Transnational technology majors are moving more jobs to offshore locations despite the negative rhetoric and move to spike tax sops.

The offshore leverage for firms like IBM, Accenture & EDS, front-end delivery staff in offshore centres as a percentage of workforce, has risen from 25-30% in 2007 to 35-40% in 2009, Everest Research Institute says in a report on global sourcing trends.

While some global majors have a high offshore leverage of 45-50%, the average ratio can go up to the 38-42% levels during 2010, Eric Simonson, managing principal of Everest Research, told ET. “Offshore leverage continues to dominate outsourcing economics and is an accepted reality for staying competitive,” he says.

By not including support staff, people engaged in domestic delivery and third-party contract workers, this measure pin-points that offshoring is imperative given the difference in cost structure and price points among locations.

However, cost is one of the offshoring drivers, the report says. Globally distributed clients are asking technology service providers to set up bases in different locations as growth moves to emerging geographies from the US and Western Europe.

This, Everest says, is pushing tech majors to become more globalised and extend delivery presence to serve buyer needs better, access fresh talent markets and acquire new capabilities. “Having a diverse set of locations can mitigate risk. Leading IT firms have delivery presence in as many as 25 countries,” says Simonson.

To boot, the average number of countries where these firms have delivery centres has gone up from 13 in 2007 to 15 in 2009. It is difficult to work out individual offshore leverage figures since most do not disclose geographically-split headcount while Everest can’t divulge names of firms surveyed for sake of confidentiality.

No less, Simonson notices two other discerning offshoring trends. First, technology suppliers are moving towards integrated matrix organisations, shaped around industry verticals and service lines. The other and more important one, Simonson says is industrialisation of the IT operating model. This implies that there is more vigour and predictability in processes and that best practices (read: Six Sigma) are being used, he says.

Source:http://economictimes.indiatimes.com/news/news-by-industry/jobs/MNCs-continue-to-shift-jobs-to-offshore-locations/articleshow/6221409.cms

Offshore outsourcing India

India has emerged as a major outsourcing hub for software development worldwide. The business is growing at a healthy pace of 30%.

Offshore outsourcing to India is one of the most popular management practices today. Though it is generally spurred by the cost reduction factor, this is just one of the reasons one should consider offshore outsourcing. Most parties who outsource are unaware that Indian Service Providers do not just offer cost effective solutions, but also value addition by improving productivity and quality.

Why consider offshore outsourcing to India?

In today’s competitive world, offshore outsourcing has become a boon for businessmen. And simply; for the majority of companies, offshore outsourcing has turned out to be a very attractive option due to its cost effectiveness. Moreover, outsourcing provides businessmen the freedom of dumping all of their non-core activities,which is also an important aspect of their business and gives them freedom to focus on their core activities. On the whole, it is a practice of handing over the work to an individual or group of individuals who can give cost-effective fair dealing to the development of your business.

Offshore outsourcing has been popular for several years. Countries like India are popular offshore outsourcing locations which offer cost effective solutions. There is a wealth of articles and write ups about the cost advantages of offshore outsourcing with a majority claiming anywhere between 40-50% savings.

• It has one of the world’s largest pools of highly educated, English-speaking workers (250 million), many with scientific and technical skills. By 2010, India is expected to be the largest English-speaking country in the world.

• India has very low wages. Starting salaries for IT engineers in India range from $5,000-$10,000, low by US standards but very attractive in a country with a per capital annual income of $500.

Offshore Outsourcing is not just about cost.

Outsourcing to India is an old concept, but its increasing popularity among leading organizations is what is making it coveted. Companies, through out the world have willingly accepted outsourcing, and are allocating there in-house operations to several other organizations situated in all parts of the world.

One should understand the need for offshore outsourcing better before making a decision. Cost is definitely one of the main reasons for offshore outsourcing to India, but one should realize that this cost advantage may not be seen immediately. Initial investment in infrastructure, training, and other such preliminaries may make one believe that the cost advantage promised is just the illusory pot of gold on the other side of the rainbow.

India Advantages

India has the advantage of a very large number of English speaking populations, which is more than in any other non-English speaking country. Add to that the lower cost of manpower; it becomes very attractive to hire Indian software professionals. Once the boom started, India is producing software professionals by thousands. IT education starts right from Nursery and specialized institutes are available to provide diplomas/degrees in various fields of IT.

