Offshoring News

IT Companies Expanding in Latin America
Driven by customer demand, Indian IT firms such as TCS, Infosys, and Patni are enhancing their ‘near-shore’ delivery capabilities in Latin America. This would also help them explore the emerging markets in the region. Last week, TCS opened its seventh Latam delivery centre at Queretaro, Mexico, where Patni Computers also chose to locate its first centre that was launched on Monday.
Source: Offshore Outsourcing World Blog.com

Acquiring Outsourcing Companies: Not for the Squeamish
This article was posted by E-Commerce Times. com a while ago but the content is still very relevant for any company looking to offshore business processes. The author explains that the effects of the recession on outsourcing companies have made them attractive targets for acquisition, but with opportunity comes risk. There are distinct differences between the way things are done in India vs. the United States, and they can impact the true value of a company.

Special Effects Outsourcing Grows in India

News Max.com reported that outsourcing to India, long dominated by software engineering and back-office work, is expanding in new terrain: special effects for movies. India's rise comes at a difficult time for U.S. special effects outfits, some of which have buckled as the 2008 L.A. writers strike cut productions and the financial crisis curtailed financing. Executives in India say cost pressures are pushing studios to send more work to India, where special effects projects are up to 40 percent cheaper than in the U.S. This is limited in nature bu shows that many processes cn be outsourced given the right circumstances,

News of the Day

Indian CEO Warns White House on Proposed Visa Curbs
The Wall Street Journal reported that one of India's most powerful businessmen is warning U.S. government and business leaders that proposed curbs on U.S. work visas are protectionist measures that could spark a major trade dispute with India. During a visit to the U.S. last week, Azim Premji, chief executive of Bangalore outsourcing giant Wipro Ltd., met with officials including White House economic adviser Lawrence Summers. The visa issue threatens to increase trade frictions between the U.S. and India, which are already trying to resolve disputes over agriculture and other sectors.

Today's News Updates

Rio's Indian Deal is a Wake-up Call for City Firms.
Times Online.com advised that Rio Tinto's decision to recruit Indian lawyers to handle a significant portion of its legal work is a wake-up call to Britain's big law firms. The move will be closely watched by other big companies, some of which spend upwards of £50 million a year on legal costs and have been grumbling for years about whether they get value for money from their outside lawyers.

Significant increase' predicted for legal outsourcing
IP Review On-Line announced that offshore legal support services will see a major increase in their work volumes as they mature. This prediction comes from a new report titled: Legal Services Outsourcing: What Do Law Firms Think? Conducted by business intelligence provider ValueNotes – one of only two quoted sources on legal process outsourcing (LPO) market size – the study indicates that law firms are becoming more familiar with the sector as they work to offset costs.

Recession Drives Retailers to Outsourcing
VNUNET.com posted a story advising that the retail sector is investigating third party suppliers to ease financial pressures. IT and business process outsourcing will become an increasing trend in retail as firms in the sector struggle to survive in the downturn, according to research from analyst Datamonitor. According to Datamonitor retail technology analyst Christine Bardwell, retail businesses are cutting down on staff and inventory – the two key focus areas for the sector – to mitigate efficiency and cost pressures. “Many retailers are looking to technology and services to help cut the cost of managing inventory, non-critical business processes and store operations,” said Bardwell.

Outsourcing News of the Day

RComm Awards Huge Outsourcing Deal to Alcatel-Lucent
BPOVoice.com announced that Reliance Communications (RCom) has awarded a $500 million (Rs 2,500 crore) operations and maintenance contract to French telecom infrastructure provider Alactel-Lucent. Last year, Reliance and Alcatel formed a joint venture for network management services, with the Indian company holding 33 percent and the French company owning the rest.

Gartner: Don't Sign Long-term Outsourcing Deals
Computer World UK.com posted a story advising that organizations renegotiating their outsourcing contracts should avoid long-term deals and look at cloud computing. This comes from the analyst firm Gartner. The next two years will be a “critical period” for the outsourcing and IT services market,” said Claudio Da Rold, vice president and distinguished analyst at Gartner.

IT Firms Face Delay in Payments from Foreign Clients
Offshore Outsourcing World Blog.com reported that a number of Indian outsourcing companies are facing difficulties as their foreign clients are delaying their payments. The firms are finding it hard to recover their money, as most of these firms are from the U.S. and Europe, which are largely hit by the recession, the Business Standard reports. Except Infosys, all the major Indian IT firms have shown a rise in the receivable income from the last three quarters.

Update of the Day

Global Sourcing and Delivery Models in Practice
The blog SASIDAR.info posted an article on the three major models of off shoring: a Captive, a Third Party Provider (TPP) or a Build-Operate-Transfer (BOT) . It is a very good article and worth reading.

Offshoring News

Research Agencies to Boost Outsourcing in the next 3 to 5 years
Source: Outsourcing Insider: Market research Outsourcing (MRO) is relatively new compared to other outsourcing segments. It has all the potential elements to grow into unprecedented levels, as current market conditions forced research cycles to be shortened in order to be more cost efficient. Data collection, processing and panel services are the top outsourced activities due their high offshorability. While project management, report writing and research design were determined to be the most difficult areas to offshore.

