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Archive for May, 2011

HP too reliant on IT outsourcing

May 18th, 2011

HP will appoint a new head for its burgeoning enterprise services division after chief executive Leo Apotheker found the company was too reliant on IT outsourcing.

Until now, HP enterprise services, bolstered by dozens of EDS-legacy outsourcing deals, has sat under the company’s US$54 billion Enterprise Business umbrella, led by executive vice president Ann Livermore.

Apotheker told investors today that Livermore would remain the interim leader of services until HP had recruited an executive vice president to oversee it separately, according to a Barrons report.

Besides a 5 per cent decline in PC revenues, year-on-year services revenue grew 2 per cent while the unit’s 15.2 per cent operating margin fell 0.6 percent compared to last year, according to HP’s second quarter 2011 results.

The unit suffered because HP was too focused on short-term margins, according to Apotheker.

“I have concluded that we had a solid strategy for services, but we didn’t invest in the path to support the strategy,” he said, according to the report.

“Instead, HP focused on maximising its shorter-term margins. We have over-executed operationally and under-invested strategically.

“As a result, our short-term margin expectations have been too high. This has impacted our ability to create sustainable growth for the long term.”

HP would address this by targetting higher value work such as application modernisation, migrations to the cloud, business analytics and mobility, he said.
The reliance on IT infrastructure outsourcing could be a difficult to break. HP’s US$3.7 billion IT infrastructure outsourcing revenue for the quarter made up the bulk of its US$8.9 billion services income, which overshadowed technology services, application services and business process outsourcing by at least US$1 billion a piece.

Apotheker’s comments regarding a leadership change for services confirmed earlier reports that HP would split up the Enterprise Business monolith as part of a major strategic overhaul.

HP cut its outlook for full-year profit, excluding items, to “at least US$5.00 per share” from previous outlook of “US$5.20 to US$5.28″ and cut full year revenue outlook from US$130 billion to US$131.5 billion to new forecast of US$129 to US$130 billion, according to Reuters.

Source:http://www.itnews.com.au/News/257787,hp-too-reliant-on-it-outsourcing.aspx

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Insurance BPO Market Blossoms

May 18th, 2011

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U.S. insurers are becoming increasingly reliant on business process outsourcing providers, a new study from Boston-based Celent finds.

Celent anticipates a combined annual growth rate of 10% in the North American core insurance BPO market, with insurer expenditures growing from an estimated $2.3 billion in 2011 to $3.7 billion by 2016.

The report, authored by Celent Senior Analyst Mike Fitzgerald and Analyst Karen Monks, also expects that BPO revenue growth in life/annuity/health sector will be slightly higher than the P&C industry given the larger average deal size in that sector.

The new report augments finding from a November 2010 survey of insurers by Celent which found that 49% of respondents expected their company’s use of BPO to remain level in 2011, while 36% expected it to increase.

Fitzgerald and Monks note that BPO activity has most frequently been seen in non-core processes such as claims management, customer service, billing and payments, and imaging. However, in light of the budget restrictions faced by insurers following the financial crisis, they may be begrudgingly acquiescing to the use of BPO in more core insurance functions.

“It was expected that the economic events of 2008 through 2010 would force many insurers to rethink their views on business process outsourcing,” the report states. “As cost containment became a mandate and insurers looked for ways to manage costs, business process outsourcing experienced growth over the past two years, but adoption of BPO by insurers for core insurance services progressed at a slower rate than expected in North America.”

The authors predict that as insurers slowly use BPO for more core functions, BPO providers will have to adapt.

“BPO vendors will continue to expand their onshore and nearshore operations in response to customer/prospect demand, particularly for processes requiring customer-facing voice support,” Fitzgerald and Monks state. “As outsourcing of core functions expands, Celent expects they will be managed onshore. Every vendor interviewed reported some level of capability in this area. Political pressure and tax policy in the United States accelerated a “mixed shore” model in some instances, but cost pressures will still require that back office functions are processed offshore.”