There are many a success stories in the field of software development and outsourcing. Right from custom software development, India is now developing many software products as well. There is lot of web application development in India, these days. There are new areas like SEO experts India. It is becoming so important that this may be the next big thing. Then there are specialized services like CAD services India and 3d designing. Web site design specially, high-end design using flash and 3d is becoming quite common. This has found applications in animation movies, special effects and even 3d gaming, So the aspect of saving money does exist, but one has to realize that initial investment may make the promise of cost reduction seem false.

There will be savings and along with these savings there is great value addition. Most who outsource only realize the quality and value addition after the offshore outsourcing relationship begins. This is not usually the primary goal when deciding to outsource, and the creativity and talent in India comes as a surprise to many.

Offshore Outsourcing to India is about quality and value addition at a reduced cost.

The reason behind the popularity of offshore outsourcing is that it provides an option for getting highly productive manpower at a cheaper rate. For instance, an offshore outsourcing destination such as India is popular to U.S.-based businesses because of the cheap working rate. The other best thing is that it will leave businessmen free from additional responsibilities and give option to focus on the core of their business. On the other hand, the outsourcing firm can also focus on the specific work delegated to them as well as the purchase of necessary technology will now be handled by the outsourcing company, thus it is a cost-efficient business operation.

You are Reading this Article because you are considering offshore outsourcing and you heard INDIA has some outsourcing expertise. However, India combines the best quality with low cost.

Source:http://outsourceforcereviews.org/677/why-offshore-outsourcing-to-india/

In today s sourcing business, whatever companies are offshoring IT services and projects to India, whatever as a Captive Center (employment of possess Amerindic staff), others opt outside assist providers for delivery.

While a some eld time much offshore decisions hit primarily been prefabricated to spend costs, today these decisions are more ofttimes included into a orbicular multi-sourcing strategy, where coverall sourcing goals watch the correct sourcing method. And,offshore outsourcing (e.g. to India), is assist a beatific resolution for limited situations.

A contest for selection makers is to acquire from lessons scholarly another companies hit experienced, since companies are typically not selection to openly adjudge and deal their failures. Thus, aggregation on key success factors are mostly composed by consulting companies or in-house, patch modify in-house noesis is ofttimes not shared.

The inexplicit article comprises a program of key success factors that crapper be observed in nearly some mid-size to large-size offshoring send centering on India. The discourse is: how is success measurable?

The respond to this is rattling simple: from the rattling beginning, KPIs should be circumscribed to manoeuvre the success of the project. In addition, it is best to send lawful spirit surveys that manoeuvre the representation of the contact crossways individual stakeholder levels.

The success of an offshore outsourcing contact should be pro-actively addressed. The mass itemize is a key assemblage of criteria to secure a flourishing offshore engagement:

1. Cultural awareness: In most cases, there is large instance push to offshore services or projects. The dripless instance schedule of a send organisation forces the direction to spend costs quickly. The event is that ofttimes noesis on already existingoffshore undergo is not sufficiently shared, not modify within the company, and therefore, with noesis to social awareness, this is rattling important. A misconceptionof the Amerindic society module termination in higher costs after and crapper at nowadays termination in outlay inadequacy disasters. Amerindic body employed with Western body (on apiece level) and Western body employed with Amerindic body staleness be drilled on social differences. Very adjuvant for trenchant employed relationships are shared visits in the another country. This has shown drastic transformation on apiece others discernment and calibre of work. Furthermore, it is advantageous to hit a limited proportionality of Amerindic colleagues effect onsite (e.g. 20% onshore – 80%offshore). The acknowledged higher costs mostly equilibrate for costs that hap otherwise (see below).

2. Strong Management & Sponsorship: For offshore outsourcing projects, a brawny direction aggroup (onshore and offshore) and a full sacred sponsorship are pivotal to enable alacritous decisions and country directions. The constant intend and proactive noesis staleness embellish from the assist recipient. For large-size projects, it is fateful to hit a Program Management Office (PMO) in locate that ensures every act is bundled, understood and available. The PMO ensures that individual rigor is presented throughout the coverall engagement, that the correct act is finished in instance and that problems are de-escalated appropriately.

3. Governance Framework: Watching the market, it has proven that most offshore outsourcing initiatives change with their goals unsatisfied because of the fact that a country organization support has not been defined. The organization support ensures that every managerial rules, regulations and processes are explicitly expressed and module be followed by every stakeholders. It is thoughtful as the rachis for an engagement. Typically, it is allied to internationally acknowledged calibre models and keyed to the send needs.

