensive strategy rather than simply outsourcing individual tasks.

IT outsourcing draws interest from utility companies
Suppliers of electricity, gas and water are reportedly spending more on IT and technology than the national average.

New research from Computer Weekly indicates that this is being led by the rising popularity of IT outsourcing, with large businesses and SMEs alike benefiting from the service.

Large utility companies are said to spend £10,296 per desktop each year on technology, which compares to a UK-wide business average of £8,455. Smaller utility firms, meanwhile, are spending £3,551 per desktop, which compares to an average of £3,132 for SMEs as a whole.

Outsourcing Boom Is Over
The outsourcing boom has passed and maturity is setting in, according to a new study from consulting firm Diamond Cluster International in Chicago.
The levelling off is due in part to experienced customers becoming savvier and pickier about the work they hand to outsourcing providers.

Poor controls raise outsourcing risks
A new survey indicates few companies have the right systems to manage outsourcing deals with multiple suppliers
James Murray, IT Week 10 Apr 2006
IT outsourcing in Western Europe will continue to increase over the next two years, according to a new survey by Gartner. But the analyst firm warned that many companies face unnecessary risks because they have not developed coherent management strategies for outsourcing.

Outsourcing Is Getting Smarter
TAKEAWAY: Outsourcing isn't all about reducing costs, and companies who operate on that assumption are making a big mistake, says the author of the self-explanatory "Smart sourcing: Driving Innovation and Growth Through Outsourcing." The most interesting section of this short but wide-ranging Q&A is his assessment of General Electric's outsourcing strategy. Jack Welch's rule: Outsource 70 percent of the back office, offshore 70 percent of that, and send 70 percent of the offshore work to India. More importantly, GE sent not just menial tasks but also R&D to India, creating what the author calls "a global ecosystem that fuelled its growth." He encourages companies to follow GE's lead and view sending work offshore as a way to improve the onshore focus on their core strengths.

Relationships Are Key to IT Outsourcing

TAKEAWAY: Outsourcing IT tasks can solve a number of problems in a cost-effective, business-savvy way, but without the proper relationships holding up the outsourcing effort, the partnership can fail. To avoid such a disaster, this article outlines some steps in finding IT outsourcing providers that will keep a data centre on the right path. Before interviewing any vendors, companies must determine the areas that need work. Once the problem area has been outlined, the company should gather information on partners with the right niche experience. These partners should prove a strong success rate in tying IT in with business goals and strategy — without that common ground, the outsourcing relationship could falter early. Companies need to give an outsourcing relationship some time to work through any communication issues, and follow-up is key in maintaining any momentum in the partnership.

Outsourcing Relationships From An IT Perspective
Security, Confidentiality & Support Are Essential Elements
Most small to midsized enterprises are more than familiar with outsourced services, often getting their carpets cleaned, taxes done, and legal wrangles handled by professionals outside the company. But when it comes to IT tasks, there are a number of distinctive issues that set the arrangement apart from other types of rented services.

Major differences include the need to protect internal data and customer information and to make sure consultants understand how much uptime is expected.

Analysts have touted the benefits of outsourcing tasks such as hardware and software integration, project management, security tasks, and data recovery. Many times, having these experts swoop in to solve problems is far more cost effective than trying to add to staff, but the relationships also need some care and feeding to be successful. Here are some steps toward finding an outsourcing provider that has both the tech savvy and business sense to keep a data centre on course.

Strategizing to Survive Outsourcing
TAKEAWAY: This article shares some advice from two new books on the outsourcing scene: "The Manager's Step-By-Step Guide to Outsourcing" by Linda R. Dominguez and "Multisourcing" by Linda Cohen and Allie Young. The first covers the risks of outsourcing, including customer service concerns, security and privacy issues and the fact that any thought of cost savings may be a "mirage." Also covered in the book are the top five mistakes, including outsourcing a broken process or function, allowing cost savings to be a key driver and rushing through the outsourcing process. The second book focuses on the need for a sourcing strategy and offers five key questions to help create one.

Outsourcing and the Board: Who Owns the Project?
With Stacey Berlow, president and founder of Project Balance [www.projectbalance.com], an Austin, Texas-based project management practice specializing in gathering business specifications and managing global teams.

Question: The boardroom-level ownership of outsourcing projects used to be clearly defined as within the IT department's arena, but now other areas in the corporate structure are laying claim to outsourcing efforts. Why is this happening?
Berlow: For many companies, the strategy of outsourcing processes or services that are not part of their core business competency makes good economic sense. IT was one of the first functional areas to outsource, but many other departments have turned to outsourcing to reduce overall operating costs. The kinds of outsourcing initiatives can vary greatly, including everything from outsourcing the mailroom to outsourcing complex processes, such as insurance claims processing. Even with the best intentions and management, the execution of an outsourcing strategy can cost much more than expected. Greater communication costs, including travel, phone and other IT infrastructure requirements, can be significant beyond the anticipated lower cost of labour. Financial managers and CFOs want to control these costs and hence control entire projects in order to meet their original expected cost reduction goals.

Global Outsourcing: Seven Steps to Selecting a Vendor
By Ravi Kalakota, Marcia Robinson

Introduction

Vendor selection requires a multifaceted, multistage methodology to evaluate not only what a service provider can do, but also how it’s done. But searching for the right vendor can be tedious. Many providers that meet defined criteria prove unsuitable for myriad reasons. Months of studying prospects, conducting site visits, and negotiating costs may result in frustration and the temptation to quickly close a contract that ends in dissatisfaction.
Here are the facts. A well-organized vendor selection process usually spans 6–12 months and ranges upward of 2% of the annual cost of the project. Some of the larger IT outsourcing deals—such as the one oil giant Shell inked with IBM and Wipro in 2004—have reached close to $1 billion in size, so that 2% adds up.

Firms no longer coy about outsourcing
Vishwanath Kulkarni
Secrecy surrounding outsourcing strategies of global software product companies may soon be a thing of the past.
Software product firms, which were forced to keep their outsourcing plans under wraps following the tech meltdown early this decade, may soon start disclosing their plans publicly, especially in India.
This is because some of the India-based outsourced product development (OPD) firms are seen convincing their clientele to open up and declare that their products are being developed here.
"We are trying to adopt a joint strategy with our customers to announce the partnerships and the kind of work we are doing with them," said Mr Ajay Kela, President, Symphony Services, an OPD firm.

SOA Spells Slowdown for Development Outsourcing
In this interview, LogicLibrary CEO Greg Coticchia discusses a new trend in which companies are avoiding application development outsourcing through reusing services with an SOA. LogicLibrary's focus is on its metadata repository, which allows IT managers to contain Web services by "mapping, securing and governing components that can be used as services." Coticchia says that companies are finding the reuse strategy as another way to compete effectively with offshore options. Coticchia has found that, generally, 60 percent of a project has reusable assets that are still in-house after the project is completed. Those assets can be reused, at great cost advantage, to continue to reap cost benefits—but only if the assets can be located and restored appropriately.

TPI: Offshore outsourcing set for further growth
Despite the continued controversy surrounding off shoring, a record level of outsourcing deals currently under negotiation involve off shoring, according to the latest Quarterly Index data from TPI, the sourcing advisory firm.

TPI: Offshore outsourcing set for further growth

Very little information is available on the breakdown of outsourcing between onshore and offshore operations. However, an analysis of deals on which TPI is currently advising (which represent approximately a quarter of the commercial outsourcing market and provide a six to nine month indicator of where the market is heading) reveals that almost half (47 per cent) involve off shoring or ‘global service delivery’. This compares with 28 per cent at this point last year and represents a record high. Furthermore, where outsourcing contracts contain an offshore element, a far greater proportion of the work is moving offshore, averaging almost half (48 per cent) of the contract value, up from 27 per cent a year ago.

Siemens CEO Klaus Kleinfeld: “Nobody’s Perfect, but a Team Can Be”
Corporate leaders must build international organizations to compete in today’s economy and be prepared to defend globalisation at home, according to Klaus Kleinfeld, chief executive of the German electrical and engineering conglomerate Siemens AG.
Speaking at a recent Wharton Leadership Lecture, Kleinfeld said U.S. concerns about the sale of port assets to a Dubai-based firm, and French resistance to the sale of yogurt-maker Danone – which French officials called a “national treasure” – highlight growing fears that globalization come at the cost of jobs in developed countries. Those fears could spark a backlash against globalism and limit future economic growth, he warned. “The common people – the voters – do not understand what’s going on and see a threat,” said Kleinfeld. “We, as leaders, need to be responsible for explaining the positives of globalization.

Finding value for BPO through revenue distance
In the last decade, companies have discovered that outsourcing some tasks to cheaper locations is one way to deliver efficiencies and cut costs. But the simple act to outsourcing to a lower cost base has evolved into a complex process that can inflict considerable damage if not dealt with in a sophisticated and scientific manner. The damage can range from not achieving the expected cost savings to losing control to a third party, particularly when a company’s more essential processes are outsourced.

When the Market Is Fragmented, Jump on a Platform
Your company's products are excellent, they're in demand, and the business opportunity is too good to pass up. You just don't have any big customers--your product sells to thousands of independent retailers. It is often difficult for any one player to justify the investment needed to build and maintain a national distribution network in a fragmented market. But a group of players with a large combined volume can create economies of scale by using a shared industry platform--a third-party vendor that aggregates the needs of multiple companies to provide more efficient supply chain-related services. This article describes the details and benefits.

Build Contractor Relationships that Are Mutually Beneficial
Companies entering into relationships with contract manufacturers know they're vulnerable to these vendors. And, too often, contractors have become adept at taking advantage of companies desperately seeking to pare supply chain costs through outsourcing. But just as you don't want a contractor to get the upper hand, you also don't want the contractor to suffer; the aim is to structure a relationship in which both parties thrive. To that end, supply chain managers and chief executives alike can take steps to ensure that partnerships with contract manufacturers are successful and prevent their companies from falling prey to one-sided deals. Read this article to learn about the steps a company can take to ensure a successful partnership with a contract manufacturer.

Are You Sending Your Problems Offshore?
It seems straightforward enough--why not simply outsource routine financial reporting functions offshore? Sure, you'll save some money. But if these processes are flawed to begin with, you only transplant their inefficiencies elsewhere, missing the greater opportunity to streamline. The authors contend that while outsourcing can be a central piece in an effort to improve operations, a significant chunk of any program's benefits comes from changing attitudes, behaviours, and cultures within the company's own walls. Read this article to learn how to look within and revamp existing functions before heading offshore.

Supply Chain Strategy, December 2005-January 2006, Volume 2, Number 1
This issue of the Supply Chain Strategy newsletter contains the following articles: "Best Buy's Customer-Facing Supply Chain," "Drive Complexity Out of Your Supply Chain," "How Soft Metrics Can Make Hard Choices Easier," "Debriefing Larry Bossidy: What Gets Things Done," and "Keep Your Sourcing Options Open."

Keep Your Sourcing Options Open
No matter how good your demand forecasts are, a supply chain that is stretched internationally is exposed to a great deal of risk--and even the best-laid offshoring plans go awry. But why should a decision to outsource be an all-or-nothing proposition? Consider a hybrid sourcing strategy--a mix of "reactive" manufacturing capacity located near end markets to meet unexpected demand surges--and a slower, less flexible "base" capacity in countries that can take advantage of mass production operations. The result? A sliding scale that allows you to balance the advantages of both systems.

THE INFORMATION ARCHITECT: On-demand cuts costs, increases success rate of CRM

Maxine Kincora, Contributor

On-premise customer relationship management (CRM) implementations have a median cost of about $1.2 million over five years, and they fail at alarming rates, almost 80%. So, it's no wonder that outsourced on-demand CRM, which offers low-cost entry and high success rates, is catching on.

IN SEARCH OF THE EXOTHERMIC DATA CENTER
by Thornton May
As any chemist will tell you, an exothermic reaction is one that releases more energy than it consumes. If we apply that notion to finance, an exothermic investment is one that releases more resources than it consumes. Now go a step further -- into the "exothermic data centre" -- where investments in IT result in a far greater return to the company than originally expected.

2006: What to expect
Now that 2006 is finally here, what should you expect? Get predictions, survey results and analyst news about blogging, outsourcing, IT spending and more for the New Year.

EXECUTIVE CHAMPION
OFFSHORING ISN'T JUST FOR THE BIG GUYS
by James Champy
Off shoring: not just for the enterprise anymore
The debate about whether off shoring IT work is good or bad for the U.S. economy focuses on the wrong issue. Companies should be concerned about their competitiveness and whether off shoring can improve their performance. Only by remaining competitive can a company maintain or create jobs. So the question isn't whether off shoring is beneficial, but rather how it can create competitive edge for your company.

Outsourcing: It’s the money stupid
By Michael Cooney
A new study from Gartner shows what most companies know (except Apple apparently) that most outsourcing deals are done to save money. According to a statement released by the company today, “controlling/reducing operating costs or improving efficiencies” was identified by more than half of the respondents in each region as the primary value they expected to receive from IT outsourcing. Efficiency deals are focused on cost control and, over time, cost reduction with the global of maintaining consistency in service delivery. The survey found that fewer organizations focused their IT outsourcing initiatives on accelerating or improving business outcomes, called enhancement deals, or significantly improving or altering their competitiveness, referred to as transformation deals.

Outsourcing is the New Rule
By Carol Kendrick
Before, large corporations were the ones who rule the industry hence implementing that old-school rules are the most effective ones in the industry. Nowadays, this kind of thinking would make you out…

Communication plays a vital part in Outsourcing
By Carol Kendrick
Outsourcing is undoubtedly a part of global development because of its ability to make the world a “smaller place” Though that is the case, not every company could claim that outsourcing is…

Outsourcing or smart sourcing?
By Carol Kendrick
Have you ever heard of the term smart sourcing? Apparently, this should be the main approach of companies who are expecting more than saving cost when outsourcing. Smart sourcing is also a book written….

Delta Turns to Outsourcing
By Carol Kendrick
Delta Airlines, the third largest carrier is now bent on asking a bankruptcy judge to consider outsourcing for the airline company. According to Delta, they are considering outsourcing their computer…

Anti-Outsourcing Attitude: A Normal Reaction
By Carol Kendrick
Outsourcing and off shoring topics have always been received with mixed reactions. Some people welcomes outsourcing as part of globalization while most people still has a negative attitude towards….

Staff Benefits Outsourcing to Double
By Carol Kendrick
“Outsourcing staff benefits continues to grow and could double in the years to come”. This was the prediction given by analysts regarding staff benefits outsourcing which could have the….

R&D Outsourcing Prioritizes on Skill.
By Carol Kendrick
Outsourcing Research and Development (R&D) is becoming a popular practice for firms. Wipro, Indian IT services company recently made a study focusing on the reasons why R&D outsourcing is…

Africa Joins the Call Centre Hype
By Carol Kendrick
Call centres are considered as one of the most outsourced functions in a business. This is also the reason why countries like India and Philippines have a growing outsourcing Industry. It also seems….

Numerous Job Loss Due to off shoring
By Carol Kendrick
If ever the term “off shoring” or “outsourcing” is mentioned to employees, they immediately adequate it with job loss. The reality behind this connotation seems to be true as…

Egypt: The new Outsourcing Destination
By Carol Kendrick
Egypt is popularly known as the country wherein one could see the historic pyramids. Nowadays, the country is now bringing up its image as an attractive outsourcing-off shoring option for firms. The….

UK Insists on Secured Outsourcing
By Carol Kendrick
The British government is now emphasizing on the need to secure all business transaction regardless if they are outsourced or not. The emphasis on secured outsourcing was done when the British…

Application Maintenance – The trend to Latin America
IT outsourcing in Mexico and other countries has started to trend to application maintenance. Corporate applications always need adjusting, as bugs are found or design flaws are uncovered. These...

Accenture Opts for SOA
By Carol Kendrick
Accenture, one of the biggest names in the outsourcing industry recently announced their intention of investing more on the development of service-oriented architecture applications or SOA. SOA was….

Culture Difference Harms Off shoring
By Carol Kendrick
One of the reasons why off shoring and outsourcing seems to be unsuccessful is because of culture difference. This was the conclusion given in the latest study done by Accenture. The study also….

Bank Outsourcing
By Carol Kendrick
Before, IT functions were the only ones that were joining the outsourcing industry. Nowadays, it seems like even banks are joining the outsourcing wave. Most finance operations are now transferring…

The New Outsourcing Destination: El Salvador
By Carol Kendrick
There is a new country joining the outsourcing industry. The country? El Salvador, El Salvador was once considered as one of the most deregulated economies in Central America because of their civil war….

Contracts: A vital Part in Outsourcing
By Carol Kendrick
Research analyst Gartner recently revealed that contracts in outsourcing plays a vital role in the outsourcing deal’s success or failure. According to the research analyst, the inability of coming…

Wipro and Motorola Combine for an IT Outsourcing Deal
By Carol Kendrick
Motorola and Wipro Technologies recently signed a joint IT outsourcing venture dubbed as the WMNetServ. The newly signed venture would deal with outsourcing different telecommunication services….

Lego Set to Outsource
By Carol Kendrick
Lego, one of the oldest names in Toy manufacturing recently announced that they are now joining the outsourcing bandwagon. According to the Danish-based firm, they would outsource most of their…

Rising Profits for Infosys
By Carol Kendrick
Infosys Technologies Ltd. Revealed that their profit and growth rate have surpassed their expectation revealing a 7% raise in terms of shares. Aside from that, statistics also showed that Infosys has…

Outsourcing Rush in a Halt
By Carol Kendrick
The number of firms considering IT outsourcing is still growing but the rush behind it is now gone. This was the conclusion shown by Diamond Cluster International Inc. in their Global IT…

ING signs MoU with LogicaCMG
By Danny
LogicaCMG and ING have signed a six-year, outsourcing activities MoU estimated at over 200 million euro. The outsourcing deal is for application development, application maintenance and testing of IT…

Convergys Awarded for Outsourcing Services
By Danny
CRM magazine has awarded Convergys Corporation the 2006 Service Leader Award for outsourcing services. “Winning this award for the second consecutive year is a great testament to our employees…

Wipro in race for American Express IT outsourcing deal
By Danny
According to market sources, Wipro and other software vendors in India are aggressively bidding for an American Express IT outsourcing deal estimated at over $1 billion. The bank's $4 billion...

Outsourcing remains strong but continues to flatten: Pulse Surveys
By Danny
Advisory firm EquaTerra has released the results of is quarterly “Outsourcing Pulse Surveys”. The survey for the first quarter of 2006 covers outsourcing trends in HR, IT, finance and…

Research and Markets offers ‘Outsourcing Clinical Development’
By Danny
With the many challenges facing large pharmaceutical companies nowadays there is a need to reduce development costs by as much as 30-40%, while at the same time significantly shortening development….

Philippines could get 450,000 call centre jobs in the next five years
By Danny
According to the Trade Union Congress of the Philippines (TUCP), the country could corner as many as 450,000 call centre jobs from the off shoring operations of US corporations over the next five…

Fed: Outsourcing helps U.S. economy
By Danny
Thomas F. Siems, senior economist at the Dallas Federal Reserve, said that offshore outsourcing results in overall economic gains in the long run. According to him, lower consumer prices, better...

Payroll outsourcing offers leg up on competition
By Danny
Payroll management can become complicated, costly, and time consuming for businesses of all sizes. This is why payroll outsourcing is becoming an easy solution to solve this problem. Companies are now…

Cambridge Among Top Three Global BPO Providers: Global Services
By Danny
The BPO division of Cambridge Solutions Ltd. Has been named one of the three ‘Best Performing BPO Providers’ in the world and one of the 100 top ranking global services providers by…

Bulgaria develops as outsourcing destination
By Danny Bulgaria has been appearing in various rankings of the most attractive outsourcing destinations. The types of services mostly outsourced to the country include data processing, software programming…

Growth in Contact Centre Outsourcing Market
Offshore outsourcing is a global phenomenon that has driven the growth in the contact centre outsourcing market in Asia-Pacific. The trend is expected to continue to be the key growth driver. Since the contact centre outsourcing market in Asia Pacific continue to witness strong growth, the demand for skilled workers is increasing day by day.

Outsourcing Tips for Small Businesses
The promise of saving time and money by exploiting technology and inexpensive labour has driven companies to opt for outsourcing. Experts believe that millions of jobs will be outsourced to overseas destinations in near future. Before outsourcing your business, you must know the strengths and weaknesses of your business. Selecting a vendor is tough for large companies with huge budgets. You can browse through several websites to find a reliable partner. The following websites can be helpful on this regard:
Elance
iFreelance
ScriptLance
Rent A Coder
Get A Freelancer
UAE: Hot Destination for Outsourcing
After India, Ireland, Malaysia and Philippines, now it is the turn of UAE to join the outsourcing brigade. The Dubai Outsource Zone (DOZ) development was first announced in 2004. The project was the brainchild of Dubai Holding. During the launch of the project, it was not expected that it would be huge success. However, it happened. Demand for space within the zone from both regional and international companies has already exceeded expectations.

Choosing the Right Time for IT Outsourcing
Outsourcing has become a "buzzword" in the industry today. Many companies are outsourcing their entire IT operations in order to bring more efficiency and effectiveness. Cost saving is also one of the major factors that drive the outsourcing growth. In the past, outsourcing was used to farm out the undesirable jobs. However, situation is completely different today. IT outsourcing has become a common phenomenon in the software industry. It is important to make a perfect analysis before finding out the right time to outsource your business operation.

Outsourcing Work Saves Time
Small businesses often do not have a HR department to manage their resources. Hence, they hire professional in order to guide and manage their staff. That is not always a preferable option. Outsourcing is one of the few options that help companies enhance their capabilities such as web site maintenance and transactions. By outsourcing their work to a third party business, it saves enormous time and money for the companies. Cost is definitely the main factor. However, time also plays an important role in determining the output. The entire hiring process for any job can be turned over to a professional employer organization, which will also help train employees. The third party will also write performance review forms and create medical and other benefit plans.

IT outsourcing in Western Europe
A new study conducted by the IDC revealed that the top 100 Western Europe outsourcing deals totaled $40.5 billion in value last year. It is driven by nine mega deals signed for a total of $20.5 billion. Five out of nine deals have been awarded by two government agencies. Outsourcing deals are getting shorter in length because customers are less willing to stick to a contract for long periods. Vendors must explore cost-savings in a much shorter time period. The study also revealed that IBM is no longer the topnotch company in the Western European outsourcing industry. Although it signed 14 deals in 2005, the aggregate value was lower than that of BT Global Services and EDS.

Asia-Pacific IT Outsourcing is Booming
According to a recent report, Asia-Pacific outsourcing spending is all set to cross the $10 billion mark this year. In this region, more emphasis is being given on IT outsourcing. Research firm IDC has estimated that $10.5 billion will be spent on IT outsourcing within the region in 2006. As the sector is booming on a high pace, it is expected to reach $16 billion in 2010. In the past decade, the Asia-Pacific outsourcing market has seen significant increase and it is surging further. Besides India and China, Philippines also joined the exclusive club of hot outsourcing destinations. Countries such as Singapore and Hong Kong are also attracting more outsourcing businesses.

Wombs Outsourcing
Outsourcing business is no longer a new concept in the industry now. A large number of firms in the USA and Europe have outsourced their businesses to India and other favorite destinations for better productivity and quality at a low cost. Outsourcing business covers health, law, transactions, finance and other related operations. However, a new concept of outsourcing has come into picture with an increasing number of couples are coming to India in search of cheaper fertility treatment, donor eggs and surrogate mothers. It seems that the West is turning to Indians to carry babies.

Outsourcing: A universal trend
When outsourcing started out as a business model for companies in the U.S., it became the alternative to high costs of operation in the U.S. and found economically viable partners in countries like India. Some years down the line, the practice of outsourcing work to save time and money is no longer a one-way-traffic, but has developed a cyclic pattern. U.S. countries outsource to India, India outsources to other countries, and so does China to other outsourcing service providers situated in other countries.

Outsourcing of Pharmaceutical Companies
According to a recent study, most pharmaceutical organizations are now shifting their IT-support functions to third-party vendors. This is the hottest trend in the outsourcing industry. Previously, only the IT sector and customer service industry were the part of outsourcing boom. However, the situation has changed now with the globalization of pharmaceutical companies.

Contemplating Outsourcing?
With even small and medium businesses outsourcing their processes today in order to cut back on costs, there are a few precautions they should take before they jump into the fray.

Consider that the decision may involve transfer of employees
Realize that software and hardware licenses may have to be transferred to the service provider
Set standards to measure if delivery measures up to promised levels
Set rules for handling personal information according to the Data Protection Act
Anticipate intellectual property issues that may come up
Decide on the time frame for the contract, and any clauses that deal with disaster recovery and termination of rights
Agree on a procedure to resolve disputes
Remember that flexibility is the key to success in outsourcing

Outsourced Work Outsourced
The outsourcing market is looking at a new scenario now – one in which outsourced processes are being outsourced again. Indian IT giants like Tata Consultancy Services (TCS), Wipro, and Infosys Technologies are among those who have opened offices in Hungary, China, Chile, and the Czech Republic. With this emerging trend, India seems to have lost its status as the golden-haired child of the offshoring industry. If India can find labor and skill in other countries, why can’t we? This seems to be the question the USA is asking. It has found suitable answers too, in the form of operations being outsourced to Dubai, Budapest (Convergys), China, the Czech Republic, Hungary (IBM Global Services), and Philippines, Slovakia (Accenture). But India is not out of the running; in fact, it has moved on to performing more sophisticated processes like design and research and development (R&D) for companies in the U.S, rather than just data entry and back office processes.

Costs, Savings, and Outsourcing
You should probably rethink your outsourcing options if you are in it for the cost benefits. A survey by outsourcing advisory firm TPI has found that the outsourcing of information technology and business services results in an average savings of only 15 percent, a far cry from the 60 percent cost reduction claims. With salaries paid to professionals, severance pays, and governance costs making a huge dent in the company budget, organizations are left with only 10 to 39 percent as savings. There's some good news though for those who prefer quality to quantity though; around 21 percent of companies have now outsourced to enhance quality, a substantial increase over the 11 percent that did so in 2004.

Outsourcing Questions
Linda Cohen, analyst at research firm Gartner, outlined the questions to be asked when any organization decides to outsource. Answers have to be provided for:

WHY – Why should the company outsource? Is it to cut costs or to improve or change business processes? Whatever the reason, it should be unanimous throughout the upper echelons of the company.
WHAT- What should be outsourced? Only the back office operations, the customer service interactions, or other processes those are strategic to the business?
WHO – Who should you choose to entrust with a part of your business? Should you choose a start up company that promises much or stick with a tried and tested firm that has been in the market for a few years?
HOW – The how relates indirectly to the WHO. You have to decide if you are going for customized, high-value solutions, or standardized, cost-effective ones. You also have to coordinate how your internal and external personnel work together, and set a standard to monitor and evaluate performance.
WHERE – Where should you send your operation? As far away as India, closer home to Mexico, or better, to home-based agents in the United States? This depends on the complexity and range of the operations you are outsourcing, and the control you would like to maintain over them.

Is Outsourcing For You?
If you are looking for ways to cut costs but also expand your business horizons, the “Off-Shoring, Near-Shoring and Home-Shoring: Does it Make Cents for You?” seminar might help you get a few pointers. Organized by the Arizona Technology Council in Phoenix (May 2) and Tucson (May 3), the conference will include speakers who are experts in the field of outsourcing IT, call centre and back office operations to other countries and to home-based agents. For details on how to sign up, or for more information on the seminar, please visit the Tech Council’s website.

Philippines is the Rising Star of Outsourcing
Philippines is taking advantage of it's strengths rather than looking at it's obvious economic problems to drive the outsourcing industry to greater heights. This 90 million nation is subject to a "not to be proud of" economic situation but it has a population where 95% speak English which is a natural advantage to grab a share of the US outsourcing market.

Where outsourcing loses out
Outsourcing can be a boon as experienced by organizations across industries and market segments. However, all discussions relating to the negative fallouts of outsourcing remain restricted to the job market. Is it time to look at other cons of outsourcing ?
Although customer service standards have risen with the increasing appetite to enjoy better service by clients, outsourcing can lead to bad customer service resulting in loss of valuable clients. It has been seen that service standards have become the prime motivating factor for customers to continue with a given service provider and third party outsourcing can lead to
undesirable results in the long run.

Onshore vs. Offshore Competition
Competition between offshore team and onshore team can either be good or bad based on how you manage it. Hence it is important to recognize it and plan accordingly. But first let’s take a look at the how the competitive spirit plays out at various stages of offshore engagement. Please note that this discussion applies equally well to captive offshore team as well as offshore-outsourced team.

Do Outsourcing Certifications Help?
In search for better quality and lower risk many enterprises are now mandating certain certifications for possible candidates for outsourcing. Are they making a mistake? The short answer is "Yes". Even though in many cases over emphasis is placed on the certifications, there is no doubt that having certifications shows that an outsourcing outfit takes quality seriously as a corporate priority and is willing to spend time and resources to do so.

Doing Your Homework Before Outsourcing
Doing homework before getting started with outsourcing is as important as managing the outsourcing relationship once established. Like any organizational decision, outsourcing requires effective management from the outset of the outsourcing evaluation through the life of the outsourcing relationship. The most critical part of getting started right is to first determine the reasons for outsourcing. Even before sending the first RFP or meeting with a potential vendor, the company should have all the stakeholders fill out a questionnaire that should contain, at a minimum, questions such as the following:
1. What are our core competencies?
2. What areas of the corporation take a large share of management time and other resources but are not critical to the survival of the enterprise?…

Terms you should know

Do you think you know every word and acronym of your industry? Are your sure you know the full forms of RFP and FM. (RFP is Request for Proposal and FM is Facilities Management).
A lot of managers talk to their subordinates in short forms and acronyms. They expect their subordinates too understand what they are saying. Chances are plenty that your boss may explain you some of them, if you do not know. But if tend to you ask for the meaning and full form of every acronym, you had it.

Things you should know before outsourcing
The thought of leaving your customer at the mercy of a person who is sitting miles away can give you goose bumps. Every business would like to keep their customer happy and so when outsourcing seems to be inevitable to business all over the world, here are a few points that one should remember before outsourcing their services.

Watchlist for outsourcing
Outsourcing is a double-edged sword. If managed properly, it can reap immense benefits; however, there can be unpleasant surprises also in an outsourcing deal. Outsourcing companies need to take care of factors such as back-end loading, cultural misalignment, preferring quality to size of the deal, and ensuring that a contractual benchmarking clause provides for periodic checks and balances regarding pricing and service quality.

Outsourcing vs. shared services
Two competing trends help companies get more value out of IT operations
There are two current trends in IT with diametrically opposed ponits of view that are worth looking at. The first is shared services, wherein the IT organization becomes the internal service provider to the rest of the company. The second is combined business process and IT outsourcing all done under one roof -- although, of course, that roof is somewhere other than at the company.

Outsourcing the desktop
Outsourcing desktop management can shave costs while bringing relief to an assortment of infrustructure management headaches.
By Dan Littman
In 2003, New York City consolidated 32 autonomous community school districts under a unified Department of Education, creating a vast organization of 130,000 employees serving 1.1 million students. The reorg also brought one IT roof approximately half a million pieces of computing equipment, including about 300,000 desktops and notebooks. According to the Department's CIO, Irwin Kroot, no one at the time really knew how many assets the system had. So Kroot's predecessor outsourced an inventory survey to a division of Dell. "They went door to door," Kroot says, to all the district's 1,200 buildings, to inventory the equipment for an asset managment database.

Is IT Outsourcing Stagnant?
By Stan Gibson
Opinion: Year-end figures show a decline in the value of global contracts.
While there is much talk about outsourcing and services being the future of IT – and IT becoming, in effect, a service—it seems that IT outsourcing is actually not growing – depending on what statistics you look at and which you believe.
TPI, a sourcing advisory company, reported that in 2005, the total value of global commercial outsourcing contracts declined by about 4% to $75 billion, from $78 billion in 2004. The figures come from TPI’s year-end market observations in its TPI Index, a quarterly report on the state of the global outsourcing industry.

Outsourcing: The Russian Revelation
By Stan Gibson
When Daniel Marovitz sought an offshore partner, he scanned the globe. “We talked about Canada, Ireland and low-cost locations in the United Kingdom. But it really came down to India, and Russia,” said Marovitz, chief technology officer for global banking at Deutsche Bank’s investment banking unit, in London.
Marovitz soon found that approaches of companies in those two countries could not be more different – and that a Russian outsourcing provider would best satisfy Deutsche Bank’s needs in maintaining and enhancing its 5,000-user “client-first” CRM (customer relationship management) system for investment bankers.

Outsourcing in India Pays Off
By Stan Gibson
MUMBAI, India—Outsourcing to India has delivered rich rewards for a number companies, freeing up scarce funds to fuel strategic investments and, in some cases, corporate turnarounds. Next up: enlisting Indian partners to revamp business processes.
And those partners are willing. Indian providers are increasingly moving beyond a reliance on labour arbitrage to create intellectual property they can sell to customers. Several large customers told their experiences here at the Nasscom conference.

Why We Offshore Our Software Development Work to Ukraine
By Ismael Ghalimi
At Intalio we started looking at taking part of our software development work offshore in late 2004. During the first half of 2005, we focused our attention on India, flew there a couple of times, talked to about 20 firms and finally engaged with one. After experiencing a significant turnover in the employee base of our offshorepartner, we decided that the model wasn't working for us and that we would be better off keeping all software development onshore, in-house.

Protecting Your Company from IP Theft: A How-To Guide
By Jason Park
Outsourcing situations are fraught with personnel turnover -- whether your internal team experiences it or the service provider does. Along the way, some departing folks may believe they have reasons to hold a grudge against your company. Most companies take care to ensure that new and departing employees have completed human resources files with non-disclosure agreements, non-competition agreements, invention and assignment agreements and varous other forms.....

Go Offshore Without Going off Track
Software development, which can be tricky under the best of cirumstances, gets even tougher when programmers are located thousands of miles and several times zones away. This article should be required reading for any company with offshore software development, whether it's done at a captive center or by a third-party provider. Though the advice is pretty detailed, it boils down to four key points: When it comes to process integration, strive to create consistency between onshore and offshore development teams. Work hard to build relationships........

Crawl, Walk, Run Strategy Leads to Success in Offshore Outsourcing
By Uttiya Dasgupta
Some companies have sucessfully leveraged offshoring to grow their businesses. Others have failed in this arena by incurring "hidden" costs, due to a lack of planning and the inability to implement an appropriate offshoring strategy.
To be successful in offshoring, you should plan to build your internal capabilities step by step. In this article, I share a strategy we advise clients to use, which we cal Crawl, Walk, Run. I also share a few tactics; detailed elaboration of the tactics is beyond the scope of this article. I illustrate my points with a case study I've composed based on the true experiences of several of ours clients in the small-medium enterprise (SME) space, to which I've given the single pseudonym of ABC-software.
Step 1.Discovery
The first step in the offshoring process is to asses your suitability for offshoring.......

Setting Standards
Benchmarking ensures that even after a number of years the outsourced service is just as attractice as it was on day one
When offshoring, both parties sign up complex contracts for the long term. This allows the supplier to spread its intitial cost and risk over a longer cycle and the customer to, in turn, benefit from a reduced annual charge and less frequent reprocurement. Yet, a dominant feature of the traditional domestic and international outsourcing market is that many contracts are terminated early or are renegotiated. Outsourcing solutions can become outmoded or expensive in a rapidly changing market.

Leveraging Services Globalization to Reduce Time-to-Market through Process Transformation
Time-to-market reduction is one of the most important and effective ways to increase market share and product revenue. Yet the question of how to reduce time-to-market continues to confound many executives. This paper explores one way of reducing time- to-market : process transformation through services globalization.
This paper also explores the question; How can process transformation be done more effectively, more cheaply, and more quickly. It will help client organizations take advantage of four unique transformative opportunities that services globalization offers.

