Eton Properties Philippines Inc. is stepping up the construction of five to seven business process outsourcing office buildings to take advantage of an industry shortage that is seen to last until the end of next year.

In an informal briefing, Eton president Danilo Ignacio said the firm is currently completing designs for two new BPO buildings in Eton Centris in Quezon City as prospective tenants jostle to secure more space for expansion.

Ignacio said BPO 3 and BPO 4 comes after the first building, 13-storey One Cyberpod Centris, has been fully leased out to some of the most successful Business Process Outsourcing (BPO) companies.

Tenants include Wipro Technologies, Genpact Services LLC, Unisys Philippines Limited, Integrim BPO Solutions, and Pascual Laboratories among others.

The entire 18,063 sqm office space in Two Cyberpod Centris, the second building set for completion by year-end, has been fully leased to a Fortune 500 company.

He said BPO 1 is fully leased out to several tenants while they have already negotiated with several prospective tenants who want to lease space in BPO 3.

“We have not signed up any of them yet but some are willing to advance payments just to secure the lease,” Ignacio said adding that rates have also gone up to around P500 per sqm from about P250 to P300 three years ago.

The 3rd and 4th Cyberpod Centris buildings are at the design stage and are scheduled to be completed by end of 2012. “Given the strong demand for office space, the buildings are expected to be pre-leased even before turnover,” said Ignacio.

Ignacio said BPO 3 and BPO 4 will be bigger buildings with each having 20 storeys and one basement each. Total area will be 42,000 sqm while gross leasable space amounts to 34,000 sqm per building.

“We can add more buildings if demand remains strong. Maybe 3 to 5 more before the end of next year,” he said noting that the masterplan for Eton Centris has space for 7 BPO buildings.

He added that, “if the market for office space continues to be strong, we are considering some adjustments in the Eton Centris masterplan to accommodate future demand for office space. There is a marked increase in demand for office space in the northern part of Metro Manila, given the outsourcing industry’s thrust to tap the manpower pool in the area.”

Ignacio said there is currently a shortage of office space since property firms had stopped building new office towers in 2008 even though demand did not slow down and continues to be at 300,000 sqm a year.

Office space is currently the company’s strongest contributor of recurring income as it continues to develop its property portfolio.

Source:http://www.mb.com.ph/articles/336125/eton-build-more-bpo-space-amid-shortage-industry

Finance and accounts BPO EXL, part of the global transformation and outsourcing company EXLService Holdings, foresees India emerging as a global destination for the high-end outsourced finance and accounts operations. According to Sanjay Gupta, global HR head of the company, the possibility arises from the phenomenal performance capability of Indian workforce beyond the commoditised delivery like simple extraction of data from accounting spreadsheet to distinguished higher functional abilities like financial planning and analysis. But what bogs down the higher billing potential is the issue of employee stickiness, he tells S Saroj Kumar of FE.
Tell us how low employee stickiness quotient hits workforce delivery capability?

There is a paradigm shift in our performance capability with clients willing to outsource some of their hardcore operations like financial planning and analysis, financial reporting and process documentation. It may be a surprising to know that finance and accounts (F&A) BPOs have a very high appetite for CA and ICWA professionals other than MBA Finance in the job market.

We need workforce stickiness to build traction in high-end task delivery as it involves high degree of domain training and unskilling and reskilling the team to meet the specific objectives of the client task.

Losing stickiness comes as the painful part of the outsourcing story where attrition and poaching kill the ripening of human resource to hone themselves for higher order tasks in the industry.

One needs to build incremental skills to metamorphose the talent for comprehensive global outsourcing engagement. Ironically, F&A workers armed with CA, ICWA and CFA degrees are lured with higher compensation and other rewards like promotion from the competing companies in the market. For F&A BPO and KPO companies people are the non-negotiable asset and attracting and retaining the requisite talent is the most challenging task.

How do you go about talent management?

Talent management is a top most priority of any growing company. In a F&A BPO business delivery model people’s cost is 60% of the sales followed by the IT cost and other infrastructure costs.

The cost of people to the company is the single largest expenditure factor that calls for diligent management of people asset. Prolonged working hours, very few holidays on yearly planner and anxious performance reviews are a passe at the present industry HR standards. With employee stickiness at stake, the industry is emerging as employee-friendly sector with a lot of pro-employee initiatives. We offer job rotation for those who wish to take a break; this could be a child-bearing women or a yuppie who wishes to go for higher studies. There is lot of attention to detail studies on employees’s work-life balance and taking the right intervention for course correction.

How do you see the fitment in the recent Outsource Partners International(OPI) acquisition?

OPI is a $100 million all-cash deal buyout aimed at boosting out footprint in the southern market. We are quite concentrated in the northern and western markets with presence in cities like Noida, Pune, Jaipur and Gurgaon. This acquisition is poised to establish a toehold in the south region with OPI’s 3,700 workers.

OPI operationally would boost our sales force, account management engine and client management engine. More on south, we are building a 700-seat delivery centre at Kochi.

The multilocational foray in a way serves the purpose of derisking which the clients are all the time concerned about.

Source:http://www.financialexpress.com/news/skilled-people-nonnegotiable-asset-in-f&a-bpo-industry/841720/0

An exciting segment for the gaming industry is the ‘iSegment,’ says Dhiren Shah, MD and CEO, Mile Nine Studios, Mumbai . Hinting at the opportunity for games that target exclusively iPhone and iPad in India, he adds that this refers to the premium segment, comprising passionate gamers, who may be less price-sensitive, but tech-savvy and high-earning. “The size of this iSegment is 100 million globally, and the size of iPhone4 alone is 1.8 million in India. If you go by the growth of Apple, this segment is growing very fast, importantly, with the same demographic structure,” avers Dhiren, during a recent interaction with Business Line. Our conversation continues over the email.

Excerpts from the interview.

How do you see the opportunities before the gaming industry in India?

In the last 15 years, India has witnessed considerable economic growth. This, in addition to its demographic structure, offers immense potential for the gaming industry. An amalgamation of our culture, rising urban incomes, education, IT development and telecom growth offer the perfect platform for the gaming industry. IT and telecom considerably drive the gaming industry. In fact, by 2013, the telecom subscriber base is expected to increase to 725 million with a mobile penetration of 60 per cent.

While the global gaming industry is growing at 22 per cent, the Indian gaming industry is valued at Rs 10 billion and is expected to grow to reach Rs 38 billion by 2015. India offers a huge pool of talent in the IT and programming sector which plays a substantial role in the development of quality games at reasonably lower costs. Additionally, while the gaming industry is picking up, serious players and investors are entering into the industry, consequently facilitating its further growth.

Recently, 3G rollout in India, an increasing number of high-end mobile phone users, and broadband and DTH penetration into homes, contributed to the strong market currents that the Indian gaming industry is now riding on. Over the years, the price of games has come down significantly, making games more affordable to Indian gamers.

