Archive for February, 2011

Allentown council escalates outsourcing dispute

February 10th, 2011

An admission by Allentown Mayor Ed Pawlowski that he violated a local ordinance that requires him to get City Council’s permission to outsource work now done by city employees escalated Wednesday with council demanding to know how many times violations have occurred.

“I know the mayor had knowledge of the ordinance and I can only conclude he deliberately violated this ordinance a number of times,” council President Michael D’Amore said during a human resources committee meeting. “There needs to be some accounting for that.”

Last month, Pawlowski spokesman Mike Moore said in a written statement that the hiring of a Florida contractor to service about 10 percent of the city’s 1,800 fire hydrants and 5,000 water valves was not presented to council because the Department of Public Works was not aware of the requirement.

A city ordinance passed in 1998 states, “City Council must approve, by resolution, all contracts for service, to do work or provide city services, which is currently being performed or provided for by city workers.”

The measure is intended to protect city jobs by restricting the mayor’s ability to unilaterally privatize portions of the workforce.

Administration staff acknowledged the oversight Wednesday and said they would now follow the correct procedures, which include a presentation before the newly re-established joint subcontracting committee composed of union, city and City Council members.

James Maley, deputy director of human resources, said that in his 12 years working for the city no one ever questioned why the 1998 ordinance was not followed until now. He and Managing Director Ken Bennington said they were not aware of the provision prior to the hydrant work.

But D’Amore rejected their position, as well as Pawlowski’s attempt last month to pass the blame on to the public works department. He insisted the mayor knew of the rule because council some years ago approved outsourcing a number of jobs from the accounting department.

“Everyone understood that City Council needed to approve the outsourcing of those jobs and that was approved by this council and the mayor knew full well about this law and he disregarded it numerous times, flagrantly,” D’Amore said.

Councilman Mike Schlossberg directed the city clerk to review the minutes from past meetings to determine who in the administration, if anyone, knew of the law.

“If the administration was aware of this in the past and specifically referenced it at any point in the meeting, I have very, very grave concerns,” he said.

The mayor was invited to the committee meeting but did not attend because he is on vacation in Florida. Maley said he would check with managers to see how much outsourcing has occurred.

Moore said last month that the limited outsourcing shows the city could save more than $100,000 a year if all of the city’s fire hydrants and valves were serviced by an outside firm and not union employees.

The maintenance work is done by members of the local Services Employees International Union, which saw 39 layoffs in 2009 and has borne the brunt of the mayor’s cost-saving measures. Overall, the city is at its lowest employment level in decades.

The union has filed three grievances against the administration based on outsourcing work. One grievance was settled, and two are pending. Ryan Hunsicker, head of the local union, said the outsourcing was a “slap in the face.”

Source:http://www.mcall.com/news/local/allentown/mc-allentown-contract-dispute-20110209,0,4111602.story

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Notre Dame considers outsourcing concession work done by non-profits

February 10th, 2011

The University of Notre Dame is considering outsourcing concession currently performed by volunteers of non-profit organizations.

In exchange for working the stands, non-profits receive 15 percent of the money collected.

“They did send a letter out late last year asking the not for profits to send a letter in and let them know what we think of our experience, what we’ve used the money we’ve generated for,” said Pastor Greg Fiechtner of St. Paul Lutheran Church.

Fiechtner has worked the stands at football and basketball games for the last 14 years.

“We had one year out in the concourse selling pizza and then we ended up in stand number 11 here. I remember the USC football game from a few years back. The neatest basketball is when ND was playing Michigan in the NIT we had dueling pep bands it really rumbled here,” said Fiechtner.

Since the church began staffing the stand it has brought in extra money for projects at the church.

“Our main budget doesn’t depend on this, but we’ve been able to do a lot of extra things that were good, so it would be unfortunate,” said Fiechtner.

Some organizations are more reliant on the revenue from concessions. Pet Refuge, which began staffing concession stand 9 three years ago, gets a majority of its funding from the stand.

“This is a guild project and I would say this is probably over 50 percent of our revenue. The guild donated money towards our new clinic that we’re going to open in June. If they wouldn’t have done that we wouldn’t be opening in June,” said Pam Comer with Pet Refuge.

Despite the potential impact the loss of revenue would have on their organizations, both St. Paul and Pet Refuge said they have confidence in Notre Dame.

