Archive for November, 2010

IT firms continue to gain market share

November 24th, 2010

Private sector has continued to look at outsourcing and offshoring, despite govt’s measures

The UK government’s ratification of the £600-million (around Rs 4,296 crore) deal to Tata Consultancy Services (TCS) to set up the information technology (IT) infrastructure and administer its revamped pension scheme highlights the significance of the outsourcing industry.

The private sector in the US, too, has continued to look at outsourcing and offshoring to tackle cost pressure, despite the government taking protectionist measures.
As a result, Indian service providers have been steadily increasing their market share since 2000. According to the third quarter TPI Index, Indian-heritage providers – TCS, Infosys Technologies and Wipro, among others -have achieved 20 per cent share of the total contract value (TCV) awarded since 2007.

The TPI Index, which measures commercial outsourcing contracts valued at $25 million or more, said Indian services companies have bagged 27 per cent of the number of contract awarded for 2010 (year to date), up almost five per cent from 22 per cent in 2007 — one of the highest year-on-year increase since 2007.

Traditionally, multi-national companies – IBM, Accenture and HP, among others – have managed to maintain a lead in deal sizes above the $25 million range. They maintain their lead in terms of the total TCV of contract awards with 58 per cent in 2010 (YTD).

One reason for the shift is that deals are getting smaller. “There are a bunch of contracts that have been renegotiated. Rather, the Q3 TPI Index points to a higher instance of renegotiated contracts. While most deals have gone to major players including Indian firms, several deals are getting broken into silos and this is where the Indian players are gaining,” said Siddharth Pai of TPI.

For 2010, of the deals up for renegotiations, 13 have been won by Indian companies. Restructuring activity, that includes renegotiations, renewals and extensions of existing outsourcing contracts, totaled $6.8 billion during the third quarter, or 48 per cent of the global market.

The average TCV size has also declined. MNCs and Indian IT services firms are converging on the middle of the market, with $25-199 million deal sizes proving to be the battle ground.

“I agree that deal sizes are moving away from the billion range to the million range. The other reason for the Indian IT services to gain share is due to the budget constraint. From the earlier days of double digit IT budgets, for many firms in the US this has come down to single-digit. While the customer’s IT budgets are getting smaller they still need to deliver services and that is pushing the offshoring trend,” said Sudin Apte, principal analyst and CEO, Offshore Insights.

This is also reflecting in the revenue share of Indian service providers vis-a-vis the MNCs. According to the TPI study, five years before Indian IT services firms garnered six per cent of the total services revenue compared to 94 per cent of the MNCs. At present, however, Indian players have increased their share to 13 per cent.

Apte said post slowdown, clients are increasingly looking at offshoring. “If offshoring was 30 per cent, clients are saying take it up to 70 per cent. This is one way of cutting cost and that is paramount today. Clients are also looking at better control and vendors who are open to change. That flexibility is there among Indian IT players. And, more important, the pricing parity.”

However, Avinash Vashistha of Tholons said MNCs get a sizeable chunk of their business from the systems integration (SI) segment, where Indian companies do not have considerable presence. “It is a low margin business. While Indian players are not being able to compete with MNCs, they are also not interested in entering this segment. Hence, we will continue to see MNCs having a larger portion of the market.”

Indian companies are expected to have a compounded annual growth rate of 10.8 per cent for the next three years.

Further, more investments in front-end capabilities are also bearing fruit for Indian IT firms. “Hiring locals need not necessarily be due to protectionist voices. As Indian companies grow and become real competitors, move to more consulting work, they will have to hire more experts onsite,” said Pai.

Take Tata Consultancy Services: It has set-up a centre in Cincinnati and is hiring locals to tap the government and health sector. Similarly, Infosys Technologies has stepped up hiring in the US, partly infused by the rise in visa fees. It also aims to garner more consulting work.

“Moreover, a lot of the deals have an onsite component. Even earlier, Indian service providers would have onsite people but they were technical specialist. With more onshore presence, the share of deals that the Indian IT services have managed to grab has gone up as they get into business discussions,” said Vashistha.