High-end mobile phone consumers, for instance, a growing iPhone consumer base, point towards a promising future for the mushrooming gaming industry. These buyers thus become a very lucrative segment which includes a premium, tech-savvy population which, evidently, has higher disposable incomes.

Would you like to specify a few key areas of gaming in which India has the right potential?

Outsourcing came as a big break for the Indian gaming industry. Primarily, India’s outsourcing businesses cater to the US and the UK gaming market. With its existing IT infrastructure and talent, India can be a dominant player in the global games production segment. The strong infrastructure and capability to deliver high quality work can act as driving factors to increase our outsourcing pie in the international gaming market.

India offers a significant cost advantage to the global gaming industry. When the global market witnessed an economic slowdown, expenditure reached the top of the priority lists of game manufacturers in developed countries. Indian gaming industry can take the advantage of the present global economic environment as it offers significant cost reduction to the gaming production houses while maintaining the global standard of work.

However, content plays an important factor in the gaming world. An industry which is primarily dominated by mid- to small-sized players is not doing enough to create and distribute its own content. Intellectual property (IP) is one of the core areas where our gaming industry needs to work with greater focus. Furthermore, for the international market, it is also very important to understand their culture and interests while creating gaming content. Content localisation and distribution can play a vital role in the industry.

These factors coupled with extensive industry support in the form of funding, and an environment for domestic market development, can steadily further the progress of an emerging gaming industry.

Are Indian companies leveraging gaming for building their brands and business?

At the moment, the gaming industry is an emerging segment in India. It also offers innovation in brand building and a new way of interacting with the target groups of customers in any brand campaign. Brands can reach their audience with an option of multilevel interactions, which help create high recall value.

Some big business houses have already carried out in-game advertising campaigns for their brands. (Recently, Mile Nine Studios developed a game for Tata Indica Vista called Paint Ball Hitch to bring out the brand proposition effectively and build steady recall in the consumers’ mind aligned with the company’s current communication.)

Currently, around 45 per cent casual gamers in India are women; and women are increasingly and more frequently playing games in India. Therefore, advertising in any gaming content developed for targeting women gamers can be a very attractive proposition for a women’s brand to reach the TG with customised interaction. Success of in-games advertising will be a win-win situation for both the brands and the gaming companies.

What are the factors that stand in the way of India realising its potential in gaming and what are the antidotes?

Indian gaming industry will only be negatively affected if the growing demand of gaming professionals is not met. Going by the industry’s growth rate, India needs a large number of skilled gaming professionals. Talent is the key to achieving the true potential of the gaming industry in India.

Along with quantity, the quality of games produced is just as crucial. Highly skilled professionals are required to produce stunning designs and fresh concepts using the best in technology. Training and development programmes for the gaming industry professionals are crucial to meet future demand and supply needs. There is a scarcity of skilled gaming professionals in India and this is restricting the growth of the industry.

Piracy is another important threat, as in any other entertainment segment. It discourages investors and professionals to take necessary risk for the growth of the industry. If incentive gets reduced by the piracy, the growth story of the gaming industry can be derailed. The Government should address the piracy issue through effective policy and regulations.

In addition, tax and customs duty imposed on the gaming industry are considerably high in India. A sound Government policy that focuses on the reduction of taxes can be a strong catalyst for this industry. It can reduce the production cost, making the Indian gaming industry more competitive at the international level.

To those who aspire to be the part of the gaming industry, your tips on the skills they should have.

The success of the gaming industry largely relies on an ideal blend of technology, talent, creativity, marketing, and distribution. The people who want to be a part of this advancement have to find their niche in these fundamental areas. But the technical professionals who are into production and development need a high level of creativity and technical skill, in addition to a strong passion to produce stunning games for the world of gamers.

Source:http://www.thehindu.com/business/Industry/article2311020.ece

The information technology – business process outsourcing (IT-BPO) industry in the Philippines is growing by about 25 percent a year, and investors see the country as the “next Asian dragon,” Commissioner Ivan John Enrile Uy of the Commission on ICT (information and communications technology) said last week.

Uy said many of the world’s largest companies operate the biggest services centers in the Philippines, which is why the IT-BPO industry here continues to grow.

As of last year, the industry employed about 525,000 people and had generated more than USD9.1 billion in export revenues, he added.

Uy, who was in Bacolod for the Negros Occidental First ICT Summit last Thursday, lauded Bacolod for being cited as the 3rd Next Wave City in the Philippines and Tholons International’s top 100th city in the world for outsourcing.

“That is a very, very good accomplishment for Bacolod to be ranked among the top 100th out of thousands of cities around the world,” he said.

Uy foresees that with the support of local officials the growth of the IT-BPO industry in Negros Occidental and Bacolod City will progress very fast.

Uy said it is the goal of CICT to strengthen the readiness of cities and regions outside Metro Manila to become preferred destinations for IT-BPO investors.

“With this strategy, we will decongest Metro Manila, spread economic growth opportunities to other parts of the country, and capitalize on the abundant and globally competitive workforce available in many parts of the country,” he said.

Approximately 20 percent of the IT-BPO industry is now located outside the main metropolitan areas of Manila and Cebu and this trend is expected to continue, he said.

The country is now witnessing the impact of the IT-BPO industry on rural communities, as other cities outside Metro Manila emerge as new IT-BPO hubs or the Next Wave Cities, he said.

Uy pointed out that Tholons, a renowned international research firm, in its 2010 Top 100 Cities in the World for Outsourcing ranked Manila as No. 4 and Cebu as No. 9.

The country’s Next Wave Cities that also made it on the list, are Davao – No. 69, Sta. Rosa (Laguna) – No. 88, Iloilo – No. 98 and Bacolod – No. 100.

Meanwhile, Gov. Alfredo Marañon said the construction of IT buildings on lot properties owned by the Negros Occidental provincial government is expected to create about 41,000 new BPO jobs here.

SM Prime Holdings has proposed to put up 10 buildings for BPO companies on a provincial government property along Gatuslao St. that will provide 40,000 jobs, he said, adding that the buildings will surround a convention center that SM plans to build in the area along with two hotels.

The provincial government is also establishing the Negros First CyberPark, a mixed-used complex consisting of more than 12,000 square meters of space for BPO services at a three-story building to be built at the Paglaum Sports Complex, which will provide more than 1,000 jobs, he added.

Rep. Alfredo Abelardo Benitez (Neg Occ., 3rd District), who was also at the summit, said he will help tap government resources for infrastructure and academic support for the IT-BPO industry.

Benitez also said he is supporting the efforts to create a Department of ICT, and the passage of bills to ensure data privacy and to curb cyber crime.

Source:http://www.abs-cbnnews.com/business/06/05/11/phl-seen-next-dragon-bpo-industry

In the various debates about outsourcing, insourcing and federal pay, one issue almost always comes up: The tough competition for IT talent.

