Archive for November, 2011

Zain Iraq signs $650m deal with Ericsson for network outsourcing

November 24th, 2011

Middle East telecom operator Mobile Telecommunications Co., better known as Zain, said Wednesday that its Iraqi unit has signed a $650 million network outsourcing deal with Ericsson, in a move to improve network quality in the war-torn country.

The five-year deal will allow Ericsson to optimize and manage Zain’s IT operations, the telco said in a statement.

The agreement will include Zain’s 3,700 sites across Iraq. It will also include the northern region of Kurdistan where Zain has recently launched its commercial services, the statement said.

Click here to find out more!”This is a significant deal for Zain as the agreement is expected to enhance the company’s competitiveness in the Iraqi market,” the telco said in the statement.

Source:http://www.totaltele.com/view.aspx?ID=469462

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As Clouds Expand, IT Shrinks

November 24th, 2011

When I launched my small company in 2004, we needed email, word processing, spreadsheets, and a shared database.

If I had launched my company earlier, I would have had to set up a server to run the database as well as the email and hire a guy to manage it so that my employees would all be able to access it, whether they were in the US, Europe, China, or India.

But this was 2004, and I was able to use Google Apps for the email and document sharing and DabbleDB (since closed) for the database. There was a small monthly fee for the database, and the free version of Google Apps gave us all the email and shared documents we needed.

Anything else we had to do — image editing, for example — we did on our desktops, and we emailed the documents around.

If the Internet went down, we waited it out. If Google went down — it happens — we waited it out. Both kinds of outages were relatively rare and didn’t impede operations.

If a computer crashed, we picked up the phone and paid for a local guy to come out and fix it, usually by reinstalling Windows. Once in a while, we’d buy a new computer for an employee.

Since then, more and more applications have become available on a subscription basis, delivered over the Web: customer relationship management, accounting, photo editing. You can even run a hedge fund out of your house by outsourcing all the back-end services to vendors.

And that’s not even the half of it. If you need some software that’s not available in the cloud — a specialized accounting application, for example, or something you developed in-house — you can hire a hosting company to run it for you.

There are even companies that will run your Windows desktops for you. You can use a tablet, or a cheapo netbook, thin client, or Linux box — pull up your browser, log in, and all your programs and data files are right there.

No worrying about upgrades, viruses, or backups — the hosting company does everything for you. All you pay is a monthly fee. And if a computer breaks, call in the local tech support shop, or just buy a new one.

If you’re a small company, you don’t need an IT department anymore.

In fact, the line at which you’ll have to hire IT staff and buy your own servers keeps moving up and up.

Even the largest corporations are getting into the game to the point where, today, any non-core process can be outsourced. Proctor & Gamble, for example, signed a $650 million deal in 2008 to outsource VoIP, Internet services, audio- and videoconferencing, and firewalls and anti-virus protection to the BT Group. And that was on top of its existing 10-year, $3 billion mega-outsourcing deal with Hewlett-Packard

After all, how many companies run their own cafeterias, power plants, or janitorial staffs these days?

There may soon come a point where the only companies with information technology divisions are those for whom tech is a key differentiator or a core strength.

A hotel, for example, isn’t likely to outsource maid service if the cleanliness of its rooms and the politeness of its staff is a strength and a differentiator.

Similarly, Amazon and Google aren’t going to turn over their servers to an outside organization.

But if you’re an online merchant and don’t have a hope of matching Amazon’s technology, why not outsource it to Amazon itself?

And if your IT department isn’t the best in your industry, why not outsource it to IBM, Accenture, HP, or another world-class technology vendor?

Instead of having to be proficient in all aspects of technology, your company will need to become proficient in choosing vendors and negotiating contracts.

Source:http://www.internetevolution.com/author.asp?section_id=1192&doc_id=235956&f_src=internetevolution_gnews

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Outsourcing stems Philippines labour exodus

November 24th, 2011

Malaysia-based computer whiz Arlene Teodoro packed his bags and flew home to the Philippines this year, going against the tide in an impoverished country that sends millions of workers abroad.

Forced to leave his family and friends in 2008 in search of a decent job overseas, the 35-year-old bachelor says he is back for good because his skills are suddenly in big demand amid a business process outsourcing boom.

