Archive for April, 2010

OutsourcingDifficult Jobs Can Save Your Business

April 22nd, 2010

It is so difficult in this day and age to see the sense in spending money to save money and yet it is more appropriate than ever. The need to reduce expenses whilst focusing on core business income is top of the priority list. Without the income from the core business activities there is no business to save and grow.

The hard part for the very small business – with one or two employees – is to value the time of the main earner, skill owner or tradesperson. The assessment of their input as a function of business income is a vital and necessary calculation. There is really no point in trying to do all the work, large and small, associated with running a business if it leaves no time for actually doing the core function the business is set up to do.

For every hour spent doing a job that another could do as well, or better, than you there is an hour you could have been earning the business much needed income from core activities. Take the need for a small piece of in-house office software, perhaps a small adaptation to existing generic software, one could sit down for a day with an online manual and figure it out, losing a day of core business earnings. Or it could be put out to an external software outsourcing contract.

Although the first option would seem to save money, actually it costs the loss of one day of earnings for the business. Once engaged the external agency may have specialists that can write the required code in an hour, the cost maybe minimal or even cost slightly more than the lost day from the other option. This is still a saving though, especially if one were to engage a Lean outsourcingcompany to do the work.

The elegance and efficiency of the process and the final code will be easier to maintain and come with a support package that will last after the contract has been delivered. This is an on-going saving as every time in the future that there is an issue with the software (if indeed there are any issues at all) immediately there will be someone to contact for support.

The use of such software development companies especially ones that promote and use Lean management principles is becoming more relevant in these tight economic times. It is a marque of trust and accountability that allows trust and faith in the outsourcing company from the start. An absolute must in the outsourcing world.

Source:http://sms58.com/23891/outsourcing-difficult-jobs-can-save-your-business/

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HCL Technologies 3rd-Quarter Net Profit Jumps 58%

April 22nd, 2010

HCL Technologies Ltd. (532281.BY) Wednesday posted a better-than-expected 58% rise in fiscal third-quarter consolidated net profit as the software exporter gained from new outsourcing contracts and a narrower foreign-exchange loss.

HCL Technologies is the third major Indian technology company to report better-than-expected net profit for January-March, indicating a revival of fortunes for the country’s outsourcing industry as technology spending in developed markets rebounds.

Over the past two weeks, larger rivals Tata Consultancy Services Ltd. and Infosys Technologies …

Source:http://online.wsj.com/article/BT-CO-20100421-704241.html?mod=WSJ_latestheadlines

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Ci&T Again Honored for Expertise in IT Outsourcing by International Association of Outsourcing Professionals

April 22nd, 2010

Ci&T, a consulting and technology outsourcing services company, has once again been recognized by the International Association of Outsourcing Professionals (IAOP) on the Global Outsourcing 100(R) outsourced service provider list. This year, Ci&T achieved a number-two ranking in the “Rising Star” judging group of the Global 100, up nine spots from its previous number-11 ranking in 2009

In addition to its rise in the “Rising Star” rankings for 2010, Ci&T was also named to 10 distinct category sub-lists on the Global Outsourcing 100, with several highlighting the company’s expertise in providing outsourced application development services for companies in specific vertical markets. These lists include: Best 10 Rising Stars by Industry Focus – Retail & Consumer Goods; Best 10 Rising Stars by Industry Focus – Entertainment & Media; and Best 5 Companies by Industry Focus – Oil & Natural Gas. Other categories in which the company appeared include: Best 10 Rising Stars in Overall Revenue; Best 10 Rising Stars in Number of Centers Worldwide; and Best 10 by Service Provided – Marketing Services.

“Being named to The Global Outsourcing 100 and The World’s Best Outsourcing Advisors is a great recognition, particularly given the strong competition,” said IAOP Chairman Michael Corbett and chair of the judges’ panel. “These companies should be proud of achieving excellence in outsourcing.” The Global Outsourcing 100 and its sub-lists are essential references for companies seeking new and expanded relationships with the best companies in the industry. The lists include companies from around the world that provide the full spectrum of outsourcing services.

These include not only today’s leaders, but tomorrow’s rising stars.

“We are once again honored to be recognized by the IAOP on the Global Outsourcing 100, and even more so to see our continued rise in the ‘Rising Stars’ group,” said Leonardo Mattiazzi, vice president, international business for Ci&T. “Our goal is, as always, to provide the best possible combination of business value and nearshore application development for every one of our clients, and to be recognized for this commitment is a major achievement.” Ci&T is a pioneer in the employment of lean thinking and agile methodologies for the software development projects it delivers for global clients. The company provides its application development and interactive services expertise across multiple vertical industries, including consumer packaged goods, financial services, automotive, pharmaceutical and many others. Its lean approach enables teams to consistently deliver business value, eliminating waste and focusing on rapid delivery of software based on close collaboration with the business.