Although federal agencies have the advantage of doing some very cool projects, they still have a difficult time competing for up-and-coming IT workers, many readers say. The problem is that techies working in hot fields – developing enterprise smartphone apps, for example — demand pay and perks outside the range of the General Schedule system.

“Our agency’s IT department is having to create non-supervisory 14s to hire system administrators because we can’t compete with private industry in pay,” wrote an FCW reader who called himself or herself Fed Up. “In three years, we’d probably only be able to hire a system admin only if we open the position as an SES position.”

Those young Turks are more likely to end up working for a software vendor or systems integrator already working in the sweet spot of the IT industry, rather than a federal agency, the theory goes.

That was the case of an information security expert who had recently left the Defense Department after just two years on the job. At first, the reader was willing to accept the fact that former colleagues in the private sector were making a lot more money. But then rumors of a pay freeze began and that was too much.

“I really want to serve (I have 15 years of previous state and local government experience on top of my private sector experience), but I refuse to be a punching bag for the politicians while my family suffers,” IT Sec wrote. “Take note, new feds: Your elected officials don’t care about you. If you can do better for yourself on the outside, go for it. I’m happy I did.”

If agencies cannot attract top talent, how does that affect their insourcing/outsourcing strategies? Should agencies simply cede the competition and spend more money on contractors any time new technology is involved? Or is that giving up too much control?

What do you think?

Source:http://fcw.com/blogs/insider/2011/04/fcw-challenge-federal-agencies-it-contractors.aspx

The government was wise to target three sectors with huge domestic market demand without allowing monopolies to form. Still, Chinese firms can’t compete yet with Microsoft on software and Intel on computer chips. China ranks No. 1 in the supercomputer sector

In the middle of November, China’s Tianhe-1 topped the world’s supercomputer rankings. The machine features thousands of graphics chips and is capable of achieving a sustained performance of 2.5 petaflops, or 2,500 trillion calculations per second. It was the first time China surpassed the United States in the sector. US-based Oak Ridge Leadership Computing Facility’s Jaguar system ranked No. 2.

The supercomputer, which requires high-end chips and server computing technologies, is a serious measure of a nation’s advanced IT technology and research ability. A supercomputer works for both industry and public sectors.

The use of a supercomputer can help an aircraft or auto manufacturer shave up to 60 percent off the research period for developing new cars or planes, for instance. The machine will also be used to crunch population trends and environmental protection data and produce weather forecasts. Debut of the iPad

Apple started selling the iPad on the Chinese mainland in September and it has proven to be more than just “a bigger iPod Touch.” The success of the iPad – shipments totaled more than 7 million by October worldwide – have attracted many rivals, including Samsung, RIM, Toshiba, Acer, Huawei and ZTE to either release iPad-like products or make plans to do so soon. Most firms have adopted Google’s Android operating system for their tablet PCs.

Analysis group Gartner has forecast that tablet sales worldwide will reach 54.8 million units in 2011. And they will displace around 10 percent of PC units by 2014.

The iPad is the first successful device in a third category between a laptop and a smart phone. With mobility and application store business models, Apple has helped create another product category.

A wide variety of tablet devices, with updated iOS 4.2 by Apple now have multitasking and wireless printing functions and Google’s new Android 2.3 having much improved user experience, will challenge the dominance of Microsoft and Intel. Overseas IPO wave

Six Chinese stocks started trading on the New York Stock Exchange and Nasdaq this month, the most ever in a single month. The IPOs were issued by Youku, known as China’s YouTube, and Dangdang.com, which has been likened to Amazon. Thirty-eight offshore IPOs this year raised US$4 billion, accounting for about 25 percent of first-time share sales in the United States, according to data firm Dealogic.

Shares of Youku rose 161 percent in the first day of trading on the New York Stock Exchange. E-commerce firm Dangdang gained 87 percent after its IPO on the same day.

Source:http://english.peopledaily.com.cn/90001/90778/90860/7245307.html

On the back of revival in the outsourcing of IT services, the growth in the global outsourcing industry stood at 20% in the quarter ended September compared to the same quarter last year. This is quite in contrast to the preceding April-June quarter when the growth was led by the BPO services.

According to the latest report by the global management consulting firm Everest Group, the July-September quarter experienced a 89% increase in the annual contact value (ACV) in IT services and a 50% decline in the ACV of BPO deals compared to the same quarter a year ago.

“The reasons behind the growth in ITO is the increase in discretionary spending by companies. This kind of spending automatically influences investment in application development and system integration. There was slowness in the discretionary spending in the first half of the year, but this pick up is expected to continue till the next two quarters and the whole of FY 2011,” said Amneet Singh, vice-president, Everest Group.

Quite in contrast the April-June quarter had witnessed a 33% increase in the average contact value (ACV) in the BPO segment and a marginal decline in the contract values of ITO on a yearly basis.

Analysing India’s share in global outsourcing, the report observed that the Indian buyers constitute 5% of the total transactions globally. The Indian service providers cater to 60% of the global IT market and 35-40% of the BPO segment.

The overall value in deals increased from $2.3 billion to $3.4 billion on a year-on-year basis. Even on a sequential basis, the IT services signified 3% growth in the ACV compared to the April- June quarter, whereas the contract value of back office declined on a marginal basis.

source:-http://www.financialexpress.com/news/Global-outsourcing-industry-grows-20-/704602/

As we move into the earnings season, this is perhaps a good time to take a look at the half year gone by and how the rest of the year is likely to pan out. The start of 2010 indicated that Indian IT firms would announce a sharp rise in profits when the quarterly reporting season would kick off, fueled by improving business and an emergence from the depths of the financial crisis. Analysts had predicted that the 30 companies that make up Mumbai’s benchmark Sensex Index would announce a year-on-year increase in net profit of between 15 and 20% for the quarter ending December 2009.

Jump start to half way through the calendar year and we find that India’s economy grew by a faster-than-expected 7.9% in the three months to September 2010, picking up pace from the previous quarter when it grew by 6.1%. This was possible due to growing demands across sectors and high business confidence.

This improved business sentiment in India was reflected in the Mumbai stock exchange which vaulted by 80% over 2009—its biggest annual gain in 18 years—after it had declined 52% in full-year 2008. Such has been the force of the revival that India’s government and central bank now face a tricky balancing act in fighting inflation and keeping economic recovery on track.

Back to the present: The results put up by the IT companies in India in FY 11 have the markets enthused. The good news is that the outsourcing industry is making a comeback. Pipelines are strong and a strong focus on expanding markets and business lines is showing results. The industry is more competitive than ever and companies are beginning once again to look out for targets to acquire.There’s little doubt that demand for outsourcing has picked up and revenues of Indian IT firms are likely to get boosted by pent-up demand. Growth in the near-term, therefore, will be strong. Demand for technology consulting is robust, with record order bookings for the second consecutive quarter.Over the past decade, the Indian IT-BPO sector has become the country’s premier growth engine. It has demonstrated tremendous resilience in recovering so quickly from the extremely adverse impact of recessionary headwinds as clients cut their IT budgets, canceled or postponed deals, delayed payments, and went bankrupt while others renegotiated pricing, looked for severe pricing cuts to stretch the dollar.