Offshore and Nearshore ITO and BPO Salary Report
Global sourcing has become a key competitive necessity for major organizations. Even as other consideration factors become important determinants of a country's success in globalization, cost savings remains they key. While a number of factors affect the cost savings potential of any given global sourcing arrangment, the cost of labour is among the most important. For that reason, we've undertaken - for the second year in a row - the challenge of analyzing salaries across different levels of experience for the most common established and emerging sourcing destinations.
This report analyzes ITO, voice-based BPO, and non-voice BPO salaries in each of 20 key services sourcing destinations - including the Czech Republic, Hungary, Ireland, Israel, Poland, Romania..

An alternative to offshoring
Instead of sending customer service work to India or the Philippines, more are outsourcing work to people in their homes.
There are a few drawbacks for home agents who work for providers like Alpine Access, LiveOps, Willow and Working Solutions. The work is oftern boring and the pay low, there are no benefits and workers must equip themselves with computer, phone line and Internet access. Regardless, says this Sue Shellenbarger column, highly qualified workers are flocking to take jobs with the flexibility that allows them to set their own hours.....

Pros and cons of offshoring
By Jean Paul Vellotti
In 2002, the term offshoring was just starting to enter the American lexicon.
At that time, Smart Sourcing Inc. a Farmingdale company that specializes in offshoring manufacturing to China, approached a local maker of plastic lawn furniture with a proposition to outsource the comany's products. their offer was simple - offshoring would save the company money.
The offer was rejected.......

News and numbers from US IT world
IT outsourcing, especially offshore outsourcing has brought about various changes in both outsourcing nations as well as vendor nations who do the outsourcing work. In US today, IT outsourcing has become one of the hot topics of discussion. While pros and cons of offshore outsourcing are discussed with vigour, surveys to determine its real impact is conducted from time to time. And through all this, the average US IT professional remains a confused self......

Software Outsourcing advantage in Global Economy
International Outsourcing in particular is apparently affecting Global Economy. Software Outsourcing Industry is also growing to this demand across the borders and boundaries. There is demand from all parts of the globe to outsource their work to India from Paris, Australia, European Countries and other big cities. The high value of outsourcing project is lured from US and UK. US based clients are ready to take risk by outsourcing their projects and products to Software Outsourcing firms.....

How to succeed in a global economy
Being a global company used to mean being a big company, but today even the smallest ecommerce firm is a global player by default.
IT has played a significant role in opening up the worlds borders. The internet, email, videoconferencing and agreement on global standards for communication, such as
For human resources, globalisation means we can seek skills wherever they are found in greatest supply. One of the manifestations of this has been the phenomenal rise in outsourcing - once the preserve of big firms, now everyone is doing it.
You don't have to be big to be global, says Phillip Everson, a consulting partner at Deloitte.......

How secure is your outsourced operations?
Steadily, more and more enterprises are exploring the outsourcing strategy, primarily to increase profitability by cutting costs. However, this seemingly attractive strategy comes with certain inbuilt risks, which if not complemented with a mitigation strategy does not create uncertainty for success in long run.
They key question that all organisations, especially the banking and insurance industry, face is: How will the secure information be guided tightly preventing any free flow, leading to any misuse?
Information security raises concerns of:
*Privacy
*Internal misuse of information;
*Intellectual property right infringement;.....

Focus on IT Outsourcing for financial services providers
IT Outsourcing is typically associated with Information Technology, for financial services providers. Look at the banks, which often turn to outside vendors to handle their back-office processing and Internet delivery functions by offshoring. The managers need to examine each discrete branch-related function and at the same time assessing its importance to the overall strategy and institutionss brand image. There is particular function which may be cheaper to handle by an offshoring criteria, those cost saving might be offset the change.......

Offshore outsourcing: Good economics but not always good politics

Around two years after the proverbial slip that became one of the most discussed topics of the 2004 US election, Dr. Greg Mankiw, Professor at Harvard University and a respected economist, has finally thought it apt to explain to the world why his stance of calling outsourcing yet another form of international trade was right.

Almost 18 months after quitting as the Chairman of the Council of Economic Advisors (CEA) to President Bush, Dr. Mankiw, often vilified by the anti-outsourcing lobby and blamed by friends of the President for creating an issue for the opposition, gives his side in a discussion paper, Politics and Economics of Offshore Outsourcing, that he has co-written with Philip Swagel, former Chief of Staff at CEA and presently with the American Enterprise Institute.

Outsourcing: No Big Deal Anymore
In the 2004 political season, offshore outsourcing -- the practice of hiring lower-paid service workers in places like India to carry out tasks previously done by higher-paid American workers -- became an important issue.The debate flared after the annual Economic Report of the President was issued in February 2004, just as the Democratic presidential primaries were heating up and payroll job growth was sluggish.
Answering reporters' questions about a section of the report on trade, N. Gregory Mankiw, then the chairman of the White House Council of Economic Advisers, made a statement that would be utterly unobjectionable if uttered in a classroom at Harvard, where he taught before joining the Bush administration and to which he has since returned. The crux of it was this: "Outsourcing is just a new way of doing international trade."

Offshore outsourcing and France

France is increasingly outsourcing its IT jobs to near shore locations that speak french. Frost & Sullivan's Study finds that the French are very strict on the point that their outsourcers speak French and so France is sending its IT jobs to Tunisia and Mauritius.

Forrester Research (2004) had put the number of IT jobs expected to go offshore from France at 2,639 jobs. This number was supposed to be consisted of 1,287 computing professionals including 1,352 junior computing staff and operatives. In 2015, the number of offshore jobs is expected to be more than 15,447, of which 8,686 jobs would be for computing professionals and 6,761 junior computing staff and operatives.

Outsourcing IT operations

Outsourcing the IT operations is often viewed as the end to all IT related woes. But mismanagement of the process can result in doubling your troubles. This article discusses some considerations managements should heed.

Outsourcing, in the past, was used to farm out the undesirable jobs, but many companies are now outsourcing their entire IT operations: it isn't just for software development anymore. If this is a business decision focused on lowering costs, it's clear that lowering revenues at the same time isn't the desired outcome. That's exactly what can happen, especially in the software industry, but also with IT outsourcing. The consequences are never immediate, however.

Companies have many choices when it comes to hiring their workforce for IT operations. They can employ a workforce in-house and hire consultants to handle the really tricky things, have a full-blown staff that handles everything, outsource everything, or varying levels in-between.

How offshore outsourcing is changing the world!

It is a fact that offshore outsourcing as well offshoring is changing the way businesses are being done. Seamless functioning across continents and time zones has revolutionised the business world. The world is now flat for the 24x7 global conglomerates. Here is a closer look at offshore outsourcing, and the global opportunities that it brings.

Outsourcing is often misunderstood. Not only do some people within the IT industry find it a threatening term, there are all kinds of new and ever-changing jargon associated with the practice - which should have endeared the practice to IT professionals.

'Outsourcing' is the term commonly used for the practice of companies to subcontract work to third party organizations.

Offshore outsourcing: The answer to all your IT woes?

More and companies are outsourcing their IT related work to offshore service providers these days. And most swear by the services they receive. So is it the answer to all your IT troubles or is it over-hyped? Here is a look at the benefits of offshore IT outsourcing ...

It is generally held as a good idea to turn IT operations and especially IT development over to external providers, as it significantly saves on staff, equipment, training and maintenance, as well as it allows customers to concentrate more on business. However, the lack of IT professionals in developed countries reached critical proportions, with 340, 000 vacant IT positions in the USA alone. This fact makes outsourcing increasingly challenging and expensive. The solution is, therefore, to go offshore.

The advantages of offshore outsourcing your IT needs
It is natural for companies that consider offshore outsourcing IT to be concerned about a lot of issues, varying from those relating to security to intellectual property rights. These are valid concerns that should be addressed before outsourcing your software development needs. To develop software inside the company's premises is undeniably safer, but lower cost alternatives nowadays, are enticing.....

Things to remember while outsourcing offshore
It is important to remember certain factors while outsourcing to offshore locations. There is a tendency to outsource and forget till it is time to receive the results. This often leads to the failure of the outsourcing contract, as the success of an offshore contract often depend on fine-tuning things on the domestic front - getting the onshore right.
It is important to remember that a successful outcome to an offshore project may very weill depend upon managing the expectations of your internal customers, as much as communicating correctly with your offshore partner.
Here are a few hot 'onshore' tips from companies who've done it.....

Revelations on the outsourcing world
A study by Chicago-based consulting firm Diamondcluster International has come out with many a revelation about the outsourcing world. It says that IT boom in India will soon be over due to labour saturation. The study lists China and Canada as emerging BPO hubs.
The study further says that there is a significant decline in the number of buyers - 64 percent offshore and 50 percent onshore......

Shatter the myths on offshore outsourcing!
Outsourcing is anavoidable in modern business world. Outsourcing offshore is no longer an issue either. In fact, developed nations are increasingly outsourcing all its routine but essential work offshore to low cost destinations. However, a number of myths about offshore outsourcing and its impact still exist among common people in these countries. Hence, it is important that these false notions are changed and people be made more aware of the long-term benefits of adopting offshore as a business strategy....

The diverse trends of Outsourcing and Shared services
Sharedx services, wherein the IT organization becomes the internal servie provider to the rest of the company and a process of combined business process and IT outsourcing all done under one roof - although, of course, that roof is somewhere other than at the company, are the two current trends inIT with diametrically opposed points of view. This article takes a look at both these practices....

Business skills are essential in IT Outsourcing

The research studies shows that the development of every company whether IT or non-IT industries, every businessman/woman needs some basic business tactics in him/her. Business skills are essential in Offshore Software Outsource and these techniques or fundamentals are not revising in a day. Outsourcing market is huge and wide. It is spread across India and even some other foreign destinations such as Germany, Sydeney, Japan and China. Yet, the Offshore Software Outsourcing demand is not fully satisfied.......

Using Outsourcing Software to Reduce Costs
It became very clear that the World Wide Web is an integral part for the global buisness paradigm when one examines the Internet as a whole. It is being said, workers can get in real touch with outsourcing software development workers in nations such as Zimbabwe or with an Internet Technology professional in city of India likes of Bombay with the simple click with a mouse. With the wide use of these websites, generally it has allowed people to market themselves in different of ways. For instance.......

Outsourcing no longer as cost-efficient
Companies often opt for outsourcing to save costs but according to recent survey IT Outsourcing saves less than ascertained, as the development cost seems to be increasing slowly globally. Many companies have now started to complain about the less cost savings through the Offshore Software Outsourcing and other IT services. These companies are now finding that their service provider is charging marginally bit more and the expected profit of the company is going down.........

The ever-changing world of Software outsourcing
Though long past the nascent stage, the world of software outsourcing is still constantly evolving. Even as the old prayers consolidate their market, new trends and fields constantly emerge and make a mark. Demands on human resources also keep changing, as opportunities open up in new and different avatars. And all these changes can be observed in India, the leader of the outsourcing market.
The budgets initiated for this fiscal period is seeing cut throat competition in Software Development Market. New businesses are empowering and the multinationals are invading India. As we all know human resources are plentiful and the talented and skilled workers are ready to serve the Company in better manner........

IT Outsourcing and trend
IT Outsourcing and Trend represents that how fast the business process in the IT Industry is changing. Increasingly, it is argued that the position and functions of Information Technology (IT) is moving from its former status of functioning as an "enabling" function. It was the function where business strategies and planning could be faster and effectively realized by the companies to that of a true driver. It was also the time where an organization's strategic positioning is pushed by deliberations alarming information technology and services. Companies use to take the help of Onshore Service Providers instead of Offshore Outsourcing. But with the increasing demand and changes in the technology along with the competition in the market IT Outsourcing has also faced the change in the trend of the business.

IT Pros Sound Off on Offshore Outsourcing IT pros aren't, as a rule, knee-jerk opponents of offshore outsourcing. Some, for example, are earning their livings (or at least scraping by) as outsourcing contractors---in some cases, in near-shore locales, such as Canada. Others sanguinely embrace offshoring as a particularly challenging consequence of free trade---or wanly acquiesce to it as an ineluctable force of global capitalism. The upshot, then, is that IT pros are surprisingly nuanced in their objections to, or support of, offshore outsourcing. Even many offshore dissidents acknowledge that there's sometimes a compelling economic case to be made in favor of offshoring, although they vigorously question its logic on other grounds. It doesn't help, either, that outsourcing as a phenomenon---and offshore outsourcing, in particular---are linked in the public imagination with cost cutting, so much so that---rightly or wrongly---the desire to reduce costs is frequently cited as one of outsourcing's most important drivers. This has many IT pros crying foul.

The Offshore Outsourcing history
The idea of Offshore Outsourcing has its basic roots with competitive advantage theory for country like India. The meaning of Offshore Outsourcing has been undergoing several changes since long years. As shifting of manufacturing process to nations that provide cheap labor during Industrial Revolution has take new connotation for scenario of today by starting off. In today's globe IT has became the backbone of businesses organizations thought out all the industry....

The recipe for success in IT outsourcing
According to David Switzer, director of outsourcing services at CTG, an international IT solutions and staffing company, to increase the chance of success in IT outsourcing, companies must increase their focus on creating and managing a successful mixture of supplier relationships that work for them. He was speaking to delegates on the framework for successful IT outsourcing at Interphex 2006.
When it works, outsourcing can help companies to effectively manage costs and labour and improve the overall IT service, however, many IT outsourcing relationships fail when companies take the wrong approach.....

The ways of offshore outsourcing
The buyer and the provider in an offshore outsourcing deal must be aware of what they are getting into. And they must understand the needs of the deal perfectly. In fact in Business Process Outsourcing implementation the most valuable step actually begins before the buyer even decides which process to Outsource and enters into discussions with an Outsourcing vendor. This includes indetification of the operations, both manufacturing and administrative, without which the organizations would cease to be viewed as a source of goods and services......

The need for software outsourcing know-how
It is very important for a company to examine the pros and cons of outsourcing before going for the process itself. However, there is a great scarcity regarding the relevant details in this sector. And often companies have to put in much concerted efforts before getting the relevant data. Hence, there are many companies who go for outsourcing without checking out all its facets. These kinds of deals are the ones that fail to take-off.
To expect from the Offshore Outsourcing team to have a list of software developed would be very unreasonable, so in that one can select what they want........

The advantages of outsourcing offshore software development services
The advantages of outsourcing offshore software development services are manifold. Also distributed Offshore Software Development is a key challenge for almost all the Software Companies. This is a mian reason as to why such companies go for IT Outsourcing and services. Cost, availability of skills and talented professionals and manpower and round-the-clock support and services are some of the key advantages that inspire service providers to look for Offshore Software Development services. Along with this they are also getting the advantage to expand their business globally....

Security concerns worry Outsourcing companies
A Survey conducted among US companies already outsourcing or actively pursuing plans to do so reveals that most of them are worried about the security risks inherent in offshore outsourcing to developing countries. The survey was developed to provide imminent perspectives on the enormity of information security risk peril in outsourcing relations, how companies vision the information security capabilities of seller, and the information security and database privacy dare that the outsourcing companies must address to build the trust and buoyancy of their buyers.......

Cost saving must not be the only objective of outsourcing
The finding of the survey by analyst Gartner, that the desire to reduce costs is the main reason for firms to outsource their IT functions, has alerted the experts who warn that paying too much attention to reducing costs, ignoring other important aspects of suppliers' performance will increase the risk of project failures.
Gartner surveyed 945 IT managers globally, including 300 in Western Europe. It found "reducing costs or improving efficiencies" was the most popular reason for outsourcing IT functions - over half the respondents said it was the main reward they expected from outsourcing.....

Pros and cons of Outsourcing
It is imperative for business houses to be knowledgeable about the pros and cons of Outsourcing before they decide to jump the Outsourcing bandwagon. As outsourcing while certainly an attractive proposition on paper, can spring a nasty surprise on you in practice.
It is important to take a good look at both the advantages and disadvantages of the outsourcing before taking the decision on whether to outsource or not. Make sure you know exactly what you stand to gain or lose by outsourcing your work.
First of all, the advantages of outsourcing for your business are that you'll be able to get done some of the less important jobs cheaper....

Offshore Software Development and Offshoring costs
Last year surveyed of Sand Hill Group executives from about fifty software development companies and found that Offshoring software development has become accepted preparation. Approximately 85% of software companies said they use offshore developers, a growing from about sixty three percent two years before.
Co-founder of Sand Hill Group M.R. Rangaswami said, "software development companies are done an offshore not just a testing and maintenance but they are more dependent on Offshoring than ever before."...

The contract is the most important part of the outsourcing relationship
Surprisingly, contracts are frequently vague about exactly what he outsources responsibility is versus the customers. Without a patrollable boundary, neither side knows with certainty what it should be doing. The result: Each side blames the other when hings inevitably don't get done. The big problem seems to occur when businesses think that outsourcing obviates the need for any kind of corporate technology strategy. Blue Cross Caron discovered that very thing when he walked into the contract from hell. "People here thought [the outsourcer] was going to do everything, but it could only do so much and had only so many resources," he says....

Offshore Outsourcing: why some deals fail?
Offshore Outsourcing process, which is used very frequently in all the industries for the purpose of success in the business process, doesn't really bring success all the times. But the reality is that almost half the times the deals fail because of one or the other reasons and this is the only fact behind all the myths of the success of the process......

Different approach for Software Outsourcing
The balance of organizations' long-term needs with the short-term needs by expanding horizons of Software Outsourcing teams, in practice fairly straightforward goal remains elusive. Very often, the Software Outsourcing project team focuses solely on the piece of pie, building new stovepipe systems that do not fit into existing environment, and prove overly expensive to develop or maintain, they do not reuse the share services and components. It is common to discover, in the same company, enterprise grouping, typically comprising experienced, architects and data administrators. Usually these folks have a wide vision to address the situation, but very often they haven't actually coded, they often propose a data oriented approach instead of a more contemporary object and service-oriented architecture for Software Outsourcing....

The right choice of IT outsourcing
Software Development market in IT Outsourcing is now using strategic trands. The efficiency is lowered when owrked onshore and so gave birth to the new idea of offshore outsourcing. Because the competition is too high and in some particular cases, United States and European IT professionals even go farming rather than own up the situation and get adapted.
So if one asks about the regions of associating with IT-industry that will get quite a short list: India, China, Russia, and Eastern Europe because The International Division of Labor has done its work in the field of IT Outsourcing. Historically these regions had the most efficient

A Simple Way To Use Core Competency and Financial Impact Analysis in Outsourcing Planning
By Nari Kannan
The phrase "core competency" was introduced by C.K. Prahalad and Gary Hamel in a groundbreaking article in 1990 in Harvard Business Review. They wrote that a core competency is "an area of specialized expertise that is the reult of harmonizing complex streams of technology and work activity." Honda Motoc Co.'s core competency is its expertise in engines. The company builds motorcycles, lawn equipment and automobiles around their engines......

Agile Outsourcing: How Agile Methodologies Help Software Development Outsoucing
By Nari Kannan
Scott Ambler, author of books and articles on agile methodoligies in software development, wrote an article in the May 2005 issue of Software Development magazine about his visit to offshore software development companies. He was giving a series of lectures on agile methodologies and outsourcing. He made some powerful arguments for why agile methodologies were more suitable for outsourcing that traditional ones....

Cultural differences cause off shoring problems
Two-thirds of execs say it’s the main reason deals run into trouble…
By Andy McCue
Cultural differences are one of the biggest reasons why offshore outsourcing deals fail or run unto problems, according to new research.
In an Accenture study, two-thirds of 200 US business executives said that miscommunication arising from cultural differences has caused problems when outsourcing offshore….

Finding the Right Balance for Outsourcing
By George Elliot
Before outsourcing should even be considered, reconsider the base from which these decisions are made. It is time to examine every process, every management policy, every initiative, both past and present, and the complexity of the current products or service mix with a ready and willing commitment to establish true lean.
Competing internationally is not just about wages. It is about total cost – design, quality and customer satisfaction. It is about an organization’s and the broader communities’ legacy and the need to work with an integrated and balanced value proposition. It is about the future of the United States…

Outsourcing: No Big Deal Anymore
By Daniel Gross
Lots of services still require face-to-face interaction for people to do their jobs. That is particularly true for the biggest sectors, retail and healthcare. As a result, according to a McKinsey Global Institute study, only 3 percent of retail jobs and 8 percent of healthcare jobs can be outsourced.
In the 2004 political season, offshore outsourcing the practice of hiring lower-paid service workers in places like India to carry out tasks previously done by higher-paid American workers – became an important issue. The debate flared after the annual Economic Report of the President was issued in February 2004…

The Seven Deadly Sins of Outsourcing
These are the transgressions that can doom you to outsourcing hell. Here’s how to avoid them.
Outsourcing is a source of stress, struggle and angst for many IT managers, and no wonder: More than half of outsourcing agreements and up prematurely terminated, according to a study released last year by Diamond Cluster International Inc., a Chicago-based consulting firm. That leaves a lot of companies far from outsourcing nirvana, but it doesn’t have to be that way. We asked IT experts and veterans to talk about the bad decisions and faulty assumptions that can cause your outsourcing project to fall from grace…

How to Survive the Outsourcing Boom
It’s something almost every IT professional worries about: will my job be outsourced?
That’s a valid worry. Undoubtedly, outsourcing is here to stay. Year after year, jobs migrate offshore, forcing American IT workers to scramble for new positions.
In the past, companies use to agonize over outsourcing, says Gartner analyst Diane Morello. But not anymore.
“Now, when I talk to companies, it is assumed that outsourcing and offshore outsourcing are at least candidates for their sourcing portfolio,” she tells Datamation. “There is much less dismay and horror.”

What Makes A Business Process A Good Candidate For Offshore BPO?
By William Martorelli
With significant growth in both customer interest and vendor revenues, offshore business process outsourcing (BPO) is of increasing interest to commercial enterprises, particularly those that have outsourced offshore successfully before in other domains. But what makes for a good candidate process? At the end of the day, any process performed successfully on a remote basis or in a shared services context can be outsourced successfully and any such process can be outsourced offshore depending on audit and compliance constraints…

Outsourcing as a Way to Optimize
By Carol Kendrick
Optimizing service delivery remains to be the constant challenge of companies when it comes to making sure that the firm profits and at the same time manages to cut back on cost and other expenses. Aside from that, there is also a big problem when the demands of customers are not met…

Significance of Offshore Staff Outsourcing in the IT Business World
Offshore staff outsourcing is now becoming a huge trend in the world of business. From large scale, to companies who are just starting up, it is obvious that they have been improving themselves continually to maintain and upgrade their status to survive in today’s highly competitive market.
Having an offshore staff gives you certain advantages aside from the fact that the price is cheap and you don’t have to worry about government tax, unemployment insurance, employee benefits, etc.
These are…

In Outsourcing, It Often Doesn’t Win to be the Lowest Price
All organizations acknowledge the need to be more competitive in their markets. That’s a fact of life in capitalistic economies – increase operational effectiveness while at the same time lower costs. There are varying techniques available to corporate executives for this relentless challenge, and strategic outsourcing is often considered…

Outsourcing Helps – Really
If you think that all outsourcing has done to the US is the job losses, think again.
Two economists from Princeton University revealed that outsourcing does not have a negative impact in the economy. Princeton professors Gene Grossman and Esteban Rossi Hansberg in fact proposed that outsourcing has helped in raising the wages for low-skilled US workers….

Outsourcing good for all sizes

Outsourcing: Good for big business, good for small business

Most companies are dependent on information and communications technology (ICT) to operate effectively in today’s highly competitive environment. Big business has been reaping the benefits of purchasing ICT as a managed service for years.
Multinational manufacturers, retailers, mining groups and financial services companies have accepted that their core competencies are not the management of computers, networks and business applications. But what about the medium-sized business?……

Triumph Over Outsourcing
Outsourcing deals for the past couple of years have shown a considerable decline thus showing that the outsourcing boom has managed to cool down. Though that is the case, it does not mean that outsourcing is close to being a thing of the past.
Though statistics have shown that there is a decline in the number of outsourcing deals, the fact remains that outsourcing is still pretty much a part of the IT industry whether we like it or not. One of the main concerns of IT workers in the US is their hold over their job and the security that their job would not be sent offshore in the months to come…

Turning outsourcing into a plus takes time and skill As jobs hopscotch across the globe, the outsourcing model will face obstacles By David L.Margulius
I made my annual trip to Florida’s Walt Disney World last week. I’d been there as a kid, but funny how it wasn’t till 30 years later that Disney’s “small world” theme really sank in – at the Gartner Outsourcing Summit.
At the conference hotel, the scene was all-American, with young families getting on and off the monorail and kids clutching stuffed animals. But as keynote speaker and former MIT professor Micheal Treacy said, those kids could be in for a big surprise in a couple of decades. “We’ve dodged the bullet,” Treacy told the crowd of greying40-something IT and procurement managers. “We’ll be retired before the full force of this really hits.” But our kids may find out later in their careers, he warned, that no job is sacred, and all work will eventually migrate to the place where it can be best done.

The outsourcing debate
THE political heat around outsourcing has cooled as the threat it once seemed to pose to western service jobs has diminished. The emphasis now is on improving the process of outsourcing, both at home and offshore. In other words, if you have to do it, try and do I better…

Now for the hard part
NOT once in a decade. Not once in a millennium, says Manish Sabharwal, boss of Team Lease, India’s biggest temporary-employment agency, of the opportunity India enjoys in 2006. It’s once in the lifetime of a country

Flextronics software
FROM his office in Gurgaon, a boom-town next to Delhi, the future looks rosy to Arun Kumar, boss of Flextronics Software Systems (FSS), and one of the architects if India’s information-technology triumphs. Competition is emerging, but the opportunity is so large, that things seem set to fair for the next five years at least, Kohlberg Kravis Roberts (KKR), most famous of American private-equity firms, seems to share his optimism…

IT Job Losses: Don’t Blame Off shoring

A study finds that automation of tasks has been more responsible for information-technology job losses than outsourcing to countries like India

Automation of tasks has had more impact on IT job losses than offshore outsourcing to low-cost locations such as India, according to a study be the Organisation for Economic Co-operation and Development (OECD).

Don't Be Afraid of Offshoring

Diana Farrell of McKinsey Global Institute takes a close look at the workforce in China and India and says U.S. workers have little to fear

Both India and China have profited handsomely from their young, able, and seemingly unlimited workforces over the past two decades. India has built itself into a global services powerhouse, moving from simple customer help lines to more complex tasks such as software design, investment banking research, and medical diagnosis. And while far more Chinese work in factories than services operations, a number of pharmaceutical companies and software houses have recently set up research operations on the mainland.

Culture Clashes Harm Off shoring

An Accenture study shows cultural differences, such as communications styles, are by far the biggest reason outsourcing deals fail

Cultural differences are one of the biggest reasons why offshore outsourcing deals fail or run into problems, according to new research.

How BofA Banks on Off shoring
Having grown via acquisition, it's used to having far-flung operations. Now with centres in Asia, it's able to keep projects moving 24 hours a day

For Bank of America, the decision to begin off shoring was, to borrow from the old adage, about time, not money. Granted, the Charlotte (N.C.)-based banking giant did realize significant cost savings by shifting hundreds of technology and analytical jobs to India, Singapore, and China. Bank execs estimate that they've saved roughly $100 million since 2001 by off shoring some work that was previously performed in the U.S. and Britain. But just as important was the dramatic savings in time that BofA realized when it developed new products and services.

R&D Offshoring: Is It Working?

Companies are increasingly moving projects to India and China, but they haven't fully integrated or exploited this brainpower potential

If you're an executive planning a new research and development center, where would you locate it? For just about anyone from a big company, that's a no-brainer: Either India or China. A just-released survey of 186 of the world's biggest corporations found that 77% of new R&D centers over the next three years will go up in one of these two emerging economic superpowers.

Britain's Software Biz Needs Better Image

To thrive, the industry must combat a geeky reputation at home and contend with the rise of offshoring, says a new report

The UK software industry is struggling to deal with the rise of offshoring, a 'geeky' image and the country's IT skills gap - but there's still hope.

Off shoring: Spreading The Gospel

Outsourcing's inner circle has deep roots in GE and McKinsey. Here's how they caught the fever

After General Electric Co. (GE ) spun off its outsourcing subsidiary, Genpact, two years ago, Chief Executive Pramod Bhasin figured he wouldn't be seeing much of his erstwhile GE colleagues. But these days, Bhasin sees plenty of the old gang. That's because GE has been so successful with its outsourcing operations that its managers continue to chant the mantra even after they have left the company. Today, GE veterans are in key positions at Home Depot (HD ), Honeywell International (HON ), Solectron (SLR ), and United Technologies (UTX ), among others, giving Bhasin a huge base of potential customers with a deep understanding of just what his company can do for them. "We go after GE alums," Bhasin says.

Learning To Live With Off shoring

Few management trends have been as defining -- or as divisive -- for the American economy over the past two decades as the practice of companies moving employment or business functions to other nations that can do the work cheaper or better. Call it outsourcing or off shoring, but one effect is the same: job loss at home.

Five Offshore Practices That Pay Off

Outsourcing is still more of an art than a science. But it's now part of the corporate toolkit, and it's important to use this tool right.

From Dell Inc. to Reuters Group PLC, corporations have run into trouble as they've shifted jobs offshore. But they've persisted since the process is so critical to corporate success. Take Bank of America Corp. It attracted media attention when it laid off hundreds of information technology workers after forcing some of them to train their Indian replacements. But BofA learned from its mistake. "It caused us to make a greater commitment to [retraining] our associates and to explaining the context of changes in the marketplace," says Barbara J. Desoer, BofA's global technology, service, and fulfillment exec. Now BofA gives its workers six to eight months' notice before an offshore move, enough time to train for new assignments or to hunt for jobs.

The Future Of Outsourcing
How it's transforming whole industries and changing the way we work

Globalization has been brutal to Midwestern manufacturers like the Paper Converting Machine Co. For decades, PCMC's Green Bay (Wis.) factory, its oiled wooden factory floors worn smooth by work boots, thrived by making ever-more-complex equipment to weave, fold, and print packaging for everything from potato chips to baby wipes.

Call Centres In The Rec Room

"Home shoring" takes off as moms and others provide an alternative to off shoring

Three years ago, when the off shoring debate was in full fury, the director of vendor relations at 1-800-FLOWERS.com ran a pilot project to see if the company should be taking advantage of the new labour arbitrage. Within weeks, the trial in India bombed. For the executive in charge, Lou Orsi, it was a reminder that customer service is as much about psychology as technology. Florists often double as condolence therapists, interior design coaches, and relationship strategists. "The folks were difficult to understand," says Orsi. "We were afraid that we would lose sales, and we couldn't risk that." The company also needed to pour on the labour during spikes like Valentine's Day. (When it came to answering customers' e-mails, though, the dazzling prose of the Indians -- many of them PhDs -- outshone that of the Americans, most of whom had gone only to high school. So Orsi left some of the e-mail jobs overseas).

Can Latin America Challenge India?

With proximity to the U.S. and free trade agreements in place, many countries south of the border are building up their outsourcing infrastructure

Softtek, a Mexican software development company, has been in business for 23 years, but it wasn't until 1997 that its founders realized they had something unique to offer U.S.-based clients: proximity. Until then, Softtek had been plenty busy helping Mexico's second-largest bank and other companies develop customized software and managing their info-tech systems.

HSBC's Lessons in Outsourcing

The bank's software-development center in Pune, India, has become one of its most important operations. Here's what HSBC learned in the process

The financial-services industry leads the pack when it comes to outsourcing technology development and business processes. Citigroup (C ) and Bank of America (BAC ) were pioneers, but now banks across the world are outsourcing their tech support and maintenance, administrative back offices, and even customer service.

Home shoring: Beyond Call Centres

Silicon Valley start-up oDesk helps companies’ find – and monitor – at home labour for a growing roster of jobs.

Susanne Bullo is a capable software programmer who until recently had few job options. She is a stay-at-home mom who has three young children and helps care for an elderly father with diabetes. Although she lives minutes from the Redmond (Wash.) headquarters of Microsoft (MSFT), Bullo's commitments keep her from pursuing a career at the software maker. It doesn't help that she's self-trained and female -- traits viewed suspiciously in the geeky programming world. "I see tons and tons of men out there with four-year degrees getting different jobs and work," she says. She managed to find contract work, but it wasn't easy.

British Firms Drive Outsourcing Boom

Demand will rise by 50% annually for each of the next two years. Asia leads, but former Eastern Bloc countries will benefit, too

Demand for offshore outsourcing services among UK and European companies is set to increase by 50 per cent per year over the next two years, according to Gartner.

Sub continental Drift

More Westerners are beefing up their résumés with a stint in India

After a year answering phones for Swiss International Air Lines Ltd. In a Geneva call centre, Myriam Vock was eager to see something of the world. So she packed her bags and hopped a plane to India. Two and a half years later she’s still there, sharing a five-bedroom apartment in an upscale New Delhi suburb with four other foreigners.

Contracts Key in Outsourcing Success

Analyst reports business outsourcing contracts, especially for IP protection, are too lax. Country differences must be addressed.

Businesses are increasing the risk of offshore outsourcing disaster by failing to draw up tighter contracts when dealing with overseas service providers, according to analyst Gartner.

Outsourcing Savings Deemed “Unrealistic”…

How much does outsourcing really save? Research says the average is just 15%. It seems that early figures were over-hyped

Outsourcing cost savings have been massively over-hyped with the actual cost reduction averaging just 15%, according to new figures from sourcing advisors TPI.

Asia warms to network Outsourcing

The mounting demand for managed networks in China, India, Malaysia and Thailand is driving the Asian managed services market, according to latest research

A new report from IDC has revealed that the biggest growth in demand for managed networks in 2006 will come from China, which is forecast to grow by 47.3% compared to 2005. Thailand is a close second at 46.5%, while India and Malaysia are expected to register growth rates of 25.2% and 22.6% respectively.

Outsourcing: The Quiet Revolution

By 2010, outsourcing for most video-game publishers will represent about 40% of development money spent.

With all the talk of video game development costs spiralling upwards as we head into the next generation, developers need to do something to keep their projects within an acceptable budget. A new report from media research company Screen Digest suggests that developers are increasingly turning to outsourcing to combat rising costs, and that this trend is likely to continue.

Call Centre? That’s so 2004

Outsourcing shops are moving fast into higher-paying businesses

Americans, it seems, hate calling a help desk or customer service number to find an Indian on the line. Well, guess what, America? India doesn’t particularly want to talk to you, either. As india’s top companies get more sophisticated at taking over outsourced work from U.S. and European multinationals, they’re finding that the lowest end of the business – call centres – just doesn’t pay anymore.

The benefits of Outsourcing for Small Businesses

Outsourcing – the practice of using outside firms to handle work normally performed within a company – is a familiar concept to many entrepreneurs. Small companies routinely outsource their payroll processing, accounting, distribution and many other important functions – often because they have no other choice. Many large companies turn to outsourcing to cut costs. In response, entire industries have evolved to serve company’s outsourcing needs.

The Ongoing Allure of Outsourcing

S&P says the data processing & outsourced-services sub industry looks good – and not just because of potential buyouts.

Amid a general upturn in M&A activity, companies in the data processing & outsourced-services sub industry have recently been at the centre of media speculation about potential buyouts by private equity firms or other potential acquirers. While acquisitions could be catalysts for stock price growth, Standard & Poor’s favours the sub industry for fundamental reasons.

China, India Ahead in IT Services Growth

Expect China to overtake Australia as the largest services market by 2010, and India will displace Korea as the No.3 market a year later, according to IDC

The Asia-Pacific IT services market is poised for further growth, riding on the success of the Chinese and India markets, according to the latest research from IDC.

2005

Outsourcing seen at $300 billion
By Danny
A recently released Nasscom-McKinsey report stated that India’s BPO and IT industry could see a near 10-fold growth from $17.3 billion at present to $166.5 billion in 2010.

Gartner: China will challenge India’s IT domination by 2008 with improved English proficiency
By Danny
Global research company Gartner said that China will challenge India’s IT leadership by 2008 through the country’s improved English proficiency.
The Chinese government is placing more importance on mastering the English language as Beijing prepares to host the 2008 Summer Olympic Games. In addition, the government is encouraging Chinese IT companies to learn from India’s experience in the software sector and replicate it.