Source:http://www.business-standard.com/india/news/it-firms-continue-to-gain-market-share/415841/

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Operational risk ,IT and Outsourcing

November 24th, 2010

The traumatic crisis that engulfed the industry two years ago prompted a renewed concern among many hedge fund managers to gain control over their positions and exposures. Traumatised investors started asking managers many more questions about how positions were being valued, and even, in the wake of Madoff, whether the assets the fund claimed actually existed. This greater activism on the part of investors has turned out to be a lasting phenomenon, with managers under pressure to answer questions continually about their investment exposures and operational risk.

Meanwhile, hedge fund managers also have to deal with the lasting financial consequences of the crisis. Many faced extensive redemptions from investors who were disenchanted with performance or needed to realise assets. In the industry as a whole, assets under management have only just recovered the level of November 2008, still some way below their peak, and many funds remain below their high water marks.

So although fund inflows are recovering, many incumbent hedge fund managers now have to run more robust and transparent operations on reduced fee income. For start-ups the situation is worse. Most fund inflows lately have gone to the largest incumbent managers. Wannabe start-ups struggle to attain critical mass, and investors are reluctant to commit money on the traditional model whereby a 2 per cent management fee was intended to fund the bulk of operating expenses.

It’s now common to see start-ups launch with only USD25m-USD50m of committed capital, often with only a 1.5 per cent management fee. That doesn’t leave much of a budget, putting funds in the risky position of funding their operations from expected performance fees.

All this means the hedge fund COO has to do more, with less. Technology is the key to managing operational risk and delivering transparency to management and investors.

Traditionally, a hedge fund manager would build its own operational infrastructure in-house, implementing third-party software as part of the solution but also building their own applications and integrating it all into coherent workflows. The manager’s own IT group would have responsibility for running and developing the in-house platform, involving ongoing costs of headcount and infrastructure maintenance.

Today hedge fund managers are increasingly outsourcing more of these operational requirements to specialist vendors such as SunGard. Our business is increasingly about hosting and maintaining systems on behalf of our clients. Managers still have full access to and control over their operational processes, but can significantly reduce the ‘total cost of ownership’ of the systems they need to have in place.

This new model requires long-term partnerships between hedge fund manager and vendor; no longer is software deployed and then managed by the client with arms-length support from the vendor. From the manager’s point of view, selecting a strong vendor with a good understanding of the challenges facing its clients can offer a number of benefits. This can include the ability to go to market quickly with a ready-made technology solution, and to leverage the expertise of a vendor which specialises in technology design, quality assurance and scalability.

But ultimately it is investors who are the principal driver for change, by turning the spotlight on issues of operational risk. They are demanding more information on internal systems, and a strong vendor partnership can provide added assurance to investors that the fund’s systems are robust and based on reliable technology.

Source:http://www.hedgeweek.com/2010/11/22/68413/operational-risk-it-and-outsourcing

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PPI Bill to boost outsourcing

November 23rd, 2010

SA’s Protection of Personal Information (PPI) Bill, which follows the European Union data protection model, gives SA an advantage, as it will make it more attractive as a destination for outsourcing.

This is according to Preeta Bhagattjee, director of Technology Media and Telecommunications Practice at law firm Cliffe Dekker Hofmeyr, who says international companies are keenly watching SA as the country gears up for the PPI Bill, which is expected to be promulgated early next year.

She says the Bill gives effect to the constitutional right to privacy while protecting the free-flow of information and advancing the right of access to information. “This will finally set to fall in line with international standards for the collection and handling of personal information.”

Bhagattjee says the PPI Bill also applies if the responsible party is not domiciled in SA but processes personal information through automated or non-automated means that are situated in SA. “This means that the PPI Bill is applicable to responsible parties outside of SA as well.”

She says the proposed law regulates how personal information can be processed and creates measures, including the establishment of an information protection regulator, to enforce the protection of personal information in SA.

“The PPI Bill also provides for various remedies for non-compliance, including the imposition of fines or a sanction of imprisonment in certain cases.

“International companies that have been operating under similar laws with regards to personal information will be better placed to achieve compliance with the PPI Bill because they would be able to adapt existing policies to fit the requirements of the PPI Bill.”

