Archive for October, 2010

Capgemini wins five-year IT contract with Anglian Water

October 29th, 2010

The deal will support Anglian Water’s infrastructure, including the full server and storage environment, and all the desktops and networks.

Mark Turner, account executive for the project at Capgemini, said: ” Capgemini will also support most of the main business applications, including the full SAP suite, a geographic information system and a range of specialist water systems.”

“There will be a knowledge transfer process on some of those specialist packages,” Turner confirmed.

In addition to the support function, the deal will involve building new infrastructure, including new storage, server and Wintel environments.

“Rather than shifting lots of kit, we’ll be building a new environment within our datacentre,” said Turner.

The deal also includes the use of VMware to create a new virtual environment, particularly around the water company’s Wintel estate. Turner explained that the company will be able to reduce the number of physical servers it maintains, thereby reducing operating expenses.

“We are aiming for 70 to 80 per cent virtualisation,” said Turner.

The transition to Capgemini’s datacentre begins immediately, with new services scheduled to go live in February 2011.

Source:http://www.managementconsultancy.co.uk/computing/news/2272388/capgemini-wins-five-contract

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Genpact net rises 21.4% in Sep quarter

October 29th, 2010

Healthy demand for business process outsourcing (BPO) made Genpact Ltd, India’s largest BPO firm, post a 21.4% rise in net profit at $40.1 million (around Rs.180 crore) for the three months ended 30 September. Revenue rose 13.1% at $321.6 million year-on-year. Net profit was up 44.2% against $27.8 million reported in the June quarter.

The company, which counts the US market and banking and financial services as its biggest sectors, said adjusted income from operations margin declined to 15.4% compared with 18.9% a year ago.

President and chief executive Pramod Bhasin said this was due to unforeseen delays by clients in transitioning signed contracts to full production, its investments in sales staff and in building technologies.

“These client delays have affected margins in the near term; because of the upfront investments, we normally make in transitioning processes from the client to us,” he said. “We have already taken aggressive actions to align our costs with these revised schedules and reset our cost base.”

Genpact has trimmed 2010 revenue growth expectation to 12-13% from the earlier 14-17% due to client delays. “The delays do not amount to any cancellations. Clients are just breaking contracts into smaller pieces due to the uncertainty in the environment,” said chief operating officer N.V. Tyagarajan.

At the end of September, Genpact had around 43,300 employees worldwide. Its employee attrition rate for the nine months to September was 28% against 23% a year ago.

Genpact generated $68 million of cash from operations in the Q3, up from $55.7 million a year ago. It added 20 clients during the quarter.

Source:http://www.livemint.com/2010/10/28220140/Genpact-net-rises-214-in-Sep.html?atype=tp

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Unions say outsourcing corrections is failed idea

October 29th, 2010

To three union presidents, who are also prison correction officers, the concept of outsourcing prisoners from the state is “Tom Foolery.”

The correction officers, who held a press conference at Council 4 AFSCME headquarters Monday, criticized Lt. Gov. Candidate Mark Boughton’s idea of outsourcing the corrections function by sending prisoners out of state — a plan they say failed tragically under Gov. John Rowland.

Rather than saving money, this attempt at privatization was, according to them, a financial drain. The state paid out $2 million to the family of two inmates who died while under supervision at Wallens Ridge, Va.

On his campaign Web site Boughton states “… nothing wrong with outsourcing our corrections function, for every 500 prisoners sent out of state, the State of Connecticut could save as much as 11 million dollars.”
*
Boughton said he was unaware of any such statement on his Web site and added that he doubted Foley would take such a stand. However, Foley on several occasions has argued for “outsourcing” major tasks performed by the state government.

A call to Foley’s campaign was not returned.

Last May, at the conventions, Foley said he would “shift state services to outside contractors where it can be shown that equivalent service levels can be provided at less cost.”

In June, CT Mirror (ctmirror.org)reported that Foley said “the key is to move major tasks performed by state government’s roughly 50,000 unionized workers such as road maintenance and social services even more into the private sector.” Acknowledging that this would probably put him in collision with unions and a Democratic controlled legislature, he said “there are probably big opportunities to save money by outsourcing.”

Then in August, CT News Junkie (ctnewsjunkie.com) quoted Foley as saying “our Department of Corrections incarcerate[s] too many people. I’m told if we change our rules and had alternative forms of punishment for non-violent criminals we could also save several hundred million dollars.”

