Outsourcing Times

NWC Invites bids from outsource service providers for motor vehicle fleet maintenance

According to an article published by The Jamaica Observer, the National Water Commission (NWC) is looking for a suitable outsource partner to take over the management of NWC's motor vehicle fleet. This announcement led to some resentment among NWC staff, and the management of the Commission issued a statement clarifying that the move will not automatically lead to job loss. NWC has a total employee strength of 2000, and only a miniscule number of 16 is involved in maintaining the motor vehicle fleet.

NWC's Public Relations Manager Charles Buchanan said that many of the 400 vehicles belonging to NWC were not able to perform the required tasks, and this makes it necessary for the Commission to look at ways in which the fleet can be augmented and managed. Among the tasks that a successful bidder for the outsourcing contract needs to perform are purchasing of the entire motor fleet and replacing it with a suitable fleet, maintaining the fleet and repairing vehicles where necessary, and providing a management system that will extract maximum advantage out of the fleet. The Jamaica Observer reports:

Clarifying the issue that had raised some concerns among NWC staff after advertisements appeared in the newspapers on Sunday and Wednesday, NWC's Public Relations Manager Charles Buchanan said Thursday that the process did not necessarily involve job loss and that, in any case, there would have to be consultations prior to the change.

Read More: NWC outsourcing management of vehicles 

Outsourcing leaves negligible impact in the US, reports The Dallas Morning News

According to a report published in The Dallas Morning News, there has not been much of an impact in the US because of outsourcing. The report, based on a research study of outsourced industries like information technology, concludes that outsourcing is no longer providing much benefit to the American employers, and the adverse effect of outsourcing on the wage structure and job situation in the US is far less.

The opening of new ventures in the US by foreign companies has also offered new job avenues for professionals in the US. The US continues to attract companies who want to take advantage of the R&D facilities available here. Among the companies who have started new business ventures are Texas Instruments, which is setting up a semiconductor plant near Dallas. The Conference Board has confirmed that only a few jobs in the US has moved out of the country. Sify.com reports:

The New York research group noted that till 2003 only 1.5 million jobs in the service sector had migrated from America. The number is expected to rise to 4.1 million within three years (still too small to make an impact on the American job market), the group said.

Read More:  Study says no big impact in US due to outsourcing

India may lose its competitive edge in the BPO industry, says Gartner report

The boom in the Indian outsourcing industry, particularly the BPO sector, may well be over. The country has exhausted its skilled labor force, and new projects that are outsourced to India may not enjoy the same level of expert work force. Gartner has recently reported on a slowing down in the Indian BPO sector because of a shortfall in skilled workers. Gartner has also expressed concerns over other factors like rising costs and security threats in India, which may hamper outsourcing.

According to a government report, the demand for skilled labor is far outweighing the supply, and there may be a shortfall of 260,000 workers by the year 2009. This will also lead to many professionals switching jobs for career advancement, and in turn employees will be forced to attract professionals by offering them better pay packages. These factors will lead to escalation of costs, and India may well lose its edge as a low-cost destination. The Financial Express quotes the Gartner report:

Quality, too, is likely to suffer as the top available talent has already been absorbed by the industry. As a result, service providers have no option but to recruit from a level below their optimum requirements. This makes high-quality in-house training a critical factor.

Read More:  ‘Poor quality, security may dent BPO industry’

SolidWorks Corporation to take advantage of CAD potential in India

Design is an important aspect of any product, and one such application is computer-aided design (CAD), which gives a 3D effect to designs created on the computer. According to France-based SolidWorks Corporation, India represents a tremendous potential in the outsourcing of the 3D designing software market. India is already the home of many IT business processes that have been outsourced from Western countries, and it is quite natural for India to add the 3D market to its services.

To leverage the situation, SolidWorks Corporation is planning to build its presence in India. This was confirmed by Ved Narayan, vice president at SolidWorks for the Asia Pacific region. The company already has 8-9 percent CAD market share in India, and views the potential to grow from there. Business Standard reports:

Another key factor for the increasing scope of electronic 3D design in India is the country’s becoming a host for knowledge process and design outsourcing. This has been vindicated by a Nasscom study that says the field of outsourcing in engineering design services to be between $7 billion and $12 billion.

Read More: Outsourcing fuels 3D designing software mkt

BPO company PeopleSupport bags market excellence award for 2004

The Philippine Marketing Excellence Award for 2004 has been conferred on PeopleSupport. The award is for excellence in call center industry in Philippines. PeopleSupport is an offshore BPO that provides customer management and accounts receivable management services to organizations based in the US. The company has been jointly recognized by Philippine Marketing Excellence Awards Institute, the Asian Institute of Marketing and Entrepreneurship and Sales and Marketing Magazine for emerging as a leading service provider in the BPO industry, and for spreading the awareness of the potential of the BPO industry in the Philippines.

The company has utilized best practices to be available for service all over the country. Sun Star quotes Bong Borja, Vice President of Global Operations for People Support and President of PeopleSupport (Philippines):

PeopleSupport is proud to be recognized as a leading BPO company in the Philippines.