A challenging demand outlook, changes in customer requirements and pricing pressure acted as a driver to build in greater efficiencies and flexibility within the service delivery and the business models—which is here to stay. The advent of 2010 has signaled the revival of outsourcing within core markets, along with the emerging markets increasingly adopting outsourcing for enhanced competitiveness. Key demand indicators in the last two quarters such as increased deal flow, volume growth, stable pricing, and faster decision making has made the industry post good results. Though full recovery is expected in another two quarters, development of new growth levers, improved efficiency and changing demand outlook signify early signs of recovery. Reports pouring in from international technology research agencies point towards a resurgence of the Indian IT industry. It was expected that during 2010, IT outlays would increase in the US and other major economies, which was indeed good news for Indian IT exporters. The forecast was based on the positive trends seen in Q4 2009. Global research agencies like Gartner and Forester Research have come up with similar predictions. While Gartner forecasts a 5.3% rise in global IT expenditure, Forrester is a bit more optimistic with 7.7% growth. Forrester expects US IT purchases to grow by 8.4% and of Asia-Pacific by 8.3%.Though currency fluctuations are still a concern for Indian IT companies and can end up taking away the sheen from the dollar earned, Forrester forecasts an increase that will more than compensate for declining dollar values. Various US sectors such as finance and insurance, manufacturing, healthcare, utilities and telecommunications are expected to make a strong come back after below-par performance last year. Forrester has raised the hopes of Indian IT exporters by predicting that these sectors will spend 17% of their IT budget on outsourcing.Both research agencies anticipate that preference will initially be given to projects offering low-cost benefits, as the focus will be on cost-optimisation.

The Indian IT-BPO industry is forecast to aggregate revenues of $73.1 billion in FY2010, with the IT software and services industry accounting for $63.7 billion of revenues. During this period, direct employment is expected to reach nearly 2.3 million, an addition of 90,000 employees, while indirect job creation is estimated at 8.2 million.

Export revenues are estimated to gross $50.1 billion in FY2010, growing by 5.4% over FY2009, and contributing 69% of the total IT-BPO revenues. Software and services exports are expected to account for over 99% of total exports, employing around 1.8 million employees. Indian IT service companies have evolved to emerge as full service players providing testing services, infrastructure services, consulting and system integration.

Further, cloud computing took centrestage this year as it offered clients access to best-in-classprocess management. Eventhough growth in BPO was in single digits for the first time, it is still likely to be the fastest growing segment of the industry and was estimated to reach $12.4 billion in FY2010. Increased acceptance of platform BPO solutions was the key highlight, as BPO providers increasingly focused on transforming client businesses through a mix of re-engineering skills and new service delivery methods.

I do believe that that when we look back at the Indian IT industry’s performance at the end of this fiscal, we will remember 2010-11 as a watershed year in which the industry demonstrated its maturity and the robustness of its business model. It has not only recovered smartly from the worst downturn we have seen in living memory but also re-engineered and reinvented itself and is now well poised for the future.

Source:http://www.financialexpress.com/news/it-industry-is-more-competitive-than-ever/698779/0

INDIA’S SILICON PLATEAU – Development of Information and Communication Technology in Bangalore: R.C. Mascarenhas; Orient Blackswan Pvt. Ltd., 3-6-752, Himayatnagar, Hyderabad-500029.

A lot has been said and written about Bangalore, and its iconic status as the “IT capital of India.” With its clear and chronological account — on both the ICT revolution and why it converged upon Bangalore — India’s Silicon Plateau gives a fresh ‘byte’ of perspective. Throughout his narrative, Mascarenhas maintains that Bangalore’s reputation of being a technopolis preceded the “IT outsourcing boom”, which, he says, rode on the back of a “scientific base” established by public sector research and educational institutes in the city.
Mascarenhas does not limit his study to Bangalore, or even the ICT industry success story. He attempts to chart its growth at the national level, offering a historical and political perspective to what triggered the upswing. Apart from marking the milestones in the ICT road map, he seeks to analyse and contextualise the various policy statements on the subject. He goes on to explain why and how India in general, and Bangalore in particular, was able to acquire a competitive edge in an industry, which, he says, is at the core of the technology-led “new economy.”
State’s role

Significantly, the author steers clear of a GDP-driven analysis of development, wherein all the successes on the economic and industrial fronts are attributed primarily to the liberation of the economy, a process that was set off in 1991. Instead, the emphasis is on the policies of successive governments, both at the Central and State levels. The book also traces the state’s role in building the pillars of what has come to be known as the “knowledge economy”. Mascarenhas looks at the computer hardware and software policies right from the 1970s, when the industry relied entirely on multi-national corporations, such as IBM and ICL, which supplied computers built overseas, and the subsequent measures to protect and promote an indigenous computer industry.

In the realm of ICT, India worked for self-reliance — the spirit that was behind the ‘Green’ and ‘White’ revolutions of the earlier decades — and this led to the exit of IBM in 1978, when the government insisted on the company adhering to the principle of local equity participation. This boosted the sagging fortunes of the ECIL and also gave the Indian programmers working for IBM an opportunity to be assigned to the CMC, set up to undertake maintenance of a wide range of imported computers. This “experience over different platforms and of diverse legacies proved invaluable in the business.”
IT hub

The book devotes a substantial section to deliberating on why Bangalore was able to score over other industrial centres in IT development. The availability of multi-level, ‘science-and-technology infrastructure in the public sector — national laboratories, research institutes and higher education institutes — is identified as a critical factor. The proximity of C-DOT’s hardware unit, the ISRO space centre, and C-DAC’s tech park (to name a few central research institutes) created an “exciting IT cluster”, says Mascarenhas.

While discussing the catalytic role the Indian Institute of Science and other research and defence institutions in creating a pool of highly talented and skilled personnel for the industry to draw from, he attempts to unravel the “social and technological diversity and heterogeneity” of the region that proved an attraction for the people all round. He reflects, albeit briefly, also on the “drastic consequences” of this phenomenal growth — the crumbling infrastructure, for instance.
Taking the narrative a little beyond the industrial perspective of ICT, the author speaks about e-governance, the Unique Identity Number project (which is expected to streamline the implementation of welfare schemes), the Electronic Voting Machine, and the ubiquitous digital divide — all of which go to make the larger ‘ICT and India’ story.

Source:-http://www.hindu.com/br/2010/09/28/stories/2010092851301700.htm

The liberating and game-changing effects of cloud computing on today’s IT shops cannot be overstated: On the fly, it seems, CIOs and their staffs are reprioritizing application-portfolio strategies, rearchitecting systems roadmaps, rethinking vendor contracts and much more. Prices may have dropped, but strategic IT planning is still as relevant as ever.

