Global Teamwork Inc.

2011-11-18T02:37:00.001-08:00

Outsourcing deal activity october 2011

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2011-08-17T03:41:00.000-07:00

Outsourcing deal activity july 2011

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2011-06-26T01:51:00.000-07:00

Outsourcing Deal Activity - May 2011

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2011-03-13T10:13:00.000-07:00

Outsourcing Deals - January 2011

2009-02-25T09:26:00.000-08:00

Changing Gloabalization

Obama announced that there would be no tax breaks to US companies that outsource their jobs abroad. Clearly a step to deter US companies from outsurcing their work to other countries. Outsourcing as a strategy has been adopted by companies not only in US but also across the world and its benefits are universally acknowledged. It would be interesting to see if US govt successfully curbs outsourcing by US companies as it gives an oppurtunity for non-US companies to grow financially by getting that competitive edge. Most of top performing companies across various industry verticals are based in US and this might change change soon.

2009-01-09T07:14:00.000-08:00

Quite some activity going at HCL - after launching global development center in Sydney, HCL Technologies has opened an office in Yokneam, Israel.

It recently acquired UK-based SAP services provider Axon for approximately $810.8m to expand its presence in Europe.

2008-01-04T03:34:00.000-08:00

Promotion for juniors is strategy to check attrition BPO companies have formulated a new hiring strategy to beat attrition: Promoting entry-level employees by the droves। Featuring in this list are Convergys, Zenta and 24/7 Customer, among others।
While BPOs claim that the strategy could give employees growth opportunities in the organisation, industry experts caution that it can work to the companys advantage only in the short term, as attrition in BPOs is linked mainly to salaries. This is an attractive strategy. But it needs to be bundled with on-the-job attractions to avoid boredom. If not, it may not work in the long run as the employees may end up doing the same work even after they are promoted, said Adecco (India & Middle East) CEO Sudhakar Balakrishnan.

2007-12-17T07:32:00.000-08:00

Taking a cue from the success of Indian Idol, a popular television talent contest, Infosys BPO has now started a similar contest for its employees.

Infosys BPO Idol, as the contest is known, is expected to get the employees involved in activities other than business, and "create a vibrant, passionate and culturally stimulating workplace," says the company.

The show has been organised on the lines of the American Idol. The elimination rounds have already been held. To maintain the same aura and energy around the event, the Infosys BPO has introduced the concept of wildcard entries, SMS voting system and a live band. Each participant is given time to practice with the band to ensure their singing is flawless.
The SMS voting system was introduced in the fifth round, which had 10 contestants. The SMS votes are given 20 per cent weightage, according to organisers. In a week, following the start of the fifth round, the event has received 5,525 SMS votes.

Besides, the company is also sending out mailers on each participant called 'Know Your Infy Idol', wherein the participants share personal information. Each participant is also expected to canvass for votes with innovative ideas to increase his/her SMS poll rating.
Said Newtom Paul, a participant: "Infosys BPO Idol is a great opportunity to show my talent. Very few people know I can sing, Infosys BPO Idol has given me the much-needed exposure. I have also established friendships with other colleagues."

The event is being organised at three locations in India including Jaipur, Pune and Bangalore. For the final round scheduled at Infosys' Bangalore campus on December 21, Bollywood playback singer Kavita Krishnamurthy will be the judge.

The winners of the contest will be awarded an all-expenses paid trip to Singapore for two persons. The other six finalists would get an i-Pod shuffle.

"The participants of Infosys Idol are given opportunities to participate at all our other events and functions. We are providing them with various platforms to showcase their talent," said Nandita Gurjar, Group Head, HR, Infosys Technologies.

Looking at the response received for the Infosys BPO idol, Infosys BPO is looking at continuing the event next year and making it an annual affair.

Infosys BPO, which was in the news till recently for high attrition rates, is planning to organise many such events to get its employees involved with the organisation.

2007-12-17T07:25:00.000-08:00

With the aim of raising awareness on India as a sourcing hub for global firms in different sectors,

The Supply Management Institute (SMI) in partnership with the Indian Institute of Management — Bangalore (IIM-B) are going to organize India Sourcing Summit in Bangalore.

The two-day summit is scheduled to begin on February 8. , is expected to see a participation of representatives from over 150 global firms, the organisers said here on Friday.

In a flat world, global firms prefer sourcing materials from cheaper and cost-effective destinations without compromising on quality of the goods they are procuring. India is fast emerging as a hub for global sourcing not only for IT or ITeS, but also in traditional sectors like apparel, automotive, special chemicals and electronic components.

According to a CII-McKinsey report, the sourcing of electronic components from India is expected to touch $15-18 billion in 2015 from $1.25 billion in 2005. The report also says sourcing of apparel from India is expected to be in the range of $25-30 billion in 2015 from $6.1 billion in 2005, and auto-components to be $20-25 billion from a mere $1.1 billion in 2005. The sourcing of special chemicals which was of the order of $1.6 billion in 2005, is expected to reach $12.15 billion in 2015.

At a time when sourcing occupies the top priority of lot of global firms, India will remain in the forefront before they go in for global sourcing being a low-cost destination; relatively safer place for IP protection, language capabilities and know-how of the people regarding the requirements of global sourcing.

“Sourcing is global and international business. This will change the dynamics of doing business in future. However, Indian firms need to undertake steps to meet the scale of the Chinese firms, and groom talents in sourcing and supply chain management to stay competitive in the game,” said Constantin Blome, secretary, Indian Sourcing Summit.
Many a global firms have recently come out with their sourcing from India. Auto major BMW has recently opened its international procurement office in Gurgaon. EADS, a major player in aerospace and defence, has opened its sourcing office in India, apart from sponsoring a chair for sourcing and supply management at IIM-B.

According to Bolme, who is also the EADS-SMI Endowed Chair for Sourcing and Supply Management, German auto majors are now aggressively looking at India as a major supply base of auto-components, after the success of Japanese auto manufacturers. This would create enormous opportunities for students in India, to pursue career in sourcing and supply chain management, he added.

Source: Business Standard

2007-11-13T04:14:00.000-08:00

Satellier, a pioneer and global leaderin the development of value-added design support and Building InformationModeling (BIM) service solutions for the global architecture, engineering,construction (AEC) industry, announced today that it has raised $10 millionin a second round of venture funding from Sequoia Capital. The investment accelerates the company's rapid migration to full technology-enabled BIMservices and will facilitate robust global expansion.

2007-10-19T07:20:00.001-07:00

Expected Growth in Global BPO and KPO Markets (2003-2010)

2007-10-10T06:52:00.000-07:00

Fujitsu India announces expansion

Fujitsu Consulting launched its fourth development centre at Noida, just outside the national capital, at an investment of $10 million. It also announced plans to mirror this facility in 12 months.John T. Rose, president and chief executive officer of Fujitsu India, said the company expected a huge demand for offshore development in the country for which it will make strategic acquisitions with a focus on mid-tier firms.

The company had recently acquired OKERE Inc, a New York-based consulting and information technology services company that has operations in India.

“The opening of this office will substantially improve our ability to deliver leading services to clients anywhere in the world,” Rose told reporters here after inaugurating the new office, which can seat 1,200 people.

He said the induction programme and expansion plans - where an additional 10,000 sq. ft. of space will be added over the next 12 months - would focus on employing quality personnel.

2007-09-30T05:50:00.000-07:00

World’s coming to India: five cities among the top outsourcing hubs

Bangalore, September 28: Chennai, Hyderabad, Pune and Kolkata are rated among the top five emerging destinations worldwide in the latest ranking of top 50 promising outsourcing cities around the globe. Bangalore, Delhi NCR and Mumbai, along with Manila and Dublin, are the five established hubs that are unlikely to fade from the outsourcing map, according to a study by services globalisation & investment advisory firm Tholons and media group Global Services.

he study ranked Chennai as the top most emerging hub for outsourcing globally, with established expertise in application development and maintenance, finance and accounting, product development, engineering services and testing. The Tamil Nadu government was IT-friendly, and an upcoming Mahindra World City, slated to be the world’s largest IT Park, in Chennai was favourable to its outsourcing climate.

Hyderabad, with relatively low property rentals and favourable government policies, recently attracted investments from BPO majors such as HCL BPO, EXL Services and Genpact and was ranked second in the list. However, recent terrorist attacks in the state have alarmed investors, the report pointed out. Pune gained prominence among outsourcing hubs owing to lower operating costs and attrition rates compared to other metros.

Among the 50 global hubs, Chandigarh, which was described as “one of the best planned cities in India” was ranked at nine and Coimbatore at 21. Cebu City in the Philippines, Ho Chi Minh in Vietnam, Sri Lanka’s Colombo and the Chinese cities of Shanghai and Beijing were also among the ten top outsourcing locations.

Kolkata and Bangalore were emerging as workplaces for application development and maintenance and business analytics, respectively. Tholons CEO & chairman Avinash Vashistha said tier-II centres are gaining prominence as investors become wary of investing in a single city as operations grow. Locations were being gauged for the available skill-sets, and investment decisions were business-driven, he said.

EMERGING CENTRES by rank

1. Chennai (India)
2. Hyderabad
3. Pune (India)
4. Cebu City (Philippines)
5. Kolkata (India)
6. Ho Chi Minh City (Vietnam)
7. Colombo (Sri Lanka)
8. Shanghai (China)
9. Chandigarh (India)
10. Beijing (China)

2007-09-30T05:44:00.000-07:00

According to The Economic Times, Citigroup Venture Capital (CVC) has also entered the race to acquire Citigroup’s BPO arm, Citigroup Global Services.

ET, quoting sources say that Genpact, WNS Holdings and CVC are the final three players who are interested in this transaction. The report adds that while Genpact is the frontrunner, CVC may also have an advantage being part of the Citigroup family.

The current valuation of the deal is expected to be in the region of $ 600 million. The BPO arm is expected to report revenues of $ 200 million this year.

Another potential bidder, Firstsource Solutions is learnt to have moved out of the race, having already acquired the US-based MedAssist for $ 300 million recently.

2007-09-14T16:29:00.000-07:00

India is still the most attractive country to which to move back-office operations, according to the 2007 Global Services Location Index compiled by A.T. Kearney.

The index evaluates 50 countries according to three main categories: financial attractiveness, availability of skilled workers and the business environment. India stays ahead of China, ranked second, thanks to lower wage, infrastructure and regulatory costs. Both countries lead the rest by a good margin. Policies to promote service exports in Latin America have helped Brazil and Mexico rise in the global league. Less established locations in eastern Europe, such as Bulgaria and Slovakia, are now ranked higher than either Poland or the Czech Republic.

2007-09-14T16:26:00.000-07:00

LAST month, Amazon, an online retailer, announced that it had opened a software development centre in Cape Town. Chris Pinkham, a South African who is returning home from Seattle to head the operation, says that Amazon chose South Africa because of its pool of high-calibre IT workers and good infrastructure. The new outfit will create programmes for users around the world. Will other foreign firms also move such operations—a strategy known as offshoring—to South Africa?

According to a recent study by McKinsey, a consultancy, South Africa is well placed to benefit from the trend of firms shifting business processes, such as customer care and payroll administration, to cheaper places. This, says McKinsey, could create 100,000 jobs in South Africa as well as attracting a modest but useful $90m-175m in foreign investment by 2008. …

2007-09-12T06:43:00.000-07:00

IT Spending by Indian SMEs Expected to Reach $900Mn in ’07 – AMI

According to a study conducted by AMI Partners (a US-based market research company), IT spending by Indian small and medium enterprises (SMEs) is expected to reach USD 900 million in 2007, reflecting an increase of 19 percent over 2006. IT spending by Indian companies includes both product support and professional services.

Among the key findings, the long-term managed services in the Indian market are strengthening, while the traditional services, such as applications development and integration are losing their foothold. The managed IT services in the country comprises end-to-end outsourcing and discrete managed services. Currently, the maximum amount of investment by Indian SMEs is made in discrete managed services.

According to Nirupam Chaudhuri, the Research Manager at AMI Partners, the managed IT service market in India is growing at a faster rate than the average market growth. He further added that a good relationship between both the sides is essential with a single point of contact for dealing with various issues regarding IT infrastructure and facilities.

Till now, a majority of Indian SMEs have spent heavily on annual maintenance contracts (AMC) for hardware and software applications. These annual service contracts are likely to mature into distinct outsourcing deals, where the service provider will deliver risk sharing, round-the-clock support, and facilities management services.

The competition among vendors delivering desktop management and routine network management services is enormous in India as the number of contracts in this domain is increasing. In addition, the contracts regarding FCAPS (fault, configuration, accounting, performance, and security)-based network management are increasing.

2007-09-12T06:38:00.000-07:00

SolutionInc Acquires Line 4 Communications & Pelatis BPO Solutions

SolutionInc Technologies (SolutionInc), a Halifax-based Internet connectivity, billing, and management software and services provider, has entered into a letter of intent to acquire the Halifax-based Line 4 Communications from Armshore Investments (a merchant and investment bank based in Halifax, Canada). In addition, SolutionInc signed a letter of intent to acquire a 51 percent interest in Pelatis BPO Solutions (a BPO service provider) from Pelatis BPO. Through the deal, the company’s headcount will increase from 40 to 200. The financial terms of the transactions were not disclosed.

The transaction with Pelatis BPO, a BPO service provider with operations in Canada and the Philippines, will facilitate SolutionInc to deliver more services through its own firm, and hence lessening third-party outsourcing costs and increasing profits. In addition, the company has the option to acquire the remaining 49 percent of Pelatis BPO Solutions within the next 2 years.

The acquisition of Line 4 Communications will strengthen SolutionInc’s portfolio to include IP telephony systems as well as enhancing the potential recurring revenue streams.

Glen Lavigne, the President and CEO of SolutionInc, cited that the two acquisitions will strengthen the company’s credibility in key areas, such as support services, customer services, network management services, and product testing services.

2007-09-12T06:35:00.000-07:00

Brocade Partners with Ness to Set up R&D Center in India

Brocade, a US-based provider of networked storage solutions that help enterprises connect, share, and manage their information, has signed a partnership agreement with Ness Technologies, an Israeli IT services and solutions company, to set up an advanced R&D center at Pune, India. The center has been set up with a focus to provide support for Brocade’s File Area Network (FAN) business. It possesses state-of-the-art IT infrastructure, such as advanced connectivity infrastructure and energy saving hardware. In addition, the R&D center meets high security standards.

This partnership will provide Brocade with access to Ness’ resources to support its FAN technology development, maintenance, and test activities.

Ness’ Indian operations are spread across Bangalore, Hyderabad, Mumbai, Pune, and Chennai. The company’s Indian operations offer outsourcing and offshore services to clients in IT, financial services, BFSI, life sciences, telecom, and utilities verticals across North America and Europe.

2007-09-12T06:30:00.000-07:00

Global investment in research and development is rapidly shifting from North America and Europe to Asian centres such as Bangalore, Hyderabad, Mumbai and Beijing, according to new research.Researchers at the University of Sheffield and Aston Business School found that the shift was resulting in a small elite club of regions, in both the advanced and developing world, that are dominating the global knowledge economy.

The researchers found that companies in advanced regions such as Silicon Valley in the US, Cambridge in the UK, Ottawa in Canada and Helsinki in Finland, are increasingly establishing partnerships and networks with companies and universities in fast-developing Asian regions.

They found that of the US $50 billion invested by multinational companies in R&D projects around the world between 2002 and 2005, Asian economies received 58 percent of this investment, with Europe receiving 22 percent and North America 14 percent. The research has been published in a report titled ‘Competing for Knowledge´.

The majority of the investment in Asia is concentrated in a very small number of locations such as Bangalore, Hyderabad, and Mumbai in India and Beijing, Guangzhou, Hangzhou and Shanghai in China.

