Archive for the ‘News’ category

Four classic IT jobs that are moving to the back burner

September 3rd, 2014

‘Volatile’ is a word that comes up repeatedly when talking to IT professionals about the jobs landscape.outsourcing34

The overall employment picture may be relatively healthy, but job roles can change quickly as new technologies and trends affect businesses’ IT requirements.

“Because this market is so volatile, things will change in a month-to-month basis, and it takes a while to understand where the trends really are,” said Jon Heise, senior technical recruiter at Instant Technology.

The following four jobs were once ‘hot’, but are now experiencing important shifts. These roles aren’t going extinct any time soon, and there are still lucrative careers to be found in some of these areas, but the overall trends are for fewer job openings.

1. Mainframe programmers
“Before there was web development, before there was a lot of custom software development, mainframe programming was really the primary programming job,” said John Reed, senior executive director at financial recruitment specialist Robert Half. With the advent of web-based software, and more client server software, mainframe applications are not used so much. Fewer people are learning COBOL and looking for careers in mainframe programming.

This is not to say the job role is extinct — governments and large financial institutions still use mainframes and will continue to do so. According to Mary Shacklett, CEO of Transworld and TechRepublic contributor, mainframes still run 60 percent of business applications worldwide: “For a transaction processing computer, there is no faster or more reliable machine out there than a mainframe. The big enterprises all know this. That’s why they keep them,” she said.

Another reason, Heise added, is just how much money it would cost to change, and when they still work, there’s just not the need.

Where there will be a need, Global Knowledge’s senior vice president Michael Fox said, is when the programmers currently in those roles start retiring during the next 10 to 15 years.

“That’s going to be a huge opportunity to step up because those new mainframe skills aren’t going to be traditional mainframe skills — they’re also going to need web services, mobility, they’re going to have to tie all that together.”

2. Systems administrator
This is another area in which bigger trends like the cloud, virtualization, and even outsourcing and large consultancies are affecting the demand for these roles.

“I think some of the administrative roles around infrastructures in companies is waning as companies are moving to cloud computing,” Reed said. “You see some of these roles where companies have people administering servers and systems, and computer hardware — as a lot of that moves to cloud computing or virtual computing environments, some of those roles are less important for certain organizations.”

Similarly, said Heise, there’s always going to be a baseline need, but the proportions, from his perspective, do seem to be going down. In other cases, these jobs are moving from employee positions within a company to working for a consultancy that handles systems administration for many different organizations.

3. Help desk technicians
The role of the help desk technician is perhaps less prominent than it once was. For smaller companies, a more tech-savvy workforce, BYOD,  technology like Macs or Gmail, and outsourcing, means that the need to have designated individuals ready to troubleshoot is not as strong.

“The help desk continues to exist — but the job increasingly gets assigned to the ‘new kid on the block’ and is a kind of ‘launch pad’ into some other role in IT as soon as the person can get himself out [of the help desk],” said Shacklett.

Heise said that it has become harder to find candidates who are good fits for help desk roles in recent years. “Help desk is usually a very challenging role for us because finding people that are good enough to do it and aren’t already moving into different things becomes a bit of a challenge,” he said. As for the general level of demand, Heise said he wouldn’t be surprised if companies “are looking to trim that type of support or service away in favor of a cheaper or easier alternative.”

The U.S. Department of Labor’s Bureau of Labor Statistics projects job growth of 17 percent for help desk analysts through 2022, but also noted that “a rise in cloud computing could increase the productivity of computer support specialists, slowing their growth at many firms.”

4. SMB IT manager
Heise said he’s experienced several instances where lower-ranking IT managers are getting passed over or reduced in favor of giving more responsibilities to a more senior manager.

“Every executive’s perspective will be different, but when it comes down to it, when competition is tight, profits are tight, everybody wants to keep boosting their IT arena,” he said.

One reason for the shift might come as managers are need to wear multiple hats instead of filling just one IT role. In other words, the new hire in marketing might be particularly tech-savvy, so instead of the company hiring a full-time IT manager, she has responsibility for IT in addition to her work in marketing.

Shacklett said she actually sees that trend resulting in an expansion for SMB IT managers. “Because the SMBs can’t afford all the IT specialists and so they hire a ‘journeyman manager’ to try to cover all of their IT,” she said.


What went down at Infosys?

September 3rd, 2014

On 25 April 2013, directors on the board of Infosys Ltd received an email from Baburaj Pillai, chief investment officer of Singapore-based Arohi Asset Management Pte. Ltd, who described himself as a “long time shareholder and well-wisher of Infosys”.outsourcing33

The tone of his email was polite but the message was tough—bring back (founder) N.R. Narayana Murthy in an executive role, or else….

