Outsourcing Times

Bank Abbey reviewing outsourcing arrangement in India

Following the newspaper report by the Daily Mail that Bank Abbey is planning to pull out of its outsourcing arrangements in India and pull back the 1000 jobs in India back to the UK, there has been widespread speculation.

However, Bank Abbey said that it is only reviewing the arrangement, and there are no plans now of any alteration in the bank's outsourced arrangement with its Indian partners ITC Infotech and MsourcE. The 1,000 jobs that the bank has in India perform administrative tasks and customer queries, and the bank established a call center in Bangalore a couple of years ago. Reuters reports:

The Daily Mail newspaper on Wednesday cited an Abbey insider as saying the bank planned to pull out of India next year and transfer the 1,000 jobs back to the UK because of customer complaints about service levels. The newspaper said a formal statement was expected later this year.

Northwest considers outsourcing of flight attendant requirements

After filing for bankruptcy in September, Northwest Airlines is attempting to reorganize its position by cutting costs. The airlines has already outsourced jobs which were earlier performed by its mechanics union, and is now making a move to outsource most of its flight attendant requirements on international flights.

This move has engendered worries in the unions of not only Northwest, but also other airlines; if the Northwest move succeeds, other airlines may follow suit. Professional Flight Attendants Association estimates that in excess of 2,000 workers would lose their jobs. CNN Money reports:

The demands on the Northwest flight attendants prompted the Association of Flight Attendants, an AFL-CIO affiliated union, to offer an unconditional, no-strings-attached pledge of resources and support to PFAA, an independent union that does not belong to the AFL-CIO.

Outsourcing business from the UK gets a boost

For thousands of IT organizations around the world, outsourcing is a critical part of their business processes. This proportion is also true for outsourcing service providers. According to an estimate, there are more than 10,000 service providers in the IT sector, spread across 175 countries.

India is one of the major participants in this world phenomenon, with Bangalore being a much-preferred destination. An indication of this came from the recent move by British Airways to start direct flights from London to Bangalore, instead of being routed through Mumbai. This move is expected to provide a further impetus to outsourcing business from the UK to India. Computer Business Review Online reports:

The cost of managing offshore contracts is built into the financial considerations of any organization looking at using such services, and by cutting down the time and cost to travel to Bangalore, the Indian offshoring industry will welcome this new route from BA.

Offshore Outsourcing Best Practices association and International Association of Outsourcing Professionals form the SME Global Sourcing Chapter

Offshore Outsourcing Best Practices association (OOBP.org), a vendor-independent association that aims to improve awareness of outsourcing among the small and medium-sized industries, and the International Association of Outsourcing Professionals (IAOP), a global membership-based organization that promotes outsourcing as a management practice and as an industry, have formed the SME Global Sourcing Chapter within IAOP.

With Eugene Goland, Founder of OOBP.org, as its chairman, the new organization will instruct SMEs on the good practices for outsourcing. The organization will also provide the experience of certified instructors to emphasize on this often-ignored segment of the outsourcing partners. i-Newswire.com reports:

The primary goal of the new chapter is to educate the SME community on best practices of outsourcing and to provide thought leadership through the network of certified professionals and relevant industry organizations.

Two Public Sector Indian Banks outsource ATM services

Two leading public sector banks in India, the Bank of Maharashtra and Vijaya Bank, have awarded an outsourcing contract worth INR 110 crore to Financial Software & Systems (P) Ltd (FSS), the leader in electronic payment system solutions and services.

Under the terms of the contract, FSS will deploy and manage 525 ATMs for these banks across the country. These services will include maintenance, network monitoring, site security, cash forecasting, replenishment, help desk, reconciliation, and settlement services. This contract will contribute toward the growth of FSSNet, the outsourcing services wing of FSS. India Infoline News reports:

FSS will install ATMs and all related equipments at the sites selected by the Banks and drive the ATMs from FSS centre in Chennai with back office support and disaster recovery support from Mumbai. Services provided by FSS include online transaction authorization, ATM and Debit card management functions, interchange support, transaction reporting and back office functions.

