Todays Offshoring News

How Outsourcing Benefits Small Legal Firms.
Immigration Daily provided some useful insight on how solo practitioners or smaller firms can benefit from legal process outsourcing.

Outsourcing in the New World Order
Computer Weekly.com explains in a recent article that given the state of the economy outsourcing projects are coming under increased scrutiny. The best service providers will have to adapt to meet the demands of the new world order - marrying the traditional priority of cost reduction with the business transformation required to drive performance in the years ahead.

Bob's Interview in The May 14 Issue of Financial Express

The Financial Express interviewed Bob in an article titled "Tax Saving is a Very Minor Issue when One Considers Offshoring". Bob answers questions regarding the proposed tax law changes and how they may impact US companies and offshoring to Indian companies.

Newsworthy Items

Baby Steps to Better Outsourcing
Nova Sphere blog.com published an article that delves into the reasons why innovation is typically not found in most outsourcing contracts. This is due to the fact that most contracts are based upon the FTE mentality. The author offers the following explanation:

• FTE based contracts encourage all the wrong behaviors for both parties, yet they are by far the most common in the industry
• You cannot put a Service Level on a person anymore than you can measure a light bulb’s output in liters. An individual’s productivity is but one component of delivering a service, yet it’s the only one companies pay for—no wonder they don’t get the process improvement/transformation/efficiency/fill-in-the-blank-with-appropriate-buzzword. Remember “you get what you pay for”? Paying for people and expecting efficiency doesn’t make a whole lot of sense to me.
• FTE-based relationships tend towards “how do we do the same thing for less” through labor arbitrage instead of “how do we do it better” through innovation
  

To read the entire post access the following link.

Obama's First Move
The Blog at World Press.com discussed President Obama's pending decision on the tax codes for companies that are involved with offshoring. He has proposed a tax revision which will mean that US companies, earning income overseas, will have to pay US corporate tax on that money immediately, rather than deferring payment until the income is returned back to US soil.

Update on Globalization

Honeywell Committed to India
BANGALORE -- Honeywell International Inc. said it is committed to India as one of its manufacturing as well as research and development hub despite Washington's plans to change tax rules related to U.S. companies' overseas operations.

A Downer on Globalization
The Wall Street Journal reported that Duetsche Bank AG Chairman and CEO Josef Ackerman did not paint a pretty picture on the future of globalization at a talk at the Atlantic Council in Washington, D.C. “We are running a risk of the disintegration” of the global economic order, he said. Why? The Great Recession is making everyone risk averse.

Maintenance Outsourcing as a Global Strategy
Industry Week.com advised that by outsourcing the global service and support of its manufacturing equipment, Lockheed Martin is building strategic value beyond cost reduction. In addition to enabling lean efficiencies and economies, the outsourcing agreement with MAG Maintenance Technologies enhances the ability of proactive maintenance to further its competitive strategy.

Newsworthy Items

Outsourcing Deals Rising, but Risks Increase as Focus Narrows to Cost Cutting
mcsolutions.co.uk reported that almost 60% of organizations in Western Europe say they will outsource more IT and business process functions this year, compared to last, according to an online survey by analyst Gartner. It's all about cost reduction. More than 70% of respondents rated budget and cost containment as their top concerns in 2009, up 17.5% from 2008.

Are You ready for Transformational Outsourcing?
Gaining better value from an outsourcing relationship also means transforming the organization, not just managing headcount. According to an article published in ittmc.net smart companies adopt outsourcing to transform their processes and strategies not simply to reduce costs. Some of the advantages if this approach is adopted include.; access to additional skill sets and business experience, better resource management and creation of new revenue streams because of available cost-effective expertise.

A Matter of Trust
An article posted by Mark Kobayashi-Hillary in his blog explains a situation that he was involved in regarding trust and credibility in outsourcing arrangements. He offers an eye-opening example of his personal experiences.