“I feel very strongly that if any other shareholder were to initiate a resolution nominating Mr Murthy, it would receive an overwhelmingly favourable vote. This however would not cast the board in good light, which I feel will hurt Infosys.”

And then, for good measure, he warned that “if the board collectively decides that status quo is the best decision, then, at the very least, the board is prepared for any potential shareholder activism.

” Pillai, also the founder of Arohi, attached another detailed letter to his email, elaborating his case, starting with a plea to bring “Mr Murthy” back and stressing his own long association with the company, first as a portfolio manager for Government of Singapore Investment Corp., and then, on behalf of his clients at Arohi.

Mint has a copy of the email and the attachment.

Within hours of receiving the email, K.V. Kamath, chairman of the Infosys board, reached out to all board members to seek their advice. One former board member remembers the call. “This is the best thing for the company. We should do it. There is no other choice,” he says he told Kamath.

Kamath said in an interview that he doesn’t remember having this conversation.

But there’s a backstory to the email, according to this person; like many others who spoke to Mint for this article, he wished to remain unidentified.

The email and the backstory were clearly incendiary enough for Infosys, once one of India’s most media-savvy companies, to issue legal notices to three publications owned by Bennett, Coleman and Co. Ltd and The Indian Express Ltd for Rs.2,000 crore each. The legal notices claimed that articles published by these newspapers had defamed the company, but people familiar with the matter said these were shots across the bows of their newsrooms, to prevent them from publishing the backstory.

Infosys also exhibited the kind of nervousness not usually associated with the company about the Mint story. A senior executive at its newly appointed public relations (PR) agency, Mumbai-based Adfactors, known for its fire-fighting skills and expertise in ensuring initial public offerings (IPOs) get the right kind of publicity, reached out to Mint twice, once presumably to stall the story, and a second time to express concern over the direction the story seemed to be taking (questions were mailed to Murthy who, through Adfactors, declined to participate in the story).

Here’s the backstory that Mint pieced together from interviews with board members and others who have knowledge of the matter.

Murthy’s comeback

The former board member cited above met Murthy in the middle of April 2013, at the latter’s house in Jayanagar, Bangalore, where he declared his intention to leave the company.

“Shibulal is running the company to the ground,” he told Murthy.

S.D. Shibulal was the chief executive officer (CEO) and managing director of Infosys then, one of the company’s co-founders, and an early protege of Murthy.

On 13 April, after its earnings announcement, the Infosys scrip had fallen by 21%, its worst decline in a decade. This event had spooked several insiders, including the board member cited above (Board Member #1).

“The company is not going anywhere,” continued Board Member #1. “You should come back. We need a good anchor to energize the company. Bring the growth back. The leadership is loyal to you and they will align to what you say.”

Murthy was reluctant.

This wasn’t the first time the board member had tried to get Murthy to come back.

A month earlier he tried the same argument, but through a different approach—using the offices of Pillai, who was visiting Bangalore at the time.

Pillai met with Murthy, who refused to even consider coming back to Infosys.

Pillai did not respond to a detailed email questionnaire.

Now, Board Member #1 was trying again, this time directly, and leveraging the threat of quitting the company.

“Shareholders are unhappy, the board is dysfunctional, not able to take any decision, employees are unhappy. You should come in to create some breathing space,” he told Murthy.

This time though, Murthy was amenable to the suggestion.

A few days later, Board Member #1 got a message from Murthy that he would consider coming back “if there was external pressure”.

Immediately, Board Member #1 called Pillai.

Kamath said that any theory about any board member orchestrating Murthy’s return “is absolutely false”.

Indeed, it is possible that Pillai acted on his own accord, and that the board decided to ask Murthy to return to an executive position because that was the best option before it.

Whatever be the case, by the end of the month, the board of Infosys asked and convinced Murthy to return.

His return, as has been widely reported, broke two rules Infosys’s co-founders had set for themselves: that they would retire at 60 (Murthy was coming back to an executive position at the age of 67); and that none of their family would be employed at the company (Murthy wanted his son Rohan to be his executive assistant).

Once he had decided to come back, Murthy, Board Member #1 says, reached out to his former A-team.

Responding to a call from Murthy, Nandan Nilekani, who was then running the government’s Unique Identification Authority of India, said he had moved on.

Nilekani did not respond to an email seeking comment.