Outsourcing IT Security

Recent experience has shown that the IT data, which is so much integrated to business processes, can be under threat from virus attacks such as Sasser, Blaster, and the more recent Zotob. Although these particular threats were tackled, they have succeeded in raising the question of adequate security for IT data. The US government has initiated steps to increase awareness of this real danger through legislation such as Sarbanes-Oxley, Basel II, and HIPAA.

Companies are constantly evolving fresh schemes to ensure security, but are conscious of the cost factor. This consideration has led companies to consider an outsourced security model. Outsourcing service providers are also dedicated to evolving security solutions. The outsourced model will not only have the advantage of a typical outsourced project (viz., saving manpower and resources), but also is aimed at delegating security to an expertise that may not be inherent in the company. Besides, the outsourcing service providers will possess the additional software required to handle security threats. Line56.com reports:

Security is more than a one-time event. Organizations must protect critical information assets, including sensitive client information, and to do so requires the active management and monitoring of IT infrastructure at all times. Failing to make security a business priority is a risk that companies can no longer afford to take.   

Towards a successful outsourcing relationship between client and provider

A strong relationship between the client and the service provider is critical for an enduring outsourcing deal. This relationship is not automated, but has to be nurtured through certain principles that apply equally well to both parties. To start a relationship, mutual trust is vital. Once a trust is inculcated, the agreement must ascertain that the benefits go to both parties, and there is cooperation between them, not dominance of one over the other.

After the project is under way, good and open communication should be built, so that there is no room for misunderstandings. Any criticism should be in the open, but efforts should be made to build mutual understanding. There should not be any hesitation to compromise on an issue, if required. There should be no room for personal conflicts, and expectations should match up to reality. ComputerWeekly.com reports:

A constructive relationship between client and supplier is crucial for the delivery of the benefits of outsourcing - and such relationships do not happen automatically.

Outsourcing in Russia: A growing phenomenon

Outsourcing, which has become a global phenomenon with more countries opting to delegate their non-core functions to an outside company, is yet to catch on in Russia. The labor force in Russia is circumspect about outsourcing and generally believes that jobs in outsourced projects are temporary. This has made it difficult for recruiters to attract enough skilled labor for outsourced projects.

Recruiters are trying to convince workers that the working conditions for outsourcing staff are the same as other normal employees. In the case of Motorola, the company transfers workers to a permanent position on its company books as soon as there is any opening. The St. Petersburg Times reports:

Unclear labor books or work records that list a frequent change of employer can put a potential candidate at risk of being seen as unstable. Meanwhile, the compensation packages of outsourcing staff sometimes lacks medical insurance, among other perks added to the wage.   

DiskSites and Unisys Global Outsourcing & Infrastructure Services in three-year service contract

According to a three-year contract signed recently, DiskSites, an innovator in providing network infrastructure optimization solutions to distributed organizations, will offer its wide area file services VBranch product range to Unisys. In turn, Unisys will build a complete product and services solution and make it available for sale to Global 2000 customers. Dell and other global channel partners of Unisys will market the product.

Unisys Global Outsourcing & Infrastructure Services is already building a program around DiskSites, and the new contract is expected to continue the positive relationship between the two companies. Businesswire.com reports:

According to Amir Shaked, CEO of DiskSites, "The combination of Dell's platforms and market presence, DiskSites' enterprise-grade software and Unisys' international service capabilities introduces a best-of-breed solution for the fast growing WAFS market."

Sri Lanka gets a slice of the outsourcing pie at the World Outsourcing Forum

Geographically situated close to the hub of the world outsourcing activity, Sri Lanka is making efforts to attract outsourced business to its shores. The country was represented at the recently held World Outsourcing Forum in Dubai by the Information Communication Technology Agency (ICTA).

Sri Lanka's presence in the outsourcing market was further heightened by its position as an event partner at the forum. Private sector companies were able to participate in the event and attract business deals. Sri Lanka was also able to benefit from the World Wide Association discussion panel through its representative Suresh Bartlett, Programme/Operations Director of ICTA. Colombopage.com reports:

Agreement was reached on ways by which the outsourcing pie could be enlarged and expanded, and these were included as part of the Dubai declaration, to which Sri Lanka was a signatory. A steering committee with representatives from each country was established to follow up on the planned action items.