“This is déjà vu all over again,” said Jon Pepe, president of AFSCME Local 391. “Foley and Boughton need to look at history. This is not a fresh idea. It’s a bad idea. It’s more ‘Tom Foolery’ from candidates who are out of touch with regular citizens.”

Pepe said in 2003 when the state realized the program costs them “twice as much as anticipated” it scrapped the program and inmates were returned to Connecticut.

Before that, there had been the cost of transporting inmates’ families to and from Virginia for visits, also video monitoring of prisoners in a controlled area.

“We’re saving the public money,” Pepe said. “There are no riots like there used to be; prison employees are doing the job they’re supposed to be doing.”

Union presidents also pointed out that outsourcing corrections functions would force the closure of prisons, which would devastate local economies, resulting in a downward spiral of joblessness, lower tax collections and a further strain on public services.

“Privatization will close prisons and the economic effect on surrounding communities will be devastating,” AFSCME Local 387 President Dwayne Bickford predicted. “Connecticut’s track record shows that privatization equals corruption at the highest levels of government.”

The union presidents said Connecticut needs solid leadership in Hartford — leaders who understand the needs of front-line prison employees who walk a tough, law-enforcement beat. Any proposal to export inmates, and with them prison jobs and economic development, shows, they argued, a lack of concern for the Connecticut residents and the correctional officers who risk their lives to keep them safe.

“What job opportunities will await relocated prisoners when they’re released and returned to Connecticut?” Bickford asked rhetorically.

“We need a chief executive who appreciates our services, understands our jobs and doesn’t need on-the-job training,” said Luke Leone, president of AFSCME Local 1565. “We don’t have that kind of confidence in Tom Foley and Mark Boughton.”

AFSCME Locals 387, 391 and 1565 comprise Council 4’s NP-4 Corrections Bargaining Unit. The three unions represent 5,000 front-line prison employees, including correctional officers, treatment officers, parole officers, and maintenance staff.

Source:-http://www.newbritainherald.com/articles/2010/10/25/news/doc4cc63dd103b5f480901292.txt

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Germany now outsourcing jobs to india, i mean, uh… america

October 28th, 2010

What happens when labor costs make it too expensive to manufacture your product domestically?

You outsource the work to India. Mexico. South Carolina.

Yes, that’s exactly what it’s come to, folks. BMW has opened a plant in Greer, South Carolina, where the workers earn half ($15/hr) what their German counterparts do.

“We are a low-wage country compared to Germany,” Kristin Dziczek, director of the Labor and Industry Group at the Center for Automotive Research, tells the Washington Post. “And that helps put jobs here.”

Sure, jobs are being created here. But they’re here because wages, adjusted for inflation, have declined since 2003.

Other foreign companies taking advantage of America’s transformation into a third-world country include Michelin, Bosch, and Daimler, which is now building its Mercedes C Class in Tuscaloosa, Alabama.

What’s really terrifying is that India itself–the classic outsourcing destination of choice–is now outsourcing its jobs.

Tata Consultancy Services opened a software development center in Guadalajara a few years ago to save money.

And it won’t be long before those jobs are being re-outsourced from there.

Source:http://www.minyanville.com/dailyfeed/germany-now-outsourcing-jobs-to/

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BPO (business process outsourcing) providers fall short on service, survey shows

October 28th, 2010

Improving process management is the no. 1 way that BPO (Business Process Outsourcing) providers can best improve service. That’s the finding of a new survey by ASQ, the leading network of global quality experts. Companies that outsource business processes rank process management as the key area that their provider(s) can change to have the most positive impact on customer satisfaction. Fifty-five percent are substantially dissatisfied with their provider(s) in the area of innovation and making process improvements.

“While low cost gets a provider in the door, it’s clear that those who innovate and provide best-in-class core processes that deliver superior value will be positioned for long-term success”

Industry Expectations for BPO Providers

Industry representatives who responded to the survey ranked the following as the three biggest benefits they expected when making the decision to outsource their business processes:

1. Reduced costs.

2. Improved efficiency.

3. A more flexible workforce.

Are BPO providers meeting expectations? Companies that answered this survey question feel that providers are falling below expectations in a number of areas, including:

Providing good value. (34%) Assigning quality people for projects. (41%) Meeting performance metrics. (41%) Retention of key people assigned to projects. (39%) “While low cost gets a provider in the door, it’s clear that those who innovate and provide best-in-class core processes that deliver superior value will be positioned for long-term success,” said Jean Harvey, ASQ business process outsourcing expert and author of Complex Service Delivery Processes published by ASQ Quality Press.

