Outsourcing Times

Outsourcing in the core service areas in South Africa: Is it working?

Private companies in South Africa now handle essential service sectors, including water, housing, and health. But is this a positive move? The answer is a flat “No”, according to British charity Oxfam. Oxfam believes that privatization has put essential services out of reach of the poor, and is leading to corruption.

However, Social Development Minister Zola Skweyiya has a different theory altogether. According to him, core service delivery is hampered by reluctance on the part of municipal employees to train themselves adequately to deliver access to portable water, electricity, and health amenities to the poorer social strata.

While the two points of view thrash it out among themselves, let us hope that conditions improve soon for the less fortunate in South Africa.

Reuters has more details from Johannesburg.

Privatization in schools: It pays to outsource

In July last year, I mentioned about the outsourcing storm brewing in schools. More than a year down the line, the controversy seems to have taken epic proportions, but paradoxically, the concept of privatization in schools is also gaining credence.

The pressure of working with smaller budgets has led to widespread privatization in non-instructional areas such as janitorial, food, and busing services. This has also stirred superintending authorities to investigate privatization in schools.

The statistical figures are there for all to see:

Officials at Muskegon Reeths-Puffer expect to save about $480,000 a year with private custodians over the life of the contract. That works out to about $114 per student. In Auburn Hills, a new contract may save the Avondale School District up to $490,000 — $128 per student — in fiscal 2007. In Jackson, a new custodial contract is expected to annually save $1.3 million, or about $193 per student.

Outsourcing or contractual agreements with third-party service providers are here to stay in school management. Private vendors increasingly provide services like transport and food. The school authorities are happy because it gives them an efficient management  technique, and then there is the "small matter" of budgetary savings.

Make no mistake, the benefits of privatization in schools are real and touches lives across different districts in the US.

Mackinac Center, which contacted all 552 schools listed in the Michigan Education Directory, has more details on the growing trend of privatization in schools.

Loyalty counts: National Australia Bank widens outsourcing deal with Accenture

Perform well, and you will be rewarded with a bigger piece of the cake—that's what NAB seems to be telling Accenture. To begin with, NAB's agreement with Accenture was limited to a finance and accounting arrangement; by April 2007, Accenture will be awarded 81 back-office finance-processing roles, where Accenture will validate and convert data into reports, and look after procurement administration.

However, NAB has not taken this step out of the blue. A pilot project was completed some months back with encouraging results, and this helped in sealing the final deal for Accenture. As Global Services reports, the NAB outsourcing venture will not lead to job layoffs:

It is expected that many of the affected employees will be re-deployed to other roles within the bank.... The plans do not involve customer-contact roles, and all customer data will remain stored in Australia. 

Maryland State Highway Administration goes the outsourcing way

You or I may not realize it, but quite a few arms of the government machinery are also attracted to outsourcing. Outsourcing is attractive because it enables you to "manage more with fewer headaches." This premise has worked well in the corporate environment, and now numerous government departments are queuing up in that belief.

The Maryland State Highway Administration has entered into a five-year $44 million agreement with CSC to enhance the Coordinated Highways Action Response Team (CHART) system.

CSC's part of the deal is to standardize a system where the administration is able to meet current and future IT requirements as stipulated by the Federal Intelligent Transportation System committee. Global Services gives more specifics:

Under the new agreement, CSC will provide systems integration, development testing and deployment of the enhanced CHART system throughout the state. Initially, CSC will assist the Administration in a review of its business area architecture to certify all CHART system requirements.

Dept. of Health Awards Outsourcing Contract to BearingPoint

The US Department of Health and Human Services (HHS) has signed a $13.7 million outsourcing contract with BearingPoint, a Virginia-based management and technology consultancy firm. Under the terms of the four-year contract, BearingPoint will provide various program management services including planning support, contract-management support and portfolio management. The company will also provide its health IT expertise as per the requirements.

Read one of our interesting posts titled "Healthcare IT Outsourcing in Europe".