4. Offshoring Readiness: Several questions requirement to be addressed in visit to appraise offshoring readiness. Is the interior body primed for offshoring? Extensive noesis and upbringing are required preceding to transfers and requirement to be consistently supported; brawny status strength adversely change a consort ssuccess . Are processes grown sufficiency to be offshored? Have the processes been scanned and evaluated carefully, considering matureness and risks to secure they are suitable? What is the substantiation takeof the processes? In most cases, this discourse module be answered with “90% substantiation done” patch the actuality shows that instead “30% substantiation is done”. Documentation is a instance pure state and mostly underestimated.

5. Experience: The large the offshore outsourcing start the more essential it is to hit the correct undergo available. Identification of risks and foresights are pivotal to secure a flourishing contactoffshore. Wrong decisions and criminal expectations crapper easily termination in a backwards designate of the services to onshore.

6. Quality Adherence: Services are typically offshored to spend costs. Although most old consultancy companies today advise this perspective, nevertheless, whatever offshore businesses are impelled primarily by outlay advantages. It is ofttimes realized New in the effect that calibre is digit of the crowning digit to threesome dynamical factors for a flourishing offshore engagement. Lacking qualities hit an effect on action and estimation of the engagement. Poor qualities crapper drive goodish follow-up costs, which in invoke hit a perverse effect on the playing case.

A near support to Industry Standards, much as ITIL, ISO9000, SixSigma, CMM, etc. is highly recommended, as substantially as lawful calibre audits and constant calibre improvements. Quality initiatives should be a accepted calibre for flourishing delivery.

7. Expectation Management: Outsourcing engagements hit a bourgeois (also in-house) and a recipient, which causes assorted expectations. The fact that a assist is delivered fromIndia , complicates the expectations. Expectations are ofttimes decorous delusive and rather or later, these criminal expectations embellish problematic. It is essential to near belief gaps which advance to dissatisfaction.

One exemplary warning for belief gaps is when assist owners are in uncertainty most the assist bourgeois s aptitude and indecisive to provideservices offshore, patch the assist bourgeois (also in-house) strength see undoubted by handling exclusive with standard, unchallenging topics.

A beatific belief direction module assist act and sets expectations right. This crapper be attended by original approaches – initiations by calibre management, for example.

8. Contract: In housing the services are bimanual discover to an outside assist provider, a individual lessen direction is needed. If there is no in-house jural division available, outside jural advice is fateful to secure that the playing is shapely on a steady base.

Over the time individual eld it has proven that “built for change” contracts are most suitable. solon and more companies are play to discuss penalties for absent assist calibre or limited situations.

9. Onshore-Offshore Ratio: A 100% offshore help (all resources employed from offshore) is rattling hard for both the assist bourgeois and assist recipient. Interactions and mercantilism opportunities are absent which ofttimes leads to functional, technical, and social misunderstandings. Frequent exchanges or a ratio of 20:80 or 10:90 crapper be advisable and acknowledged to be awninged in the playing case.

Offshore outsourcing is seen today as digit discover of individual sourcing options. It crapper be designated in encounter with the coverall consort Multi-Sourcing strategy. India, as digit of the choices for offshoring, is constantly decorous more and more expensive. While it is not country when inaction crapper be expected, Bharat has a some advantages to offer. Today, the key players in Bharat crapper substance rattling beatific experience, complete direction staff, a beatific stock and a decorous discernmentof the Western IT mart and needs.

Source:http://changemanagemente.com/key-success-factors-for-offshore-outsourcing-to-india.html

Developing countries are benefiting from business process outsourcing jobs (BPO) that are of “reasonably good quality” by local standards, but the industry has some way to go to improve stressful working conditions, according to a study by the International Labour Organization (ILO) released on Monday.

A large number of companies in countries such as the U.S. and the U.K. have outsourced call center and back-office work to low-cost locations such as India, the Philippines and Brazil. A lot of the work gets done at night because of the time zone differences.

Employees have benefited with higher salaries. The wages of Indian BPO workers are nearly double the average wages in other sectors of the Indian economy, according to the study titled “Offshoring and Working Conditions in Remote Work.” In the Philippines, BPO employees earn 53 per cent more than workers of the same age in other industries.
On the flip side, the ILO study confirms to a large extent concerns raised by social workers and trade unions in India about stressful working conditions at BPO companies.

