Archive for May, 2014

IBM customizes cloud services for the enterprise

May 30th, 2014

Hoping to jump out in front of providers of generic cloud services, IBM has launched a portfolio of cloud packages, called IBM Cloud Business Solutions, designed to run specific business processes such as asset management and customer care.outsourcing17

Each service is composed of a mixture of IBM consulting services, software, analysis tools, support and cloud infrastructure, and is tuned and customized to meet specific uses.

The move to offer these services takes the company a step beyond the usual IaaS (infrastructure-as-a-service) or PaaS (platform-as-a-service) offerings from competitors such as Amazon, Hewlett-Packard and Microsoft.

“To date, the cloud has been about ready-made, as opposed to custom-made. But we believe there will be a big shift in how consulting and systems integration services are consumed,” said Kelly Chambliss, CTO of IBM’s Global Business Services unit, explaining how the portfolio enables organizations to work with IBM to customize cloud services.

“Systems of engagement require a degree of personalization to tailor them to their environment, their processes and for competitive advantage,” Chambliss said.

Initially, IBM Cloud Business Solutions will offer 12 packages, with another eight promised by year’s end.

The idea behind the packages is to provide functionality for some common task within an enterprise. Clients start with a base set of technologies, which IBM and the organization can alter to meet individual needs.

Among the initial packages available are those for managing patient-care coordination, customer data, mobile systems and predictive asset optimization.

The patient-care package lets caregivers coordinate with patients across different systems.

The customer-data package aggregates multiple external and internal data sources and analyzes them to provide insights for marketing and operations.

Mobile systems is for organizations that need to develop more interactive mobile applications for their customers and employees.

Predictive asset optimization provides monitoring and analysis to track equipment, predict when components fail and mitigate against failed equipment through advance planning.

TP Vision, which manufactures Philips-branded televisions, provides an example of how the cloud packages can be used. The company is an early user of the IBM Customer Data Cloud Business Solution, capturing and analyzing user data from its smart TV services for a better understanding of customer preferences.

Pricing for IBM Cloud Business Solutions will be based on a subscription model, with an up-front setup fee.

Source:http://www.computerworlduk.com/news/outsourcing/3522327/ibm-customizes-cloud-services-for-the-enterprise/

Infosys running out of time to name new CEO as president quits

May 30th, 2014

India’s second largest IT services exporter Infosys Ltd is under pressure to bring in a new chief executive soon to check an exodus of junior staff and reassure investors after a slew of departures at the top. outsourcing33

Shares in Infosys, the most widely held Indian stock, fell to their lowest level in nine months on Thursday, the day after it announced president and board member B.G. Srinivas had resigned.

The departure of Srinivas, the 10th senior executive to exit in the last year, widens a leadership vacuum at Infosys as it searches for a new chief executive. It also increases the chance the company will break with tradition and hire an outsider for the job, analysts said.

Srinivas was widely seen as a frontrunner for the top job among internal candidates after Chief Executive S.D. Shibulal, one of company’s seven founders, said in April that he wants to retire by January 2015 at the latest.

“With his (Srinivas’) resignation, the impression is quite clear that the company is going to get an outsider for the job,” RK Gupta, managing director of Taurus Asset Management, which owns Infosys shares, told Reuters.

“With a large organisation like Infosys you need new blood. Old guards sometimes have a sense of lethargy.”

A decision on the new CEO is likely to be made earlier than expected, possibly during the July-September quarter, said two people with knowledge of the matter. The sources declined to be named as the selection process is confidential.

Infosys did not reply to a Reuters email seeking comment.

The company, which has been losing market shares to its rivals Tata Consultancy Services LtdBSE 0.43 % and Cognizant Technology Solutions Corp, did not give a reason for Srinivas’ resignation in a stock exchange filing.

Srinivas’ resignation follows the departure of at least nine senior executives who left since the company brought founder N.R. Narayana Murthy back from retirement to help revive its fortunes in June last year..

INVESTOR CONFIDENCE

Infosys was once a star performer in India’s more than $100 billion outsourcing sector, but the uncertainty at the top and its shrinking market share have dimmed its status as the employer of choice for young IT workers, with staff leaving at an unprecedented pace.

Analysts said the company would benefit from swiftly appointing a new CEO.

“They should announce the next CEO in one or two months to bring some stability and boost investor confidence,” said Sanjeev Hota, assistant vice president of institutional equities at brokers Sharekhan.