About IAOP The International Association of Outsourcing Professionals(R) (IAOP(R)) is the global, standard-setting organization and advocate for the outsourcing profession. With more than 100,000 members and affiliates worldwide, IAOP helps companies increase their outsourcing success rate, improve their outsourcing ROI, and expand the opportunities for outsourcing across their businesses. To learn more, visit www.iaop.org.

About Ci&T: Ci&T delivers consulting, application outsourcing and digital marketing services in a unique way. Its “best-of-all-worlds” model combines the efficiency of offshore development with the convenience of a Western Hemisphere partner. Development centers in Brazil put creative marketing and technology expertise in near-local time zones, saving clients time and money and helping them to gain competitive advantages with a proven, real-time development partner. Ci&T specializes in customized application development, business intelligence, SAP consulting, digital marketing and Web 2.0 applications. Its clients include a diverse array of large and global Fortune 500 customers in the United States, Brazil and Europe.

Source:http://www.tmcnet.com/usubmit/2010/04/21/4742060.htm

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HCL Technologies quarterly profit surges 78 pct, amid Indian outsourcing rebound

April 21st, 2010

Indian software services firm HCL Technologies Ltd. said Wednesday that quarterly profit rose 78 percent in dollar terms, adding to evidence that India’s outsourcing industry is rebounding quickly from the global downturn.

Net income for the January to March quarter was 3.44 billion rupees ($76.6 million), up from $43.0 million during the year earlier period, under U.S. accounting rules.

Revenues were 30.76 billion rupees ($685.2 million), up 21.4 percent in dollar terms from $564.4 million in the year ago period.

The company said revenue grew across sectors and geographies, but was led by 9.6 percent quarter on quarter surge in U.S. sales.

It signed 13 new deals with, among others, the Commonwealth of Virginia and Vodafone.

Top Indian outsourcers Infosys and Tata Consultancy Services also reported strong gains in quarterly profit and said hiring and wage pressures have been picking up, pointing to a consolidating recovery for India’s $60 billion software services industry.

Enthused investors sent HCL’s stock up 6.9 percent to 369.1 rupees ($8.31) a share in midday trade on the Bombay Stock Exchange in an otherwise flat market.

Source:http://www.canadianbusiness.com/markets/market_news/article.jsp?content=D9F7A0B80

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TCS, Infosys, Wipro shy away from overseas buys

April 21st, 2010

For the past few years, India’s outsourcing giants, sitting on piles of cash, have just watched global rivals IBM and HP take a definite inorganic route without attempting even a single billion-dollar deal of their own. As TCS, Infosys and Wipro seek to raise their profile and compete better with bigger rivals, they are caught in a dilemma of whether to sacrifice profitability and gain market share by buying large firms that can boost the topline multi-fold.

And with companies such as Infosys sitting on $3.5 billion in cash, it’s definitely not about the size of war chest “but more to do with their risk averse, profit-obsessed and India centric growth strategy,” said the chief executive of a multinational outsourcing firm, which competes with Indian software exporters.

Until last year, investment banking firms were holding hectic parleys with TCS, Infosys and Wipro proposing M&A opportunities such as CapGemini, Atos Origin, and Logica, among others. Now, Indian tech firms are realising that such acquisitions would not only be too heavy to pull off, but also bring complexities that could affect their profits and double-digit growth rates.

“Why would they acquire troubled companies all you would be getting is headaches and huge cultural disconnect,” argues John McCarthy, principal analyst and vice-president at USheadquartered Forrester Research.

Already, large European services firms are struggling to trim their high cost payroll and increase offshoring to cheaper locations such as India. “In Europe, when you lay off someone it’s very expensive and you try to delay it, that has a weight on margin. We at Capgemini said with offshoring it will move to double digits pretty soon,” said Paul Hermelin, the group chief executive of Capgemini.

“We do not plan to build large empires of hardware and services, and it’s not about being risk averse. We want to bite what we can chew,” said the chief executive of a top Indian technology firm. He requested anonymity because his company is in a financial silent period.

Compared with some of their top European rivals scrambling to push their operating margins to double digits , the top three Indian tech firms boast of margins well above 20%. “Last year, Infosys on its own earned more net income than then entire European IT services industry,” said Peter Schumacher of European strategy consulting firm Value Leadership.

Source:http://economictimes.indiatimes.com/infotech/software/TCS-Infosys-Wipro-shy-away-from-overseas-buys/articleshow/5839059.cms

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IT firms go Twitter way to engage GenY

April 21st, 2010

Social media – both external sites like Facebook, Twitter and internal portals – are becoming an important tool for people-heavy IT companies to deal with their young employees. HR heads feel that the new generation prefers this mode of communication.