While Asia was the dominant destination of R&D investment, North America was the primary source, accounting for 50 percent R&D investment, followed by Europe with 28 percent This resulted in North America having net R&D investment deficit of US$18 billion and Europe a deficit of US$3 billion.

According to report authors Robert Huggins, of the University of Sheffield´s Management School, and Hiro Izushi, of Aston Business School, the key impact of this global redistribution of knowledge is that many regions in North America and Europe were losing out and the competitiveness gap between these locations and the elite regions was becoming even wider.
The research also showed that companies in advanced economies were finding it increasingly difficult to create innovations resulting in market-leading goods and services.
For example, between 1996 and 2006 productivity growth resulting from innovation in the United States amounted to only 1.5 percent per annum, considerably lower than that achieved in the 1950s or 1960s.

Huggins said: “As the knowledge required to produce innovations becomes more specialised and located in new locations around the world, companies are having to ensure that they are closely linked and aligned with these new sources wherever they may be.

“Since China is now the second highest research spender it is increasingly likely that it will feature more prominently as one of these new sources.”

Source: Indo-Asian News Service

2007-09-08T02:39:00.000-07:00

In the first phase of expansion, Wipro had tapped cities like –
Delhi, Mumbai, and Bangalore

In the second phase it had tapped cities like –
Kolkata, Chennai, Hyderabad, and Pune.

Now Wipro is looking at the third phase of expansion
Nasik, Guwahati, Bhubaneshwar, Kochin, Vishakhapattanam, and Jaipur.
-----------------------------------------------------------------------------------------------
Wipro’s employee strength of key delivery centers in India:
[Delhi and Pune: - ~3,000; Kolkata: ~2,900; Mumbai: ~5,000 ]

With established centers close to saturation point, it was logical to stabilize them and look at new cities. Wipro already recruits a lot from satellite towns for its Kolkata operations. The ratio of ‘met to offer’ to ‘fit’ candidates had declined from 15-16 per cent earlier in cities like Delhi or Mumbai, to 8-10 per cent currently in the big cities. In smaller towns, the ratio was lower.

Wipro preferred to have people on board who would stay on for longer periods and one way to do this was to ensure they started off with realistic expectations from the industry. Attrition rates fell 40 per cent since last year thanks to this. At the same time, Wipro developed incentive schemes, with around 200 employees going to offshore operations, and around 400 shifting from BPO to IT. The company today provided personal growth opportunities to deserving employees including on-going education while on the job. Candidates below internal criteria in some way or the other received training in skill-deficit areas and were absorbed if they cleared tests.

Kolkata was a leading training centers. Kolkata as a centre grew at 100 per cent over last year. Wipro would add 500 recruits in the coming six months. One of the major advantages of Kolkata was that it attracted talent from satellite towns like Jamshedpur, Ranchi, Bhubaneshwar, and eastern Indian cities.

2007-09-06T07:04:00.000-07:00

Globalization Changing Service Delivery Models for Organizations’ Business Processes – EquaTerra

Globalization is rapidly forcing a paradigm shift in G2000 organizations’ delivery models for their core business and information technology (IT) functions, as per EquaTerra perspective paper titled, ‘How to Design and Optimize Global Service Delivery Models’. These delivery models are becoming increasingly global themselves, and encompass a mix of internal and external delivery options including domestic shared services centers, offshore captive centers, and local, nearshore, and offshore outsourcing.

Virtually all functions within an organization – including IT, human resources, finance and accounting, procurement, call center, engineering, research and development, logistics services, research and analytics, clinical trials, and legal – contain some processes that could be optimized if delivered via an external captive, offshore or outsourced delivery model.

Thus, according to the paper, the question for today’s leading organizations is not whether a global service delivery model is needed, but rather, how to design, deploy and manage such a model. Given the plethora of in-house and third-party delivery alternatives, corporations must address how to assess, prioritize, execute on and exploit the breadth of options to achieve the desired outcomes. The paper also identifies the value achieved when organizations move beyond a focus on just cost reduction or labor arbitrage, and include an increased emphasis on multi-pronged service delivery models to achieve process improvement and transformation.

Said paper co-authors Cliff Justice, EquaTerra’s Managing Director of Globalization, and Stan Lepeak, EquaTerra’s Managing Director of Research, ‘Today’s buyers must understand their global options and opportunities for enterprise-wide delivery of a broad range of functions and process areas. They must also assess their organization’s unique needs in terms of what benefits they seek, which service providers and geographic locations to add to their short list when outsourcing, how to prepare a retained organizational model to govern the effort, and how to undertake outsourcing and still support various regulatory compliance mandates.’

According to the paper, organizations must address many topics when developing and implementing a global service delivery model, including:

Firstly, a process to determine which business and/or IT functions are suitable for and should be outsourced beyond local providers and boundaries, as well as those that should be managed via domestic or offshore captive shared services centers. Secondly, what the business case is – including expected benefits – and how to measure achievements for a specific outsourcing scenario. Thirdly, a risk profile to identify and assess the additional potential risks involved (e.g., financial, personnel, regulatory, compliance, data privacy, intellectual property, negative public relations) in offshore and outsourcing models. In addition, processes to identify, vet, assess and select candidate service providers and service locations and geographies. Lastly, a retained organization and outsourcing governance model capable of supporting global sourcing efforts.

The paper also discusses how service providers are addressing the growing need for global service delivery capabilities, how to design a global services governance model, and graphically depicts how a services delivery model answers the questions of what work gets done, by whom, and how.

via:GlobalSourcingNow

2007-09-06T07:02:00.001-07:00

RR Donnelley on Expansion Move in India

RR Donnelley & Sons, an Illinois-headquartered print and BPO service provider, has announced the opening of a 1,000-seater BPO delivery center in India at the Technopark Thiruvananthapuram, Kerala. The new BPO facility will focus on delivering transaction processing and financial management services to the US and European clients. The company already has a BPO facility in the city with 500 professionals. In addition, the company’s Chennai-based Indian facility employs more than 4,500 professionals. It will continue to focus on offering non-voice BPO services.

RR Donnelley specializes in delivering solutions in commercial printing, direct mail, financial printing, logistics, call centers, and content and database management to clients across several industries, such as publishing, healthcare, and technology.

2007-09-04T07:02:00.000-07:00

Hewitt Associates has announced its decision to acquire RealLife HR to strengthen its benefits outsourcing services and solutions portfolio for middle-market companies. The transaction is expected to be concluded by end-August 2007. According to the acquisition, Hewitt will acquire RealLife HR's existing 35 clients with about 15,000 employees and/or retirees. The RealLife HR's clients will also have access to Hewitt's outsourcing and consulting services portfolio as part of the transaction. Post-acquisition, about 85 professionals and the facility of RealLife HR in Maryland will be transferred to Hewitt.

2007-09-04T06:52:00.000-07:00

HOUSTON & LONDON--(BUSINESS WIRE)--EquaTerra has acquired Morgan Chambers, creating the market leading independent sourcing advisory firm.

As EquaTerra and Morgan Chambers are, respectively, the world's number one and number two top ranking Full Service Outsourcing and Offshoring Advisors(1), the acquisition creates the advisory firm of choice for organisations seeking to improve their business and IT processes through shared services, outsourcing and offshoring.

The collective teams will provide unrivalled depth of knowledge and services across all business support functions, including Information Technology (IT), Human Resources (HR), Finance & Accounting (F&A), Procurement and Customer Care. The firms have additional expertise in sector-specific processes such as claims management, mortgage processing and policy administration. The acquisition will also broaden and solidify the firm's geographic reach, thereby providing greater value for clients. The combined firm has approximately 300 employees across North America, Europe and Asia Pacific.

Mark Toon, CEO, EquaTerra said, "The leadership teams of our firms are excited about this acquisition. We are in the unique situation of bringing together two organisations with a strong presence in different geographies, yet with similar cultures, methodologies and depth of experience in the markets we serve. The expanded geographic reach and enhanced service offerings, combined with the tenure and expertise of our advisors makes this acquisition a positive event for our clients, employees and business partners."

Phil Morris, CEO, Morgan Chambers said, "Both EquaTerra and ourselves possess a relentless commitment to our clients and their needs and objectives. We've built a well-respected advisory business in Europe and we feel joining EquaTerra gives us the organisational depth and geographic reach our clients need. We believe our collective strengths will further support our clients on their journey to create sustainable value in their business support functions."

Robert Morgan, Chairman and founder of Morgan Chambers will leave the organisation once the deal is complete. "Creating Morgan Chambers back in 1994 was such an exciting opportunity and I am extremely proud of what the company and its hugely talented staff have achieved for our clients. I am pleased to be able to hand over to such a likeminded organisation, which in turn provides me with the opportunity to invest in new ventures."

(1) Source: Black Book of Outsourcing 2007

Notes for editors:

ABOUT EQUATERRA

EquaTerra sourcing advisors help clients achieve sustainable value in their business and IT processes. With an average of more than 20 years of industry experience in over 600 global transformation and outsourcing projects, our advisors offer unmatched industry expertise. EquaTerra has deep functional knowledge in Finance and Accounting, HR, IT, Procurement and other critical business processes with advisors throughout North America, Europe and Asia Pacific. We help clients achieve significant cost savings and process improvement with outsourcing, internal transformation and shared services solutions. www.equaterra.com.

ABOUT MORGAN CHAMBERS

Established in 1994 with a single purpose - to provide high quality, practical and totally independent advice on the best client Sourcing solutions, Morgan Chambers remains true to these principles today. Morgan Chambers employs business and service delivery experts who passionately believe that balanced Sourcing strategies deliver sustainable business advantage and huge flexibility. Whether in-house, Shared Services or utilising external suppliers, we drive innovative, accountable and measurable solutions. Europe's leading specialist Sourcing advisory firm, we employ over 60 full-time consultants from eight offices world-wide. With more than 1000 client engagements in over 60 countries, we have unrivalled experience in achieving successful results. www.morganchambers.com

2007-08-28T06:16:00.000-07:00

BEST IT EMPLOYERS in INDIA

1. Tata Consultancy Services
2. HCL Infosystems
3. iGate
4. RMSI
5. Synechron
6. IBM
7. Capgemini
8. Infosys
9. Tavant Technologies
10. Sun Microsystems

According to the annual survey conducted by Cybermedia's flagship publication Dataquest in collaboration with IDC India., TCS, with a large workforce based in foreign shores, followed innovative HR practices and maintained ethos across geographies to achieve consistency in workforce. The employees of HCL Infosystems were found to be satisfied with the growth opportunities, job security and relationship with peers in the company.

According to Pradeep Gupta, publisher of Cybermedia, multinational employers IBM, Capgemini, Sun Microsystems and CSC have mastered the art of managing Indian employees to rank among the Top 20 best IT employers in the country. "Others, especially many India-based IT employers, need to balance aggressive recruitment with the warmth and personal touch...to retain people as they ramp up headcount". A notable absentee in this list is Wipro

The seventh annual Dataquest-IDC survey was participated by 2,844 software, hardware and marketing professionals from 33 IT companies, totally employing 3,04,834 people in seven cities. The rating of employers was done upon the basis of employee satisfaction and HR scores.

2007-08-25T10:58:00.000-07:00

"2007 - TOP 20 Companies in the Training Outsourcing Industry"

The 'Top 20' list includes those leaders in the training industry that have demonstrated experience and excellence in providing learning BPO services to a variety of clients.
Because of the diversity of services included in training outsourcing engagements, no attempt is made to rank the ‘Top 20’.

1. Adayana
Minneapolis, MN

2. Raytheon Professional Services
Dallas, TX

3. Development Dimensions International
Bridgeville, PA

4. IBM Learning Solutions
Armonk, NY

5. Delta College
University City, MI

6. Global Knowledge
Cary, NC

7. NIIT, Ltd.
New Delhi, India (World Headquarters)Atlanta, GA (USA)

7. Element K
Rochester, NY
[Note: For the purposes of the Top 20, NIIT & Element K are considered to be one company since NIIT acquired Element K in 2006]

8. GeoLearning
West Des Moines, IA

9. KnowledgePool
Berkshire, UK

10. Accenture Learning
New York City, NY

11. Expertus
Mountain View, CA

12. Convergys
Cincinnati, OH

13. Affiliated Computer Services, Inc. (ACS)
Dallas, TX

14. Aptech Worldwide Corporation
Mumbai, India (World Headquarters)San Mateo, CA (USA)

15. Lionbridge
Waltham, MA

16. RWD Technologies
Baltimore, MD

17. Intrepid Learning Solutions
Seattle, WA

18. General Physics - GP
Elkridge, MD

19. Innovatia
Saint John, New Brunswick, Canada

20. SkillSoft
Nashua, NH

2007-08-22T21:55:00.000-07:00

FirstSource Solutions, has emerged as the frontrunner in the quest to buy the US-based healthcare player MedAssist.

Approx deal size - $300 million (around Rs 1,200 crore).
If materialised, it would be one of the largest overseas acquisitions after Wipro’s buyout of Infocrossing for around $600 million and the largest in the BPO space
MedAssist, which has revenues of $90-100 million and provides patient services, eligibility services, patient financing and healthcare collections. It has around 1,400 employees and 950 healthcare providers as clients

[Disclaimer - This information has not been provided to thestock-exchanges, and is source-based]

FirstSource is also rumoured to be in the race to acquire Citi’s BPO unit after the first round of bidding. The sale of the BPO business, being run by Citigroup Global Services (formerly eServe), is expected to fetch Citi around Rs 3,200 crore.

Other bidders include WNS and Genpact. Around 13 per cent of FirstSource's revenue comes from the healthcare segment. In January this year, it acquired BPM — a Delaware-based healthcare claims outsourcing company — for around $30 million.

2007-08-22T01:43:00.000-07:00

CAIRO, Egypt -- As rising wages and attrition rates in India spur some international companies to seek new locales for outsourcing operations, Southeast Asia, Eastern Europe and Latin America have all been competing to become new offshore hubs.

Now, the Middle East and North Africa are elbowing into the race to host remote sales staff, service centers, tech support and the like, thanks to a favorable time zone, a multilingual work force and an oil-fueled investment and expansion spree. Companies also are attracted by some efforts by some governments there to diversify and liberalize their economies, as well as the prospect of tapping into the growing local market.

The offshore industry faces challenges in the Mideast, which is better known for political instability and ingrained bureaucracy than customer support. But underscoring the region's promise, some of the biggest outsourcing companies operating in India -- the industry's undisputed powerhouse -- are establishing outposts there.

Satyam Computer Services Ltd. is hiring 300 people for a new center in Cairo that will handle clients in Saudi Arabia and the Arab world. Earlier this year, Wipro Ltd. set up an outsourcing joint venture in Saudi Arabia and recently announced plans to enter Egypt. Tata Consultancy Services Ltd. says it will soon start offering services from Morocco to French-speaking European clients.

Indian companies pulled in nearly $1 billion of outsourcing revenue from the region in the fiscal year ending March 2007, up from $600 million the year before, according to India's National Association of Software and Service Companies, a trade group.
"There is a lot of money flowing in the region, and it doesn't make sense to not make best use of it," says Virender Aggarwal, Satyam's director and senior vice president for Asia-Pacific, Middle East, India and Africa.

Much of the Middle East offers the same appeal other outsourcing hot spots have: cheap, skilled labor. But companies are finding other advantages, including a time zone that roughly straddles the world's three biggest economies -- North America, Europe and Asia. The region's geographic proximity to Europe and a multilingual labor force also help. And with business booming in much of the Mideast, there is more demand for Arabic speakers.

