Archive for January, 2012

ABTO Software Undergoes Dramatic Growth

January 31st, 2012

ENP Newswire – 30 January 2012 Release date- 27012012 – Since its establishment in 2007 ABTO Software, a global provider of offshore IT outsourcing and high-end software development services, has developed dramatically.

It has grown from a small group of enthusiasts into a successful, fast-expanding software company, currently undergoing rapid growth on its core software development and outsourcing market.

ABTO Software boasts an excellent dedicated team, constantly replenished by young talented and ambitious developers. Currently, ABTO Software employs over 70 specialists possessing in-depth experience in a wide range of software development domains. In 2011 our team actually grew twice! Taking care of personnel qualification ABTO Software organized professional trainings and lectures for the employees on a regular basis.

Over last 6 months of 2011 ABTO Software successfully accomplished over 50 projects varying in scale and complexity for our customers in Europe and the USA. Currently, ABTO Software serves a comprehensive portfolio of 150+ projects. They were performed for various domains and vertical markets, including Healthcare, Military/Police, and Government, etc. Microsoft Dynamics CRM is now one of those popular technologies that ABTO Software also uses for delivering its solutions.

ABTO Software is proud to announce that a separate Product Department was set up in 2011. The main responsibility of the department is to support the full product cycle – starting from an idea and to delivery of the tailored product to the end-user. A set of new improved products, like SIP SDK for Windows Mobile, Android and iPhone, was also released last year.

In 2011 an improved, attractive and user-friendly website went live simultaneously with the adoption of the new company’s slogan: ‘Accelerate Business Today – Outsource to ABTO’. The newly-created website is filled with relevant content, boasts convenient structure and serves as a helpful instrument of communication with our visitors.


Outsourcing sector upbeat on revenue

January 31st, 2012

THE BUSINESS process outsourcing sector is expected to have reached its $11-billion revenue target last year based on initial figures that showed growth for the voice, health care and back-office subsectors, an official said yesterday.

“We’re optimistic that we will reach our target [for 2011]. Based on indications, it has been a growth year except for smaller sectors,” Gillian Joyce G. Virata, senior executive director of the Business Processing Association of the Philippines (BPAP), said during a Department of Science and Technology (DoST) briefing.
The target represents a 22% growth over the previous year’s $9-billion revenue.

“The call center industry has already reported growth, while the back-office sector reported a high growth rate. The health care information management [outsourcing], on the other hand, also reported a respectable growth,” Ms. Virata said.

Consolidated figures will be completed next month, she added.

Based on expected revenues in 2011, the sector is seen to grow by at least 20% this year. Revenue is projected at $25 billion by 2016.

The upbeat outlook comes amid a pending bill in the US Congress that seeks to discourage outsourcing.

“We are not worried at all… We are confident that the majority [of US companies] will recognize that outsourcing makes them competent as this allows them to focus on their core operations,” Alfredo I. Ayala, BPAP chairman, said during the same briefing.

For his part, Technology Secretary Mario G. Montejo said the government is extending full support for the development of the IT (information technology)-BPO sector.
“We’re pushing for our programs that will identify the skill requirements, test the work force, and develop modules to address the lack of work force for the industry,” Mr. Montejo said.

Alejandro P. Melchor III, deputy executive director for the DoST’s Information and Communication Technology Office, said that aside from the BPO voice sector, the government is aiming to boost the following: health care information management outsourcing; finance and accounting outsourcing; human resources outsourcing; and animation and game development.


Identity and access management trends

January 31st, 2012

Six major trends will drive the evolution of corporate management of identity and access management (IAM) and privacy management in 2012, according to Gartner.

“In 2012, businesses need to increase their focus on identity and privacy projects that can achieve quick time-to-value and deliver real value not just to IT, but also to the business,” said Bob Blakley, vice president and distinguished analyst at Gartner. “As organizational boundaries erode under the pressure of federation and outsourcing, and as organizations’ control over IT continues to weaken through increased adoption of mobile devices and cloud services, identity management is more important than ever — and more problematic.”