Workers have to cope with heavy and variable workloads driven by performance targets, tight rules and procedures enforced through electronic monitoring, and unpleasant tasks such as dealing with difficult customers over the phone, the study said.

Efforts by trade unions to introduce collective bargaining in the BPO industry in some key outsourcing places such as India and the Philippines have not been successful.

“We have not had any success in introducing collective bargaining in call centers and other BPO companies in the Philippines,” said Anna Fos, who heads research at the Trade Union Congress of the Philippines, in a telephone interview on Tuesday.

A key reason is that BPO workers in the Philippines find it easy to move to another BPO job if they have a problem with their current employer, Fos said. “They will not come to us, if there is a problem, as there are lots of jobs available”, she added.

Workers in BPO companies also do not join trade unions because they are scared of reprisals from employers, Fos said.
Moves to unionize Indian BPO workers have also been frustrated by lack of interest from employees, according to analysts.

The BPO industry employs about 1 million people in India, according to the National Association of Software and Service Companies (Nasscom).

The work conditions faced by BPO workers constitute a “tailor-made recipe” for stress-related hazards, according to the ILO study. These problems are also clearly linked to the high rates of staff turnover in the industry — which can be as high as 100 per cent annually in some companies — and represents a serious problem for BPO companies, it added.

The study suggests a number of measures that governments and companies can take to improve working conditions, including measures to protect workers’ health and safety at night. It also suggests a redesign of work processes, particularly in call centers, in order to allow BPO employees more discretion to “make use of their often considerable qualifications.” ILO also recommends policies and practices aimed at improving workers’ dialog with management.

Source:http://www.pcworld.com/businesscenter/article/200972/offshore_outsourced_jobs_pay_well_but_are_stressful.html

The outsourcing market is witnessing an increase in activity as the global economy recovers from the recession of 2009, according to a report by Everest Research Institute.

Offshore outsourcing business that was in the pipeline, but was delayed during the recession for financial reasons or for lack of management focus, is now gathering momentum again, Anand Ramesh [CQ}, research director at Everest, said on Saturday.

More concerned about cost reduction after the recession, customers in the U.S. and other markets are planning to offshore more of the work that was earlier being outsourced to suppliers in their countries, Ramesh said.
Companies that have not sent work offshore so far are also now considering outsourcing to low-cost locations like India and the Philippines, he added. Over a period, the credibility and scale of offshore suppliers in countries like India has also increased, Ramesh said.

Most current buyers plan to expand offshoring and a significant proportion plan to do so aggressively, the Everest report said. Approximately 75 percent of small and medium adopters and 90 percent of large adopters plan to expand their offshore outsourcing by more than 500 FTEs (full time equivalents) over the next two years, it added.

Small adopters are defined by Everest as organizations with already less than 500 FTEs offshore, while medium adopters are organizations with 500 to 2,500 FTEs offshore. Large adopters are organizations that already have more than 2,500 FTEs offshore.

The report surveyed companies that currently send IT services and business process outsourcing (BPO) work to either their own subsidiaries or to third-party suppliers in off-shore locations like India, Mexico, China and the Philippines.
A number of analysts have forecast a pick up in offshore business. A lot of the offshore business that was delayed by the recession is back, said Sudin Apte [CQ], principal analyst at Forrester Research. But there are no large new deals yet, he said.

The improvement in business is also likely to place demands for staff in countries like India, thus pushing up costs. Companies in India, for example, have started hiring again, and staff attrition is likely to go up to over 15 percent in the current quarter, Apte said.

India continues to be the dominant offshore location with more than 70 percent of buyers planning to expand in the country, according to Everest. The Philippines, riding mainly on its strong presence in the BPO business, and China are two other key countries where companies plan to expand.

But the offshore market in China is primarily for work done for neighboring countries like South Korea, and Japan, according to Ramesh. The number of U.S. companies outsourcing to China are few, and the size of their operations are small, he added.

Malaysia, Brazil and Mexico are other locations that figure in companies’ plans to expand offshore outsourcing.
Companies are however looking to spread their risks, and may not send all their work to India.

Buyers are increasingly looking at other complementary locations in Asia, Latin and Central America, and Eastern Europe for setting up delivery centers, according to Everest. The drivers of this approach include risk diversification and business continuity, need for specific skills and support in specific languages, regulatory requirements, and time zone coverage requirements, Everest said.