In recent years, Egypt, Jordan and the United Arab Emirates have all broken into the top 20 most-attractive offshoring destinations, according to an index published by consultancy A.T. Kearney Inc. Tunisia, Morocco, Israel and Turkey made the top 50 in this year's list.
"The Middle East region is going to be, I think, the next big destination," says Simon Bell, an A.T. Kearney principal, who has worked with the Egyptian government recently on ways to draw in more offshore work.

Despite growing interest, Mideast countries are still small players, dwarfed by India and China and lagging behind hot spots such as Malaysia, Brazil and the Philippines. There are also some big obstacles to boosting growth. First among them: the perception that political instability or conflict in places such as Iraq, Lebanon and Israel makes the region a risky place. And while structural changes have cut red tape in places such as Morocco, efforts to ease bureaucracy elsewhere have lagged behind the rest of the world.

Talent pools in many Middle Eastern countries are relatively small, too. Egypt, the Arab world's most populous country, pumps out about 250,000 university graduates a year. But many of them need additional training to boost foreign-language and other skills before multinationals will consider them. Amid a wave of expansion, local information-technology workers are starting to see more job offers from regional companies. That could put upward pressure on wages and attrition rates.

Satyam's Mr. Aggarwal says wages in Egypt, especially among the more-experienced employees, may be slightly higher than in India. But with businesses expanding in the Middle East, hiring Egyptians still can be cost-effective. Cairo has long been the region's cultural capital, and its export of movies and soap operas, makes the Egyptian dialect familiar across the Arab-speaking world.

Language is also a big plus in French-speaking parts of Arab North Africa. In Tunisia, Paris-based call-center operator Teleperformance SA employs more than 3,500 people catering to its Francophone market. The company is looking to hire for a contact center in Cairo that can serve U.S. and European multinationals.

New outsourcing jobs are a big boon for a region struggling with high unemployment and a bulging birth rate, and some countries have been recruiting the industry. The Egyptian government is offering to pay 80% of training costs for new employees, and officials are offering cheap rates for voice and data links to major U.S. and European cities.

Dubai, in the UAE, is promoting an "outsource zone," one of several zones aiming to attract specific industries. While wages in the UAE are relatively high, officials highlight its advanced high-tech infrastructure and large talent pool, including educated Southeast Asian and Arab-speaking expatriates.

An outsourcing joint venture between Electronic Data Systems Corp. of Plano, Texas, and another UAE emirate, Abu Dhabi, is pouring $100 million into a new center aimed at Mideast customers. EDS recently started hiring in Morocco to service its European clients. It already has 450 employees in Egypt.

"We see the importance of this region both in itself as a market and as a center from which to service other businesses," says Charles Cox, EDS's regional vice president for Middle East and Africa.

2007-08-22T01:21:00.000-07:00

Aug 21, 2007: Infosys Technologies Limited (NASDAQ: INFY) today announced the creation of the company’s first Latin American subsidiary, and the opening of the development center and office for the region based in Monterrey, Mexico.

The subsidiary, Infosys Technologies S. De RL De CV, provides the company’s full range of business consulting and information technology services for clients in all industries including banking, financial services, retail, consumer packaged goods, resource, energy and utilities.

The center provides key offerings in business process outsourcing, infrastructure management and packaged solutions implementation.

Often referred to as “nearshore facilities,” such operations provide client solutions in time zones which are more convenient to clients and still provide access to processes, systems, services and talent globally. The Monterrey facility provides Infosys with the dedicated resources to service clients in North America, Latin America and Europe with bi-lingual talent in an agreeable time zone and close proximity. Furthermore, it strengthens the company’s global delivery model capabilities and joins such new facilities already on the network such as a development center in Brno, Czech Republic and BPO facilities in India.

“The world continues to flatten, unlocking Mexico’s potential as a major business center and solidifying its role as a strategic location for technology innovators such as Infosys,” said Mexico Secretary of the Economy Dr. Eduardo Sojo.

After examining several countries in the region, Infosys chose to establish a presence in Mexico because of the broad language skills available in the region, its geographical proximity to Canada, the U.S. and Europe. Latin America is a strong emerging market and one where many of Infosys’ clients have operations already.

“The combination of human and intellectual capital, nurturing business community and entrepreneurial spirit found in Monterrey positions the state for amazing IT service growth,” said Governor of the State of Nuevo Leon Jose Nativdad Gonzalez Paras.
Infosys has appointed Mohit Joshi to head the new subsidiary. Joshi, formerly a group engagement manager with the company’s banking and capital markets organization has more than 12 years of client and leadership experience.

“Our clients are exploring opportunities to mitigate risk while expanding operations into the burgeoning market,” said S. Gopalakrishnan, chief executive officer, Infosys Technologies. “The facility will help us establish our services in the Central time zone which allows us to provide better support to our clients located across multiple geographies.”
For the first year, Infosys Technologies S. De RL De CV will have more than 250 seats. By its third year of operation, the Monterrey facility is expected to employ nearly 1,000 employees. Local and international hires will participate in the standard Infosys training programs to ensure global consistency.

2007-08-22T01:15:00.000-07:00

Dallas-based Q Source Global Consulting Private Limited, a provider of BPO and IT staffing solutions, plans to start two more branches in India and one at Singapore.“We have decided to open offices at Hyderabad and Delhi in India and also at Singapore over the next one year,” Ashish Sawant, senior vice-president (Indian operations), Q Source, told media persons here on Friday.

The company currently has offices at Bangalore, Chennai, Pune and Visakhapatnam. It has overseas offices at UK and US.

The company aims to provide job opportunities to 800 graduates by ‘train and deploy mode’ in the country during this fiscal, Sawant said.

Apart from staffing solutions, Q Square is also into the software export business. “Last fiscal, our software exports were about Rs 10 crore,” he said.

Source: Business Standard

2007-08-20T08:15:00.000-07:00

According to a survey conducted by Datamonitor, a majority of respondents agreed to outsource their infrastructure services to Eastern European countries, while about 38 percent respondent agreed to outsource their infrastructure services to India. About 15 percent respondents preferred China, while about 9 percent preferred the Latin American countries. Among the key findings, about 50 percent respondents revealed to outsource their infrastructure services to a Western services supplier having worldwide sourcing capabilities. About 35 percent plan to outsource such functions to their captive operations, while only 12 percent plan to outsource to offshore-based third-party service providers.

In addition, about 47 percent respondents revealed that they are expected to generate cost savings between 10 percent and 20 percent by offshoring such functions as against managing their IT infrastructure onshore, while another 41 percent expected savings to be between 20 percent and 40 percent. According to the survey, about 80 percent German respondents cited Eastern Europe as their preferred offshoring location, while about 21 percent respondents agreed to opt for multiple offshore locations to minimize risk. Moreover, security was cited as the prime concern by respondents who were reluctant to offshore their IT infrastructure in the near future.

2007-08-20T08:12:00.000-07:00

Tata Consultancy Services (TCS), an Indian IT service provider, has won a USD 16 million information technology outsourcing (ITO) contract from AGL Energy, an Australian gas and electricity retailer. The contract is in line with AGL’s IT change program, under which it plans to outsource its in-house IT operations.

AGL’s major IT change program will enable it to generate cost savings worth USD 60 million per year after the implementation of its new retail solution. The contract with TCS will support AGL’s plans of executing its major IT change program.

The deal is expected to generate cost savings worth USD 12 million per year for AGL over the next 5 years. Moreover, it will allow AGL to reduce its in-house IT support staff from about 300 to 20. According to an AGL spokesperson, the deal will also support the company’s newly integrated retail platform.

2007-08-10T22:41:00.000-07:00

Pramod Bhasin

President and CEO, Genpact Limited

Professional Profile:

Started his career with General Electric (GE), a $150-billion diversified technology, media and financial services company

His career with GE and RCA Corporation spanned 25 years

Served as CFO for GE Capital's Corporate Finance Group

Served as head of GE Capital in India and Asia

Established Genpact (formerly GE Capital International Services) in 1997

Part of the Executive Council of NASSCOM

Member of Band of Angels (group of Angel investors)
Founding member of the International Association of Outsourcing Professionals

Board of Director - NGEN

Board of Governer – IIM –Lucknow

Academic Profile:

Chartered Accountant from Thomson McLintock Co., London

Holds a Bachelor of Commerce Degree from Delhi University

Personal Profile:

Age: 55 years

Lives in Jungpura, New Delhi and New York

Areas of Interest:

IT products and services

High end BPO services

Retail

Media, Real Estate, Industrial, Supply Chain

2007-08-07T09:00:00.000-07:00

Reliance Expected to Achieve 30% Cost Savings by Outsourcing

According to media sources, Reliance Communications, an Indian telecom operator, is expected to award a 5-year outsourcing contract worth about USD 500 million by the end of August 2007. Several big information technology outsourcing service providers, such as Accenture, EDS, and IBM, are eyeing the contract.

As part of the outsourcing contract, Reliance is expected to outsource its entire infotech and related infrastructure functions including billing, call center operations, customer care management, and data management to one of the successful bidders. The successful bidder is expected to modernize the existing IT infrastructure of Reliance. The company expects to achieve cost savings of about 30 percent by outsourcing such functions.

Once this deal is finalized, it will be the third biggest deal awarded by an Indian telecom company over the last few years. About 3 years ago, Bharti awarded a 10-year, USD 750 million outsourcing deal to IBM covering its infotech infrastructure. A few months back, Idea Cellular awarded a USD 600–800 million deal to IBM covering infotech infrastructure and applications outsourcing.

Is the Party Over for Indian Outsourcers?

2007-08-07T07:14:00.001-07:00

Infosys, TCS, and Wipro still rake in profits, but they face challenges ranging from a stronger rupee to the likes of IBM and Accenture romping on their home turf

read more | digg story

2007-08-07T06:02:00.000-07:00

Wipro Technologies has acquired Infocrossing, Inc.

Deal information

For US$600 million, this is the largest-ever overseas acquisition by an Indian IT firm
The agreement is for $18.70 per share in an all cash deal

What’s in it for Wipro

This deal will address the capability gap regarding capability gap we had regarding managed data center hosting services
Wipro would be one of the world leaders in end-to-end IT infrastructure management solutions
Through Infocrossing, Wipro would deepen their presence in the United States with the addition of five data center locations and approximately nine hundred employees
Wipro healthcare arm is also going to get a boost as Infocrossing is also a heathcare solutions provider, where they have a unique IP and actually own the platform. Wipro will be able to provide healthcare solutions to their large customers, including the specific platform
Infocrossing brings about 200 clients to Wipro, thus enhancing its total client base while providing an opportunity to cross-sell its other services

Other information:

Wipro was advised on the transaction by Citigroup and represented by the law firm of Wilson Sonsini Goodrich and Rosati, and Infocrossing was advised by Credit Suisse Securities (USA) LLC and represented by the law firm of Gibson, Dunn & Crutcher LLP.

About Infocrossing

Infocrossing, Inc. is a provider of selective IT infrastructure, enterprise application and business process outsourcing services delivering the computing platforms and proprietary systems that enable companies, regardless of industry, to process data and share information within their business, and between their customers, suppliers and distribution channels. Leading companies leverage Infocrossing's robust computing infrastructure, skilled technical team, and process-driven operations to reduce costs and improve service delivery by outsourcing the operation of mainframes, mid-range, open system servers, networks and business processes to Infocrossing

2007-08-02T07:10:00.000-07:00

The International Association of Outsourcing Professionals (IAOP) has announced the names of companies that have been selected as 2007’s best outsourcing service providers – The Global Outsourcing 100.

Given below is the Top 20 list

Rank - Company - Strength*

1 - IBM - Size and Growth
2 - Capgemini - Customer Testimonials
3 - Hewlett-Packard - Executive Leadership
4 - Sodexho Alliance - Number of Centers/Locations
5 - Accenture - Balanced Strength
6 - Wipro Technologies - Balanced Strength
7 - Infosys - Customer Testimonials
8 - Genpact - Executive Leadership
9 - Tech Mahindra - Employee Management
10 - Cambridge - Executive Leadership
11 - Mastek - Methodologies/Innovation
12 - CGI Group - Number of Centers/Locations
13 - Xchanging - Size and Growth
14 - EDS - Methodologies/Innovation
15 - HCL Technologies - Methodologies/Innovation
16 - ARAMARK - Number of Centers/Locations
17 - ACS - Number of Centers/Locations
18 - Teletech - Balanced Strength
19 - Colliers International - Size and Growth
20 - Cognizant - Number of Centers/Locations

* Companies were judges on four critical characteristics: size and growth; customer references; organizational competencies; and management capabilities

For the full list visit http://www.outsourcingprofessional.org/content/23/152/1197/

2007-08-01T03:14:00.000-07:00

International football organization chooses global consulting and information technology services company to deliver FIFA Extranet, Intranet, and customized Event Management System with Match AG

Satyam Computer Services, Ltd. (NYSE:SAY), a leading global consulting and information technology services company, announced today that it has signed two multimillion-dollar contracts to support FIFA and its major forthcoming events.

Thanks to the strength of its technical capabilities and flexible approach, Satyam has not only been selected to develop a customized Event Management System for one of the world’s premier sports organizations, but it has also been chosen to build an Extranet and Intranet for FIFA over the next 12 months. Satyam’s partnership will also include full, uninterrupted support for both solutions for FIFA, until the final whistle of each game.

Working primarily from FIFA’s Zurich headquarters, Satyam will provide in-country support for matches. It will also have teams work from offshore locations to enable lower costs and optimized CMM Level 5 quality.

“Clearly, FIFA organizes incredibly large-scale, high-profile tournaments. In fact, we host the world’s most widely viewed sporting events, with as many as 28 billion people watching the 2006 Tournament. As such, we cannot afford even a second’s downtime, even during the huge usage spikes throughout games,” said FIFA head of information technology solutions Michael Kelly. “That is why we have chosen the reliability, flexibility, and reusability of Satyam’s applications. This is the start of a long-term relationship that will see Satyam working closely with FIFA over the next few years.”

“We are delighted to have been chosen to deliver such critical applications for FIFA, and are committed to ensuring the success of managing its event logistics and Extranets/Intranet platforms,” said Dr. Keshab Panda, the senior vice president, director, and head of Satyam’s European operations.

A press release from Satyam Computer Services Ltd. website

2007-08-01T03:00:00.000-07:00

Outsourcing can act as a key 'enabler' and catalyst for sectors such as telecom, organised retail, insurance, healthcare, hospitality and airlines, suugests a study.
According to a study by Everest Group, outsourcing can help the ''sunrise sectors'', which are witnessing tremendous growth for the last few years, in multiple ways, ranging from release of scarce capital, providing quality talent, innovative practices and management bandwidth.

The study further suggests that outsourcing may help these growth sectors free up their resources and focus on core business activities. ''So far, India has been seen as a leading supplier destination in the outsourcing arena. Its potential as a buyer of outsourcing has not yet been explored to the fullest. Today, sectors like telecom, organised retail, insurance, healthcare, hospitality, and airlines in India are witnessing unprecedented growth, which will further be fuelled by the increasing entry of global players, said Everest Group Country Head Gaurav Gupta.

It will be important to address the resultant operational growth challenges in these sectors to ensure that they maintain their momentum. Companies in these sectors will need to evaluate a range of 'build or buy' options, to address these constraints suitably, he added.

''Capital efficiency is a huge challenge for business leaders in these growing sectors. Outsourcing can create growth opportunities by releasing the capital otherwise required for investment in non-core assets and activities, thereby, reducing the capital investment required per unit of growth,'' said company
Senior Consultant Punish Mishra.

Outsourcing also reduces operating costs through more efficient and competitive service delivery. The study suggest that IT outsourcing alone can improve EBITDA margins by 30-50 basis points for the retailers, which is significant considering it is imperative for the retailerâ€™s to expand margins.