Murthy then reached out to T.V. Mohandas Pai, former chief financial officer and director of human resources at Infosys. He too declined.

On 1 June 2013, nearly a month and a half after the events detailed above were set in motion, Murthy announced his comeback. In a statement issued by the company, Murthy said: “This calling was sudden, unexpected, and most unusual. But, then, Infosys is my middle child. Therefore, I have put aside my plans-in-progress and accepted this responsibility.”

Only, it wasn’t really sudden or unexpected, and doesn’t really show Infosys’s board in the best light.

A failure of the board

How did an $8 billion company, a former bellwether of the information technology (IT) industry, get here? Why did it turn as desperate as to seek the return from retirement of its first CEO?

One of the most important responsibilities of any board is planning for succession—identifying at least one leader who can immediately take up the role if the current CEO gets hit by a bus.

What happened at Infosys? “They have known for nine years that Kris and Shibu are the last in the line (among founders preordained to head the company),” says a former board member of Infosys (or Board Member #2). Kris is S. Gopalakrishnan, Shibulal’s predecessor as CEO.

“If things were not working out under Shibu, then the next CEO should have been appointed then and there,” says another former board member (Board Member #3). But it clearly didn’t happen, and more on that later.

A current board member, who spoke on condition of anonymity because he is not authorized to speak with the press, says that the directors were caught in a situation where there were just too many moving parts. While the board was preparing for succession planning, keeping in mind Shibulal’s date of retirement (early 2015), two things changed in quick succession—growth petered out and the company got ensnared in a messy legal battle about visas in the US. That was in July 2012; by then, Shibulal had been in charge for less than 12 months.

“You did not have too many quarters to take the decision on what is the corrective,” says the board member. “And then Infosys faced this other challenge, probably the biggest challenge, of the US visa. I have not seen anybody question and go into the root of it; when did that happen, it did not happen under Shibu. It happened under somebody else and somebody else is responsible for this activity. So all governance issues have come on Shibu’s shoulders; 40% of his energy was on that. We as a board were trying to cope with all this.”

That is, till things became too hot to handle. And Murthy came in.

Botching up succession planning was not the only lapse of the board. The appointment of Rohan Murty as his father’s executive assistant (EA) was another low.

Way back in 1994, Infosys started a programme called Voice of Youth. The idea was to harness the creative energy of its young employees and also develop future leaders. Then there is the Infosys Leadership Institute in Mysore—an institute that was supposed to churn out 500 leaders at one point in time.

What stopped Murthy from picking an EA from within? asks Board Member #3.

“What happened to these hallowed institutions? They couldn’t produce one EA.”

All about compliance?

The (current) board member says that Infosys did not cross the line on any governance issue. According to him, governance implies disclosure. “As long as you disclose, there is no governance issue,” he says. “And I don’t think Rohan enjoyed any more authority than an EA should.”

Most people that Mint spoke to who’ve served on the board of Infosys in the past agree on one thing though. When Narayana Murthy says something, everybody agrees.

“It was always about compliance, you know,” says Board Member #3. “Compliance for regulators, compliance for financials, and it is one of the best paying boards in the country. A director makes about Rs.80 lakh. Despite all of this, it was always about compliance, never about commitment.”

In early 2014, about six months after Murthy came back at Infosys, the nominations committee of the company was changed. Jeffrey S. Lehman, Ravi Venkatesan and Ann M. Fudge were replaced by Kamath, R. Seshasayee and Kiran Mazumdar Shaw, chairperson of Biocon Ltd. No reasons were given for the sudden change.

According to Board Member #2, Fudge, among others, was alarmed by the changes at Infosys. She eventually decided not to seek re-election after completing her three-year term.

Fudge did not reply to a detailed email questionnaire seeking comment.

Lehman said there was nothing unusual or untoward about the appointment of a new committee . Lehman, who has been on the board of Infosys since April 2006, also said he intends to remain on the board until he reaches the term limit imposed by Securities and Exchange Board of India (Sebi) rules.

Board Member #3 believes Kamath, former head of ICICI Bank Ltd, should have done better. “He was ruthless at ICICI,” says the board member. “Why did he go blunt?”

Is it because, as a former Infosys employee who worked closely with Kamath says, he felt he was an “outsider”?

Kamath denies this. “Never,” he says. “I was very conscious of the fact that you had people who know this business for the last 30 years. And you have to respect that.”

Still, it remains that Kamath never really critiqued Shibulal’s performance as CEO. Maybe because to have done that would have been tantamount to questioning Murthy’s philosophy of management at Infosys—that every founder would have a go at the wheel.

