Archive for October, 2010

Services Cloud’ big opportunity for Indian IT

October 31st, 2010

Indian IT firms are likely to extend their services’ focus to the fast-evolving cloud economy as well, said panelists at the Cloud Computing track of the Bangalore IT.biz 2010 on Saturday.

Vice President at NIIT Technologies Vijay Ghei said as the different pieces of the cloud computing puzzle such as infrastructure, hardware, software and applications were coming together, Indian firms were best suited to target those services that were part of the cloud.

Given the availability of talent in the country, Indian firms could play an important role as value aggregators and extenders of the cloud computing stack, he said. Building value added services (VAS) or providing end-stage customisation of applications was an opportunity uniquely open to the Indian firms, Ghei said.

To the existing cloud terminology such as ‘network cloud’, ‘computing cloud’, and ‘platform cloud’, Indian firms would add ‘services cloud’ and ‘relationship cloud’, he said. Given that Indian firms have been traditionally shy of investing in assets and infrastructure, the strategy laid out by Ghei seems to be logical. By focusing on services, they would also be playing to their natural strength. Many of them have already begun to strike partnerships with infrastructure providers to build a services layer. NIIT has tied up to provide VAS on Hitachi cloud, Ghei said.

He also cautioned that cloud services were a greenfield area and there was a huge amount of learning to be done by the service providers. “Every day we are falling and picking up ourselves and it is too early to say what will succeed on the cloud,” he said.
Drawing attention to a few challenges before the service providers who will face the music from the end-users on the cloud, he said, achieving flawless integration with all players of the stack and sharing liability was difficult to accomplish.

Indian firms would have to move away from piece-meal pricing and offer standard rate cards. They will also have to address the human factor effectively in ensuring security, he said. Most customers in India remained just curious about cloud and even service providers were not sure what benefits would finally emerge out of the cloud, he added.

Agreeing with Ghei, Vice President, Outsoucing and Offshore services, IDC, David Tapper said companies should do what their genetic code dictated on the cloud. Cloud-based outsourcing was underway to replace traditional outsourcing, he said. Business Process as Service would replace BPO, Software as Service would replace application development and Platform as Service would replace network outsourcing, he said.

Cloud would cannibalise traditional outsourcing and public cloud would grow five times faster than the traditional IT products over the next few years, Tapper said. Quoting an IDC survey of 300 large and mid-size companies, he said, cloud penetration in India would increase from 4.09 per cent in 2009 to 6.8 per cent in 2012. When customers migrate to the cloud they would start with data centres and progressively move on to networking, applications business process and desktop layers.

Source:-http://www.deccanherald.com/content/109333/services-cloud-big-opportunity-indian.html

UK body confers outsourcing award to PHL

October 31st, 2010

The Philippines is an “abundant graduate workforce” that makes it a “veritable offshore giant for the UK BPO market,” a UK-based outsourcing trade association said when it gave the Offshoring Destination of the Year Award to the country for the third time.

The country bested nominees Egypt, Sri Lanka and Ukraine to clinch the top award given by UK’s National Outsourcing Organization, the Department of Foreign Affairs (DFA) said in a statement.

The NOA — a recognized, 20 year-old outsourcing trade association in the UK and a founding member and prime mover of the European Outsourcing Association — also noted the country’s 92 percent literary rate, a 36-million labor force with 450,000 university graduates per year and about 100,00 finance and accounting graduates, and the general ability to understand and speak English with a neutral and understandable accent, as factors that make the country a good place to outsource.

The country’s “world-class telecommunications infrastructure and unparalleled government support in the form of income tax holidays of up to six years and other fiscal and non-fiscal incentives also heavily boosted the country’s chances,” the DFA also noted.

Fiscal incentives after the initial four- to six-year income tax holiday include granting outsourcers who locate their offices in buildings and installations accredited as Philippine IT economic zones a flat five percent tax rate on gross income.

The NOA Awards are held every year in recognition of the best practices in the UK outsourcing industry, with 17 categories in contention this year.