“Nothing compares to being back in the Philippines,” said Teodoro, part of a 30-strong computer science class at a Manila university in the early 1990s, most of whose members also went overseas to find work.

“When I was working abroad I’d use up all my vacation leaves to attend family events and reconnect with my family.”

Teodoro now earns about $3,000 a month as a business intelligence analyst for a US data mining firm, which uses powerful software to predict such key measures as future sales and trends for clients.

Big multinationals from aircraft manufacturers to retail chains are increasingly using these sophisticated tools, and the Philippines and India offer the most cost-efficient locales for such labour-intensive tasks, he said.

They also, crucially, have large English-speaking populations.

Data mining is one small part of the outsourcing phenomenon in the Philippines that has emerged from virtually nothing 10 years ago to become one of the country’s most important economic planks and sources of jobs.

The Philippines has for decades suffered an exodus of people who have headed overseas to escape dire economic conditions, with one quarter of the population currently living on a dollar a day or less.

Nine million, or 10 percent of all Filipinos, now live overseas, performing low-skilled jobs such as maids and sailors, but also working as nurses, engineers and IT specialists.

They sent $18.17 billion back to the Philippines last year, equivalent to 10 percent of the country’s GDP, and their importance to the nation is such that they have earned the nickname: “Mga Bagong Bayani,” or “Modern Day Heroes”.

However the exodus has also led to a massive “brain drain” and caused social disruption as families are torn apart, with one or both parents going overseas and leaving their children at home with relatives.

But now the rise of outsourcing is giving many Filipinos a chance to stay at home.

The outsourcing workforce grew about 10 percent this year to 600,000, and is expected to expand to 900,000 employees by 2016, according to the Business Processing Association of the Philippines.

More than than 60 percent of the outsourcing jobs are in call centres with Filipinos fielding telephone inquiries from, or selling products to, customers across the globe.

Although they are the lowest-paid in the sector, an entry-level call centre job still pays between 14,000-20,000 pesos ($325-$465) a month.

This is roughly equivalent to what a Filipino maid would typically earn in a wealthier Asian country such as Singapore, or a seaman’s starting salary in the global merchant fleet.

The local industry is also increasingly attracting work for higher-paying skills such as data warehousing, accounting and medical transcription, as well as creative work ranging from webpage design to animation and video games.

“Before, it was the call centre boom in the Philippines, but now it’s more of really specialised skills,” said Teodoro.

The Philippines has risen to have the second biggest outsourcing sector in the world behind India partly because it has a huge English-language workforce.

Filipino workers are also particularly prized in the United States and other Western nations because of their familiarity with their culture, a legacy of the Philippines’ history as a former US colony.

“We have had expats telling us that working with Filipino teams is a very pleasantly unique experience, which they have not had elsewhere in the world,” industry association senior executive director Gillian Joyce Virata told AFP.

The government has also sought to amplify the country’s natural advantages by offering significant tax breaks for outsourcing firms and easing labour laws, such as one that used to bar women from working past midnight.

The industry association said outsourcing would generate revenues of $11 billion this year, up from $8.9 billion in 2010, and continue to grow by at least 15 percent annually to hit $20 billion by 2016.

This would place the outsourcing industry’s revenues almost on a level with the money sent home by overseas workers.

“This industry has provided a very big support to the economic environment of the Philippines in the past decade,” Trade Secretary Gregory Domingo told an outsourcing forum recently.

Aside from the direct benefits of employing people, Domingo credited the industry with a wide range of other knock-on effects such as increased car sales and the explosion of 24-hour convenience stores.

Outsourcing has also begun to transform Manila’s skyline, with skyscrapers rising to cater to big foreign banks and technology companies that have set up shop with workforces that run into the tens of thousands.

“The contribution of this industry cannot be overstated,” Domingo said.

Source:http://www.google.com/hostednews/afp/article/ALeqM5il05rdbmROqF0851NvCKDQr0PJUA?docId=CNG.83ceffe8824cb60b48ae4fbbe46657af.381

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Judge rules against Costa Mesa in outsourcing argument

November 24th, 2011

A Superior Court judge on Tuesday denied the city of Costa Mesa’s attempt to throw out half of the employee association’s lawsuit challenging the city’s efforts to layoff city workers and replace them with outsourced contractors.