Bulgaria lands in Top 20 of global outsourcing destinations
By Danny
Bulgaria has debuted in A.T. Kearney’s annual ranking of the leading off shoring locations for service activities. The country ranked 15 out of 40 destinations that are part of the Global Services Location Index.

New Idiot’s Guide Tackles Outsourcing
By Danny
From the makers of the Idiot’s Guides series, a new book that shows the ins and outs of outsourcing is now available for business owners and consumers alike. “The Complete Idiot’s Guide To Successful Outsourcing” by small business owner and outsourcing expert Gene Marks shows that vast opportunities and challenges that outsourcing provides.
The book details how to evaluate and successfully implement outsourcing. It discusses many topics such as the historical and global issues of outsourcing, the need to outsource, costs and benefits of outsourcing, tips on hiring and managing outsourced help, and compliance in outsourcing.

Epson plans to make India outsourcing hub
By Danny
Imaging Products Company Epson is looking at India to become its outsourcing centre for software development. The Japanese-based company plans to expand its products range and establish itself as a technology driven company.
According to Epson executive vice president and chief financial officer Toshio Kumura, India would be the primary choice for software development intended for electronic devices being developed for commercial purposes.

Outsourcing boosts economy: British official
By Danny
Sir Digby Jones, director general of the Chamber of British Industry, said developed countries should not worry over job losses due to offshore outsourcing. He explained that offshore outsourcing actually drives an economy upmarket where there are big rewards.

Outsourcing boom continues
By Danny
Outsourcing continues to grow as UK-based BG Group PLC announced plans to outsource the billing of 18 million customer accounts to India. A spokesman for the company said, “We are in the process of introducing computerized customer billing system some time next year and 18 million customers’ billing accounts will be outsourced to India.”

Offshore outsourcing sees continued rise
By Danny
According to a research by sourcing advisory company TPI, offshore outsourcing will see more growth as more than 80% of large companies plan to increase their offshore outsourcing activities.
The research which surveyed 100 senior UK executives showed that 81 percent of companies plan to increase offshore outsourcing over the next three years. Conversely, only 4 percent of the respondents believed that offshore outsourcing would see a decrease in activity.

Ernst & Young: Indian Pharmaceutical Industry Holds a Competitive Advantage
By Danny
Global consulting firm Ernst & Young said that India’s pharmaceutical outsourcing sector has a solid competitive advantage in global pharmaceutical outsourcing sector has a solid competitive advantage in global pharmaceutical innovation, patenting, manufacturing and regulation.

A New Trend In Outsourcing
A new trend in the outsourcing industry has emerged in India. International financial organizations – especially those under the IMF or World Bank – are now starting to invest in outsourcing start-up…
Outsourcing Less Extensive Than Assumed
By Danny
A new research by Arizona-based CAPS: Centre for strategic Supply Research and Chicago-based management consulting firm A.T. Kearney revealed that businesses do not outsource a substantial bulk of…

Russia Poised to Capitalise on Outsourcing
Leonid Reiman, Russia’s Ministry of Information Technologies and Communications (MITC), launched the country’s campaign to become “the next global leader in outsourcing.”
According to TechWeb’s W.David Gardner, over 250 Russian firms are currently involved in offshore software development.

GoToMeeting: Offshore Collaboration As It Should Be
By Creative Web logging
Off shoring entrepreneurs have a wide range of free collaboration tolls to choose from. There are web logs, instant messengers, and email, among a lot of other things. However, these methods may not be the most flexible or even secure means of getting a message across… and when it comes to networking many users at a time, they can even be totally useless.

Outsourcing Hits The Mainstream
By Danny
According to a recent study by Data monitor, outsourcing is currently experiencing a period of “super growth” that is pushing it into the mainstream.
The study stated that the United States, the leading outsourcer, and the United Kingdom are now increasing outsourcing operations. Moreover, countries like India and the Philippines would likely benefit from this.

Outsourcing Staff Attrition
By Danny
In a study on worker retention in the Indian outsourcing market, over 50% of respondents said that lack of growth, desire for better job content, mismatched expectations, and dissatisfaction with policies were the top reasons for leaving their jobs. Additionally, 39% of respondents said that night shifts, monotony of work, and salary were factors for quitting.

Smart Outsourcing is the future
By Danny
A new outsourcing business model which shifts focus from blind outsourcing to managed outsourcing is emerging in the industry. In the ‘Managed Competition’ model, instead of enlisting the services of a major service provider, companies outsource to a number of selected vendors that match their specific segments of work. In this way, clients are able to set their own standards of performance for their chosen service providers.

Gartner: Companies Outsourcing Customer Services Will Fail by 2007
Research firm Gartner said that around 80% of companies that outsource customer service functions would fail by 2007. Gartner stated that a diminishing work force and unmanaged offshore operations are the main reasons for the failure. They added that 60 percent of these companies would face problems in the form of client defections and hidden costs (which will cancel out cost savings) by 2008.

How Long Can Price Advantage Drive India’s Outsourcing Boom?
By Danny
Analysts are now questioning how long would India’s favourable currency differential with the US – 44 Indian Rupees to 1 US Dollar – drive the country’s outsourcing boom. As India becomes richer (with the Rupees gaining against the dollar) analysts ask what effects this would have on the country’s outsourcing industry.

Outsourcing from Asia to Grow Rapidly
By Danny
A study by ACA Research said that 60 percent of call centres in the Asian major outsourcing markets expect to expand in the next 12 months.
India leads predicted growth at 64%, followed by the Philippines at 53 percent, and China at 50 percent. Last year, China, South Korea, India and The Philippines were the leading performers. Also, most countries have developed and upgraded their telecommunication systems in the past months.

The new outsourcing kid on the block
By Danny
Costa Rica’s outsourcing industry is growing strong as it builds on existing outsourcing contracts, and improves its IT expertise.
The country is now part of the multi-billion outsourcing deal between Proctor & Gamble and Hewlett-Packard. It also performs advanced design work for semiconductor giant, Intel. Because of this outsourcing boom, Indian Minister, Rao Inderjot Singh, said that his country would establish a $2 million Regional IT Training Centre in Costa Rica. Costa Rica has become the centre for allied countries in Central America and the Caribbean region.

Frequently Asked Questions on Offshore Outsourcing (part1)
By Danny
Here are come answers to your questions about off shoring outsourcing.
1. Why is work going offshore?
Work is migrating offshore because of the following reasons. New technologies (Internet, voice over IP, enterprise applications) make it easier to manage labour in the global economy. Also, competition and cost management push companies to go offshore when their competitors do so. Lastly, the global economic downturn makes companies focus on increased return on their IT investments.

2. Which industry is leading the off shoring wave?

Frequently Asked Questions on off shore Outsourcing (Part 2)
By Danny
Here are more outsourcing FAQS.

4. Which country is dominating the off shoring market?
India dominates the off shoring market due to the country's established IT companies, favourable wage differentials, and high English proficiency. Notably, India has about 2 million graduates -- 250,000 of which have degrees in engineering and computer science.

Tax incentives are expected to spur growth in the country's business process outsourcing industry. Since 2000, IT companies have enjoyed a ten-year tax holiday that reduced tax rate from 36% to 15%.

5. What is the growth trajectory of off shoring in India?…

Frequently Asked Questions on Offshore Outsourcing (Part3)
Here is the last installment on outsourcing FAQs.

7. Who are some well-known offshoring companies?
Some of the top BPO service providers include:
India - Nipuna, Progeon, Spectramind, WNS
Philippines -- eTelecare, Ambergris Solutions
Russia -- LUXOFT

Careful planning is needed before selecting an offshore vendor. Most companies select vendors based on their BPO service specialty. Some companies select a country first, and then choose the top vendor there. Overall, it is advisable to select an operational model before a vendor.

8. How do you develop an offshore outsourcing strategy?……

Mid-Sized Contracts Drive Outsourcing Boost
By Danny
Market research firm, Datamonitor, reported that business-processes outsourcing increased the value of information technology services by 37 percent last year. Mid-size outsourcing contracts were largely responsible for the industry's growth from $118.9 billion in 2003 to $163 billion in 2004.

Analysts say business outsourcing must change
Don't just rush into a deal
Many firms are outsourcing without thinking it through first, according to Gartner.
The analyst group is advising organisations to be much more disciplined in the way they handle outsourcing contracts.
Gartner outsourcing expert and VP Linda Cohen says outsourcing to date has been applied in a tactical, ad hoc way as a cost cutting exercise or as a solution to a specific problem, and instead needs to be thought out at a strategic approach.

Strategies in Data Center Outsourcing
The concept and scope of data center outsourcing has changed over the years. One of the measures of this change is the reduction of contract periods. According to Deloitte Consulting, contracts are now of 3-5 years instead of 6-10 years seen at the turn of the millenium. Outsourcing companies are also looking for specialized providers and , as Gartner reports, large deals involving only one service provider are now a rare commodity. The objective of an outsourcing contract is nore more limited to saving costs.

Innovation blowback: Disruptive management practices from Asia

Emerging markets such as China and India have become breeding grounds for new management processes and practices that help companies to maintain or even improve the quality of their products and services while simultaneously slashing prices. The disruptive impact is now confined to developing countries, but "blowback" from this surge of innovation could quickly be unleashed on the rest of the world. To meet the challenge, established businesses must learn new skills—not least important, an ability to orchestrate complex networks of specialized enterprises. The take-away In Asia, managers need a "clean-sheet" mentality to exploit mass markets and compete with best-in-class companies. Merely stripping costs from existing products will prove inadequate. Capturing the full offshore experience could be critical to survival back home.

The onshoring option

Not all of the developed world's manufacturing jobs are destined to move to low-wage countries. Some manufacturing is best kept local, even in expensive locations like California. At least two-thirds of that state's manufacturing jobs are in capital-intensive or customer-service-intensive industries that would benefit little from offshoring to cheaper production locations.

What global executives think about technology and innovation

A survey uncovers shared perspectives on the challenges now facing companies, but IT execs must still sell tech innovation to business leaders. Sam Marwaha, Parul Seth, and David W. Tanner A recent McKinsey Global Survey of Business Executives1 suggests that technology executives are more bullish about innovation and automation than are their business counterparts and see managing global scale and finding skilled people as two of their biggest challenges.

Sizing the emerging global labor market

Rational behavior from both companies and countries can help it work more efficiently. Diana Farrell, Martha A. Laboissière, and Jaeson Rosenfeld 2005 Number 3 The topic of offshoring generates extreme differences of opinion among policy makers, business executives, and thought leaders. Some have argued that nearly all service jobs will eventually move from developed economies to low-wage ones.1 Others say that rising wages in cities such as Bangalore and Prague indicate that the supply of offshore talent is already running thin.2

How France can win from offshoring

The cost benefits have started to tempt more and more French companies. Instead of resisting the trend, policy makers should explore the ways France could gain from it. Tony Blanco, Diana Farrell, and Eric Labaye Web exclusive, August 2005 When it comes to offshoring, France is a newcomer compared with the United States, the United Kingdom, and even Germany.1 From 2002 to 2004, offshoring accounted for only 4 percent of all jobs lost in France, and most of them were in manufacturing rather than the office work that UK and US companies increasingly move to countries with low labor costs. But the offshoring of service jobs is bound to accelerate as French companies strive to match the efficiency of their foreign rivals. With French unemployment above 10 percent, offshoring has already created anxiety among workers in France and sparked protectionist sentiment there. The entry of ten lower-wage countries into the European Union in 2004 raised the level of angst, as did recent government-commissioned reports on the challenge France faces in restoring its competitive position in the global economy.2

How Europe’s banks can win in tougher times

The winners in retail banking will speak the language of consumer products: customer service, quality, branding, and market segmentation. Marc Beaujean, Dirk Reiche, and Charles Roxburgh Web exclusive, June 2005 Retail banking in Europe has reached a crossroads. After a decade of strong profits, rising shareholder value, and consolidation in most countries, the sector is in danger of running out of steam. Management teams urgently need to find strategies for growth, either domestic or foreign.

Outsourcing grows up

Many outsourcing deals are tantamount to strategic divestitures and joint ventures. Executives should start treating them that way. David Craig and Paul Willmott Web exclusive, February 2005 When companies first started thinking about farming out nonstrategic functions—such as payroll, IT maintenance, facilities management, and logistics—their goal was to reduce costs. Today, however, these corporations regularly contemplate outsourcing core operations to third-party specialists in order to improve operational performance. Many such deals are big and strategic enough to qualify as "bet the company" arrangements involving a complex mix of people, processes, and assets. Indeed, almost 100 megadeals (contracts with values of greater than $1 billion) have taken place in the past ten years, with 15 in 2003 alone.

The journey to Outsourcing: Successful Transitioning Through Selecting the Right Provider.
Joanna Young
No company wants to follow the path of outsourcing, only to unwittingly approach a pitfall during the transition phase. Mirant Corporation, an international energy suuplier with headquarters in Atlanta, Georgia, certainly wanted to avoid this potential calamity, as it turned to outsourcing in the first place for solutions to calamity-type business challenges.

Lab Develops Outsourcing ROI Formula
Word is "out" that adjunct laboratories of major academic institutions are "in" as top-choice outsourcing providers. During the past year, for example, 170 U.S. and international clients outsourced highly-critical and strategic-differentiating processes to the National Institute for Aviation Research (NIAR), a Kansas Technology Enterprise Corporation Center of Excellence at Wichita State University in Wichita, Kansas.

Trends in Outsourcing Printing and Publishing
Jerri L. Ledford
Imagine, if you will, what it would be like to never handle another piece of paper again. No bills, no magazines, no books, no newspapers and no advertisements would clutter your world. It's the ultimate vision of paperless society, but it's met with resistance at every turn. Studies have shown that people prefer to have some paper in their lives. That doesn't necessarily mean they want the clutter that exists today, but there are certain pieces of mail and printed entertainment that consumers would rather just touch.

Keeping up with Trends in Outsourced Packaging,
Joanna Young
Sally Shopper clutches her shopping list in her hand, navigating her way through the aisles of the giant computer store. She enters the software applications aisle (her nephew would love a computer game for his birthday). A brightly colored, sparkling box stands out among the assortment of applications. The box promises hours of educational entertainment in outer space, stimulating graphics, several gaming options, and a free coloring book. With the shiny new game in her basket, Sally moves on to tackle other critical purchasing decisions.
Next stop: tomorrow's lunch. Sally makes her way to the canned-meats aisle in search of tuna. These nice pouches look so much fresher than cans, she thinks, not to mention easier to open and less mess. So, into her cart go three pouches of fresh and convenient tuna. And off she goes.

It never occurs to Sally Shopper how the multifaceted system of packaging has affected her buying judgment.

At the shelf level, a consumer's decision-making process occurs within three seconds. This isn't a lot of time to influence a customer. As Paul Klebahn, director of sales at service provider Software Packaging Associates Ltd. (S.P.A), states, "Companies have one chance of getting it right, on the shelf. Usually in the matter of a sound byte, the package needs to emphasize the 'why to buy'."

Tapping the Power of Outsourcing to Achieve Innovation
Kathleen Goolsby
Suppose your company is in a very, very tight competitive market and you've come up with an innovative idea for product development … but there are technical challenges to getting there. Or suppose you've developed an ingenious idea for meeting a crucial need in today's society; but you have limited funds for starting a new business, let alone developing and rolling out a product never before marketed.

Mechanisms Necessary for Strategic Outsourcing Relationships.
Kathleen Goolsby The genius of outsourcing is that it is not designed to be shoehorned into achieving just tactical, bottom-line-objectives – offloading tasks, people and capital resources to a service provider. It is also designed to be strategic in nature, enabling buyers and service providers to innovate and create products and services that become competitive differentiators that can add to the buyer’s top-line growth.

Identity management
Dr. Alok Aggarwal
Identity management (IM) is a process used for authenticating and tracking individuals or objects with the help of various technologies. It enables organizations to facilitate and control their users’ access to critical online information, while protecting confidential personal and business information from unauthorized users.

Interveiw of Mark Hodges

I recently chatted with Mark Hodges, co-founder and chairman of the board of EquaTerra, a multinational outsourcing and insourcing advisory firm, upon his being named Sourcing Consultant of the Year 2004 and 2005 by an independent panel of judges at the HRO World conference in April. I first interviewed him back in 1999, when he had sold G2 Research, Inc. to what was then GartnerGroup's Dataquest and was helping launch Exult, Inc., the world's first comprehensive HR outsourcer (since merged with Hewitt Associates in 2004). He also established the BPO practice for TPI, Inc., the industry's first ITO sourcing advisory firm, before moving on to found EquaTerra.

A CIO conversation with David Guzman of Owens & Minor
Four years ago, Owens & Minor Inc. was perfectly happy with its outsourcing agreements. The Richmond, Va.-based Fortune 500 Company, which is the country’s leading supplier of medical and surgical supplies, had great relationships with IBM Corp. and Perot Systems Corp. So why did Owens & Minor CIO David Guzman rip up the contracts and have the vendors bid for his business? Ultimately, his decision turned IT into an indispensable business driver that operates with surgical precision and gives a lot more than it takes.

Is offshore outsourcing being eliminated for the State of Wisconsin? Q&A with Senator Robson of the State of Wisconsin.
There has been USA citizen concern over the increasing trend of Offshore Outsourcing hurting the American job market and economy and now the political arena has decided to take action against this growing trend. Does offshore outsourcing hurt our economy and job market? I’m still on the fence. However the State of Wisconsin lead by Senator Robson of Wisconsin believes it does and in this believe has created the American Jobs Act. I asked Senator Robson about this new bill and why the State of Wisconsin is trying to eliminate offshore outsourcing in that state.

Key Success Factors in Multi-sourced Environments.
In the debate over whether outsourcing works best from a single-source, mega-deal approach or a best-of-breed approach, multi-sourced environments (using two or more external providers and an internal IT group) have clearly become the preferred service-delivery model. Historically, the single-sourced approach has often not delivered the anticipated return on investment (ROI).

Putting an End to problems in Achieving Return on Your CRM Investment.
Bradley Graham
Customers are a company's greatest asset, and Customer Relationship Management (CRM) solutions have for several years been touted as effective means in acquiring and retaining customers. But CRM solutions have also been in a heavy line of fire during the past two years as analysts and vendors have battled in the media over whether CRM solutions actually result in the anticipated benefits. Some point to a large number of failed initiatives (as many as 50%); others point to an increasing rate of adoption (especially now that CRM solutions are cost-effective for the SMB market) and proven value achieved. With such mixed messages, companies now eye CRM investments with more scepticism.

It's about Time - Outsourcing and Business Decisions Cycles
F. Keaton Whitlow
Probably no executive is unfamiliar with the idea that speed or time can be used as a competitive weapon. Military commanders through that years used time-based strategies to seize the initiative and win battles. Military thinking can be, and often is, applied to competitive strategies in business; and time-based stratagems, in particular, are proven competitive-advantage weapons that greatly improve the odds of “winning” over competitions.

Change Management in Outsourcing
Dalip Raheja
One of the most overlooked aspects of implementing outsourcing projects is the activity of change management. Change management is an organized, systematic application of the knowledge, tools and resources of change that provides organization with a key process to achieve their business results. Too often, the process and technology moves much faster than the people who need to implement the new business paradigm. We at The Mpower Group have noted many studies that cite poor change management as the number one issue in outsourcing failures. When change management is done correctly, it is cited as the number one contributing factor for the success.

Costco Shops for Right Outsourcing Contract Linda Tucci When Don Burdick took over as senior vice president of information systems for Costco Wholesale Corp. in 2000, his department had 60 programmer spots to fill. Employees were struggling to keep up with routine work. Morale was low. "Every day you came in and were fixing stuff that was broken," said Burdick, estimating that less than 30 percent of the work focused on projects designed to add value to the company. That put IT badly out of sync with a company that has become the nation's largest wholesale club operator with 452 stores. Over the past five years alone, Costco has grown from $35 billion to $52 billion in sales.

Outsourcing the Backup Data Centre
Matt Stansberry
Business continuity outsourcing is big business, as recently evidenced by the private buyout of business continuity provider SunGard. While more midrange companies manage mission critical IT infrastructure, they don't have the capital to invest in redundant systems. Therefore, many companies are looking at outsourcing the backup data centre. The practice of keeping mirrored IT infrastructure off site can mean different things to different organizations. What the service entails often depends on the level of involvement the customer wants to have with the backup facility. But is it really outsourcing? It depends on who is doing the management and the monitoring.

Should You Outsource for New technologies?
With nearly all business processes these days having IT-enabled components, executives face the dilemma of deciding which competing internal projects and competitive-advantage initiatives are the best IT investments. Among other factors, they must take into consideration:

· business value vs. cost
· business value vs. risk
· buy (outsource) vs. build in house

All three parameters come into play with new and evolving technologies.

Learning from A Thought Leader
Paul Grim
Brian Keane a graduate of Harvard College and Harvard Business School started with Keane at the bottom as a sales representative liked the industry and thought it was a great opportunity. He worked his way through the ranks to become CEO in November of 1999. Before becoming CEO Brian worked in Japan for a few years in international trade.

Eliminating the Greatest Threat to Success in Outsourcing
Kathleen Goolsby
For a host of reasons, many people mistakenly believe an outsourcing service provider's poor performance is the primary cause for a failed relationship. Root cause analyses, however, most often identify poor communication as the biggest culprit. Through decades of case studies, clients and service providers are awakening to the problem. Essentially, effective communication in outsourcing is like chlorophyll, the substance that transforms carbon dioxide from the air into food flowing through a plant's vessels. With effective communication, a relationship can grow and thrive; without it, an outsourcing relationship will become diseased and may die. If effective communication exists, the parties can discuss and resolve performance problems and other challenges.

Survey Finds Outsourcing Hurts Supply Chain Visibility
The prevalence of outsourcing in electronics has resulted in companies losing control and visibility across their extended supply chain, creating increased risks, according to a new survey.
By Dylan McGrath
San Francisco - The prevalence of outsourcing in electronics has resulted in companies losing control and visibility across their extended supply chain, creating increased risks, according to the reults of a survey by INdustry Directions Inc. and the Electronics Supply Chain Association (ESCA).
The survey results, released Wednesday (Nov. 16), indicate that both "outsourcers" - original equipment manufacturers (OEMs) and the fabless semiconductor companies - and service providers have suffered a serious loss of visibility over their supply chain activities.

Can Big Blue Succeed in BPO
By Knowledge@Wharton, Written for Outsourcing Magazine This isn't your father's IBM. After decades of specializing as a computer manufacturer and provider of computer-related services, Big Blue in the past year or two has been heading into some not-terribly-technical fields. Today's IBM processes thousands of insurance claims, ensures that Procter & Gamble employees get paid, and takes charge of repairing televisions and CD players sold by Philips Consumer Electronics.

Outsourcing’s Well Kept Secret
David M. Klein and Kenneth U. Surjadinata
In January 2001, Merrill Lynch Credit Corporation and Cendant Mortgage Corporation entered into an outsourcing alliance to provide an enhanced array of home-financing services to Merrill Lynch clients nationwide. In connection with this transaction, approximately 600 Merrill Lynch employees dedicated to mortgage origination and servicing functions were hired by Cendant. Under the alliance, Merrill Lynch utilizes Cendant's services on a private-label basis to originate, process, and service mortgage loans while Merrill Lynch continues to market mortgages and other credit products through its network of financial advisors in branches nationwide.

Benchmarking In HR Outsourcing

Lowell Williams Almost every master services agreement for human resource outsourcing specifies that the client has the right to audit the provider's services and to call for a benchmarking study against which pricing and services levels can be compared. These provisions have been imported from IT outsourcing agreements where benchmark and comparison studies have long been available.

Heroic HR

Marc S. Miller
Much has been written about HR's mandate to become a "Strategic Partner" within its own organization. Proponents of change from venerable Peter Drucker and well-known Professor David Ulrich, and many other thought leaders of "guru" status have championed this needed transformation for the function of Human Resources. In today's uncertain economic climate it is more critical and evident that HR has to evolve into a "player" status, possessing clout, visibility and yes, even power, in the eyes of an organizations senior leadership.

Economics of offshoring
For those fearing that the offshoring wave would leave the home shores high and dry, take heart. Authors of The Black Book of Outsourcing believe offshoring would be a self-limiting phenomenon that would actually even give the US workers an edge.
Douglas Brown and Scott Wilson pointed out that increasing costs in developing countries, along with management issues would eventually lead to a tapering of the job influx. It is a play on the basic demand and supply principle. The jobs simply follow the trend of heading the wat of high demand: underutilized, qualified works. Once equilibrium is reached between the workers in foreign countries and the jobs avaliable, these jobs would head back onshore...

Offshoring rollback?
Unmet expectations have urged major companies to rethink their strategy on outsourcing functions, mostly in the field of IT. A Deloitte Consulting survey served as basis for this report by the Financial Times.
A huge three quarters of the survey respondents encountered problems with their outsourced projects while a quarter have reported to bringing back their operations in-house...

IT offshoring boosts economy
Despite the controversies surrounding the exodus of jobs it has created, offshore outsourcing of software and information technology services has not only given the US gross domestic product a considerable boost - it has actually helped generate US jobs even within the very volatile IT sector...

Human Resource Outsourcing Moves Forward

David White
Throughout the world, new terms are describing business models that provide more efficient and effective client solutions. The concept called outsourcing is nothing new. However, sophistication brought about through the internet and globalization has now made outsourcing highly attractive to entrepreneurs, investors and clients.

Using The SMB Approach

Paul Grim
The Reader’s Digest Association, Inc. (RDA) has a long history of helping everyday people and has grown to become one of the world's paramount publishers with its flagship publication Reader’s Digest magazine appearing now in 48 editions in 19 different languages and sold in more than 60 countries. DeWitt and Lila Wallace, the founders of Reader’s Digest, published their first issue in 1922 out of their Greenwich Village apartment. If you can believe this, they sold the magazine for 25¢ per issue exclusively by regular mail. Reader’s Digest Association has grown to millions of readers through other special-interest magazines, books, music, videos, and a diverse set of other global businesses such as school fund raising and display marketing.

Remaining Competitive
Lance Kirk Blue Cross & Blue Shield of Rhode Island (BCBSRI) is the largest health insurance company in the state of Rhode Island and has a dominant position in that geographic market. One of its key priorities is to ensure that they remain independent and financially strong so Rhode Islanders continue to have a local healthcare insurer they can count on to provide affordable, quality health coverage.

Outsourcing requires careful planning
Many outsourcing projects fall apart because companies fail to consider the costs and complexity
By Sumner Lemon
Companies looking to outsource some IT functions should plan carefully ahead of time, consideringa broad range of issues, to help insure these projects will be successful, according to industry analysts.
Demand for outsourced IT services is rising quickly as more and more companies look for ways to cut their IT costs and improve productivity. By 2007, global spending on outsourcing will top $50 billion per year, according to market analyst Gartner. But not all of these outsourcing projects will succed. Many outsourcing projects fall apart because companies fail to.....

Outsourcing's image problem
Most respondents said outsourcing is good for the world economy and bad for the United States
A recent Opinion Rsearch poll leaves no question that outsourcing -- particularly offshoring -- suffers from an image problem. Among 1,000 Americans surveyed, 72 percent of respondents said outsourcing is "really all about corporate greed," and 25 percent associated the world outsourcing with job losses....

Outsourcing In Mid-Market Companies
Ram Iyer
Globalization is here to stay, increasing the complexity and competitiveness of business. Large corporations with deep pockets and international presence have become competitive by perfecting the multinational model. They leverage specialized skills, suppliers, and less expensive labour pools to balance quality and cost levels for their business.

Outsourcing, As Sweet As Candy
David Hogan
Farley’s & Sathers Candy Company, known for confections like Super Bubble, Jelly Bean, Fruit Stripe, and more, has a long history behind them. In 1870, Gunther Farley and two of his brothers founded Gunther Chocolate Company. In 1891, they merged with another company, also owned by a member of the Farley family, to create Farley Candy Company. They continued on as Farley Candy Company through two sales in 1968 and 1974.

Software Project Outsourcing
Outsourced software development can offer important business benefits over in house development in many situations. Equally, outsourced development can introduce issues for the project and the long term success of the resulting solution. In this article we discuss the potential issues and benefits, and suggest ways to maximise the benefits and avoid potential problems.

Managed Services for Operators - Options and Approaches on Outsourcing
Today's mobile telecommunications market continues to present good business opportunities, but it's a tough, competitive environment. New mobile services and content promise additional revenues and differentiation, but require investment in new technologies and the ability to manage them effectively in the face of increasing network complexity. Meanwhile, price competition is fiercer than ever and Average Revenue Per User (ARPU) continues to fall relentlessly, causing an immense need to drive down operational costs. The decision to hand over specific activities to an outside supplier is always important and requires thorough analysis. Operators should pay particular attention to finding the best scope for outsourcing, defining the related business objectives, managing the outsourcing process and selecting the right managed services provider.

High Paying Jobs From Offshore Outsourcing - An Oxymoron?
Managing offshore IT projects themselves have become more complex. Companies with IT operations overseas find themselves dealing with a multitude of cultural, language, and legal issues. Managing these issues is starting to evolve as a profession in its own right. If one keeps on reading, one might find that the IT professional could play an important role in this new outsourced world. If the trusted pipe was implemented at firms doing offshore outsourcing, IT professionals may be able to create a role for themselves using this methodology.

In store. Right now. Retail Solutions from IBM.
IBM provides a full range of solutions for the retail industry, helping transform business into On Demand Business with point-of-sale systems, IT strategy and planning, supply chain optimization, outsourcing and managed operations, and much more. This is possible with solutions such as IBM Store Integration Framework, IBM Personal Shopping Assistant, IBM Dynamic Digital Merchandising, IBM Guided Selling for Complex Products, the IBM Retail Business Intelligence Solution, and more.

Industry Trends in Outsourced Testing Services
Currently IT organizations have to deliver enhanced quality applications with less time with fewer resources. Often, the first downsize in the IT budget is felt on testing systems, thus making it difficult for many IT organization to execute a complete application testing function internally. An outsourcing provider delivers centralized and qualified testing methodologies, skilled stuff as well as certified standards.

Coaching Your Team for Better Code Quality Management
There are many reasons for software failure: poor project management, the growing complexity of software and market changes. But most often, poor code quality is to blame and whoever developed the software—whether a commercial software vendor, an outside technical vendor or a company’s IT organization—is liable.

CEOs Who Fail to Actively Manage Outsourcing Relationships Miss Out on 'Trust Dividend' Worth Up to 40 Per Cent of Contract Value LONDON, November 24 /PRNewswire/ -- Well managed outsourcing arrangements based on mutual trust can create a 20 per cent to 40 per cent difference on service, quality, cost and other performance indicators over outdated power-based relationships. This is the finding of new research(1) published today by LogicaCMG and Warwick Business School. The study shows that CEOs who neglect to actively manage their relationships with outsourcing partners are missing out on a `trust dividend' worth up to 40 per cent of the total contract value. The study suggests that companies should agree a relationship charter with their outsourcing partner that sets a benchmark for behaviour, and that regular health checks, balanced scorecards and senior executive dashboards for the customer are introduced as mechanisms for monitoring success.

The changing dynamics of outsourcing

The outsourcing marketplace is going to lean more towards BPOs and more players will join the fray; however, the total value of deals is likely to reduce. This was concluded by an IDC study of the 100 best outsourcing deals in 2004. According to the study, the total value of these 100 deals went down from $69.1 billion in 2003 to $68.3 billion in 2004.

ITIL, IT Governance & the Managed Service Provider (MSP)
Organizations are adopting ITIL to provide a framework for best practices, and, many of these organizations are seeking out external partners who use complementary, compatible processes. These organizations want to share the same consistent, common language as they contract out and transition a specific area of their IT organization. Consequently, Managed Service Providers (MSPs) are facing mounting pressure from potential customers to demonstrate how their services align with ITIL best practices. This document aims to illustrate and describe the reasons for an MSP to adopt ITIL, as well as some of the pitfalls that an MSP might encounter in the current IT environment.

Managed Security Services for Small Businesses: Protecting Your Business Cost-Effectively Through Outsourcing
Small and medium-sized businesses aren't immune to security threats. If you use e-mail for communications, have mobile employees or remote offices, or maintain a Web presence, you are at risk. How can you mitigate your risk without taking resources away from core business activities? This white paper outlines the advantages that small businesses can gain by outsourcing security management services and provides advice on what to look for when choosing a managed security service provider.

Why Enterprises Outsource Network Security
Written by Stratecast Partners, this study will give you a comprehensive business cost and benefit analysis on outsourcing network security. Learn how the Managed Security Service Provider (MSSP) business model could result in increased economic benefits and security effectiveness for enterprises over an in-house approach. Download this White Paper now!

Outsourcing not all it’s cracked up to be
Just when the zealots would have us believe that outsourcing was on the verge of steamrolling IT departments and leaving far fewer employees in its wake, Deloitte and Touché issued the results of a study that indicates myriad twists in just such a plot.
Deloitte’s report, Calling a Change in the Outsourcing Market, Found:

-70% of participants have had negative experiences with outsourcing.
-One in four respondents realized that they could handle certain functions better in-house, and yanked those back inside the corporate walls.
-44% did not see cost-savings from outsourcing…

A Broader View of Off shoring

Author John Hagel says many Western execs see only cost savings when they can learn so much more from Chinese and Indian companies

Off shoring has been a hot topic in recent months, as Western companies have cut tech labour costs drastically by shipping such jobs to countries like China and India. But the trend means more than just job loss at home or short-term wage arbitrage for the West. In their book The Only Sustainable Edge ($25, Harvard Business School Press), John Hagel III and John Seely Brown argue that the rise of the tech industry in China and India will lead to the creation of formidable overseas competitors. The advantage has less to do with sheer population figures, they say, and more with the differences in how these new powers do business.

An Onshore Play In Off shoring
Shares in Indian tech consultants may be pricey -- but there's room to grow

As more American and European companies ship specialized service and high-tech work to developing nations such as India, business looks bright for the outfits that supply the labor. Yet stocks of many major offshore consultants have been struggling. For instance, the American depositary receipts of Infosys Technologies (INFY ), India's second-largest outsourcing specialist, are down 13% so far this year. Returns for Cognizant Technology Solutions and Wipro (WIT ), two other brand-name offshoring companies, are down 4% and 27% respectively. Intensifying competition, concerns over rising labor costs, and worries about growth prospects have put pressure on stock prices.

The Soft Underbelly Of Off shoring
A high-tech scam on Citibank accounts is a nightmare for India's call centres

On the steamy morning of Apr. 4 two smartly dressed men walked into a branch of Rupee Co-operative Bank Ltd. in Pune, 150 km from Bombay. The two were among the city's software and back-office workers -- a growing, prosperous group coveted by banks and merchants.

Asia: Spam Factory of the World The region’s efforts against a surging, ever more harmful tide of unwanted e-mail are falling short. Now, add cell-phone viruses to the mix.
In the fight againts spam, Asia seems to be losing. Over the past few years, servers based in China and South Korea have become major sources of unwanted e-mail as spammers take advantage of loose regulation, low costs, and lax security (see BW Online, 9/13/04, Now spam is being outsourced)

Insource, Offshore, Outsource –Help!
The number of new work-allocation terms floating around could confuse any small-business owner. Here’s what they really mean.
Insourcing, off shoring, outsourcing, near-shoring: The confusing terms crop up frequently but aren’t always well-defined. What do they mean in practical terms? Should small-business owners sign on to these oftpromoted business models? Do they really deliver on promised cost-savings? Smart Answers columnist Karen E. Klein recently posed these questions to Phil Bloodworth, a partner in PricewaterhouseCoopers’ advisory performance-improvement practice. Edited excerpts of their conversation follow:

The Slippery Slope of Outsourcing R&D
Your recent "Outsourcing innovation" (Special Report, Mar. 21) addressed an important transformation that is often underestimated: the off shoring of knowledge work. It is hoped that this story will help to put the sources of innovation back on the agenda of corporate strategists. While retaining the work of highly educated workers can be expensive, letting it go can weaken the competitiveness of companies.

An Offshore Connection for Small Biz
Call centres are beginning to pitch their services beyond the big leagues. But be aware of hidden costs and PR risks

Offshore call centres have emerged as an option even for small companies, with the potential for major cost savings. Problem is, they can also be a turnoff for customers. Controversy over sending American jobs overseas erupted during last year's Presidential campaign, leaving nearly all the companies that hire overseas call centres so touchy about the practice that most refuse to discuss it publicly.