About 60 percent of India’s outsourcing business comes from the U.S., followed by the U.K. which accounts for about 15 percent.

Even as companies are planning to expand offshore outsourcing, they are also looking at expanding in near-shore locations, such as Latin America for U.S. companies. The drivers for near-shore outsourcing, such as the need to keep sensitive work closer to home, are different than for off-shore outsourcing which is mainly driven by cost and the ability to scale, Ramesh said. Although it is growing fast, near-shore outsourcing is a smaller market than offshore outsourcing, and will not necessarily compete with the offshore locations for business, he added.

Even as companies expand near-shore and to other locations besides India, they may still turn to Indian service providers to provide services from these new locations, Ramesh said. They may value an existing relationship with an service provider rather than assign the business to a local provider, he added. A number of Indian outsourcers have set up operations in Europe, U.S. and Latin America to target the near-shore and onshore requirements of their customers.

Source:http://www.pcworld.com/businesscenter/article/200888/offshore_outsourcing_picking_up_after_recession_everest.html

There are many reasons for considering offshore outsourcing to India and in fact, this happens to be one of the popular management practices of the present day. The primary reason as to why people are increasingly seeking us for outsourcing is that we offer services at reduced and cost effective rates. There are a lot of parties according to whom India is a growing hub for productive, quality returning and cost effective solutions. With the ever increasing popularity, Clearpath Technology has the best in terms of brains and talent for generating the best of savings.

Outsourced Services

When it comes to offshore outsourcing, the providers at Clearpath Technology make sure that the best services are provided including:

Business process outsourcing

Database, software and programming outsourcing

Marketing and website development

CAD, Architecture and engineering

Sales and marketing

Presentations, multimedia and presentations

Business consulting

Editing, translation and writing services

Legal outsourcing

There are also effective tips and strategies for reducing operational costs with our outsourced services. However we have come a long way from the point when outsourced services were considered merely for cost efficient services. Today, with companies like ours, the shift is towards making investments in the field of infrastructure, and added preliminaries like training for delivering you the best of services in the above mentioned areas.

Advantages of cost are added with your outsourcing ventures for growing a relationship of commitment and chemistry between us and our clients.

Offshoring and Motivation

Clearpath Technology is specialized in outsourcing and hence, we have expanded our resources by making substantial investments in the fields of IT equipment, services and mechanisms. The aim is to generate a high margin sales track for making an interdependent rapport with our customers. The focus is also on ensuring the savings of our clients for generating an outstanding relationship of offshore outsourcing. Our project manager sees to it that effective communication is maintained and that the standards of creativity are guaranteed. The major goal for us in outsourcing is to harness the best of talents and creative resources that we have.

With quality and value additions made, our objective remains reducing costs and expenditures with bulk work delivered everyday. With other countries bidding with us, we ensure that all our projects are taken up and delivered in the best manner possible. Our scalability factor is a major draw for our clients who trust us with the latest in technological incorporations, prompt response and abidance by the projected timelines.

Delivery Capacity in Global Services

We take pride in mentioning that our workforce has a high delivery capability with the best of technical skills. We are confident that our developers are some of the best possessing superior IT skills as well as implementing major projects successfully. The best option is offering you the best of our services within the estimated time frame. This has made us from being a mere services provider to a solutions provider, with an excellent sales pitch and ROI.

Clearpath Technology is owned and managed by a team of experienced programmers, search engine optimizers, internet marketing experts, web developers and designers. Clearpath Technology provide the best internet marketing and programming services found anywhere and we build reliable, innovative software to complement your marketing and business initiatives. Clearpath Technology is a Software Development Company based out in New Delhi, India.

Source:http://www.freeezinearticles.com/2010/07/05/offshore-outsourcing/

HRS Telemarketing announced that it is seeing an increase in orders for its virtual assistant and offshore telemarketing services. The increase in business is thought to be the result of the company’s recent price reductions. Beginning in April, the agency began charging a flat rate of $7 per hour for outbound cold calling. “We’re getting a great response from our customers”, said CFO Dan Granbury. “Our previous pricing model may have confused some clients who were new to outsourcing. The simple plan and lower pricing seem to be working for everyone”, Granbury continued.

HRS Telemarketing’s flagship entity, Telemarketing Companies, has seen an increase in both direct and referral business. Granbury said that its secondary units including Outsource Telemarketing and Virtual Assistant Services, are also benefiting from the pricing change. The company launched the web properties in 2008 to provide targeted information and specialized services to its clientele.