Six major trends will drive the evolution of the IAM and privacy management sectors in 2012:

Tactical identity: The scope of, and budgets for, identity management projects will remain constrained. A major cause of failure for these projects has been an overly broad scope combined with a lack of focus on business value. There is no longer the budget or the appetite for projects that run the risk of such failure. This year’s IAM projects will generally be limited in scope and schedule to help ensure success.

Identity assurance: Demands for stronger authentication and more mature identity provider infrastructures and practices will intensify. Serious deficiencies in both these areas, and in credential issuers, came to light in 2011. Organizations need to know who they are trusting, why, and for what. They also need to know what the consequences will be if the organizations they trust to provide identity information do not fulfill their obligations, and they need to know the strength of the mechanisms used to convey identity information.

Authorization: Authorization requirements will grow more complex and more urgent in response to continuing regulatory pressure and riskier and more complex IT and business environments. Identities are not very useful by themselves — their usefulness lies in authorising access and in the creation of logs that can be used to hold people accountable for their actions. Identity life cycle management, authentication and auditing are fairly mature in many organizations. Authorization (i.e., the creation and enforcement of access control policies) is much less mature, but will assume a place as a first-class business function.

The identity bridge: Identity management must start to span the chasm between organizations — a new architectural component is needed to manage the flow of identity information between cooperating organizations. Managing federated identities is a complex task, and the protocols for federated provisioning and federated management of identity policies and attributes are immature. The central authoritative source of identity information can only reside at the edge of the organization to look inward and outward simultaneously, and the processes that manage federated identity span the perimeter. The hole in modern identity architecture is starting to be filled and will become an identity bridge.

The sea of tokens: Identity information frequently has to be transformed by each domain that receives it, and then passed on to downstream domains. Identity information is transmitted via tokens (which may be carried in protocol headers, but are increasingly carried in protocol payloads). The new tokens-and-transformers architecture is more modular, more flexible and more loosely coupled.

Policy battles: Increasingly, concerns over privacy and identity theft are alarming the public, and they are also having a serious impact on business operations and even business viability. The business community, the privacy lobby, and law enforcement and national security communities will continue to wrangle over identification and privacy laws and regulations — and this will continue to drive changes in the identity infrastructure.


Dell readies Rs 5,000 crore war chest for India buyout to boost IT business

January 31st, 2012

Dell is on the prowl for an India acquisition worth up to $1 billion (Rs 5,000 crore), part of a strategy to bolster its information technology services business and compete better against the likes of IBM and Accenture.

The world’s third-largest computer maker wants to buy a mid-sized Indian tech firm with “several thousands of staff” and revenues of $500 million to $1 billion or even more, Suresh Vaswani, chairman of the company’s Indian operations and executive vicepresident of the Dell’s global application and BPO business, told ET.

He declined to say which companies Dell, which has cash of about $16 billion, is interested in, but bankers identified Hexaware Technologies and NIIT Technologies, each with revenues of around $300 million, as potential targets. Both companies have been denying plans to sell. Vaswani, a Wipro veteran who joined Dell last year to help the company grow its services business, said mid-sized firms with a majority of staff in India and with expertise in areas such as banking or healthcare will make good targets.

“The services acquisition can be Perot Systems-like but with more India leverage and in the tier-II space. They may be $700 million or $800 million (by revenue) in one vertical and may even be ahead of tier-I companies in that space. We don’t have to look at one; we could look at two,” he said.

Dell acquired Perot Systems for $3.9 billion in 2009, marking its entry into the services space. The acquisitions also gave it significant offshore delivery capabilities and strength in the healthcare services business.

Experts familiar with Dell’s strategy said the company plans to leverage acquisitions to more than double, or even treble, its current IT services revenues of $8 billion in 3-4 years. Dell has said it wants to increase revenues from IT services to $11 billion in three years, but this does not account for business from any potential acquisitions. IT services contribute less than 15% to Dell’s total income.

From around 28,000 staff in India, Dell plans to ramp up to a level where it can compete more effectively against IBM, which has over 1,00,000 employees in the country. This can only be achieved through an acquisition; competing with traditional campus recruiters such as TCS, Infosys and Wipro to hire hundreds of software engineers will be difficult.