Outsourcing Innovation
First came manufacturing. Now companies are farming out R&D to cut costs and get new products to market faster. Are they going too far?
As the Mediterranean such bathed the festive cafes and shops of the Cote d’Azur town of Cannes, banners with the logos of Motorola (MOT), Royal Philips Electronis (PHG), PalmOne (PLMO), and Samsung fluttered from the masts of plush yachts moored in the harbor.

2004Outsourcing: Something lost, something gained Outsourcing security can ease IT burdens, just be sure to read the fine print By Roger A.Grimes
Configuring and maintaining firewalls, IDSes, and anti-spam filters can challenge even the best security administrators. How can anyone realistically review every message in every event log? A tightly managed security framework frequently requires more time than available resources allow.
That’s why hiring MSS (managed security services) providers is a popular alternative to internally managing off-the-shelf solutions or customized programs. MSS providers promise the expertise and staff resources to maximize security. Take for example e-mail content filtering. Service providers Message Labs and Postini are leaders in providing anti-spam, anti-virus, and anti-pornography filtering for SMTP e-mail. Both companies scan billions of e-mails each week for thousands of customers, and their accuracy is extremely high. They can also save on maintenance costs, customers say.

Offshore outsourcing poses privacy perils Contractual ties with overseas vendors advised for data usage By Kaikumar Vijayan, Computerworld
Washington – outsourcing job to offshore destinations can sharply increase data privacy risks and the complexity of managing that risk, several experts at the Fourth Annual Privacy and Data Security Summit here warned this week.
As a result, companies need to ensure that overseas vendors are contractually tied to specific conditions regarding how data is transmitted, accessed, used, stored and shared, they said. Those challenges include regulatory compliance, data protection and access issues, as well as monitoring and auditing issues.
The secrets of outsourcing success From IM to on-site staff, communication is critical – and flexibility doesn’t hurt By Ephraim Schwartz
Outsourcing is a volatile subject after all; it puts jobs and even careers at stake. But we need to remain calm and take a sober look at the business strategy of outsourcing IT. Besides, I promised part three of my look at outsourcing last week.
To that end I spoke with Arkadiy Dobkin, CEO of Epam Systems, an outsource provider in Minsk, Belarus; Abnash Singh, executive vice president of Amoksha Technologies, an outsourcer based in Bangalore, India, and Micheal Akselrod, senior vice president for research at Reuters, an Epam customer in New York.Akselrod stresses that his opinions are his own and do not represent those of Reuters…

2003Tapping the outsource Outsourcing has immediate bottom line benefits, but management issues warrant a close look By Ephraim Schwartz
Outsourcing appears to be the topic of the day, and from what I can tell, that conversation will only grow more intense this year.
Outsourced software development is focused on new product development, custom development for the enterprise, and support and maintenance, especially for mainframe and other legacy systems. There are two issues that those working in IT appear to be most concerned about. First and foremost, what are the long-term repercussions on IT of using outsourced resources? And, what are the issues facing a North American IT shop that deals with a service supplier thousands of miles and many time zones away?

Gartner: Most companies unfit to manage outsourcers

Without proper supervision, outsourcing often yields low return on service value

By Juan Carlos Perez, IDG News Service
Most companies are unprepared to properly manage the outsourcing vendors they hire and to closely monitor their work, Gartner Inc. has found.
Gartner forecasts that by 2005, 70 percent of companies will use more than three IT service providers for projects in key areas, but that less than 10 percent of companies will be prepared to effectively manage the outsourcers' work.
Without proper oversight and supervision, companies can't ensure that the goals and expectations of the outsourcing engagements are being met. This in turn often yields a low return on service value, particularly when the client has hired several outsourcers that need to collaborate and interact, according to Gartner's new report "Successful IT Outsourcing: Strategies, Tactics and Management Approaches for Effective Strategic Sourcing."

China

Anonymous — Tue, 05 Sep 2006 05:41:59 CDT

2006

A life insurance policy for China

A strong life insurance industry could help China tackle its economic and social challenges. Stephan H. Binder, Heidi Z. Hu, and Peter B. Walker Web exclusive, March 2006 After 20 years of breathtaking growth and massive industrialization, China is now facing economic and social challenges to its sustained development. On the one hand, it must find 12 trillion renminbi ($1.5 trillion) over the next five years1 to finance the construction of a staggering amount of physical infrastructure if it is to keep its growth on track and extend economic development to smaller cities and rural areas. On the other, it must address increasingly pressing issues of social harmony and stability, in part by tackling shortfalls in its pension and social-welfare systems. Both of these efforts will be crucial for narrowing the potentially explosive gap between the wealthier coastal and urban regions and the poorer countryside.

Leaks in the Great Wall

There is growing interest in outsourcing software development to China, but some CIOs worry about protecting their intellectual property in a country where software theft is perceived to be widespread. Is that perception accurate?

BY GIUSEPPE DE FILIPPO AND CHRIS IP
An increasing number of software companies as well as CIOs from a variety of industries are looking to China to outsource some of their software development. Good experiences in India have made the prospect of going far offshore more palatable. And as prices in India and other markets rise, cost-conscious CIOs are looking for even less-expensive alternatives.

Outsourcing Plans for China
By Carol Kendrick China, also known as the manufacturing central of Asia recently announced their plans to join the outsourcing wagon. Ma Xiuhong, the Vice Minister of Commerce explained that by joining the outsourcing….

China Software Outsourcing – A 29.5 Billion Market by 2009
By Danny According to a new research, China's domestic software outsourcing market will develop rapidly with a growth rate of 35.6% from 8.71 billion in 2005 to 29.43 billion in 2009. Analyses...

China strives for offshore outsourcing supremacy
Communist China is vying to become the favored global offshore outsourcing destination. With many a government initiative in this direction, it is indeed making calculated moves to achieve offshore outsourcing supremacy.
Strong government initiatives, an education system creating a larger skilled work force, and unique economic conditions has positioned the country to challenge even India for dominance in offshoring......

Outsourcing to ChinaIN A vast curtained room in Xian in western China, rows of dark, pony-tailed heads are sliently bowed, fingers moving quickly and expertly. They might be in any Chinese factory- except that they are not assembling shoes, nor soldering circuit boards, but sitting at computer terminals processing medical-claim forms from New York and car-loan applications from Detroit and marking examinations for high-school students in Melbourne, Australia. This is the future of the global back office, says Michael Liu…

2005

China's looming talent shortage

To make the move from manufacturing to services, China must raise the quality of its university graduates.
Diana Farrell and Andrew J. Grant
2005 Number 4
With a huge supply of low-cost workers, mainland China has fast become the world's manufacturing workshop, supplying everything from textiles to toys to computer chips. Given the country's millions of university graduates, is it set to become a giant in offshore IT and business process services as well?

Can US auto suppliers stay ahead of Chinese rivals?

Chinese parts producers do have one advantage—cheap labor—but that isn’t the whole game. Stefan Knupfer and Glenn Mercer Web exclusive, September 2005
The US automotive industry is understandably concerned about the competitive threat of low-cost cars and components from China. The United States already imports almost $4 billion a year in Chinese parts, and that figure grew by an average of 25 percent annually over the past three years.

How private equity firms can play in China

Given the difficulties of doing business there, direct investment in Chinese companies isn’t always the best option. Gordon Orr Web exclusive, February 2005
International private equity houses are stepping up their efforts to invest in China in the next few years, reflecting a gold rush mentality that could leave some investors disappointed.
Private equity funds with good connections and deep insights account for the bulk of recent investments. But some new entrants have relatively untested China investment teams.
The influx of new money reflects the pulling power of the "China story," which suggests that there are opportunities that investors cannot afford to miss.

Can China compete in IT services?

Many of China's companies have proved that they can compete with any business in the region. But a close look at the Chinese IT industry shows that it must overcome significant obstacles before it can pose a threat to India.The take-away Fragmentation and a consequent lack of scale will prevent China's IT firms from capturing a larger part of the outsourced-IT-services market until the industry consolidates and learns to manage its talent more effectively.
This article includes the following exhibit:

Exhibit: M&A not a priority for Chinese software-services companies

India Vs China - The IT Outsourcing War
Changes in the Chinese IT Industry have been phenomenal. The country is making remarkable improvement in increasing English-speaking software engineers to sustain IT offshoring projects. The Chinese government is making serious efforts to attract investors and widen its revenue from the IT sector. The transformation has been termed as the 'Changing face of China'. The growth had left the leading IT outsourcing giants and the government of India, tense. Is the growth of the Chinese Software Industry a threat to the Indian IT rule? This paper presents a discussion India and China IT Outsourcing War.

Making It in China

China is not for everyone, because of the high logistical costs of getting products into, around and out of the mainland. Here's how to figure out if and how China should be in your company's future.

BY CHRISTOPHER KOCH

When Arvinder Surdhar traveled to China in 1990 to form a joint venture between IBM and a Chinese manufacturing company to produce PCs, he wound up manufacturing something he hadn't expected: cardboard boxes.

It’s Cheaper In China

CIOs are beginning to see China as a cheaper alternative to India. Nypro, a global plastics manufacturer, shares some lessons from its experiences over there.

BY STEPHANIE OVERBY

When Mike MacKenty first considered sending Web-based development and maintenance work to China two years ago, he was already well-acquainted with the fourth-largest country in the world. He'd visited his company's various manufacturing sites in China, a country coming on strong in the offsourcing scene, several times. So he thought he had a good handle on the problems he might face in sending IT work there. He knew he would need to find good IT talent with decent English skills and beef up his own IT department's internal processes for packaging up projects to send abroad. And he would have to address any internal opposition to offshoring.

Moving to China
For many years, Plantronics, a manufacturer of headsets, resisted moving production to Asia. Given the nature of Plantronics' business, the cost savings afforded by a Chinese workforce were small, and when the additional costs associated with a physically longer supply chain--higher inventory, higher freight costs, and lower flexibility--were added, the savings were quickly eaten up. So why, after dismissing such a move for decades, did the company decide to break ground in December 2004 on a manufacturing facility in Suzhou, China? And why is the company operating the plant itself instead of outsourcing manufacturing altogether to reap the biggest cost savings? The answer to both questions is found in the way Plantronics' corporate strategy drives decision making in its supply chain. The company's strategy requires a manufacturing process that is highly flexible, relies on skilled and innovative workers, focuses on optimized total cost, is close to markets, and protects its intellectual property. It was an analysis of each of these demands that led the company to its present course of action. And by understanding further how Plantronics viewed its supply chain through the lens of its business priorities, companies may discover a stronger framework for thinking more strategically about their own supply chains.

China Rivals India in Services
Software outsourcing in Asia’s billion-dollar-plus giants bears distinctly different fruit.
September 5, 2005 Print Issue
China’s burgeoning software outsourcing sector knows where its advantages lie. When bidding against established Indian rivals for a contract from an American or European company, “certain companies encourage prospective clients to fly to India first, and then come over to Beijing, Shanghai, or Shenzhen,” says Dion Wiggins, a Hong Kong-based analyst for Gartner Research.

China’s gleaming new cities are a surprise to some Westerners, who still see millions of bicycles when they think of Beijing.

Research Summary: The China Reality Check
Impressions from a Recent Market Visit
By neoIT
neoIT conducted an extensive visit to china during the latter half of April with the intent of obtaining a clear understanding of the IT services market and service provider capabilities. During the visit, neoIT met with 16 leading suppliers across the country in cities such as Shanghai, Beijing and Dalian. The trip was extremely informative as it allowed us to better appreciate the facilities and capabilities of Chinese IT services companies as well as evaluate the state of the infrastructure in various parts of China. We were also able to assess key gaps between perception and reality.
In this paper, we will address the follwing questions:
-What are the characteristics of the IT services market in China?
-What are the perceptions foreign companies have of China with respect to the IT services industry?
-What key trends can be postulated for the China IT services industry?

The ICT landscape in the PRC: market trends and investment opportunities in China
Information and Communications Technologies (ICT) are increasingly an important tool for supporting sustainable development and economic growth in developing markets. By embracing communications at unprecedented rates, people around the world have demonstrated their appreciation for the contribution of ICT to the betterment of their lives. It took 113 years from its invention for the fixed telephone to reach ten percent global penetration. It took 15 years fromt its invention for the mobile telephone to reach the same penetration, and ten percent of the World's population are now Internet users less than twelve years after the birth of the World Wide Web.
China: Golf, Sushi -- And Cheap Engineers The Chinese port city of Dalian is becoming an outsourcing centre for multinationals

Stroll along the aptly named Japanese First Street in downtown Dalian, and it's easy to forget you're in north eastern China. With its faux rice-paper lamps and shoji sliding doors, the street could easily pass for a tidy neighbourhood in Tokyo. There are restaurants with names such as Fuji and Fukuhana, and signs on storefronts are all in Japanese. Kimono-clad women stand outside sushi bars and karaoke joints, beckoning salary men to come inside. JCB credit cards -- or, even better, Japanese yen -- are accepted everywhere.

2004
China IT Outsourcing Panel: Managing Perception and Improving Reality to Capture the IT Opportunity

Plotting a "China Strategy"

More often than not, it's necessary for Westerners to act like a missionary with an evangelism apostolate. (Part One of Two.) David Scott Lewis [IT E-Strategies, Inc.] | POSTED: 12.01.04 @00:01A lot of Western companies are in the midst of designing (perhaps "divining" is a better term) their China strategy. And many Westerners are trying to figure out what China might mean for them. Although there's way too much to say in these columns, I can toss around some basic considerations.

Like always, it's important to figure out what you personally want and/or your company wants to accomplish in China. Although it may seem like I'm stating the obvious, many of all ilks are treating China like it's the new Gold Rush. Maybe it is, but the actions of many seem foolhardy at best. For the balance of this column, I'm going to take the perspective of an individual rather than a company—although my comments apply to both individuals and companies.

Plotting a "China Strategy"—The Bonus Points

Location considerations for the enterprising expat. (Part Two of Two.) David Scott Lewis [IT E-Strategies, Inc.] | POSTED: 12.08.04 @01:28Continued from Part One.)Certain places are "safer" than others, too. If I were a VC with limited experience in China, I'd place my first bets in Shanghai (SH) and Beijing (BJ). Actually, I'd bet on Hong Kong (HK), then BJ, and then SH. SH is my favorite city in the mainland, but it wouldn't be my first choice for IT investments. However, even this requires a bit of refinement. For example, contrary to so-called conventional "wisdom," SH is in many ways a better place to locate an enterprise software R&D unit—i.e., a better place than BJ. (Proof points to follow in a future column.)

2003

Can Chinese brands make it abroad?

The answer is yes, but it won’t be easy. Paul Gao, Jonathan R. Woetzel, and Yibing Wu 2003 Special Edition: Global directions China dominates world manufacturing because of its low-cost labor. So far, though, most Chinese companies have been content with the role of original-equipment manufacturer (OEM), supplying the world's biggest brands and retailers' private labels with products ranging from toys to televisions. But the government is now urging some of China's biggest companies to sell branded products abroad—and many have reasons of their own for trying to establish brands in developed countries. The home market is fiendishly competitive and puts constant pressure on prices, branded products can be more profitable than those of OEMs, and competing in foreign markets forces companies to innovate and improve, thus helping them to move away from their image as producers of cheap goods.

2002

Roadside retail in China

China's fuel distribution network is ready to be overhauled, and the government is keen to fix it. Is this an opportunity for multinational oil companies as well as for China's two domestic giants, PetroChina and Sinopec? Perhaps. But with competition among multinational and local companies already driving down retail margins and with prices for retail sites soaring, it is far from clear how any oil company will make money. In fact, only the highest-volume sites will turn a profit on fuel revenues alone; the rest will need substantial nonfuel revenues just to break even.

Other
15 Tips from a Firm That Took Software Work to China

By Dian Schaffhauser
When the CIO for a ticketing services company heard from his CEO that they were going to scrap plans to get work done by a big-name firm in India and take it to China instead, he was a major skeptic of the decision. A year later he’s changed his mind 180 degrees. This case study shares 15 tips gleaned from his experiences.

Paciolan competes with Ticketmaster, but with a different approach. Whereas Ticketmaster, the gorilla of the box office, typically takes over all operations of ticketing, then shares a portion of revenues with the venue, Paciolan offers reservation functionality in a self-service model. The college basketball, professional baseball, hockey, museum and performing arts centers box offices that make up the bulk of its clients license access to the software modules they want and then set up their own ticketing operations, paying a fee to Paciolan for each aspect of the service they use in their environment.

A buyers guide to Offshore Outsourcing: China
CHINA: Up-and-comer
Geopolitical risk: Moderate
Infrastructure/Communications: Fair. Best in software centers.
English proficiency:Poor
Labor cost advantage (average IT programmer salary): $8,952/year
Pros: Think India 10 years ago-low-cost workers and lots of them. China is currently experiencing the opposite of brain drain: the number of IT professionals returning to the country is increasing.
Cons: Multinationals are eating up the labor supply. Not the best option for enterprise customers seeking to outsource development or maintenance-poor English skills, lack of exposure to Western business culture, shaky U.S. relations and immaturity of processes all pose risks.
Insider tip: China could be a better place to outsource in five years.

Analyst David Scott Lewis Shares his China Perspective

By Dian Schaffhauser
You can never know what's going to come out of David Scott Lewis' mouth next -- but you should know whatever he says will be insightful and you'd better pay attention. An ex-METAGroup analyst who -- along with many others -- lost his job when the company was acquired by Gartner Research, he had never been to China, aside from Hong Kong. But not so many months ago, he moved overseas because little was keeping him in the US and love beckoned from afar (and online). The last time we caught up with him -- in July 2005, when he’d returned home for a brief visit to speak at the AlwaysOn conference at Stanford University -- he was providing consulting services in China, primarily to US clients trying to locate just the right service providers to work with.In this interview, Mr. Lewis supplies a no-holds-barred rundown on the current state of the outsourcing business in China. Part 1 of a three-part article.

Is it easy for an American to get a job in China?

David Scott Lewis: Well, because I was sponsored by a software park, it was easy for me. If you don’t have connections, it can be difficult to get a visa. I mean you can go for 30 days, but to get for one-year multiple entry... Once you’re in the loop, it’s very easy to stay in the loop, but to get in the loop could be a little bit difficult, which is good for us. Keeps other people away.

Doing Business in China

By Mark Streich
One billion customers!

That has been the siren song for countless businesses thinking about selling their products in China. But unlike the mythical Ulysses' order to his men to ignore the song, James McGregor's book, ONE BILLION CUSTOMERS: Lessons from the Front Lines of Doing Business in China (Wall Street Journal Books, $27), attempts to prepare you for what you may encounter when you are enticed by it.
McGregor was The Wall Street Journal's China bureau chief after the 1989 Tiananmen Square massacre, chief executive of Dow Jones' China business operations during the 1990s, and a venture capitalist. These positions gave him access to people and information that few businesses have.

That is perhaps my greatest misgiving about the book. His experiences are not likely to be relevant to the vast majority of readers, as you're unlikely to have the same access in your business dealings. How many of you will be able to draw upon high level contacts in either the U.S. or China government when you're being strong-armed by a ministry official, or have the media's ear when your intellectual property is being stolen?

Global Outsourcing: Destination China
A pre-recorded Webinar that discusses the advantages and disadvantages of offshoring to China as well as tax and legal issues.

Interview with a Beijing Official on Outsourcing By Dian Schaffhauser The People’s Republic of China, if you haven’t noticed, is mind-bogglingly big. A behemoth of a country, just the Great Wall alone stretches longer than the distance between New York and Los Angeles. So, it would not be too shameful a thing to confess that, beyond the economic jugular cities of Beijing and Shanghai, beyond the well known fact that China is the largest consumer market in the world and the source of industrious and dirt-cheap workers, you have no idea where to begin to make sense of the country in terms of IT outsourcing and -- most importantly -- how and where best to find an outsourcing partner that will serve your needs and/or help you establish an offshore development center.

Can you qualify how important outsourcing is to Beijing government and what it adds to the economic progress of the area?

First of all, I think it is necessary to make sure you know some of the background of Beijing. The population of Beijing is quite large -- 17 million. Among the 17 million, 14 million [are] permanent residents. Three million [are] temporary. For the last 10 years, the [gross domestic product] growth is almost 10% per year. As for the capital of our country, the government in Beijing promotes policies for the comfortable living of [all] of Beijing.

Outsourcing in China: The Beijing Region

By Jacqueline Zhang
The People’s Republic of China, if you haven’t noticed, is mind-bogglingly big. A behemoth of a country, just the Great Wall alone stretches longer than the distance between New York and Los Angeles. So, it would not be too shameful a thing to confess that, beyond the economic jugular cities of Beijing and Shanghai, beyond the well known fact that China is the largest consumer market in the world and the source of industrious and dirt-cheap workers, you have no idea where to begin to make sense of the country in terms of IT outsourcing and -- most importantly -- how and where best to find an outsourcing partner that will serve your needs and/or help you establish an offshore development center.

SPECIAL REPORT: Outsourcing to China, Part 1

By Jacqueline Zhang
According to some reports, China is just a few years away from catching up with India as the destination of choice for companies looking to outsource all or parts of their operations. Others say, no way! Too many barriers sit between it and success. The important question right now is what recent developments in China mean to your organization and its outsourcing strategies.

Taken at face value, China’s presence in the service provider world is good news, since much of the impetus to outsourcing is cost management, particularly in the area of labor. China’s cost advantage -- which can translate into as much as a 70% savings over US salaries -- sounds compelling.

SPECIAL REPORT: Outsourcing to China, Part 2
By Jacqueline Zhang

Intellectual Property Concerns

There’s just one way to describe the record of intellectual property (IP) rights protection in China: appalling. Pirated DVDs and fake branded goods are ubiquitous on the streets, and -- more relevantly -- up to 98% of software products sold in China are unlicensed or pirated copies. There’s almost no cultural awareness for IP rights. It’s been said that in China, anything that can be profitably copied will be.

The Current State of Services Outsourcing in China
By Dian Schaffhauser
You can never know what's going to come out of David Scott Lewis' mouth next -- but you should know whatever he says will be insightful and you'd better pay attention. An ex-METAGroup analyst who -- along with many others -- lost his job when the company was acquired by Gartner Research, he had never been to China, aside from Hong Kong. But not so many months ago, he moved overseas because little was keeping him in the US and love beckoned from afar (and online). The last time we caught up with him -- in July 2005, when he’d returned home for a brief visit to speak at the AlwaysOn conference at Stanford University -- he was providing consulting services in China, primarily to US clients trying to locate just the right service providers to work with.In this interview, Mr. Lewis supplies a no-holds-barred rundown on the current state of the outsourcing business in China. Part 3 of the three-part article.

The Passage to Outsourcing in China
A rundown on outsourcing in China by attorney Peter A. Neumann that includes useful advice about how the legal system in China works, the risks you face in doing business there and how to mitigate potential problems.

This expert explains how to work with China
By Dian Schaffhauser Just like IT service providers elsewhere in the world, those in China would have you believe they can handle just about any aspects of your programming, testing or localization work. Only a small percentage has actually succeeded in attracting business outside their own border.
Using International Arbitration to Resolve Disputes in China
By Walter J.Duffy, Jr.
Walt Duffy is the head of Faegre & Benson's international arbitration pratice. He recently represented a U.S. equipment manufacturer in a highly successful arbitration in China.

Your China Strategy Development: Advice from an Analyst
By Dian Schaffhauser
You can never know what's going to come out of David Scott Lewis' mouth next -- but you should know whatever he says will be insightful and you'd better pay attention. An ex-METAGroup analyst who -- along with many others -- lost his job when the company was acquired by Gartner Research, he had never been to China, aside from Hong Kong. But not so many months ago, he moved overseas because little was keeping him in the US and love beckoned from afar (and online). The last time we caught up with him -- in July 2005, when he’d returned home for a brief visit to speak at the AlwaysOn conference at Stanford University -- he was providing consulting services in China, primarily to US clients trying to locate just the right service providers to work with.In this interview, Mr. Lewis supplies a no-holds-barred rundown on the current state of the outsourcing business in China. Part 2 of a three-part article.

India

Anonymous — Tue, 05 Sep 2006 05:32:00 CDT

2006
Benchmarking India’s business process outsourcers
A new methodology for measuring the performance of remote providers shows that while clients are mostly satisfied, there is significant room for improvement.
Noshir F. Kaka, Shailesh S. Kekre, and Saipriya Sarangan
Web exclusive, July 2006
India, having captured 46 percent of the global business-process-offshoring (BPO) market, is the leading offshore destination and will probably remain so for some time. But competition is intensifying there (and in other popular offshore destinations) as more companies compete to supply such services.

Running a customer service center in India: An interview with the head of operations for Dell India
Romi Malhotra shares insights on recruitment, retention, and developing talent.
Noshir F. Kaka
Web exclusive, May 2006
RunningDell's recent announcement that it intends to double its staff in India, to more than 20,000 people by 2009, was widely recognized as a vote of full confidence in the country's development. For Dell, India represents not only a rapidly growing consumer market—its annual demand for five million PCs is expected to double by 2010—but also a huge talent pool for transaction processing, R&D, and IT operations, as well as a potential manufacturing base.

Pharma leaps offshore

Although late to offshoring, pharma companies stand to benefit at least as much as those in other industries.
Michael Bloch, Ajay Dhankhar, and Shankar Narayanan
Web exclusive, July 2006
As executives across industries grow used to cost savings from low-cost offshore labor, they're exploring ways of tapping this workforce to generate additional revenue, improve core business processes, and offer more value to customers (see "Taking offshoring beyond labor cost savings").

Building a global IT organization: An interview with DPWN's managing director for IT
Stephen McGuckin explains how the company consolidated its IT operations and developed a unique model for outsourcing and offshoring.
Michael Bloch and Marcus Schaper
Web exclusive, May 2006
Few companies have as much on-the-ground familiarity with remote locations around the globe as Deutsche Post World Net, the corporate parent of Deutsche Post and DHL, a logistics and parcel delivery business. So perhaps it was natural that DPWN would emerge as a leader in the creation of a globally connected IT-development and operations model that has consolidated many of the company's once-fragmented application-development and data-processing locations into three supercenters, in Cyberjaya, Malaysia; Prague; and Scottsdale, Arizona, in the United States. Along with some outsourced help in India, these facilities keep DPWN's IT operations and development running around the clock. They are complemented by another application-development center, in Bonn, Germany.

Taking offshoring beyond labor cost savings
Offshoring becomes a powerful tool for business transformation once companies combine labor cost savings with other productivity and revenue-generating levers.
Vikash Daga and Noshir F. Kaka
Web exclusive, May 2006
Most global executives know by now that offshoring can deliver more than just labor cost savings. A good offshore strategy should also generate new revenues, increase capital productivity, and manage risk in ways that would be unaffordable in home markets. (For a look at how offshoring plays out in the pharmaceutical industry, see "Pharma leaps offshore.")

Article at a glance:
The untapped market for offshore services

Providers of offshored IT services and business processes have so far captured only 10 percent of a $300 billion opportunity. In the next five years, a study shows, this market will grow by an additional $80 billion.
· Traditionally outsourced IT services, such as hardware and software maintenance—which have seen very little offshoring to date—will probably drive the next wave of growth. Offshoring should increase more rapidly in business processes than in IT services; banking and insurance will likely lead the way.
· Further growth will come from new "offshore-only" services that go beyond the simple replication of onshore ones. This article includes the following exhibits: · Exhibit 1: IT services offshoring is experiencing rapid growth.
· Exhibit 2: Business process offshoring is growing even faster.
· Exhibit 3: Innovation can further expand the addressable market.

When social issues become strategic

The case for incorporating an awareness of social and political trends into corporate strategy has become overwhelming.
· Issues such as privacy, obesity, offshoring, and the safety of pharmaceutical products can alter an industry's ground rules, and the financial and reputational impact of mishandling these issues can be huge. But they also create new market opportunities that nimble companies can exploit.
· Companies should look for signs of emerging hot topics, be ready to respond to them early, and place a series of small strategic bets that will create value if the social and political landscape shifts.
· CEOs must be willing to ensure that different parts of their own organizations are united behind a coherent approach, to engage in external debate, and to consider collaboration with others. This article includes the following exhibits: · Exhibit 1: The social contract has formal and informal components. (Interactive)
· Exhibit 2: Emerging sociopolitical megatrends are shaping expectations. (Interactive)
· Exhibit 3: Articles in the New York Times reveal a significant turn in the obesity debate.
· Exhibit 4: Organizational coordination is essential.

The McKinsey Global Survey of Business Executives : Business and Society
Executives say they face a host of worries about society's expectations of their companies, which can—and must—do better.
Executives around the world overwhelmingly embrace the idea that the role of corporations in society goes far beyond simply meeting obligations to shareholders, according to the latest McKinsey Quarterly global survey.1 But executives also say that, for most companies, sociopolitical issues—such as environmental concerns and the effects of offshoring—present real risks. Indeed, finding ways to control them is so important, the executives say, that the effective management of sociopolitical concerns must start with the CEO.

Executives are far less certain, however, that corporations adequately anticipate which sociopolitical concerns will affect them. These executives also believe that the tactics—lobbying and public relations, for example—companies now use to meet such concerns are not the most effective ones. In addition, they think that the public will expect corporations to take on a significant role in handling the new pressures.

India's New Faces of Outsourcing

High-Level Technicians Lead a Transcontinental Shift in Business Culture

By S. Mitra Kalita

PUNE, India -- Before he supervised teams, wooed American clients over dinner or sat in a Northern Virginia boardroom alongside U.S. executives, Constancio Fernandes wrote computer code for a living. That's how it started in the late 1990s -- American businesses ordered up software applications, and Indian programmers such as Fernandes dutifully delivered. But somewhere along the way, Fernandes became more confident and outspoken. He began questioning the Americans and suggesting cheaper, faster ways to run their businesses. They listened."Most of the companies in the U.S. used to see Indian companies as sweatshops," said Fernandes, 33, who began as a programmer but is now the director of engineering at Reston-based Approva Corp.'s offices here, supervising product-development teams, tracking projects and improving engineering techniques. "The changes have been phenomenal."

New rules in India
India has played by its own rules and been successful in the offshore market. But now Indian businesses are expected to play by international investor's rules. Can they succeed?

India attractive offshore location despite wage hikes
By John Ribeiro
India is still an attractive offshore location for software development and other IT services, despite increasing staff salaries, according to analysts.
The cost advantage of hiring engineers in India is likely to continue for at least another five years, said Sudin Apte, senior analyst and country manager for India at research firm Forrester Research.

Stronger IPR Protection in India
By Carol Kendrick
IPR Protection is something that every outsourcing firm prioritizes when dealing with their outsourcing contracts. In response to this, India’s Ministry of Information recently amended their IP…

Rural Outsourcing in India
By Carol Kendrick
M.S. Swaminathan, a known scientist in India recently made a remark stating that rural outsourcing could be the answer in the improvement of rural areas in India. Dr. Swaminathan mentioned different…

Design Outsourcing in India
By Carol Kendrick
It seems like there are no limitations when it comes to thinking of a new industry to be outsourced. This time, its design outsourcing. Big-sized firms like GE, LG, Phillips and the like are already…

ES Outsourcing in India
By Carol Kendrick Aside from KPO (Knowledge Process Outsourcing), another industry is set to join the outsourcing move in India. The time for outsourcing engineering services has arrived. NASSCOM’s recent study….

KPO in India: Thriving
By Carol Kendrick Before, India was only known as a Business Process Outsourcing (BPO) destination but nowadays, another type of outsourcing seems to be taking over India. This new type of outsourcing is called KPO or….

India: Still Number One
By Carol Kendrick India still remains as the number one outsourcing destination despite the rising salary rate in the said country. This was the given prediction of outsourcing analysts despite the continuing rise of…

Make India outsourcing hub for manufacturing, says Murthy
By Danny N R Narayana Murthy, chief mentor of Infosys, said that India should now focus on becoming the world's preferred manufacturing destination. By becoming the global outsourcing and off shoring...

Indian tech firms overcoming infrastructure woes
By Danny According to the National Association of Software and Service Companies (NASSCOM), India’s IT industry would see positive growth despite infrastructure problems. NASSCOM stated that total…

India’s Outsourcing Revenue Is Growing In the past few weeks, there have been rumours and speculations about the outsourcing business in India. Many people went to the extent of saying that outsourcing boom was over. However, the latest report suggests that India's outsourcing revenue rose 32 percent to reach US$6.6 billion in the second quarter of 2006. There is no doubt that India remains the most preferred destination for Western companies to shift their back-office work. This report will definitely boost the confidence of Indian outsourcing industry.

"Engineered in India": India waiting to cash in on global engineering outsourcing

India, already spearheading the IT outsourcing market, is now set to expand services in engineering services. Globally, the highest spend in the engineering industry comes from powerhouses such as the US, Germany, and Japan.

Medical Outsourcing Wave in India Analysts believe that another larger outsourcing wave is all set to sweep the Indian BPO industry. A number of hospitals in the US and the UK are outsourcing laboratory and diagnostic tests to India at a lower cost. It costs about 70 to 80 percent less by outsourcing their businesses. Indian labs offer the facility where over 1,500 tests can be conducted under one roof. At the moment, this is generally limited to highly specialized tests. Experts say that outsourcing of laboratory testing and diagnostic services all set to become big business in India.
Truck Makers Outsourcing to India European and American truck makers see India as an outsourcing hub. They are looking towards India to outsource their business operations. Recently, Volvo Trucks has set up a product development group in India. The main objective of Volvo is to support development activity in North America and Europe. It will outsource components worth 70 million euros this year. Volvo currently has 70 engineers working on chassis and cam development to support R&D centres in North America and Europe.

Outsourcing of Education in India In the global arena, India's education sector receives high praise for providing quality education and knowledge to students who excel internationally. However, the ground reality is something different. Although India is ahead of others in providing total number of higher qualified professionals, Indian higher education is still slow in responding to the challenges posed by globalization. Globalization poses numerous challenges for higher education. As the market for talent has become global, most countries face problems in providing better quality of education in a competitive environment.

India is Leading Outsourcing Business According to a recent report, more than three-fourth of the top providers of offshore services to US companies have their operations in India. The report was released by the International Association of Outsourcing Professionals (IAOP). Although China, Philippines and Russia have made steady progress over the years, they are still lagging behind India in outsourcing operations. Most of the top-ranked offshore providers are located in India, thus making it the number one destination for outsourcing.
India: Hot Destination for Outsourcing? Although India always has been preferred as the major destination for outsourcing, some UK firms were hesitant to outsource their businesses because of infrastructure problems. However, in the recent months, Indian companies have resolved the issues attached with infrastructure problems to a considerable extent. Experts believe that India is in a better position to tackle the infrastructure problems that have discouraged some UK firms from outsourcing IT work to the country.

India unbeatable - Reasons why sceptics are wrong!
Doubting Thomases have raised two issues in recent times even as the latest strategic review of India's IT and ITeS sector by Nasscom, the country's largest IT and ITeS industry association has predicted that India is well on track to achieve IT and ITeS exports of $60 billion by 2010, and that it will continue to maintain its leadership in the global BPO market. Rising wages, new challengers The first issue is: with the demand for BPO/KPO out of India rising, the labour cost arbitrage that is now driving BPO/KPO business to India will narrow down…………

IT & BPO industry: India can sustain its global leadership position
The Indian IT and ITES industry is booming as outsourcing and offshoring are catching up fast in the global arena. NASSCOM, the apex organisation of Indian IT & ITES industry, along with McKinsey prepared a detailed report on the future potential of the industry and what India needs to do to get a larger share of the global offshoring cake.
In the last decade, the IT and BPO industries have seen substantial offshoring. India has been the leading offshore destination during this period, and now accounts for 65% of the global industry in offshore IT and 46% of the global Business Process Offshoring (BPO) industry......

What's in store for BPO in India this year
Small cities, knowledge process outsourcing and global competencies - these are the buzzwords fro the India-based outsourcing industry in 2006. ValueNotes Database looks at whats in store for BPO in India this year.
1.KPO jobs: In demand
Predictions of a boom in the knowledge process outsourcing industry are rife, with estimates for the industry size ranging from anywhere between $12 billion and $15.5 billion for 2010. This envisages a growth rate of 40 to 50 percent for the industry for the next five years.....