The city had filed a motion in court to dispose of the Costa Mesa City Employees Association lawsuit’s claims that the layoffs violated the city’s contract with the employees and constituted a breach of contract.

In March, the city issued six-month layoff notices to almost half of its staff as it began its ongoing exploration of the viability of outsourcing city services.
The employees association filed suit in May, earning an early victory in July from Judge Tam Nomoto Schumann, who placed a preliminary injunction on the city, currently preventing the council from contracting to private companies. The injunction does not prevent the city from outsourcing to the public sector.

The union called Tuesday’s dismissal another incremental victory.

“The employees are grateful that calmer and more reasoned minds continue to prevail over the politically motivated agenda of the City Council majority,” said Helen Nenadal, president of the Costa Mesa City Employees Association, in a statement.

The city’s legal defense said the judge accepted the union’s incorrect interpretation of its contract with the city.

“However, the city maintains the union’s alleged interpretation is not an interpretation at all, but rather a contradiction to the contract, which allows for outsourcing and even provides for a six-month notice for it,” said John A. Vogt, special counsel for the city, in a statement.

The ruling does not affect the temporary injunction, nor does it mean the union’s argument will stand up in trial.
The lawsuit will be heard in court April 9, 2012.

Source:http://www.ocregister.com/news/city-328438-employees-outsourcing.html

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Healthcare Outsourcing Market (2011-2016): Provider (Medical Coding) and Payor (Claims Processing)

November 24th, 2011

Healthcare industry has invested around 50% of its capital in Information technology in the last 5 years. This is expected to increase further and would enable physicians to bring down the preventable deaths mark by 50% by 2013. Internal resource unavailability, focus to improve company business, need to have access to latest technologies and capabilities, lack of proper back office administration, internal resource allocation to key priorities of the firm etc are the main factors that are driving the It outsourcing market. Payor outsourcing capabilities include claims processing, HR services, Customer care and Finance & Accounts. Provider outsourcing capabilities are Medical billing, Medical coding and Medical transcription. Medical Billing is the major process outsourced by the providers from the US market and Claims processing is the dominating outsourcing process for the Payor market. India, Philippines, China, Eastern Europe and Thailand are the major outsourcing destinations. The BPO healthcare market is shifting from discrete services (e.g., data entry) to systematic end-to-end business solutions which need a BPO vendor with standardized, healthcare “business and operations” expertise, and advanced technology base. The Healthcare Outsourcing (BPO) Market is expected to grow at a CAGR of 13% till 2015.

About MarketsandMarkets
MarketsandMarkets is a global market research and consulting company based in the U.S. We publish strategically analyzed market research reports and serve as a business intelligence partner to Fortune 500 companies across the world.

MarketsandMarkets also provides multi-client reports, company profiles, databases, and custom research services. They cover thirteen industry verticals, including advanced materials, automotives and transportation, banking and financial services, biotechnology, chemicals, consumer goods, energy and power, food and beverages, industrial automation, medical devices, pharmaceuticals, semiconductor and electronics, and telecommunications and IT.

Source:http://www.sbwire.com/press-releases/sbwire-115859.htm

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India’s BPO business supremacy is not fading away: Convergys’ Christine Timmins Barry

November 24th, 2011

Business process outsourcing firm Convergys, which has completed 10 years in India, is one of the few standalone outsourcing firms not to be acquired by a technology company. From the heady days of the BPO boom in 2001 to an uncertain economic climate today – not to speak of Occupy Wall Street protests – the firm has seen it all. Convergys’ Christine Timmins Barry , senior vice-president, customer management and Marife Zamora, senior vice-president and MD for Asia-Pacific, Europe Middle East and Asia, gave a lowdown on the impact of slowdown on outsourcing decisions and the new trend of social network monitoring at BPOs. Excerpts from an interview with Harsimran Julka :

On the new trend of analysing Tweets and Facebook posts by Indian BPO agents….