Infosys shares were trading down 7.2 per cent at 0728 GMT, underperforming the main Mumbai market index which was down 0.7 per cent and the IT sector index, which was trading 2.8 per cent lower. The stock is down nearly 16 per cent so far this year.

Some analysts said the stock was likely to remain under pressure until the new CEO proved themselves capable of turning Infosys around.

In a research report published on Thursday, Barclays analysts Bhuvnesh Singh and Hitesh Das said the CEO selection process may lead to “further management churn”.

“We believe that the probability of an external candidate may indicate that the company’s problems are more deep seated than earlier thought and that an external person is required to bring significant changes within the organization,” they wrote.

Source:http://economictimes.indiatimes.com/tech/ites/infosys-running-out-of-time-to-name-new-ceo-as-president-quits/articleshow/35720759.cms

Once India’s IT Industry Star, Infosys, Battered By Leadership Struggles, Loses Another Top Executive

May 30th, 2014

India’s second largest IT services firm, Infosys, lost yet another key executive this week without a reasonable explanation, the latest in a parade of high-level departures in recent months. Infosys stock slid 7.5% on the news when markets opened on Thursday morning.Outsourcing15

The executive, B.G. Srinivas, is an Infosys board member and was named president in January this year making his exit even more unexpected and baffling. Also, Srinivas was one of two long-serving Infosys executives considered a front-runner for the CEO’s job that falls vacant when co-founder S.D. Shibulal steps down in January 2015. He headed key units such as financial services and manufacturing for the outsourcing firm.

Infosys, formerly a bellwether for India’s outsourcing industry, has had a wrenching time in recent years. It has lagged behind in revenues as rivals have caught up and overtaken the firm. Peers like TCS and Cognizant have outperformed Infosys and clinched large customer deals. It has been bad news after bad news for a firm that was once synonymous with outsourcing and globalization.

Underlying Infosys’ struggles has been a long-drawn leadership struggle at the firm where, so far, only co-founders have held top jobs. That has led to the exits of several top executives including two chief financial officers, Mohandas Pai and V. Balakrishnan, all said to have been in the running for the CEO’s post and later rejected.

Then last year, its billionaire co-founder N.R. Narayana Murthy, 67, ranked #1157 in Forbes’ list of the world’s billionaires, pulled himself out of retirement and returned as executive chairman, much to the surprise of analysts. Murthy’s comeback revived hopes among employees, investors and analysts that the company would regain some of its lost glory. Murthy has undertaken a series of cost-cutting measures in recent quarters and also focused on signing large deals.

But nearly a dozen top-level departures suggest that the company is still sailing through rough waters. Srinivas’ exit was the eleventh departure since Murthy returned as executive chairman about a year ago. Even at the middle and lower rungs, attrition has been much higher compared with other top-tier IT services companies. In the quarter ending March 31 for instance, Infosys’ attrition rate stood at 18.7%, despite as many as three pay raises in the past year.

Infosys
The Infosys campus in Bangalore, its headquarters (Photo: Namas Bhojani)

Several top firms in India’s $100 billion outsourcing industry have had their leadership struggles but Infosys stands out. At the firm, oddly, its co-founders have taken turns to be CEO. Its current CEO Shibulal is the junior-most and will be the last of co-founder CEOs at the firm. Infosys will now have to perforce look outside for a leader and do it soon to stem the slide in its brand ratings. Last month the firm appointed the New York-headquartered executive search firm Egon Zehnder, to come up with a selection of outside candidates for the CEO’s job. Experts view an outsider CEO as a good thing and feel it might lead to a badly-needed shakeup at the firm.

Source:http://www.forbes.com/sites/saritharai/2014/05/29/once-indias-it-industry-star-infosys-battered-by-leadership-struggles-loses-another-top-executive/

New UK outsourcing deals up 65 per cent year-on-year to £2.1 billion

May 30th, 2014

The total value of new UK outsourcing deals rose 65 per year-on-year to reach £2.1 billion in the first quarter of 2014, according to a study.
Outsourcing16
The arvato Quarterly Outsourcing Index showed the increase was driven by public sector contracts, which made up £1.5 billion of spend in the period – a 168 per cent year-on-year increase.

However, the value of private sector deals dropped 20 per cent year-on-year to £600 million.

According to the index, compiled in partnership with analysts NelsonHall, 39 deals were struck in the first quarter of the year, of which three quarters were onshore agreements and more than half were first-time outsourcing deals.