Why India?
Why Outsource Data processing and Software development in India? Just as the Gulf has its natural resources in crude oil and South Africa in diamonds, India's natural resource lie in its abundant technically skilled manpower. India is the world's largest exporter of software (after the U.S.), and is the source of management and technical talent for over 40% of new start-ups in Silicon Valley. Thanks to its large English-speaking scientific and higher education institutions, specialist computer institutes, and low costs of software talent, India has more software companies with ISO 9000 certification than any other country in the world........

Offshoring IT Outsourcing and India
Offshore Outsourcing IT has indeed become an unavoidable part of the business world. And it is springing up a world of changes to everyone directly or indirectly associated with it. While outsourcing is helping companies to dramatically lower their costs and as a result drop prices to increase demand for their products or services, attracting new clients and customers and even entering new markets; it is boosting the economic growth of offshore IT outsourcing countries like India.

Inside Offshore Software Outsourcing in India
Inside Offshore Software Outsourcing in India indicates some of the facts attached with Outsourcing to India. It can offer a huge payback, if you are eager to work at it. Many offshore veterans have shared their opinions for India and overseas services to the country. Today, though, overseas services to India are one of the best methods for no. of information Technology companies to reduce application development and maintenance costs. It also helps the companies in dealing efficiently with the crests and valleys of software requirements in the market, and concentrate on more strategic work......

IT Outsourcing organizations of the world
India is home town for some of the largest IT Outsourcing organizations of the world; everything from software development organizations to manufacturers of pharmaceutical products and the global banks, to the world of BPO or information technology, we can say that the business is booming over here. And when it comes to Offshore Outsourcing, we can say India is where the action has taken place in Outsourcing business wherein the cities like Bagalore, Mumbai, Delhi Hyderabad and emerging Ahmedabad are the key players in this sector....

India, the top knowing offshore outsourcing place
India take a top position for offshore software outsourcing across the globe but with the excellent government support, China is also on the top way of offshore outsourcing, according to the survey from Gartner.
For Offshoring destination only India has the excellent combination of good economical resources and forceful technology communication.
Gartner expect it will carry on to pick up the lion's share of world offshore market spending on Information Technology services, which is expected to sum $50 billion by 2007....

India, undisputable king of the Offshore Outsourcing world
Despite strong global challenge India continues to reign as the undisputable leader in Offshore Outsourcing. Though, more and more countries are vying for piece of the Offshore outsourcing pie, India holds her place.
Due to Software Outsourcing Market, world has become a smaller place and the application to different users have become ordained. India neighboring country China is also almost in the same speed. It has been continuously threatening many of the Software Development India and other Software companies in Philippines, Japan, Indonesia, Australia and many other outsourcing destinations....

India's Offshore Outsourcing business
Offshore Outsourcing business in India is expanding not by the day, but in minutes we can see the outsourcing industry gaining momentum success. Accenture, the consultancy and Offshoring Company announced India as most active developing market in Software Development, playing a key role in international delivery model and network.
The American based global Information Technology services and solutions companies, plans to invest Rs. 810 million to expand its operations in India, including its human recources, over the next five to seven years. During the expansion plan, that includes setting up of India Software Development centre, which will be in addition to the existing international services centre in city like Bangalore, with 150 IT Software professionals. This organization also has long-term partnerships with NIIT and Tata Infotech for Information Technology and business process outsourcing services by Offshore Outsourcing process.

Indian Outsourcers Roll On with Strong Results
By Stan Gibson
Indian outsourcing powerhouses Wipro and Tata Consultancy Services have both reported strong fourth quarters and stellar yearly results. The announcements came on the heels of a strong quarter reported by Infosys Technologies the week of April 10. Satyam will report its results later this week.

Rural Outsourcing in India
By Carol Kendrick
M.S. Swaminathan, a known scientist in India recently made a remark stating that rural outsourcing could be the answer in the improvement of rural areas in India.
Dr. Swaminathan mentioned different possible outcomes if rural outsourcing would push though. One of the reasons that he mentioned was rural outsourcing’s ability to develop the skills of the youth who are residing in these “underdeveloped” areas. Aside fro, that, rural outsourcing would bring about “re-training and re-deployment” to rural workers who are in need of such intervention in their careers….

Outsourcing to India is ‘short-sighted’
A former IT freelancer who now runs a recruitment agency has argued that outsourcing IT functions to India is short-sighted.’
Chris Barlett, who founded IT recruitment company, GCS, in 1989, asks why would agencies ‘ bite the hand that feeds them?’
Chris Barlett writes:
Using cheap but highly-qualified technicians and call centre staff in India has been increasing trend for many UK IT companies and recruitment agencies keen to reduce overheads in areas such as software development and candidate research…

India to Keep Offshore Lead for 30 Years

Asia’s IT dynamo will maintain its advantage over Britain for 30 years and will trump the U.S. for 18, says researcher Everest

India will maintain its low-cost IT skills advantage in the offshore outsourcing market for at least another 30 years, according to a new study.

2005

Ensuring India's offshoring future
The country must not only produce more top-quality engineers but also show the world the depth and quality of its talent in other fields—and in cities beyond Bangalore and Mumbai.
Diana Farrell, Noshir Kaka, and Sascha Stürze
2005 Special Edition: Fulfilling India's promise
India's offshoring sector, the world's largest and fastest growing, is dominated by IT services, which play a major role in the country's overall economic growth. In 2004–05, the Indian offshore IT and business-process-outsourcing industry will generate approximately $17.3 billion in revenues and employ an estimated 695,000 people. By 2007–08, that workforce will consist of about 1,450,000 to 1,550,000 people, and the industry will account for 7 percent of India's GDP.1

Fulfilling India’s promise

The country must take steps to boost its economic prospects, lift its living standards, and improve opportunities for the multinational companies that do business there.
Rajat K. Gupta
2005 Special Edition: Fulfilling India's promise
Let's praise India for its recent economic achievements. By now, they are familiar: the growth of a world-class IT sector, the development of a competitive automotive industry, and a burgeoning middle class.
But the time for self-congratulation is over. Increasingly, India knows it must get on with the job of sharing the country's newfound wealth with the vast majority of its people, who so far have little to show for the economic growth that followed the liberalization of 1991.

The right passage to India
Companies attracted to the country’s potential must do more than merely transplant products and systems that have succeeded elsewhere.
Kuldeep P. Jain, Nigel A. S. Manson, and Shirish Sankhe
Web exclusive, February 2005
India, for some time now the focal point of the global trend toward strategic offshoring, has simultaneously become appealing as a market in its own right. With GDP growth more than double that of the United States and the United Kingdom during the past decade, and with forecast continued real annual growth of almost 7 percent,1 India is one of the world's most promising and fastest-growing economies, and multinational companies are eagerly investing there.

Innovation from Asia
The capabilities that companies gain serving cost-conscious consumers in emerging markets can become competitive advantages in developed ones.
Lenny T. Mendonca
2005 Number 1
The threat of competition from Asia worries Western executives in nearly every product and service industry. The chief concern for many is the impact of low-cost Chinese manufacturing and Indian services on global pricing. Focusing on this concern alone represents a profound misunderstanding of the nature of the competitive threat.
As this issue of The McKinsey Quarterly makes clear, Asia is no longer merely a source of comparative advantage based on low-cost labor; it is fast becoming a source of competitive advantage based on management innovation. The implication is clear: Asia can now compete on much more than price.

The next wave in US offshoring
Offshore manufacturing in low-cost countries will soon increase sharply as companies there develop capacity in industries previously unaffected by it. Skill-intensive US sectors such as pharmaceuticals and auto parts haven't shifted production overseas so far but are likely to feel the brunt of this next wave of outsourcing.The take-away By 2015, manufacturing imports from developing countries to the United States could increase to more than 50 percent of total US manufacturing imports, up from 42 percent in 2002—a shift worth hundreds of billions of dollars.This article includes the following exhibits: · Exhibit 1: Imports from low-cost countries and prospects for offshoring production to them in the future
· Exhibit 2: US manufacturing imports from low-cost countries
· Exhibit 3: Projected US imports from low-cost countries in 2nd-wave skill-intensive sectors

An upgrade for the Indian IT services industry
-India’s offshoring specialists have grown dramatically in the past decade, but they will need to raise their game to maintain the same torrid pace.
-Among the many challenges are increased competition from established global IT services companies, a shortage of workers fluent in European languages, and the rise of rival offshoring destinations.
-To respond, Indian companies must grow beyond their roots, building global organizations that can serve multinational clients anywhere in the world, and evolve to offer higher-value-added services.
-The possibility of a virulent offshoring backlash in Western countries is a wild card that could hinder the growth of Indian IT services companies.

Article at a glance:

Strategy in an era of global giants

The world's largest corporations are greatly increasing their scale and scope, and the resulting mega-institutions are fundamentally changing the landscape of business.
These mega-institutions have disproportionately high profits and market values because they understand the link between their profitability and the talents of their professionals and knowledge workers.
Mega-institutions are pioneering a new model of competitive advantage by using their huge size to develop and exploit intangible assets in novel ways.
The corporate strategists of these companies must now develop new performance metrics and business models as well as find ways of overcoming the organizational barriers that size creates.

This article includes the following exhibits:

Exhibit 1: Mega-institutions are developing extraordinary scale
Exhibit 2: Book value is shrinking for the top 150 companies
Exhibit 3: Increasing income with fewer employees
Exhibit 4: Increasing returns on net income per employee
Exhibit 5: The leaders achieve higher levels of profit per employee
Sidebar exhibits: How complexity affects business

What executives are asking about India

The head of McKinsey's Indian offices addresses the concerns of senior multinational executives. Adil S. Zainulbhai 2005 Special Edition: Fulfilling India's promise
The world's senior executives, many of whom were slow to recognize China's vast potential, are flocking to India for fear of missing out on one of the last great growth stories. But the country and its economy present a mosaic of contradictions. India is a stable democracy, but an undercurrent of religious and ethnic tension remains. Cities such as Bangalore and Hyderabad are bustling high-tech centers, but Mumbai, the financial and media center, is a confusion of gridlock and slums. Foreign investment is desperately needed, especially to build the manufacturing sector, but India has been painfully slow in opening up many of its markets.

How India's executives see the world

Business leaders across India share an upbeat vision of the future while recognizing the obstacles ahead.
Erica J. Bever, Elizabeth Stephenson, and David W. Tanner
2005 Special Edition: Fulfilling India's promise
By and large, executives in India1 think that the opening up of the global economy presents them with huge opportunities for growth. A McKinsey Quarterly survey, which polled more than 9,300 executives around the world, including 537 in India (Exhibit 1), shows that Indian business leaders are much more optimistic about the future than are their international peers. Yet rather surprisingly for a country with one of the world's largest labor pools, they see the high cost and low availability of talent as the single greatest constraint on their companies—a problem that worries them much more than it does their counterparts around the world.2

When to make India a manufacturing base

Multinational corporations are starting to see the country's potential.
Shashank Luthra, Ramesh Mangaleswaran, and Asutosh Padhi
2005 Special Edition: Fulfilling India's promise
India leads the market in offshored back-office services, but as a manufacturing center it lags behind China, Thailand, and the rest of Asia. The reasons are well documented: multinational companies operating in India must overcome erratic electricity supplies, poor roads, and gridlocked seaports and airports while contending with government policies that discourage hiring and hold back domestic demand for goods in many sectors.

Making India a global hub

India could be a global leader in education and financial services, to name just two possibilities, asserts the IMF's chief economist—but not until it opens up to the world. Raghuram G. Rajan 2005 Special Edition: Fulfilling India's promise India fever is spreading in the world's investment community. The Western press rarely mentions that certified growth miracle, that leviathan of global trade—China—without adding "and India." In an admittedly unscientific test, a Google search reveals over 10 times more references linking "India" and "China" than "India" and "tiger" and 100 times more than "India" and "maharaja." But amid all the hoopla, it is well worth asking whether India is really ready to play a central role in the global economy. Instead of going through the familiar litany of strengths and weaknesses, it would be useful to pose the question in a different way: does India have the mind-set it needs to be a player in a globally integrated economy?

Service Management and Employment Systems in U.S. and Indian Call Centers
This paper draws on a comparative international survey of management strategies and employment practices in U.S. and Indian customer contact call centers. The paper compares these practices across three types of centers: U.S. in-house, U.S. outsourced, and Indian outsourced-offshore operations and considers two questions. First, how similar or different are call center management strategies and employment systems in each type of establishment? Second, what are the implications of variation in management practices for outcomes such as turnover, which is a major problem for service quality and productivity in the industry. The paper concludes with a discussion of policy implications.

Product Analysis: Imported Java

Patni Delivers

We contracted with a well-known Indian outsourcer to develop an application for our fictional NWC Inc. What we learned will help you decide if offshore is right for your enterprise.

By Don MacVittie

We've been bombarded by analysts, vendors, trade groups and reporters telling us how great (or horrible), how cheap (or expensive) application-development outsourcing is. But we had to find out more about it for ourselves, so we invited top offshore vendors to develop a customer-service application for the production environment of our mock NWC Inc. enterprise, and planned to use the review process to determine whether we would recommend outsourcing as an alternative to in-house development.

India eyes role as hub for aerospace outsourcing

Jay Shankar

February 14, 2005

After courting success with information technology, India is poised to become a key outsourcing hub for global aerospace firms as it has cheap and skilled engineers on offer, top officials say. "India's aerospace industry is at the take-off stage,'' said Edward Gordon, manager of offset programs of Northrop Grumman, a United States-based defense firm with operations in 25 nations.

Dataquest-IDC-NASSCOM Survey: India's Best T-Schools

Yes, the IITs top the Tech schools. But surprise: missing from the Top 10 are BITS Pilani, IIT Roorkee and DCE, edged out by the NITs and the Thapar and Netaji Subhas Institutes

Bhaswati Chakravorty

There are T-Schools and there are T-Schools. But which is the fairest? What sets the best apart from the good? Who's the laggard? Here's your opportunity to find out. The second T-School survey conducted by Dataquest-IDC-Nasscom throws up some interesting results. Sit straight and fasten your seat belts as we zip you through some of the key highlights of the study.

IT Cities in India
There is an increasing global interest in India for IT Services and BPO. The requirements range from establishing relationships with 3rd party service providers to, increasingly, evaluating setting up captive centres as subsidiaries of the global organisation. An area of confusion continues to be the differences in the various regions and cities in India in which to base operations in or have work done by a 3rd party provider. There is a growing recognition that India is not Mumbai and that India is not Bangalore, but a mosaic of various regions and indeed cities, each of which brings with it certain pros and cons. These trade-offs need to be actively evaluated as part of the overall evaluation and selection process. This requirement becomes more critical as the resource pool in India starts to tighten, wages are spiralling upwards and companies start to grapple with attrition rates that are reminiscent of the dot-com boom days.

The New Ideas Labs

As more firms send research to India and China, could the U.S. fall behind?

By ARAVIND ADIGA AND JYOTI THOTTAM

A decade ago, Whitefield, a remote suburb of Bangalore, made headlines on those rare occasions when gangs of armed bandits burst into homes at night. Today that former stretch of farmland and scattered houses is disturbed only by giant cranes, cement mixers and trucks piled up with white sand. Buildings of glass and steel are rising all over, as Bangalore's fast-expanding outsourcing industry radiates far beyond the city. Perhaps the most impressive spot in Whitefield is the campus of SAP Labs. The main building, with its comfortable sofas and a sunny atrium, is a sumptuous workplace by Indian standards.

Webcast: Working with India: What To Know before You Go
Are you fully prepared for your first business trip to India or to work with your India-based offshore team?
Understanding cultural differences can change how you approach business relationships, establish trust, negotiate and motivate, and manage your project.
Sixty minutes worth of cultural training will help you avoid costly and damaging cross-cultural blunders and become more effective in your outsourcing engagement with India.
In this interactive Web briefing, you’ll learn about business customs and protocol, skills for successful communication and negotiation, and strategies for working with Indian teams.

Epson plans to make India outsourcing hub
By Danny
Imaging Products Company Epson is looking at India to become its outsourcing centre for software development. The Japanese-based company plans to expand its products range and establish itself as a technology driven company.
According to Epson executive vice president and chief financial officer Toshio Kumura, India would be the primary choice for software development intended for electronic devices being developed for commercial purposes.

Microsoft expanding fast in India outsourcing
By Danny
Microsoft plans to double its staff in outsourcing centres in Hyderbad and Bangalore in India by March 2006.
Tess Field, Microsoft's head of human resources in India, said, "We aim to ramp up the strength at the India Development Centre [located in Hyderabad] by another 1,000 professionals."

India faces high quality talent shortage
By Danny
India is facing a shortage of high quality workers as outsourcing opportunities from the West keep coming into the country finding that top-quality workers are now fully employed. As a result, BPO companies are now looking at smaller Indian cities to host their operations, but have found that the workforce there is not as good.

India Can Be Aerospace Off shoring Base
By Danny
India’s aerospace industry is being promoted an as off shoring base for foreign companies. According to defence Minister Pranab Mukherkee, joint ventures that take advantage of India’s low-cost…

Architecture outsourcing from India: A viable option

With a shortfall of professional talent in architecture and rising costs, the US and Europe are looking to India to source architects, graphic designers, and software professionals to fuel the needs in the field of architecture. Indian service providers are now able to provide complete solutions including design concept and 3-D simulation of projects.

India tops list of outsourcing destinations, followed by China and Malaysia

Consultant A.T. Kearney has released the latest annual ranking of top outsourcing destinations in the world. According to the Global Services Location Index, Southeast Asian countries are the best outsourcing destinations, with India topping the list and China and Malaysia following in that order. Philippines is fourth in the list, followed by Singapore and Thailand.

Outsourcing from India instead
In a surpriseing reverse of job shifts, it is now actuallu India's turn to outsource. In light of the uproar over jobs being sucked out from developed countries and into the laps of workers from lower-costing countries, it would come as a refreshing break to hear of jobs generated by India, instead of for it.

India IT firms enjoying outsourcing cash flow
Top Indian IT firms are all revved up with glistening quarterly profits to report, up by about a third from last year. Tata Consultancy Infosys Technologies head the list of companies riding tthe crest of the outsourcing wave.
The bigger software companies are projected to do better by the second half of 2005, though the smaller firms may have to grapple with manpower management and cost issues.

India still leading in IT Offshoring
Despite attempts from China, the Philippines, and Eastern Europe to take over the top spot in IT offshoring, India still holds the distinction of being deemed the most desirable destination. Wipro chairman Azim Premji points out that India still has an overwhelming advantage in IT offshoring.

"Areas such as China, Eastern Europe and the Philippines are becoming major players in IT offshoring but India still has an overwhelming advantage because of the support of the government and the country's huge talent pool."

The ways of Indian software outsourcing industry
From trading in traditional resources since time immemorial, India is now emerging as the outsourcing capital of the world. Providing outsourcing services in various sectors, India also tops the global output in most of them.
Vendors and Outsources are making profits in the Indian software development market. Certainly Top Software Company in India llike TCS has promising ramp for Indian crews of 39,000 employess now. Entrepreneurs are atill thinking of expansion, recruiting nearly 4000 more employees in the company.....

Labour shortages for India’s out-sourcers
THE last thing you would expect India’s call-centre bosses to be worrying about is a shortage of staff. The entire business process outsourcing (BPO) industry, including a wide range of services besides manning the telephone, employs an estimated 348,000 people. Nearly 3m English speakers graduate from university every year.

India’s IT and outsourcing industries
THE arriving businessman, anxious to get to grips with India’s information-technology industry in its very capital, may need a little patience. He might meet his first traffic jam just outside Bangalore’s airport. He can examine the skeleton of the early stages of a planned flyover on the airport road….

India as Number 1By Michael Mandel The New Economist points us to a new report on the Indian economy by Deutsche Bank. The DB report reproduces a table, which I've never seen before, ranking which countries are most attractive for outsourcing and off shoring. India comes in #1, well ahead of China (the original source for the table seems to be consulting firm A.T. Kearney)….

India: An Agent of Change
That’s how Inforsys CEO Nandan Nilekani sees the coutry’s impact on the U.S. economy, through globalization and outsourcing.
While many U.S. tech companies are stuck in the slow-demand doldrums, India’s Infosys Technologies (INFY) is soaring. Revenues were up 42% last quarter. The reason: Infosys and its Indian brethren are rewriting the rules of global competition in the software and tech-services industries with their use of highly skilled but low-cost Indian talent.

2004

Exploding the myths of offshoring
Far from damaging the economy of the United States, offshoring should enable its companies to direct resources to next-generation technologies and ideas—if public policy doesn't get in the way.
Martin N. Baily and Diana Farrell
Web exclusive, July 2004
With the digital revolution and the dramatic fall in international telecommunications costs comes the prospect that white-collar jobs—once insulated from global competition—can be performed offshore, in low-wage nations such as India, where labor can be hired for as little as one-tenth its cost in the United States. Call-center agents, data processors, medical technicians, and software programmers could all find their jobs at risk from the nation's growing trade in services with emerging markets. In fact, offshoring is frequently blamed for the agonizingly slow pace of job growth in the United States, despite a recovering economy.

A richer future for India

The wealth generated by India's fast-growing information technology and business-process-outsourcing industries shows that the country has started living up to its economic potential. Unfortunately, they produce just 3 percent of GDP and employ less than one-half of 1 percent of the nonfarm labor force. By contrast, most sectors of India's economy remain shielded from global competition by high tariffs and restrictions on foreign direct investment and are thus woefully uncompetitive. Although some might argue that removing these barriers would threaten social objectives such as the protection of jobs and incomes, a robust economy would be more likely to realize them.The take-away If India is to replicate the success of its IT and outsourcing industries elsewhere in its economy, its leaders must lower barriers to trade and encourage foreign investment in other sectors.

China and India: The race to growth

The world’s two biggest developing countries are taking different paths to economic prosperity. Which is the better one? Diana Farrell, Tarun Khanna, Jayant Sinha, and Jonathan R. Woetzel 2004 Special Edition: China today First it was China. The rest of the world looked on in disbelief, then awe, as the Chinese economy began to take off in the 1980s at what seemed like lightning speed and the country positioned itself as a global economic power. GDP growth, driven largely by manufacturing, rose to 9 percent in 2003 after reaching 8 percent in 2002. China used its vast reservoirs of domestic savings to build an impressive infrastructure and sucked in huge amounts of foreign money to build factories and to acquire the expertise it needed. In 2003 it received $53 billion in foreign direct investment, or 8.2 percent1 of the world's total—more than any other country.

India: Comparison of Locations
Services globalization has turned the world into a global village, enabling the seamless delivery of IT and business processes across time zones. As a result, traditional and emerging globalisation destinations such as India, the Philippines, China and Russia are developing Centers of Excellence. These Centers of Excellence epitomize the best of the four core evaluation criteria that companies look to optimize: cost, control, quality and risk.

Lessons Of Outsourcing
In Four Historical Tales
By Bob Davis
Staff Reporter of The Wall Street Journal

What could be a more modern dilemma? High-speed data links allow employers to ship white-collar jobs from rich countries to India, China and other nations where workers earn far less.

The New Face of the Silicon Age

How India became the capital of the computing revolution.
By Daniel H. PinkMeet the pissed-off programmer. If you've picked up a newspaper in the last six months, watched CNN, or even glanced at Slashdot, you've already heard his anguished cry.

Study Ranks Top Indian Cities neoIT, a specialized consulting firm providing advice and governance on global/offshore ITO and BPO, has studied 27 cities throughout the entire year, and come up with a ranking that will allow clients to see which cities are best for BPO (business process outsourcing) and ITO (information technology offshoring).

GE rethinks Indian outsourcing
THEY invented the game; now they have changed the rules. General Electric's back-office services arm, GE Capital International Services, or GECIS, is one of the oldest and biggest of India's business-process outsourcing (BPO) outfits. Formed in 1997, it has been a model for hundreds of other firms that have sought to cut costs by shifting to India back-office jobs that can be performed remotely (see our survey of outsourcing in this issue)…

Now the IT department is off to India
IN A shiny new building in the drab construction site that is Noida, a Delhi suburb, teams of young Indian engineers are, in a manner of speaking, managing the world. A number of America's best-known companies have entrusted the remote running of part of their global computing networks to HCL Comnet. This information-technology services firm is at the crest of what Gartner, a consultancy, has called the next big wave of Indian outsourcing deals, covering remote infrastructure-management services…
Outsourcing to India
FIRST they steal our jobs, then our credit-card numbers. Those seem to be the fears inspired by outsourcing back-office financial-services work to India. In both Europe and America, the argument that outsourcing costs jobs at home still has political resonance…

Outsourcing in India
THERE comes a point in any boom when the weak go under and the strong go shopping. In India's thriving software and remote-services industries (call centres, for instance) bigger fish have for some time been gobbling up small fry. The shake-out has barely begun, but already has a cross-border dimension…

India's growing strength in innovation
UNDERSTANDABLY, many Indians take umbrage at the wave of protectionist rhetoric engulfing the American election campaign. Not only do they point to the endless lectures they have received from Americans in years past on the benefits of globalisation and open markets. They also resent an insinuation underlying the debate over outsourcing: that all countries such as India have to offer is cheap labour and a telecommunications link…

Outsourcing in India
THE annual jamboree of Nasscom, the lobby for Indian information-technology (IT) and services firms held in Mumbai this week, has for years been a forum for self-congratulation. Whatever other ills may plague India, its software and, more recently, outsourcing firms—call centres, back-office processing, technical support and the like—are an unfailing source of pride, able to take on the best in the world. They also make up the fastest-growing segment of what is now a booming economy…

An Indian Adventure for Tech Investors
The country's outsourcing giants such as Wipro, Infosys, and Cognizant are still alluring, despite the offshore bashing in Washington

With American employers doing little hiring in the U.S. right now, outsourcing has become a dirty word. On the stump, Democratic Presidential candidate John Kerry is railing against "Benedict Arnold" companies that ship jobs to low-wage countries. Other vote-hungry polls are threatening legislation to curb the trend that threatens to move 3.3 million U.S. service-industry jobs offshore over the next 15 years, according to Forrester Research in Cambridge, Mass….

Outsourcing: Fortress India?
Call centers and credit-card processors are tightening security to ease U.S. and European fears of identity theftA line of neatly dressed workers files into the Golden Millennium, a shimmering glass-and-steel building in central Bangalore. One by one, they swipe ID cards through a reader, then empty their pockets and bags and stuff cell phones, PDAs, and even pens and notebooks into lockers as a dour security guard watches.

2003
Who wins in offshoring
The savings enjoyed by companies that move labor-intensive service industry work from the United States to countries with lower labor costs have triggered an exodus of US business-processing jobs. Some analysts project that by 2015 roughly 3.3 million of them will have moved abroad. This prospect has prompted calls for the government to restrict offshoring. But they overlook the benefits that accrue to the US economy from it. The take-away A study by the McKinsey Global Institute details the substantial positive economic benefits to the US economy from offshoring.

The next hurdle for Indian IT
Surging demand for offshore IT services has vaulted Infosys Technologies into the ranks of India's premier technology services companies and positioned it at the epicenter of the offshoring debate. In this McKinsey Quarterly interview, cofounder and chairman Narayana Murthy discusses the Bangalore-based company’s rise and its new challenges as multinational IT services firms open their own software-development centers in India and customers squeeze IT vendors there as everywhere else.The take-away Narayana Murthy, the company's cofounder and chairman, says that the burgeoning business in offshore services isn't simply about arbitraging low-cost labor—it's about honing the skills and processes to provide low-cost, high-quality software-development services remotely.

Inside Outsourcing in India
Outsourcing to India can provide a huge payback—if you're willing to work at it. Two offshore veterans share their hard-earned lessons to help you determine if Indian outsourcing is right for your company.

BY STEPHANIE OVERBY

DON'T BOTHER TRADING horror stories about outsourcing to India with John Doucette. He'll trump you every time. "I was doing this back when you didn't want to be doing this," says Doucette, CIO of Hartford, Conn.-based United Technologies, who first sent coding work to India more than a decade ago when he worked at General Electric. "Most CIOs don't have any clue what it used to be like. You had people who couldn't speak English. The telecommunications were terrible. It was awful trying to transfer files back and forth."

Our Company’s Story in Outsourcing

The following is a summary of TierSolution’s experiences in opening a full service offshore office in India. TierSolution is a boutique software company that provides engineering solutions for larger companies. The entire process took about one year from the initial inquiry to being operational, with many mishaps along the way. This story describes our experiences, both positive and negative, in offshoring.

Outsourcing to India and elsewhere
HE IS a senior underwriter for Friends Provident, a life insurer. The lives that concern him are British. But he is in Pune, India…

Worries for India's IT firms
THE boom in business process outsourcing (BPO) to India replicates the explosion a few years ago of the country's software industry. Indeed, with even run-of-the-mill call-centres now being labelled an information-technology-enabled service (ITES), it is part of the same phenomenon. Many of the same firms are involved, and face again the challenges of coping with spectacular growth…
India's IT industry
IT DOES not have the high-street resonance of a Nike, a Pepsi or a Windows. In its unglamorous but lucrative niche in the bank back office, however, FLEXCUBE is the brand of choice. According to rankings published in March by International Banking Systems, a trade journal, it is in fact the world's best-selling banking-software product…
Outsourcing to India
POOR as it is, India is rich in well-educated, English-speaking, young people. It has become a prodigious exporter of their remote services: as skilled software coders and accentless call-centre voices; as long-distance sales-people and invisible insurance clerks; as diligent medical-record transcribers and patient number crunchers. Multinational financial firms have been among their best customers…
Indian software firms
SURGING revenues, strong profit growth, lucrative new contracts and a massive recruitment drive—can this really be the information technology (IT) industry in 2003? Yes, provided you are in India, where software firms are flourishing thanks to booming outsourcing business from some of the world's leading multinationals. Though the Indian outsourcing industry was heavily hyped a couple of years ago, its current strength reflects something of a recovery after a tough time at the start of the decade, when the bursting of the tech bubble and a slowdown in America led many big firms to freeze all technology spending, even when, as with outsourcing, it could cut costs…

Rising to India’s Challenge
It is easy to lose sight of India's remarkable achievements in information technology amid the cries of alarm from Silicon Valley about America's jobless recovery. No less an authority than Intel Corp. (INTC ) founder Andrew S. Grove warns that American information technology could follow the path of steel into decline. With virtually every major U.S. corporation off shoring operations to India -- especially such services as law, accounting, design, and medicine -- a growing chorus is asking whether India's high-tech success is a direct threat to American prosperity.

Other
A buyer's guide to outsourcing in India
INDIA : Leader
Geopolitical risk: High
English proficiency: Good
Average IT programmer salary: $5,880/year; $18-$25/hour
Infrastructure/Communications: Poor. However, the government is attempting to strengthen telecom infrastructure and build fiber-optic networks in city centers of software activity, as well as providing uninterrupted power supply.
Pros: With the early-mover advantage, India remains the offshore country of choice: a large, low-cost, English-speaking talent pool and the most mature market in the world.
Cons: Poor infrastructure, in general, political instability, distance and increased competition from other developing nations threaten India's position as outsourcing king of the world. Supply may not continue to meet demand.

Aerospace gets outsourced
Propelled by its reputation in the software industry, Indiatakes on theglobal aerospace business.
October 31, 2005 Print IssueAs the largest civil aircraft ever built readied for rollout in Toulouse, France, in January of this year, a group of people celebrated big in an unlikely venue halfway across the world: Bangalore.

An Updated Guide to Establishing a Subsidiary in India
Businesses in the U.S. continue to move a portion of their development, support and other operations offshore to India, primarily for cost-saving reasons. Venture capital investors may require such outsourcing in order to reduce a company's burn rate. While a U.S. company may initially contract for services with a third party in India, many companies establish their operations in India through incorporation of a subsidiary, a private limited company under the India CompaniesAct of 1956, as amended (the "Companies Act"). This memorandum summarizes certain of the legal and administration issues that a U.S. company (the "U.S. company") should consider in establishing an Indian subsidiary.

Culture Notes: Change Management and How It Can Help
By Shyamal Asangi and Deepali Sathe Improving performance is the driver behind all changes. Outsourcing is a result of change in business policy and it affects people the most. With top management caught up in transition, the segment that is central to the entire exercise -- employees -- are nowhere in reckoning. Fair? Not at all. This is where Change Managers step in -- to manage the ripples created by outsourcing.

Culture Notes: Indians Love Their Job Titles!
By Deepali Sathe and Shyamal Asangi "Indians tend to be very career-oriented and want to climb the ladder fast. I have a cousin who has been a Cobol programmer for the last 35 years," said Rita Terdiman, principal of consulting firm Conscient, at a seminar on change management. "Most Indian engineers expect to move into managerial roles after five years." Indians attach immense significance to job titles. Flat structures are not welcome.

Everest Research: Trends in Offshoring
By Dian Schaffhauser Everest Research Institute, the research division of Everest Group, an outsourcing advisory firm, recently announced that it expected labor arbitrage -- the key cost-savings benefit of offshore outsourcing -- to continue to drive sourcing decisions for the next 30 years. It struck us that projections don't often go that far into the future. These researchers were truly putting a stake in the ground for the long-term.

How to keep the offshore hidden costs in check - part 2: Transitioning cost
"The transition period is perhaps the most expensive stage of an offshore endeavor. It takes from three months to a full year to completely handover the work to an offshore partner."
-CIO article on hidden costs of offshore outsourcing.
Why should the transition cost be so high? In this article, we discuss some of the reasons for the high transition cost and some best practices to reduce it

How To Make Your India Site Visits More Effective
By Zinnov Offshoring Research and Consulting It's not a good idea to finalize your long-term offshore service provider selections without a trip to evaluate their offshore locations and gain firsthand knowledge of their capabilities. However, visitors are often overwhelmed by Indian hospitality and miss out on some of key aspects of their visits. In this article, we highlight some of the areas you should look out for during your trip to India. This is by no means an exhaustive list, but we hopeit will get you thinking in the right direction about your future site visits to India.

How To Reduce Offshore Hidden Costs
By Zinnov Offshoring Research and Consulting According to a CIO article published in 2003, if you're sending $10 million worth of work to India, selecting a vendor could cost you anywhere from .2% to 2% of the price each year -- $20,000 to $200,000. Likewise, it stated that the transition costs could be the most expensive aspect of the offshoring endeavor. Should vendor selection be that expensive? What are the reasons for the high cost of transitioning work? In this article, we discuss some of the reasons for the high price tab for these phases of offshoring and provide you with some best practices for reducing the expense.

How To Set Up an Offshore Development Center in India
By Zinnov Offshoring Research and Consulting Often US companies underestimate the process involved in setting up and managing a development center. Many multinational companies that have started development centers in India in the last few years have reconsidered the wisdom of their decision due to the issues they have at the development center related to human resources and cost control. Recently, an IT vendor based in India acquired the subsidiaries of two US companies when the subsidiaries were unable to ramp up as planned.

Knowledge Process Outsourcing: The Big Game

By Deepali Sathe and Aradhana
Touted as the Next Great Thing to happen to the outsourcing industry in India, knowledge services or KPO, could outpace business process outsourcing. While the latter draws upon the process expertise of the vendor, the former utilizes specialized knowledge skills.

One Programmer’s Encounter with Outsourcing

By Josh Evitt
My experience with IT outsourcing began in early 2004. The company I worked for at the time had recently been purchased by another company, and the new owners had already begun outsourcing some of their work to an independent Indian outsourcing firm based in New Delhi. Part of my job after the buyout involved managing some of the projects that the team in India worked on.

Optimizing Your India Captive Center Company

By Zinnov Offshoring Research and Consulting
Technology companies such as GE, Texas Instruments and Motorola pioneered offshoring initiatives more than 15 years ago. The focus of these companies was building technology from their Bangalore Centers. Thousands of technology companies have followed that example and are working in various parts of India from their own development centers and through vendor partnerships.