Once the world’s largest PC maker, Dell has lost more than a quarter of its share in the commoditised computer market to aggressive Asian rivals such as Lenovo. Now, the company wants a bigger share of the high-margin IT services pie to improve profitability by bundling computer hardware with outsourcing contracts.

IBM had a head start in IT services when in 2005 it sold its PC business to Lenovo to focus on the rapidly-growing areas of software and services. IBM now gets over half of its $100 billion revenues from services.

“These companies are looking at a trillion-dollar market which is only growing. Dell has been an acquisitive company especially in the services space. A mid-sized acquisition will definitely add value for them and help them respond to clients faster,” said Viral Thakker, a partner at KPMG.


Consultant sees more opportunities in outsourcing businesses

January 31st, 2012

The marketing communication business in Nigeria has come a long way over the years in providing services to clients across various segments within the country. The industry has experienced remarkable growth in terms of delivery of quality product and service offerings, owing to the fact that there has been significant improvement in the country’s IT infrastructure.

This infrastructural development has aided the growth of the segment, currently estimated at N1 billion annually. In terms of losses, the marketing communication business has not incurred much loss rather; they have gained immensely from increased pricing on their products and services.

Their most prominent customer segments include the telecommunications companies who spend on average, over N30 billion annually on marketing. Marketing communication did experience some decline in its use by the financial services industry due to the need for banks to manage costs after the CBN led industry reforms.

Effect of removal of fuel subsidy on consulting industry
Concerns have been raised by various members of the larger society that the removal of fuel subsidy will have a negative effect on businesses across the country in the near term, but it is expected to ease up in the medium and long term. Although, businesses will be forced to better prioritise their expenses, a number of consulting firms that are well positioned for this economic period will do very well.

Based on the projections that the economy will be tight, we envision that a number of consulting firms will make reasonable gains in outsourcing businesses. For example, some clients would prefer to outsource certain technical functions such as HR and accounting to professional services firms as long as it makes financial sense.

However, consulting firms that do not have strong value propositions will struggle. Given that clients will be extremely cost conscious and in search for ‘real value for money,’ consulting firms that have typically thrived without differentiated and high impact solutions would not be approached for their services.

How consulting firms coped in 2011
The consulting companies that coped last year did so based on strong client relationship management: Some consulting firms have been able to build strong client base and relationships over the years, and have been able to leverage retainerships with these firms.

Secondly, a good understanding of the Nigerian market: The ability to navigate inherent bureaucracies within the market is also an advantage that made it easy for these companies to cope, and thirdly, staff strength and expertise: The quality of output of consulting firms has helped them gain the trust of their clients.

Addressing of delayed payment

Non-payment of fees by clients is one of the biggest challenges faced by business owners within the services sector. This problem is alarming as the consulting industry incurred losses of over N600 million last year.Some of the typical practices for ensuring that clients pay include signing of legal agreements and memoranda of understanding before the project commences. Now, firms are more creative in how payment terms are structured, for instance, some consulting firms collect a substantial part of their fee at the point of commissioning the projects and ensure that the client makes the final payment before the end product is delivered. Everybody wants to be a consultant.

In Nigeria today, there is room for individuals to work in whatever field of endeavour they choose. That said, the consulting space is not for people who do not have strong problem-solving and analytical skills. The consulting industry typically demands a high level of professionalism that cannot be mimicked. As the saying goes – “water will always find its level.”
Incompetent consultants often find themselves out of the industry in a matter of months, because the poor quality of their work is not tolerated by clients and supervisors in the firm.

Threat consulting poses to internal workforce
I think that this is a myth – that when a consulting firm is hired to do a job, that some employees of the client will be fired. To be frank, I do not know where this idea originated from, but we do notice it when we do work for different clients. Most times, we allay employees’ fears by informing them about the scope of work and our approach.

In projects that require that we look at improving employee productivity, we often use methodologies that promote right-sizing rather than downsizing i.e. moving employees to job functions that are appropriate and match their personalities and skill sets.