The Shibulal story

S.D. Shibulal, the last of the founder-CEOs of Infosys. Photo: Bloomberg Sarojini Damodaran Shibulal, now 59, will possibly go down in corporate history as one of the most vilified CEOs in the history of Indian IT. On Glassdoor, an employee-rating website, his approval rating stood at 50-60% in May 2014—the lowest among CEOs.

One of the seven founders who attained rock-star status after Infosys rose through the 1990s and 2000s to become India’s most admired company, Shibulal appeared clueless as Infosys lost its exalted bellwether status, underwent the worst financial performance in its history, surrendered its premium pricing position and was compared—unfavourably—with rivals it once used to ridicule.

Such was the state of affairs under “Shibu”, as he is popularly known, that within a year of his tenure as CEO, Infosys started missing its own annual revenue guidance. Soon after, investors and analysts started speculating on when Infosys would start looking for a replacement for Shibulal. No other Infosys founder had to undergo such ignominy.

Current board members also started to feel the heat.

In October 2013, all the independent directors on the board of Infosys received an email from an angry US-based shareholder—one of several mails the board received from worried shareholders over the course of the last 18 months.

In the letter, the shareholder questioned the board’s decision to retain Shibulal as CEO even after Murthy came back and why Shibulal and even vice-chairman Gopalakrishnan were not held accountable for Infosys’s poor performance between 2011 and 2013.

One board member thought the shareholder’s questions had merit.

In a letter to Kamath and other independent directors, independent director Omkar Goswami said the board should not ignore the email.

“Clearly (the shareholder) has marshalled fairly sound data. I believe an appropriately correct and possibly assuaging response may be warranted. I leave it to you, my other colleagues and General Counsel to choose the correct path. But we shouldn’t ignore it,” Goswami wrote in the email.

Mint has seen both letters.

During his term, Shibulal, the only founder to have taken a break from Infosys to work at a different company (Sun Microsystems Inc.), doggedly pursued a widely criticized business strategy—the so-called Infosys 3.0—that snowballed into disaster.

This strategy, touted as a bold bet when it was announced, was the company’s attempt to separate itself from the rat pack by venturing aggressively into newer areas of technology such as cloud computing, software application products and platforms.

“Infosys fell into the classic Founder Trap and that’s what has put it in its current predicament,” said the CEO of one of India’s top five IT firms, which competes with Infosys. He requested anonymity. “It should’ve got an outsider or a non-founder as CEO at least five years ago.”

Timing, execution

The 3.0 strategy was akin to changing the engines of a plane mid-flight.

The problem was its timing. Oh, and the execution, too. Which eventually led to Infosys dropping the ball with its traditional outsourcing business, as Murthy made it clear on his comeback at Infosys.

To add to that, Shibulal promoted leaders whom he favoured and sidelined others who were overseeing important portfolios and were seen as threats to his position, according to several Infosys executives, who requested anonymity.

Several Infosys insiders point to an instance when Shibulal, sometime in 2012, swapped the portfolios of banking and financial services, and manufacturing that Ashok Vemuri and B.G. Srinivas—both were seen at the time as potential future CEOs—were overseeing, respectively. “That decision defied logic,” says an Infosys executive.

To be fair, Shibulal’s tenure also coincided with the post-recession period when top Fortune 500 clients had tightened their IT budgets. And for an industry where traditional plain-vanilla software and desktop maintenance projects were getting increasingly commoditized and automated, and customers were increasingly demanding more for less.

The 3.0 strategy indicated a willingness on Infosys’s part to undertake bold transformations in a rapidly evolving technology landscape. But customers had not drastically reduced outsourcing traditional software development projects. Nor were they interested (just not yet) in making bold new, expensive bets.

It is here that Infosys lost out to competitors such as Tata Consultancy Services Ltd and US-based Cognizant Technology Solutions Corp.

Shibulal though vehemently defended his tenure during recent press briefings.

“Infosys today is much stronger than it was when I took over,” he said in an April interview with Mint.

Publicly Kamath, non-executive chairman of Infosys between 2011 and 2013, continued to back Shibulal through all these decisions. In private, it was a different story altogether.

The current board member quoted earlier and another current board member say that privately Kamath was unhappy with Shibulal’s performance and jumped at the opportunity to bring Murthy back when the suggestion came up.

The exodus

Celebrations around Murthy’s comeback lasted just about a month.