Debra Maxwell, managing director of arvato UK, said: “The outsourcing industry is in good health at the start of 2014. A rise in total spend coupled with a high proportion of first-time outsourcing partnerships proves there is a clear business case for outsourcing, and smart organisations continue to use it as a means to achieve their objectives.

“This is particularly true for the public sector, where the strong performance suggests that outsourcing remains a key strategy to reduce costs while protecting frontline services.

“There’s also a positive to be taken from the high proportion of onshore deals. While there remains a place for offshore work in the private sector, more contracts delivered in the UK is good news for the outsourcing industry’s contribution to the economy and the UK’s status as a leading global outsourcing hub.”

Business process outsourcing – mostly HR, payroll, benefits administration and recruitment – represented 71 per cent of deals and £1.3 billion of spend, while IT outsourcing made up 29 per cent (£798 million).

Source:http://www.supplymanagement.com/news/2014/new-uk-outsourcing-deals-up-65-per-cent-year-on-year-to-ps21-billion

Outsourcing poses business continuity risks

May 30th, 2014

Widely recognised as a great way to improve efficiency and allow for a focus on core business, outsourcing also presents specific risks to business continuity.Outsourcing15
So says Peter Westcott, senior business continuity management advisor at ContinuitySA, who advises stringent due diligence in selecting an outsourcing partner.

According to Westcott, risks arise when an incident at a service provider can have a knock-on effect, interrupting production at your company even though you might have a thorough business continuity plan of your own.

“Managing your outsourcing partners is very important to avoid being compromised by an incident that affects them. If they aren’t able to recover timeously, the knock-on can be devastating to your ability to continue delivering on the expectations of your clients,” he says.
Complex interdependencies

For example, consider the case of the imaginary company United Cellular, which manufactures handsets, Westcott says. It’s a highly competitive business with a demanding customer base. Quick turnaround and highest quality are essential – along with a competitive price, of course. To help meet these demanding requirements, United Cellular outsources the manufacture and fitting of the LCD screens to a third-party, GCD. Thanks to the large volumes it manufactures, GCD can offer a good price and superb quality, Westcott says.

“It’s a symbiotic relationship but does United Cellular fully understand the implications of a manufacturing disruption at GCD?” he asks, adding that handsets are released to the market at pre-arranged times, and if United Cellular’s handsets are not available, the void will be filled by competitors.

“In fact, United Cellular will feel the effects of the stoppage more than GCD itself,” Westcott observes. “GCD will still invoice United Cellular for every screen delivered: GCD is affected only by delayed revenue while United Cellular has probably lost a lot of revenue as many customers due for an upgrade will opt for another android handset – consumers are impatient impulse buyers.”

This web of interdependencies could be even more complex if, say, GCD had in turn outsourced a part of its manufacturing process, and that supplier experienced a disruption, Westcott explains.

It’s thus vital, he stresses, that each company ensures suppliers and outsourcing partners have proven business continuity plans so as to ensure that their strategic objectives (product delivery expectations) can be met.

“If your supply chain partners do not have proven business continuity plans, you will be impacted at some point,” Westcott states. “Their lack of business continuity thus compromises yours.”

Owing to the complex interaction of processes, departments and activities that go into the creation of products and services, he says, the simple act of outsourcing any one of these aspects can have unexpected consequences. “This means the impact of an outage at a supplier isn’t always fully understood. It routinely runs deeper than anticipated, affecting more of your business than is immediately obvious.”

Spider’s web
This is apparent in the example above; GCD may have been just one of the outsourcing partners, but disruption of its manufacturing process delayed the delivery of United Cellular’s flagship product, deemed crucial to the company’s survival.

Westcott continues: “The more you outsource, the more complex your business continuity becomes. The interdependencies become a spider’s web; trying to understand how everything fits together can take time and effort, but failing to do so will almost always result in an impact on your business.”
He adds that most SLAs document turnaround times and uptime, but not recovery time. Ensuring that business continuity is sufficiently robust thus depends on analysing the recovery capability of outsource partners, he urges.

“Before selecting an outsource partner, make sure they have a proven business continuity programme by reviewing their business impact analysis documents, business continuity plans and IT disaster recovery plans.”

Westcott advises a detailed examination of these documents, but he says some resistance is possible.

“You will want to see if the plans speak to the delivery of the product or service your partner provides and upon which you are going to depend, and not just the recovery of a department. By the same token, though, it is important to focus only on those processes that impact on the service offered to your company – your partner will be understandably reluctant to reveal its full business continuity plan.”