CIOs are trying to keep up with the flurry of cloud options now offered to them. (Whether some of those are total bunk or not, is a CIO’s job to determine.)

That “everything going to the cloud” mantra is also going to have a significant effect on traditional IT service providers, long accustomed to lucrative on-premise consulting and systems integration work as well as multi-year outsourcing contracts.

That’s the crux of a new report from Forrester Research, The Coming Upheaval in Tech Services, by analysts John McCarthy and Pascal Matzke. The report is a tour de force examination of the IT services industry and the tectonic changes ready to erupt.

[ For more on Cloud Computing's alphabet soup, see Cloud Computing's World of Acronyms: Enter at Your Own Risk ]

Those IT services deals have enriched many consultancies and systems integrators over the years; the market exceeded $450 billion in 2010, according to Forrester. The companies in play range from the big boys, such as IBM, Accenture, HP and CSC, to smaller, regional players that provide the needed tech expertise to SMB IT shops.

Yet even with their accumulated know-how, deep pockets and brand prestige, these providers are going to endure a seismic shift, courtesy of the cloud and the fleet of -aaS acronyms infiltrating CIOs’ strategic plans.

“The worst economic downturn in 70 years coupled with the technology change of cloud computing and software-as-a-service (SaaS) undermines the future validity of traditional IT services business models,” write McCarthy and Matzke. “While many service provider strategists recognize that some form of change is coming, it’s unclear how the disruption will play out or what the scale of the impact will be.”

Below is a graphic, from the report, that shows the traditional services offered today versus the emerging ones that CIOs and their companies will be seeking during the next several years.

IT service providers will also take a hit in their wallets. “The tough macroeconomic environment coupled with changes in pricing and delivery models will affect what we think of today as the IT services of consulting, systems integration and outsourcing,” the Forrester analysts write. “Price erosion and pressure on margins won’t end after users renegotiate rates.”

For budget-conscious CIOs, the overall message of the report is that there will be a sort of commoditization of those IT service-provider portfolios, which will result in lower IT costs on “as-a-service solutions for infrastructure and software,” note McCarthy and Matzke. Margins for those providers will be pinched-in the short-term.

Long term, however, the analysts predict that those margins will return-at an even high percentage, as CIOs come to rely more on the vendors for higher-value cloud services and support.

Source:-http://www.computerworld.com/s/article/9180105/Cloud_Computing_Is_No_Y2K_Bonanza_for_IT_Consulting_Industry

PPD, Inc. (Nasdaq: PPDI) today announced it has been named Best Contract Research Organization (CRO) in Asia at the World Vaccine Congress’ inaugural 2010 Vaccine Industry Excellence (ViE) Asia Awards held in Singapore on June 9. The award recognizes PPD’s quality of services provided in Asia and its long-standing client partnerships in the vaccine industry.

Our large presence in China and strong expertise in vaccine clinical research well position us to advance our clients’ vaccine research and development programs and address unique requirements for managing vaccine studies in Asia,” said Simon Britton, PPD’s vice president of clinical development for Asia Pacific. “We are pleased the World Vaccine Congress has recognized our client relationships and investments in the growing vaccine industry.”

PPD has delivered full-service, global vaccine development services to biopharmaceutical companies and government and nongovernment organizations for more than 20 years. In April, the company opened a vaccine clinical research center at the Taizhou China Medical City in Taizhou, China, further strengthening its clinical research and development services in one of the country’s major regions for conducting vaccine studies. Through the center, PPD provides clinical monitoring services to companies seeking to develop vaccines in China.

PPD also launched its Vaccines & Biologics Center of Excellence earlier this year, which is a first-in-kind comprehensive network of integrated, world-class laboratory services focused on vaccine and biologic drug development. The center advances PPD’s position as the industry leader in providing testing services for vaccines and other biologics with state-of-the-art facilities, processes and instrumentation to help clients realize the highest scientific standards and cost efficiencies for their programs.

PPD is a leading global contract research organization, celebrating 25 years of providing drug discovery, development and lifecycle management services. Our clients and partners include pharmaceutical, biotechnology, medical device, academic and government organizations. With offices in 41 countries and more than 10,500 professionals worldwide, PPD applies innovative technologies, therapeutic expertise and a commitment to quality to help clients and partners accelerate the delivery of safe and effective therapeutics and maximize the returns on their R&D investments. For more information, visit www.ppdi.com.

Except for historical information, all of the statements, expectations and assumptions contained in this news release, including expectations and assumptions about PPD’s selection as best contract research organization in Asia, are forward-looking statements that involve a number of risks and uncertainties. Although PPD attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors which could cause results to differ materially include the following: success in sales growth.

competition in the outsourcing industry; rapid technological advances that make our services less competitive; loss of large contracts; increased cancellation rates; economic conditions and outsourcing trends in the pharmaceutical, biotechnology, medical device, academic and government industry segments; dependence on collaborative relationships; the ability to attract and retain key personnel; risks associated with acquisitions and investments, such as impairments; and the other risk factors set forth from time to time in the SEC filings for PPD, copies of which are available free of charge upon request from the PPD investor relations department.

Source:-http://www.bradenton.com/2010/06/16/2367713/ppd-named-best-contract-research.html

New TPI Momentum research finds activity slowing in industries that have historically outsourced heavily while adoption growing in other verticals
HOUSTON, June 10 /PRNewswire/ — TPI, the largest sourcing data and advisory firm in the world and a unit of Information Services Group, Inc. (Nasdaq: III), a leader in the information-based services industry, today announced the release of the TPI Momentum 2010 Market Trends & Insights Vertical Industries Report, a comprehensive look at outsourcing activity in 27 major sectors of the economy that shows the factors driving new outsourcing adoption, client decision-making, and spending levels vary dramatically by market segment.

Cost-cutting imperatives brought on by weak economic conditions are affecting outsourcing activity in all verticals, including several that traditionally have outsourced only sparingly. Meanwhile, outsourcing spending is falling in some of the largest verticals, including Diversified Financials, Consumer Durables and Banking.

“There are clearly new industry, regulatory, political and technological drivers that are impacting outsourcing activity,” said TPI Momentum Chief Research Officer Paul Reynolds. “This report highlights the specific, topical factors that impact outsourcing spending levels and decision-making within each of these verticals.”

The report, which combines proprietary market data on outsourcing activity within the Forbes® Global 2000 (G2000) largest public companies with commentary from TPI’s expert advisors, is designed to help service providers and market watchers identify the latest critical market trends and opportunities.

With more than 260 pages and more than 1,500 charts and graphs, it features a global market overview plus individual chapters on 27 vertical industries. It shows not only total spending by G2000 companies within each industry, but also documents the specific services being outsourced and identifies which service providers are winning the contracts. TPI advisors share their recent experiences from real-world sourcing engagements to provide insight into the specific factors that are influencing decision-making in each industry. “Most service providers go to market by vertical, and our research was designed with this in mind,” Reynolds said.