The Basics of Communicating with Your India Team

By Alyssa Lenhoff
Two years ago, when healthcare technology company St. Croix Systems set up a subsidiary in India, one of the hardest tasks facing the project manager was one he had never anticipated: His overseas team members were too polite.

The big wave: product engg outsourcing

Rajesh S Kurup in Mumbai | October 29, 200511:39 IST

India, hailed as the outsourcing destination of the world, is all set to prove its mettle in the emerging vertical of offshoring -- product engineering services outsourcing.
Still in its infancy, PES has caught the fancy of Indian information technology majors such as Patni Computer Services, Tata Consultancy Services and Wipro Ltd, among others. The sector is poised to rake in revenues of over $11 billion in the next three years.

Working with India: What To Know before You Go

By Dian Schaffhauser
You've been in contact with several companies that are based in India. Now the time has come to make site visits and get to know the people at these service providers face to face on their own turf. But you've never been to India and you don't know what to expect. Time for a crash course in cross-cultural training.

Process, Process, Process. Outsourcing to India.
A recent report in CIO magazine recounts a successful long term engagement of software offshore outsourcing in India. The use of cheaper labor in the developing world has been happening for years. However, offshore outsourcing is now becoming the standard for many North American companies. As more and more companies make use of this process, certain best practices are becoming established.

India Becomes Backoffice to the World
An Economist article provides interesting insights into the outsourcing in the banking industry. It notes that many of the dull jobs that were once piled onto recent college graduates are now being sent to India. A key reason for this occurring has been the difference in cost. These functions can be performed much more inexpensively by Indias highly skilled graduates, than the graduates here in the United States.

India, back office to the worldUNTIL a few months ago, Marc Vollenweider was a partner in the Delhi office of McKinsey, that most patrician of management consultancies. Mr Vollenweider, who is Swiss, is still in Delhi, but in a line of business that sounds almost plebeian by comparison: back-office work. He and his partner (lured from running the Delhi arm of IBM’s research centre) have set up Evalueserve, a firm that undertakes various business processes for clients in Europe and North America, offering cheaper, better and faster service than they can deliver themselves…

Russia

Anonymous — Tue, 05 Sep 2006 05:29:42 CDT

A buyers guide to offshore outsourcing Russian federation
RUSSIAN FEDERATION : Up-and-comer
Geopolitical risk: Moderate
Infrastructure/Communications: Fair. Poor telecom infrastructure overall, but much better in technology centers. High cost of bandwidth.
English proficiency: Poor
Labor cost advantage (average IT programmer salary): $5,000-$7,500/year; $10-$40/hour
Pros: Rocket scientists for nearly rock-bottom prices. Russia has the third-highest number of scientists and engineers per capita, according to the World Bank.
Cons: Russia and its rubles are still struggling to emerge from communism. Erratic government, unstable economy, lack of managerial talent, and poor consumer protection and intellectual property laws continue to cause problems. Some talented IT workers flee to friendlier climes.

Belarus Attempts to Become the Eastern European Bangalore
By Ulad Radkevitch For a long time outsourcing buyers have praised India as a source of low-priced yet high-quality IT workforce. Today the country enjoys the lion’s share of offshore IT outsourcing business. India’s IT services export reached $12.6 billion in 2003-2004, according to India’s IT and telecom minister Dayanidhi Maran. Inspired by India’s success, a number of nations, including Eastern Europe, have recently started looking for their niche in the IT outsourcing arena. Since the 1980’s the city of Minsk in Belarus has had sister city arrangements with Bangalore, a major center of Indian outsourcing. Now Belarus, the former Soviet republic landlocked between Poland and Russia, is coming into its own as an IT outsourcing location.

IT OUTSOURCING DESTINATION: RUSSIA
This white paper is a part of the Research Series published by RUSSOFT, Russian's nationwide trade association of software development and IT services companies. This paper is intended for software and IT sourcing decision makers and other executives responsible for IT outsourcing strategies. This document provides an up-to-date overview of the Russian IT outsourcing industry and can help assess Russia's outsourcing capabilities.

Russia outsourcing deal points to lessons learned
ST. PETERSBURG, Russia -- When the Norwegian branch of European IT services company TietoEnator Corp. decided in late 2001 to outsource a major project to a Russian company, it had no idea it had a nightmare in the making.

The job seemed simple enough: Update a human resources and payroll system supporting several thousand end users and written with Borland Software Corp.'s Delphi 3, using Delphi 6 and Microsoft Corp.'s SQL Server.

A RUSSIAN OFFSHORE SERVICES PRIMER
The Russian and related former Soviet Union states' IT services markets are among many new and growing locales that are potential additions or alternatives to the dominant Indian offshore services market. Although Russian firms typically possess strong and specialized skills, the overall market is still immature and high risk. However, offshore service consumers and providers should add it to the pool of potential IT service providers and locations.

A close look at offshore IT outsourcing from Russia
Russia is slowly making its presence felt in the global offshore IT outsourcing market. As a result, some multi-national IT companies have started investing in the country. The main reason for Russian growth is its low-cost yet high quality IT services. The country also boasts of a large number of talented IT professionals. Also, experts are comparing the approach of Russian IT companies to that of Indian companies that are quite professional.......

Russia is the new IT hotspot
Russia is fast emerging as one of the biggest IT hubs. And Russian IT market has started to attract the interest of foreign investors. Lots of landmark changes are taking place in the country for overseas services in IT industry, as more IT companies are looking to establish their presence in Russia. One example is that of MartinsonTrigon venture fund is planning to invest capital in Russian IT market. Demand of Russia Software Outsourcing is also increasing gradually....

Offshore Outsourcing: Why Russia?
According to Gartner Group, the Russian market size for exported IT services approached $500 million in 2004 and is growing at a rate in excess of 25% per year.
So why should European and American firms choose Russia? The reasons are simple: Russia is the best location for technically challenging tasks; it has a huge pool of high-tech and engineering talent built upon one of the finest education systems in the world; it has a very strong home-grown IT sector that is receiving strong government support; it has both cultural and geographical proximity to the West; and it has a distinct cost of labor advantage......

Russia poised to benefit from outsourcing deal Change in focus may cut into India’s revenue By Michael Mainville, IDG News Service
ST. PETERSBURG, RUSSIA – The IT offshore outsourcing market is far from saturated and Russia is poised to become a major market player if it can overcome Western prejudices, speakers at the opening of Eastern Europe’s largest outsourcing conference said Wednesday.
Ian Marriott, a research director at Gartner Research’s European headquarters, said that though outsourcing has been a growing trend, Western companies have only started to fully accept that outsourcing can be a reliable way of doing business.
“We’re seeing a drift toward the idea that while companies need IT infrastructure, they don’t necessarily need to own it,” he said.

Outsourcing’s Russian Front
High skills and low turnwover could make Russia a programming player
Alexei Nikolaevsky has had his share of difficulties. In the 1990s, the 41-year-old Muscovite wrote programs for Russian banks – until the 1998 banking crisis forced major clients out of business. Then he emigrated to the U.S. and worked for two years at a small info-tech company in Texas – until the dot-com bubble spooked him.

Location Selection

Anonymous — Tue, 05 Sep 2006 04:06:06 CDT

A buyer's Guide to Offshore Outsourcing canada
CANADA: Leader
Geopolitical risk: Low
Infrastructure/Communications: Good
English proficiency: Good
Labor cost advantage (average IT programmer salary): $28,174/year; $22-$37/hour
Pros: Low risk, high quality, similar time zones, compatible cultures...
Cons: ...all of which come at a price (higher costs than other offshore options). But due to lower real estate prices, lower salaries and a favorable exchange rate, it's still cheaper than the U.S.

A buyer's Guide to Offshore Outsourcing China
CHINA: Up-and-comer
Geopolitical risk: Moderate
Infrastructure/Communications: Fair. Best in software centers.
English proficiency:Poor
Labor cost advantage (average IT programmer salary): $8,952/year
Pros: Think India 10 years ago-low-cost workers and lots of them. China is currently experiencing the opposite of brain drain: the number of IT professionals returning to the country is increasing.
Cons: Multinationals are eating up the labor supply. Not the best option for enterprise customers seeking to outsource development or maintenance-poor English skills, lack of exposure to Western business culture, shaky U.S. relations and immaturity of processes all pose risks.

A buyer's Guide to Offshore Outsourcing India
INDIA : Leader
Geopolitical risk: High
English proficiency: Good
Average IT programmer salary: $5,880/year; $18-$25/hour
Infrastructure/Communications: Poor. However, the government is attempting to strengthen telecom infrastructure and build fiber-optic networks in city centers of software activity, as well as providing uninterrupted power supply.
Pros: With the early-mover advantage, India remains the offshore country of choice: a large, low-cost, English-speaking talent pool and the most mature market in the world.
Cons: Poor infrastructure, in general, political instability, distance and increased competition from other developing nations threaten India's position as outsourcing king of the world. Supply may not continue to meet demand.

A buyer's Guide to Offshore Outsourcing Philippines
PHILIPPINES: Leader
Geopolitical risk: Moderate
Infrastructure/Communications: Good. The Special Economic Zone Act of 1991 established IT parks to support the IT export industry, and the U.S. military left behind a solid telecom structure here. However, bandwidth can be costly.
Labor cost advantage (average IT programmer salary): $6,564/year
English proficiency: Good
Pros: The English skills of this former U.S. protectorate and its close U.S. ties eliminate language and cultural problems. A large, skilled labor pool (universities churn out 350,000 technology-related degrees each year) works cheap.
Cons: Reports of political instability and corruption tarnish the Philippines' image even though most terrorist activity is limited to a very small region. Project manager supply doesn't meet demand.

A buyer's Guide to Offshore Outsourcing Russian Federation
RUSSIAN FEDERATION : Up-and-comer
Geopolitical risk: Moderate
Infrastructure/Communications: Fair. Poor telecom infrastructure overall, but much better in technology centers. High cost of bandwidth.
English proficiency: Poor
Labor cost advantage (average IT programmer salary): $5,000-$7,500/year; $10-$40/hour
Pros: Rocket scientists for nearly rock-bottom prices. Russia has the third-highest number of scientists and engineers per capita, according to the World Bank.
Cons: Russia and its rubles are still struggling to emerge from communism. Erratic government, unstable economy, lack of managerial talent, and poor consumer protection and intellectual property laws continue to cause problems. Some talented IT workers flee to friendlier climes.

Analyst David Scott Lewis Shares His China Perspective

By Dian Schaffhauser
You can never know what's going to come out of David Scott Lewis' mouth next -- but you should know whatever he says will be insightful and you'd better pay attention. An ex-METAGroup analyst who -- along with many others -- lost his job when the company was acquired by Gartner Research, he had never been to China, aside from Hong Kong. But not so many months ago, he moved overseas because little was keeping him in the US and love beckoned from afar (and online). The last time we caught up with him -- in July 2005, when he’d returned home for a brief visit to speak at the AlwaysOn conference at Stanford University -- he was providing consulting services in China, primarily to US clients trying to locate just the right service providers to work with.In this interview, Mr. Lewis supplies a no-holds-barred rundown on the current state of the outsourcing business in China. Part 1 of a three-part article.

Brazil as an Outsourcing Destination

By Marcio Silva
It's a fair bet that Brazil will beat off all challengers this summer to retain the Football World Cup in Germany. Brazil is well known for its stamina, skill and flair on the football pitch, usually leaving the rest of the world competing for second place. But far removed from these football certainties is how well Brazil will fare in a newer contest now taking place across the business world -- the contest to be the next location for offshoring of IT and business process services. Is Brazil a serious competitor in the "BPO/ITO World Cup"? Do they have the "right team" to get to the final or do they face disqualification in the first round?

China Rivals India in Services
Software outsourcing in Asia’s billion-dollar-plus giants bears distinctly different fruit.
China’s burgeoning software outsourcing sector knows where its advantages lie. When bidding against established Indian rivals for a contract from an American or European company, “certain companies encourage prospective clients to fly to India first, and then come over to Beijing, Shanghai, or Shenzhen,” says Dion Wiggins, a Hong Kong-based analyst for Gartner Research.

Choosing An Offshore Call Center Location
By Shyamal Asangi and Deepali Sathe Call centers in the US are facing margin pressures on account of high operating and labor costs. While India is currently the preferred outsourcing destination for offshore call center operations, several other countries, such as Canada, Ireland, Singapore, the Philippines, Mexico and South Africa, are rapidly building capacity and capability. In this article, we analyze seven countries including India on the basis of:

Cost saving potential for outsourcing
Labor cost attractiveness
Telecom cost index
Utilities and infrastructure cost index
Composite economic attractiveness

Top Spots For Global Outsourcing

ByMark D. Minevich and Frank-Jürgen Richter

Despite the supercharged politics surrounding the issue, outsourcing IT offshore has become a fact of life, and it's growing quickly. Why? Because despite the difficulties, offshoring can provide huge benefits in terms of productivity, prices, profits and wages—an irresistible combination in a highly competitive world. A natural evolution of how the global marketplace operates today, offshoring is on the way to becoming a mainstream business. And the future for outsourcing looks even brighter.

Global outsourcing report 2005
India is the most competitive and popular IT-outsourcing destination in the world and tops the ranking of The Global Outsourcing Report 2005, released today by Ziff Davis Media's CIO Insight, Horasis and Going Global Ventures. China is in secong position, followed by Costa Rica and the Czech Republic, consecutively, The report examines the risk and costs profile of the world's leading outsourcing destinations by proposing two different indexes--the Global Outsourcing Index (GOI), which describes teh current competitivesness of doing outsourcing work in the top 20 countries, and the Future Outsourcing Index (FOI), which assesses the long-term (10 years) competitivesness of the top 30 future outsourcing destinations. China takes lead in the future Outsourcing Index, followed by India, U.S., Brazil and Russia. In the future, the authors believe that China will most likely become the largest and most competitive outsourcing destination, assuming China makes significant progress in geopolitical and legal arenas and demonstrates reasonable results in all categories outlined in this report. Global Outsourcing Index is a necessary and effective tool that offers the business community a baseline. It is the first milestone in a process that should give the business and corporate communities a road map to the right out-sourcing process. International whiteboards offer all the relevant information about specific countries, their relative advantages and the specific resources capabilities.

How Exchange Rates Affect Outsourcing

By Zinnov Offshoring Research and Consulting
When putting together offshoring plans, companies rarely look into the currency trends of the destination country. Often, volatile and fluctuating currencies coupled with poor planning can eat into savings -- or worse, end up costing more than the expense of having the work done onsite. Hence, trends in the exchange rate -- a country’s currency price in respect to a foreign one -- has to be one of the major factors taken into consideration when you’re selecting from different offshore destination countries.

India: Comparison of Locations
By neoIT
Service globalizationhas turned the world into a global village, enabling the seamless delivery of IT and business processes across time zones. As a result, traditional and emerging globalization destinations sych as India, the Philippines, China and Russia are developing Centers of Excellence. These Centers of Excellence epitomize the best of the four core evaluation criteria that companies look to optimize: cost, control, quality and risk.
neoIT regularly conducts research on existing and emerging offshore and nearshore markets to assess the markets' viability as a destination for our clients.
This research report analyzes location attractiveness among the top cities in India to service ITO and BPO clients.
Key Topics covered
-Which Indian cities are the most attractive ITO/BPO destinations for services globalization?
-Which Indian cities will emerge as future ITO/BPO hotspots for developing Centers of Excellence (CoE)?
-How critical is city classification as part of a global sourcing strategy?

India's Top Tech Cities

Bangalore, Hyderabad, Mumbai, Chennai and Delhi are the expected Top 5. But the surprises were in the next five: Pune, Nagpur, Kolkata, Lucknow and Coimbatore, considered laggards in IT

Rajneesh De

This happened a few years back during the Nasscom opening ceremony in Mumbai. The Maharashtra CM was waxing eloquent on how Mumbai has emerged as a top IT hub in the country and how other cities in Maharashtra too are ahead of their counterparts in terms of IT adoption. Subsequently, there was a mild rebuke by the then Union Minister for IT, Pramod Mahajan, who said that states should concentrate not on outgunning each other in IT adoption, but in helping build a resurgent IT country.

Interview with a Beijing Official on Outsourcing

By Dian SchaffhauserThe People’s Republic of China, if you haven’t noticed, is mind-bogglingly big. A behemoth of a country, just the Great Wall alone stretches longer than the distance between New York and Los Angeles. So, it would not be too shameful a thing to confess that, beyond the economic jugular cities of Beijing and Shanghai, beyond the well known fact that China is the largest consumer market in the world and the source of industrious and dirt-cheap workers, you have no idea where to begin to make sense of the country in terms of IT outsourcing and -- most importantly -- how and where best to find an outsourcing partner that will serve your needs and/or help you establish an offshore development center.
Mapping Offshore Markets Update 2004
By neoIT
neoIT intially published Mapping Offshore Markets in April of 2003. Since then, the concept of offshoring has become a mainstream reality. As a matter of fact, it is now part of the standard economic ecosystem between developed and developing countries. This follow on issue examines how the offshoring ecosystem has morphed during the past year and how various nearshore and offshore markets have evolved to take advantage of rising demand by US and Western Eurpean clients.

Offshoring BPO to Pakistan: TRG's Experience
By Mohammed Khaishgi The Resource Group (TRG) is one of the largest offshore-controlled BPO companies in the world. Its business consists of taking controlling stakes in business services companies in North America and Western Europe, and repositioning them for growth using a globalized service delivery model. TRG was founded in 2002 and currently has $185 million in revenues, with over 4,000 employees in 24 facilities worldwide. The company is publicly listed on the Karachi Stock Exchange.
Outsourcing in China: The Beijing Region
By Jacqueline ZhangThe People’s Republic of China, if you haven’t noticed, is mind-bogglingly big. A behemoth of a country, just the Great Wall alone stretches longer than the distance between New York and Los Angeles. So, it would not be too shameful a thing to confess that, beyond the economic jugular cities of Beijing and Shanghai, beyond the well known fact that China is the largest consumer market in the world and the source of industrious and dirt-cheap workers, you have no idea where to begin to make sense of the country in terms of IT outsourcing and -- most importantly -- how and where best to find an outsourcing partner that will serve your needs and/or help you establish an offshore development center.

Outsourcing Malaysia: In Search of Excellence
By Dian SchaffhauserSecret Service had finished its bomb sweep of the Hilton meeting room, which meant we could file back in to await the arrival of the Malaysian dignitaries, including the Prime Minister, the Hon. Dato’ Seri Abdulla Ahmad Badawi.Across the street (guarded by a phalanx of Austin’s finest and their motorcycles) at the Austin Convention Center, the World Congress on Information Technology 2006 was in full swing. Keynoter Michael Dell had just finished taking questions from the crowd of a thousand on Dell’s stock price. Gray-suited businessmen, grinning like soap-box derby contenders, rolled around on demo Segues in the exhibit hall. And 300 delegates from Malaysia (including 74 government officials, 12 exhibitors and representatives from 70 private companies) were studying the details of the conference with an eye toward the country’s own hosting of the event in 2008 in Kuala Lumpur.
Outsourcing to The Philippines: Metro Manila and BeyondBy neoITGlobalization has enabled the seamless delivery of information technology (IT) and business process (BP) services across borders, through time zones, and over oceans. It has transformed our world into more of a global village than it has ever been. Thsi increasing demand for ITO and BPO services has opened opportunities for emerging ITO and BPO destinations such as India, the Philippines, China, and Russia to improve and expand their services offerings.

Software Outsourcing Offshore Business and Legal Issues ChecklistOutsourcing particular business functions is not something new. In the late 1970's and early 1980's many companies "outsourced" many of their "back-office" functions to service bueaus that performed these services for many customers, thereby gaining economics of scale from their investment in what was then, and is still, expensive mainframe computer hardware and software systems. Similarly, in the 1980s, large U.S. integrated circuit chip ("chip") design companies began moving manufacturing of their chips to offhore fabrication facilities (or "fabs") that also leveraged economies of scale to produce large volumes of chips for many chip comoanies. This eliminated the need for chip companies to raise capital or spend the time necessary to establish their own manufacturing capabilities. The benefit for these companies included reducing their costs to produce their chips, while freeing up capital and time to develop newer and better chips. Today, almost every new U.S. chip company is "fabless;" they design their semiconductor products and turn to offshore fabrication facilities to produce them. This model for outsourcing allowed the U.S. chip design industry to remain vibrant and it continues to attract investment capital.

The Current State of Services Outsourcing in China
By Dian SchaffhauserYou can never know what's going to come out of David Scott Lewis' mouth next -- but you should know whatever he says will be insightful and you'd better pay attention. An ex-METAGroup analyst who -- along with many others -- lost his job when the company was acquired by Gartner Research, he had never been to China, aside from Hong Kong. But not so many months ago, he moved overseas because little was keeping him in the US and love beckoned from afar (and online). The last time we caught up with him -- in July 2005, when he’d returned home for a brief visit to speak at the AlwaysOn conference at Stanford University -- he was providing consulting services in China, primarily to US clients trying to locate just the right service providers to work with.In this interview, Mr. Lewis supplies a no-holds-barred rundown on the current state of the outsourcing business in China. Part 3 of the three-part article.

What one outsourcing customer discovered while shopping for providers

One outsourcing customer shares his research into potential service providers

Outsourcing Newsletter ByMark Ehr,Network World,01/19/05 Yesterday, I had a very interesting conversation with thevice presidentof Development for a software company that recently conducted extensive research into outsourced development shops in a number of countries including India, Russia, Vietnam, and South America (Argentina and Uruguay). After submitting 15 RFPs and actually traveling to those countries in December 2004, this vice president, who asked that he and his company remain anonymous, was kind enough to share his results with me. I applaud the effort that was made to visit the finalists in their own offices to see what they were really like.

Dubai: the new outsource zone

Dubai has launched efforts to attract some of the outsourcing work that is heading to countries with low labor costs like India and China. A part of United Arab Emirates, Dubai has emerged as a polyglot metropolis and it is positioning this as a point of interest for senior employees who don’t want to live in Mumbai or Bangalore.

Onshore, Offshore, Nearshore, Best Shore. Be sure of Your Shore for Outsourcing.
Regardless of what the latest spam email might say, outsourcing is no trip to the beach. Before you consider the complicated NDA and SLA contracts, it's important to consider the best location for your project.
Outsourcing, just like software development, is becoming more and more crowded with jargon. Often, it seems that a special outsourcing dictionary would be useful to make sense of it all.

How to succeed in Offshoring &#151and Where
Outsourcing business processes or entire departments to overseas companies has become so common a tactic that senior managers more often have to justify why they're not doing it than why they are.
But the common wisdom about offshoring if often wrong. It's not panacea for high-cost corporate processes; it's not a fire-and-forget solution to functions you dont' want to manage; and it's not a uniform experience.
How much bang you get for your buck depends on picking the right processes, the right locations, the right service provider and the right contract.....

Offshoring closer to home
Mobil Trtavel Guide was looking for cost savings when it decided to outsource its call center operations, but offshoring wasn't an option. The company needed workers with good knowledge of U.S. geography, and that wasn't readily available in India......

Choosing the Right Country for IT Offshoring
Its not always about the money.
At least not when it comes to chooding what country your company should use its offshoring outsourcing.
A group of outsourcing experts, gathered for the recent CDExpo in Las Vegas, sat in agreement that there are many issues to factor in when choosing a country to deal with for IT offshoring work. Sure, its obvious that corporate executives need to factor in cost. But that just one factor. The educational level of the countrys workforce, social and political problems or advancements, and the number of available workers also factor in.....

Malaysia Gears Up as an Outsourcing Destination
Another country bites the outsourcing dust.
This time, Malaysia is set to strengthen their “outsourcing stand” in the business world. Datuk Seri Rafidah Aziz, the International Trade and Industry Minister remarked that they plan to prioritize Malaysia as one of the best outsourcing/off shoring destinations in the world.
The focus for this would be on shared services and outsourcing (SSO) industries. The minister also remarked that with Malaysia has several advantage over their outsourcing competitors such as……….

Government

Anonymous — Tue, 05 Sep 2006 04:04:58 CDT

2006

Daniels Releases Report Supporting Outsourcing Government Jobs
(Indianapolis – AP) A new state report says more than one-third of Medicaid long-term care applications approved by state human services agency contained errors. Another 13,000 people are still waiting to learn if they are eligible for disability benefits.
Governor Mitch Daniels says those and other problems in Indian’s welfare system could be improved by outsourcing the application process for food stamps, Medicaid and other government net programs. The contract could be worth $1 billion…

2005
Government Outsourcing: Making the Decision
Information technology outsourcing has been an important part of the commercial market for more than a decade, and governments at all levels are beginning to adopt the practice to meet their own needs. The decision to outsource, however, is not a simple one. This is especially true in the public sector, which still is accustomed to very different contractual relationships with vendors.

A Strategic Guide for Local Government on: Outsourcing
Over the next five years, local governments will face unprecedented pressure to provide better services while maintaining or reducing costs. Outsourcing is one way to address this challenge. Governments outsource when they have decided that the best way to increase efficiency, improve performance and reduce cost is to privatize parts of the organization that are not inherently governmental responsibilities. This Guide is written for local government officials interested in learning about technology outsourcing and the key steps for evaluation and implementation. It captures the collective knowledge and lessons learned of progressive cities and counties that have been using technology outsourcing to enhance their capabilities and control costs.

2004
Managing Government and Healthcare IT Outsourcing in Europe: A Relationship Based Approach
This paper offers approaches and tools for successful IT outsourcing in the European market. It begins by presenting background on the European IT outsourcing market. This sets the stage for a general discussion of the value propositions and challenges associated with IT outsourcing. The main section of the paper discusses a new mindset (a partnership approach) and a new tool set (a process-oriented model). Finally, the paper looks at trends and future developments, and outlines a general set of recommendations to ensure success.

HR Outsourcing in Government Organizations
Few subjects today have garnered the level of public attention and debate as outsourcing and its subset offshoring. Pros and cons have been extensively - and emotionally - debated on the American presidential campaign trail and in the media. Government officials, labor unions, candidates for elected office, reporters, company spokesmen, and academic leaders all have offered viewpoints. Despite its controversial nature, outsourcing has become the latest new way that business is doing business.

HR Outsourcing in Government Organizations: Emerging Trends, Early Lessons
Outsourcing parts of the HR function can offer many advantages, not in the least to the government employees themselves. Improved communications, faster feedback, rapid problem-solving, computerized training, do-it-yourself HR programs are just a few of the benefits outsourcing can provide. These elements can help improve employee morale and service levels.

Other
How A CIO Saved His County $300K (By Reading His Contract)
By Gary M. Stern When Ira Rosenthal was named CIO in November 2003 of Solano County, located 60 miles north of San Francisco and adjacent to Napa Valley, he noted that its IT outsourcing contract with Affiliated Computer Services was due for renewal in a month. Recognizing that he couldn’t complete the process for a new request for proposal in such a short time, he did a preliminary contract review. The contract covered a wide range of services including infrastructure, database administration, network services, PC support, help desk and data communication, though the county continued to own its equipment and did handle some applications.

Request for Proposal for Outsourcing of Mainframe and Midrange Computer Operations and Support
Want to see what a thorough RFP looks like? This one, 63 pages long and issued in 1998, is as good as it gets. Use it as a starting point for figuring out what you should write, and you won’t go wrong.

When Minneapolis Outsourced Its IT Department
By Gary M. Stern When the city of Minneapolis in December 2002 outsourced much of its IT technology and infrastructure to Unisys, it operated differently than other municipalities in its outsourcing arrangement. "We wanted to turn IT infrastructure into a utility," declares Karl Kaiser, chief information officer of Minneapolis. "You come into the office, switch on a light and don't need to own the power plant," he says. Since 60 percent of Minneapolis' IT budget was devoted to maintaining and upgrading its 4,000 desktops, the city could leverage its technology and reduce costs by outsourcing its IT infrastructure to Unisys. Unisys now owns all the equipment, and Minneapolis retained only its application support in 28 departments and new initiatives.

Communication

Anonymous — Tue, 05 Sep 2006 04:01:25 CDT

Communicate Your Outsourcing Plans Effectively
Effective communication in the early stages of your company's outsourcing intiative is critical; however few companies do it successfully. The political backlash from poor communications can cause negative press, low employee morale, and reduced shareholer value. But hpw do you communicate with your employees on a sensitive issue that may affect their jobs? Let's look at the factors that contribute to effective communication on outsourcing.

Formalizing Your Outsourcing Decision Process

By Linda L. Briggs
“You can’t just sit back and say, OK, I’ll outsource this. That’s not good enough any more. You have to be able to figure out, on a global basis, where does my supply chain give me the most efficient return?” –Dalip Raheja, CEO, The Mpower Group

In business, sometimes the simplest parts of the process can be the most challenging. That can be true in outsourcing as well, according to Dalip Raheja, president and CEO of The Mpower Group, a professional services firm that helps Fortune 500 companies with sourcing in general, including outsourcing and offshoring.

How Communications Helped Avert a Strike

When the Dow Chemical Company’s Michigan Operations site began the three-month collective bargaining process with United Steelworkers of America (USWA) Local 12075 in December 2000, ongoing tensions and a contentious history made a work stoppage an extremely likely outcome. The Company enlisted the help of its agencies – Ogilvy Public Relations Worldwide for employee communications and Ketchum for media and community relations – to develop and execute communications that would help bring about contract ratification.

How To Communicate When You're Outsourcing

By Linda L. Briggs

“If the focus of outsourcing for your organization is short-term and tactical, the benefits will be both short-term and tactical.” -- Frank Casale, CEO, The Outsourcing Institute

The Outsourcing Institute, with CEO Frank Casale at the helm, has been around long enough to see plenty of outsourcing mistakes. Since 1993, Casale has been watching firms work at getting outsourcing right -- and still get it wrong. One of the biggest errors he sees: lack of communication.

Russia outsourcing deal points to lessons learned
ST. PETERSBURG, Russia -- When the Norwegian branch of European IT services company TietoEnator Corp. decided in late 2001 to outsource a major project to a Russian company, it had no idea it had a nightmare in the making.

The job seemed simple enough: Update a human resources and payroll system supporting several thousand end users and written with Borland Software Corp.'s Delphi 3, using Delphi 6 and Microsoft Corp.'s SQL Server.

True-Life Tales: Outsourcing Problems

By Anonymous
My firm sells complex software applications for training management and skill tracking to medium and large companies. Back in 2003 we decided it was time to refresh our technology from Visual Basic 5 and Cold Fusion to .NET, so our investors gave us an infusion of cash. But rather than ramp up internal tech staff here, we decided to try outsourcing for the development of the new product.

American Business Culture:
What Offshore Teams Need To Know
By Dr. Karine Schomer, CMCT President and India Practice Leader

When I present seminars on Indian business culture to American managers and technical professionals involved in offshoring or offshore outsourcing to India, someone inevitably asks: “So what are our offshore teams and counterparts in India being taught about American business culture?” The answer is: “More than they used to, but seldom at a level deep enough to inculcate the attitudes, thought patterns and behavior norms that would ensure optimal effectiveness in working with Americans.“

Why You Should Be Using Skype in Offshore Work

By Zinnov Offshoring Research and Consulting
The statement, “We get a $10,000 phone bill every month just for communicating with our Indian office,” used to be the common complaint from small to medium US companies with development centers in India.
Most companies couldn’t afford dedicated point-point Internet connectivity between their India and US offices. These companies were forced to rely on regular phones for voice communication, though the quality of the phone connections was often poor.

Why Your IT Team Needs a Full-time Internal Consultant

By Dean Meyer
Often executives pursue outsourcing, with or without fundamental economic benefits, because of dissatisfaction with internal service functions. But another reason is to get just what they want, rather than standard corporate-wide solutions. If outsourcing vendors tailor their responses to the unique needs of each client, why would internal staff think that "one size fits all"?

Working with India: What To Know before You Go

By Dian Schaffhauser
You've been in contact with several companies that are based in India. Now the time has come to make site visits and get to know the people at these service providers face to face on their own turf. But you've never been to India and you don't know what to expect. Time for a crash course in cross-cultural training.

Offshoring advice: Be upfront with customer
Let real motives for offshoring be known or risk facing the wrath of angry customers and a witchhunt-hungry media. In an Offshore Customer Managament event in London, Radio 4 presenter and media communications advisor Liz Barclay warned that failure of firms to clearly communicate what they were doing and why they were doing it would result in public outcry from customers and media backlash over UK moving work offshore.

Mutual understanding between client and supplier key to outsourcing troubles
A panel of outsourcing vendors and customers in UK who met to discuss how customers and suppliers in an IT outsourcing relationship can enhance mutual understanding - aided and abetted by lawyers - and how they can anticipate and deal with problems have come out with the following revelations and consensus.
The consensus was that, in these situations, it is far better for client and supplier to forge a better understanding - thus reducing the likelihood of a dispute - than for the supplier to pay compensation after the event......

Misunderstanding between the client and the vendor can kill an outsourcing deal
Though IT outsourcing is now considered a mature market, studies reveal that its still error prone as ever. And huge losses on both sides can be a direct result of an outsourcing mishap.
A report, Understanding Misunderstanding, says that the majority of problems occur when purchasers and suppliers don't communicate properly, particularly at the outset of a deal.......

Mutual trust between parties cricial to outsourcing deals
IT outsourcing phenomena might not be as technology driven as we thought after all. Research reveals that 50% of outsourcing deals fail because the companies involved don;t share a warm relationship with each other. It seems that trust precedes technological concerns while deals are made.
PricewaterhouseCoopers' information technology (IT) effectiveness practice director Angeli Hoekstra confirms this as she says, "What makes any arrangement wih a third party work is the fact that you have established trust and a relationship," explains Hoekstra....

Communication plays a vital part in Outsourcing
Outsourcing us undoubtedly a part of global development because of its ability to make the world a “smaller place” Though that is the case, not every company could claim that outsourcing is the answer that they are looking or when it comes to reaching their company goals and mission.
One of the reasons why these companies do not experience a “successful outsourcing transaction” is because of communication problems….

Pharma & Biotech

Anonymous — Tue, 05 Sep 2006 04:00:40 CDT

2006

Pharma leaps offshore

The changing role of IT in pharma

Pharma's health will depend on a dose of IT to improve efficiency and innovation. Sam Marwaha and Steven J. Van Kuiken Web exclusive, January 2006 CIOs in the pharmaceutical industry have an opportunity to become true pioneers. That's the good news—and the bad news. With the business model straining to operate at scale, pharma companies are asking their IT leaders to do two things at once: dramatically improve the efficiency of IT and use it to drive business innovation. Never before have CIOs in any industry had to face these challenges at the same time and to meet them so quickly.

Large Pharma companies rely on outsourcing to reduce costs Large pharmaceutical companies are facing tough times with rising research and development costs coupled with slowing sales. The outsourcing sector is gearing up to combat these tough times and it is expected that there will be increased dependence on outsourcing by the pharma companies for reduction in costs as well as help the companies to minimise development cycle duration.

Pharmaceutical Outsourcing: Where Companies Can and Can't Save by Outsourcing IT Support Functions
Pharmaceutical organizations are evaluating outsourcing options for some of their support areas in an effort to control costs.

Profiled in a benchmarking study by Best Practices, LLC, one benchmarked company, with an 80-20 outsourcing vs. in sourcing mix for all IT support areas combined, achieved the lowest staffing cost per FTE (full-time equivalent) user out of all respondents….

2005
Outsourcing Trends in Pharma Companies
Best Practices LLC, which researches organizational operations to understand best practices, has set its sights on outsourcing in pharmaceutical companies. Outsourcing Trends for I.T. Services Supporting Pharma Sales & Marketing, which is being sold for $1,495, examines practices at the biggles: Aventis, Bayer Healthcare, Abbott Laboratories, Bristol-Myers Squibb, GlaxoSmithKline, Eli Lilly, Sankyo, Roche, Novartis and Johnson & Johnson.

Pharmaceutical industry leaning towards outsourcing services

Services in the arenas of finance/accounting, logistics and human resources, and IT are now being provided by contract research organizations (CROs), and the pharmaceutical industry is taking advantages of these services to counter the problems of rising costs of drug development and increasing drug discovery times. CROs have contributed their expertise in geographic coverage, making it possible for researchers situated at far-flung areas to access data simultaneously and thereby cutting down on the reporting time.