If the partner cannot commit to recovering within the timeframes you expect, then Westcott is adamant: “Find another outsourcing partner.”

Source:http://www.itweb.co.za/index.php?option=com_content&view=article&id=134917:Outsourcing-poses-business-continuity-risks&catid=69

Infosys says board member Srinivas resigns

May 29th, 2014

Infosys Ltd president and board member B.G. Srinivas, seen by some investors as a candidate to take over as CEO, has resigned, becoming the latest senior manager to leave India’s second-largest software services exporter.Employees of Indian software company Infosys walk past Infosys logos at their campus in the Electronic City area in Bangalore

Infosys did not give a reason for his resignation in its statement to stock exchanges. Srinivas, who joined in 1999, will remain in his role until June 10.

Infosys started a search for Chief Executive S.D. Shibulal’s successor in April. Shibulal, one of company’s seven founders, wants to retire in January 2015 or before, if his successor is ready to take over.

The company, part of India’s more than $100 billion outsourcing services sector, has said that it would consider both external and internal candidates for the role.

The possibility of Infosys recruiting a CEO from outside, breaking with its tradition of choosing its chief executive from its founders, has gone up after Srinivas’ resignation, analysts and investors said.

“The fact that he has left the company indicates he was no longer in the running for the top job,” said Bhavin Shah, CEO of brokerage Equirus Capital. “He was a key person from a client interaction perspective, so it’s a big loss for the company.”

Srinivas’ resignation follows the departure of at least nine senior executives who left since the company brought founder N.R. Narayana Murthy back from retirement to help revive its fortunes in June last year.

Infosys, once a showpiece for India’s outsourcing industry, is losing its status as the employer of choice for young IT workers, with staff leaving at an unprecedented pace as the company struggles to regain ground lost to rivals.

Shibulal is one of seven engineers who launched the company in 1981 by pooling together $250, mostly borrowed from their spouses. He is the fourth person from the group to become CEO, and will be the last.

“With Srinivas’ resignation, there are not too many high-profile candidates left in Infosys who can replace Shibulal,” said Walter Rossini, a fund manager for Gestielle India, which owns Indian shares, including Infosys, worth about $150 million.

“An outsider as a chief executive, who will change the management mentality and bring in a different approach, could be a game changer for Infosys. This is what the company needs.”

Infosys’ shares in New York were down 3.4 percent at 1530 GMT. The company’s India stock ended up 1.3 percent ahead of the announcement on Wednesday, while the main market index closed flat.

Source:http://in.reuters.com/article/2014/05/28/infosys-executives-idINKBN0E817V20140528

Offshoring more strategic than cost-cutting alone: Sundaram

May 29th, 2014

Most companies using business process outsourcing (BPO) are motivated by the opportunities to expand their client offering and not simply cost-cutting, according to India-based Sundaram Business Services. Outsourcing13

In a white paper published on Sundaram’s website, the outsourcing company, reported that an independent survey of directors of companies using BPO services ranked access to scale and faster processing, as having a higher impact on their businesses than lower cost.

Global Head of Business Development at Sundaram Business Services, Harish Rao, said the perception that offshoring roles was a tool for cost savings for accountancy firms was a “misconception”.

“More professional services firms see BPO as a multi-dimensional business asset and are using it strategically to help drive growth,” he said.

“The idea of BPO as merely a cost-cutting mechanism is fast becoming out-dated.”

Data from the company’s whitepaper cited Accenture’s 2012 Research Report Achieving high performance in BPO, which suggested that high performing businesses tended to be less motivated by cost when considering BPO.

The Accenture report found that two-thirds of high-performance businesses focused on the potential value of business benefits beyond cost alone, when considering adopting BPO.

“Pick up a newspaper or business magazine and the concept of BPO, offshoring or outsourcing is overwhelmingly described as a strategy geared towards cost cutting,” the company said. “But in professional services the reality is often different, and BPO has more strategic aims.

“Professional services firms have other motivations beyond cost for engaging BPO, such as managing a seasonal or fluctuating workload, accessing the security and efficiency benefits of scale and accessing a ready available pool of talent.

“The ability to offshore accounting tasks, while re-orienting staff toward higher value goals aimed at increasing revenues, is where BPO is most powerful.

“This has overwhelmingly been the case in Sundaram Business Services’ experience of SMSF processing, where more accountants and superannuation administrators are outsourcing processing work in order to concentrate on their core business.”

Source:http://www.moneymanagement.com.au/news/financial-services/2014/offshoring-more-strategic-than-cost-cutting-alone

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