This saving, apart from improving the bottom-line of companies, can be ploughed back into growth initiatives allowing retailers to drive additional four to five per cent growth with the same capital.

The study also highlights the impact of outsourcing and other challenges facing the country's sunrise sectors.

The study identifies issues of inadequate labour pool, poor quality talent and attrition by outsourcing to suppliers who have extensive experience in hiring in large numbers, creating a powerful engine to recruit and in training talent pool to meet global standards.

Source: http://news.webindia123.com/

2007-07-31T04:32:00.000-07:00

Virtual Recruiter
Corporation enters chat room to recruit top talent

In January Lockheed Martin launched “live chat” feature on the Careers section of its Web site. The Corporation is the first in the industry to use an online, real-time environment for recruiting.

Scheduled chats take place regularly on topics ranging from software engineering and transitioning military personnel to available opportunities in specific locations. User questions range from questions on starting the application process to tips on how to get their resumes noticed. Participants can also talk about their skills and experience to see how they may fit in a particular program area. Corporate Staffing analyzes chat activity and identifies trends in topics and the process. Employees have already been hired as a result of virtual chat sessions, and many more are expected as the tool grows in popularity.

Source: Lockheed Martin newsletter story.

Comments:

Such a system in very useful when there is an emergency to fill the seats
This is surely going to help reduce cost per hire
Improves job fit and reduces turnover

2007-07-30T04:20:00.000-07:00

Infosys Technologies Ltd has signed a multi-million dollar outsourcing contract with Royal Philips Electronics’ (“Philips”) of the Netherlands.

Highlights:

TCV: US$250 M
Contract Duration: 7 years
Philips will enter into a multi-year contract with Infosys BPO to provide F&A services and the processing of purchasing orders
Infosys will also acquire three shared service centers located in India, Poland and Thailand from Philips for US$28 million
This contract is amongst the largest Finance & Accounting BPO engagements from India and will expand Infosys’ global network, particularly strengthening its European operations

About PhilipsRoyal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is a global leader in healthcare, lifestyle and technology, delivering products, services and solutions through the brand promise of “sense and simplicity”. Headquartered in the Netherlands, Philips employs approximately 125,800 employees in more than 60 countries worldwide. With sales of EUR 27.0 billion in 2006, the company is a market leader in medical diagnostic imaging and patient monitoring systems, energy efficient lighting solutions, personal care and home appliances, as well as consumer electronics. For more info visit www.philips.com/

2007-07-25T07:42:00.000-07:00

Hot action in the last quarter among top 4

Infosys

Plans investment of US$75.1m (Rs3.1bn) in a 8,000-seat development centre in Thiruvananthapuram; also setting up a 400-seat facility in Brno, Czech Republic and a 300-people centre in Mexico.

Introduced a non-compete agreement in employee contracts, barring the employee to work for the same client at a defined set of competing firms for a period of six months after their job termination at Infosys.

TCS

Bought out the joint-venture partner’s stake in the Brazil subsidiary for US$33.4m; inaugurated a new 500-seat centre in Mexico; targeting 5,000 employees in Mexico over the next five year.
ntegrated its financial services solutions (organic and from FNS acquisition) into a new SBU, TCS Financial Solutions.

Satyam

Launched a 4,500-sq ft near-shore development centre in Brazil; a 150-seat centre in Sydney (third in Australia); plans development centre in Vietnam by April 2009.

Announced extension of its existing contract with the Nestle group for a further three years; we estimate the current relationship at an annual run-rate of US$15m, that could go to US$25m. We estimate the pricing increase at about 3% in the renewed contract.

HCL Tech

Launched a 100-seat centre in Poland, its second in East Europe.

US$15m contract win from Alenia Aeronautica.

2007-07-24T10:43:00.000-07:00

Worldwide market trends in Engineering Services

Engineering services is a huge market: global spending for engineering services is currently estimated at $750 billion per year, an amount nearly equal to India’s entire gross domestic product in 2005. By 2020, the worldwide spend on engineering services is expected to increase to more than $1 trillion.

Key sectors that dominate global engineering spends include high-technology / telecom, automotive and aerospace – accounting for over 55 percent of the total. Other sectors include industrial, defense, utilities and construction.

To date, offshoring of innovation services has largely been done in advanced countries — only 9 per cent of the world’s budget for engineering found its way to low-cost countries.

However, like in many other business functions, competitive pressures are driving large corporations to undertake their engineering activities on an increasingly global basis. A 2005 survey by Booz Allen and Duke University’s Centre for International Business Education and Research (CIBER) found that 36 per cent of companies surveyed sent some of their engineering offshore, 31 per cent offshored some research and development, and 16 per cent shipped out a portion of their product design

Of the $750 billion spent today, only $10-15 billion is currently being offshored—a tiny fraction of the total. India brings home about 12-15 percent of today’s offshored market, which it currently shares with Canada, China, Mexico, and Eastern Europe. This trend towards building increasingly global R&D footprints, observed over the past few decades, is expected to accelerate over the coming years with emerging economies – notably India emerging as the destination of choice for these expansions

Updated on: 27 Sep, 2006

Source: NASSCOM

2007-07-21T14:24:00.000-07:00

NASSCOM has released the rankings of the top 20 IT-ITES employers in India for FY 06-07.

The rankings are based on the India-based headcount of firms with IT-ITES operations in India, as reported to NASSCOM in its annual survey.

Methodology

NASSCOM sends out a detailed questionnaire annually to all its member companies, accounting for 95 percent of the Indian IT software and ITES industry revenue. Information collated through the questionnaire includes: aggregate performance; service lines; verticals and geographies.

Key findings of the survey:

The top 20 companies collectively employ over 500,000 people of the 1.6 million employed directly in the industry

IT-ITES industry is India’s largest employment generator in the organized sector IT-ITES industry is creating jobs for over 7.5 million people both directly and indirectly and this figure is expected to cross 10 million by 2010

A varied combination of factors have led to this - healthy growth environment, attractive remuneration and different kinds of employment opportunities in the new economy based on varying skill sets, and above all the availability of talent in India which meets the employment projections

This industry needs to work on is the quality factor to ensure we remain the highest employment generator and maintain India’s share of the global offshore IT and ITES industry

Employment is spread across many cities, and the industry is increasingly going to tier II and tier III cities

This process of widespread geographical dispersion of the industry is being adversely affected by the non-extension of the STPI scheme and attendant tax incentives

2007-07-17T07:12:00.001-07:00

A Frost & Sullivan study cited that the worldwide shared services and outsourcing (SSO) market is expected to grow at a CAGR of 15 percent over the next couple of years to reach USD 1.43 trillion by 2009 as compared to USD 930 billion in 2006.

The banking, financial services, and insurance (BFSI) sector spent the maximum on SSO at USD 273 billion in 2006, followed by the technology/ICT sector and the healthcare industry at USD 233 billion and USD 130 billion, respectively. The spending by other verticals, such as transportation and logistics and energy stood at USD113 billion and USD 84 billion, respectively.

In addition, India was cited as the most preferred destination for SSO operations, followed by China, Ireland, Singapore, Malaysia, Mexico, the Czech Republic, Poland, the Philippines, and Canada, while countries, such as Russia (for software development) and Dubai (for BFSI services) are also emerging as preferred SSO destinations.

The study also cited that the Philippines is a hub for back-office operations for IT and IT-related services, while Malaysia which already has a strong position in the BFSI, transportation and logistics, and energy verticals is also gaining the attention of technology companies (such as IBM and Satyam) due to its excellent infrastructure and low attrition rates.

2007-07-17T07:11:00.000-07:00

According to TPI Index report for 1H 2007, the total contract value (TCV) of sourcing contracts awarded in 1H 2007 stood at USD 33 billion, reflecting a 34 percent decline over the TCV awarded in 1H 2006. This value is the smallest first-half TCV value since 2001. In addition, the total number of sourcing contracts witnessed a 25 percent decline in 1H 2007 as compared to 1H 2006.

The annualized contract value (ACV), or average annual spending also declined by 30 percent over 1H 2006 to reach USD 5.5 billion in 1H 2007. The study also reported that the number of BPO contracts awarded in 1H 2007 (78 contracts) were lower as compared to the number of contracts in 1H 2006.

In addition, according to the study, only 56 sourcing contracts were awarded in 1H 2007 in the Americas as compared to 86 contracts in 1H 2006. The TCV of these contracts declined from USD 24 billion in 1H 2006 to USD 10 billion in 1H 2007, reflecting the lowest first-half TCV value since 1994. In contrast, TCV of the contracts awarded in Europe increased from USD 14 billion in 1H 2006 to USD 18 billion in 1H 2007. In terms of sectors, financial services sector accounted for 47 of the total number of contracts having a worth of USD 11.5 billion in 1H 2007. Though the overall outsourcing industry did not perform well in 1H 2007, yet TPI expects a growth of 5 percent in annualized revenue for 2007 as compared to 2006.

2007-07-17T07:10:00.000-07:00

A study by the Work Foundation cited that the threat of job losses in the UK due to offshoring to developing countries (such as India) was overstated. It is evident from the study that the computer and information services were the third largest imported services in the UK from India and stood at GBP 122 million; after travel and transport services valued at GBP 626 million and GBP 289 million, respectively. In addition, the study cited that IT and business services imports from Germany to the UK have increased by 4 and 16 times, respectively, as compared to imports from India.

Low labor cost was identified as one of the factors for offshoring. However, cultural aspects are extremely important for successful organizations while offshoring. The study also revealed that offshoring led to job losses of 5.5 percent of the total in Europe in 1Q 2007 as compared to 3.4 percent in 2005. In addition, it has been found that call center jobs in the UK have increased as against expected decline. The trade of services between the UK and India is increasing at a slower rate than expected. It increased from 0.4 percent in 1995 to 1.2 percent in 2004, reflecting a marginal increase.

According to other key findings, an increasing number of western companies are adopting a mix of business models with nearshore, offshore, and onshore operations, while a majority of successful Indian companies are expanding their business operations in western locations to cater to the onshore/nearshore needs of their clients.

2007-07-03T07:43:00.000-07:00

Merrill Lynch Acquires Minority Stake in Copal Partners

Merrill Lynch, a US-based financial management and advisory company, has acquired a minority stake in Copal Partners, an Indian research firm, through an investment of USD 11 million in the company. The size of the stake acquired by Merrill Lynch was not disclosed. Deutsche Bank, a German financial services provider, and Citigroup, a New York-based financial services company, are the other investors and clients of Copal Partners.

At present, Copal Partners employs about 550 professionals across its operations in India, the UK, the US, and Mauritius. Since the company’s establishment in 2002, it has been offering financial research and analytics services to various investment banks, hedge funds, and private equity funds across the globe. According to Rishi Khosla, the CEO of Copal Partners, Merrill Lynch, Deutsche Bank, and Citigroup collectively hold a stake of about 25 percent in Copal Partners.

2007-07-02T07:53:00.000-07:00

IT Exports by Top 10 IT Service Firms Reached INR 682.36Bn – Dataquest

According to a survey and analysis conducted by Dataquest, the IT software and services exports of India by the Dataquest top 10 IT service companies reached INR 682.36 billion in 2006–07 (FY 2007). Of this, nearly INR 392.60 billion was contributed by the top 3 IT services companies – Tata Consultancy Services, Infosys, and Wipro. Satyam accounted for INR 57.89 billion and IBM accounted for INR 48.80 billion, followed by HCL Technologies and Cognizant accounting for INR 45.98 billion and INR 45.84 billion, respectively.

Of the Dataquest top 10 IT service firms, 7 are Indian companies. The study also cited that the IT software and services exports of the Indian development centers of the three international companies (IBM, Cognizant, and Oracle) stood at INR 131.27 billion. Oracle stood at the eighth position with revenues worth INR 36.63 billion in the Dataquest top 10 IT service providers list, while Tech Mahindra stood at the ninth position with revenues worth INR 28.90 billion. Patni dropped two positions down to reach the 10th position, with revenues worth INR 25.73 billion.

In addition, the study revealed that a majority of the top 10 IT companies witnessed a significant increase in their revenues from their European operations in FY 2007. All the top 10 companies are focusing on combining their BPO operations with IT that has resulted in faster growth for BPO. According to the study, the weakening dollar and the strengthening rupee did not affect exporters significantly until the latter half of FY 2007.

2007-07-02T03:01:00.001-07:00

According to Everest Research Group, software- and BPO-related functions worth about USD 9 billion were outsourced by big North American and European firms (primarily financial service firms) to their Indian captive centers in 2006. General Motors, Deutsche Bank, JP Morgan Chase, etc., are expanding their Indian offshore operations instead of outsourcing their software and back-office operations to Indian third-party service providers, such as Infosys Technologies, Tata Consultancy Services, and Wipro Technologies.

More than 50 centers have been set up over the past three years by such international firms in India and a majority of them plan to expand their operations two-fold over the next two years as the country offers a huge market. Moreover, such companies plan to conduct important businesses through these offshore centers. However, smaller US-based banks continue to outsource their operations to third-party vendors, such as Infosys, Genpact, and Cognizant Solutions, rather than establishing their offshore captives in India. According to Indian third-party vendors, international companies are also adopting a hybrid model under which work is divided between third-party vendors and company-owned offshore operations. Captive centers are growing at 30 percent annually and have employed more than 200,000 full-time employees for software development, back-office operations, high-end research, and product engineering.

2007-07-02T03:00:00.000-07:00

Offshore Headcount Increases 18-fold in Financial Institutions – Deloitte

According to a study conducted by Deloitte, the number of jobs going offshore in the financial services sector has increased 18-fold over the past four years. It has been estimated that financial service firms across the globe have been saving about GBP 4.5 billion annually at present by offshoring to low-cost countries as compared to GBP 2.5 billion in 2003.

Currently, the British financial service industry has been saving GBP 1.5 billion annually by offshoring. The study also cited that the US- and UK-based financial service firms are increasingly offshoring their business processes. By 2006, about 75 percent of financial institutions were offshoring, while even less than 10 percent of financial institutions had offshore operations in 2001.

According to other key findings, the average offshore headcount has increased from 150 in 2003 to 2,700 in 2006. It has been found that offshoring has spanned across all business functions. However, functions, such as transaction processing, finance, and HR, are witnessing increase in growth. Firms that are offshoring one or two business processes are saving about 20 percent less on an average as compared to those offshoring over five business processes.

2007-07-02T02:38:00.000-07:00

A study conducted by Deloitte cited that the number of jobs going offshore in the financial services sector has increased 18-fold over the past four years. It has been estimated that financial service firms have been saving about GBP 4.5 billion annually at present by offshoring to low-cost countries as compared to GBP 2.5 billion last year. The study also revealed that the US- and UK-based financial service firms are increasingly offshoring their business processes. By 2006, about 75 percent of financial institutions were offshoring, while even less than 10 percent of financial institutions had offshore operations in 2001. Among other key findings, the average offshore headcount has increased from 150 in 2003 to 2,700 in 2006. in addition, firms that are offshoring one or two business processes are saving about 20 percent less on an average as compared to those offshoring over five business processes.

In contrast, according to another study conducted by Compass Management Consulting, the UK-based financial service organizations are not benefiting from offshoring their call center operations to countries, such as India and China. This is because the cost saving benefits that are generally achieved by offshoring to low-cost destinations are diminishing due to increase in wages (by up to 15 percent annually) in such countries. In addition, communication inefficiencies (due to differences in speaking the English language) between the UK customers and offshore call center agents have also led to a decrease in productivity. It is evident that often offshore agents take twice the time as taken to handle a customer query call as compared to UK-based agents. Productivity is measured in terms of sales closed and new accounts opened. The study also cited that operating an onshore call center by financial service firms is capable of generating 10 sales (on an average) per month as compared to an offshore call center that is capable of generating only 4 sales per month. The study suggested that financial firms should focus on enhancing their onshore capabilities and adopt a 'fix and mix' approach towards call centers (having both onshore and offshore call center operations) as compared to a 'lift and shift' model (shutting down domestic operations and moving to offshore).