Economic outlook for 2012
It is expected that the economy will continue to grow at its current rate of 7 percent, with agriculture retaining its position as the dominant contributor to GDP. The agricultural sub-sector currently contributes about 46 percent of the GDP and is likely to increase its contribution this year through President Jonathan’s transformation agenda.

Based on some of the policies and developmental initiatives that will be undertaken this year under the President’s transformation agenda, it is expected that remarkable growth will be experienced in other sectors of the economy, especially the manufacturing sub-sector.

In the recently enacted Subsidy Reinvestment programme, plans are being made to increase the level of the nation’s productivity with huge investments in infrastructural development that will aid industrialisation.


Global Outsourcing Outlook In 2012

January 31st, 2012

January is an exciting month and being the 1st month of the year, people ponder what would likely be the business scenario for the year. I always look forward on what the experts and research groups may forecast for this year particularly in the outsourcing industry.

In the article I wrote at the beginning of 2011 -January 27, 2011 to be exact in this same paper – I mentioned that 2011 will usher in growth in new set of industries such as healthcare and financial services. And rightly so, the year 2011 results show the popularity of the banking, financial services, insurance (BFSI) business process outsourcing and BFSI applications outsourcing (AO). In fact for 2012, Everest Research Group forecasts growth of about 15% in BFSI globally depending on global economy and majority of this will be driven by the capital markets BPO which is seen to account for the 20% growth. This growth will most likely be led by emerging economies in Asia Pacific and Latin America. Just as in 2011, BFSI will continue to dominate the market with North America being the dominant buyer in terms of geography – Europe and Asia Pacific following behind with growth seen to be faster than the industry average.

The other areas of the market predictions of Everest Group include Finance and Accounting Outsourcing (FAO) and HR Outsourcing (HRO) to mention a few and the paper also include a forecast of the whole Global Outsourcing. I will focus more on FAO and HRO since these are the more popular ones in our country today.

For 2012, FAO is seen to bring in 15% growth in the market in Annualized Contract Value (ACV) year on year (YoY) though the cycle to reach a done deal will still remain long. Reason for outsourcing will not just be cost arbitrage but also process transformation. As forecasted in 2011, this year will still be more a phased approach rather than a “big-bang” approach. The over-all ACV is predicted by Everest to cross the 700 mark and will be in the range of US$4.5-5billion. The growth will also spur on the increase role of technology and more inclined for platform and what we call in our Company – SaaS (Software as a Service) proposal catering to SMEs.

Knowledge outsourcing (analytics, internal audit, risk assessment, IT audit, etc.) will continue to increase as its favorable results show in 2011. In the Philippines, knowledge outsourcing has become popular too, as more and more companies turn to outsourcing to leverage on the provider’s expertise. There will also be an emergence of FAO delivery locations outside of India with the increase in services offshore.

In HRO, high growth is expected to continue in standalone single process outsourcing, such as multi-country payroll, benefits and recruitment outsourcing. Multi-country payroll outsourcing will increase among multi-national companies.

Uncertainty in the global macroeconomic and political environment will slow down outsourcing activity in the early part of 2012. Recovery is seen toward the end of the year when business confidence returns. Our country (Philippines) will continue to ride in the bandwagon of outsourcing growth in the above industry segments together with India as established markets, although this growth will not happen in the early part of the year but towards the end of the year with both countries to experience again the labor market pressure (which is really a good problem for the two countries) due to the demand at this period.

In the Philippines, tier 2 cities for outsourcing will continue to grow in outsourcing business and this same thing will also happen to tier 2 cities in India. Tier 1 cities however will dominate Central Eastern Europe and Central and South America.

Outsourcing is a major dollar earner if not the number 1 dollar earner for the Philippines. We have to improve our labor market since from the forecast this year and in the recent years, labor market pressure is a significant constraint in both countries (India and the Philippines). To remain an established market and continue to be the dominant player in the outsourcing industry we should be able to anticipate this concern and find ways to be ready to tackle the demands.

(The writer is the Chairperson of FINEX Publications Committee, VP-Chief Business Development Officer of KPS Outsourcing, Inc and Partner- Inventor, Miranda & Associates. The views expressed herein are her personal views and do not necessarily reflect the opinions of these institutions.)