Bhagattjee also notes that this is an advantage for SA, as it will become more attractive as an outsourcing destination.

She recently attended the International Association of Privacy Professionals (IAPP) Conference in the US to inform her global peers, some of whom advise companies doing business in SA, as to what they can expect from the PPI Bill and how they should comply.

Source:http://www.itweb.co.za/index.php?option=com_content&view=article&id=39065:ppi-bill-to-boost-outsourcing&catid=69

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Use These Outsourcing Tips for Better Results Today

November 23rd, 2010

Outsourcing can not only help your business grow but also give you more free time away from it. Big businesses are not the only businesses that can benefit from outsourcing; when it’s done well, any business can. It’s only after you really begin to outsource that you’ll have the free time available to focus on growth for your business over simple operation. In this article we shall be looking into 3 simple tips that will help you with your outsourcing project.

If you want your outsourcing project to be successful, you need to make sure you communicate effectively with the provider. Many projects are less than successful and this is mainly due to not enough communication. It is a critical part of outsourcing and this is why you should have a strong plan of communication at the ready. You can change this plan as you need to and improve it in time. You need to ensure that you know what is happening at all times and you can do that with daily status calls. You will clear up a lot of issues by learning how to communicate effectively with your service provider regularly. If you are in constant contact with your service provider, he or she won’t have to search for support when they aren’t clear on something. It makes your project move faster and smoother.

Make the investment n a project manager who can keep the project on task, on target, on budget, and on deadline. When you’re outsourcing your work, you’ll notice that there are some tasks that you just cannot compromise on and a project manager happens to be one of them. This is a position that is too important to outsource. But you can make sure that your outsourced projects are effectively managed by one.

Finally, stay on top of things with the projects and firms you hire. Respond quickly to any problems that might arise. You should have a more firm project management and try to take care of problems at an early stage. Small issues that are ignored today may be major issues tomorrow.

To conclude, we have seen that outsourcing can change your business and offer you a high ROI. However, to gain the most benefits, you will have to be intelligent in making the proper moves and employing the right person. Starting out small is critical and once you gain the experience and confidence required you can fry bigger fish. Remember, consistency is the key and the success is one step at a time.

Source:http://www.kingofthebop.com/2010/11/23/use-these-outsourcing-tips-for-better-results-today/

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3 Outsourcing Tips You Can Use Now

November 23rd, 2010

Outsourcing is one of the contributing elements to the success of your online business. You will strike that perfect balance that leads to success by outsourcing effectively only the right tasks and by handling the important matters yourself. A lot of people fail at outsourcing for many reasons but probably one of the biggest is that they aren’t sure what tasks they should handle themselves and what should be outsourced. Like any other skill, though, you can learn to outsource effectively. Given below are 3 easy to apply tips that you can use right away to improve your business and get the most out of it.

If you want your outsourcing project to be successful, you need to make sure you communicate effectively with the provider. Many projects are less than successful and this is mainly due to not enough communication. It is a critical part of outsourcing and this is why you should have a strong plan of communication at the ready. You can change this plan as you need to and improve it in time. You need to ensure that you know what is happening at all times and you can do that with daily status calls. You will clear up a lot of issues by learning how to communicate effectively with your service provider regularly. If you are in constant contact with your service provider, he or she won’t have to search for support when they aren’t clear on something. It makes your project move faster and smoother.

Make the investment n a project manager who can keep the project on task, on target, on budget, and on deadline. When you’re outsourcing your work, you’ll notice that there are some tasks that you just cannot compromise on and a project manager happens to be one of them. This is a position that is too important to outsource. But you can make sure that your outsourced projects are effectively managed by one.

Don’t use the price as the only criteria to choose a certain vendor or another. Finding the ideal vendor is simply a matter of choosing one whose bid is midway, neither too high nor too low. You need a vendor who has reasonable rates while providing amazing results and great value. When you pick a service provider who have to pay attention and exercise caution because it is easy for people with no experience to get burned.