Research agencies are expected to boost outsourcing of non-core activities in the next 3 to 5 years, as shown in the data above. Industry experts estimate the potential for offshoring research services to be in the range of $8 billion to $10 billion in 2010. “This growth will be primarily driven by ‘rapidly growing’ and other ‘untapped’ opportunities”

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.

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.

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.

Today's News

Process Design / Redesign with a Clean Sheet
Sourcing Mag.com reported that quite often, process designs or redesigns are burdened with a lot of legacy ideas! Sometimes, it may be better to start a design or a redesign of a business process with a clean sheet rather than make marginal improvements!Many processes just evolve from nothing, or have a lot of outdated steps that may have been necessary when they were designed for the first time but may be outdated today!

Travel Companies to Increase Outsourcing in the First Quarter of 2010
Travolution advises that outsourcing company Sitel is predicting one third of travel company call centers will be outsourced by the first quarter of the next financial year.The forecast comes as the company experiences increased demand from travel businesses looking at ways to reduce operating costs while maintaining or bringing back call booking volumes during the current recession.


US Federal Agency Issuing RFP's for $6.6 Billion in Outsourcing Deals
Information Week published an article advising that the Defense Intelligence Agency is moving forward with plans to spend up to $6.6 billion over five years on new outsourcing contracts. They recently issued a request for a proposal that covers development, deployment and management of various Department of Defense systems between now and 2015. The new multi-vendor contract vehicle, Solutions for the Information Technology Enterprise (SITE), will be managed by the DIA, but covers military intelligence technology that will be used by the military branches and other DoD agencies.

News of the Day

Multi-country Payroll Outsourcing is Growing
According to a report in CXO Today.com multi-country payroll outsourcing (MCPO) is ahead of other, stand alone multi-country process outsourcing markets on the maturity curve. The research said that MCPO has registered a growth of 49%


Data Center Outsourcing Increases; Most are Happy with the Results
Search CIO-Mid Market.com reported that data center outsourcing is on the upswing and a recession economy is only one reason. A recent study from research and advisory firm Computer Economics Inc. shows that more companies plan to increase rather than decrease their data center outsourcing and most are pleased by the results. Another telling sign? Data center providers are expanding facilities and adding services.


Outlook for Sourcing Spending Brightens
The Wall Street Journal posted a story advising that spending on outsourcing is set to come out of a slump and return to pre-recession levels by the end of the year, bringing a much-needed boon to technology companies in India and elsewhere, says a closely-watched survey of the industry.

Todays Offshoring News

Romania, an Increasingly Attractive Outsourcing Location
Financiar-ul reported that Romania continues to be an attractive location for outsourcing, climbing 14 spots in the most sought after locations according to a recent study of consultancy A.T.Kearney

Global Economic Situation Drives Outsourcing Firms to Offer New Services
According to GMA News.TV Philippine outsourcing companies have introduced new services, providing additional revenue streams for their businesses. These findings were among those reported by a survey that polled executives of business process outsourcing (BPO) companies in the Philippines.

India Turning into a Hub for Clinical Research
The Financial Chronicle ran a story about India fast turning into a global hub of cost-effective clinical research outsourcing (CRO). This is due to the adaptation of international regulatory standards. The revenue from this sector is expected to reach $1 billion by 2010.

Offshoring News

7 Out of 10 Indian Call Centers Fail Turing Test
This article posted in World Press.com highlights the importance of the need to fully investigate an offshoring partner before finalizing the deal.

Firms Shifting Focus
News on layoffs has become a norm nowadays. Some blame it on the economic slowdown, some on political bureaucracy while others blame it on offshore outsourcing. There could be a number of reasons for the job cuts but according to a report in Outsourcing Insider it all boils down to “cost reduction”.

Todays Offshoring News

Sourcing in China Harsher During Economic Downturns:
China Daily ran a story about a survey conducted by Gasgoo.com that revealed "the overall sourcing strategies of China sourcing are not expecting big changes during global economic downturns". The website surveyed over 150 purchasing executives that attended the 2009 Global Automotive Sourcing Summit on April 21. Read more

Bulgaria – Most Attractive European Country for Outsourcing Activities
bgnewsnet.com presented data from the A.T Kearney’s Global Service Location Index. The information shows that Bulgaria is the most popular country in Europe, and 13th out of 50 overall, for locating outsourcing activity. Additional information can be found via the above link.

Outsourcing Updates

Green Sourcing the Time has Come
Novasphere blog.com posted an article today that discusses how the environment and its protection has bubbled up to the top of corporate agendas. There are a number of ways buyers and sellers of outsourced services can use this trend to their advantage while doing something that the vast majority of people now agree is worthwhile.


Everest Q1 Report: Outsourcing Market Drops
Global Services Media.com reported that the North American outsourcing market witnessed a 15 percent decrease in transaction volume during the first quarter this year compared to the previous quarter, according to the Market Vista: Q1 2009 report on global outsourcing and offshoring activity by Everest Research Institute.