How Can BPO Providers Improve?

When asked what would improve satisfaction with their BPO provider(s), industries most often requested:

Increase the communication flow between provider and client. Provide better staff training to avoid common turnover problems. Implement or upgrade quality processes to improve service. Allow for more innovation and creativity. Meet expectations/deadlines more efficiently. Outsourcing Quality Assurance

Of those who outsource quality assurance/management functions, industries most often requested improvement in quality and technical knowledge (24%) followed by better understanding of business objectives (18%) and improvement in relationships with in-house management teams (18%).

The survey of more than 300 ASQ members and customers was fielded October 8-22, 2010, and reflects a number of industries including transportation, utilities, wholesale trade/retail, banking/finance, healthcare, government and IT. Those surveyed are currently outsourcing the following business processes:

Back office services such as accounting, record-keeping, compliance and IT. (36%) Facility services/security. (23.6%) Quality assurance/management. (18.4%) Human resources. (12.6%) Front office services such as customer service, sales and marketing. (7%)

ASQ is a global community of people dedicated to quality who share the ideas and tools that make our world work better. With millions of individual and organizational members of the community in 150 countries, ASQ has the reputation and reach to bring together the diverse quality champions who are transforming the world’s corporations, organizations and communities to meet tomorrow’s critical challenges.

Source:http://www.mfrtech.com/articles/6349.html

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Outsourcing a threat to supply chains, says PwC

October 28th, 2010

The new study , which asked 112 execs for their views on outsourcing’s likely impact on the supply chain, revealed that 78 per cent think sourcing ingredients outside the US will increase and 76 per cent believing more manufacturing will be done elsewhere.

However, while they acknowledged the practice of outsourcing will increase they also see it introducing more problems with the sourcing of raw materials sourced from outside the US as the greatest threat to supply chain security.

The problem, according to the respondents, is that the standard method of supply chain monitoring though supplier audits only provides “snapshots in time” become increasingly expensive and complex when multiple parties are involved.

The lack of communication between the relevant parties is also in issue, with 60 per cent of respondents voicing worries about the willingness of suppliers to provide regulatory information and 40 per cent raising similar concerns about distributors.

On a more positive note the executives surveyed welcomed the advent of track and trace technologies as an important step in increasing supply chain visibility, although many still worry about the cost and difficulty of implementation in a global industry.

Source:http://www.outsourcing-pharma.com/Contract-Manufacturing/Outsourcing-a-threat-to-supply-chains-says-PwC

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UK IT outsourcing market shrivels

October 28th, 2010

The UK was the biggest laggard as the European outsourcing market remained in the doldrums in 2010’s third quarter.

Figures from research and advisory firm TPI reveal that 57 outsourcing contracts worth €20m (£17.5m) or more were awarded across EMEA during Q3. Total contract value stood at €5bn, down 10 per cent on 2009. Global TCV slumped more than 20 per cent to €11.3bn. European contract values sunk to their lowest level in five years and, in the UK, TCV for the year to date is half what it was last year.

Restructuring contracts have been one of the bright spots of 2010 and remained so in Q3. Deal volumes in EMEA rose 80 per cent sequentially and almost 500 per cent annually.

IT outsourcing deals took a battering during the quarter, with EMEA-wide TCV plummeting 35 per cent annually to a little more than €3bn. In contrast, business process outsourcing has enjoyed a strong year to date. EMEA contract values for 2010’s first nine months have risen 19 per cent on last year to €4.3bn.

Duncan Aitchison, EMEA president of TPI, said the market for restructuring deals would continue to perform well next year, but cautioned that the rest of the market could be far more volatile. The market will pick up somewhat in this year’s closing quarter, he predicted, but stressed that 2010 has been a year to forget overall.

“While we foresee a more robust fourth quarter for outsourcing awards in general, we do not believe it will be as strong as the fourth quarter in 2009 and do not expect it to compensate for the third-quarter doldrums,” he said. ” It is highly unlikely that full-year TCV in 2010 will measure up to last year’s results.”

Source:http://www.channelweb.co.uk/crn/news/2272344/uk-outsourcing-market-shrivels

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