Mobile Phone and PC Industries Outsourcing Webinar

Both PC and mobile phone original equipment manufacturers are making extensive use of contract manufacturers to reduce cost and increase efficiency. However, the outsourcing dynamics in the two industries and the roles of Electronics Manufacturing Services (EMS) providers and Original Design Manufacturers (ODMs) in each supply chain vary dramatically.

It is necessary for the users in the PC and mobile phone industries to understand the difference in outsourcing trends between the two supply chains. To address these concerns, iSuppli Corp. is hosting a free Webinar event on August 30 titled "Apples to Pomegranates? Outsourcing Across the Mobile Phone and PC Industries". Leading giants from PC and mobile phone industries will attend the Webinar.

Read our previous post titled "Offshore Outsourcing is Set for a Huge Growth" for more information on outsourcing.

Hawaiian Airlines Moots Outsourcing

Outsourcing has become a buzzword in the airline industry. You must have heard about the impact of outsourcing in that industry. According to reports, Hawaiian Airlines is planning to take the help of outside companies for certain jobs. It is planning to downsize departments and transfer employees to save money. Hawaiian Airlines' decision is based on its objective of improving both the service and profits.

The airlines may outsource all or parts of its operations in eight groups. It is important to note that telephone reservation is the largest operation it is having. There are about 300 employees in Hawaiian's reservations department. Recently, I had written a post titled "Aircraft MRO Outsourcing Is On Rise". That will give you more information on Aircraft MRO Outsourcing, which is considered a new revolution for outsourcing industry.

R&D Outsourcing on the Move

Many companies are collaborating with outsourcing providers in a bid to get their products to market faster and cut costs on innovation. A recent study revealed that CIOs and IT directors are increasing relying on the global services market for their research and development. R&D outsourcing is giving companies a competitive advantage over their business rivals. Reduced R&D costs are a top driver for outsourcing. Lower cost is the largest benefit of offshore development. There is no doubt that global R&D is one of the most important benefits of outsourcing.

Manage time, outsource email!

In this time and age, we are all familiar with the value of the adage, "Time is money." All ventures are resource-strapped, and the objective is to maximize output from the limited human resources.

Communication plays a big part in maximizing the output; the quicker you are able to communicate, the more is the yield. But what if an external agency is able to manage communication for you and free your in-house resources for core activities of the enterprise?

Many companies have taken that route by outsourcing their email requirements. Apart from cutting operating costs, outsourcing emails also leaves "both hands free" for your IT department to concentrate on day-to-day business requirements.

There are other potent advantages of email outsourcing. Outsourcing can tell you exactly how much it is going to cost to manage email, so you are better prepared when allocating budgetary needs. It also lets you get away with your technical limitations in email management; your service provider will be tech-savvy and have all the updated strappings necessary—POP3, IMAP4, WebMail—for effective email communication. Most important, you will be backed up by 24x7 tech support from your service provider, and this will ultimately boil down to better customer response.

So, what are you waiting for, go the email outsourcing way, and discover a new management tool; your customers—and your IT department—might just thank you for taking that step!

Click here to read more about email outsourcing.

Outsourcing from within: Specialized units draw local health outsourcing business

In an older post titled Medical Outsourcing Catches On, I mentioned the rampant outsourcing of health services from U.S. hospitals to India. However, that is only one face of outsourcing. Another facet that is emerging now is local health outsourcing within India to counter lack of specialization.

For instance, when a patient goes to a hospital for a diagnostic test, it is likely that the test will be outsourced by the hospital to another unit, which has a specialized capability to carry out the test. This mode of health outsourcing may be right across the street, or in another city.

For complicated health-checks, hospitals in remote areas in India are particularly benefited by this trend, because they can now outsource the test requirement to a high-end testing laboratory located in a metro.

The patient is ultimately the winner, although —ironically—the patient rarely gets to know that his or her health has been outsourced!

The Financial Express has more.