Source:http://www.insurancenetworking.com/news/insurance_technology_business_process_outsourcing-27944-1.html

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TCS eyes slice of legal process outsourcing market

May 18th, 2011

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The country’s largest software exporter Tata Consultancy Services could soon join domestic rivals Infosys and Wipro for a slice of the multi-billion legal process outsourcing market.

“It (the legal process outsourcing segment) seems like an interesting space…we are currently looking at it,” the TCS Chief Executive Officer and Managing Director, Mr N Chandrasekaran, told Business Line in a recent interview.

Hiring

However, he did not give further details of the company’s strategy going forward.

The company has already begun on a “small scale” with 2-3 clients and has raised hiring, both in India and the UK, for this practice, said a source familiar with the development. However, TCS will make a big ticket announcement only when the business achieves sizable scale, the source added.

LPO is a different ball game from the regular back-office work as it refers to the practice of a law firm or corporation obtaining legal support services from an outside law firm or legal support services company.

Litigation and business document review, contract management, electronic discovery, legal analytics and document preparation are some of the services outsourced to third party vendors.

TCS has been active in providing technology solutions to law firms globally. Earlier this year, the Law Society of England and Wales selected TCS’ flagship legal management solution as part of a systems development project.

LPO vendors

The Indian LPO space is dominated by pure play LPO vendors such as Pangea3, CPA Global, Unitedlex, and Evalueserve. Some of these firms have been growing at over 100 per cent in the last few years largely because they charge a fraction of the $150-350 an hour billed by an attorney in major markets such as the US and the UK.

In fact, LPO was one of the few industries which got a shot in the arm following the economic meltdown of 2008 as the pressure to control costs pushed more legal services work into the third party realm.

According to a Nasscom market intelligence report, the LPO segment is expected to touch $15 billion by 2015.

Bangalore-based Infosys and Wipro have been actively pursuing opportunities in the LPO space for the last few years now.

In June last year, Wipro’s BPO arm won a LPO contract to provide trademark filing and docketing services to Microsoft.

TCS’ back-office business, which includes its LPO initiatives, generated revenues of Rs 10,157 crore for the quarter ended March 31.

Source:http://www.thehindubusinessline.com/industry-and-economy/info-tech/article2026901.ece?homepage=true

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How will outsourcing your IT department benefit your small business?

May 18th, 2011

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It pays to outsource your IT department. When you outsource, you are only paying for the service they complete correctly. These consultants do not make money unless you are having problems with your modern technology. Outsourcing your IT department covers the digital divide that you might be having. These companies keep you from having to take at least one IT course and often it takes more than one to learn the basics and more so that you can successfully run your system.
These technology companies have no business incentive to be proactive about solving your problems. This is an advantage, because they will only be handling a small portion of your modern technology equipment problems as you need them. Some companies provide unlimited support for a fixed price, this pays them for success in developing a trouble free platform, and failure isn’t an option.

The history of technology shows that your data is precious, while your hardware is inexpensive enough now to be disposable. Many IT departments recommend more and more equipment hoping that the new equipment will fail less often. If your data is protected with automated backups and monitored offsite. You reduce costs and protect your valuable data. The digital divide is costly to learn and having the equipment and personnel in your office costs more than outsourcing.

Technology history is expanding at a rapid rate, and in order to conquer your modern technology, you need to have your software, your data and all of your systems in sync. That is why small business people think they need a server. Small businesses do not really need servers; they are expensive, high maintenance and high risk, often requiring an IT course to monitor them. With cloud technology, you can save the money these will cost. With IT outsourced, you will have the best that technology companies have to offer. This conquers your digital divide so that you can concentrate on building your business and improving your profit.

Source:http://www.newsformatics.com/2011/05/17/5254

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01Synergy launches Youtube Channel

May 17th, 2011

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01Synergy – announces the opening of its official Youtube Channel.

The channel, which can be found at http://www.youtube.com/user/01schannel , showcases 01Synergy’s services & event videos. 01Synergy’s Youtube page compliment its core value of communicating with an increasingly far-reaching and diverse audience.

