Outsourcing Times

Outsourcing As A Slur

I knew outsourcing was a touchy subject with most Americans. But I didn’t expect it to sound like a slur for some. What else do you make of a Michigan company that recently asked U.S. Sen. Debbie Stabenow to retract her statements that it outsourced jobs overseas?

Last week, Jackson National Life Insurance Co. sent a letter to Stabenow asking her to apologize for stating that the company outsourced jobs to India and China. She is said to have made this comment during a campaign TV commercial and public talks. Not one to retract on her word, the Stabenow campaign still stands by its statements.

Stabenow is supposed to have said that her Republican opponent, Mike Bouchard, supports Bush administration policies. She claims that these policies have led to the outsourcing of Michigan jobs. Company president Clark Manning Jr. wrote to Stabenow saying that she “falsely denigrating the excellent organization they have worked to create." Wow! Now what do you make of that?

Any company that wishes to improve its profits and thereby shareholders’ revenues will look for means to reduce costs. I’m not commenting on the present situation but I think it’s high time we behaved like we mature people. Yes, it is a bit difficult to think about that when you are the person losing a job. But then throughout history, there’ve been upheavals, which may have seemed unbearable at that point. However, these events always led to something good. So also is the case with outsourcing.

'Education Stays Home'

Outsourcing doesn’t work every time, everywhere. Recently, the New York City Department of Education virtually prohibited US companies from hiring teachers from other countries. The main reason cited was that it was not possible to undertake their background checks in foreign states. For quite some time now, a controversy had been raging about whether US companies can employ teachers in other countries to tutor American children.

Given the huge shortage of teachers in the country, it seemed like a logical next step. The companies planning distant learning had argued that since the student and teacher do not come into contact, do not talk with each other and as everything is done on computers, the background checks are unnecessary. Dnaindia.com reports:

But the officials did not agree as the rules provided that teachers must give their finger prints and social security numbers, the latter which only American educators can give. As a result, the New York authorities cancelled the $2 million a year contract of a Texas-based Indian American owned company Socratic Learning Inc, which, the Educations Department said had employed 250 teachers in India and was expected to tutor some 2,000 children.

Read more: NY dept prohibits US firms from outsourcing teaching

Offshoring Has Benefits Beyond Saving Labor Cost

Offshoring delivers more than just labor cost savings and a good offshore strategy generates new revenues, increase capital productivity, and manage risk. But in many sectors, relatively few executives are acting on this knowledge. This, despite leading companies showing where the gains can be made. Mckinseyquarterly.com reports:

One reason for the lag is that many executives don't fully recognize the potential for generating revenues and cutting costs through offshoring—or through broader strategies that combine it holistically with other restructuring initiatives.

Read more: Taking offshoring beyond labor cost savings

Now, Pharm Offshore

Executives across industries are now exploring ways of tapping their offshore workforce to generate additional revenue, improve core business processes, and offer more value to customers. While pharmaceutical companies came late to offshoring, they are making up for this delay by moving quickly to capture gains beyond labor cost savings in back-office operations. Mckinseyquarterly.com reports:

Most of the industry, however, has been more cautious. Some pharma companies are outsourcing selected functions (such as certain IT activities) only for cost savings rather than looking more broadly at the development of new processes that would improve business productivity or generate revenues.

Read more: Pharma leaps offshore

CRM In The Time Of Outsourcing

Outsourcing is here to stay… at least for some time. And the sooner we accept it, the better. That sounds like conventional wisdom. But can we blindly follow this advice and outsource our operations, especially our CRM (customer relationship management) services? I don’t think that is such a good idea.

Outsourcing, like any other business plan, isn’t a one-size-fits-all kind of thing. Agreed that when you outsource, you can get the benefits of qualified talent pools and cheaper infrastructure in offshore locations. But customer satisfaction is a very tricky thing and once you lose a customer thanks to bad management, it is very difficult to get them back.

So you have to be exceptionally careful, since even today, quite a few American customers are still quite prickly about the outsourcing of a company’s CRM activities. There are good reasons for U.S. companies to select large, relatively expensive U.S. providers…Customer service and some back-office operations can be so critical to a company's image and brand integrity that it is worth paying premium rates in order to minimize risks. The best choice for risk minimization is usually made by trusting an experienced market leader, despite the higher prices levied by the major firms.