HRS provides call center services from its locations in the Philippines. The Business Process Outsourcing company specializes in virtual assistant services, telemarketing and appointment setting, as well as data entry. The firm serves businesses of all sizes around the world.

Source:http://www.benzinga.com/press-releases/10/07/p357989/offshore-telemarketing-company-cuts-fees-sees-orders-increase

There are companies that are not only hesitant about virtual assistance they are also hesitant about hiring workers from abroad. But there are so many benefits to outsourcing to an offshore company that you get double-benefits when you hire a VA. You get the best benefits of outsourcing, you also get the best benefits from hiring a worker from a company abroad.

Off-shoring allows you to get the best possible workers for different tasks. Now without geographic borders and other limitations, you can get the workers with the best skills from anywhere in the world. Modern technologies allow you to communicate with anyone from anywhere around the world. Now you can hire a writer from Asia, a web designer from the US, a web programmer from India or any worker from any nation.

You can hire a worker that understands the culture in a particular region. Do you have plans of expanding your business to another country? You can hire a worker from that country even if you maintain an office in the US or the UK. The VA can help you communicate more effectively with your target market.

When you hire a virtual assistant, you can answer inquiries more quickly which can lead to more sales. Anytime you introduce a worker or a process that will allow you to become more attentive to your clients, a business is really going to have greater opportunities to sell.

An offshore virtual assistant can provide you with savings. A virtual assistant from a country with cheaper labor cost can really help you get tasks done for much cheaper. Think of all the time-consuming tasks in your business. Think of how much your time costs if you did all the tasks yourself. Just imagine having a full-time worker and how much you need to spend to hire and keep the worker. With a virtual assistant, you don’t have to spend as much. Not only will you save money on the salary of the virtual assistant, you also save on the overhead expense related to workforce.

You also get to hire workers that you do not have to keep permanently. You can get their services only as they are needed in the business. Should the business later on require other specializations or skills, you can easily get the worker that the business needs. Virtual assistance really provides businesses with greater flexibility. Before virtual assistance became popular, it was not easy for companies to hire and keep workers as they needed them and to let them go when there is no more tasks that the VA needs to perform.

Source:http://www.officialwire.com/main.php?action=posted_news&rid=169446

2e2, which recently bought Morse, is considering sending its support desk jobs to India.

Codenamed ‘Project Victoria’, the process is due to kick off after 25 July when 2e2 should have finished due diligence with Patni – the company to which it is outsourcing the outsourcing.

Patni will take on 2e2 support staff except for level 1 – about 150 jobs. It’s expected the jobs will stay in the UK for three months but that staff will then be made redundant and the work moved to India. So 2e2 won’t actually be making anyone redundant itself.

But Nick Grossman, group business development director at 2e2, said the process is far from finished.

He said: “This is genuinely up in the air right now, we’re looking at the feasibility of doing it and looking at a range of different blends – numbers could vary and which work we look at could vary.

“This is not a non-serious issue and it’s been contemplated for some time.”

Grossman said 2e2 is moving to offer more “transformational” projects which require it work with other companies with other skills. He said cost pressure from customers was another impetus and increased pressure to be more flexible in how it responds to customers.

2e2 customers include Pret a Manger, TieRack, Philips ServiceCentre, British Airways voice systems, Nuffield Health, ITV and Remploy.

The company, including Morse, turned over £414m in 2009.

2e2 is privately-owned, it employs 1,500 staff and boasts of 1,000 “customer facing service delivery and IT professionals. Its website says: “95 per cent of services delivered by 2e2’s onshore fulltime employees.”

Source:http://www.channelregister.co.uk/2010/06/28/reseller_support_offshore/

A new bill circulating through congress has one call center services provider up in arms. Senator Charles Schumer of New York recently authored a bill that would impose strict fees on businesses that outsource customer service operations to offshore providers. Hit Rate Solutions, a U.S based outsourcing company with contact centers in the Philippines is the latest to speak out against what it considers to be a blatant attempt at protectionism. “The senator’s proposed legislation shows a fundamental lack of understanding of the outsourcing industry, and business operations in general”, said Operations Director Adam Shore. “The bill would be devastating both to businesses in the U.S and in the developing world”.

Are Schumer’s policies protectionist?

Schumer’s bill would levy a $.25 per call tax on companies transferring calls to an offshore call center, and require the company to notify the consumer of the location of the contact center handling the call.