Davinder Singh, General Manager adds, “01 Synergy is constantly seeking ways to support effective, two-way communications with our global client base. The opportunities provided by social networking sites such as YouTube fit in well with our existing channels. We are also working with a number of multinational clients to explore how technologies such as these can be used as elements of blended learning and communications programmes within their organisations.

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Aditya Birla Minacs inaugurates second delivery center in Philippines

May 17th, 2011

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Aditya Birla Minacs, a global business solutions provider (subsidiary of Aditya Birla Nuvo), has announced the inauguration of its second delivery center at Makati City in the Philippines. The 3,000 square meter facility, with 600 seats, is the latest addition to the company’s global delivery network.

At this center, Minacs will be hiring 500 employees over the next few months. The employee strength at this facility will further grow to over 1,000 employees over this fiscal year. Both the Minacs facilities in the Philippines currently service clients across the telecom, technology and healthcare verticals.

Announcing the launch of the new center, Milind Godbole, President-Asia Pacific at Aditya Birla Minacs said, “We believe in delivering value to our clients by providing the right combination of deep domain and process expertise with the right talent at the right delivery destination. The Philippines has emerged as a strong hub due to its capable and varied talent pool, close cultural and business affinity with North America, state-of-the-art infrastructure and active government support. This new center strengthens Minacs’ presence in the Philippines and reiterates our commitment to offering best-in-class Business Process Outsourcing (BPO) solutions by investing in expanding our global footprint.”

This facility in Makati City will offer multi-lingual customer service capabilities to the company’s clients in the telecom and technology verticals. It is designed to offer a range of world-class amenities to employees in an enabling work environment.

Source:http://www.indiainfoline.com/Markets/News/Aditya-Birla-Minacs-inaugurates-second-delivery-center-in-Philippines/5155458847

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EA Trilink to set-up 2,000 ‘tele-kiosks’ in ARMM

May 17th, 2011

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Jumpstarting the business process outsourcing (BPO) industry in ARMM, a wholly Filipino-owned telecommunications firm would put up a total of 2,000 electronic centers dubbed as ‘tele-kiosk’ in 30 municipalities across ARMM to provide telecommunications services.

In a press release, ARMM Information chief Ali G. Macabalang said that the project was approved recently by the Regional Board of Investment (RBOI) in the Autonomous Region in Muslim Mindanao (ARMM) with a P1.5 billion investment in the region by the EA Trilink Corporation.

Lawyer Ishak Mastura, RBOI-ARMM chairman, said the EA Trilink telecommunications project is the single biggest investment ever to be set up in ARMM and showcases the viability of large-scale business venture in the region.

At the press launching of the project, EA Trilink President Alfredo Panizales, refer to their bold venture as a road not taken. He revealed that the project will be implemented in two phases. The first is set to be initiated at the second quarter of this year while the second phase will be on the third quarter of 2012.

The project is expected to open up job opportunities for workers in the region. Each ‘tele-kiosk’ is designed to be manned by 3 personnel, creating job opportunity to at least 6,000 workers.

The company has already tapped the help of the Technical Education SD Authority in the ARMM for manpower training.

EA Trilink will utilize satellite uplink to connect the region as it has done in a similar project in Cambodia; describing its success in Cambodia as their “proof of concept” that such project is feasible in remote or impoverished areas like most of ARMM.

Regional authorities expect the huge project to enhance business climate in the region and improve its social landscape with the introduction of information and communication technology even in some of the remotest communities in ARMM.

ARMM Acting Governor Ansaruddin Alonto Adiong said the project would bring ARMM at the threshold of the digital age, linking it more efficiently to the rest of the world.

He said the EA Trilink venture is unparalleled in the region’s 21-year history and a testament to the confidence of the private sector at the policies being enforced by the present ARMM administration.

The company is also looking at installing submarine cable link to connect Southern Philippines to Sabah, Malaysia in the future as part of their vision to become a leading service provider of telecommunications facilities in the Brunei-Indonesia-Malaysia-Philippines-East ASEAN Growth Area (BIMP-EAGA).

Source:http://www.zamboangatoday.ph/index.php/news/13-top-stories/4431-ea-trilink-to-set-up-2000-tele-kiosks-in-armm.html

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