TPI has identified common influences that span markets, such as cost-cutting initiatives, government involvement, technology and increasing demand from emerging markets. The specific outsourcing opportunity within each industry is shaped by penetration rates, historical spending levels, current catalysts and other conditions.

TPI found significant year-over-year changes in the market opportunities for two-thirds of the 27 industries studied. Some industries that were previously weak for hunting new prospects are now much more promising, while in other industries service providers would be better served by trying to expand relationships with current clients.

Source:-http://www.prnewswire.com/news-releases/study-shows-industry-outsourcing-adoption-patterns-changing-96068084.html

India’s business process outsourcing (BPO) industry is forecast to increase its revenue this fiscal year by 15 percent to 16 percent, officials of the National Association of Software and Service Companies (Nasscom) said on Wednesday.Revenue increased by 6 percent in the last fiscal year ended March 31, 2010, despite the recession, according to Nasscom.But there are still serious challenges ahead for the Indian BPO industry, including the crisis in the Euro zone in Europe, said Vikram Talwar, chairman of Nasscom’s BPO forum, in his speech at a Nasscom conference in Bangalore.

As business picks up, there is also concern that hiring and retaining top quality staff may be a problem for the BPO industry which includes Indian outsourcers as well as wholly owned subsidiaries of global services companies, and companies, including banks, that run their back offices from India.Before the recession, competition for staff had led to a wage spiral.By March this year, staff attrition was already 8 percent to 10 percent higher than a year earlier, said Som Mittal , president of Nasscom. Wages could rise by 10 percent to 20 percent by next year, Nasscom said.

There is also concern among Indian outsourcers about increased protectionism in the U.S., a key market.U.S. Senator Charles E. Schumer, a Democrat from New York, announced earlier this month that he was introducing a bill that would help stem the flow of American jobs being outsourced abroad by imposing a per-call excise tax on companies that transfer domestic customer service calls to foreign call centers. Schumer’s legislation also requires that companies that transfer calls to foreign call centers disclose to the caller that their call is being transferred to a particular country.

Calls transferred to India from the U.S. constitute a very small proportion of the business of Indian BPO companies, and the bill if passed will have no impact on Indian BPO companies, Talwar said.While there is understandably concern in the U.S. about saving jobs, protectionist measures can at best be short term in effect, Mittal said.

India’s BPO industry currently employs 1 million staff, while also providing indirect employment to 3.5 million people. The country’s BPO revenues have however been growing faster than employment, as companies have focused on more sophisticated services.

As demand for BPO services is booming, including from the domestic market, there is also greater interest in setting up service delivery centers in rural areas, Mittal said. The model, which has been tried so far mainly by NGOs, is now attracting outsourcers as well. About 60 percent of BPO employees in the cities currently come from small towns and villages, according to Nasscom.

Source:-http://www.businessweek.com/idg/2010-06-09/india-s-bpo-industry-growing-by-over-15-percent.html

This year’s college graduates appear to have more option for employment, with a wide array of new job options in the market, among them in the field of information and communications technology (ICT) and in the back-office services such as business process outsourcing (BPO).

The government has transformed the Philippines into a “global powerhouse” in the BPO industry. The administration highlighted their major accomplishments in both human and physical infrastructure for the ICT-BPO sector during President Gloria Macapagal Arroyo’s recent Cyber Corridor Super-Region Tour.

If the trend continues, the Philippines is well on its way to becoming No. 1 in the ICT-BPO industry, considering the telecommunications and digital infrastructure that have already been put in place and the English proficiency and technical skills of young Filipinos.

The BPO sector, which was a fledgling industry in 2001 employing a mere 2,000 workers, has become a “sunshine industry” generating half a million jobs and US$7.3 billion in revenues in 2009, which is about five percent of the country’s Gross Domestic Product (GDP). Part of the success of the BPO industry in the Philippines can be attributed to the government mandate given to concerned government agencies to ensure the competitiveness of the ICT-BPO sector.

Among these agencies is the Technical Education and Skills Development Authority (TESDA) that works closely with the Business Process Association of the Philippines, the Medical Transcription Industry Association of the Philippines, the Animation Council of the Philippines, and the Philippine Software Industry Association, in the formulation of training standards and in designing appropriate training programs. Last year, these training programs produced 25,846 graduates, 93 percent of whom are now call center agents.

A sustained supply of quality trained workers, the continued effort to enhance the English language proficiency of the Filipino workforce, and government policies that continue to attract investments by leading companies worldwide guarantee the sustained growth and success of the ICT-BPO industry. And this will help resolve structural unemployment by equipping even the out-of-school youth and the underemployed with the knowledge and skills required to fit existing job vacancies.

Source:http://www.mb.com.ph/articles/260266/business-process-outsourcing-sector-a-sunshine-industry

While there’s a lot of puff coming from several providers, expectations are not being met when it comes to the actual achievement of innovation within many Business Process Outsourcing (BPO) engagements. Consequently, this improves the options for the first-time BPO buyer to select a provider that can demonstrate a proven track record of innovation, but what about the second-time buyer, firmly-rooted in BPO purgatory?

Our brand new survey* of 588 shared services and outsourcing executives, studying the current achievements of innovation within BPO, serves up a major does of realism to the global sourcing industry: buyers want it, but they are not working effectively with their providers to achieve it. And many buyers and providers are pointing the finger at each other. So why should we care?

Innovation is becoming a critical component when it comes to BPO

In the past, many buyers shied away from innovation because they were so laser-focused on achieving operational stability within their BPO environment. Many claimed that they would have to sacrifice meeting service levels if they tried to tinker with their processes to find new ways of achieving better outcomes. However, when we look at how those buyers with significant influence over BPO decisions are viewing innovation today, the importance being placed on innovation is distinct:

Close to half of enteprises’ operational leadership today now view the achievement of innovation as a critical component of their BPO strategy. With most providers operating within a similar price-band today, this is clearly becoming the major differentiator for the first-time BPO buyer, as we first discussed in our “New Normal in Outsourcing Delivery” study, ealier this year.