IBM, US lay off 400 employees

Are you aware of the recent lay-off of the employees of IBM? Do you know that their headquarters for procurement in going overseas to china from the current one at New York?

The shocking news about the lay-off of 400 employees from IBM came up at the wake of this month! The company has accounted the unavailability of suitable position within the company for a period of a month as the reason for this lay-off.

Informationweek reports that the employees suspect the lay-off to have taken place with the Bladecenter team while an IBM spokesperson has denied saying that this suspicion was untrue.

Read one of our previous post titled 'IBM Outsourcing More Jobs' to know the details of work being outsourced by IBM!

IBM records inexplicable profit in the third quarter!

By Priya Venkatesh, Staff Writer

Have you heard of the third quarter results from IBM, the software giant? With the outsourcing boom on the move, IBM has reported a 4% increase in net earnings when compared to the previous year.

As per the reports from informationweek, the hottest global service Business of IBM that amounts to 50% of its total revenue has reported 3% increase in sales.  As per the report from Information week, Net value of the innumerous deals with IBM has accounted to around $10.5 billion this year. IBM promulgates a 9% increase in hardware sales and another 9% in software sales.

Click here to know the details of the major outsourcing contract signed between Disney and IBM.

IBM chosen to develop a centralized Indian Web Portal

By Priya Venkatesh, Staff Writer

Do you know the latest initiative taken by India, to keep its huge population connected over the Internet?  With growing competition in outsourcing, do you know that India has taken measures that could supersede the performance of its competitors very soon? Go ahead & read to know the details!

The software giant, IBM has bagged a project to develop a national web portal for India, which is expected to connect every nook and corner of the nation. This portal is expected to give information on innumerous services like permits to start business, tax tips and more! The portal is expected to use the middleware from IBM to get linked to the state and central government sites.

IBM on the other hand expects to yield maximum profits through such projects, which has given rise to reverse subcontracting processes within the nation!

Read one of my previous post on 'IBM Calcutta increases employee strength' to know the extent of establishment of IBM in India.

CSC – Global Crossing initiate the real time implementation of IPv6

By Priya Venkatesh, Staff Writer

Have you upgraded your network to be compatible with IPv6? You and I may be thinking on the necessity to do so! We may not be aware of the need to make this move!

But CSC & Global Crossing together started an initiative towards real-time implementation of IPv6 Network in 2001. They took advantage of the enormous experience of CSC In IT services and the inexplicable expertise of global crossing in IP based network.

Targeting the federal customers, the joint venture expects the successful implementation of IPv6 Network by June 2008!

Read more on 'CSC renews seven-year outsourcing contract with Schroders' to know the details of CSC's another venture with Schroders.

Profits recorded point to continuing IT boom!

By Priya Venkatesh, Staff Writer

Do you know the details of the continuing IT boom in India?  Are you aware of the profit data that the pioneers in outsourcing have recorded this year? Read on to know the details!

Infosys, one of the pioneering IT giant in India has recorded a profit of 42.4% amounting to a total income of $746 Million. As per the reports from informationweek, 7700 employees have been added to the payrolls of Company this quarter. Wipro, another outsourcing giant has recorded a profit of $589 million which accounts to 46% growth in this quarter that ended on September 30 2006. The results of the last 2 quarters of the outsourcing pioneers clearly indicate an ongoing boom in the field of IT!

Read more on 'Indian IT stocks creep incredible heights amidst tight competition' in one of my previous post to know the consequences of this growth in Indian IT stocks!

Profits recorded point to continuing IT boom!

By Priya Venkatesh, Staff Writer

Do you know the details of the continuing IT boom in India?  Are you aware of the profit data that the pioneers in outsourcing have recorded this year? Read on to know the details!

Infosys, one of the pioneering IT giant in India has recorded a profit of 42.4% amounting to a total income of $746 Million. As per the reports from informationweek, 7700 employees have been added to the payrolls of Company this quarter. Wipro, another outsourcing giant has recorded a profit of $589 million which accounts to 46% growth in this quarter that ended on September 30 2006. The results of the last 2 quarters of the outsourcing pioneers clearly indicate an ongoing boom in the field of IT!