2007-07-02T02:37:00.001-07:00

A recent study by Everest Research Institute cited that an increasing number of human resources outsourcing (HRO) buyers are focusing on accessing the best technologies and improved business process functions at present, rather than focusing on achieving cost savings. According to a company spokesperson, some HRO buyers are even ready to achieve cost savings of less than 10 percent or even zero percent as they are more inclined to access latest technologies and value-based functions; however, HRO buyers' major focus was on cost savings five years ago.

Among the key findings, about 54 percent of HRO buyers have outsourced about 10-12 HR processes out of 12 processes, with transaction-intensive and support HR processes being outsourced more frequently as compared to judgment-intensive processes. Other key findings cited that about 22 percent of HRO buyers did not outsource their HR training function, while about 45 percent revealed that they outsourced 1-5 training activities. However, about 22 percent of HRO buyers revealed that they have offshore operations.

2007-07-02T02:36:00.001-07:00

According to the White Paper, titled 'Building a World-Class IT Services Outsourcing Industry in China' by EDS, the Chinese ITO industry is expected to generate revenues worth USD 18 billion by 2010 and USD 56 billion by 2015. The industry is also expected to create job opportunities for about 4 million professionals by 2015. In addition, the paper boasts of abundant supply of workforce, excellent infrastructure, and low-cost advantage in the country. The Chinese Information Industry Ministry estimated that the country's software outsourcing industry revenues grew by over 40 percent year-on-year to reach USD 1.4 billion in 2006. The ministry also expected the Chinese software and information services market to reach about USD 131.32 billion (CNY 1 trillion) by 2010. In addition, some newspapers sources cited that various Chinese provinces are offering tax rebates and have implemented favorable policies to facilitate the country's outsourcing industry and allow international companies to expand/open their offshore operations or set up joint ventures in the country.

2007-06-14T07:46:00.000-07:00

NASSCOM, DRDO Collaborate to Develop Innovative Technologies

National Association of Software and Services Industry (NASSCOM), the Indian IT industry lobby, has signed a deal with the Indian Defence Research and Development Organisation (DRDO) to focus on developing innovative technologies.

Under the terms of the memorandum of understanding, NASSCOM’s expertise will complement DRDO’s capabilities to develop advanced projects for the IT industry. In addition, the agreement will enhance the involvement of the IT software companies for DRDO’s development projects.

DRDO’s advanced military systems projects are increasingly relying on software, thus, its partnership with NASSCOM is essential for the development of its software projects related to radars, electronic warfare systems, flight control systems, avionics, missile systems, and command, control, and communication systems.

According to Kiran Karnik, the President of NASSCOM, the partnership with the Indian R&D agency will allow NASSCOM to focus on creating an innovative ecosystem.

DRDO has been successful in developing various innovative technologies across areas, such as aerospace, control systems, communication, etc. This was the prime reason for NASSCOM to choose DRDO as its partner. In addition, the Indian IT industry is moving up the value chain in these areas, and thus, DRDO’s expertise is very relevant and of interest to the industry.

2007-05-24T02:41:00.000-07:00

Another Captive on Sale!

The first round of bids for Citi’s business process outsourcing operations — Citigroup Global Services (formerly known as e-Serve) — is likely to be completed this week. A host of global IT companies and also private equity firms are said to be in the initial race. However, Citi is likely to look at selling part of its operations only to a strategic partner, given the sensitivities involved in the deal. According to sources, IBM, Automatic Data Processing (ADP), Genpact, Infosys and private equity firms such as Blackstone and General Atlantic are in the race for Citi’s BPO business.

Citi is likely to follow the Genpact model, where it is likely to sell off over 50% stake in the BPO firm. It is, however, likely to retain a part of the stake in the firm so that they can not only get the benefits in case of a future listing but would also handhold the firm.

According to sources, one of the main reasons that the group is looking at bringing in a strategic partner is to bring down the overall costs and not monetising the stake.

“Though there is interest from a host of firms, the group is most likely to sell the operations to someone who has experience in the field. They would want a strategic partner in the firm. It’s a core asset and they would not like to have any issues post a sell off,”

said a senior private equity official of a leading firm. ADP and Genpact are said to be the front runners for the deal.

Citi officials declined to comment. When contacted Genpact president and CEO Pramod Bhasin declined to comment while Infosys BPO’s officials were unavailable for comment. However, experts believe that Genpact has more synergies with Citi’s BPO unit because it has the experience of working out of a captive shell. Genpact had started off as a captive for GE in 1997.

GE had in 2004 sold 60% of its stake to Oak Hill Capital Partners and General Atlantic Partners. It was then renamed as Genpact. Citi had delisted Citigroup Global services in 2004. Citi held 44.4% stake in the BPO company. It had accepted an exit price of Rs 975 per share while delisting the firm. At that price the company was valued at around Rs 1,200 crore. According to i-bankers the value of the company now would be at around $700 million.

According to Forrester Research, nearly 60% of the captives in India are struggling due to spiralling costs, high attrition and lack of integration and management support. “Nearly, 10% of these struggling captive BPOs are most likely to sell off and go the outsourcing way,” a recent Forrester study says. Another Mumbai-based analyst voiced similar views about Citi’s BPO stake sale. “It is simply following the trend set by the likes of GE and Deutche Bank,” he added.

Deutsche Bank later sold off its stake to the Delhi based HCL Technologies. Citi globally has been on a major cost cutting spree. It had recently announced that it would cut 17,000 jobs on the back of a restructuring plan that is targeting billions of dollars in cost savings over the next few years. It is also looking at moving out 9,500 jobs overseas and to smaller American cities. Citi’s BPO operations have over 9,000 employees with nearly 4,000 servicing its international businesses.

from ET

2007-05-18T05:25:00.000-07:00

Australian BPO to Grow by 60% to Reach $3.84Bn in 2010 – IDC

According to a white paper released by IDC for Accenture, business process outsourcing (BPO) in Australia is expected to increase by about 60 percent from USD 2.387 billion in 2006 to USD 3.84 billion in 2010, reflecting a CAGR of 12.4 percent. This growth is likely to be attributed to the increase in outsourcing in the areas of HR and training, finance and accounting, procurement, and customer care.

Among the key findings, the HR services market in Australia is estimated to grow at a CAGR of 9 percent to reach USD 1.591 billion by 2010, while finance and administration outsourcing will grow at a CAGR of 12 percent to reach USD 2.47 billion in 2010. In addition, the customer care segment is expected to grow at a CAGR of 15 percent to reach USD 833 million by 2010. However, procurement outsourcing by Australian firms is expected to grow at a CAGR of 18 percent to reach USD 354 million by 2010.

HR BPO in Australia has become mature as many HR BPO deals encompass high-end services including recruitment, workforce management, and learning. Growth in finance and administration outsourcing in Australia will primarily be driven by compliance and regulatory mandates.

The study also cited that BPO in Australia is still not mature as compared to the American and European countries. According to Aprajita Sharma, an outsourcing and BPO research manager at IDC Australia, a majority of BPO deals in Australia pertain to single function arrangements rather than complex end-to-end process deals. Sophisticated deals are, however, more prevalent in the overseas locations.

source: globalsourcingnow

2007-05-14T00:27:00.000-07:00

Genpact CEO Pramod Bhasin took home $2.8m in ’06

In what could be one of the highest paid salaries to a professional CEO in India, Pramod Bhasin, 55, president and CEO of Genpact, earned an annual salary of $2.8 million in 2006. Bhasin’s compensation includes a salary of $610,000, annual bonus of $100,000, stock option awards of $ 971,123 and the rest in pension and retirement benefits and other benefits like housing, security and so on.

Bhasin is one of the founders of Genpact when GE started the company in India and serves as director on the company’s board. “This package would easily put Mr Bhasin amongst the top 5 highest paid investor-backed professional CEOs in the country” says Priya Chetty Rajagopal , VP, Stanton Chase International, an executive search firm.

Genpact’s next highest earning official is V N Tyagarajan, executive VP, business development and head of sales, who earned $1.2 million followed by Mitsuru Maekawa, CEO of Genpact Asia, whose total package was $844,065. Genpact disclosed the information in a preliminary prospectus filed by the company with the US Securities and Exchange Commission on May 11, 2007.
In what is reflective of the growing importance of India in global markets, CEO salaries in India have gone up sharply in the last few years. “There are at least a hundred CEOs earning $1 million in salary in India today,” says managing partner of EMA Partners International K Sudarshan.

Close to half of this salary includes performance-linked bonuses as well as stock options. Some of the highest paying executives are found in industries like large investment banks, telecom companies and banks. Search executives say that CEOs in companies such as IBM, Bharti, Reliance Retail, HSBC, Cairn and Walmart India are earning salaries in the range of $1 million and above. In 2006, India reported the highest salary increase in the Asia Pacific region.
Genpact began as an India-based captive BPO arm of GE Capital. In 2005, GE spun it off as an independent business and renamed it Genpact. The company has 28,000 employees and earned revenue of $613 million in 2006 with a profit of $39.8 million. It’s attrition stood at 32% last year.

Genpact filed a preliminary prospectus on May 11, 2007 for a listing on the NYSE. The company has not disclosed how many shares it will offer for sale and at what price. GE owns about 29% of the company.

source copy+paste: EconomicTimes

2007-05-07T02:46:00.000-07:00

Mergers and Acquisitions:

Northgate Information Solutions has entered into an agreement with ARINSO International to acquire a 60.43 percent stake in ARINSO from Jos Sluys, the company's Founder and CEO, for about EUR 375 million. The acquisition has been approved by the management of both the companies and is subject to approval from Northgate's shareholders. Post-acquisition, Northgate is likely to make a public offer to buy the remaining stake in ARINSO. The deal will allow the two companies to strengthen their position in the HR and payroll service market across Europe, the Americas, and Asia Pacific. The combined entity is likely to have an employee base of 6,000 people and will generate revenues worth EUR 700 million.

Dimension Data has acquired an additional 40.1 percent stake in Datacraft Americas Holdings (DCAH), the wholly owned holding company of Datacraft do Brazil, increasing the company's stake to 50.1 percent. Post-acquisition, Datacraft do Brazil will be known as Dimension Data Brazil. The acquisition will enable the company to strengthen its position in the technology markets. The company can benefit from DCAH's expertise in the areas of networking, converged communications, and security in Latin America. The company also aims to enhance its association with Cisco in Brazil through this acquisition.

HCL Technologies has formed an IT alliance with Saba allowing both companies to expand and enhance their offerings across Asia Pacific, Europe, and North America. The alliance aims to offer IT as well as software services to the companies' common customers across various markets, such as media and entertainment, healthcare, financial services, retail, hi-technology, and manufacturing. HCL's back-end IT services combined with Saba's technology will allow the companies to offer a comprehensive package of IT services to their customers.

CDC Software has acquired a majority stake in Vectra Corporation for an undisclosed amount. The acquisition will allow CDC Software to expand its portfolio of offerings in the IT security and service market and strengthen its operations in the APAC region (primarily in Australia). In addition, the acquisition will support the company's consulting and professional services division (Praxa Australia) in Australia.

2007-05-07T02:45:00.000-07:00

Fiserv unveiled its plans to expand its Indian operations by increasing the company's headcount to 5,000 by 2009. Fiserv's Indian subsidiary Fiserv India, has recruited about 1,000 employees since its establishment in 2005. Fiserv India has been offering information management systems and services for the financial and insurance service industries. It specializes in offering various services, such as transaction processing, outsourcing, BPO, software, and systems solutions, to its parent company. Recently, the company has opened a Center of Excellence in India.

Fidelity International has expanded its offshore operations in China by setting up a back-office center in the North-Eastern port of Dalian. The facility is expected to cater to the company's mutual funds and pension business operations in Japan. The center is likely to prove competitive to the company's Indian operations (employing about 9,000 professionals).

The Securities and Exchange Board of India (SEBI), a regulator of securities markets in India, has intervened in the plans of Unit Trust of India (UTI) to acquire a BPO firm. The acquisition aimed at supporting UTI's mutual fund (UTI MF) operations. According to SEBI, an AMC is only allowed to cater fund management, portfolio management services (PMS), offshore fund management, and venture equities companies; however, AMCs are restricted to enter into any other business domains such as BPO.

Oracle is planning to establish a business services division headquartered in New York, which will cater to the financial services industry. The new division will be headed by Rajesh Hukku, the current Chairman and Managing Director of i-flex Solutions. The new division will integrate i-flex's products, such as Flexcube, Reveleus, Mantas, DayBreak, and Insure3, with Oralce's product portfolio. It will also consolidate and manage the financial services software while serving as a vehicle for future acquisitions. Other executives of i-flex who will join the management of Oracle's new division include R Ravisankar and Deepak Ghaisas who will join the team as Vice Chairmen.

2007-05-07T02:44:00.000-07:00

M& A Roundup

Citigroup has entered into a definitive agreement to purchase the outstanding shares of BISYS for about USD 1.47 billion. Post-acquisition, BISYS Fund Services and Alternative Investment Services division will be integrated with Citigroup's operations to create a globally competitive entity in the investment servicing industry and allow it to offer a wide range of product offerings. Subsequent to the acquisition, JC Flowers will acquire BISYS' Insurance Services Group and Retirement Service business from Citigroup. Citigroup is likely to gain USD 645 million from this transaction. JC Flowers also plans to merge Crump, the insurance business of JC Flowers, with BISYS's Commercial Insurance Services to create a leading provider of wholesale insurance brokerage and retirement service solutions.

Fidelity National Information Services (FIS) has purchased Marketing Solutions for an undisclosed amount. The executive team of Marketing Solutions headed by Neal Packard will also join FIS. Marketing Solutions offers Web-based technology products which allow financial organizations to modify offerings, cross-sell products, and maximize client relationships. As a result of the acquisition, Marketing's CRM capabilities, profitability solutions, and relationship pricing structure will be merged with FIS solutions. The transaction will also increase FIS' potential, which in turn, will help the company's clients to make more informed decisions.

2007-05-02T06:31:00.000-07:00

PwC finds fault in Swansea's outsourcing

Big 4 firm PricewaterhouseCoopers (PwC) has found fault with Swansea City Council's £83 million outsourcing deal.

A PwC audit found that the council failed to apply important principles of IT management in the deal, reports Computer Weekly.

PwC's report said that the council failed to check whether the savings Capgemini predicted were accurate.Capgemini was enlisted by the council to replace back-office systems and claimed that the council would save £26 million over two years.

The council stated:

"The PwC report clearly outlines a series of serious weaknesses associated with the development of the e-government programme. As a council we need to frankly admit to the weaknesses and set about creating a sure strategy for ensuring no repetition."

An integral mistake of the council was the failure to benchmark the project against the performance of other councils and their suppliers.Based in Paris, Capgemini operates in over 30 countries around the globe.

via: GAAPweb

2007-04-30T04:04:00.000-07:00

Pharma offshoring will present a $7 billion opportunity by 2013

Outsourcing of drug discovery research is slated to show the highest growth of 26% a year, according to the report by the Pune-based Value Notes

The pharma outsourcing business in India will grow to around $7 billion (Rs28,700 crore) by 2013, as global firms seek to leverage advantages related to cost and quality the country possesses, said a report by research firm Frost & Sullivan.

Another report, by Pune-based research firm Value Notes, forecasts a growth of 23.6% a year for the industry up to 2010.