First time BPO buyers can select proven innovators, but the second-time buyers have a challenge on their hands to escape BPO purgatory

As the following data illustrates, both buyers and service providers of BPO services are equally disappointed with each others’ provision of resources and technology to meet their expectations of achieving innovation. Considering 38% of enterprise customers view innovation in BPO as critically important to their operational leadership, with a further 50% viewing it as quite important, this is becoming a major concern for the future of BPO services:

While the present disappoints, hope for future innovation is abundant

While buyers are clearly not seeing a lot of business value beyond operational delivery today, they see abundant potential for innovation in both generic processes and industry-specific domains. Major findings, which will be featured in a forthcoming HfS Research report, include the following dynamics:

More innovation has currently been achieved across industry-specific, analytics, supply chain and general accounting processes. Customer care, recruitment, payroll and management reporting are noticeably failing to meet customer expectations.
The potential to achieve innovation across many core business processes is huge. This was notably cited in industry-specific process and analytics areas, in addition to some maturing BPO domains, namely procure-to-pay, and payroll and recruitment.
Major impediments to buyers achieving innovation included unempowered governance teams, and ineffective change management and communications.
The Bottom-line: escape-plans from BPO purgatory are bring hatched, but the hard work starts now

All-in-all, an increasing majority of buyers are aware they can achieve innovation, and know the potential is there to do exactly that. Moreover, most realize the blame doesn’t always sit with their service provider – it rests with both parties to work together to a well-crafted plan that introduces innovative goals and milestones over time, that do not derail from meeting service levels that actually matter. This involves developing more partnership-oriented relationships with their service providers, increased IT-enablement of business processes, and developing gain-sharing metrics based on business outcomes.

Stay tuned for Part II, which will take a look at the specific processes where innovation is currently being achieved, and – perhaps more importantly – where their is real innovation potential in the future…

* The survey, entitled “Are you Achieving Innovation in BPO”, was conducted in May 2010 by HfS Research, in conjunction with the Shared Services and Outsourcing Network’s (SSON) network of senior finance and operations executives. It received 588 participants that encompassed senior decision-makers within buy-side enterprises, BPO service provider executives and outsourcing advisors.

For the purposes of the study, “Innovation in BPO” was defined as “the customer going beyond transactional / operational work to achieve new productivity gains and /or new revenue streams by implementing new practices through unique, creative methods.”

Source:http://www.horsesforsources.com/innovation-purgatory1-051710

The IT industry has been left with an uncertain future after the General Election resulted in Britain’s first hung parliament in decades.

Conservative leader David Cameron insists Gordon Brown’s Labour party has “lost its mandate to govern”, but without a clear Tory majority, efforts to form a coalition with the Liberal Democrats continue.
Any coalition government, or a minority administration, could add not just to uncertainty affecting the country generally, but the IT industry in particular.

In the run up to the election all the parties insisted on major cuts in public sector spending with IT-driven efficiencies being counted on to protect service levels. Some existing projects are also likely to be axed — including the expensive and controversial ID card scheme. Shares in outsourcing companies have fallen heavilly since the result was declared.
The Conservatives used the election to reiterate existing plans — to freeze major new IT spending, and to make changes in government procurement by opening the market to smaller suppliers.

The Liberal Democrats called for improved government IT procurement, and encouraged greater use of cloud computing and open-source software.

Labour, which could yet lead an administration, made a particular focus of what it calls Digital Britain, pledging to support the IT industry including startup companies.

This year’s Budget promised some support for new workers, as Alistair Darling, the chancellor, announced funding for 20,000 higher education training places in science, technology, engineering and mathematics subjects, and more support for small businesses and entrepreneurs. The rollout of high-speed broadband across the country is also being touted by Labour as a way to boost industry.

Both Labour and the Liberal Democrats have insisted they would create hundreds of thousands of jobs in the green technology industry. The Conservatives, conversely, have made fewer specific announcements on the environment and related jobs.

In recent months, IT workers across the UK on public and private sector contracts have protested at difficult conditions, pay freezes and the limiting of their retirement benefits. A number of workers have even gone on high profile strikes, with HP and Fujitsu seeing major industrial action on key contracts.

All three of the large parties recognised the changing online habits of voters, some buying Google keywords to gain traction on the web. And after it emerged that the Conservatives had reportedly been sponsoring thousands of Google AdWords for more than three years, Labour’s former deputy leader John Prescott appeared on Twitter calling for Labour activists to click on the Conservative Party’s Google ads in an attempt to rack up costs for the Tories.

But Labour and the Conservatives faced controversy last month as they swept the new Digital Economy Bill into law, meaning users face being cut off if they access pirated material. While the Bill met support from creative industries and copyright holders, vocal opponents — including broadband firm Talk Talk and the Open Rights Group — said it limited free speech and imposed heavy burdens on internet service providers.

There has been much talk about how the ever-growing public sector deficit will be tackled — resulting in pledges to cut huge costs from government IT. Labour has insisted it will cut £3.2 billion (US$4.7 billion) from IT spending by 2012, as part of a £15 billion operational efficiency review.

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Socitm, the industry body for local government IT managers, lambasted Labour’s IT strategy, accusing the government of focusing on cutting costs instead of improving services.

Conversely, the Tories say Labour’s planned cuts are not ambitious enough. They brought in former Labour efficiency adviser Sir Peter Gershon, who calculated that a further £12 billion could be cut, including £4 billion from public sector IT and £3 billion from contract renegotiation.

The Conservatives also say they would cap projects at £100 million. But no definition has been given so far on how having smaller IT projects would deliver definitive improvements.
The government’s often-chequered procurement of IT has become a clear political issue. With the £12.7 billion NHS National Programme for IT hitting major contractual problems in recent weeks, the government is scrambling to find a solution. Health minister Mike O’Brien has lavished praise on the scheme, but the Conservatives and Liberal Democrats have taken a different stance, saying centralised patient records needed to be scrapped.

Other IT-focused projects have also been met with political controversy. Last year the government backtracked on the £5 billion ID cards scheme, saying the cards will no longer be compulsory, but it pressed ahead with a biometric passport database that will store the same data. The Tories and Lib Dems have both vowed to entirely scrap even voluntary ID cards.

There is also the issue of offshoring public sector technology work. A number of projects have been sent abroad in recent months, including a £600 million pensions processing deal with Tata Consultancy Services in India. The company already runs the new child support and maintenance scheme systems.

Tory advisers have suggested the party outsource back office functions if it wins the election — according to public sector website Kable — and some of this could go offshore. Such moves remain controversial.

Any party to win the election would likely focus on the use of shared services to cut costs. But successful examples remain scarce, so far, and the move has been described as a “massive” culture change.

Whichever party wins, after some early announcements it is likely to take some time before concrete changes are made. And, of course, whether all the pledges are met is another question.

Source:http://www.networkworld.com/news/2010/051010-hung-parliament-leaves-it-industry.html?page=1

Driven by positive growth rates in outsourcing services, infrastructure services and mobile data services, Germany’s information and communications technology (ICT) industry is on track to grow in 2010. ICT in Germany is an important catalyst for innovation, creating unique market opportunities for cutting-edge companies. Germany Trade & Invest will have representatives at this year’s Web 2.0 Expo in San Francisco, California, from May 3 – 6 to share information on business opportunities in Germany’s ICT industry.

Germany’s ICT market is the largest in Europe and ranked fourth in the world behind the U.S., China and Japan. With a market volume of almost EUR 130 billion in 2009, the ICT industry is expected to record a positive growth rate in 2010. In the IT market, outsourcing services posted the strongest growth rates in a challenging year, coming in at approximately five percent. In the telecommunications market, infrastructure and mobile data services led the way with growth rates of six and eight percent respectively. The market for online advertising in Germany also had a record year in 2009. This growth segment posted over EUR 1.4 billion in revenue.