The award was received by Commercial Attaché Michael Alfred Ignacio and Trade of Investment Representative Vicente Casim of the Philippine Trade and Investment Center in London.

Awarding ceremonies were held at the Park Plaza Riverbank Hotel in London on Oct. 22, the statement noted. The Philippines received the same award in 2007 and 2009.

The country’ entry for this year’s NOA Awards was prepared and submitted by the Board of Investments, in cooperation with the Philippine Outsourcing Industry, Business Process Association Philippines and other major players.

7.2B industry and still growing

Industry records show the country’s BPO industry employed around 442,000 employees and garnered revenues of $7.2 billion last year, a 19% gain from 2008’s $6.06 billion. For this year, revenues are still expected to hit $9.5 billion.

The country has become a location of choice for outsourcing in the fields of customer service; legal and medical transcription; backroom operations for finance, logistics and accounting; and software development and animation — all primarily because of cheaper labor costs and an English-speaking workforce.

Working conditions and compensation remain of “good quality” for the country’s business process outsourcing (BPO) workers, the International Labor Organization (ILO) said.

However, it also noted that BPO employees — the majority of whom are working in call center facilities — suffer from work-related health problems.

Among these problems are sleep disorders, fatigue, eye strain, neck, shoulder and back pains, and voice problems. The ILO study also indicated that BPO workers have less freedom, and are constantly under “high levels” of stress.

Some of the stress-inducing factors mentioned in the study were harassment from irate clients, excessive and tedious workload, performance demands, monotony, and regular night work.

Source:http://www.gmanews.tv/story/204809/uk-body-confers-outsourcing-award-to-phl

Extend Indian hospitality to Obama: Narayana Murthy

October 31st, 2010

Infosys mentor N R Narayana Murthy has said the country’s citizens should extend “Indian hospitality” and not foc US on outsourcing issues during US President Barack Obama’s visit next month.

“Obama would an honoured guest and should be be treated in the Indian tradition and philosophy of ‘athithi devo bhavo’ (a guest is like God), without any expectations from him,” Murthy said on the sidelines of a CII event here last night.

When asked if outsourcing issues should be at the top of the agenda for Indo-US discussions, Murthy said, “Instead of focusing on such issues, we should look at how to make his (Obama’s) stay in India a good one, we should extend our hospitality, which we are known for.”

The US had recently increased H1-B and L1 visas fee, thus hiking operational costs for Indian IT companies, which send a large number of professionals on working visas to the US.

Obama had also stepped up the campaign against outsourcing, giving jitters to the Indian IT industry, whose earnings are heavily dependent on the American market.

Source:http://economictimes.indiatimes.com/news/politics/nation/Extend-Indian-hospitality-to-Obama-Narayana-Murthy/articleshow/6845704.cms

RBS Insurance set to create 160 call centre jobs in Glasgow

October 31st, 2010

The news will come as a surprise to observers, since it flies in the face of the announcement in August that RBS Insurance is to close two Glasgow offices with the cost of 440 jobs as part of a wider consolidation ahead of a probable flotation.

It has nevertheless been confirmed by two separate sources that the banking giant has been in negotiations for most of the year with Vertex, the company that was unveiled several weeks ago as the recipient of an IT outsourcing deal for Tesco Bank’s mortgage operations in Glasgow that will bring 200 jobs.

This was followed by an announcement by the Scottish Government last week that Vertex was to receive £1.7 million in regional selective assistance funding to create 368 jobs in the city – even though the group denied that such an announcement was imminent when it was contacted two weeks ago by the Sunday Herald. According to one well-placed source, negotiations would be “well down the line”.

The deals involve 4 Atlantic Quay, a 10-storey office block that overlooks the north side of the Clyde in the city centre. Vertex was last week close to signing a 10-year leasing deal for the seventh floor to house Tesco. It also has an option to lease the eighth floor, also for Tesco, and has earmarked the ground and upper ground floors for a deal with RBS. It expects to reach an agreement – which would also be for 10 years – with the bank by early next year at the earliest.