India is a preferred destination for pharma outsourcing because of the low cost of research but manufacturing in the country and tapping opportunities in contract manufacturing and research is still a relatively new strategy for Indian firms that have traditionally focused on manufacturing and marketing drugs.

The Frost & Sullivan study, titled The Indian Contract Research and Manufacturing Services Market, said the pharma services outsourcing market in India (also known as contract research and manufacturing services or CRAMS) was valued at $895 million in 2006.

Making raw material for medicines (known as active pharma ingredients or APIs) and oral solid formulations (tablets and capsules) continue to be the major sources of revenue for India’s contract manufacturing industry. And of the various segments in contract research, outsourcing of drug discovery research is slated to show the highest growth of 26% a year, according to the Value Notes report, titled Contract Research Opportunity for the Indian Pharmaceuticals Industry.

“These estimates too are conservative, as several of the top Indian outsourcing vendors are pursuing some combination of international expansion and investment in new drug discovery programmes in the product patent regime,” said Suchita Chaudhari, an analyst at Value Notes and co-author of the report .

The key players in the Indian CRAMS space are
Nicholas Piramal India Ltd,
Divis Laboratories Ltd,
Dishman Pharmaceuticals Ltd,
Dr Reddy’s Laboratories Ltd, and
Shasun Chemicals and Pharmaceuticals Ltd (in the contract-manufacturing sector);

Syngene (Pvt) Ltd,
Jubilant Biosys Ltd,
Suven Life Sciences Ltd,
GVK Bio Ltd, Chembiotech (Pvt.) Ltd,
Quintiles Transnational Corp.,
Vimta Labs Ltd,
Lamda Therapeutics Ltd,
Lotus Labs Ltd, and
Siro Clinpharm Pvt. Ltd are the majors players in contract research and clinical research space.

And multinational companies such as Pfizer Inc., GSK Plc., Novartis AG, Eli Lilly and Co., Bristol-Meyer Squibb Co., Teva Pharmaceutical Industries Ltd, etc. have already tied up with Indian companies for both drug development and manufacturing services.

“While (traditional) contract manufacturing, consisting of (manufacturing) API and formulations, has been growing at a phenomenal pace of close to 35%, there are (other) emerging areas (in it) that are also picking up pace,” said Mahesh Sawant, programme manager, biotechnology and life sciences, healthcare practices, Frost & Sullivan.

According to the Value Notes report, global pharmaceutical companies are increasingly turning to Indian vendors offering drug discovery research using newer techniques at much lower costs. Major drug discovery companies are realizing that the question is no longer whether to outsource or not, but one of finding the right partners.

Drug discovery is the process by which molecules are identified for their therapeutic efficacy and can take up to several years. Companies are now finding that improving the hit-to-lead conversion and early identification of unsuccessful compounds can accelerate the process.
While India has enough expertise in areas such as chemistry and drug delivery systems, it doesn’t have enough expertise and enough trained manpower in biological services such as protein structural analysis or expression profiling. This is one of the main challenges facing Indian companies.

The Value Notes report said that Indian firms would enter into various strategic alliances and also acquire companies in India and abroad to build on capabilities to leverage the opportunity.
“There is an increasing trend among Indian contract research organizations to move up the value chain by becoming preferred vendors of a few global outsourcers rather than serving as jack-of-all trades. Preferred vendors often land up with high-margin contracts such as researching and/or developing proprietary technologies for the client,” said Chaudhari.

Source: Mint-WSJ / LiveMint (Plus) Microsoft Corporation for Copy+Paste commnad

2007-04-30T03:52:00.000-07:00

Vertex announces exclusive contract with HSBC

Vertex Financial Services (VFS) today announced that it has signed a new services contract with HSBC Life (UK) Limited for several new protection and life investment products. This is an exclusive contract over the next five years which is expected to generate significant value for both companies.The first phase of the contract is for VFS to deploy its Bond Services solution to provide administration for a new Guaranteed Income Bond (GIB) product range.

Further life investment and protection products for various distribution channels, including IFAs, are also planned.The services provided by Vertex will include:

• Quotations
• New Business
• Policy servicing
• Claims administration

David Child, managing director, Vertex Life, Pensions and Distribution, comments

:"Winning this services contract is a clear demonstration of our market-leading capability in the life, pensions and STP arenas. We are very pleased to work with HSBC Life to help develop and support their insurance growth into new channels and I am confident we will add value as a key partner."

Craig Colton, director, HSBC Life comments:

"HSBC Life is delighted to enter into this new agreement with Vertex, which will give us a really solid foundation to take forward our development plans. Part of HSBC’s insurance growth strategy is to increase the market share of our bonds business and the launch of the GIB and other products with Vertex’s support will be crucial to achieving this."

HSBC Life's new dedicated administration services will be based in Cheltenham.

The new HSBC Life contract for Vertex Life, Pensions and Distribution follows other contract wins in 2006 including AIG/Living Time and Gartmore (Jessop Fund Managers).

2007-04-27T06:35:00.000-07:00

ISG to Acquire TPI for $280Mn

Information Services Group (ISG), a Connecticut-headquartered acquisition company created in 2006 to build a high-growth, industry-leading information service company, has entered into an agreement to acquire TPI, a US-based sourcing advisory firm, for USD 280 million (in cash). The acquisition is subject to the approvals of ISG shareholders and customary regulatory. The transaction is likely to be completed in 4Q 2007.

Post-acquisition, ISG aims to repurchase TPI’s common stock and/or warrants worth USD 40 million, while the founder and members of the management of TPI are likely to invest about 30 percent of their proceeds from the acquisition in ISG stock at closing price.

ISG’s financial and legal advisors for the transaction were Evercore Partners and Simpson Thacher & Bartlett, respectively, whereas TPI’s financial and legal advisors were Deutsche Bank Securities and Ropes & Gray, respectively.

TPI registered revenues of USD 147 million in FY 2006 and expects its FY 2007 revenues to increase by about 15 percent. The company’s headquarters are located in Texas, the US. The company also has operations across Australia, France, Germany, India, Japan, the Netherlands, New Zealand, Singapore, Sweden, and the UK.

It serves several clients, such as AT&T, Bombardier, ChevronTexaco, Diageo, Goodyear, P&G, Pfizer, Singapore Airlines, Volvo, etc., from diversified sectors including energy, financial services, healthcare, manufacturers, pharmaceuticals, restaurants, retail, etc.

2007-04-27T06:33:00.000-07:00

Atos to Provide IT Services for Olympic Games

Atos Origin, a French IT services provider, has won an information technology outsourcing (ITO) deal from the Beijing Organizing Committee for the Games of the XXIX Olympiad (BOCOG). The financial terms of the deal were not disclosed.

The deal entails Atos to offer IT support services including provision of IT products and services for the Beijing 2008 Paralympics Games. In addition, the company will provide system customization, integration, and operations services to the committee for its two information systems – the Games Management System (GMS) and the Information Diffusion System (IDS). Atos will be responsible for designing, developing, and testing these two systems.

In addition, Atos will develop an information system catering to the special requirements of the Paralympic sports. It will also customize existing applications to make them more user-friendly and offer support in Chinese. Atos will also be a sponsor for Beijing 2008 Paralympic Games.

2007-04-27T06:31:00.000-07:00

CSC to Buy Covansys for $1.3Bn

CSC, a California-headquartered IT services company, has entered into a definitive agreement to buy Covansys, a Michigan-headquartered IT services company, for about USD 1.3 billion in cash. The acquisition is likely to be completed by 2Q 2008. The transaction is approved by the Board of Directors of CSC and Covansys. The directors at Covansys have recommended that the company’s shareholders to approve the acquisition.

The acquisition is also subject to customary approvals, such as expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. CSC’s financial and legal advisors for the transaction were UBS Securities and Gibson Dunn & Crutcher, respectively, while Covansys’s financial and legal advisors were Credit Suisse and Butzel Long, respectively. In addition, special legal advisor for the transaction comprised the Board of Directors of Covansys and Katten Muchin Rosenman (a US-based law firm).

Through the acquisition, CSC will nearly double its Indian headcount to about 14,000 employees, thereby strengthening its position in the Indian market.

2007-04-27T06:30:00.000-07:00

About 65% Outsourcing Contracts Ended Before Actual Termination – Compass

According to a study conducted by Compass Management Consulting, a UK-based business and IT consulting company, about 65 percent of outsourcing contracts terminated before the actual date of termination over the past two years. The move was primarily driven by increasing costs charged by vendors as well as distrust among the outsourcing buyers and vendors.

These findings came after the company examined a total of 240 outsourcing contracts worth GBP 3.3 billion awarded over the last 2 years. Among the key findings, outsourcing deals costs about 20 percent more as compared to the cost involved in maintaining a comparable in-house department providing the same functions/services. However, vendors claimed to reduce the cost of maintaining an in-house department by up to 18 percent.

2007-04-24T02:44:00.000-07:00

KPO to Generate Employment for 280,000 People by ’10 – Evalueserve

According to a white paper published by Evalueserve, an Indian KPO company, the Indian KPO industry is expected to generate employment for about 280,000 professionals and earn revenues of USD 11-12 billion by 2010. The industry recruited about 75,000 professionals and earned revenues of USD 3 billion in 2006. The increasing demand for KPO services from small- and medium-sized enterprise (SME) segment and the acceptance of the KPO model are major forces driving this growth.

Among the key findings, the number of SMEs depending on captives or third-party KPO service providers is likely to increase from 900 in 2006 to 5,000 by 2010. In addition, KPO service providers are expected to increase their capacity by 55 percent, while capacity in the captives is likely to increase by 45 percent by 2010.

Vendor model (buy model) is likely to outgrow the captive model (make model) by 2010. The cost and time involved in implementing a third-party vendor solution is less as compared to the time and cost involved in establishing captives. These advantages will encourage SMEs and other big companies to opt for the buy model as compared to make model; about 90 percent of centers are expected to be built on the buy model by 2010.

In addition, KPO vendors have been expanding their operations in Latin America and China to offer their services in multiple languages. About 5-10 percent of the US and European SMEs are expected to benefit from KPO. Dual-sourcing (outsourcing work to their captive and external vendors simultaneously) will be an emerging trend among large companies having captives.

2007-04-20T02:33:00.000-07:00

Quatrro BPO buys out eIndia’s stake

Raman Roy’s Quatrro BPO Solutions has bought out Mauritius-based fund eIndia’s stake in Chennai-based Scope eKnowledge, a knowledge process outsourcing (KPO) firm. Through this acquisition, Quatrro has taken a ‘significant majority stake’ in the 500 people KPO.

This is Quatrro’s fourth big investment in the last 12-18 months. Others include 100% buyout of Flextronics BPO arm and investments in Annik Technology Services, an analytics firm and John Keells, a shipping and ports services company.

Simultaneously, Quatrro has also got an additional funding of $100 million from a bunch of VCs, taking the total VC investment in the company to over $200 million. Olympus Capital is one of the VCs which had invested about $90 million in Quatrro sometime back. Scope eKnowledge is a top-end KPO vendor with services spanning patent filing, knowledge extraction, legal processes and market research. Its clients include Thomson Scientific, Reed Business Information, London Business School and Fortune 100 companies.

Its 500 staff comprise engineers, doctors, radiologists, MBAs and other professionals. Raman Roy, CMD, Quatrro and V Balakrishnan, who spearheads Quatrro’s M&A effort, will be joining the eScope Knowledge board. Interestingly, Scope eKnowledge was set up back in 1987 as a business research organisation and made its foray into KPO space in 2001.

To Economic Times India, Mr Roy said,

``Scope eKnowledge is a top-end research and KPO firm. What excited us was the
kind of work they do and the fact that net margins in such business are almost double of what you can expect in BPO work. Our business model is to support management teams. We will supplement the management of Scope eKnowledge and will not replace it. We are already making joint calls to customers for new business.’’

Typically, for BPO work, the net margins are in the range of 12-15% while in KPO companies it can be double of that. Says R Sivadas, CEO, Scope eKnowledge,

We have a spectrum of clients including Fortune 10 companies and four of the top
10 global publishing companies. KPO business is still nascent in India but we see lot of potential. It is beginning to grow now. We have built a large, trained, qualified team and with Quatrro now we have access to significant domain expertise as well.’’

Besides English, Scope eKnowledge offers services in German, Spanish, French, Korean, Chinese, Russian and other languages. The delivery centre is in Chennai and it also has offices in China, New York, Chicago, Orlando, London, Brussels and Cologne.

With Scope eKnowledge, Quatrro now has 1,300 to 1,400 people and is looking at both organic and inorganic growth options.

source: EconomicTimes India

2007-04-20T02:06:00.000-07:00

Outsourcing Deals’ TCV Declined to $17.6Bn in 1Q’07 – TPI

According to TPI Index report for 1Q 2007, about 68 outsourcing contracts having a total contract value (TCV) of USD 17.6 billion have been awarded in 1Q 2007 as compared to 99 contracts having a TCV of USD 25.6 billion in 1Q 2006. TCV recorded in 1Q 2007 was the lowest as compared to the corresponding first quarters in last five years. In addition, the annualized contract value declined from USD 4.3 billion in 1Q 2006 to USD 3 billion in 1Q 2007.

The total number as well as the total value of commercial contracts (above USD 50 million) awarded in 1Q 2007 in the Americas declined as compared to 1Q 2006 and 4Q 2006. About 27 contracts were awarded in the Americas; the number was lowest as compared to the number of contracts awarded in the corresponding quarters of the past five years.

Among the other key findings, the index revealed that information technology outsourcing (ITO) is increasing as compared to BPO. Managed network services (MNS) outsourcing witnessed better growth rate as compared to ITO in the Americas. However, the European outsourcing market is predicted to grow as large number of ITO deals is yet to be awarded.

According to TPI’s study, annualized revenue from the outsourcing industry is estimated to grow by 3.9 percent in 2007 over 2006. This increase can be attributed to a 4.4 percent year-on-year increase in ITO.

2007-04-19T04:31:00.000-07:00

Biotech Firms Continue to Outsource Drug Development for Another 2 Yrs – E&Y

According to a survey published by Ernst & Young (E&Y), a UK-based professional services company, about 77 percent of companies have agreed that they will continue to outsource their key drug development activities for another 2 years. However, about 65 percent are still dependent on contract research organizations (CROs) to carry out such activities. The survey was conducted among 400 executives from biotech companies across the US, Canada, and Europe.

Improved efficiencies and reduced costs were identified as major factors driving biotech firms to outsource drug development functions. This will create huge opportunities for CROs.

Among the key findings, the percentage of biotech firms outsourcing this function will increase from about 16 percent at present to 36 percent over the next 2 years. In addition, it was evident from the survey that various biotech firms will continue to rely on contract sales organizations (CSOs) to outsource their sales force to achieve benefits, such as efficiency gains, expertise, speed, flexibility, and avoiding capital outlay.

According to another study conducted by HighTech Business Decisions, a US-based consulting firm, several pharma and biotech firms will continue to depend on contractors for assisting them in biomanufacturing processes, such as clinical, preclinical, and early-stage drug development functions.

2007-04-19T02:26:00.001-07:00

Increased Technology Usage Among End Users Drives Firms to Outsource IT Functions – Unisys

According to a study conducted by Unisys, a US-based IT services company, the growing needs for increased IT support and productivity among end users and cost saving initiatives are the major drivers for firms outsourcing their IT functions, such as IT support. Employees have been relying heavily on technology such as PCs, laptops, PDAs, etc., which is driving the need for increased IT support among firms. However, the inability of the in-house IT staff to provide IT support to diverse end users primarily encourage outsourcing of IT functions.