2010 promises to be a strong year for Germany’s ICT industry, creating a number of opportunities for companies entering the market, especially in growing areas such as cloud computing, social networking applications and next generation gaming. With almost 60 million people online, Germany has by far the highest number of Internet users in Europe. High-speed broadband penetration is currently at 67 percent, which is expected to grow to 75 percent by 2014.

The success of Germany’s IT industry is in large part due to the country’s R&D infrastructure. Public and private R&D funding is currently stimulating new developments. The Emmy Award-winning Fraunhofer Heinrich Hertz Institute (HHI) is just one example of Germany’s innovation leaders. The unique research infrastructure in Germany allows for companies to benefit from collaboration and partnerships with German research organizations and industry players.

Germany Trade & Invest will be showcasing the latest developments in Germany’s ICT industry at Booth 409 and in a dedicated workshop session at this year’s Web 2.0 in San Francisco. Cutting-edge innovation on display includes Fraunhofer HHI’s Image and Video Retrieval technology, a novel search technique for multimedia data including face recognition and temporal video segmentation. The innovation comes from the institute best known for its contribution to the H.264 standard for video compression, which serves as the backbone of video management for iTunes, YouTube, Blu-Ray and several other video applications.

In addition, Germany Trade & Invest and the Fraunhofer Heinrich Hertz Institute will be hosting the evening reception “Germany: Driving the Digital Future” on May 4th at 7 p.m. in the Intercontinental Hotel. The event will be held in cooperation with Berlin Partner and Theseus, the research program initiated by the Federal Ministry of Economics and Technology to bridge research and practical application of technology.

Germany Trade & Invest is the foreign trade and inward investment promotion agency of the Federal Republic of Germany. The organization advises foreign companies looking to expand their business activities to the German market. It provides information on foreign trade to German companies that seek to enter foreign markets.

Source:http://digitalproducer.digitalmedianet.com/articles/viewarticle.jsp?id=1064931

The Indian software industry seems to have hit an air pocket.The Obama administration has been consistently drumming up the spectre of curbing outsourcing to India by American companies and has also been vocal about its efforts to offer tax breaks to companies that will create jobs in the US.

IT industry analysts have been voicing concern about the snail’s pace at which the sector has been growing lately. However, none of the noise seems to have breached the software companies.

So, check out the latest buzz in the Indian IT industry:

Source:http://economictimes.indiatimes.com/quickiearticleshow/5731394.cms

Egypt hopes its burgeoning foreign outsourcing industry will generate $2 billion in revenue by 2013 and $10 billion in 10 years, aided by targeted incentives for incoming firms, the communications minister said on Tuesday.

It expects the industry to earn the country $1.1 billion this year, Tarek Kamel said, after meeting employees at a new 1,000-seat call centre on Tuesday.

“We are working, in ITIDA (Information Technology Industry Development Agency) and the ministry, on an incentive package. We are expanding in technology parks for the offshoring industry,” Kamel said at the centre’s official opening.

Eight hundred of those seats are filled, providing technical and sales support to six clients of Stream Global Services (SGS.A), including satellite radio station Syrius-XM.

Stream’s chairman and chief executive, Scott Murray, told Reuters the firm intends to expand further in Egypt and Brazil and to enter China, where it will employ 2,000 people.

“We are starting to look at new sites tomorrow,” Murray said. “This centre here is pretty much sold out, so we will need another centre sometime this summer and probably another one by late in the year or early in 2011.”

Boston-based Stream has 30,000 employees in 22 countries. It started in Egypt last year with 50 employees in temporary faciities and expects up to 5,000 employees in Cairo and other Egyptian cities in the next two to three years.

INCENTIVES

Egypt’s outsourcing industry pales in comparison with that of India and the Philippines, but is one of the country’s fastest growing sectors, aided by a pool of university graduates fluent in French, German, Spanish and Italian as well as Arabic and English.

The incentives offered increase significantly once a company commits to employing more than 3,000 Egyptian employees. They now target firms providing back office financial and accounting services, ITIDA board member Amin Khaireldin told Reuters.

“We do the incentives to share risk with those who are coming,” he said. “As we speak now we are encouraging people to come for financial and accounting because we graduate every year 60,000 accountants from our universities.”

Khaireldin said ITIDA subsidies cover up to 90 percent of vocational training costs. ITIDA also matches the difference between Egypt’s telecommunications costs and the lowest such costs elsewhere in the world and even helps pay rent and transportation costs.

Stream’s largest client in Egypt is satellite radio station Syrius-XM, which chose Egypt to diversify away from its significant presence in the Philippines and elsewhere.

“From a performance standpoint it is very comparable,” said Joe McGuinnis, senior director of call centre operations at Syrius-XM, adding that costs were comparable.

“We chose Cairo … as an alternative to the Philippines, the same offshore value but in a different location,” he said.

Source:http://www.reuters.com/article/idUSLDE62L2AU20100323

Has Finance Minister Pranab Mukherjee’s budget 2010 missed Indian IT industry? Yes if one thinks of Indian IT industry’s long- standing demand for STPI scheme extension.

The much-anticipated extension of SEZ benefits for STPI units did not come through (once again) in FM’s budget. In addition, the rise in MAT from 15% to 18% will impact the industry, especially small and medium size software firms.

Small and mid-size outsourcing companies function from STPI units and tax benefits under the STPI scheme are getting phased out in 2010-11.

Most large outsourcing firms have set up in SEZs and will not be impacted significantly. “I am very disappointed. There was no mention of mirroring of SEZ benefits for STPI units,” said Ashank Desai, chairman of Mastek Ltd.

The mirroring of SEZ benefits for STPI units was one of the demands of the software industry. Exports from SEZs are eligible for exemption for a period of 15 years in all — 100% of profits are tax exempt in the first five years, 50% in the next five and 50% in the last five years provided the profits are invested in specified areas. “The top 50 software companies contribute 60-65% of the revenues of the industry and 90% of the profits. When they grow their business, they will grow into SEZs.

Many of their older units have already come out of the tax benefits offered under STPI because they are over 10 years. It is the smaller firms that have set up STPI units in last few years that will be hit though the government will not gain much in terms of tax inflows,” said a Nasscom official.

However, IT companies focussed on the domestic market will gain from the IT mission mode projects announced in the budget. The allocation of Rs 1900 crore for UID project and the announcement of the modernization of national employment exchanges are some moves that would help the IT industry as a whole.

Refunds for IT/BPO companies have also made easier. Over Rs 4,000 crore refunds are pending and just last month there were some changes made to make refunds easier. The budget gives it further filip.

Source:http://www.optoiq.com/index/lasers-for-manufacturing/display/ils-wire-news-display/141843543.html