Archive for the ‘News’ category

Infosys partners with China’s Huawei for cloud-based services

September 19th, 2014

Infosys Ltd (INFY.NS), India’s second-biggest IT services provider, said it had signed a partnership agreement with Huawei Technologies Co Ltd [HWT.UL] to offer enterprise customers cloud computing services.Outsourcing11

Infosys also said it had expanded existing cloud computing partnerships with Microsoft Corp (MSFT.O) and a Hitachi Ltd (6501.T) unit.

Infosys, led by Chief Executive Vishal Sikka, has been planning to boost investment in cloud computing, smartphone apps and other new technologies to win more high-margin outsourcing contracts. These are expected to help Infosys back to the forefront of India’s $100 billion IT outsourcing industry.

Infosys and Huawei will jointly develop IT solutions that combine Huawei’s cloud infrastructure and Infosys’ service expertise, the companies said in a statement on Thursday.

Under an expanded partnership with Microsoft, Infosys will help companies use and migrate to Microsoft’s cloud platform in a more secure manner, Infosys said in a separate statement.

Under an expanded partnership with Hitachi Data Systems (HDS), Infosys and HDS will help clients transition their IT infrastructure to new cloud-based environments, the Indian IT firm also said.


Huawei enters IT services with telecom projects

September 19th, 2014

Telecom networking giant Huawei has entered IT services, a shift from its hardware-focussed strategy which will eat into the marketshare of Indian software exporters, especially in telecom-related projects.Outsourcing10

The world’s largest privately held technology company is using its India R&D centre to take up projects involving managing of telecom infrastructure and their networks, thereby treading on the bread-and-butter businesses of Indian IT exporters. When contacted, Wilson Wang confirmed the development and told BusinessLine that engineers from India have started doing projects onsite and offshore for its clients such as China Mobile, China Telecom and others.

“Our 2,700 Indian engineers are paving the way in services, working on areas such as Ring Back Tones, cloud computing and agile software development, which helps telcos to provide different solutions to their customers” he said.

Huawei started off making telecom equipments such as routers and switches for telecom operators globally and within a span of a decade, the company gained significant marketshare from competitors like Cisco and ZTE. This development also underscores the ambition of Huawei, as it branches out into services, especially with global client base, noted Sanchit Vir Gogia, Analyst at Greyhound research.

The company, which started off selling networking equipment to Chinese telcos, now counts Mobily, MegaFon, Etisalat as their customers. “We already have an existing installed base of products that telecom companies use and services is our next frontier,” explained Wang. Also, services an area where Chinese companies have been laggards when compared to their Indian counterparts who have exported $75 billion worth of software in the 2014 fiscal year.

For a decade-and-a-half, Indian IT exporters have been trying to make a mark in the Chinese market, with the likes of TCS, Infosys, Wipro and others have subsidiaries in cities like Shanghai and Shenzen. However, they have not been able to make much inroads and almost all of these companies contribute a fraction of its overall turnover, according to company data. In a bid to spruce up revenues from China, TCS last year, Tata Information Technology was merged into TCS China.

Accroding to analyst data, global telecom outsourcing market is estimated to hit $76 billion by 2016.


IGATE to focus on ITOPS to sustain its growth momentum

September 19th, 2014

Outsourcing solutions firm IGATE will focus on its integrated technology and operations (ITOPS) model, besides concentrating on automation and geographies like Europe to sustain its growth momentum.Outsourcing9

Ranked among the Fortune 100 fastest growing companies in the US this year, the US-based firm in the last one year has rejigged organisational structure to strengthen capabilities, increase focus on large deals and building a team of strong professionals through on-the-job training.

“The Fortune ranking is a revalidation of what we have done in the last one year. IGATE is the only IT services firm in the list and that makes it even more special,” IGATE President & CEO Ashok Vemuri told PTI.

Vemuri, who also completes a year at IGATE, added the firm’s focus on monetising and amplifying its strengths by adding new solutions and services and increased focus on large deals have helped it achieve the milestone.

“We are better than before with a clean balance sheet, reduced debt, strong organisation structure, right leadership and niche service offerings. This will further IGATE’s reputation as a complete solutions and software services provider,” the former Infosys Head of Americas said.

For the loan of $770 million (at an interest rate of 9%), IGATE was paying $23-25 million per quarter in interest costs. Now, the firm has refinanced it and taken a loan of $685 million at an interest of 4% and will be paying $7-8 million per quarter in interest costs, which will reduce over $50 million in interest costs annually.

Its net debt stood at $475 million at the end of the second quarter.

But the one-time charge of $51.8 million on debt settlement hit its net profit for the April-June quarter, which fell by 89.6% to $3.1 million. The company had posted a net profit of $30 million in the second quarter of 2013. It follows January-December as fiscal year.

When asked about plans of the company to maintain this growth momentum, Vemuri said the deal pipeline is good and the firm is focusing on building new technologies and train its manpower on those lines.