Then global sales head Basab Pradhan was asked to go. At the time, Murthy spoke about the need to take “tough decisions” to return the company to its former health. No eyebrows were raised. It was assumed that Pradhan’s exit was part of an early shake-up that Murthy was orchestrating. Next to go was Sudhir Chaturvedi, a man who oversaw some of Infosys’s most important financial services accounts and was responsible for over a billion dollars’ worth of business.

The trickle became a stream.

Even when Vemuri quit in August 2013 to join iGate Corp., nobody was ready to press the panic button yet. Vemuri had a simple choice before him. A three-in-one chance to become the CEO of Infosys. Or the top job at iGate. He chose the latter. This happened after nearly half-a-dozen more exits, capped by V. Balakrishnan’s departure in December that effectively left only Srinivas as a viable internal candidate for the post of CEO.

Balakrishnan’s departure was anything but pleasant. According to a person familiar with the development, from the time Murthy came in, the two had been discussing the idea of three co-chief operating officers (COOs): Vemuri, Srinivas and Balakrishnan himself. While Murthy seemed agreeable to the idea, he wasn’t acting on it. On 20 December 2013, after a make-or-break discussion that told him that he was not getting his way, Balakrishnan quit.

It was also his last day at Infosys.

Meanwhile, Murthy was continuing to ask people to go.

“You see, Murthy left the executive position at Infosys in 2001-02,” says Board Member #1. “When he came back, his mindset was: ‘Why do all these sales guys get paid so much? Let us replace them with freshers’.”

Murthy for one continued to believe that most people who had left were not “adding value” to the company.

Even as all this was happening, the board seriously started considering the possibility of an outsider CEO. In early 2014, Kamath suggested Vishal Sikka’s name. It was then that Srinivas approached Murthy and asked him about his chances of becoming CEO, according to Board Member #4. He was told he would not become CEO and there were others who were ahead in the race; he quit.

That was on 28 May 2014. Srinivas didn’t respond to an email seeking comment.

Srinivas’s departure was the 11th top-level exit from Infosys from the time Murthy took over. And with him went an entire generation of leaders, most of whom had ironically been hand-picked by Murthy and the other founders themselves.

In June, with the appointment of Sikka, the first non-founder CEO at Infosys, Murthy and his son moved out of the company.

Murthy’s legacy

In the midst of the hoopla surrounding Sikka’s appointment as CEO, no one really asked why Murthy, who had suggested that he would stay for five years when he returned in 2013, left barely 12 months later.

There are two explanations.

One, Murthy’s presence may have been a deterrent to potential CEOs who did not want to operate under the shadow of an active chairman. So, Murthy had to go—at least from his executive role. Once Murthy decided to leave, the other founders followed suit.

Two, having zeroed in on a successor, Murthy felt the time was ripe to cut his losses and move out.

“He couldn’t work the magic and did not want this to be widely known. So he decided to cut his losses. He is a man famous for his oft-repeated line: under-promise and over-deliver. This situation was the opposite. He wanted to go out in a blaze of glory. Like Steve Jobs. Instead, things had spun out of control and trust (in him) plummeted,” said Board Member #3.

There is yet another theory, a contrarian one, and this suggests Murthy did just what was expected of him.

A third current board member of Infosys conceded that while Murthy could not solve Infosys’s growth problem, he successfully cleaned up the “deadwood” that was dragging Infosys down.

“What he did was clean up the ship. One can easily argue that the current set of leaders who replaced the lot that left are easily a brighter set. He’s cleared the decks for Vishal.”

The second current board member echoed similar sentiments and said Murthy was instrumental in solving Infyosys’s succession-planning dilemma.

“Murthy had the challenge of putting a proper succession plan in place, which he executed. And that was most important, given that the issue of succession planning wasn’t exactly addressed under Kris and Shibu,” added this person.

In the 2000s, as a procession of founders had their go at the top job at Infosys, the chairman of the company’s rival across town told a reporter that while Infosys had democratized ownership (by going public; he continued to hold most of his company’s shares at the time), he had democratized management.

With Sikka’s entry, Infosys can finally claim to have democratized management, too.


Python is still greek to India’s top IT firms

September 3rd, 2014

Recently, one of India’s top software companies was faced with quandary. It had won a $200 million (Rs 1,200 crore) contract to develop an app store for a large US bank, but did not have adequate numbers of programmers who could write outsourcing32code in Python, the language most suited for the job. Eventually, it paid thrice the billing rate to a group of freelance Python programmers in the US. And learned a valuable lesson about the importance of a language named after the British television comedy series Monty Python.