A further intriguing note is added by the fact that RBS is in the throes of vacating 6 Atlantic Quay, from where it has run its Direct Line operation for many years. Together with the closure of another office in St Vincent Street, it is retrenching the insurance operation to Cadogan Street, adding 200 to the existing staff to take the Glasgow total in the division to 1300.

The moves are part of the wider closure of 14 offices around the UK, reducing the insurance portfolio to 13 offices after the European Union ordered the company to offload the division by 2013 as part of its investigation into state aid to the banks. RBS announced at the time that the decision would lead to the loss of 2000 jobs UK-wide.

While Tesco is contracting Vertex because it does not have the IT infrastructure required to get permission from the Financial Services Authority to offer mortgages, it is not clear why RBS would be looking to outsource part of its operation. Other brands in the portfolio include Churchill, Privilege and Green Flag.

A spokesman for RBS Insurance said: “Pitched against an ever-competitive market, we are constantly exploring options that will help us achieve greater cost efficiencies. However, we do not comment on speculation and have a commitment to our staff that we will always tell them first if we are announcing any changes that affect them.”

A spokesman for Vertex said: “We don’t comment on speculation or rumour.”

Source:http://www.heraldscotland.com/business/corporate-sme/rbs-insurance-set-to-create-160-call-centre-jobs-in-glasgow-1.1064872

Indian ADRs shed nearly USD 3-bn in a week

October 31st, 2010

For the week ended October 29, the 15 Indian entities listed on the New York Stock Exchange and Nasdaq together shed USD 2.73 billion of their market capitalisation (m-cap), while the previous week they had lost USD 4.82 billion.

Thus, put together, Indian firms have lost about USD 7.55 billion in value within two weeks. Of the 15 firms listed as American Depository Receipts, 7 have registered loss in their valuations last week, while the remaining 7 saw a gain in their m-cap. The valuation of IT major Patni Computer Systems remained unchanged.

ADRs are bought and sold on American markets just like stocks and are issued by a bank or a brokerage firm. The market capitalisation of IT major Wipro plunged by USD 2.76 billion to a total of USD 34.98 billion, and the valuations of HDFC Bank decreased by USD 535 million to USD 26.5 billion.

In terms of gainers, private sector lender ICICI bank’s m-cap boosted by USD 804 million to USD 30.16 billion and pharma major Dr Reddy’s Laboratories’ valuations surged USD 170 million to USD 6.39 billion.

Apart from Wipro and HDFC Bank, IT bellwether Infosys Technologies and outsourcing firm Genpact too witnessed a significant loss in their respective valuations. Infosys’ m-cap declined by USD 299 million to a total of USD 38.52 billion, while that of Genpact fell by USD 228 million to USD 3.49 billion.

The market capitalisation of Internet firm Rediff.com, BPO company EXLService Holdings and telecom major Tata Communications was down by USD 7 million, USD 10 million and USD 53 million respectively.

Among the gainers, the valuations of Internet firm Sify Technologies, auto maker Tata Motors, BPO firm WNS Holdings, Mahanagar Telephone Nigam Ltd and copper producer Sterlite Industries increased in the range of USD 6 million to USD 97 million.

On Friday, the US markets ended mixed, with Dow Jones Industrial Average settling up by 4.54 points at 11,118.49 and S&P 500 fell by 0.52 points at 1,183.26. Besides, tech heavy Nasdaq was down 0.04 points at 2,507.41.

Source:http://www.deccanherald.com/content/109198/indian-adrs-shed-nearly-usd.html

World class call centres for Kampala, Nairobi

October 31st, 2010

The aim of the deal is to set up world-class call-centres in East Africa in Kampala and Nairobi.

Over 700 jobs will be created in the first phase of the project and will lead to further employment. The call centre is aimed at providing vital support services to the telecommunications, financial services and government sector. The new company will operate under the name Spanco Raps.