Read more on 'Indian IT stocks creep incredible heights amidst tight competition' in one of my previous post to know the consequences of this growth in Indian IT stocks!

IBM Calcutta increases employee strength

By Priya Venkatesh, Staff Writer

Are you into IT? Do you know the employee strength of IBM in India? As an individual one is seldom aware of the fact that IBM has 14 offices across India with over 43000 employees.

IBM has promulgated the addition of 3000 more software developers at its Calcutta development center shortly.

With the enormous increase in the employment rate in the field of IT, informationweek reports that NASSCOM expects to have 25% more growth of IT in the wake of the year 2007.

Read more on 'IBM Daksh - Marching Ahead' in one of our previous post to know how IBM has expanded its operations in India via Daksh.

Surprising trends in Outsourcing

-- By Priya Venkatesh, Staff Writer

Are you aware of the current trend in outsourcing? Do you know the current scenario with respect to the number subcontracting deals this year? IDC has come up with an interesting report on Outsourcing very recently.

The study by IDC proclaims that the core changes in the trend in outsourcing include the huge number of competitors who have entered into the outsourcing market this year! It also reports that the TCV (Total Contract Value) of the top 100 deals have drastically reduced to $67.9 billion from last year’s 70.1 billion.

Crmbuyer articulates that the number of business deals have plunged dramatically while desktop subcontracting have shown an enormous growth. With the lump sum deals weaning and With the clients’ demands on the rise, the service providers strive hard to cater to the rising demands of the customers!

Read one of my previous post on 'Indian IT stocks creep incredible heights amidst tight competition' to know the trends of Indian IT stocks this year!

Indian IT stocks creep incredible heights amidst tight competition!

-- By Priya Venkatesh, Staff Writer

Do you get involved in the stock market? Did you have a look at the results of the third quarter? Here are the details of outperforming stocks of the stock market as on date!

Share prices of the IT vendors, Wipro, Satyam, Infosys & TCS have crept incredible heights very recently! While the European and American counterparts struggle hard to sustain the high value of their stock prices & are at 100.4 & 98.3, Indian IT companies have gone up to 117 recently.

Sourcingmag.com accounts this to the gain that the companies have incurred in bagging larger contracts from overseas. Shares of CTS seem to outperform its Indian peers since the share value of the company has crept up by 50% this year.

Read one of our previous post on 'Build infrastructure to sharpen outsourcing edge, says the Indian P.M' to know more about the initiatives taken by the Indian government to encourage outsourcing!

Security Projects – The major contributor in Outsourcing!

-- By Priya Venkatesh, Staff Writer

Are you into outsourcing? Do you outsource your work overseas? Here is an piece of interesting news for you!

A recent survey by the CSI & FBI uncovered the steep increase in the sub contraction of security functions around the globe.The survey has unveiled that the rate of outsourcing of security related projects has approximately doubled when compared to the statistical data of year 2005.

It is believed that the decrease in the number of security breaches & reduction in monetary losses due to outsourcing have accounted to the results of this survey!

Read one of my previous post on 'Driving towards a highly secure IT Network' to know the security measures taken by the IT companies across the globe!

Driving towards a highly secure IT Network!

-- By Priya Venkatesh, Staff Writer

Are you afraid of the security breaches occurring in the IT network as on date? Do you have second thoughts in outsourcing your work due to this fact? Read on to know how proactive the IT industry is in enhancing the security?

You know that the first phase of security was in the form of restricting users to confidential data. The second phase involved the design of counter attacking the viruses & Trojans after they induce damage to the network!

Moving towards the third phase of security, the IT vendors have decided on integrating security features as a part of application development across the globe.

IT big shots are trying to evolve well-defined security standards & architectures that could form the basis of security in all future business critical processes across the globe!

Read more on 'Data Security Tightened in India' in one of our previous posts to know the measures taken by India to circumvent the probelm of security in outsourcing.

Pros & Cons of confined facilities at offshore

-- By Priya Venkatesh, Staff Writer

Do you know the vantages of commencing confined facilities at offshore? How does that differ from subcontracting? Read on to know these interesting details.