For a nation regarded as a software programming powerhouse, the episode has salutary lessons. While skills in traditional computer languages meant for stitching software applications and maintaining large mainframe computers are a strength, ignoring Python could prove to be a costly mistake.

“Because companies like Infosys and TCS prefer proprietary languages like Java or dot NET most students think of these as an option in college. That is the reason you don’t get good quality talent in the industry to work with us in Python,” said Jofin Joseph, cofounder and chief operating officer of Profoundis, a Kochi-based technology startup which has been struggling for about a year to hire young Python programmers.

Python is by no means a new language — it was developed in the late 1980s by a Dutchman Guido van Rossum. It is open source, easy to write and can be used for a variety of applications such as development, testing and scripting. Because of its simplicity and elegance, Python has been embraced by top technology companies such as Google, Dropbox, Mozilla, Quora, Intel, Cisco, Hewlett-Packard, Seagate, Qualcomm and IBM.

In spite of its popularity among developers, Python is yet to find a place in the teaching curriculum of schools or universities, most of which continue to teach the conventional languages such as C, C++ and Java, unlike countries like the United States and United Kingdom where universities and schools now impart Python training.

According to the Institute of Electrical and Electronic Engineers, which tracks programming languages by popularity, Python is the second most popular programming language this year for development on the web after Java. According to HackerRank, which provides a competitive platform for coders, out of a total of 38 programming languages worldwide, 13.95% of all code submitted was in Python, while 19.92% submissions were in Java, and 15.72% in C.

The maximum number of solutions were submitted in C++ with 37.7%. For Python to have such a large share in the submissions compared to legacy languages suggests that coders have started adopting it in a big way, said Anirvan Mandal, product developer at HackerRank.

Indian IT outsourcers like Infosys, TCS, Wipro began by building software when Python was not as popular, and most code was built in languages such as C, C++, Java or .NET. “To rewrite something from C to Python would take a long time, so these companies find it easier to maintain existing code in those languages,” said Mandal. On the other hand, Ajit Kumar, a president at HCL Technologies, said that for IT outsourcing companies, proficiency in Python is now considered as an additional skill for developers.

In May, Google India announced the second edition of its “Code to Learn” contest, where students from classes 7 to 10 have the option to code in Python. “Our intention of including Python in the Code to Learn contest was to introduce a new language to interested students. A lot of professional software developers use Python these days and a number of universities are teaching it as the first programming language but it has less adoption in academia in India,” said Ashwani Sharma, India head for university relations at Google.

However, hiring agencies said that Python is a hot skill that is commanding a premium over traditional languages. For Python programmers with about six years’ experience, the salary could be up to 30% higher than for those with skills in traditional languages. “Of the most commonly required programming languages, Python was the only one to see a year-over-year increase,” said Alka Dhingra of recruiting firm TeamLease.


ServicEngineBPO to expand workforce by more than double

September 3rd, 2014

The outsourcing service provider, ServicEngineBPO, has announced plans to increase employment opportunities by more than doubling its current workforce over the next 36 months, it has been claimed.outsourcing31

Their Dhaka offices may be welcoming around 600 new faces as their operations are extended in keeping with the increasing demand for outsourcing solutions.

The chairman of the company, ASM Mohiuddin Monem spoke with The Daily Star, confirming that they “(…) want to exceed the 1,000 employee mark by 2015 from the existing 400 workforce if the present growth trend continues.”

According to Monem, the company has registered a 35-40 percent rise of revenue per annum since the US-Bangladesh joint venture started in 2006.Where Philippines and India were previously considered the best outsourcing destinations, he says, global perception is gradually changing due to the growth of labour costs in these areas.

ServicEngine is the first Bangladeshi company to be listed among the top 100 BPO companies, which Monem says provides outsourcing services mainly to the FTSE 500.


First IT jobs went offshore, now they’re being automated

September 3rd, 2014

The US and European IT roles that were pushed to offshore service providers will increasingly be automated, as the outsourcing giants look to preserve their margins. outsourcing30
By 2016 almost 1.1 million IT jobs are expected to have been sent offshore by major US and European companies.

The drive to send jobs abroad has, in part, been fuelled by low labour costs relative to western countries, with recent entry-level salaries for engineers in India falling between $4,200 and $5,900.

However, after years of double digit growth in Indian IT workers’ wages and with western customers demanding more for less, offshore service provider margins are being squeezed.

To protect their profits, major providers are beginning to automate an increasing number of roles traditionally carried out by systems adminstrators.

Milind Govekar, VP with analyst firm Gartner specialising in IT operations, said the push towards automation is partly being driven by the complexity of IT systems these service providers run on behalf of their clients.