“After seeing the success of call centres in India which employ millions, educate the youth and provide a base for them to kick-start their careers, we wanted to replicate this model within the ICT sector in East Africa,” said Mara’s Managing Director, Ashish Thakkar.

Raps Uganda has been providing superior IT services for 15 years in Sub Saharan Africa and incorporating world-class HR practices enabling them to attract, train, and retain among the best talent in the industry.

The knowledge and expertise of a highly skilled and trained workforce is the bedrock for delivering superior service quality to their clients.

Spanco employs over 10,000 people in call-centres in India and Mara has an in-depth knowledge of the local market conditions and how to train staff in Africa.

The combination of these talents will drive the growth of the business in the region. Spanco Chairman, Kapil Puri firmly believes that the strength and know-how of Spanco in the sector will send a signal that East Africa is ready to do business.

“Building a world-class call centre business here will allow us and our partners at Mara to lay the groundwork for opportunities in the private and public sectors,” he said.

The Mara Group sees the partnership attracting international clients to the region and by so doing create more and more local jobs and lead to investment in the ICT sector throughout Africa.

The Mara Group is a young and dynamic brand synonymous with professionalism, integrity, innovation & entrepreneurial flair.

They have a 15-year track record and has grown from a small IT shop to an international multi sector business to include Information technology, real estate, financial services, hospitality, energy, packaging, retail and media, spanning four continents.

The Mara Group has been selected by the World Economic Forum¹s Community of Global Growth Companies (GGC), as a dynamic high-growth company in 2010.

Spanco on the other hand was established in 1995. Spanco Limited is a public limited company on the Bombay Stock Exchange.

An ISO 9001:2008 certified and CMMI level 3 Company; Spanco is an active player in the field of Information and Communication Technology (ICT) with dedicated System Integration and BPO arms besides strategic investments in the related field of ICT.

The various business activities/divisions under the single corporate entity of Spanco actually complement each other, thereby resulting in provisioning best of the breed solutions and services to the end customer to enhance their business competencies.

Source:http://www.capitalfm.co.ke/business/Kenyabusiness/World-class-call-centres-for-Kampala,-Nairobi-4926.html

UK outsourcing declines as Nordics surge

October 31st, 2010

The number of new outsourcing contracts signed by UK businesses declined in the third quarter, according to the latest research from sourcing consultancy TPI.

The research looked at private sector outsourcing deals worth more than €20m in Europe, the Middle East and Africa.

For the region as a whole, the total value of contracts signed in the third quarter was €5bn. This is 8% lower than the previous quarter and 10% lower than the same period a year ago. Globally the total value of contracts was €11.3bn in the quarter, which was 20% lower than the previous quarter and the same period a year ago.

Spending on outsourcing increased in the Nordics and Netherlands as a result of several large scale restructuring deals signed in the first nine months of the year. However, in the UK and Germany the total value of contracts awarded was only half that of the same period last year.

Duncan Aitchinson, head of Europe at TPI, expects to see more outsourcing activity in the UK next year. “Theoretically the recession is over, but there is still nervousness and reticence to do big deals,” he said.

Robert Morgan, director at consultancy Burnt-Oak Partners, said the company is seeing demand for sourcing advice from the Benelux and Nordic businesses far outstripping the UK.

He said the Nordic economies are growing much faster than the UK, at 6.5% in some cases, and businesses are moving into new areas.

He said businesses there have a different attitude to outsourcing contracts. “Scandinavian companies will not go to competitive tender if the business case is right from a single supplier,” he said.

Morgan said there is a lot a lot of activity in Benelux countries because there are a lot of contracts up for renewal and multi-sourcing is being introduced for the first time by many businesses.

In the UK, businesses have been waiting to see how the coalition government works out and the details of the spending review.

Morgan said deals will be slower to be signed in the UK because businesses are looking at new ways of working, such as joint ventures, and they are asking suppliers to go the extra mile.

Source:-http://www.computerweekly.com/Articles/2010/10/29/243600/UK-outsourcing-declines-as-Nordics-surge.htm

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