The Unisys Trusted Enterprise Index revealed that about 60 percent of the business and IT professionals across the US and UK believe that outsourcing will affect their organizations’ image negatively among their customers. In addition, a recent IDG Research Services study commissioned by Unisys revealed that a majority of the respondents were unable to properly quantify the benefits out of outsourcing for their businesses.

2007-04-16T04:24:00.000-07:00

Why Finance and Accounting Outsourcing deals never happen or go awry if they do?

It has recently been reported in the press that 30% of offers made to buy houses do not result in an exchange of contracts. Based on research this number is much higher for Outsourcing deals with an incredible 50% of all Outsourcing initiatives never getting to contract signature.
As with many other functions and processes, plans to outsource finance and accounting (F&A) can fail for many reasons. This paper explores some of the reasons why F&A Outsourcing deals can fail and provides you with insight into how to avoid making these mistakes.

An Incredible 50% of Outsourcing contracts never get to contract signature!

Find out all Morgan Chamber thoughts on F&A Outsourcing here [free subscription]

2007-04-16T01:54:00.000-07:00

Citigroup Plans to cut 17,000 Jobs, Revamp IT

Citigroup, a New York-headquartered financial services company, has announced its plans to cut about 17,000 jobs and revamp its entire IT operations. The move is in line with the company’s restructuring plan aimed at achieving cost savings of over USD 10 billion by 2009. About 8 percent of the group’s employees will be affected by the company’s plans of restructuring its operations.

In order to modernize the group’s IT operations, various activities, such as consolidating its data centers, standardizing application development, and modernization of voice and data networks will be performed for its operations across the world. In addition, the company plans to offshore/outsource part of its back-office operations affecting about 9,500 employees to low-cost destinations. The company is also considering increasing the usage of shared legal, human resources, risk management, financial operations, and back-office functions and plans to centralize its entire purchase functions by 2009.

According to Guillermo Kopp, an analyst at US-based research and consulting firm TowerGroup, the group is cutting large number of jobs from non-growth areas and aims to retain employees from high growth areas including global wealth management in the US and corporate banking in Europe.

source: globalservicesnow

2007-04-16T01:53:00.000-07:00

Capgemini plans to open an information technology outsourcing (ITO) center in Katowice, Poland ,with an investment of about EUR 2.3 million. The company has been serving the Polish market since 1996 and employs about 2,000 professionals across the country.

Initially, the center will employ about 135 professionals in 2007, and the company plans to increase the headcount to 410 in the near future. The company aims to offer various ITO services, such as helpdesk, IT infrastructure management, and monitoring of IT system operations, to its clients across the country through the center.

2007-04-16T01:52:00.001-07:00

First Tennessee plans to outsource some of its processing services including checks, statements, mail processing, and its back-office operations of Prescott-based operations center to WNS. The move is likely to affect the bank's 44 employees in its Prescott (Arizona) center and aims at achieving significant costs savings. About 76 employees of the bank will be affected from the bank's operations in Tennessee and Kentucky. Moreover, some of the affected employees are likely to be placed within the bank.

2007-04-11T00:14:00.000-07:00

Revenues from Top 5 European IT Providers to Reach EUR 5Bn in ’08 – Value Leadership

According to Value Leadership Group, a New York-headquartered management consulting firm, revenues from the top five European IT companies (Capgemini, LogicaCMG, Atos Origin, Indra, and Tietoenator) are expected to increase from EUR 2 billion in 2006 to EUR 5 billion in 2008.

Among the key findings, India’s top two IT companies – Tata Consultancy Services (TCS) and Infosys – collectively generated net profit of about USD 1.7 billion in 2006, while the entire European IT industry generated net profit less than this figure of USD 1.7 billion. In addition, the combined market capitalization of the top five IT companies in Europe was USD 23 billion last month as compared to USD 100 billion among the top five Indian IT services firms including Infosys, TCS, Satyam, Wipro, and Cognizant (a US-based company having India-centric operations). However, the European IT market is expected to display various fluctuations by 2009 to compete with their Indian counterparts.

About 92 percent of the German firms are yet to realize the need for establishing offshore operations in India. However, some European big IT firms such as Capgemini have established their presence in India (Capgemini acquired Kanbay in 2006 to access Indian professionals).

Among the other key findings, Infosys’s revenues from Europe are expected to increase from EUR 950 million in 2007 to EUR 1.4 billion in 2008, reflecting a CAGR of 62 percent for the next decade. Even Wipro acquired few niche companies in Europe.

2007-04-11T00:13:00.000-07:00

Hosting IT Infra Benefited SMBs

According to a study titled ‘The Small Business Transition to Hosted Technology: Costs vs Benefits’ conducted by BizTechReports.Com, a US-based reporting agency, small and medium businesses (SMBs) that outsource their IT infrastructure are benefited more than those that maintain their in-house IT department. About 54 percent of SMBs (those who outsource their IT infrastructure) revealed that they spent less than 5 percent of their revenues to upgrade IT infrastructure, while about 64 percent of the organizations (those who do not outsource) revealed that they spent more than 10 percent of their revenues on IT infrastructure.

Among the key findings, companies outsourcing their IT infrastructure are better in terms of frequency of security incidents or incidents of technical failures as compared to the companies who do not outsource their IT infrastructure. In addition, the outsourcing organizations gain exposure to cutting-edge technologies and approaches such as Software as a Service (SaaS) much ahead than their non-outsourcing counterparts.
According to Lane Cooper, the CEO of BizTech Reports.Com, outsourcing IT operations allows companies to focus on their core businesses and to achieve business objectives.

2007-04-11T00:11:00.000-07:00

Firms in Automotive, Manufacturing, and High-tech Industries to Outsource IT and BPO Back-office Functions – EquaTerra

According to a study conducted by EquaTerra, firms across various industries including automotive, manufacturing, and high-tech in North America have been increasingly outsourcing their back-office IT and business processes functions to external vendors to remain globally competitive. In addition, reduced cost, improved customer satisfaction levels, and enhanced performance are the major factors driving the need for outsourcing such functions.

It has been discovered that firms across the three industries have been outsourcing their IT, call centers and CRM, finance and accounting, contract manufacturing, logistics, application development, and engineering functions for a long time. At present, they need to focus on outsourcing back-office IT and BPO.

Among the key findings, about 32 percent of firms revealed that they outsourced at least 1 process and are expecting to outsource few more processes in the future. About 38 percent of firms are expected to outsource their functions to new geographies or business units while about 29 percent are expected to expand their existing outsourced process areas.

According to EquaTerra, big outsourcing vendors are expected to offer a wide range of services in other areas, such as R&D, logistics services, document services, warranty, and after-sales services. However, the number of vendors offering multiple services across various geographies will not be substantial. In addition, it is expected that organizations will outsource their back-office BPO functions to low-cost destinations, such as India or China, and leverage those markets as well. However, Central and Eastern Europe will remain the preferred destination among buyers.

2007-04-09T00:36:00.000-07:00

About 72% of Irish Firms Prefer IT Outsourcing – ICS

According to a study by the Irish Computer Society (ICS), the national body for ICT professionals in Ireland, about 72 percent of the Irish organizations outsource their IT operations, while the remaining 28 percent do not outsource their IT functions due to factors such as uncertainty regarding providers’ ability to supply the required level of service, apprehension about the realization of outsourcing benefits and goals, and concerns over the management of the outsourcing providers.

In addition, hardware maintenance, application development, application support, website development, and consultancy were cited as the most frequently outsourced IT functions. In terms of sectors, public sector organizations prefer to outsource application development and hire consultants, while private sector organizations outsource hardware maintenance.

The study estimated that although the smaller organizations do not have appropriate IT infrastructure and human resources, they outsource less as compared to large organizations. Only 4 percent of the organizations outsource the entire IT functions to external vendors.
The study revealed that the IT outsourcing among the various Irish firms was driven by the provision of additional IT services and not cost reduction.

2007-04-06T02:34:00.000-07:00

Delphi has announced its plans to offshore about 650 finance jobs from its worldwide operations to Genpact. The move is in line with the company's plans to restructure its operations and exit court protection.

According to the papers filed by Delphi with the US Bankruptcy Court in Manhattan, the company has signed a deal with Genpact under which Genpact will provide finance-related functions, such as bills and receipts processing, travel and expense reporting, accounts receivable, and accounts payable. Through the deal, Delphi is likely to save about USD 150 million over the 88-months term of the deal. The company is expected to spend USD 220 million (including payments to Genpact) to shift its finance-related functions to Genpact.

2007-04-06T02:33:00.000-07:00

IBM has expanded its presence in India by opening a new Autonomic Computing Technology Center in Bangalore, India, to cater to the needs of self-managed autonomic technology and systems among its Indian business partners and clients. The facility will primarily aim to focus on IBM's global Autonomic Computing initiative and will enable IBM to create and provide systems equipped with in-built intelligence to the Indian market and will help in simplifying IT complexity for clients. Employees in the center will work in association with various other software development centers of IBM, including IBM India Research Laboratory, across the globe to develop autonomic solutions.

2007-04-06T02:32:00.000-07:00

According to a study conducted by Frost & Sullivan, although healthcare information technology (HIT) market in the US is currently in its early stages, the market is expected to offer considerable growth opportunities for HIT vendors in the near future.

The federal government has been significantly focusing on electronic health records, which is driving growth opportunities for the HIT industry. The study also revealed that vendors must focus on educating third-party payers about various benefits of HIT solutions. In addition, vendors should also educate insurance companies and other organizations about benefits derived from implementing HIT systems. Among the other key findings, reasons, such as lack of technical expertise and professionals, need for workflow changes, and lack of awareness on HIT are major factors hampering the adoption of HIT by various physicians. However, independent physicians are more reluctant to HIT adoption than salaried physicians.

2007-03-22T03:35:00.000-07:00

According to recent 4Q 2006 Outsourcing Pulse Surveys conducted by EquaTerra, the demand for outsourcing in the overall BPO and IT outsourcing markets has grown at a slower rate in 4Q 2006 as compared to 3Q 2006 and 4Q 2005.

The number of expected deals grew to 61 percent in 4Q 2006 as compared to 48 percent in 3Q 2006 and 67 percent in 4Q 2005. The study also anticipated a low growth in the outsourcing market during 1H 2007. This slow growth is primarily driven by multisourcing and capacity constraints among BPO service providers. The study also revealed that outsourcing of non-traditional functions, such as document and imaging services, legal processing, knowledge process outsourcing, and logistics services are expected to grow significantly in terms of demand as well as supply in 2007. The existing renegotiations for outsourcing deals among buyers and suppliers were not the main reasons for slow growth in the outsourcing industry. However, it has been predicted that large outsourcing vendors will be able to retain a majority of their business with their existing buyers.

According to a recent study by AT Kearney, the US firms will not be benefited (in terms of cost savings) by offshoring their IT and back-office work to destinations, including India and China, in the next 20 years due to rising wages and price inflation in such countries. Among the key findings, the average wages for the programmers in India, China, and Eastern Europe grew by up to 40 percent in 2006 as compared to up to 10 percent for their US counterparts. Despite this fact, majority of US-based companies, such as Accenture and IBM, are establishing/expanding their offshore units in countries such as India and China, in order to leverage the low-cost labor market in such countries.

It is evident that Indian professionals' wages are 40-60 percent less as compared to their US counterparts.

2007-03-20T07:23:00.000-07:00

Indian Salaries Saw Highest Growth in A-Pac in 2006

Working in India could not have been better at any other time considering the salaries that the market is offering. Employees across industries in India saw their salaries increase between 11.9% and 16% (average 14.4% increase) in 2006 over the previous year, according to Hewitt Associate’s 11th annual Salary Increase Survey released a few days ago. This makes 2006 the fourth consecutive year in which salaries grew by double digits.

India’s salary increase was the highest in the Asia Pacific region. Not surprisingly, China came second to India; but at 8.3% average increase in 2006 over the previous year, its percentage increase still quite behind India.

While forecasts for 2007 are more or less along the same lines as 2006, the numbers for Singapore make one sit up. From an average salary increase of 4.6% in 2006, it is expected to see an increase of 8.9% this year. The Philippines, too, which is seeing increasing international investment, will see a much higher increase in 2007 (8.9%) than in 2006 (8.2%).

Average Salary Increases in Asia Pacific :

Country Year 2006 (%) 2007 (expected) (%)

India 14.4 14.5
China 8.3 8.2
Philippines 8.2 8.9
Korea 7.4 7.4
Thailand 6.5 6.6
Malaysia 6.2 5.9
Australia 4.8 4.4
Singapore 4.6 8.9
Taiwan 4.3 4.4
Hong Kong 4.0 3.9
Japan 2.6 2.7

While salary hikes may be good news for employees in India and other Asia Pacific countries, it may not be so for Western companies that have taken to increasingly source IT and business services from the Eastern hemisphere. Salaries comprise a large component of the total cost of offshoring incurred by customer companies.

Yet, a recent McKisney studies argues that rising wages in India do not impact the overall cost. It presents data to show that other costs — technology, infrastructure, staff productivity, shift utilization — if managed efficiently keep the fully loaded cost of offshoring low.

Yet, India’s offshore market is likely to maintain its low-cost labor advantage over countries such as the U.S.A. and U.K. for at least the next two decades, according to Everest Research Institute’s 2006 Global Sourcing Market Update.

source: GlobalservicesMedia, Everest Research Institute

2007-03-20T07:21:00.000-07:00

No Plans to Divest Indian BPO Unit: HP

Hewlett-Packard (HP), the U।S.-based PC giant, has no plans to sell its Business Process Outsourcing (BPO) business in India, according to media sources. The firm’s Business Development and Communications Head in India Arundhati Chakraborty confirmed the information. In fact, the company is planning to increase headcount in its Indian BPO unit 20% from the current strength of 6,500 employees to 7,800 employees over the next one year.

The company is also planning to ramp up its operations with headcount and infrastructure additions as well as new contract wins.

via: globalservice media

2007-03-05T01:44:00.001-08:00

According to a study conducted by IDC, the Philippines IT and telecom spending is expected to grow by 10 percent during 2007. About 67 percent of the IT spending is expected to be contributed by hardware, while about 68 percent of the total telecom spending will be contributed by wireless services. The Philippines IT industry is expected to witness a shortage of human resources in 2007 due to the widespread outsourcing of the Philippine IT professionals to ASEAN countries. The study also predicted that the Philippine BPO industry will try to reposition itself as a quality-of-service destination rather than a cost-reducing destination in order to compete with various emerging countries such as China, Vietnam and Eastern European countries in the BPO space.

According to the recently released Indian budget, all the services carried out in the contract research and clinical trials industry was proposed to be exempted from the services tax of 12.24 percent. The proposal has been approved by the Indian Parliament and the exemption will be enforced from April 1, 2007, in India. The move will help to boost the growth of contract research organizations (CROs) as well as encourage international pharmaceutical firms to establish their CROs and outsource clinical trials to India.

2007-03-05T01:42:00.000-08:00

Annual Banking IT Budget to Increase by 30% by ’10 – Deloitte

According to the latest study by Deloitte, the annual IT budget of the banking industry is expected to increase from 6 percent in 2006 to 30 percent in 2010. Several banking organizations around the world will increase the percentage in their IT budget to secure technology services from various offshore providers operating from low labor cost countries, such as India and China, in the next three years.

The study also reported that the banks have started relying on offshore service providers, as they have moved away from outsourcing low-level work. At present, banks consider offshoring as a basic necessity and not just a cost-cutting strategy. Also, offshoring of technology workers help in savings as the Indian programmers receive 40-80 percent less than their US competitors.

According to the study, shifting bank’s IT projects to an offshore service provider could save about 40 percent in their IT budgets. It also claimed that extensive salary hike reduces the cost savings offered by offshore outsourcing. About 55 percent of the banking IT executives expect offshoring costs to increase by about 10 percent in 2007, while 36 percent expect a decline in the costs.