“I often call IT an archaeological science, because nothing dies. You have generations of applications and infrastructure buried in an organisation. There’s a bank in the UK that has applications running from 1957. You can imagine the complexity that particular environment has,” he said.

“It’s a combination of old systems, new systems and everything co-existing. At the same time demand is going up as well, as almost all organisations have launched digital business initiatives.”

Customer expectations of service providers are also rising. Govekar referenced a large European bank outsourced to India’s largest IT services company TCS that expects demand on its systems to grow by 25 – 30 percent each year but wanted its costs to increase by no more than five percent.

“A lot of these service providers are saying ‘It’s just not sustainable to hire people and get them to maintain these systems’.”

For example, the CEO of TCS recently said in an interview the firm is working on up to 15 platforms to automate different aspects of its work. For its part Wipro is building its FixOmatic framework, which it says will enable automation of up to 40 percent – 45 percent of all level 1 and level 2 support tasks, reduce downtime and lower operational cost.

What sort of roles are being automated?

Automation software maker IPSoft has deals with some of the largest IT companies operating in India – such as Wipro, Cognizant, Infosys and Accenture. The firm is one of a growing number of businesses providing automation technologies for running and maintaining an IT estate.

A look what IPSoft does demonstrates the types of tasks that are being automated. The firm’s main product is IPcenter, a software platform that is designed to monitor and automate the running of IT infrastructure, and respond appropriately when a problem arises.

“If you’re driving a car a light will come on to tell you to go to the garage. What IPSoft is doing with their technology is basically trying to solve any issues before it gets to the stage where the warning light needs to come on,” said Martijn Gribnau, chief change officer at IPSoft.

IPcenter relies upon “virtual engineers”, autonomic software that can handle incidents across the corporate infrastructure – from configuring a misbehaving firewall to reducing the load on a server running virtualised machines. Virtual engineers control their own operations, monitoring the network for incidents and are able to adapt and change tasks if a higher priority incident occurs.

“It’s basically a third generation expert system. It’s not cognitive yet, but it’s smart automation of virtual engineers. What we basically do is look at what an engineer is doing and automate it,” said Gribnau.

The product is designed to automate what Gribnau referred to as level one and two support engineers, as well as part of level three engineers’ responsibilities, as defined under the Information Technology Infrastructure Library service management practices.

IPSoft says that IPcenter autonomically resolves an average of 56 percent of incidents without human intervention and up to 90 percent of level one support incidents.

What effect is it having on IT hiring?

Fierce competition for the hundreds of thousands of newly qualified engineers India’s universities produce each year has pushed up salaries and encouraged service providers to poach staff from competitors.

Gartner’s Govekar said as demand grows for outsourcing and external services, including cloud, providers are looking at automation as a way of “not hiring more people”.

“They are also using automation as a way of buffering themselves against this huge turnover of people, where people are jumping from one organisation to the other. They look at automation as a way of filling those gaps, of making sure that certain repeatable tasks that systems administrators undertake are very much automated.”

The desire to control labour costs is already evident at the major service providers. After years of paying engineers double-digit salary increases, Infosys and its competitors are offering no more than 10 percent this year, in spite of projections by the Indian IT association Nasscom that the industry will grow by 15 percent, an improvement on 2013.

When contacted, Wipro had no comment to offer and Infosys declined to share its views.


Belarus IT outsourcing market to grow at 17.78% CAGR by 2018

September 2nd, 2014

IT Outsourcing Market in Belarus 2014-2018 discusses the attractiveness of the market in the country. The report contains of all the important information regarding the economic system and the aspects related to doing business in the country.

Cloud computing allows end-users to store their data in a vendor’s data center. Cloud resources are not only shared by multiple users, but are also dynamically reallocated to meet demand. Users of cloud computing resources do not have to invest in infrastructure and other resources; they only have to pay for the services that they use, based on pay-per-use subscription model, which helps them save cost and time and to focus on their core competencies. Cloud computing can be divided into IaaS, SaaS, and PaaS. Belarus companies have strong expertise in providing cloud computing via SaaS.
According to the report, the growth of the IT Outsourcing market in Belarus is driven by several factors. For instance, Belarus lies in close proximity to Western Europe and hence shares similar business principles. Moreover, the transportation costs associated with outsourcing can be reduced because of easy accessibility to Europe and other countries.

Analysts forecast the IT Outsourcing market in Belarus will grow at a CAGR of 17.78 percent over the period 2013-2018.