Shore believes the taxes are exorbitant, and the impact could be enormous. “I don’t believe Schumer understands the sheer volume of phone calls placed to customer service departments”, Shore continued. Hit Rate Solutions serves businesses of all sizes from large corporations to entrepreneurs and sole proprietors. “Schumer seems to think that the only companies using offshore call centers are large corporations with deep pockets. That’s simply not the case”.
Hit Rate Solutions’ mission is to create a means for companies small and large to cut costs and increase production. Contrary to Schumer’s apparent perception, most of its business has come not from companies looking to replace existing workers, but business interested in trying new methods to expand their services. The company specializes in telemarketing, customer service, data entry, andvirtual assistant outsourcing. The majority of the company’s clients are new to outsourcing and are in the start-up phase of their businesses.

The goal of the bill going through congress is to create a disincentive to U.S. companies interested in hiring employees offshore. Shore reiterated his belief that the legislation is misguided. “For most of our clients, the alternative to hiring offshore is to not hire at all”.

Source:http://www.prweb.com/releases/2010/06/prweb4182964.htm

The outsourcing scenario in India has grown by leaps and bounds and companies working out from India are cashing in on all the opportunities available at their disposal. The services being turned out have grown manifold and the quality in them has been phenomenal. IDS Logic is a growing company in this new breed of enthusiastic service providers emerging in India that provides complete IT Services. Be it website development, website designing, internet marketing or search engine optimization; IDS Logic works as a complete services provider. Every small nuance that concerns the website is addressed well and all issues too are taken care of.

Offshore outsourcing has been popular for several years. Countries like India are popular offshore outsourcing locations which offer cost effective solutions. There is a wealth of articles and write ups about the cost advantages of offshore outsourcing with a majority claiming anywhere between 40-50% savings. However, offshore outsourcing has come under attack recently. There is an outcry against outsourcing by parties in the US and UK because of the loss of jobs to people in these countries. Many have pointed out actual costs and poor quality of service as the hidden truths behind the attractive packaging. Skilled professionals work on projects and deliver the quality that is expected of them.

One should understand the need for offshore outsourcing better before making a decision. Cost is definitely one of the main reasons for offshore outsourcing to India, but one should realize that this cost advantage may not be seen immediately. Initial investment in infrastructure, training, and other such preliminaries may make one believe that the cost advantage promised is just the illusory pot of gold on the other side of the rainbow. However, this cost advantage is seen over a period of time in an outsourcing venture which involves a committed relationship and understanding between both parties involved

Offshore outsourcing involves a great deal of thought. One should not be spurred simply by expectations of rapid cost reduction. The new mantra of offshore outsourcing to India is quality solutions. When processes are outsourced to India, companies not only get the advantage of low cost but also experience improvement in productivity and quality. Companies like IDS Logic ensure that the quality that enterprises get from the west is the same and the cost factor gets reduced manifold. These are the reasons that should motivate offshore outsourcing to India.

Source:http://idslogic.wordpress.com/2010/06/16/ids-logic-offshore-outsourcing-company-in-india/

Recent upsurge in outsourcing and globalisation has led many Indian companies to obtain various services from overseas. Taxability of payments made by Indian companies for such services has given rise to many complex but interesting issues.

The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, in a recent case of Ashapura Minichem Ltd vs ADIT dealt with the taxability of payments made by an Indian company in respect of testing services provided by a Chinese company.

Ashapura Minichem (“the taxpayer”) was in the process of building an alumina refinery using bauxite. It entered into a contract with the Chinese company for testing the said bauxite. The said testing services were undertaken by the Chinese company in its laboratories in China and the test reports for the samples were also prepared in China.

TDS issue

The taxpayer made necessary application to the tax officer seeking authorisation for remitting the consideration for the said testing services to the Chinese company, without deducting any tax at source on the grounds that the payment made to the company was is in the nature of business income and in the absence of any permanent establishment of the Chinese company in India, the same was not taxable in India.

The taxpayer therefore contended that it was not under any obligation to deduct any tax at source.

The tax officer, however, did not agree with the taxpayer’s contention and held the payment to be taxable as ‘fees for technical services’ under the provisions of the Income-tax Act as well as under the Double Taxation Convention (DTC) entered into between India and China, which position was upheld by the Commissioner of Income Tax (Appeals).