2007-02-26T04:36:00.000-08:00

U.S., India Adjust Policies to enable greater trade in high technology

The U.S.A. and India agreed to begin adjusting their policies to enable greater trade in high technology, part of efforts to cement their fast-growing economic and political relations.

The U.S.-India High Technology Cooperation Group produced plans to ease U.S. export controls for selected Indian buyers, while tightening India’s regime governing exports of industrial items with military applications, US Assistant Secretary of Commerce Christopher Padilla told reporters.

The United States is committed to “clear up the Cold War cobwebs” of U.S. curbs on dual-use technology that imposed restrictions on pro-Soviet India, he said after the two-day meeting of government officials and business executives.

Washington has identified Indian technology companies that will be eligible for the U.S. “Trusted Customer Program” of streamlined or waived licensing requirements for buyers with good records of compliance with nonproliferation treaties.

India would be included in a program, proposed last year and under U.S. governmental inter-agency review that will also cover China and other states, Padilla said. To facilitate trade in chemicals, military supplies and other technology, Washington presented lists to New Delhi of products for which it wants India to bring its policies in line with international anti-proliferation standards.

Experts from the two countries would meet in several months and conduct a

“product-by-product comparison of the Indian control lists with the four major multilateral control regimes,”

Padilla said.

India’s policies on exports of nuclear technology and missiles were getting close to those of the Nuclear Suppliers Group and the Missile Technology Control Regime, he said.

India was also moving closer to harmony with the controls of the Australia Group, which aims to prevent chemical and biological materials from being sold to countries or others that would use them in weapons, said Padilla.

New Delhi still needed to close large gaps in its policies with those of the Wassenaar Arrangement, which governs dual-use items and conventional weapons, he added.

The United States and India dramatically advanced their relations in 2005 when visiting Indian Prime Minister Manmohan Singh and President George W. Bush signed a host of agreements, including a deal that, when finalized, would allow US sales of civilian nuclear equipment and fuel to India.

via: Globalservicesmedia

2007-02-22T01:54:00.000-08:00

Russian ITO Market to Grow by 40%-50% in 2007: neoIT

In 2007, Russian Information Technology Outsourcing (ITO) market will grow by 40%–50%, says a study by neoIT — a management consulting firm. Russia is currently the third largest IT outsourcing supply market, behind India and China. Russian IT companies are specialized in high-end software and embedded software product development, which acts as a differentiator from lower-priced offerings from Indian companies, according to the research.

The study predicts the key trends for 2007. The key trend this year is business transformation, which global companies will leverage to improve time-to-market, gain new business, standardize processes and significantly lower costs.

“Business transformation through services globalization is one of the most important levers that global companies can no longer afford to ignore,”

stated Atul Vashistha, CEO, neoIT.

“We see the services globalization industry continuing to grow at a brisk rate of 25%–30% in the coming year, as more and more companies ramp up their services globalization initiatives.”

The new report looks at the factors that contribute to the growth in services globalization and identifies several trends. The report also takes an in-depth look at the impact that the increasing number of sophisticated buyers, who now have several years of global sourcing experience, will have on the industry.

On the supplier side and perhaps more relevant for Indian companies, the report says, competitive forces are leading to increased supplier sophistication. The year 2007 will see an increased focus among service providers on developing industry-specific subject matter expertise through acquisitions. In fact, acquisitions will be a continuing trend in 2007 with the report saying that Eastern companies will acquire Western outfits to gain a global footprint and venture into services that demand a significant onshore presence. The companies based in the West will take a keen interest in setups in the East to stay competitive as well as explore eastern markets, which are not only cost effective delivery locations, but also rapidly emerging markets by themselves. Geographically, new locations are emerging, although India will continue to lead the supplier market, with Europe showing strong growth.

The research brief also predicts that billing rates will go up amongst the Tier 1 suppliers by two to three percent due to the growing demand for skilled resources, rise in wages and increased overheads incurred in maintaining quality or ensuring tight security.

The report also says that despite the ongoing debate about Tier 1 versus Tier 2 cities and concerns of wage inflation, attrition and infrastructure issues, Indian Tier 1 cities (NCR, Bangalore, Chennai, Hyderabad and Mumbai) will grow at a continued pace in attracting offshore delivery work, through 2007. The European market for global services is also expected to grow at a faster rate with European companies offshoring to India, China and the Philippines and other lower-cost locations, depending on the language and culture-dependence of the particular service.

Source: NeoIT, Global Services Mag

2007-02-19T02:12:00.000-08:00

Remote Infrastructure Management Outsourcing (RIMO) Market Growth to Exceed US $8 Billion over Next Five Years

The Remote Infrastructure Management Outsourcing (RIMO) market is likely to exceed US $8 billion over the next five years, according to a new report released today by the Everest Research Institute.

The RIMO market, an emerging Infrastructure Outsourcing (IO) model, is growing at approximately 60 percent annually. According to the Infrastructure Outsourcing Roadmap report, 75 percent of this growth is attributed to renewals of pilot contracts with significant scope increases with the remaining 25 percent is attributed to new deals. The Roadmap report also provides insights into the benefits of RIMO for buyers, such as enhanced flexibility in IT asset ownership arrangements and increased control over IT service delivery, as well as discusses suppliers’ challenges in meeting these new trend demands. The report is the first of a series of four studies to be released this quarter by the Institute’s newly formed ITO Research Group, established to analyze the ever-changing ITO marketplace in greater depth and provide actionable insights into its future evolution.

“While the Infrastructure Outsourcing market appears calm on the surface and is growing in line with the overall IT industry,”

said Ross Tisnovsky, Vice President, ITO Research Group,

“there are significant structural changes in the market itself that are driven by emergence of new technologies in infrastructure and fundamental changes in the IT asset ownership dynamics.”

The report series will progressively build the picture of the IO market trends and dynamics through analyses of the effects on key market stakeholders relative to four key market developments:
(1) arrival of the labor arbitrage in the IO market;
(2) changes in the asset ownership dynamics;
(3) emergence of new business models in IO; and
(4) emerging global locations for offshore infrastructure management delivery.

The first report, Infrastructure Outsourcing Roadmap, revisits the IO market history and reviews the prevalent business models in this market (traditional outsourcing, managed services and RIMO). After an examination of the fundamental drivers of the new models, such as RIMO, the study describes the entry of the offshore suppliers and their approaches to the market’s growth. The report also discusses the economic rationale behind traditional and RIMO models of service delivery, defines the impact of labor arbitrage, and offers a balanced view of the growth prospects and next steps for the market constituents.

Following the Roadmap report, forthcoming reports this quarter from the Institute’s ITO Research Group are:

“Asset-light Outsourcing Model” will offer insights into one of the most important drivers of changes in the IO market – the IT asset ownership trends in an infrastructure outsourcing deal. The report will cover the historical reasons for asset ownership transfer in the IO deals and changes in the ITO landscape, which have prompted buyers to reconsider their asset ownership strategies. This report will also examine the decoupling of asset control from asset ownership requirement through remote management tools, the emergence of third-party financing alternatives, and looming changes in accounting that will further decrease the benefit of asset ownership transfer.

“Growth of Infrastructure Management Outsourcing” will predict growth scenarios for RIMO market and outline effects on the overall IO market. The report’s findings will be gleaned from an analysis of key market forces shaping the IMO marketplace that determine IMO growth prospects, as well as an outline of the Institute’s growth model for the RIMO space that incorporates the effects of key market forces and defines a mathematical model of key signing and renewal dynamics in the RIMO market.

“Selecting a Location for Remote Infrastructure Management Service Delivery” will provide a high-level view of the emerging global locations for offshore infrastructure management service delivery and identify the most attractive cities in pre-selected geographies by utilizing the Institute’s proprietary location selection methodology.

2007-02-13T22:39:00.000-08:00

ChrysCapital to Sell Global Vantedge BPO to ACG

According to media sources, ChrysCapital, an Indian private-equity firm, and other shareholders are expected to sell their respective stakes in Global Vantedge, a US-headquartered credit and receivable management BPO services provider, to Aegis Communications Group (ACG), a US-based CRM BPO services provider, for about INR 1 billion.

Chrys Capital holds a 75 percent stake in Global Vantedge. The BPO firm has been offering credit and receivable management services to various clients including credit card companies, telecom operators, and auto companies catering primarily to the US and UK markets through its two Gurgaon-based centers in India since 2001.

Aegis has been operating from its 24 centers across the world offering a wide range of CRM services including customer acquisition and customer services, back-office services, and value-added services catering to the telecom, retail, financial services, energy, education, and logistics verticals. It employs about 9,000 professionals in India and the US.

2007-02-05T01:22:00.000-08:00

About 80% Clients Satisfied with BPO Operations

NASSCOM-McKinsey

According to a study conducted by NASSCOM-McKinsey titled, ‘Operational Excellence: The Next Frontier in Offshoring’, about 80 percent of clients are satisfied with the performance of BPOs. The study is in continuation of the two companies’ report regarding India’s ability to generate about USD 60 billion from IT/BPO export.

In addition, the pressure on various offshore companies is likely to increase due to high expectations from clients. Among the key findings, the study indicates that there is scope for various BPO firms to reduce cost by about 20-30 percent, and for IT firms to increase EBIT margins by about 3-6 percent.

In the BPO domain, the priorities of clients will shift towards other benefits, such as innovation and productivity, once the offshore services are well established. In addition, there is a lack of consistent performance across various companies due to inadequate recruiting practices. Owing to high retention rates, the performance of data-based operations is better than voice-based processes.

However, in the IT domain, the IT service providers are estimated to improve performance and consistency across six practice areas, including requirements gathering, solution design, and training. Despite client satisfaction and strong outcomes, inconsistencies are reported in issues, such as solution design, training, and recruitment. There has been a significant increase in clients seeking upstream services such as requirements gathering and solution design. At present, these services are not strong enough to competently meet a client’s demands. The leading IT performers are expected to increase salaries in the range from 15 percent to 18 percent, without impacting their profit margins.

According to Kiran Karnik, President, NASSCOM, India is the leader in the global offshoring market with about 50 percent market share. Companies need to focus on operational excellence to achieve the target of USD 60 billion from IT/BPO export revenues by 2010.

2007-01-29T04:10:00.000-08:00

Pharma Firms to Expand Outsourcing Scope : EquaTerra

According to a report, ‘Outsourcing trends in the pharmaceutical industry’ by EquaTerra, about 44 percent of the pharmaceutical companies that have already outsourced one or more IT or BPO services are likely to outsource a few more functions, including HR and finance, during 2007. While the primary reason for IT outsourcing is cost reduction, BPO services also help to improve costs as well as processes.

Among the key findings, while about 39 percent of the pharmaceutical companies are planning to outsource their activities to new geographies or business units and about 22 percent are likely to expand their existing outsourcing activities. The firm also reported that none of the companies are planning to reduce their outsourcing activities.

The organization also confirmed that IT is the most common process that is being outsourced by pharma companies. About 72 percent of the pharmaceutical firms are already outsourcing their IT services, while the others are either planning to or have no intention to outsource. In addition, the survey claimed that business process functions, such as call centers, finance, and human resources in the pharma industry are still in the nascent stage and are expected to mature gradually.

In the BPO domain, the most common processes which are outsourced in the pharma domain include call center or CRM services. The report also highlighted the increase in outsourcing activities in clinical trials, R&D of new drug, and developing drugs in the future.

2007-01-25T02:25:00.000-08:00

Indian IT-ITeS ‘07 Export Revenues Expected to Increase 32.6% to $31Bn – NASSCOM

According to a study by NASSCOM, an Indian IT and BPO industry trade lobby, export revenues of the Indian IT- ITeS industry for FY 2007 are predicted to increase at a rate of 32.6 percent to reach USD 31.3 billion as compared to USD 23.6 billion (an increase of 33.3 percent) in FY 2006. In addition, the total IT industry, including hardware sales, is predicted to reach about USD 47.8 billion in FY 2007 and USD 100 billion by FY 2010.

The IT industry is forecasted to contribute about 5.4 percent to the GDP of the country in FY 2007 as compared to 4.8 percent in FY 2006. A recent study of India’s IT and BPO sector, conducted by NASSCOM and McKinsey, predicted that the industry to be worth USD 60 billion by 2010. The current NASSCOM estimates are in line with the prediction. NASSCOM also predicts that the software exports will be required to grow at a CAGR of 24.2 percent for the next four years in order to achieve the target.

In addition, NASSCOM expects that the employment level in India’s software and services sector will reach the 1.6 million mark in FY 2007, representing a growth of 26 percent over the previous year. The export services contributing to the growth of the IT industry are expected to account for USD 18.1 billion in the FY 2007. The UK and the US were the largest market for exports in FY 2006. The Americas accounted for about 67 percent, Europe for 25 percent, and rest of the world for 7.7 percent.

Among other key findings, the domestic IT industry is anticipated to grow by 21 percent to generate revenues worth USD 15.9 billion in the fiscal year, with the software and services segment accounting for majority of the growth. The domestic hardware will contribute USD 7.6 billion, while USD 5.6 billion is expected to be attributed by services, followed by USD 1.6 billion from software and USD 1.2 billion by the BPO sector. MNC investments over the next few years are expected to exceed USD 10 billion for FY 2007.

2007-01-25T00:14:00.001-08:00

Outsourcing grows up

Many outsourcing deals are tantamount to strategic divestitures and joint ventures. Executives should start treating them that way.

Read the McKinsey Quarterly article, Pretty OLD, but interesting

http://www.mckinseyquarterly.com/article_page.aspx?ar=1582&L2=5&L3=4

2007-01-22T06:44:00.000-08:00

About 3.3% US IT Budgets to be Spent on Offshoring in ‘07 – SIM

According to a study by the Society for Information Management (SIM), a Chicago-based professional society of IT executives, about 3.3 percent of the IT budget will be spent on offshore projects in 2007 in the US, while about 9.3 percent of the IT budget is expected to be spent on domestic outsourcing.

In addition, about 66 percent of the respondents stated that they will not spend their IT budgets for outsourcing in 2007. Many companies are planning to establish in-house IT support infrastructure and are expected to spend about 33 percent of their IT budgets for training IT staff. Most of the IT professionals favored domestic outsourcing over offshoring. The companies providing IT support to various firms located in London are expected to gain more business, including outsourcing of IT infrastructure and applications, from the capital.

2007-01-18T05:34:00.000-08:00

Demand for Outsourcing Growing Slowly – EquaTerra

According to EquaTerra 4Q 2006 Outsourcing Pulse Surveys, the demand for outsourcing in the BPO and ITO market is growing at a slower pace as compared to the growing rate of earlier years. The organization reported that there has been a decrease of about 13 percent in the last quarter of 2006 as compared to 3Q 2006 and 4Q 2005.

Among the key findings, the non-traditional functions, such as document and imaging services, legal processing, knowledge process, and logistics services outsourcing increasingly depends on both supply and demand. Also, there has been an increase in the multi-provider outsourcing that allows the client to have the best for each of its process. However, the multiple services provider model can be ranked as complicated as well as expensive as compared to outsourcing services to the single services provider.

In addition, most of the clients outsourcing their processes underestimate the cost and complexity related issues while performing Outsourcing Management and Governance (OM/G) activities, including the governance organization’s staffing, the costs related to the third-party services, such as lawyers, advisors, etc., and the costs related to the software support for OM/G activities. The above mentioned reasons are often considered as one of the root causes for problems related to outsourcing.

According to Stan Lepeak, Managing Director – Research, EquaTerra, most of the outsourcing contracts awarded during the late 1990s and early 2000s were not structured properly, which used to create problems either for the service providers or clients.