Outsourcing Pharma R&D to India and China
After conquering the BPO and IT outsourcing realms, India and China are fast moving into the field of international pharmaceuticals. With costs uncontrollably shooting up, product shelf lives getting shorter getting shorter by the minute, and rules and regulations bearing down on an industry struggling to keep afloat, it comes as to surprise that pharmaceutical companies have turned their attention to India and China to carry out their research and development (R&D) processes.

2004
Pharma firms turn to India for expertise
Other than software development, the scientific community in India now also plays a significant role in the global pharmaceutical industry.
According to a recent Reuters report, India has already edged out Europe as the leading source of active ingredients US pharma firms to develop new drugs.
More importantly, however, multinational drug-makers are also turning to India's chemists and medical professionals for expertise. Druh companies are currently scouting around India for painstaking chemical synthesis work for early drug development.

Other
3 Tips from a Pharma Start-up on Setting Up IT -- Fast!

By Mike Dano
William Goure has learned a number of lessons on the IT front while helping to launch Acumen Pharmaceuticals Inc., a San Francisco-based research and development startup. Goure knew that Acumen would have to find an IT service provider that would help the company get up and running, but he had no idea how to go about finding one.

Risk Management

rk_sandhu — Fri, 01 Sep 2006 07:58:45 CDT

Managing Risk: After the Contract Is Signed
By Stephen ReedWhen planning to outsource all or part of an organization's IT functions, it's important to perform active risk management throughout all stages of the outsourcing lifecycle. Active risk management is a process of continually identifying and monitoring potential failure points in a plan, determining the probability of occurrence, estimating the impact of each failure and then developing ways to lessen or avoid those risks (i.e. mitigation). The more unknowns your service provider faces, the greater the risk. Risk costs money, so the more risk that can be driven out of an IT outsourcing solution, the less a vendor will charge you and the greater the chance becomes for a successful outsource. In this article we address the risk factors of oversight and relationship building.

Managing Risk: Covering Disputes in the Contract
By Stephen ReedAfter choosing your outsourcing partner it becomes time to establish the contractual framework that the relationship will function within. Your legal department and outsourcing consultant can (and should) draft a service agreement of exquisite detail; but, to be blunt, there is simply no way to cover every aspect of this new relationship. There will be scores of issues small and large that will need to be addressed throughout the life of this relationship.

Managing Risk: Evaluating Proposals and Providers
By Stephen ReedAfter developing an overall IT outsourcing strategy and distributing an RFP to seek potential partners, it’s time to take the next step and evaluate the proposals and providers themselves. Numerous studies have shown that a large majority of all IT projects fail to meet their goals in terms of schedule, cost or meeting customer needs. Having done risk assessments on scores of large projects, I can comfortably state that the majority of times this occurs is because somebody has oversold something. This does not mean that people intentionally set out to deceive, but rather that self-honesty is a rare trait among us all. Hopeful executives tell their boards that a project will be a painless panacea for all that ails the company; eager sales teams overestimate the ability of their technical teams to overcome all obstacles, and so on.
The end result is that when you receive the proposals from your potential partners, you must not only look to see how well the proposal works for your organization but how likely the vendor is to accomplish it. My eight-year-old is positive he can drive my car, but for some reason I just don't give him the keys…

Reducing Operational Risk in Business Process Outsourcing
By Nari KannanBusiness process outsourcing (BPO)is fraught with risks, whether onshore or offshore. When you make a decision to outsource a business process -- possibly involving layoffs -- bringing it back in-house if it doesn't work as needed is an expensive proposition. This doesn't even take into account the public relations impact or the effect it will have on careers of people involved in such decisions. Reducing these risks is essential to the success of the outsourcing effort.

Reducing Risks in Logistics OutsourcingMany firms have turned to logictics outsourcing as a way to restructure their distribution networks and gain competitive advantages. Logistics outsourcing in which a third party logistics (3PL) provider contracted for all or part of an organization's logistics operations has seen consistently increasing use. Although there are clearly pros and cons of using logistics outsourcing, the full extent of both of these has not been adequately examined. This paper begins to examine some of the risks and discusses some risk reduction measures.

Second Stage Outsourcing: Keys to Success in Switching Suppliers
by Brad Peterson, Mark Prinsley and Michael Kalachman
Switching from one outsourcing supplier to another involves the effort and risk of both terminating and entering into an outsourcing engagement. This article highlights some of the key issues for a customer in deciding whether to switch suppliers, in preparing to switch suppliers, and in making the transition from the incumbent supplier to the new supplier. For this article, we assume that the customer outsourced a mission-critical information technology function.

Why Offshore Outsourcing Projects Fail
We have all heard of outsourcing projects, particularly those that involve offshore, that have failed. Some recent examples of failed offshore outsourcing have made headlines and become hotly debated among opponents and suppporters of outsourcing. In this paper, we will examine a few of the reasons why offshore outsourcing projects fail.

Reducing Operational Risk Business Process Outsourcing
By Nari Kannan
Business process outsourcing (BPO) is fraught with risks, whether onshore or offshore. When you make a decision to outsource a business process -- possibly involving layoffs -- bringing it back in-house if it doesn't work as needed is an expensive proposition. This doesn't even take into account the public relations impact or the effect it will have on careers of people involved in such decisions.

Top 10 Risks of Offshore Outsourcing
Offshore outsourcing is on a steady growth path, growing about 20%-25% per annum, with little evidence of slowing. Though enterprises experience intitial resistance, most technical issues are readily resolved and geopolitical risk is deemed insignificant after careful evaluation. Even the current political fervor about jobs being moved offshore via outsourcing is not impacting the demand or strategy of IT organizations.
No matter which country you choose as your outsourcing destination, be sure to analyse its statistics in depth, as choosing the right outsourcing destination and partner can go a long way in ensuring that you reap huge benefits.......

Risks involved in outsourcing software-as-a-service
It is a commonly acknowledged fact that outsourcing increases security risks for any type of data. But the many advantages of the outsourcing package is forcing more and more companies to outsource despite the risks involved. And for many firms, outsourcing now is synonymous with software-as-a-service from outsourcing companies which will - for a healthy fee - help an organization trim the fat off its business processes. While software-as-a-service may work miracles for your bottom line, surrendering control of a business process to a partner increase the risk for your data....

Risk management vital to the success of IT outsourcing deals
As the volume of IT outsourcing increase globally, controlling the risk factor becomes vital. Even while unlocking value for corporations and shareholders, the global growth has brought about considerable change in operating models as different functions of the same supply chain are now being performed in geographically dispersed environments.
This is a paradigm shift and is still in evolution. Businesses are continuously trying to adapt to this change. Sych changes in operating models and dispersed global footprints of corporations has brought with it risks, which need to be managed effectively.....

Risk Management in Software Outsourcing
It is from this analysis, Marc who runs a seperate Software Outsourcing firms, can realize the potentials in team leadership and to revive his bankrupt business to set up again. When Marc comes in touch with a renowned source to an experienced and professional engineer who is been trained in carrying out Individual sector analysis, he understands the probabilities of risks involved in overall sale in a software Outsourcing industry.

Tips

rk_sandhu — Fri, 01 Sep 2006 07:43:10 CDT

Offshore Outsourcing Tips
Offshore Outsourcing unless managed efficiently wil not yield reliable results. The following are some tips for successful offshore outsourcing.
1.Government regulations- Foreign governments have their own rules for labor regulation, taxes and economic development. Failing to comply with these rules can result in stiff penalties and lengthy delays. Make sure your supplier understands the rules and will keep you in compliance, and make sure your service agreement spells out your suppliers responsibilities.
Time zone constraints- The time difference between locations in the U.S. and Europe, Africa and Asia can range from seven to fourteen hours. Your offshore resources may be going home when your workday is starting......

Golden rules of offshore outsourcing
It is imperative to follow certain rules for success in offshore outsourcing. However, there are several constrasting views however regarding how to maximize value and minimize risk by outsourcing. The following best practices can serve as a guide when structuring your Service Level Agreement, and then implementing and maintaining a relationship with the chosen provider...

Some tips for Offshore Outsourcing parties
There are certain things that both the service provider as well as the outsourcing company must take care of to ensure smooth business transactions. This is very important, as only a smooth two-way transaction will help you to realize the basic abjective of offshore outsourcing, which is to make profits for both parties......

How to do Perfect Offshore Outsourcing
How to do perfect Offshore Outsourcing? Though no one can saythat he is perfect in this world. As we all know that even a perfect one also lacks somewhere. In this world at present lots of cometitions are taking place especially for overseas dealings. These are the deals where you are to work with the partner whom you might have never seen or met. So selection of such overseas partners sometimes becomes very difficult for some crucial projects. Even companies who are in this business of Offshore Development for a long, many times makes mistakes while such important selections. There are lots of scopes and aspects to be studied well before and while selecting such partners. It is not an easy task to move overseas and find a perfect qualitative partner.....

Vendor Selection

Anonymous — Fri, 01 Sep 2006 03:56:22 CDT

3 Tips from a Pharma Start-up on Setting Up IT -- Fast!
By Mike DanoWilliam Goure has learned a number of lessons on the IT front while helping to launch Acumen Pharmaceuticals Inc., a San Francisco-based research and development startup. Goure knew that Acumen would have to find an IT service provider that would help the company get up and running, but he had no idea how to go about finding one.

Advice from a Pro on Trusting Your Service Provider
By Dian Schaffhauser
Started back in 1959 with two guys and a $100 investment, Computer Sciences Corp., better known as CSC, today is one of the world’s largest IT service providers, with 79,000 people in 76 countries. Russ Owen oversees 19,900 people as president of CSC's Global Infrastructure Services group. This organization is responsible for the IT infrastructure that supports both outsourcing clients and the company's internal operations. The Americas employ 9,000 people in that division, Europe has 8,100, Australia has 1,800 and Asia Pacific has 1,000.

Advice on Picking the Right Outsourcing Service Provider
By Linda L. Briggs
“The selection process is so key, and yet it typically becomes adversarial, with lawyers and consultants… trying to drive vendors down to zero margins.”--Ed Agar, PrimeSourcing Advisors

Finding the right outsourcing partner for your particular project is like finding the right mate -- the importance of a good match can hardly be overemphasized. But how do you approach the search so that you end up with just the right partner for your needs?

Analyzing The Outsourcers

Customers say they want reliability, trust, skill, and value from their outsourcers. And they give Hewlett-Packard top marks.

By Robin Gareiss
InformationWeek

Nov 18, 2002 12:00 AM
Ah, the start of a promising courtship, the dreams and hopes for a happy future together. Then the first (then the second and the third) disagreement surfaces, and the reality of melding backgrounds, ideals, and goals looks so complicated. So it is with the continuing love affair between corporate America and the outsourcing companies that run their business-technology systems. But surprisingly, this long-running, sometimes stormy romance is doing better than most marriages. Two-thirds of companies say their outsourcing experiences have met expectations, according to 700 business-technology professionals in InformationWeek Research's Analyzing The Outsourcers study.+

Application service provision: risk assessment and mitigation
Many business managers understand the value of renting applications over the Internet, such as lower total cost of ownership, fewer in-house IT staff, more rapid delivery of applications, scalable solutions, and superior cash flow. But there are also risks, such as power shifting asymmetrically to the supplier, suppliers overselling their capabilities, suppliers encountering subcontracting problems, and customer concerns about Internet security and reliability. In conducting ten case studies and surveying 270 companies, we developed a risk-assessment and risk-mitigation framework and learned four lessons about the Application Service Provision (ASP) space. One, ASP sourcing has many of the same risks as traditional IT outsourcing, but the pattern of likely risks differs. Most risks are greater with ASP, but some are the same of less. Two, business managers can learn how to assess ASP risks based in lessons from both traditional IT outsourcing and early ASP adopters. Three, mimicking ASP risk-mitigation strategies will not guarantee success, but many risk mitigation tools are available for most business environments. And four, ASP outsourcing, like all IT outsourcing, requires significant in-house oversight.

Best practices for management information security
This outline of Best Practices for Management Information Security has been developed based upon the industry standard practices of ICO 17799. The framework of these was originally developed by the British Standard Institution in London. These are suggested practices and by no means represent a comprehensive list of all the possible procedures to secure information. Some of the practices should be modified based upon your business requirements and the facts and circumstances of your company.

BPO Providers: More than you think
With five definitive categories, BPO providers prove to be more than meets the eye
By Mark Hodges
I am surprised constantly how little is known about the five categories of Business Process Outsourcing (BPO) providers. Let's review them.
-Category 1: Large, global outsourcers: IBM/PwC, EDS, CSC and ACS. Each has revenues over £2 billion and serves multiple industries and countries. All Categorys I's, except Accenture and PwC, lack capabilities in some BPO domains.
Category II: Emerging global outsourcers: Deloitte (Braxton), OGE& Y, Exult, Unisys, Convergys, Mellon HR solutions, Aon and others. Each has $500 million to $2 billion in revenues and serves multiple countries. They either specialise in 1-3 horizontal functions (e.g,. HR, finance & accounting, procurement) or in BPO for specific industry sectors (e.g. mortgage processing, travel reservations).
......

Agile Outsourcing: Where Agile Methods and Outsourcing Intersect
By Nari Kannan
Agile outsourcing? At first blush, agile methods and outsourcing seem to be somewhat disconnected and irrelevant to each other. On the contrary, they have never been needed more by each other than now.
In fact, I believe that buyers and sellers of outsourcing services need to care about agile methods in outsourcing if they want to still be gainfully employed in five years' time.

Choosing The Right Outsourcing Vendor
By Mike Dano
Imagine you've been tasked with figuring out how to outsource the data center operations of a major high-tech corporation. Suppose you've been told to choose from among three vendors for the job. How would you decide on the best candidate for the position?
Now, imagine that you know for a fact, due to your personal experience in the field, that none of the three vendors would make a good fit for the position. How would you convince your supervisors that their preferred vendors wouldn't measure up?

Diving into BPO
Compared with traditional IT outsourcing, business process outsourcing can mean grater risk -- and greater reward. Here's hwo to avoid slip-ups and score high.

Five Common Claims Vendors Make in Outsourcing Sales
By Dean Meyer
When service providers start their sales pitches, you're bound to get an earful on how their services can make your company more nimble, more responsive to market needs and smarter about technology. Let's look at five common claims they make -- and explore whether they can be accepted at face value.

--> CLAIM #1: You will improve business accountability.

Claim: Since external vendors issue clear invoices, the more businesslike relationship will improve clients' accountability for their use of the function in the business unit.
Reality: There is no reason an internal service provider can't issue clear invoices for its work. Outsourcing is likely to be far more expensive than improving staff's accounting systems.
Furthermore, there's no reason clients throughout the company can't be held accountable for their consumption of staff's services. If they currently aren't, then they probably won't be more accountable when asked to manage an external vendor's costs.
This problem is probably not isolated to a single function. If the mechanisms are not in place to induce clients' accountability for one set of services, then it's likely that the problem extends to many internal service functions. The entire company may be missing some fundamental control mechanisms. Outsourcing one function will not address this deeper root cause.
Real cost/benefit: Outsourcing does little to build an environment of business unit accountability for all their cost factors.

--> CLAIM #2: You will obtain greater competence.

Global Sourcing Trends Necessitate Considerations of Nearshore Sourcing in Canada.
This IDC white paper explores the various IT services delivery models, compares nearshore (Canad) and offshore sourcing strategies, and discusses how organizations can choose the best services delivery model for their specific application development project needs.

How To Make Your India Site Visits More Effective
By Zinnov Offshoring Research and Consulting
It's not a good idea to finalize your long-term offshore service provider selections without a trip to evaluate their offshore locations and gain firsthand knowledge of their capabilities.
However, visitors are often overwhelmed by Indian hospitality and miss out on some of key aspects of their visits. In this article, we highlight some of the areas you should look out for during your trip to India. This is by no means an exhaustive list, but we hopeit will get you thinking in the right direction about your future site visits to India.

Hybrid Model: Domestic Management and Offshore Operations
By Dian Schaffhauser
Exploiting the price advantages of going offshore with your IT work doesn’t always require working directly with a company in another country. A new kind of service provider has emerged that provides a US-based management core to act as a face to Indian-based operations. That’s the hybrid model: onshore, offshore, as the project pieces fit together. What’s it buy you? Try a closer relationship with your service provider.

Identifying the Strategic Value of the Work You Provide
By Dean MeyerWhen users (the clients) see the deliverables of an internal function as a commodity, rather than as a core competence of the company, it's understandable that they think in terms of simple comparisons of internal and outside costs.On the other hand, when they understand its strategic value, a function may be kept internal even if its costs are a bit higher. The premium price is more than repaid by the incremental strategic value that internal staff can contribute (and service providers can't).
Information Technology outsourcing:
Ket contract provisions for managing the risks of offshore outsourcing.Here you’ll get attorney Kate Boschee’s 30-page primer on how to conduct a service provider search and evaluation and what to make sure you include in the contract you set up.
InformationWeek Outsourcing Tech Center
The latest coverage of outsourcing, including a link to Outsourcing Pipeline, a weekly e-newsletter on the topic, which occasionally shares useful, practical tidbits.
IT Cities in India
Partha Iyengar, research VP for Gartner, discusses the challenges of working with service providers located in India in this freely available 50-minute Webinar with slides. Note slide 18, which provides a useful chart of Tier 1 and 2 cities with ratings on infrastructure, skills availability, skills retention, access, cost of living, political support and quality of life.

Organizing for Offshore Effectiveness
How your prospective offshore service provider is organized can affect the success of your outsourcing initiative.

Outsourcing to the Heartland
Coverage of Rural Sourcing, which has made many headlines with its strategy of taking IT work to the midwest, where salaries are lower, the culture is American, the time zones don't differ by much and language problems are few.

Outsourcing’s fiscal red flags
How to evaluate the financial status of your service provider. One technique for judging the solidity of your provider that we've advised is tuning into earnings reports, which are frequently available with a phone call.

Plotting a China Strategy
This is a useful blog posting by David Scott Lewis on the prime geographic locations where he'd place his IT investments when it comes to China. The writer runs IT E-Strategies, a consultancy focused on IT outsourcing in China.

Plotting a China Strategy, The Bonus Points
Additional advice from David Lee Scott on selecting a location in China for your services work.

Selecting the Right Supplier
A step-by-step primer on choosing the right service provider once you've set out your strategy for an outsourcing initiative.

Service Level Management (SLM) Software Vendors
A directory listing of vendors that sell service level management services and products, handy for that initial culling process.

Strategic Outsourcing: The Importance of Choosing the Right Partner
Joe Hogan, who has an executive position in the HP Services division, shares his advice for finding the right kind of service provider partner.

The China Reality Check
This research firm visited 16 leading suppliers acorss the country in cities such as Shanghai, Beijing and Dalian. The purpose: To evaluate the facilities and capabilities of Chinese IT services companies.

The Optimal Approach for Sole Source Outsourcing
As attorneys Rebecca Eisner and Paul J. N. Roy point out, there may be legitimate reasons you’re not following the competitive route to choosing a service provider. But even when you sole-source, you don’t have to enter contract negotiations as the weaker party. The authors lay out 14 guidelines to follow as you enter into deal-making.

Two Vendor Claims on Cost Savings that Deserve Scrutiny
Vendors' claims about cost savings may seem plausible, but under scrutiny, most do not hold up well. To become a judicious buyer of outsourcing services, you must cut through the hype and focus on the fundamental economics and business trade-offs.

When Small Companies Offshore (with non-disclosure form)
IndogenFX, a tiny software consulting firm whose main focus is developing projects involving applications with business rule processes, has parceled programming work to India, Israel and is now talking to companies in Ukraine. Includes eight lessons.

2006

CIOS SHOULD SEEK MORE FROM WEB VENDORS, SAY EXPERTS

By Shamus McGillicuddy, News Writer
A growing number of small businesses are doing business online, but many aren't taking full advantage of the Web. In fact, according to a new study, nearly 65% of small businesses have Web sites, but only 39% conduct e-commerce on their sites.

DATA DELIGHT: A 'SET AND FORGET' SOLUTION FOR CLASSIFYING DATA?

By Linda Tucci, Senior News Writer
What if you could shuffle data up and down your storage chain without lifting a finger or paying through the nose? Data classification -- the holy grail of storage -- has claimed its share of victims. Sorting data according to type and matching it to the appropriate tier of storage sounds like a prudent approach, but making it happen costs time and labor. It's hard to find tools to handle the many types of data that are stored; hard to ensure those tools support your platform and hard to actually make those tools work across data centers, or even within one location.

CLUSTERED STORAGE WINS MAINSTREAM FANS

By Beth Pariseau, News Writer When the county of San Bernardino began searching for more reliable storage following the loss of critical data on an older NAS system, department information systems manager Patrick Honny said even Isilon Systems Inc.'s marketing materials hinted clustered NAS might be an unorthodox approach for them.
EXECUTIVE GUIDE: OFFSHORE OUTSOURCINGTimes have changed. Offshore outsourcing is no longer just about saving money. The focus is now on value and risk assessment. There are new rules today in offshore outsourcing. CIOs are not as quick to jump at the least expensive option. Today IT organizations are looking at selective sourcing options to meet their needs, and in many cases this includes sending work offshore. But the offshore market isn't what it was two years ago. Check out our updated Executive Guide for expert advice and resources about today's offshore market and what you need to know to make smart offshoring decisions.
DATA CENTER CROSSROADS
by Maryfran Johnson
Midmarket companies are arriving in ever-greater numbers at that critical build-versus-outsource decision point. There are many paths to take. Sooner or later, every growing midmarket company arrives at an agonizing choice: Do you build your own data center or outsource it?
WAITING FOR MICROSOFT
by Michael Ybarra and Tom Kaneshige
After years of fanatical focus on large companies, Microsoft has rediscovered the midmarket and launched aggressive new strategies there. But CIOs remain smartly skeptical.

2005

THE INFORMATION ARCHITECT: 'Relationship is king' in IT contracts

Ed Parry, Contributor
John Pfeiffer, CIO of Corrections Corporation of America Inc. in Nashville, Tenn., has broken up with one of his longtime software vendors -- and there was nothing mutual or amicable about it. Pfeiffer makes a major purchase every fall from the vendor (which he refused to name), but this year, he was told he didn't buy enough software to earn a price break. "For the volume I've done with this vendor, it shocked me," Pfeiffer said.

2003
STEPS TO SUCCESS: The art of the deal: Tips on negotiating with IT vendors

Carol HildebrandCIO Robert Tidwell badly wanted to create a campus-wide wireless network for his organization, New Mexico's San Juan College, but the price tag was more than he could afford. So instead of calling Cisco et al. and trying to wangle a bargain price that would fit his budget, Tidwell took a different tack.

Outsourcing: Let's make a deal
A long-term IT outsourcing agreement can be a sizeable document that addresses various aspects of this important relationship in great detail. For the uninitiated, it may seem a bit initimidating, but its doesn't need to be -- not if you've done your homework in advance.
What follows, then, is a lesson for CIOs on IT outsourcing basics. A there's a fair bit of ground to cover, we've called this Part 1. Class will continue in an upcoming issue of CIO Canada......

White Papers

rk_sandhu — Thu, 31 Aug 2006 06:37:55 CDT

The Offshore Development Center: ODC - A Closer Look at the Trends and Benefits
Nearly all of the Fortune 500 use offshore development services or have their own branches set up offshore. Solution providers ensure well-connected ODCs emerging with ISO 9000 and / or SEI CMM certifications. The option and ability of executing any software project offshore is available, now. This white paper explores the outsourcing trends, Offshore Development Center Concept and Benefits.

Corporate foundation in building an Offshore Development Center
Companies are increasingly looking at offshore suppliers for a variety of IT tasks. As more and more enterprises turn to offshore service providers for their in-house IT needs or software product development, competitive pressures are forcing others to review the option of building their own Offshore Development Center (ODC). However, there are many challenges building an ODC and the risks need to be weighed. This white paper discusses the type of foundation a corporation needs when building an ODC, and some of the pitfalls, costs, and issues that need to understood.

Offshore Development Center: An Offshore IT Outsourcing Framework
While Offshore Outsourcing can be adopted in its various manifestations, an Offshore Development Center (ODC) with its pool of specially trained resources, well designed infrastructure, proven and time tested processes is the most beneficial outsourcing delivery model with a compelling value proposition for businesses looking at IT Outsourcing. This paper attempts to present an overview of Offshore Outsourcing in general and ODC in particular with its main advantages and challenges. The paper concludes after introducing TATA Infotech’s framework of ODC.

Offshore Setup model: An overview
Companies such as Texas Instruments and Motorola initiated the IT industry in India by starting their own subsidiaries in India. Late the IT industry growth was dominated by India based IT vendors providing IT, BPO and R&D services. In the recent past, reasons such as higher cost savings, increased confidence in global operations, Intellectual property concerns, need to use India operations for core competency activities are increasingly making the western enterprises look at the option of setting up a development centre.

Product Innovation: Growing up the Value Chain
he outsourcing market in India has grown phenomenally in the last few years. The industry has consistently grown more than 30% a year over the last few years. From supplying knowledge workers to enterprises across the world, the IT industry in India has matured to a level of providing business consulting to Global 1000 companies.

Optimal Captive Centre Model for Technology Companies
Technology companies such as GE, Texas Instruments and Motorola pioneered off shoring initiatives more than 15 years ago. The focus of these companies was building technology from their Bangalore Centres. Thousands of technology companies have followed that example and are working in various parts of India from their own development centres and through vendor partnerships.

An overview of Challenges: Technical Support Outsourcing.
The real and perceived cost savings from outsourcing IT development and product development to low cost centre in India have prompted organizations to try and outsource various core and non-core activities that can provide short term cost saving benefits. One of the recent outsourcing initiative is been the outsourcing of technical support services. There is great level of optimism about the growth of this industry.
In the last two years, one Chennai based Technical support start-up and two Banglore based Technical support start-ups have managed to get Venture funding to rapidly expand their technical support services. Large IT outsourcing companies such as Accenture, Wipro, and IBM is also providing Technical support outsourcing services to their customers. Large organizations such as Microsoft, Dell have started their own captive centres to provide technical support to their customers all over the world.

Intellectual Property Rights Protection in India: An analysis
Intellectual Property Protection is emerging as a critical challenge for companies that are currently employing offshore business models and for those that are evaluating offshore Business Models. In this paper, Indian Intellectual Properties Rights, Key initiatives taken by the Indian Government to protect the Intellectual Properties, some best practices that companies can follow to protect their Intellectual property, Case Studies related to Indian IP Protection are described.

India BPO: 2004
The BPO industry in India is growing at a breathtaking speed. The growth rate has surpassed that of the IT services industry during its hey days in 1999 – 2001. The Indian BPO sector’s size in 2008 is predicated to be anywhere between $30 billion to $50 billion by various research firms that are tracking the industry. The number of BPO companies in Indian cities has mushroomed from a handful a few years ago to about 500 in 2004. Venture capitalists (VCs) are setting up their offices in India to identify who might be the winners 5 years from now, and are investing in those companies. VCs who had invested in the BPO sector a couple of years ago are urging their portfolio companies to merge or get acquired in order to fuel the growth, and allow them a profitable exit from these companies. We have looked at the current state of the Indian BPO industry and have tried to answer the following
questions in this paper: Who are the major players in the industry? Will India continue to maintain its leadership? What are the current trends? What are the effects of the BPO industry on the Indian economy? How is the current BPO market segmented? What were the major deals in the last one year?

Global Currency Trends- An overview

While off shoring, companies rarely look into the currency trends of the destination country. Often, volatile and fluctuating currencies coupled with poor planning can eat into their savings or worse end up costing more than onsite. Hence, the exchange rate trends of the country’s currency has to be one of the major factors when selecting from different offshore destination countries. A steady lower currency value of the destination country generally ensures higher ‘return on investment (ROI) to the country which invests. A volatile currency can definitely impact the planning and budget allocation for offshore initiatives.

Global Organizations - An Analysis

Global sourcing is evolving as one of the major strategies of Organizations to enable them offer quality product or service at lowest cost possible. Organizations are taking a 360° look at all the functions of their organization to see what functions what can be done in offshore countries. This paper is organized in the following sections to enable the readers of the paper navigate easily through the components of Globalization A: What does it mean when we say Global Organizations? B: What are the key organizational components of an effective Global Organizations?

Implementation of Metrics Using SCM Tools

In spite of the difficulties involved in designing and implementing a measurement program, the benefits, when the program is correctly done, are tremendous.
Zinnov research found that for the success and sustainability of any metrics program, it should not only have the approval and commitment from management but from everyone involved in that measurement program. It is not easy to get stakeholder commitment to change the way they work without showing them tangible short-term benefits. Zinnov has come up with a unique iterative measurement model based on the philosophy of stakeholder approval and experience.

Automated workflow systems in virtual teams

With the increase in the size and complexity of the projects executed at offshore facilities, there is a need for increased control over the entire execution process. To enforce the development process, managers need to define a workflow for changes driven by requirements, change requests and/or task assignments. This workflow must be automated and enforced for all users and platforms through all user interfaces provided by the development system. However, most offshore projects do not implement an automated workflow system, and this causes many of the problems related to communication, project transparency etc. These eventually lead to trust related issues. In this whitepaper, we have discussed the commonly used interaction system between onsite and offshore teams and how the interaction can be improved using automated workflow systems.

An Overview of Change Management Models

Change is one of the most important business issues of our day. The post-World War II period was characterized by steady and predictable economic growth that has since given way to a tumultuous phase characterized by a sharp increase in competition and technical innovation. In order to stay ahead of the game, it is now important and inevitable, for organizations to Change. It is safe to say that Change is the only constant in today’s business world. In today’s World of Global Sourcing, managers are faced with an ever increasing resistance to Change. Despite employees understanding the importance of Global Sourcing, fear of layoffs instill a lot of resistance to the process. This paper is organized in the following sections to enable the readers of the paper navigate easily through the components of Change Management. A. Definition of Change Management
B. Unique Change Management Challenges in Global Sourcing
C. Overview of Change Management models

The Offshore Amalgam Solution Methodology: Uniting Technical Requirements With Business Needs for Enterprise Agility and Interoperability
This white paper describes the Offshore Amalgam Solution Methodology (OASM), developed to integrate outsourcing strategy among business users and technologists as well as between Enterprise applications and their respective business partner systems. To better understand the magnitude of the effort required to successfully transform business operations through offshore solutions, one must review the key factors necessary to propel organizations to achieve the degree of interoperability necessary for continued growth and improvement via outsourcing.

Increasing Profits From the Inside Out... A Capital Idea
This white paper shows how Capital Markets companies can outsource procurement processes to significantly reduce spend on goods and services, while achieving greater financial transparency and control. Accenture works with forward thinking executives, including Chief Procurement Officers (CPOs), to help solve a fundamental and heretofore unanswered question: "How can Capital Markets companies capture and optimize the savings from high performance procurement" This executive white paper shows how.

Fit for Business, Fit for Britain: Corporate Fitness Programme for More Competitive and Valuable Businesses This white paper explores both the study of the “Potential Economic Impact of Outsourcing on the UK Economy” and then further describes how “Corporate Fitness Programmes” can successfully leverage outsourcing strategies in the quest for sustainable competitive advantage and superior returns. Outsourcing allows companies to access the economies of scale of their outsourcing supplier.

Transparent Outsourcing
This white paper talks about “Transparent Outsourcing,” devised by New York-based IT services firm Aithent, is a unique scalable model that lets organizations of any size exploit offshore development. Aithent's Transparent Outsourcing approach stands out as a system that delivers on the promise of offshore development by significantly enhancing the inherent benefits and solving the daunting issues of control that still plague the traditional IT outsourcing process.

The Role and Benefits of Quality in Delivering Offshore IT Services
This white paper discusses the role and benefits that quality can have in delivering IT services and, in particular, offshore IT services. Quality is a term that is often used, especially when IT services firms market to potential customers, but its meaning is usually abstract. This document attempts to make the term "quality" more tangible by providing IDC's framework for understanding it as a critical element of service delivery and organizational effectiveness as well as analyzing its effect on business benefits.

The Advantages of Outsourcing Training
This white paper discusses outsourcing training and its benefits. Three benefits truly make outsourcing a logical solution for many Fortune 500 companies. The first driver for many companies is the fact that outsourcing is cost effective. The second benefit is that outsourcing business processes allows a greater focus on core business. The third benefit is access to world-class solutions.

White Paper on Offshore Software Development in India: Part 1 This white paper talks about offshore software development in India. Outsourcing takes place when one company hands over operational responsibility for one or more of its non-core functions to another company. India is the dominant offshore player with more than $4 billion export industry that is strongly supported by government initiatives. Indian companies have been committed to high quality in their endeavours.

Onshore Versus Offshore Outsourcing: Significant Differences Require Unique Approaches This white paper discusses the key differences that enterprises should be aware of when comparing the traditional onshore outsourcing and the offshore outsourcing model. The white paper also focuses on the sourcing life cycle, and answers what are the differences in methodology that ensure a successful engagement in offshore outsourcing.

Rightsourcing: The Most Secure Path to Outsourcing This white paper provides Getronics’ vision on taking advantage of the benefits of outsourcing processes and the Information and Communications environment. A balance should be sought between those processes that must be executed using internal resources and those that should be outsourced. The objective of Getronics’ concept of Rightsourcing is to support management in striking this balance, optimising resources and internal investments while considering the advantages offered by a specialised company.

Best practice in outsourcing
Measuring success
An NOA Best Practice guideline written by Adrian Quayle and Martyn Hart, NOA Board directors and based on research by NOA member Gartner Inc. (the leading technology-related insight organisation).
Abstract
Outsourcing is just one way of providing resources; the way that any organisation arranges its various forms of supply is called “Sourcing”.
This paper is designed to help you understand how to consider various forms of service provider relationships you might want to enjoy and how you can measure success.

Quality Governance and Testing in Outsourcing
Produced by IS Integration in cooperation with the National Outsourcing Association

Introduction

As the business world becomes an increasingly globalised environment, innovations in technology and communications underpin every decision and process. As such, more and more organisations, realising their limits in terms of resourcing these technological developments in-house, are building outsourcing and off shoring strategies into their business practices in order to boost innovation in technology and communication through partnerships.

Future Risks and Opportunities in the Outsourcing Market
Executive summary
-The outsourcing market will see an estimated US $88 billion renewal event between 2006 to 2008
-The renewal event will fundamentally change the outsourcing market due to four key factors:
-Global sourcing will see rampant growth across all outsourcing areas
-Functions will be bundled differently, unlocking additional value from outsourcing
-Process-technology integration will gain ground rapidly, allowing for significant cost reduction
-Outsourcing locations and suppliers will proliferate, creating huge risks and opportunities.
-The completion of the renewal event will see a different set of advantaged buyers and winning suppliers (and many disadvantaged buyers and losing suppliers!)

Competitiveness and an Emerging Sector: The Russian Software Industry and its Global Linkages
Ashok Deo Bardhan & Cynthia A. Kroll
This paper analyses the Russian software industry in the context of trade in information technology services. We assess Russia's underlying sources of competitive adge in software, such as its scientific establishments, education system, diaspora and low costs, and identify the institutional impediments to growth. A survey reveals that foreign outsourcing contracts, a high value-added niche and high education levels characterize Russia's small, privately held software firms. A comparison with the Indian software industry underscores the structural differences in outsourcing relationships developed by the two countries and emphasizes that national advantages are complex amalgamations of many factors and need to be overtly marketed.....

2005
Mapping Offshore Markets Update 2005
By neoIT
This research report updates neoIT’s 2003 and 2004 Mapping Offshore Markets reports.
Specifically, this follow-up issue examines how the off shoring ecosystem has evolved over the past year as near shore and offshore markets have adapted to rising demand for Information Technology Outsourcing (ITO) and business Process Outsourcing (BPO) by clients in the US and Western Europe.
Mapping Offshore Markets Update 2005 offers a unique look at the specific factors that influence a country’s ITO and BPO attractiveness. Leveraging our extensive knowledge and experience, we’ve indexed each country’s unique ITO and BPO advantages to create a map of today’s global sourcing landscape – a map that will help our clients optimize their firms’ outsourcing decisions.