The pros of such confined facilities at offshore are:

• Monetary transactions of the employer can be restricted to one bank account.
• Time zones can be taken advantage of by serving local clients during the daytime and western clients during the night.
• Keeping a handful of American managers at offshore, promoting local managers & aiming at quality products can circumvent Security/privacy issues.
• Work environment at the confined facilities are way better than work environment in subcontracting firms.

Looking into the cons of the confined facilities at offshore, one is able to see the tax liabilities, which has become a matter of deep concern. ]

• With the tax rates steeply rising, employers are forced to have second thoughts regarding the commencement of confined facilities at offshore particularly in India.

Click here to read one of our previous post on 'Is Outsourcing good or evil?'

AT & T terminates customer service contracts for DSL installations

Here is a piece of breaking news from AT & T! Are you aware of the terminations of customer service contracts to other countries by AT & T? Read on to know the details.

AT & T has decided on terminating the customer service contracts for DSL installation that it had been outsourcing in the past. The company has come to a consensus with the CWA (Communication Workers of America Union) to use the personnel within the nation for the customer care service of DSL installations at home. In addition to this, the customer care executives would provide the technical details regarding email,internet and DSL related technical queries.

The employees who would be taken into will be into the rolls of AT & T by the wake of the year 2008

Click here to read more on "Threat of Outsourcing Causing Union Growth" in one of our previous posts.

IBM, EDS bag outsourced projects from Vodafone

IBM and EDS have bagged the subcontracted projects from Vodafone. The outsourced work involves back end application maturation and maintenance activities of IT network across the Globe Group.

Amidst a severe downfall of the Vodafone group in the European market very recently, the company has given emphasis to the cost curbing activities. As an initiative towards cost curbing by 30% within the next five years, Vodfone group has taken up this deal with EDS and IBM.

Read more on "Vendors watchout" to know the details on the IT and BPO projects that are outsourced by Vodafone group, UK.

Build infrastructure to sharpen outsourcing edge, says the Indian P.M.

If you reflect on the recent statements emerging from the government echelons in India, you will be convinced that outsourcing ranks pretty high on the agenda for the government.

Look at the recent statement of Prime Minister Manmohan Singh, for instance. Speaking at a conference on ''Building Infrastructure'', the Prime Minister said that the government is willing to pitch in to overcome the infrastructure deficit in India. He said that the government is finalizing a policy that will put the framework in place for a massive infrastructure improvement drive.

Quite rightly, Manmohan Singh identified the power sector as the major pitfall, and stressed the need to overcome the power crisis that is reigning in several parts of the country. India Daily quotes the P.M:

The bane of power sector seems to be the high transmission and distribution losses which account for almost 40 per cent of the electricity produced. No civilised society nor a functional commercial entity can sustain losses on such a scale.

Indian state government does the outsourcing act

The relatively recently born state of Jharkhand in eastern India favors the outsourcing path in core infrastructure sectors such as roadways and town planning. The steady growth in population has all but stagnated life in the many towns in this state, and the government has finally woken up to the necessity of improving the civic amenities and building efficient road networks.

The government is looking for investors from across India to step in and take the outsourcing bait, and thereby to help improve life in Jharkhand. Outsourcing could help the state tide over the increasing population pressure, and also ensure that the non-planned and planned expenditure of the state is put to tangible use.

The Times of India has more on the development.

Outsourcing concern raises its head in Australia

All of us know that outsourcing can be a double-edged sword. For the outsourcer, it certainly helps cut costs in business processes, but there is also the lurking danger of private data going public. In an older post, we have mentioned how real this concern is among outsourcers.

This concern over data security is particularly serious in the banking sector, where the outsource vendor is literally playing with considerable personal information.

Not surprisingly, the Finance Sector Union (FSU) has inserted advertisements in newspapers all over Australia to emphasize this concern over data safety. The Union is exerting pressure on the banking institutions in Australia to refrain from sending personal information of customers to the country of a service provider. As ABC Newsonline reports:

...[The Union has] put a message out to shareholders saying that they need to send a clear message to their banks to say that nobody likes jobs going offshore, nobody likes personal data going offshore and that the banks need to change their minds.

