PM Modi bats for IT companies

January 27th, 2015 by Rahul Jain No comments »

PM reminds Obama that Indian IT industry helped US in creating jobsOutsourcing56

Prime Minister Narendra Modi on Monday lobbied for easy norms for Indian IT companies as they are contributing to the creation of jobs in the United States.
“Indian IT companies are creating skilled jobs in the United States; and, helping US companies stay ahead. They have also helped US military veterans rebuild their lives,” Mr Modi said in his joint address with the visiting US president Barack Obama to the India-US Business Summit, attended by nearly 500 business leaders from US and Indian industry.

He said that Indians are powering US businesses.

Mr Modi’s remarks assume significance in the wake of growing opposition to outsourcing in the United States, which triggered concerns in the IT industry, whose mainstay continues to be American companies.

The proposed US Border Security Economic Opportunity and Immigration Modernisation Act, if passed by the US Congress, requires companies functioning in America to reduce their foreign workforce over the next few years.

This law is expected to force Indian companies to hire local talent in the US at a higher cost. If the bill is passed in its current form, it has the potential to hurt the margins of the Indian IT sector. India’s IT exports make up a major part of India’s services exports and a major foreign currency earner.

During his electioneering, US President Barack Obama had spoken against outsourcing. In one of his remarks, Mr Obama had said that he wanted to create jobs in Buffalo rather than in Bangalore.

During the current visit of the US President, both countries have agreed to resume talks on totalization agreement, a long pending demand of Indian IT industry.
This agreement, Indian experts say, will exempt Indians IT professionals, who are take up short-term assignments in the US, from paying social security tax.

Mr Modi noted that there are more than 1,00,000 Indian students in the United States and thousands of American students visiting India. “They are sowing the partnerships of tomorrow. And, the success of 3 million Indian Americans points to our potential,” PM said.

Source:http://www.asianage.com/business/pm-modi-bats-it-companies-432

Wipro wins Rs 900 crore Irish contract

January 26th, 2015 by Rahul Jain No comments »

Wipro has won a $150-million (Rs 900-crore) IT outsourcing deal from the Allied Irish Banks (AIB), one of the big four commercial banks in Ireland. India’s third largest IT services company will provide infrastructure management services (IMS), data centre and hosting services to AIB over five years.Outsourcing55

“We will bring our expertise to build agile and adaptive infrastructure while improving the predictability and cost effectiveness of services,” said Rajan Kohli, senior vice-president and global head (banking and financial services) in Wipro.

The deal is Wipro’s biggest win in Ireland and provides a gateway to participate in other IT deals including the Bank of Ireland contract that’s coming up for renewal later this year.

Source:http://timesofindia.indiatimes.com/tech/tech-news/Wipro-wins-Rs-900-crore-Irish-contract/articleshow/46016064.cms

IT Outsourcing Company in Dubai Announced Promotional Rates

January 26th, 2015 by Rahul Jain No comments »

IT-Serve, a Dubai based leading managed IT services and support provider in the United Arab Emirates (UAE) offer a range of managed IT services including Annual IT Support Contacts and IT Outsourcing Services. The services are already some of the most competitively priced in the market, but now enjoy a 50% discount until the end of March 2015.Outsourcing55

Ali Liaquat, Marketing Manager, said, “We are seeing a shift in the market away from the traditional in-house IT support model to IT outsourcing model. Businesses realize that the mantra of zero downtime is only possible with enterprise class IT services including quality hardware support and technical management. IT-Serve’s IT outsourcing services are designed from the ground up for SMEs and Enterprises, and therefore have significant advantages over other One-size-fits-all IT outsourcing services.”

“If you don’t have a dedicated IT person, IT outsourcing service is the perfect substitute. Rather than paying the salary and benefits for another employee, you could pay a reduced amount for IT outsourcing services. A technology professional with five years of experience may be worth AED 80,000+ a year. That AED 80,000 salary only gets you one person, not a team of professionals with expertise and knowledge. When you hire your own IT staff, there are also challenges scheduling around vacation, training, and illness. Using IT outsourcing services provides full time IT coverage and vacations, illness, and other absences don’t affect your support,” said, Nikhar Juneja, Head of SME Engineering.

Source:http://www.virtual-strategy.com/2015/01/25/it-outsourcing-company-dubai-announced-promotional-rates#axzz3PtkAdiwa

IBM’s APAC fourth quarter revenue slides 17 per cent

January 23rd, 2015 by Rahul Jain No comments »

IBM’s fourth quarter APAC revenues have dived 17 per cent, more than any other region, as the company reports full year profits of $US15.8 billion.Outsourcing54

Net income was down seven per cent on the previous year’s figure of $US16.9 billion.