To conclude, we have seen that outsourcing can change your business and offer you a high ROI. However, to gain the most benefits, you will have to be intelligent in making the proper moves and employing the right person. You should start off small but once you have gained the confidence and knowledge you need you can move on to bigger projects. Remember, consistency is the key and the success is one step at a time.

Source:http://articleslocation.com/3-outsourcing-tips-you-can-use-now/

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Outsourcing Lets Someone Else do Your Boring Business Tasks

November 23rd, 2010

Outsourcing can not only help your business grow but also give you more free time away from it. Outsourcing, when done well, is something that any business can benefit from not just big businesses. Once you begin outsourcing regularly, you’ll discover that you have more time available to work on making your business grow instead of simply running it. These three simple tips will help you get a greater return for your outsourcing dollars.

First and foremost, even before you invest any money into outsourcing, it’s important that you do your homework and understand the implications of outsourcing your work. It’s quite possible to enjoy extraordinary results from outsourcing but you’ll have to do a little research of your own to find what you need and which firm will serve those needs best. There’s tons of information available online when you search, but make sure you filter out the crap and only keep the knowledge that’s going to be useful to you. Do your research though because knowledge will help you avoid costly mistakes.

The plan for your project should always include clearly specified milestones. You can create a schedule on a spreadsheet which can be used to for checkpoints as well. Since you want to be sure that the final product is what you are expecting, you should review the status of the project regularly as you move closer to the deadline to make sure that all your requirements are being fulfilled.

You can connect the payment of your service provider to predetermined milestones.

Last but not the least; you need to be on your toes to any upcoming problems with your outsourcing firm that you hire. Stay on top of potential problems and respond at the first sign of trouble. Swift attention to problems is a sign of excellent project management skills. Small issues that are ignored today may be major issues tomorrow. It isn’t a huge hassle to start outsourcing work for your business. If you start out small you can steadily begin to outsource even more work. This is one strategy that will never go out of fashion because there’s tons of talent online, where people want to do something to earn money. If you can give them that opportunity, they will be more than happy to oblige with you.

Source:http://www.itwillbeyou.info/?p=3172

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Use These Outsourcing Tips for Better Results Today

November 23rd, 2010

Outsourcing is one of the contributing elements to the success of your online business. If you effectively outsource the appropriate tasks and handle the important matters yourself, you will find that you achieve a balance that leads to success. A lot of people fail at outsourcing for many reasons but probably one of the biggest is that they aren’t sure what tasks they should handle themselves and what should be outsourced. Like any other skill, though, you can learn to outsource effectively. In this article, we look at three tips that are simple to apply and can be used immediately to generate excellent results for your business.

The more communication you have with your vendor, the more successful your outsourcing project will be. Quite often, projects fail simply due to insufficient communication. It’s a very important element of outsourcing, which is why having a strong communication plan in place is necessary. You can change this plan as you need to and improve it in time. Make certain that you are using daily status calls so you can stay on top of things. You will clear up a lot of issues by learning how to communicate effectively with your service provider regularly. If you are in constant contact with your service provider, he or she won’t have to search for support when they aren’t clear on something. It makes your project move faster and smoother.

Make sure you invest in an excellent project manager for better control over your project. When you’re outsourcing your work, you’ll notice that there are some tasks that you just cannot compromise on and a project manager happens to be one of them. This is a position that is too important to outsource. But you can make sure that your outsourced projects are effectively managed by one.

Don’t use the price as the only criteria to choose a certain vendor or another. Finding the ideal vendor is simply a matter of choosing one whose bid is midway, neither too high nor too low. You need a vendor who has reasonable rates while providing amazing results and great value. When you pick a service provider who have to pay attention and exercise caution because it is easy for people with no experience to get burned.

In conclusion, this article has shown that outsourcing can turn your business around and generate a high return on your investment. However, to gain the most benefits, you will have to be intelligent in making the proper moves and employing the right person. You should start off small but once you have gained the confidence and knowledge you need you can move on to bigger projects. Remember, consistency is the key and the success is one step at a time.

Source:http://kenoshagirlscouts.org/use-these-outsourcing-tips-for-better-results-today/

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