Bristle side of Outsourcing

Do you happen to work with a co-worker who is a foreigner? Have you noticed the ethnic differences between yourself and your neighbor/co-worker who is a foreigner? Are you afraid of privacy/security issues that could come up as a result of outsourcing?

On a close observation of the current IT market trend towards outsourcing, you can very well understand the vast conflicts that are a part and parcel of the outsourcing wave of today's market.

When you are not comfortable with a co-worker who is a foreigner and a neighbor who does not match your wavelength in terms of ethnics, conversing medium and behavioral practices, its hard to digest the fact that Outsourcing, which is highly beneficial from several perspectives, is indeed the abode of working people with unimaginable ethnic differences and behavioral practices. Security is definitely one of the concerns in Outsourcing.

Cross-cultural training and proper selection of the company where the work is going to be given are some of the factors to be considered before outsourcing happens in any organization.

Click here to read my previous post on the measures taken by Indian firm to avoid security breaches, which are a part and parcel of the wave of outsourcing.

Dell plans to embark upon India!

Are you into outsourcing? Do you involve yourself with IT enabled services? Have you got ideas about the major subcontracting destinations across the globe? Have you heard about the next outsourcing move from Dell? Read on to know the expansion plans of Dell in detail. Dell, the pioneer in computer manufacture has set up new plans of expanding its computer monitor manufacture operation in Tamilnadu, India.

As per the reports from crmbuyer, a proposal to this effect has been ratified between the Management of Dell and the state government of Tamilnadu, India. The operations are expected to commence in the wake of the year 2007 at Sriperumbudur in Chennai, Tamilnadu, India.

Read my previous post on 'How India is able to circumvent the security issues in Outsourcing' to know why the wave of outsourcing is moving towards the Indian subcontinent.

Incursion of ITeS into China

Are you into software development and debugging? Do you really know what is the latest trend in the IT industry? Read on to know the futuristic trail of IT enabled Services across the globe!

The Indian software giant, Infosys is setting up two new development centers in China. Crmbuyer articulates that ITeS growth could account to around $65 million involving around 6000 engineers in a span of 5 years from now.

Cheap labor is one of the main factors that drives this incursion of IT enabled Services into China. Driving IT work into China would help the employer to belt along the hectic software delivery docket accompanied by accurate deadlines and labor accountability.

Click here to read my previous blog on the penetration of outsourced work into Philippines.

Circumventing the security issues in Outsourcing!

Are you one of the lots who outsource work to Indian firms? Do you have fear and anxiety regarding the privacy and security of the data being outsourced? Are you ambiguous as to whether India can be accounted as a trustworthy subcontracting destination? If yes, go ahead to read the measures Indian firms have taken up to resolve these issues.

From the perspective of the Indian government, it is working with NASSCOM to bring in stringent laws on par with US for continued privacy/security issues. Indian IT firms do understand that privacy issues will not only tarnish their image amidst competitors but will also tarnish the established brand name of India as an efficient outsourcing destination. Mid cap and large cap companies in India have come up with innumerous ways of handling the concerns related to data privacy and security.

• Palm readers are being used to restrict access to work places at IT Firms.
  Internet and Intranet access has been removed from machines that are into the domain of the client.
• USB Port access has been taken out at the work place to avoid the data security breaches across the organizations.
• Visitors are not allowed to enter the workplaces in the IT Firms.
• Telephonic conversations are being recorded for security reasons.
• Surveillance cameras inspect and take care security breaches at the work place.

Click here to get an insight on Outsourcing to India.

Philippines join the Outsourcing race

As an onlooker of the current outsourcing scenario, you must be aware of the fact that India, China and Malaysia are the most popular subcontracting destinations. But of late, you are seldom surprised to hear that Philippine has also joined the race. Crmbuyer.com reports that the outsourcing initiative has become a $3 billion industry.

As a beholder, you are aware of the recent reports from newsmagazines describing the unimaginable technical expertise in web design, software development and graphics among the youth of Philippines. The clarity in communication, the fluency in English that Filipinos have added feathers to the cap.

The law enforcement in Philippines is on par with US. The ease with which software application development happens at a much lower labor add fuel to this fire of Outsourcing to Philippines.

Click here to read in detail about the growth of subcontracting work to Philippines.