Outsourcing Times

AT&T boosts U.S. workers

I mentioned in an older post about the sustained outsourcing phenomenon among telecom companies. The benefits of outsourcing in this sector are there for all to see, and it is little wonder that telecom players are riding high on the outsourcing wave.

However, in a significant reversal of its earlier decision, telecom giant AT&T has decided to bring about 2,000 unionized customer service jobs back to the U.S. Thus, contrary to the popular belief that offshoring is inevitable and a one-way ticket, the AT&T move gives an added credence to the workforce in the U.S.

Quite obviously, the build up of domestic pressure led to the reversal of its outsourcing policy. The major chunk of the pressure came from the Communications Workers of America (CWA), which was particularly aggressive about pushing for U.S. jobs.

However, CWA doesn’t stop its campaign only at the offshore factor. As Line56 reports:

AT&T had promised that CWAers would have opportunity and access to the jobs of the future, but union members are pointing out that much of this work—running video hubs, installing and maintaining Internet routers and hubs and other jobs—is being performed by managers and contractors.

Schools before, Universities now: On with the outsourcing bandwagon

Outsourcing administrative processes by educational institutions is nothing new. On this very forum, I reported on the practice of outsourcing food and transport components by school authorities. Although the outsourcing efforts in schools have met with roadblocks, the idea now appears to be appealing to higher educational institutions, such as universities like California Coast University.

Indiana University officials are debating whether to invite a private operator to look after the 600-odd school vehicles that are used on the Bloomington campus. While a decision is expected by the year-end, the outsourcing wave is also likely to spread to the operation of campus bookstores as well. At least eight other support areas are also being targeted for outsourcing.

The move toward outsourcing can swing one way or another, based on the raging debate now on between board members: Should the university be accountable for its spending, or should it decide to turn out people to save a nickel?

For more on the debate, click here.

Rationale behind the IT Outsourcing to India

Outsourcing work to developing countries like India is becoming the order of the day.

Apprehensions apart, as individuals have we analysed the factors that add fuel to this fire of outsourcing to India, lets get a deeper into this and analyse the situation.

As per the reports from itoutsourcingindia, the factors that re-iterate the essentiality of outsourcing to india can be summarized as follows:

• Abundance of human resources with the required technical expertise and excellent communication skills.
• Economic factors are another add-on.
• Highly reliable communication lines provided by VoIP service providers pave way to uninterrupted communication between countries.
• The time zone provides a helping hand for getting our things done at India during our late night hours.
• Adherence of Indian IT firms to global quality standards like SEI CMM, PCMM and Six Sigma Practices
• Tax deduction offered by Indian government to pioneering ventures in the field of Information Technology.

And lots more......

Click here to know more on IT outsourcing to India.

Walter Reed Outsourcing Blocked

Recently, a bill was produced in the Senate that sought to block spending on a contract for operations support services at Walter Reed. However, the bill fell through in the Senate. The House already passed language to keep the Army from moving forward with a plan to transfer work that is being done at Walter Reed. Had the Senate passed the bill, all the spending on the contract would have been blocked. However, it would not have prevented the Army from carrying out a new public-private competition for the same work.

Read my previous post titled "Outsourcing Tips for Small Businesses" to get outsourcing tips for small businesses.

Privacy Concerns on Legal Outsourcing

In a recent post titled "Law Firms to Benefit from Outsourcing", I had mentioned about the benefits of legal outsourcing. Now there are some concerns over the legal process outsourcing. Outsourcing certain types of legal work to offshore destinations has become a common practice in the United States. However, there are already concerns about how it would affect issues such as privacy. By outsourcing legal work, law firms are dealing with people in another country who are not subject to the US or Canadian law. That might create many problems in future.

The overseas lawyers are not very close to the work produced. However, they remain responsible for it. Outsourcing has serious limitations, as there are several limits imposed by privacy legislation and solicitors. Another concern is regarding the authority of the client company over the offshore workers. Since they are contractual workers, the company may not be able to dictate its terms and finally end up with heavy losses.

Bio-outsourcing is Booming

The bio-outsourcing market is booming, thanks to the benefits of outsourcing for the biomanufacturing organizations. Many biomanufacturing companies are outsourcing their operations to offshore destinations. According to estimates, over 50 percent of biopharma companies will outsource at least some aspect of their biomanufacturing activities. The reason is clear. Biomanufacturing is a complex, costly and labor-intensive process. Ongoing labor shortages and increasing costs of building biomanufacturing facilities have forced many biopharma firms to turn to outsourcing for help.

Read my previous post titled "Are You Looking to Outsource?" to get some tips on outsourcing.

Hospital Outsourcing

Bangalore-based research BPO firm BrickWork has taken a project that is entirely a new concept in India. The project is outsourcing of hospital management and administration. The company has signed a contract for a 300-bed hospital project called the Cauvery Medical Center in Bangalore.

Under the terms of the contract, BrickWork will manage the hospital, recruit doctors and nurses, put in IT systems, procure medical equipment and run the hospital for five years. The US-based investors are putting in Rs 150 crore into the project. BrickWork is expecting that its network of 175 medical professionals can refer the patients to this hospital in Bangalore.

To know more about mid pharma outsourcing, read my previous post titled "Mid pharma Outsourcing Pipeline".

Future of Outsourcing

Outsourcing is expanding its reach in terms if industry and geography. Companies that invest in outsourcing are growing in large numbers. Their individual needs are all similar. They just need to reduce overheads as much as possible. Outsourcing in automotive, energy, healthcare, technology and financial services markets is gaining momentum. Outsourcing brings multiple benefits to the firms. It enhances speed and efficiency. Outsourcing experience also enables the companies to gain expertise in new geographic areas into which they wish to expand. If the current trend will continue, outsourcing industry will have a great future.

Read my previous post titled "Offshoring Risks" to know more about risks associated with outsourcing.

Dell's Outsourcing Initiatives

Dell is planning to change its business strategy by outsourcing most of its services in order to expand its operation across the globe. Traditionally, Dell has been US-centric. However, now it wants to focus on other countries that have emerged as top IT and Software hubs. The company will reduce the number of services it currently provides in-house. Dell is expanding into growth markets by building new plants in countries like Brazil, China, India and Central Europe.

My previous post titled "Reducing Cost Adjustments in Outsourcing Contracts" gives useful information about cost adjustments in outsourcing.

Jazz Semiconductor to Increase Foundry Outsourcing

Jazz Semiconductor will increase the proportion of its outsourcing to China-based foundries to 60% of the company's total output in the future. Jazz has taken a cautious approach to expand its own capacity. It will widen its collaboration with China-based foundries Advanced Semiconductor Manufacturing Corporation (ASMC) and Hua Hong NEC. About 80% of Jazz's output is from its own facilities and 20% from China. However, in future, the proportion of outsourcing to China will increase to 60%.

Read my previous post titled “China into Service Outsourcing”