Fisher Centre Research Reports Innovation, R&D and off shoring
By D. Barddhan & Dwight M. Jaffee

Off shoring Jobs and Innovation

Recent years have seen major debate in academia, the media and policy circles on the impact of the phenomenon of off shoring on the US economy. The relative weak nature of the economic recovery since the last recessions and the accompanying sluggish job creation has prompted speculation that perhaps off shoring is to blame for the slow jobless growth. Varying estimates of job migration and potential future job losses have been developed and supporters have lined up on both sides of the issues, debating the pros and cons of off shoring for the US economy in the short-run, the long-run and under different scenarios.
Offshore & Nearshore ITO Salary Report 2005 By neoIT Not all offshore/nearshore locations were created equal. This white paper discusses the differences among popular offshore and nearshore sourcing locations. The specific intent of the paper is to offer a comprehensive look at the cost-saving potential in global sourcing to select offshore and nearshore locations and to provide a roadmap for understanding what factors influence each country’s cost-saving potential.

We’ll discuss the direct and hidden costs in the global services sourcing and access the differences in costs between onshore and offshore or nearshore locations – in this way we’ll frame the rest of the discussion to focus on how firms can use these differences to maximise cost savings in their global sourcing decisions.

Operating in Developing Economies

Outsourcing, Trade, and Political risk

With a thorough approach to risk management, an American of European company can move or outsource its service or manufacturing operations to an economically developing nation without assuming increased operational risk. Chief Financial Officers, Offshore Program Managers, Risk Managers, Consultants, and Attorneys will all benefit from understanding how the specialty insurance solutions presented in this publication assist in protecting a company’s significant investment in an operational savings achieved by moving operations to economically developing nations.

Best Practices in Communicating Global Outsourcing Initiatives
By neoIT
Over the past five years, globalizations of IT and other business functions has taken on the characteristics of a mega trend, a trend that represents opportunities for some, threats for others and changes for everyone. These changes seep into organizations at different stages of the off shoring lifecycle, affect both internal and external stakeholders and need to be managed carefully in order to avoid damaging effects such as employee productivity, negative publicity and a myriad of other issues. To effectively deal with this change organizations must anticipate the discontinuity that global service delivery introduces into organizational structure, workforce, focus and mission and out in place an effective communication strategy that accounts for the needs of all stakeholders. An effective communication strategy will consist of both internal and external elements and treat each as a separate function with its own set of objectives, guidelines and tactics.
This research summary discusses best practices in communicating global outsourcing initiatives.

Concerns companies have when hiring offshore providers
A company with various IT related needs would prefer outsource rather than developing in-house solutions as because outsourcing provides access to talented, experience-enriched developers who can cater to the need for a complex business solution efficiently and cost effectively. However, the decision to outsource is not an easy one for a company. The below mentioned are some of the concerns companies have when hiring offshore providers.
1. Real Cost of a Project - The final cost of a project relates to the developer's productivity.....

IT Offshore Outsourcing: An Overview
The Outsourcing market is estimated to grow by leaps and bounds in the years to come with more and more companies planning to outsource low end as well as high-end jobs to offshore destinations. If you are involved with any facet of the IT industry, it is important to learn more about this latest development in evolution of the industry.
Let us begin by attempting to understand what the term "Offshore Outsourcing" means.....

The Real Cost of Outsourcing: The Good and Bad of Outsourcing IT
Offshore out sourcing is seen as a means to reduce costs and increase the firm's ability to compete globally. While there are very real benefits to be gained from [offfshore] outsourcing, there are many hidden costs that can easily reduce or even negate many of these expected benefits......

High Tech

rk_sandhu — Wed, 30 Aug 2006 06:29:13 CDT

What high tech can learn from slow-growth industries

To drive productivity, high-tech executives should focus not just on technological innovation but also on business process innovation. Janaki Akella, James M. Manyika, and Roger P. Roberts 2003 Number 4 During high technology’s boom years in the late 1990s, companies across many sectors tried to emulate their high-tech counterparts. The business models, the creativity and innovation, the speedy decisions, the headlong growth in revenues, profits, and shareholder value—slower-growth industries aspired to all of these blessings.

Keeping Taiwan's high-tech edge

Taiwan's electronics manufacturers produce many of the world's computers, monitors, printed-circuit boards, and other high-tech goods. But rising competition from global contract manufacturers and China's nascent electronics makers threatens to squeeze out Taiwan's original-design manufacturers unless they can become more competitive. Outsourcing some tasks to China has helped, but companies will need to do more to stay in business.

Building a global IT organization: An interview with DPWN's managing director for IT
Stephen McGuckin explains how the company consolidated its IT operations and developed a unique model for outsourcing and offshoring.
Michael Bloch and Marcus Schaper
Web exclusive, May 2006
Few companies have as much on-the-ground familiarity with remote locations around the globe as Deutsche Post World Net, the corporate parent of Deutsche Post and DHL, a logistics and parcel delivery business. So perhaps it was natural that DPWN would emerge as a leader in the creation of a globally connected IT-development and operations model that has consolidated many of the company's once-fragmented application-development and data-processing locations into three supercenters, in Cyberjaya, Malaysia; Prague; and Scottsdale, Arizona, in the United States. Along with some outsourced help in India, these facilities keep DPWN's IT operations and development running around the clock. They are complemented by another application-development center, in Bonn, Germany.

An upgrade for the Indian IT services industry
-India’s offshoring specialists have grown dramatically in the past decade, but they will need to raise their game to maintain the same torrid pace.
-Among the many challenges are increased competition from established global IT services companies, a shortage of workers fluent in European languages, and the rise of rival offshoring destinations.
-To respond, Indian companies must grow beyond their roots, building global organizations that can serve multinational clients anywhere in the world, and evolve to offer higher-value-added services.
-The possibility of a virulent offshoring backlash in Western countries is a wild card that could hinder the growth of Indian IT services companies.

The next hurdle for Indian IT
Surging demand for offshore IT services has vaulted Infosys Technologies into the ranks of India's premier technology services companies and positioned it at the epicenter of the offshoring debate. In this McKinsey Quarterly interview, cofounder and chairman Narayana Murthy discusses the Bangalore-based company’s rise and its new challenges as multinational IT services firms open their own software-development centers in India and customers squeeze IT vendors there as everywhere else.The take-away Narayana Murthy, the company's cofounder and chairman, says that the burgeoning business in offshore services isn't simply about arbitraging low-cost labor—it's about honing the skills and processes to provide low-cost, high-quality software-development services remotely.

China's looming talent shortage

Reinventing IT services

IT service providers have taken a hard fall, and it doesn't look as though things will get better any time soon. IT budgets aren't as hefty as they were in the fat times, and even if they were, it's not likely that companies would spend as freely as they once did: many managers believe that they haven't gotten their money's worth out of their big investments in enterprise software. Worse yet for outsourcers, the market is so flooded with tech talent that their old customers can hire it inexpensively, and competition from low-cost providers based in India and China is growing.

IT Professionals Learn to Manage Vendors
fter preparing for a career in technology, and keeping their technology skills honed, many IT professionals find themselves becoming managers of outsourced activities. Even training in project management, traditionally part of the IT professional's repertoire, is only partly useful for this role. For some professionals, this is an exciting opportunity to learn and exercise new managerial and liaison skills, and to impact a broader delivery base than they otherwise might as an individual contributor. For others it is at best a disappointment, and at worst a nightmare. Managing outcomes, service levels and results requires a different mindset. Ultimately, all management is about getting results. Vendor management is different - a manager can no longer manage behaviors, but must look to results.

Offshore Outsourcing: An Aalpha Technologies Perspective
Offshore outsourcing of IT services when prudently executed drives up productivity gains, delivers attractive efficiencies in scale, cost and time-to-market, and contributes significantly to enterprise agility by freeing up precious intellectual resources in-house to deliver more strategic work. Today, outsourcing of software services has moved into the mainstream, aided largely by the advancing learning curve of organizations engaged in analysis of, or experiencing, the benefits of outsourcing actively. Customers are gaining better understanding of what the potential is, and are beginning to push the limits to what is possible. Break-through results and track records of Asian expertise in delivering high quality outsourcing options has set high expectations and never-before clarity in expectations.

Driving Toward Change: The New Role of IT and the CIO in the Automotive Industry
This paper examines the steps that automotive Original Equipment Manufacturers (OEMs) and suppliers are taking to not only reduce IT costs and increase productivity, but also to leverage IT so that it delivers real business value to the enterprise. HP considers structures and practices - such as consolidation and standardization, and HP provides examples of recent automotive industry best practices.

IT Project and Portfolio Management and Application Life Cycle: Understanding the Market and Enabling IT/Business Coordination
Today, Global 2000 organizations are striving to gain strategic advantage and efficiencies of scale through better governance and management of IT projects and programs. This executive level white paper from IDC offers in-depth analysis into the benefits of integrating Application Life-Cycle Management and IT Project Portfolio Management capabilities and processes to enable qualitative assessments about project/program success. This is a must read for IT leaders tackling the strategic and operational challenges of IT/business alignment, off-shoring, outsourcing and regulatory compliance.

Working Through Sarbanes-Oxley Compliance and Outsourcing IT Services
Increasingly, companies are turning to outsourcing in the hopes of reducing the cost and complexity of their operations. The Sarbanes-Oxley Act has not diminished interest in outsourcing. Companies can view outsourcing providers as supportive in their compliance efforts. The potential benefits are enabled when a company logically facilitates its compliance effort in concert with an outsourcing provider. The step-by-step process outlined in this paper can help put an organization on the path to a successful outsourcing relationship. HP professionals follow this same general process when they assist clients with their outsourcing and compliance needs.

Beyond Technology: Maximizing Return on IT Outsourcing Investments
This paper will explore what HP has learned from hundreds of global outsourcing engagements with clients who have used outsourcing to drive IT transformation, IT agility, and increased business value from their IT. It will focus on critical success factors that often lie outside of the outsourcing contract, but should inform outsourcing decisions. These sometimes-overlooked factors, such as relationship-building, governance, and human resources management, characterize successful outsourcing engagements. These elements have proved, time and again, to enable HP clients to boost their return on IT outsourcing investments.

5 Key Steps to Delivering Enterprise-Level IT Services With SMB Resources
Across the board, internal IT organizations are under the gun to do more with less and to continuously prove their value to the business. This pressure is particularly acute in the mid-sized enterprise. This paper discuss 5 concrete steps one can take to escape this vicious cycle, overcome these unique challenges, and deliver the enterprise-class production IT environment one's business needs to thrive.

Making IT Outsourcing Work: Top IT Consumers in Latin America Speak Out on How to Successfully Implement IT Outsourcing
Now more than ever, governments throughout the region see outsourcing as a way to not only reduce cost and stay technologically up to date, but more importantly to really focus on their main function, which is serving the citizen. The growth in e-government practices implemented in several countries of the region has pushed the public sector to become more aware and open to this new proposition. Thus, it is clear the private sector is leading the way in outsourcing IT processes in Latin America; segments such as manufacturing and finance have shown a preference for using IT outsourcing as means to implement part of their core business strategy.

Offshore Outsourcing and America's Competitive Edge: Losing Out in the High Technology R&D and Services Sectors
The debate on offshoring has taken center stage in the country. The loss of manufacturing jobs, and increasingly the services and IT jobs, is real, and it is causing pain to the workers. The offshoring issue is made all the more acute because of the jobless recovery one is in and this Administration's inability to devise a comprehensive economic policy to restore U.S. competitiveness. The problem is complex, with many components which reinforce each other - the enormous budget deficits which make one dependent on foreign purchases of U.S. securities and facilitate currency manipulation, unbalanced exchange rates, and lost manufacturing and services jobs.

ODIN Contract: Adding Value to NASA Langley Research Center IT Outsourcing Goals
Lockheed Martin Information Technology (LMIT) is a leading provider of managed services to the federal government, including NASA. Through contract vehicles such as NASA ODIN, LMIT manages over 30,000 desktops at five Manned Space Flight Centers nationwide. This includes the outsourcing services Lockheed Martin Information Technology provides to Langley Research Center (LaRC).

What’s Hiding in Your IT Support Costs?
When you investigate whether or not to use an IT vendor to support your organization, one question will inevitably weigh on your mind: “Will outsourcing save me money?” However, comparing the cost of an outsourced versus an in-house support solution can be complicated. One reason is that there are many hidden costs incurred when your support offering does not meet the needs of your organization’s end-users. This white paper describes five hidden costs that you should consider when evaluating the financial implications of outsourcing versus using internal resources.

15 Tips from a Firm That Took Software Work to China

By Dian Schaffhauser
When the CIO for a ticketing services company heard from his CEO that they were going to scrap plans to get work done by a big-name firm in India and take it to China instead, he was a major skeptic of the decision. A year later he’s changed his mind 180 degrees. This case study shares 15 tips gleaned from his experiences.

Pay Your Service Provider Out of the Savings It Promises

By Mike Dano
It’s generally a good idea to limit the number of companies you outsource to, just to keep things simple and easy to manage. However, if a new outsourcing vendor approaches you with a spectacular, fabulous new service that you just can’t live without, first see if they’ll back up their promises with a financial commitment. An agreement that requires specific cost-reduction targets forces the vendor to prove the worth of its offering -- and takes the risk off your shoulders and puts it on theirs.

Sun Microsystems: Finding Flexibility at a Big Company
By Dian Schaffhauser Sun Microsystems has had plenty of experience in partnerships. Not only does this $11 billion dollar company contract with other firms for its manufacturing, but it relies on a huge community of partners to sell and support its servers, workstations, software and storage products.

The Basics of Communicating with Your India Team
By Alyssa Lenhoff Two years ago, when healthcare technology company St. Croix Systems set up a subsidiary in India, one of the hardest tasks facing the project manager was one he had never anticipated: His overseas team members were too polite.

Offshoring remains hot issie for IT
By Mears, Jennifer
Corporate users in growing numbers are turning to offshore services providers as a way to cut costs, boost efficiencies and focus domestic IT staff on more business-related tasks, analysts say
According to Gartner and IDC, both of which issued predictions for 2005 last week, the market for offshore IT services will more than double from about 3% of overall IT services spending to between 6% and 7% overall spending in the next three years. GArtner expects offshore IT services spending to reach $50 billion by 2007....

Aerospace

rk_sandhu — Wed, 30 Aug 2006 06:06:02 CDT

Aerospace Gets Outsourced
Propelled by its reputation in the software industry, Indiatakes on theglobal aerospace business.
As the largest civil aircraft ever built readied for rollout in Toulouse, France, in January of this year, a group of people celebrated big in an unlikely venue halfway across the world: Bangalore.

Boeing's IT Outsourcing Deals Generate More Savings Than Expected

Boeing executive outlines what works and what doesn't with the aerospace company's IT outsourcing contracts.

By Paul McDougall
InformationWeek

Apr 6, 2005 04:00 PM
Executives at Boeing Co. are telling a tale of two outsourcing stories that shows the importance of preparation to the success of an IT services engagement. The company's decision in 2003 to outsource a range of technology operations to several vendors is resulting in greater savings than expected because IT execs at Boeing followed a meticulous transition plan, says Philip Harris, director of IT sourcing and benchmarking at the aerospace company.

India eyes role as hub for aerospace outsourcing

Jay Shankar

February 14, 2005

After courting success with information technology, India is poised to become a key outsourcing hub for global aerospace firms as it has cheap and skilled engineers on offer, top officials say.

Aerospace works outsourced to India by Boeing, Airbus

Boeing Company and Airbus Industries intend to outsource aerospace systems works to India after the trans-Atlantic rivals finalize the deal to supply 111 aircrafts to Air India and Indian Airlines. The project is valued at over $ 3 billion. Indian government has cleared the $2.2 billion fleet acquisition plan from Airbus.

Aerospace firms take to offshoring
By Mears, Jennifer
With the airline industry continuing to struggle, aircraft manufacturers such as Boeing and Airbus are expecting to cut costs by sending some of their software development and engineering work offshore.
Increasingly, offshore providers realize that they must cater to vertical market segments and establish more technical expertise in areas such as aerospace, telecom, and oil and gas. Recent moves by Indian IT providers such as Tata Consultancy Services and Wipro Technologies underscore the trend.....

Negotiation

Anonymous — Fri, 25 Aug 2006 03:48:14 CDT

Don't Sign That Contract! Getting the Best Price from Your Service Provider
By Jim Tharrington
Renegotiating an outsourcing relationship isn't easy. In many instances your existing service provider may surprise you with an entirely different pricing approach, which may not be to your advantage.
Today, clients expect a strategic relationship or partnership with their providers. A vendor provides an integrated set of functional services, some of which are commodity operations. By integrating its service offerings, the provider adds value beyond the value of the individual services. In a strategic partnership, the client expects to be able to focus on its strengths after handing off major operational responsibilities to the provider. As part of their thinking, clients typically expect cost savings and access to variable capacities.

Get Beyond Contract Price as the Final Factor
By Linda L. Briggs
“We’ve got to get [outsourcing] off the zero-margin deals.”–Ben Trowbridge, Alsbridge

Does driving the absolute best deal possible always make your firm the winner? When it comes to sourcing, maybe not.
The hype around outsourcing has led to a feeding frenzy in which clients drive deals forward solely on expected cost savings, and suppliers desperately make concessions to land deals in a crowded market. That’s not healthy for either side in the long run, says Ben Trowbridge of Alsbridge, a Dallas, Texas- and UK-based outsourcing advisory firm.

The Healthcare Provider that Outsourced IT After All
By Mike Dano
Meadowbrook, Pa.-based healthcare provider Holy Redeemer Health System knows that sometimes, patience and an open mind can be the most effective weapons a company can bring to bear at the bargaining table. “At first we were not interested in [outsourcing] at all,” said Mark Jones, the hospital’s executive vice president and chief operating officer. But, he said, as time went by and negotiations advanced, “it just began to make much more sense.” In November 2004 Holy Redeemer signed a 10-year, $115 million deal with Siemens Medical Solutions to outsource all of its IT operations. The deal also involved the purchase of major new software applications and medical scanning and diagnostic equipment. Although Mr. Jones said he is happy with the agreement, he said he would never have guessed it would turn out like it did.This article share four tips we culled from the experience Holy Redeemer went through in the course of signing that 10-year agreement.

--> TIP #1: Unhappy with what you’re hearing from a potential service provider? Then don’t rush into the deal.

To understand Holy Redeemer’s change of heart you have to go back to 2000, the year when the company was looking to replace some of its aging healthcare equipment and systems. The hospital -- which at the time was content with its internally managed IT staff -- was in the market for new healthcare gear including diagnostic imaging equipment, radiology information systems, picture archival and communications systems and updated clinical and financial applications.

The Three Year Itch
Adjusting Outsourcing Relationships to a new Economic RealityBy Leslie Willcocks and Geraldine FoxJust a few years ago, businesses viewed outsourcing as an opportunity to gain a competeitive advantage from business processes enhanced through the strategic application of information technology. Corporations invested significant resources and expected substantial returns. Vendors, for their part, envisioned healthy margins and long-term revenue streams, and committed themselves to delivering the best skills and the latest technology innovations to their clients.

UP TO CODE
by John Sterlicchi Failing to keep track of your software licenses is no excuse for violating them. Before you get caught, consider software asset management tools. You might find some surprising results. It's the kind of scene that sends midmarket CIOs ducking for cover: Jenny Blank, flanked by U.S. marshals, marches toward the reception desk demanding to see the CIO. Blank, director of enforcement at the Business Software Alliance (BSA), is about to levy a huge fine on the company for software licensing violations. Moments before enduring an embarrassing public episode akin to getting a traffic ticket on a busy highway -- not to mention an imminent flogging by the CEO and CFO -- the hapless CIO often wonders why he didn't invest in software asset management earlier.

2006

MICROSOFT TARGETS ENTERPRISE WITH BRANCH OFFICE SOFTWARE BUNDLE

By Margie Semilof, News Director
BOSTON -- With its latest promotional software bundle, Microsoft is targeting IT managers who oversee large branch offices, provided those managers don't already buy their software via enterprise licensing agreements.

PLAYING HARDBALL WITH YOUR VENDOR

By Linda Tucci, Senior News Writer
"It's the economy, stupid," has never been more relevant to CIOs in the throes of negotiating deals for their companies. As the economy picks up, the favorable terms CIOs wrung from vendors during the tech recession are fast disappearing. To get the best deals for their companies -- that is,

OFFSHORE CONTRACTS: THE FINER THE PRINT, THE BETTER

By Linda Tucci, Senior News Writer save money, save time and secure favorable terms -- CIOs need to don their reading glasses and sharpen their pencils. ORLANDO, Fla. -- Companies that have become expert procurers of information technology services on domestic shores need to be hyperdiligent when they contract offshore. Standardization might be the way to go for IT services, but offshore contracts should be custom-made, says research firm Gartner Inc.

THE INFORMATION ARCHITECT: Expert advice -- Negotiate offshore contracts on value, not price

Maxine Kincora, Contributor Fixating on price is the worst and most common mistake CIOs make when negotiating offshore IT outsourcing contracts. Ironically, that focus usually leads to higher costs and unacceptable service levels.

The outsourcing shift CIOs who outsource today are coming to the negotiation table knowing what they want and why. And it's leading to a whole new kind of outsourcing.

Outsourcing management
Today's outsourcing market is very complex, as companies spread their outsourcing business among multiple providers. Learn how to successfully manage deals.
Executive Guides:
Leadership resources on IT and business topics

How many times has your CEO returned from a business trip and "strongly suggested" that you implement or invest in the latest trend or technology that he or she read about in a magazine, from 35,000 feet in the air? This actually happens more than often than not. Times have changed and the pressure is on today's CIOs to make the right decisions and invest in technology that's in step with the goals of the business.
2005ERP JOURNEY: NEGOTIATING MORE THAN 'THE BARE NECESSITIES'
by Les Johnson Recently I had the opportunity to practice spontaneous negotiation during my annual fishing trip to Alaska. It seems that a local and I had been planning to fish the same stretch of river at the same time. While sure of my legal position, thanks to the valid fishing license on my person, I felt compelled to examine the nonlegal and noncommercial factors after seeing him stand, stare and establish his 7 1/2-foot Alaskan brown bearhood. Though I was across the river and 40 feet away, we communicated perfectly.

INVOKING THE CHANNEL
by Alan R. Earls
Let it be known and preached from the mountaintops: Know your business. Communicate. Don't be too stingy. These are but a few of the 10 canons that CIOs, resellers and other experts cited when asked their secrets to success in that most sacrosanct of relationships -- user and technology supplier.

2004

SERVICE DESK OUTSOURCING: ONSHORE, OFFSHORE, NEARSHORE

By Michele HudnallThe outsourcing of standardized IT service and support services to low-cost resource providers is gaining attention in the market and with organizations. The promise of significant cost savings is the alluring attraction for many organizations investigating alternative services to costly insourced IT resources. However, quick-hitting resource cost reductions at the service desk must be carefully weighed against the long-term cost management of IT service delivery.

13 STEPS TO SUCCESSFULLY MANAGING YOUR OFFSHORE OUTSOURCING SUPPLIER

By David Foote, Foote Partners LLCMore than half of offshore outsourcing initiatives fail to meet cost savings and contract performance targets, according to a three-year study of 90 offshore initiatives. This Foote Partners study found that poor supplier relationship management was to blame. In particular, there were several companies abdicating too much management responsibility to their offshore supplier once the contract was signed.

2003
STEPS TO SUCCESS: Service level management: Linking IS performance to business goals

Carol Hildebrand
Oli Thordarson knows that technology works best when the level of IT performance is directly linked to business goals. But many of his clients don't. Thordarson, the CEO of Alvaka Networks, a managed service provider in Huntington Beach, Calif., tells of meeting with the CFO of one client company, a firm with approximately $40 million in annual revenue. "They were having problems with their infrastructure, and we identified their Exchange server as the biggest problem," he says. "We determined that, when the server went down, it cost the company about $50,000 a day. And with four to five outages last year, the company was feeling the dent. They had about four or five outages within the last year, which was a lot of dollars for a $40 million company." When the CFO realized the fiscal impact of these ongoing infrastructural glitches, the importance of managing his IT infrastructure performance suddenly became clear.

STEPS TO SUCCESS: The art of the deal: Tips on negotiating with IT vendors

Carol Hildebrand CIO Robert Tidwell badly wanted to create a campus-wide wireless network for his organization, New Mexico's San Juan College, but the price tag was more than he could afford. So instead of calling Cisco et al. and trying to wangle a bargain price that would fit his budget, Tidwell took a different tack.

Creative Outsourcing Relationships Can benefit Strong Offshore Providers.
The market for outsourcing services can be intimidating for businesses. The lure of high quality output and cost savings can be very strong. But this lure is often tempered by the real risks that a buying business faces.

Phillipines

rk_sandhu — Thu, 24 Aug 2006 03:39:56 CDT

Attracting more offshoring to the Philippines

Despite recent gains, much work needs to be done.
Christopher P. Beshouri, Diana Farrell, and Fusayo Umezawa
2005 Number 4
The Philippines is emerging as an important supplier of labor to the global offshoring market, but new research finds that although the country has marked advantages, it must overcome significant obstacles to compete with nations such as India. The stakes are high: from 2003 to 2008 alone, the McKinsey Global Institute (MGI) estimates, an additional 2.6 million offshore services jobs will be created around the world, offering a valuable source of employment and exports for the low-wage countries that capture them.1 The full report, The Emerging Global Labor Market, is available free of charge online.

A Review of Global Gendering in Offshore Call Centers: The Case of India and the Philippines
This paper contributes to the latest media and academic debates of about gender, identity, and control in the offshore telephone call center industry. In the last decade, these centers have propagated across the United States and Europe. But in recent years, given the low cost of human resources in developing countries, U.S. and European countries began outsourcing their call centers to centers in developing countries - a process referred to as off-shoring. U.S. and British offshore call centers have proliferated especially in India and the Philippines as the majority of these populations speak English fluently. To reconsider this research gap, the author explores the communicative processes by which call center agents create American or British identities.

Global Sourcing: Destination The Philippines
A pre-recorded Webinar that discusses the advantages and disadvantages of offshoring to the Philippines, as well as tax and legal issues.

A Buyers guide to offshore outsourcing Philippines
PHILIPPINES: Leader
Geopolitical risk: Moderate
Infrastructure/Communications: Good. The Special Economic Zone Act of 1991 established IT parks to support the IT export industry, and the U.S. military left behind a solid telecom structure here. However, bandwidth can be costly.
Labor cost advantage (average IT programmer salary): $6,564/year
English proficiency: Good
Pros: The English skills of this former U.S. protectorate and its close U.S. ties eliminate language and cultural problems. A large, skilled labor pool (universities churn out 350,000 technology-related degrees each year) works cheap.
Cons: Reports of political instability and corruption tarnish the Philippines' image even though most terrorist activity is limited to a very small region. Project manager supply doesn't meet demand.

Outsourcing to The Philippines: Metro Manila and Beyond
By neoIT
Globalization has enabled the seamless delivery of information technology (IT) and business process (BP) services across borders, through time zones, and over oceans. It has transformed our world into more of a global vollage than it has ever been. This increasing demand for ITO and BPO services has opened opportunities for emerging ITO and BPO destinations sych as India, the Philippines, China, and Russia to improve and expand their services offerings.

Philippines' English Lapse Amidst all the talk of the Philippines catching up to India as the favorite outsourcing destination, there's a survey that reveals that English proficiency is on the decline in the country. A poll conducted by Social Weather Stations found that only 32 percent of the respondents said they spoke English, a significant drop from the 54 percent in 2000 and the 56 percent in 1993. While 65 percent said they understood the language, 14 percent admitted they were ignorant of even the basics of the language. The number of those who thought in English dropped to27 percent from 44 percent in 2000 and 42 percent in 1993. The survey, which was sponsored by the "Promoting English Proficiency Project", a program introduced by the American Chamber of Commerce of the Philippines and the Makati Business Club, polled 1,200 participants with a margin of error of 3 percent.

Philippines grabs a foothold in the outsourcing pie A study sponsored by the trade department’s Board of Investments and the industry groups Business Process Association of the Philippines, and the Commission on Information, Communication and Technology estimated outsourcing revenues taking a quantum jump with 52 per cent growth in 2006. The study further projected that up to 1.2 million people would be employed in the sector showing a staggering growth from the 2,33,000 people as of now.

Philippine Outsourcing Needs to View Alternatives
Outsourcing seems to thrive now here in the Philippines but in due time, the momentum of outsourcing would soon fade because of the tough competition from other countries particularly in India and China. This is the viewpoint of Lawrence Hughes, chairman and chief technology officer of Infoweapons when asked about outsourcing in the Philippines...

Egypt

rk_sandhu — Tue, 22 Aug 2006 07:58:49 CDT

2005
Emerging Opportunities - Offshore Outsourcing in Egypt: A Growing Contact Center Market Looks to Build Global Business
According to Datamonitor research, the global offshore outsourced contact center market will grow from 138,000 Agent Positions (APs) in 2004 to 241,000 APs by the end of 2007. The driver of much of this growth is the effort of western companies to save costs on domestic customer care overheads, in locations where wages and facility costs are substantially lower. This paper focuses on the newest call center market in North Africa, Egypt. The aim is to enable readers to understand the main drivers for offshoring their customer care facilities, identify the key nearshore markets and their local nuances, and learn about Egypt as a contact center outsourcing location.

Egypt: The new Outsourcing Destination
By Carol Kendrick
Egypt is popularly known as the country wherein one could see the historic pyramids. Nowadays, the country is now bringing up its image as an attractive outsourcing-off shoring option for firms. The….

Egypt builds infrastructure to attract customer contact outsourcing

In a bid to open Egypt as a leading destination for customer contact outsourcing, the country is gearing up to provide the necessary infrastructure to attract outsourcing contracts. The government is building a subsidized call center training facility, offering free trade zones, and promoting awareness all around of Egypt's preparedness to meet outsourcing requirements from around the world.

Education & Non Profit

rk_sandhu — Mon, 21 Aug 2006 04:54:20 CDT

Should We Outsource IT?
By Linda L. Briggs Smart schools are discovering that by freeing up IT to focus on core competiencies, outsourcing may be the great higher ed ‘enabler.’

AN INSTITUTION’S CORE COMPETENCIES are what make it unique and desirable—strengths that vary from school to school. Managing IT, however, may not always be one of them. That’s why institutions of higher education often look at ways to outsource some of their IT functions to outside experts.

When Outsourcing Didn’t Work, This School Canceled the Contract
By Mike Dano It’s a tough place to be. Outsourcing your IT systems can help you save on expenses, time and effort; but it also removes you from the day to day development of your IT strategy. Although it’s possible to work with your service providers to develop new products and services, sometimes you won’t be able to move as nimbly or be as flexible as you could be on your own.

Why Outsourcing Is In
by Peter MagnusonShrinking state budgets have school districts and administrators scrambling to make ends meet. Since increasing revenue is extremely difficult for public schools, many are cutting costs. Outsourcing non-educational functions such as food service, maintenance, transportation, and computer services is one way this is being done.

Outsourcing of Education in India In the global arena, India's education sector receives high praise for providing quality education and knowledge to students who excel internationally. However, the ground reality is something different. Although India is ahead of others in providing total number of higher qualified professionals, Indian higher education is still slow in responding to the challenges posed by globalization. Globalization poses numerous challenges for higher education. As the market for talent has become global, most countries face problems in providing better quality of education in a competitive environment.

Due Diligence

rk_sandhu — Wed, 09 Aug 2006 08:43:39 CDT

Five Common Claims Vendors Make in Outsourcing Sales
By Dean Meyer When service providers start their sales pitches, you're bound to get an earful on how their services can make your company more nimble, more responsive to market needs and smarter about technology. Let's look at five common claims they make -- and explore whether they can be accepted at face value.

--> CLAIM #1: You will improve business accountability.

Claim: Since external vendors issue clear invoices, the more businesslike relationship will improve clients' accountability for their use of the function in the business unit. Reality: There is no reason an internal service provider can't issue clear invoices for its work. Outsourcing is likely to be far more expensive than improving staff's accounting systems. Furthermore, there's no reason clients throughout the company can't be held accountable for their consumption of staff's services. If they currently aren't, then they probably won't be more accountable when asked to manage an external vendor's costs.

How Service Providers Buy Your Business
By Dean Meyer Even if internal costs are lower than outsourcing, as is often the situation when an "apples to apples" case is made, the comparison may be distorted by a common vendor tactic. Outsourcing vendors sometimes "buy the business" by offering very favorable rates for the first few years of a contract and making up for the loss of profits throughout the rest of the relationship.

Key Considerations for Background Screening Practices
According to the August 2004 U.S. Secret Service amd CERT Coordination Center's Insider Threat Study: Illicit Cyber Activity in the Banking and Finance Sectir:

........(The fact that) over one quarter of the insiders has a criminal record prior to their incidents underscores the importance of looking into employee backgrounds prior to hiring. Background checks for prospective, and current, employees that include at least basic criminal history checks may help identify employees with histories of fraud, theft, or other criminal behaviour.

Effective financial institution due diligence and outsourcing management programs should evaluate the partner company's financial statements and controls for technology, processes and procedures, including the employees and principles involved in the outsourced relationship. As part of that evaluation, and consistent with the institution's internal policies and procedures, financial institutions should understand their global sourcing partners' employment, hiring, training, and firing policies and criteria.

One Outsources, The Other Doesn't

Two companies. Two different dilemmas. How each analyzed its outsourcing options and arrived at differing conclusions.

BY STEPHANIE OVERBY

ON THE FACE OF IT, retailer Sears, Roebuck & Co. and financial services company Huntington National Bank seem to have little in common. But over the past few years, the CIOs at both companies faced a similar conundrum. To outsource or not to outsource; that was the question.

Organizing for Offshore Effectiveness: How the Vendor's Organization Structure Can Affect the Success of Your Outsourcing Initiative
By Scott Noble, Director, Global Sourcing Insights LLC
Your offshore outsourcing vendor's organization structure can affect their ability to provide specialized services that fit your company's unique needs. This often overlooked component of vendor selection can make or break some types of offshore projects. How do you know what type of vendor organization structure best fits your unique situation?

Outsourcing's fiscal red flags

Know what to look for in your outsourcer's financial statements.
Whether a potential outsourcer is headquartered right down the street or in Bangalore, you need to do plenty of due diligence to ensure that your company's needs will be met by a stable, fiscally healthy partner.
Lawyers, analysts, consultants, insurance firms and others offer this advice: IT managers can make better outsourcing decisions if they're conversant in fiscal terms. "Today, I'm seeing more CIOs who really understand this [due diligence] process," says Dan Smolnik, senior partner at The Smolnik Law Office, a West Simsbury, Conn.-based firm specializing in corporate law.
The appropriate role for IT managers has its limits, however. Just as you wouldn't want a plumber removing your spleen, you need to confer with your company's financial specialists before committing to any outsourcing deal. Robert Zahler, a partner at Shaw Pittman LLP, who heads the law firm's outsourcing practice in Washington, urges CIOs, "Don't do it yourself. Turn to your corporate finance people -- ask them to do the analysis."
Nonetheless, an educated consumer is a wiser one.

Two Vendor Claims on Cost Savings that Deserve Scrutiny
By Dean Meyer Service providers offering outsourcing services have promised dramatic cost savings, along with enhanced flexibility and the vision that line executives will have more time to focus on their core businesses. While, on the surface, vendors' claims may seem plausible, under scrutiny, most do not hold up well. To become a judicious buyer of outsourcing services, decision makers must cut through the hype and focus on the fundamental economics and business trade-offs.

Romania

rk_sandhu — Fri, 04 Aug 2006 03:04:33 CDT

2005
Romania: General Presentation
The Romanian IT industry is in an early stage of a constant growing process, with good chances to attain a maturity stage; this is proved by observable trends, such as internal market orientation, development of complex projects and a growing interest of managers for IT products. The growth of internal market sales volumes is more accelerated than that of the Romanian IT products exports, while software sales rapidly gain ground against hardware sales, the clients being increasingly interested in complex projects. From a human resource point of view, IT outsourcing activities by Romanian companies for foreign clients employ almost 4,700 persons, which is about 25% of the 18,700 employed at the end of 2002.