Covered in this Report

The IT Outsourcing market in Belarus discusses the attractiveness of the market in the country. The report contains of all the important information regarding the economic system and the aspects related to doing business in the country. It includes the various economic forces that affect the IT Outsourcing industry such as currency and tax laws. The report also compares Belarus with other popular IT outsourcing destinations.

IT Outsourcing Market in Belarus 2014-2018, has been prepared based on an in-depth market analysis with inputs from industry experts. It covers the IT Outsourcing market in Belarus landscape and its growth prospects in the coming years. The report also includes a discussion of the key vendors operating in this market.


Outsourcing firm looks to ride on global growth

September 2nd, 2014

A leading outsourcing service provider, Servic Engine BPO, aims to more than double its workforce over the next two and a half years, a top official said.

The recruitment drive will create around 600 new jobs at the company’s Dhaka office as it expands operations to cater to growing demand for outsourcing services.

“We want to exceed the 1,000 employee mark by 2016 from the existing 400 workforce if the present growth trend continues,” ASM Mohiuddin Monem, chairman of the company, said in an interview with The Daily Star recently.

The US-Bangladesh joint venture company has registered 35-40 percent growth of revenue a year since its inception in 2006, he said.

The company checks backgrounds of customers for financial institutions and provides medical appointment assistance for US hospitals.

Interactive marketing, quality assurance, software and web development, back-office processing and digital advertising are also among the services it provides, he said.

The company’s outstanding performance did not go unnoticed: It has been adjudicated as one of the Top 100 Global Outsourcing Service Providers in the world by the International Association of Outsourcing Professionals (IAOP) in 2014.

IAOP, the global standard-setting organisation and advocate for the outsourcing profession, also ranked ServicEngine as the 12th best outsourcing company in the Rising Star category.

These rankings are based on applications received and evaluated by an independent judging panel organised by the IAOP, which has more than 120,000 members and affiliates worldwide.

“This is a tribute to the exceptional service delivered by our employees. I am proud of our employees who have shown the world the talent we have in our country,” said Monem.

The accolade will help the outsourcing industry of Bangladesh to reach new heights globally as ServicEngine is the first Bangladeshi company listed among TOP 100 BPO (Business Process Outsourcing) companies, he said.

“It will benefit the entire BPO industry in Bangladesh,” he said adding that the country has some 10-15 outsourcing companies which are doing well and the number is growing.

ServicEngine faced several challenges as business process outsourcing is new in Bangladesh, said Monem. “It was not a very easy ride.”

The company had to compete with an Indian vendor to receive its first ever work project, he said.

The country’s biggest strength for BPO industry is its large young population base, he said.

Earlier, India and the Philippines were considered the best outsourcing destinations, but the global perception is gradually changing due to rising labour costs, he said.

Bangladesh has the potential of becoming a leading outsourcing destination due to cost competitiveness and scope for capacity development, he said.

Monem, also the deputy managing director of Abdul Monem Group, a leading diversified company that engages in construction, beverage, and ice-cream business, expects a bright future for the outsourcing industry.

Global market of BPO and IT Services stood at $952 billion in 2013, of which $304 billion was BPO based, according to HfS Research, an American consultancy firm.

“The country will be able to earn at least $15 billion if it can grab only 5 percent of the global outsourcing market,” he said adding that it is not too late to try as yet.

The area of BPO activities are widening globally, said Monem, who earned his bachelor’s degree in industrial engineering in 1991 and a master’s in engineering management in 1994, both from Northeastern University of the US.

“When BPO started, it was concentrated on payroll and human resource management but that is changing,” he said.

Monem said there will be huge demand for heath care and legal process outsourcing globally. “The market is opening up especially in the hearth care sector due to a favourable policy of the Obama Administration in the US.”

ServicEngine, which has offices both in the US and Bangladesh, provides outsourcing solution mainly to the Fortune 500 companies, he said.

The work rates charged by the company are either on a per-hour or project based, depending on the service offered, and the applicable business model. The rates can range from $7 to $40 per hour.

The company that employs graduates in business studies, computer science and other IT studies pays its employees in Dhaka Tk 20,000 to Tk 200,000 a month depending on job profiles, he said.

The country registered robust growth in exports of IT and IT-enabled services in the last couple of years.

Local software and IT vendors exported services and products worth $124.72 million in fiscal 2013-14, up 22.71 percent from the previous year, according to data from the Export Promotion Bureau.

Bangladesh Association of Software and Information Services has set a target to earn $1 billion from such exports and create 1 million professionals in five years.


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