It’s the latest growth line. It’s a unique product line over and above the conventional offerings we offer in the financial, retail, telecom and tech space. We have a technology platform with built-in decision tools. For example, a well-known blogger is posting something offbeat, the tools direct an agent to monitor and act. It offers an automated manual, of what to do in certain scenarios when there is a deluge of blogs, tweets or comments being posted on a certain issue about a client. It’s a unique selling proposition we are offering.

On the impact of Occupy Wall Street protests and high US unemployment on clients’ outsourcing decisions….

We are not shipping existing jobs to India. If there is an expansion, then jobs go offshore. Most of our clients in the US already have global operations. Also, the jobs debate largely takes place during the election cycle in the US. Frankly, we don’t know what exactly the Wall Street protestors want. But am sure they are not protesting against increased business to India or other geographies where clients exist. Clients now want to have a balanced footprint and not concentrated in the US only. Protests such as these are not impacting business decisions, till now.

On the last 10 years in India and competition with Philippine’s BPO industry….

The last 10 years in India have been outstanding. We have about 10,000 people in India across three centers – Delhi, Pune and Bangalore. We are hiring 1,000 more this year. At Convergys, we are always focused on not putting our eggs in one basket. That’s the rationale behind setting up centres in the Philippines. But, India has a scale advantage and Indians are more experienced and proficient in tech-related issues – something that’s not there in other geographies.

On the change in clients’ buying behaviour in a recessionary market and the future of India’s BPO industry….

Earlier, clients’ buying decisions were based on cost. Now with wages increasing in India and salaries falling in the US, gap has reduced and the customer is less focused on cost. He is more focused on quality. And the quality delivered out of India centres is more often than not better than what we get from other centres. Surely, Philppines might better India in voice but the quality India offers in web support and highend analytics is unparalled. We don’t see India’s supremacy in BPO business fading away anytime soon.

Source:http://economictimes.indiatimes.com/opinion/interviews/indias-bpo-business-supremacy-is-not-fading-away-convergys-christine-timmins-barry/articleshow/10849370.cms

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Debt crisis fails to roil Indian IT companies’ Europe plans

November 24th, 2011

Indian IT services exporters are on track to increase Europe’s share in their revenue and see only a short-term impact of the paralyzing debt crisis, top executives said at the Reuters India Investment Summit.

The debt crisis is sweeping closer to the heart of euro zone, with fears that the contagion may now spread from Greece and Italy to Spain and France.

India’s showpiece IT sector feeds off increased outsourcing by companies trying to cut costs. As the crisis in Europe — the sector’s second-largest market — deepens, clients will likely outsource more, executives said.

“We are seeing clients — who in the past have been hesitant to outsource ongoing application management work — are now looking at outsourcing those type of services,” Cognizant Technology Solutions (CTSH.O) Chief Financial Officer Gordon Coburn said on Tuesday.

A slowing U.S. market, which accounts for more than two-thirds of the Indian IT industry’s exports, has forced companies such as Infosys (INFY.NS), TCS (TCS.NS) and Cognizant to expand their business in Europe and Asia.

“The short-term challenges will impact business, but in the long term, we see opportunities even in Europe,” S.D. Shibulal, Chief Executive Officer of Infosys, said on Wednesday.

Infosys plans to double its revenue share from Europe to 40 percent by the end of its 2014 financial year, while Cognizant expects “significant revenue” coming from the region in the next 4-5 years.

Infosys and Cognizant are also looking to scale up in continental Europe through acquisitions.

“We are now making heavy investments in building up our capabilities in France and Germany,” Coburn said on Tuesday.

It’s not just the IT sector that is expecting gains from the crisis. Kiran Mazumdar-Shaw, head of India’s largest listed biotechnology company Biocon Ltd (BION.NS), said diminishing returns on R&D spending is forcing European and U.S. companies to outsource their research work to India and China.

SHORT-TERM CONCERNS

Both the companies are, however, cautious about the short-term impact from the Europe crisis.

“Europe in 2012 is tough to determine,” Cognizant’s Coburn said.

Analysts echoed the sentiment.

“Nobody is quite sure what the impact of the sovereign debt crisis will be on demand for capital goods,” analyst Mark Wilson at Collins Stewart Europe said.

Source:http://www.reuters.com/article/2011/11/23/us-india-summit-indianitservices-idUSTRE7AM10520111123

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