Big Blue reported fourth-quarter 2014 diluted earnings from continuing operations of $US5.54 per share, compared with diluted earnings of $US5.76 per share in the fourth-quarter of 2013, a decrease of four percent.

Fourth-quarter net income from continuing operations was $US5.5 billion compared with $US6.2 billion in the fourth-quarter of 2013, a decrease of 11 per cent.

It reported consolidated net income of $US5.5 billion or $US5.51 of diluted earnings per share, including operating net losses in discontinued operations related to the microelectronics manufacturing business.

While total revenues from continuing operations for the fourth-quarter of 2014 of $US24.1 billion were down 12 per cent (down two per cent, adjusting for the impact of the divested customer care outsourcing and System x businesses and for currency) from the fourth-quarter of 2013 and were down one percent for the full year 2014, adjusting for the impact of the divested businesses and for currency.

IBM chairman, president and chief executive Ginni Rometty, said the company was making significant progress in its transformation, continuing to shift IBM’s business to higher value, and investing and positioning it for the longer term.

“In 2014, we repositioned our hardware portfolio for higher value, maintained a services backlog of $US128 billion and achieved strong revenue growth across cloud, analytics, mobile, social and security,” she said.

“Together these strategic imperatives grew 16 percent in 2014 and now represent $US25 billion and 27 percent of our revenue.”

In terms of geographic regions, the Americas’ fourth-quarter revenues were $US11.1 billion, a decrease of nine percent (down four percent, adjusting for divested businesses and currency) from the 2013 period.

Revenues from Europe/Middle East/Africa were down 13 per cent to $US8 billion (down one per cent, adjusting for divested businesses and currency).

Asia-Pacific revenues decreased 17 per cent (down 2 per cent, adjusting for divested businesses and currency) to $US4.9 billion.

The global services segment revenues decreased eight percent (flat adjusting for the impact of the divested customer care outsourcing and System x businesses and for currency) to $US13.5 billion.

While global technology services segment revenues decreased eight per cent (up two per cent adjusting for the impact of the divested customer care outsourcing and System x businesses and for currency) to $9.2 billion.

Global business services revenues were down 8 per cent to $US4.3 billion.

Software revenues were $US7.6 billion, down seven per cent (down three per cent, adjusting for currency) compared with the fourth-quarter of 2013.

Revenues from IBM’s key middleware products, which include WebSphere, Information Management, Tivoli, Workforce Solutions and Rational products, were $US5.4 billion, down six per cent (down three per cent, adjusting for currency) versus the fourth-quarter of 2013.

Operating systems revenues of $US557 million were down 19 per cent (down 16 per cent, adjusting for currency) compared with the prior-year quarter.

Hardware revenue for the systems and technology segment plummetted 39 per cent (down 12 per cent, adjusting for the impact of the divested System x business and currency) to $US2.4 billion.

Revenues from System z mainframe server products decreased 26 per cent (down 23 per cent, adjusting for currency). Revenues from System Storage decreased eight per cent (down five per cent, adjusting for currency).

However, total reported expense and other income from continuing operations declined 20 per cent to $US5.8 billion compared with the prior year period. The reported reduction was driven by the gain of $US1.4 billion ($1.1 billion pre-tax income benefit, net of related transaction and performance-based costs) from the divestiture of the System x business and the elimination of the expense for the System x business from the company’s run rate.

Debt, including Global Financing, totalled $US40.8 billion, compared with $US39.7 billion at year-end 2013, and down $US4.9 billion from the third quarter of 2014.

Source:http://www.arnnet.com.au/article/564504/ibm-apac-fourth-quarter-revenue-slides-17-per-cent/

Wage settlement for private outsourcing firm employees

January 23rd, 2015 by Rahul Jain No comments »

Labour department officials held talks with the employees of C Cubed Solutions, a company that provides call centre, BPO, healthcare billing and IT outsourcing services, and the management representatives here on Thursday and arrived at an agreement on payment to the employees as the company was stopping operations here.Outsourcing53

An employee who did not want to be identified said that C Cubed was present in India for the last 15 years and started Coimbatore operations four years ago. It employed 283 people and most of them were engineers. On January 19, employees who reported to work at 6 p.m. were told that the Coimbatore operations were being stopped, the employee claimed.