“I’m sure that they’ll make the right choice,” said Comer.

Notre Dame is expected to make a decision on how it will staff concessions for the 2011-2012 athletic seasons in March.

University spokesperson Dennis Brown declined an interview, but said the school periodically reviews business operations and it is now reviewing its concessions.

Source:http://www.wndu.com/localnews/headlines/Notre_Dame_considers_outsourcing_concession_work_done_by_non-profits_115691239.html

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IT outsourcing company Fifosys increases turnover to £4m through acquisition of Octavia

February 8th, 2011

The acquisition creates a company with revenues in excess of £4m and 50 highly qualified IT support professionals with skills encompassing Microsoft, Citrix, Asigra, VMWare, Juniper, Cisco, BlackBerry, Vodafone and more.

Fifosys, along with Octavia, will continue to provide our trademark high standards of consultancy, IT support, network infrastructure, cloud computing, data backup and recovery and mobile services.

With an increased knowledge base and skill set, our clients will benefit greatly from this deal whilst still receiving the same high levels of service they have come to expect from the respective companies. By combining the passion, creativity, and expertise of two leading-edge service providers, we will continue to drive innovations that help SMEs across the UK.

Mitesh Patel, the Managing Director and Owner of Fifosys said “This is a key part of our growth strategy. We have acquired a highly skilled technical team and a growing customer base to whom we can offer Cloud Computing solutions and services to complement Octavia’s existing service offerings. It provides us with greater critical mass to exploit new technologies and helps to strengthen our management team. It is such a great way to start 2011.”

Giles Sirett, Chief Executive of Octavia commented “I am really pleased with the acquisition and truly believe it will provide positive benefits to all of our customers and to my team. Fifosys has invested heavily in infrastructure and services to offer Cloud Computing, IT Outsourcing and the Fifosys

Online Back-up service. I am really looking forward to introducing these new capabilities to Octavia customers. I see it as a very positive step for us all.”

Source:http://www.benzinga.com/press-releases/11/02/p841999/it-outsourcing-company-fifosys-increases-turnover-to-%C2%A34m-through-acquis

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India retains global top slot in BPO race

February 8th, 2011

INDIA CONTINUES to hold its position as the best outsourcing destination across the globe, despite the emergence of new rivals, according to the latest report from management consultancy firm AT Kearney.

The top three slots in AT Kearney’s 2011 Global Services Location Index ( GSLI) are occupied by three Asian countries India, China and Malaysia.

” With its first- mover advantage and deep skill base, India remains the unquestioned leader in the indexa half – point ahead of China and a full point in front of Malaysia.

” India is the all- around standout, able to provide manpower for any type of offshoring activity and still maintains the lion’s share of the IT services market,” the report said.

It also states that ” India’s IT services stalwarts are moving up the value chain.” Companies such as Infosys and Wipro are developing their research and development ( R& D) capabilities and expanding well beyond their traditional vendor roles.

Interesting, before the political unrest, Egypt had emerged as the fourth best outsourcing destination.

The report said that it was before the political turmoil broke out and the ranking may change later.

” The political uncertainty and country risk associated with Egypt have dramatically increased and the situation needs to be closely monitored to gauge whether the long- term risk profile will change,” the report said.

It added that China may not make a great impact in the call centre business as its most attractive avenues are high- end analytics and advanced IT, where it is an alternative to Russia and Eastern Europe.

Nevertheless, it can be a strong competitor to India in the BPO sector.

US remains the top customer for outsourcing services, accounting for 63 per cent of global IT outsourcing spending.

The GSLI analyses and ranks the top 50 countries worldwide for locating outsourcing activities, including IT services and support, contact centers and back- office support.

Each country’s score is made of a weighted combination of relative scores on 39 measurements, which are grouped into three categories financial attractiveness, people and skills availability and business environment.

Asia is ranked highly among the rest of the top 10, which features Indonesia ( 5), Thailand ( 7), Vietnam ( 8) and the Philippines ( 9). The report said Indonesia, Vietnam and Thailand have not yet fully devoted their resources in promoting information and communications technology but they score highly in the index because of their vast talent pools and competitive wages.

The report also said that in addition to economic changes, the nature of outsourcing itself is in transition.

” The old model involving multi- year contracts, custom code, and on- site systems integration workers is beginning to give way to a new model in which outsourcers provide standardised software solutions on a per- use basis,” the report said.