Read More: Business outsourcing firm receives most outstanding call center award

ARINSO and ISS engage in €12.5 million HR services contract

The Netherlands was recently in the news as an emerging destination in Europe for outsourcing. A step in this direction is the first major outsourcing agreement in the HR services sector between ARINSO People Services and ISS Facility Services. Under the agreement, ARINSO will provide HR services to ISS, which is one of the global leaders in facility services groups. The contract extends over a period of five years, and is worth €12.5 million for ARINSO.

As per the terms of the contract, ARINSO will manage the administrative HR services for more than 22,000 ISS employees in the Netherlands. the services will be extended by ARINSO from its service-base in Utrecht. ARINSO is a subsidiary of ARINSO International, which has a presence in 23 countries worldwide and recorded a net sales figure of €153 million for 2004. Consultant-News.com reports:

Under the terms of the agreement, ARINSO will take over ISS staff and operate the administrative HR processes for more than 22,000 ISS employees in the Netherlands. As part of the contract, ARINSO will set up an HR Shared Service Centre.

Read More: ISS & ARINSO sign first HR outsourcing agreement in the Netherlands

IBM to provide data management services to Banco Sabadell

IBM is fast emerging as a service provider in the outsourcing industry. Following its agreement last year with the Portuguese bank Banco Santander Totta to provide operational support to all the 640 branches of the bank across Portugal, IBM has now signed an agreement with another financial institution: Banco Sabadell, which is Spain's fourth largest banking network, has sought the services of IBM for maintaining the bank’s information technology infrastructure. This includes the management of the data processing center and security and recovery of the bank's total infrastructure.

With this deal, the expected savings for the bank will be in the region of €42 million. After the IBM deal, the bank will be able to concentrate on its other business requirements. Banking Technology quotes Miguel Montes, deputy general manager of IT and operations at the bank:

This agreement reinforces Banco Sabadell's capacity to face growth challenges and is an important step to achieving the efficiency goals established in our three-year strategy plan 'Value and Growth'

Read More: Banco Sabadell signs 10-year outsourcing deal with IBM

AB Volvo records rapid growth in India, expands components outsourcing

AB Volvo, the Swedish commercial vehicle company, announced that it will increase its components outsourcing from India from $75 million in the current year to $100 million next year. This step is in line with other giants like General Motors and DaimlerChrysler who have leveraged the low cost of Indian vendors. Volvo has had a presence of more than seven years in India, but initiated sourcing of work in 2003.

In the last two years, Volvo has doubled its outsourced work. The company expects this growth trend to continue over the next two years, in spite of the slow growth in infrastructure development. Volvo is already planning new ventures in India, such as setting up an R&D center with MindTree Consulting. Initially, this center will cater to the development of engine and engine parts. Sify.com reports on other ongoing activities of Volvo in India:

Volvo, which started assembly operations in 1998 in the country, started sourcing from 2003 with $17.5 million worth of exports. Since then, it has outsourced $32.5 million in 2004 and $75 million this year. The Indian arm has also started exports of trucks to South Korea and buses to Bangladesh. Year-to-date, the company has exported 88 units. The Indian arm has a capacity of 1,300 vehicles per year.

Read More: Volvo to raise components outsourcing

‘India’s share of world BPO market to be $20 billion by 2008’

According to Farzine Fazel, a partner at Capco, India is one of the best outsourcing alternatives for companies based in the UK and those belonging to the European Union. Capco is a $100 million software company based in the US, and it has a presence in India. Fazel was in India, and was responding to queries on his company and the general European outsourcing scenario.

According to Fazel, the BPO market around the globe is around $300-544 billion, of which $20 billion will be India's share by the year 2008. Capco aims to transform operating models in the BPO sector. This is an important juncture in the industry's progress, as a second wave of re-engineering is beginning to occur, where financial institutions are including transformation programs in their agendas. Sify.com quotes Fazel:

We intend to provide BPO and technology solutions aimed at preempting some of this effort. Finally, our work in transforming operating models of a few leading firms in the sector has enabled us to develop leading edge solutions that we intend to deploy in providing outsourcing services.

Read More: 'UK eyes India as potential outsourcing option'

India leads outsourcing destinations worldwide for US companies, reports neoIT

Outsourcing consulting firm neoIT released a report this week confirming that the market leaders in the outsourcing industry are India, Canada, and China. The report prepared a list of 14 IT outsourcing destinations for US businesses, of which India is the clear leader because of its cost competitiveness, availability of skilled labor, and a mature level of service.

No wonder, India also tops the IT services exports with sales figures in excess of $12 billion for 2004. Canada ranks second, and one of the reasons is its proximity to the US. Canada also has a skilled labor force. China came third with advantages of a skilled labor pool and low costs. Other emerging destinations include Poland, the Czech Republic, and Russia. InformationWeek also reports:

Romania, Brazil, and South Africa are the least attractive among possible destinations for IT outsourcing, says neoIT, because of their lack of infrastructure and labor skills.

Read More: India, Canada, And China Are Top Outsourcing Destinations: Study