“We have great business opportunities developing, which can be seen with our expansion plans for our delivery centres across the US, Canada, Europe and India. Besides, we have been building on new technologies and investing on training our employees so that we go ahead prepared,” he added.


TCS leads Indian peers, says global survey

September 19th, 2014

Clients see Tata Consultancy Services (TCS) as the only local information technology (IT) company strong on two important parameters, implementation and innovation, said a study.Outsourcing8

It was conducted by America-based HfS Research and KPMG last month. The annual survey, state of services & outsourcing, covered 312 global clients, 347 advisors and consultants, and 420 participants from the companies that manage IT and business operations.

“IT-outsourced service providers, such as TCS, are leading the way in terms of buyer perceptions, both on innovation and execution, relative to their peers,” said Charles Sutherland, executive vice-president of research at HfS Research.

The country’s second- and third-largest in the sector, Infosys and Wipro, respectively, were seen as strong on implementation but weak on innovation. This could mean if their areas of execution become less significant, these may become candidates for churning, the report added.

Smaller companies iGate, Xerox, Fujitsu, Unisys and CSC scored low in the survey. “For these, the task ahead is to increase awareness of their capabilities and, in particular, to highlight investments in innovation,” said Sutherland.

Almost half the survey participants said they would look at switching their existing IT service providers for several reasons. While 15 per cent said they planned to do so at the renewal cycle, 12 per cent said they planned to move some or all of the outsourced work in-house. As many as 23 per cent said they wanted to switch their provider but were still working through the practicalities of doing so.

“Some of this (dissatisfaction) may be the result of long-standing contracts where it is harder to repeat the level of savings initially achieved and booked for first-generation contracts,” said Sutherland. “But when combined with the results of a perception study of the IT outsourcing service providers, it may be that the larger issue is the market is increasingly fragmenting and certain providers (specially some entrants like Amazon and Google) are just changing the market at such a speed, that a new level of dissatisfaction with the previous status quo is setting in.”


The benefits of outsourcing for a small business

September 19th, 2014

So your business is flourishing, and you’re taking on an increasing workload; the question is, how do you maintain this steady growth without compromising its core values and quality of service? There comes a time in every business’s life cycle when the issue of staff constraints begins to raise its head, and the question of outsourcing becomes a serious consideration.Outsourcing7

Firstly, why do businesses outsource? One of the main reasons is simply time – or lack of it. Small businesses, ones that are growing quickly and juggling lots of plates, simply cannot afford to have key members of staff overstretched to the point of ineffectiveness. Outsourcing offers a spare pair of hands to help manage busy periods, bringing in specific skills on a temporary basis, to help support the company and maintain the success it has built from the launch onwards. Using expert outsourcing organisations essentially frees up your staff to concentrate on the core of the business and to concentrate on developing their own skills.

Outsourcing can provide further multiple benefits. It can also help control capital costs by reducing overall spend on staff; hiring a full time specialist is much more expensive than using a freelancer to do the same job, who can be hired on and off dependent on the needs of the business.

Outsourcing also allows companies to turn on new projects quickly, reacting to market demands and fulfilling customers needs much more effectively. Customers can often request work that the core business might not be able to provide – outsourcing can help to meet this demand and draw in new revenue streams, which might not have been part of the existing model in the first place.

Further benefits which are important for all businesses, not just those at the early stage of their lifespan, are the expertise that outsourcing tasks can bring, and the risks it can mitigate respectively. Utilising external specialists can help breathe fresh life into a venture and offer a different perspective to a particular challenge, which can be vital when maintaining growth in a small business. In terms of mitigating risk, take hosting or working in the cloud for example; if you’re a small business utilising sensitive data, it can be much more effective to use an expert cloud hosting provider to look after it. Not only will they have the skills to do this effectively, they will also be much more aware of regional regulations and legal requirements, which in turn reduces the legal risk that could threaten your company in the case of a data breach.

Pitfalls of outsourcing
So now that we’ve covered some of the benefits of outsourcing, what are some of the pitfalls that can be encountered when working with external partners at this stage in the business?

One of the first points I would raise is the loss of control to an extent. When outsourcing to a partner, you are placing a huge amount of trust in the ability of their team to deliver on your brief. If the brief is poor, misunderstood, or the team working on it are not the strongest, then you run the risk of results being delivered that are not up to par. And in many cases you will still have to pay for these. This can be hugely damaging, especially in the early stages of a business when budgets are tight.

The second are hidden costs. When outsourcing, especially to service providers, there will be a limit to the amount of work that you are paying for, and so anything extra that arises will often be subject to further outlays. Being at arm’s reach with your external partner can often mean costs are not necessarily transparent when you first begin working together.

And finally, confidentiality can be an issue. No matter how much you trust an external partner, if you share data with them then essentially you are increasing your risk by relying on their security systems. In most cases this is never an issue, but as soon you share your data with another organisation the likelihood of a breach increases as it’s now in a location that is not under your immediate control.

While outsourcing can offer risks, for most businesses in early development stages it is a vital ingredient to success. Every business needs support at certain times in its life cycle, and so choosing the right partner can be the difference between triumph and failure.


