Newsworthy Items

Mexico Edges in on China's Manufacturing Turf
The Dallas Morning News ran a story about Mexico vying for manufacturing jobs currently located in China. The author notes that China has consistently won the sourcing game with scores of manufacturers ready to produce products to customer specifications, pack and ship them in containers. Now Mexico is making a play for this work, with custom-made products and overnight delivery – a time frame that China can't touch.

Recession Sparks a Sharp Drop in Outsourcing in Britain
Outsourcing101.com reported that even though offshoring to locations such India and China offers cost reductions the initial cost of setting up these relationships can be significant. As a result many companies aren’t willing to invest in offshoring in the current economic climate.

Investors Predict Globalization of Industry, Especially to China
The Wall Street Journal reported that Venture capitalists expect their industry to grow increasingly global, as firms shift more attention to Asia and as institutional investors around the world seek to add venture funds to their portfolios.

Offshoring News

Infosys Plans to Set Up Unit in Brazil
Economic Times.India Times.com announced that India’s second biggest software exporter Infosys Technologies plans to open a software development and back office center in Brazil
later this year, as the company seeks to serve its US customers better by establishing a near-shore presence.

Wal-Mart to Invest $500 Million in India
www.CXO Today posted a story announcing that Wal-Mart is expected to offshore its business and back office operations to India. The company has shortlisted Wipro, Infosys and TCS for its $500 million contract for a five-year term. Through this initiative, Wal-Mart may also serve its customers worldwide with online product sourcing.

News of the Day

Retailing in a Recession - The Opportunities for Outsourcing
Research and Markets has announced the addition of the "Retailing in a Recession - The Opportunities for Outsourcing" report to their offering. The increasing economic pressures affecting the retail industry means that companies will increasingly look to outsource technology and business processes to cut costs and focus on core skills. This report provides a detailed analysis of service providers capabilities in selling to the retail sector through the current recession.


Lenexa Outsourcing Facility Adding 725 Jobs
DB Digitalburg.com advised that a Pennsylvania outsourcing company is nearing the end of an expansion at a customer call center in suburban Kansas City that will ultimately employ 725 new workers. NCO Group began the $5.6 million expansion in Lenexa, Kan., last year. The facility originally employed about 400 people and will ultimately employ 1,100. The company provides outsourcing services for businesses, including accounts receivable management, customer management and other administrative functions.

Significant Increase Predicted for Legal Outsourcing
IP Review Online reported that offshore legal support services will see a major increase in their work volumes as they mature. A new study indicates that law firms are becoming more familiar with the sector as they work to offset costs.

Today's News

Smart Balance Keeps Tight Focus on Creativity
The Wall Street Journal reported that the heart-health food developer outsourced manufacturing and distribution to target in-house strengths on new products.

Industry Expert Believes India Needs to Overhaul it's Education System
A leading outsourcing director in India believes that in order to maintain a competitive edge in the industry they need to review their education system. He shares his thoughts on the situation in the article posted yesterday.

Offshoring News

India Feels Less Vulnerable as Outsourcing Presses On
The New York Times reported that even though the global downturn has slowed the rapid growth in India’s outsourcing business many outsourcing businesses are booming- because of the pressure on companies, and even governments, to reduce costs is still ever present. Unemployment has risen to 8.9 percent in the United States, a 26-year high, increasing longstanding pressures to “keep jobs in America.” But managers of companies big and small, squeezed between political pressures and the necessity of slimming down to survive, are choosing the bottom line.

Tough Times Give a Boost to Second-gen Outsourcing
The Economic Times ran a story about Second Generation Outsourcing (SGO) that might be worth reading. It discusses the point that rather than looking for simple cost reductions companies are beginning to look for a better overall value proposition.

Outsourcing Agriculture
WNYC.org aired a story about China sending One Million workers to Africa this year as part of a growing trend for countries to outsource their food production. This report is connected to a blog post we made in late May 2009.

Outsourcing Updates

Ford Drives Cost Control with Outsourcing Deal
VNUNET.com announced that Ford has outsourced its payroll and time and attendance service. Ford hopes to see cost savings and increased efficiency through more automation across the business, with its payroll staff focusing less on administration and more on value-added activities.

White House Wouldn't Stop GM from Outsourcing
A story in Real Clear Politics.com yesterday explained that reporters could not get a straight answer when they pressed Robert Gibbs to explain how the White House would react if a new General Motors board wanted to act in a way that might be contrary to the administration's goals. The press secretary was posed with this hypothetical question: What if GM could save money by outsourcing jobs to China? Would President Obama, who promised that the company would make more cars in the United States, allow that as the company's majority shareholder? The answer and entire article can be accessed via the above link.