” The past two years have seen a number of outsourcers building and/ or acquiring the capabilities required to survive this shift, in the opening salvo of a coming revolution in outsourcing,” the report said.

Erik Peterson, managing director ( MD) of A. T. Kearney’s Global Business Policy Council said that ” regardless of changes in the outsourcing industry business model and other temporary setbacks, we believe the era of globalisation of services production has only just begun”.

Source:http://www.tmcnet.com/usubmit/2011/02/08/5296001.htm

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IT, BPO export to grow 3-fold to $175 bn by 2020: Nasscom

February 8th, 2011

With a steady recovery in major markets such as the US and Europe, Indian IT and BPO export is likely to grow three-fold to USD 175 billion in revenue by end -this decade, apex software industry body Nasscom said today.

However, in 2011, the IT industry will witness a flat growth at 18%. Last year, revenues from software exports and BPO services stood at USD 59 billion, it said.

“IT will continue to play a significant role in the transformational agenda of India. Export revenue is expected to increase three times at USD 175 billion by 2020. However, among the various segments in the sector, the IT segment will continue to perform better than the BPO industry and software and engineering products,” Nasscom President Som Mittal told reporters here.

India contributes about 55% to the global outsourcing of IT-ITES services and about 26% in the exports market. Of the total export in FY 10, IT services witnessed a growth of 27% followed by BPO at 12% and software production at 10%.
In FY 11 as well, major export revenue came from IT segment.

Nasscom, which will conduct its 19th leadership forum here from February 8-11, also forecast that the current decade will witness a major demographic shift, that would fuel the growth of sectors such as retail, health and education that will start including IT services.

“About 80% growth will be driven outside the current core and traditional sectors, verticals and customer segments,” Mittal said.

Source:http://www.moneycontrol.com/news/business/it-bpo-export-to-grow-3-fold-to-36175-bn-by-2020-nasscom_520391.html

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Will Nasscom reveal the new normal in outsourcing?

February 8th, 2011

“The annual Nasscom India Leadership Forum in Mumbai from the 8 to 10 February will involve over 150 speakers, 30 trade delegations and over 3000 delegates.

Throughout the three days, PA Consulting Group will be interviewing industry leaders and CEOs of suppliers and end user organisations alike, looking at how their predictions for 2010 compare with the reality of the last few months – and discovering how they think 2011 will develop.

The official theme of the event this year is ‘Drivers of the Decade’. Three key words, almost sub-themes in their own right, have been identified by Nasscom. They are ‘innovate’, ‘redesign’ and ‘reinvent’. There are also ten different ‘tracks’ to the show, ranging from building alliances to innovation. There is anticipation that these tracks will reflect the Nasscom pre-event statement that “working on yesterday’s logic could be risky and the ‘New Normal’ is yet to take shape”.

Precisely how these ideas will manifest themselves throughout 2011 will be a prime topic of conversation over the three days.

I’ll be blogging throughout the event, reporting on how industry leaders believe 2011 is likely to differ from 2010, and on how the months ahead could herald the beginnings of a new industry.”

Source:http://www.computerweekly.com/blogs/inside-outsourcing/2011/02/will-nasscom-reveal-the-new-normal-in-outsourcing.html

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Wipro reorganises core IT outsourcing business

February 8th, 2011

India’s No.3 software services firm Wipro Ltd said on Monday it had reorganised its key IT outsourcing business, less than three weeks after it named a new chief executive as it seeks to win more clients.

Wipro has been struggling to keep up with sector leaders Tata Consultancy Services and Infosys Technologies, with its earnings and volume growth in the December quarter lagging that of its larger rivals.

Last month, Bangalore-based Wipro named company veteran TK Kurien as chief executive officer, overhauling its joint chief executive structure.
“The fact that they announced the reorganisation so quickly is a positive sign, but we will need to see how this goes,” said Arun Kejriwal, director at KRIS, a research firm.
Wipro has organised its IT business into six business units by industry, and managed by different people.

“With the change in environment, there is a need for a bolder, simpler and more agile organizational structure,” Kurien said in a statement.

Last month, India’s top engineering and construction company, Larsen & Toubro said it will reorganise its operations into nine business verticals as the conglomerate seeks to simplify its structure to better manage growth.

Source:http://www.moneycontrol.com/news/business/wipro-reorganises-core-it-outsourcing-business_520404.html

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