Nigeria: Minister Decries Offshore Outsourcing of Local Operations

September 19th, 2014

The Minister of Communications Technology, Mrs. Omobola Johnson has faulted the outsourcing of operations generated locally to foreign companies under the Business Process Outsourcing (BPO) arrangement. According to the minister, local companies in Nigeria Outsourcing6have the capacities and skilled manpower to handle outsourcing within and outside Nigeria, even though Nigeria is not regarded as a destination country for BPO. She insisted that it would be a disservice to Nigeria, if local operations are outsourced to foreign companies that are established outside the country.

Johnson, who stated this in Lagos, while inspecting the operations of Communications Network Support Services Limited (CNSSL), a local BPO company with over 6,000 employees, said she was impressed with the facilities and manpower of the company. The minister told THISDAY that CNSSL has all it takes to operate outsourced services in Nigeria and still offer such services outside Nigeria, noting that it would be out of place if local BPO companies are not given the chance to do what they are capable of doing. Johnson said Nigeria has local content agenda (LCA), which dwells so much on local content implementation.

According to her, the LCA was introduced was because the government discovered that multinationals were taking over businesses in Nigeria. Although she said multinationals doing business in Nigeria is not bad, she added that there is the need to protect and support the growth of local companies through policy implementation, and the LCA would address all of that.

“The truth is that if we must create jobs and develop Nigeria to the level it should be, then we must grow successful and sustainable local industries. China, Germany and Japan are doing well today because they have over the years, developed their local industries, making them to contribute substantially to Gross Domestic Products (GDP),”Johnson said. Speaking on the operations of CNSSL, the Chief Executive Officer of the company, Mr. Gbenga Adebayo, said the company had been in operation since 2007, servicing the telecoms, oil & gas, banking & finance sectors of the economy, as well as state governments. According to him, CNSSL has been managing the operations of these companies and states, through call centre operations in some parts of the country that are driving the initiative. He however called for government policies and regulations that would protect local BPO companies since Nigeria has no such policies in place.

Adebayo said: “We are one of the local pioneers of BPO in Nigeria. When we started operations in 2007, most people thought we will not be able to deliver, but today our call centre operations are so standardised that local companies now patronise us, and international companies want to have a stake in it, which of course will increase foreign direct investments (FDI) and boost knowledge transfer. However good this may sound, there is a threat about the foreign interest, since BPO destination countries that are mostly foreign are now coming up to say that the local companies in Nigeria are not supposed to do outsourcing and that the BPO business should be carried out by the foreigners alone because it is their trade since they have the international expertise and technology.” Adabayo stated that should this be allowed, it will expose local companies to a lot of vulnerabilities, since Nigeria has no policy protecting local BPO companies.


Tech outsourcing firm HCL adding 1,237 jobs in Cary

September 19th, 2014

HCL Technologies will add some 1,237 jobs at its operations in Cary after signing an agreement with the state of North Carolina to includes nearly $20 million in tax incentives and grant money.Outsourcing5

Gov. Pat McCrory made the announcement at HCL’s offices.

“HCL has been steadily building its Wake County presence and one reason is the incredible talent pool the Triangle region has to offer IT companies,” McCrory said. “Providing a well-trained and motivated workforce that meets the real-world needs of employers is evidence of the importance that North Carolina puts on helping employers grow.”

HCL already employs several hundred people in Cary.

The state’s Economic Development Investment Committee approved $19.6 million in incentives based on how many jobs HCl does create.

The state also is awarding HCL a $123,000 One North Carolina Fund grant, which requires a local match.

“Given our core philosophy of building Relationships Beyond the Contract (RBtC), we remain committed to enhance our investments by developing nearshore capabilities in the communities we operate in,” said Anant Gupta, CEO of HCL, in a statement. “We will continue to bring global expertise and experience to accelerate growth and success for our clients, partners, employees and the communities in the region.”

SchoolDude, another IT company which recently announced plans to expand, also is based at that Cary office building.

In 2008, HCL announced plans to expand in Cary and create more than 500 jobs.

The jobs announcement follows a transportation-related project the governor is scheduled to make at Raleigh-Durham International Airport.

HCL which launched in 1999, has more than 7,000 employees in the U.S. with operations in Michigan, New Jersey, New York and Washington as well as Cary.

“We find the talent from here is as good, sometimes better, as what we see in Silicon Valley and other parts of the world,” said HCL Corporate Vice President Vikram Duvvoori.

The company is based in India and generated some $5.4 billion in revenue in 2013.

HCL offers  “IT and engineering services expertise under one roof to solve complex business problems for customers.”

The firm says on its website that “HCL’s local hiring strategy is a crucial part of our commitment to the cities and towns in which we operate.”

The JDIG agreement specifies that “HCL is eligible to receive up to twelve annual grants equal to 75 percent of the state personal income tax withholdings from the eligible new jobs created since the date of the initial award.”

The agreement would be worth some $19.6 million if all 1,237 jobs are created.


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