Cisco Piloting an Outsourcing Channel Program
CRN.com advised that Cisco Systems has offered insight into an outsourcing channel program that is in the works and should be ready for launch in fiscal year 2010. Word of an outsourcing program comes as Cisco readies to relaunch its Managed Services Channel Program, which will occur on Aug. 31. The program builds on one originally established in 2007. Currently, 61 partners are part of the Managed Services Channel Program.

IBM Slovakia and Soitron experts discuss IT outsourcing in Slovakia
The Slovak Spectator published an article discussing the fact that despite an increase in the level of IT outsourcing, Slovakia is still lagging behind trends in other countries. The Slovak Spectator spoke to Juraj Hupka, global technology services manager at IBM Slovakia, Pavol Németh, director for outsourcing at Soitron about IT outsourcing, and Marek Gešo, marketing and communications director at Accenture its benefits and drawbacks as well as the impact of the global economic downturn on this market segment. To read the entire post click on the above link.

Beware of Minimum Commitments with Offshoring Contracts
IT World.com advises that with the changing landscape of Offshoring companies looking for vendors need to pay attention to the details of minimum requirements. The article offers alternatives that can be considered when negotiating contracts.

US Based LPO Company to Open New Center in India and Hire 1,450 People
Timesofindia.indiatimes.com announced that US-based CPA Global, a Legal process outsourcing will set up its third center in India and hire 1,450 people over the next two years. “Like in the case of BPOs, there is a good level of expertise and costs advantage in India, which offers a good proposition to us…We are looking at setting up our third centre in India and also increase the headcount,” CPA Global Country Head (India) Bhaskar Bhagchi said.The third centre will be set up over the next three quarters and the

Today's Offshoring News

Some Harsh Truths about Technology
Mark Kobayashi-Hillary posted a story on his blog about the 850 jobs Hewlett Packard is planning to axe in Erskine. The manufacturing plant is being reduced in size, with more focus on increasing production in the Czech republic.This is a blow for the local economy and an emotional decision for anyone who cares about job creation in the UK. But who is right and wrong in a case like this? Companies such as HP do have to think of all stakeholders when they make these decisions, and clearly they believe that continuing to offer a better deal to their millions of customers is more important than the livelihood of a few hundred people in Scotland.

Top Offshoring Trends to Watch in 2009
PR-Inside.com announced that the 2009 World Outsourcing Summit was held by the International Association of Outsourcing Professionals in Carlsbad, California. A report issues by the summit announced 5 trends for 2009; Enhanced Near shoring, Reliance on Smaller Deals, Importance of Professional Expertise, Enhanced Competition and Enhanced Social Responsibility. The review the entire article use the following link.


The 10 Riskiest Offshoring Locatons
Infotech-India Times.com posted a story that reviews the riskiest offshoring locations with details of each location.

Newsworthy Items

IT Outsourcing. The Direction Factor
Outsourcing-Russia.com reported that in order to make the offshoring model work properly it is necessary to consider all the factors that will impact the outcome. The information in this article supports the basis of Bob's book; "The Services Shift".

Novell and ACS Form Outsourcing, Supply Partnership
www.masshightech.com issued a story today on a supply partnership that was established between Novell and ACS. Novell Inc., the Waltham-based open-source IT infrastructure provider, has partnered with Affiliated Computer Services Inc. in a five-year $135 million contract in which Novell will outsource some internal information technology services to ACS (NYSE: ACS). The partnership also entails ACS paying Novell at least $30 million in the first three years for Novell products.

The outsourcing partnership involves shifting service delivery from the 156 employees of Novell Information Services and Technology group in Provo, Utah. A release from both companies does not outline where ACS will then outsource this work, but Novell officials expect “significant cost savings.”

Financial Institutions Perspective on Outsourcing
IBS Publishing.com advised that outsourcing core systems is an area that polarizes opinion. In countries such as the US it is highly popular, but in other regions it is seen as a risk too far. The financial pressures of recent times may have changed this situation.

Offshoring News

International Association of Outsourcing Professionals Releases Global Outsourcing 100 Plus Report
The International Association of Outsourcing Professionals (IAOP) released its premier 2009 Global Outsourcing 100 Plus Report highlighting the qualifications and capabilities of leading outsourcing providers and advisers globally, as well as reporting industry trends.

This newly released industry guide is an additional report available for purchase as a companion to the annual Global Outsourcing 100 ranking of top service providers and advisers. It provides independently researched profiles of an expanded list of companies including their industry focus, service expertise and geography served.

Offshoring is a Value Creation Question (the Dutch are Reviewing their Options)
Contact Center Intelligence posted a story regarding the Dutch markets approach to offshoring. Offshoring Customer Services or Contact Center Services has been a trend over the past decade or so, mostly for English, French and Spanish languages. The dutch have been waiting for quite some time, but over the past few years an increasing number of Service providers offer Offshore services for the Dutch market.