Surprising News: Services Shift Blog Named a Top 100 Offshoring Blog

Somewhat of a surprise, but welcome news. The oDesk. blog has come out with a list of the Top 100 Best Outsourcing and Offshoring Blogs and Resources.

The list is simply presented in alpha order, not as a rank. I was pleasantly surprised to see that the Services Shift Blog was listed as one of the top 43 "general outsourcing" blogs. My impression is that we are just learning to do this, so making any "Top" list is good news.

Thanks for whoever recommended us.

News of the Day

Wipro Bags IT Outsourcing Contract from Unitech
Business Standard.com advised that Unitech Wireless, the newest telecom services player in India, today announced that it had awarded a multi-hundred-million long term outsourcing contract to Wipro for creating the next generation telecom company.

Can Outsourcing Its Network Stem the Bleeding at Sprint?
Gigacom.com posted an update from the Wall Street Journal regarding Sprint, the No. 3 wireless carrier. They are consideringoutsourcing network operations and management duties to Sweden’s Ericsson. The deal, if agreed to, would see Sprint pay Ericsson $2 billion in return for a 20 percent reduction in network costs. Part of those cost savings would likely come from shifting between 5,000 and 7,000 service employees to Ericsson.

Today's News

Choose IT outsourcing firm with good track record, says guru
ihotdesk.com presented an article that says firms should not go into IT outsourcing deals with their eyes closed and should ensure that the provider has a proven track record in the business. Ross Taylor, marketing manager at Direct Response advises "Ultimately if you outsource key functions of the business to a company that cannot deliver on it, from your customer's point of view, it's not the outsourcer that's failed, as far as they're concerned, you've failed,". Access the full article via this link.

Health Care Services: Potential Opportunity for Outsourcing Growth
Seeking Alpha.com ran a story that discusses the health care situation in the US, rising costs and a need to maintain quality health care at affordable costs. The article explains that outsourcing is one possible solution. Wit the digitization of data many services are now offshored that were not possible in the past.

Obama vs. Outsourcing
Business Week.com ran this article that discusses President Obama's proposed changes to the tax code. It's a lenghty article but worth reading.

News of the Day

Outsourcing: Thriving at Home and Abroad
Business Week.com reported that cities from Boise to Gdansk benefit as economic and political pressures prompt companies to outsource work to lower-cost cities at home and overseas. In spite of the troubled global economy—or more likely, because of it—one of the few business sectors that continues to thrive is outsourcing. No wonder: Companies looking to cut expenses in the face of soft demand are keener than ever to hand off parts of their operations to lower-cost providers.

Outsourcing: Obama Tax Plan Unlikely to Prevent Offshoring
CIO.com reported that analysts say it's the low cost of highly skilled labor overseas--not the tax code--that has driven the offshore outsourcing trend. President Obama unveiled tax code changes Monday he said could curb offshoring, but analysts and tax experts believe the plan will have little to no impact on the megatrend that threatens as many as one-in-four IT jobs at large companies.

News of the Day

Document Outsourcing on Growth Path as Manufacturers Cut Costs
MCSolutions.co.uk ran a story that says interest in strategic document outsourcing has surged as companies look for ways to cut expenses and capital cost. A Gartner analyst is advising organizations to ensure that outsourcing print and electronic document publishing improves customer communications without sacrificing quality, efficiency and confidentiality.

Plan an Outsourcing Deal's End at it's Beginning
Computerworld.com ran a story advising that the time to set the groundwork for a termination transition plan is when you negotiate the original contract. How can you mitigate this risk? Start by making sure your contract addresses the minimum requirements for a termination transition plan. The plan should provide a detailed rule book for doing this in an organized way.

Indian IT Firms Abroad Plan to Hire Foreign Hands
www.expressbuzz.com advised that due to increasing sentiments against offshoring jobs from the US in particular and other countries in general, Indian IT majors are planning to hire more non-Indians in foreign countries. The IT companies however, claim that this is not due to pressure from the US or other countries and is in line with their strategy. Read more via this link.