On Tuesday, a couple of representatives of the company told the employees that the pending salary payment would be made in two terms. The employees met the District Revenue Officer on Wednesday and labour department officials on Thursday here.

According to Joint Labour Commissioner P. Marimuthu the employees would get 25 per cent of the pending salary on Thursday and a post dated cheque for the remaining on January 27. The company would also give experience certificates to the employees.

At another IT firm located at Singanallur here, there were reports that the company was downsizing the employee strength. However, an official of the company said that it was “downsizing to a minimal level”. The total strength of about 350 plus will come down by hardly ten per cent and “We have followed the due process of retrenchment.” The company started operations here seven years ago.

An industry source told The Hindu that with technology development, the dynamics were changing for service companies. The companies here should be able to live up to the expectations of customers. If some of the overseas customers shut shop, companies here would bring down the employee strength. Downsizing is neither a trend nor a problem in the industry. About 7,000 new jobs would be created by the IT and IT Enabled Services sector here in the next one year. “We are on the growth path.”

Mr. Marimuthu said such instances are a new dimension of industrial disputes here. These are new to Coimbatore as the management teams of these firms are not headquartered here.

Source:http://www.thehindu.com/news/cities/Coimbatore/wage-settlement-for-private-outsourcing-firm-employees/article6813737.ece

IT outsourcing: When it’s necessary and when it’s not

January 23rd, 2015 by Rahul Jain No comments »

With Britain still managing a weaker economy than its traditionally used to outsourcing has become a necessity to keep businesses afloat and to stay competitive. Often outsourcing teams or projects proves to be an effective method to get high-quality work done without the need to go through the hassle of finding permanent staff, but is outsourcing always effective? I spoke to Rick Simmonds, managing partner of Aecus, all about outsourcing; when you should and when you shouldn’t, questions to ask ensure your business is right for outsourcing, and why outsourcing has become a trend in IT.Outsourcing52

Why do you think the IT sector in particular was seen an increase in outsourcing? What is the reason for the trend, would you say it’s due to new technologies, a change in working philosophy or a combination of both?

There are a number of reasons why ITO (IT outsourcing) continues to grow, some to do with the market and some to do with technology.

The first is the market. ITO is now a mature field, with many second and third generation deals and a wide range of large, sophisticated suppliers keen to grow their businesses. This means that there is something of a ratchet effect – relatively few deals are terminated and brought back in-house, most are renewed with the incumbent or re-let to another supplier.

Although deal scopes flex, with some functions moving in or out, on the whole this means that there is a solid platform of existing deals, with new first generation deals and expanded scope on existing deals providing constant growth. The rate of renewals also indicates that most clients are at least reasonably satisfied with outsourcing as a delivery model – although some might argue that deals are renewed because clients no longer have the skills and experience internally to take work back in-house.

The second is access to skills. For example, most ITO deals have a substantial offshore component. It is hard for most client organisations to compete with specialist outsourcers in building sustainable, scaleable, high-quality offshore operations. Only the very largest organisations are likely to be able to invest enough and have the scale to offer attractive careers to IT professionals, compared to the major outsourcers. So as the amount of work delivered from offshore increases, so does outsourcing.

The third and final reason is technology and access to skills – the rate of technology change continues to increase. It is arguably easier to access new technologies like digitalisation and robotics through leveraging the investment of outsourcers. And, of course, the cloud and the trend to “as a Service” is a big driver of using outsourced resources which are delivered in a cost-effective way not available in-house.

In terms of “working philosophy”, the big change over the last 10 years is that outsourcing has become an accepted norm. It used to be a more controversial and esoteric business model, whereas now it is firmly mainstream and part of the popular lexicon.

Obviously you have a great belief in outsourcing, could you run us through some of the “sticking points” or aversions businesses have toward outsourcing and explain why businesses tend to have said “sticking points”?

Actually at Aecus we’re absolutely agnostic about outsourcing! It is a commercial model for delivering results, and in some circumstances it is the right model, in some circumstances it isn’t. But to answer the question, these are some of the key concerns that businesses have.

An important consideration is the loss of control of the service. Businesses fear that if employees no longer deliver the service, they won’t be able to get what they want, when they want it. In other cases, businesses fear that the decision will be irreversible, that they will no longer have the skills or capability to take back the service at the end of the contract.

Cost is also an issue. Many businesses worry that once they are in a commercial relationship with a sophisticated outsourcer they will be “out-gunned” and end up over-paying.