IT Outsourcing Deal Size Data Shows Decade-Long Decline

January 31st, 2012

An analysis of last year’s outsourcing activity reveals the continuation of a decade-long decline in deal size. While the numbers of mega-deals and mid-range contracts awarded each year has remained relatively stable since 2002, those valued at $100 million or less have more than tripled, according quarterly data from outsourcing consultancy Information Services Group (formerly TPI).

The shift toward smaller IT services deals has been happening for the past several years, with sub-$100 million deals holding steady at around 70 percent of contracting activity since 2009, according to ISG. While IT contracting activity in 2011 increased by 8 percent over last year and is up 86 percent since 2005, total contract values declined slightly year-over-year in the fourth quarter, and the full-year total of $66 billion represented a 6 percent decline over 2010.

In the less mature business process outsourcing (BPO) space, the preference for littler deals has been more pronounced. “Organizations have been more cautious to adopt emerging BPO strategies as they wait to see if provider capability and quality is really there as promised,” says John Keppel, partner and president of research and managed services for ISG.

It’s not just new or smaller outsourcing customers inking deals of a lesser size. While the percentage of Global 2000 clients signing IT contracts is down from 69 percent (by contract volume) in 2004 to 44 percent today, an increasing number of big, experienced outsourcing buyers are signing smaller contracts.

“Especially in the Americas, we see many companies awarding ITO deals on their second and third generations, and they have become much more sophisticated,” Keppel says. “A decade ago, a client may have awarded an ITO contract to one service provider with instructions to ‘take care of everything’. These days, clients are separating out asset purchases from services and splitting the service stream by scope to many different service providers.”

The data underscores the widespread adoption of the multisourcing approach as the outsourcing market has matured and IT service providers specializing in specific industry or technology capabilities have emerged, Keppel adds. Such a best-of-breed approach can afford several advantages, including allowing IT organizations to establish competitive internal markets for new work, enabling the gradual introduction of new providers, and eliminating the reliance on a sole vendor. “Competitive dynamics keep providers earning the right to do business& a vendor can be tried out on smaller less-critical functions before being handed a bigger slice of business& [and] businesses can spread risk by utilizing a basket of expert suppliers,” says Keppel.

But the model continues to prove problematic for IT organizations to manage.

Several dominant issues plague multisourcing arrangements, says Keppel, including the following:

Unclear Delineation of Responsibilities

With little clarity around end-to-and responsibility, providers point the finger at each other or the client when service levels sink, and the customer spends an inordinate amount of time resolving disputes.

Lack of Supplier Collaboration

Real or perceived barriers to cooperation among outsourcing providers, such as concerns over intellectual property, thwart innovation and business change efforts.

Contracting Issues

With best practices for multisourcing contracts still in flux, the legal language of many deals leave customers wanting–such as poorly defined transition or transformation terms or ineffective service level agreements

Impotent Governance

From the client failing to take responsibility for the outsourcing portfolio to multiple governance organizations managing different contracts to inconsistent service management processes, multisourcing customers are flailing when it comes to day-to-day management.

Such management challenges have given rise to the latest outsourcing buzzword: service integration. In the most basic terms, it means coordinating and consolidating discrete services from multiple outsourcers to provide an end-to-end service to the business that meets performance, quality and cost objectives.

Both IT consultancies and, interestingly enough, IT outsourcers themselves may offer service integration. But mature outsourcing customers can also develop internal capabilities for managing multiple IT service providers. The key elements of multisourcing governance include clear delineation of roles and responsibilities, enterprise-to-enterprise processes, common metrics and reporting, shared management tools, risk management planning, and collaboration incentives. Whether such discipline is provided in-house or by a third-party, it’s a necessity, says Keppel, as all signs point to multisourcing as the dominant ITO and BPO model for the foreseeable future. “The development of centers of excellence for sourcing and service management, as well as the outsourcing of some of the core elements of provider control, are now key components of best-of-breed approaches to enterprise-wide sourcing,” Keppel says.

Stephanie Overby is regular contributor to’s IT Outsourcing section.


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