So, firms are now using external websites or starting their own portals to leverage social media. Even if it sometimes brings in negative feedback as in the case of Infosys where the internal media was often used to give vicious comments on the management’s HR initiatives, mainly iRace.

Infosys HR head Nandita Gurhar, said that the Gen Y (people born after 1982) who are coming into companies now, require a different mode of communication. “This category is frank and brusque, and wants to be part of all decisions concerning them. So, traditional business etiquette has been given a go by,” she said.

The company, apart from its bulletin board and internal portal, has started other sites like ‘My Voice’ and blogs to encourage interactive discussions.

Ravi Kumar, senior vice-president-global delivery, Keane said his firm had implemented — ‘Socially’ — a few months ago and a lot of employees, irrespective of age, got onto it quickly.

The new method of communication signals moving away from the ivory tower concept and going into a person’s cubicle, said R Elango-HR head, MphasiS. “Companies who want to have genuine interactive conversations with employees will have to look at this option. It will soon get to a point where firms will use it just like email now,” he said.

MphasiS uses instant messaging for communicating inside the firm. It has also started an interactive platform called ‘Manager’s Universe’, which is similar to Wikipedia where employees can create discussion forums and comment. Elango said that while comments may sometimes be negative, they have never come ac ross incidents where it has been personal or vicious.

According to consultant Jessie Paul, who has worked in Infosys and Wipro, firms will have to get savvy for engaging with the Gen Y. “Use of this medium, while generally free, requires investment into supply of people and content,” she added.

A few companies have already got the message, and are either setting up their own team or are outsourcing to maintain such sites. While social media has begun to garner lot of attention from HR teams, MindTree’s senior vice-president, head (people function), Babuji Abraham said, “We feel social media is not formal, but more of an engagement medium.”

Source:http://www.mydigitalfc.com/it/it-firms-go-twitter-way-engage-geny-262

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When it comes to outsourcing, India’s up but IBM’s down

April 21st, 2010

Once again, Indian outsourcing companies are illustrating an uptick in business. Tata Consultancy Services beat expectations earlier this week with a 47 percent jump in quarterly profit from a year earlier, and TCS says the growth is due to a strong outsourcing demand.

And you might remember, just last week when I wrote about Microsoft’s decision to outsource all its internal IT services to Infosys (India’s #2 outsourcing company, behind TCS), I also reported that Infosys had reported that revenue for the quarter ended March 31 was $1.3 billion, up 15.6 percent from the same quarter a year ago. Net profit grew by 8.7 percent to $349 million.

As for TCS, it reported that net profit rose 19.31 billion rupees ($419 million) for the final quarter of the financial year that ended in March 2010, from 13.14 billion rupees in the same period a year ago. According to reports, TCS inked 10 major deals in the quarter.

On the other side of the world, back here in the United States, things weren’t quite so rosy. IBM reported on Monday that its first quarter revenue—$22.9 billion—was flat. Net income was $2.6 billion, up 13 percent.

But IBM’s total outsourcing services signings, which includes strategic outsourcing and application management outsourcing, decreased 3 percent (8 percent, adjusting for currency) to $6.8 billion. While IBM gained a bit in strategic outsourcing (signings were up 6 percent) it took a big hit in application management outsourcing, which decreased 23 percent, or approximately $700 million. According to IBM, without the impact of this decline, total services signings would have been up 4 percent year to year; instead it was down 2%, to $12.3 billion.

It is difficult to know how many hires IBM’s making region to region (remember that IBM is now only providing a global headcount instead of providing in specifics on the number of employees it has in the U.S.). But unlike TCS, IBM hasn’t added much to its employee roster. It had been reported that IBM apparently dropped some 10,000 U.S. workers in 2009. The annual report doesn’t necessarily reflect that number, however, and indicates that IBM’s roster was up by 0.2%, or just short of 1,000, from 2008. The 10K layoff number is an estimate from the Alliance@IBM/CWA Local 1701, a worker union bargaining for employee rights.

In comparison—while it’s not apples to apples—TCS reported that it hired about 10,700 foreign nationals (it doesn’t specify more than that) and a total of about 16,670 professionals. And for what it’s worth, Ajoy Mukherjee, TCS’ VP and head of global HR, said in a prepared statement that the company has made 20,000 offers on campuses for fiscal year 2011.

So, what all these numbers add up to is, at least when it comes to outsourcing, India is up but IBM is down.

Source:http://advice.cio.com/beth_bacheldor/10112/when_it_comes_to_outsourcing_india_s_up_but_ibm_s_down

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