Some businesses are concerned about being disloyal and unfair to their staff and want to protect them and their jobs. Similarly, a key sticking point can be the fear of bad publicity. This is typically linked to job losses or moving work offshore as a result of outsourcing.

The first three concerns (loss of control, fear that it’s irreversible and cost) can typically be addressed by contracting in the right way. Regarding the people and PR issues, these can be managed in various ways – many deals include staff transfers or re-training provisions.

On that same tack: Is an outsourced IT department a good option for any business? For example businesses that already have highly skilled staff, or that have a strong company culture that may be affected by part of the team being outsourced?

The question of whether to outsource is always very particular to the specific business and circumstances. The question to answer is ‘what is the business case?’ (in a broad sense, including capability, sustainability, risk and financials) for outsourcing versus retaining an in-house option. Outsourcers have no “secret sauce” – it is generally at least theoretically possible for an in-house function to deliver anything that an outsourcer can. The question is always “will they deliver in practice and which option is more likely to succeed?”

Highly skilled staff and a strong company culture may well be reasons why it would be hard to make a business case in favour of outsourcing. Each case should be assessed on its merits.

A study from Leiberman found that in 62 per cent of cases outsourcing cost more than originally planned, what are three strategies that businesses can implement to avoid this? And for what reasons does this happen?

Cost overruns will happen for a number of common reasons. For example, poor initial planning and analysis often means that initial costs were underestimated and drivers of future costs insufficiently understood. Similarly, poor or (often) over-complex charging mechanisms in the contract can mean it is difficult for a client to understand and control charges. Another factor can be a lack of active client management of the arrangement, which leads to loss of control.

The strategies to avoid this include spending sufficient time upfront producing a detailed cost model of current and future services, and modelling in-house and outsourced scenarios. This will help businesses know how they will compare in different circumstances.

Businesses should also negotiate a clear, robust contract with strong change control and clear charging mechanisms, and model scenarios so that they know how charges will change in different circumstances.

It also helps to assign a dedicated contract manager or management team, with the skills, experience and remit to manage the supplier. If businesses leave this all to the supplier, they are asking for trouble!

Lastly, what are there any situations when businesses should definitely outsource a team?

There are NO examples where you should definitely outsource a team! However, examples where businesses should seriously consider whether outsourcing might be the best option for them would include where in-house teams have continuously failed to deliver what the business expects, and remediation efforts have failed.

Outsourcing might also be used in functions where businesses are struggling to attract and retain and motivate high quality staff, for example, the maintenance of old technologies. It is also appropriate when the outsourcing market has specific, leverage-able assets or capabilities which provide cost or efficiency advantages which the business cannot replicate in-house, such as cloud-based services or offshore resources.

Equally, outsourcing can be beneficial when a major investment is needed in order to make a change. That investment can be funded by the outsourcer and/or shared with other clients. Finally, in some organisations, there is simply a philosophy to focus only on their core functions and to outsource everything else.

Source:http://www.itproportal.com/2015/01/22/outsourcing-necessary-not/

Kakinada SEZ opens rural BPO

January 22nd, 2015 by Rahul Jain No comments »

In an attempt to promote the Business Process Outsourcing (BPO) business in rural pockets, the Kakinada Special Economic Zone (KSEZ) has opened a state-of-the-art Rural BPO at Kotha Mulapeta village of Uppada Kothapalli mandal on Wednesday.Outsourcing51

The KSEZ, in association with the Tata Business Support Services Limited (TBSSL), one of the largest domestic BPO services companies in India, has set up the centre for which 20 youths from the relief and rehabilitation colony have been recruited.

The BPO was inaugurated jointly by GMR-KSEZ president Prasanna Challa and TBSSL MD Srinivas Koppolu at a programme at Kotha Mulapeta.

Mr. Srinivas Koppolu said the centre had the capacity to provide job to 200 youths and its operations would commence from the next month. Mr. Prasanna Challa said that the KSEZwould provide world-class infrastructure, including digital connectivity to the Rural BPO.

“Unemployed youth from the villages in and around the KSEZ will be imparted with pre-employment training by the GMR Varalakshmi Foundation, the CSR wing of the group,” he said.

“Priority will be given to the evacuees in and those which have parted their land to the KSEZ while providing employment,” he said.

Around 200 local youths will be given employment in the project.

Source:http://www.thehindu.com/news/national/andhra-pradesh/kakinada-sez-opens-rural-bpo/article6809962.ece

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