On further appeal to the ITAT, the taxpayer contended that the payment made to the Chinese company was not taxable in India as services were rendered outside India. The taxpayer went on to argue that even under the DTC between India and China, the Article dealing with fees for technical services is uniquely worded which required the services to be rendered in India for the payments to be taxed in India.

In the present case, since undisputedly, the services were rendered by the Chinese company outside India, the same were not taxable in India and, therefore, the taxpayer was not required to deduct any tax at source.

Act, Tax Treaty

Before we proceed further, let us have a brief synopsis of the provisions of the Act as well as the DTC between India and China.

Before the enactment of the Finance Act, 2010, the Supreme Court, in the Ishikawajima Harima Heavy Industries Ltd case, had held that the services should also be rendered in India for them to be taxed in India. This landmark ruling was subsequently followed by the Bombay High Court in the Clifford Chance case and several others. However, the Finance Act, 2010, made a retrospective amendment in the Act right from 1976 to bring within its ambit even the services rendered outside India.

Similarly, Article 12(4) of the DTC between India and China is worded uniquely to define the term ‘fees for technical services’ to mean provision of managerial, technical or consultancy services in the other contracting state.

Most of the DTCs that India has entered into do not contain the condition of provision of services in other contracting state. Hence, a prima facie reading of the above Article suggests for the payments to be taxed in India, the services should be rendered in the other contracting state, that is, India. Article 12(6) further states that such fees for technical services shall be deemed to arise in India where the payer is a resident of India.

Change in law

Coming back to the facts of the case before the Tribunal, the tax authorities reiterated that by virtue of the amendment made by the Finance Act, 2010, there was a change in law and, therefore, the decisions relied upon by the taxpayer no longer hold good. Further, even under the DTC between India and China, the payment being made by a resident of India, fell within the deeming provisions of Article 12(6) and hence taxable in India.

The Tribunal held that in view of the retrospective amendment by the Finance Act, 2010, the satisfaction of condition of services to be rendered in India is no longer required, in order for the fees for technical services to be taxed in India.

The Tribunal also observed that by virtue of the said amendment, the decisions relied upon by the taxpayer no longer hold good.

Moving on to the provisions of the DTC between India and China, the Tribunal observed that the definition of fees for technical services is wider in scope as it provides for provision of services instead of provision of rendering of services (which is the wording in some other treaties entered into by China) and, therefore, it will cover the services rendered outside India as well.

The Tribunal also held that considering the deeming provisions of Article 12(6), the services would be taxed in India even when the same are not rendered in India, else the deeming provisions will be redundant.

The Tribunal accordingly concluded that the payments made by the taxpayer for provision of bauxite testing services in China, would be taxable in India, both under the provisions of the Act as well as the DTC between India and China and, therefore, subject to deduction of tax at source in India.

This ruling assumes significant importance as it reaffirms the taxability of services rendered outside India, under the provisions of the Act, on the basis of the retrospective amendment made by the Finance Act, 2010 as well as under the DTC between India and China.

However, it may be noted that the Tribunal, while commenting on the provisions of the DTC between India and China, has commented only on the scope of the term ‘provision of services’ vis-à-vis ‘provision of rendering of services’ but has not emphatically dealt with the latter part of the definition which states that the said provision of services must be ‘in the other contracting state’, except for observing that the interpretation to a Tax Treaty which renders treaty provisions unworkable and which is contrary to the clear and unambiguous scheme of the treaty has to be avoided. Hence, even if the term ‘provision of services’ is wider in scope, as held by the Tribunal, the term ‘in the other contracting state’ may necessarily involve performing the services in the other contracting state.

To sum-up, when viewed in entirety, the present definition of fees for technical services under Article 12(4) of the DTC between India and China, may still require that the services should be provided in India, for them to be taxed in India. It would have been interesting to note whether the latter part of the definition would have had any bearing on the ultimate decision, had the same been dealt with emphatically by the Tribunal.

Source:http://www.thehindubusinessline.com/mentor/2010/06/14/stories/2010061450611200.htm

Thanks to the advancement in communication technology, it enabled business to save a lot of money on call centers. Companies today are now taking advantage of call center outsourcing and are now considering it as one of the most economical solutions for businesses.

Firstly, call centers manages tasks to satisfy customers, and attract customers for your company. Call centers can also be help desk support and advice center for your business and it can handle both inbound and outbound calls for your company.

As you can see, call centers are a very important tool for businesses today in terms of customer relations. It is considered to be an essential part of any company in order to satisfy, attract and in keeping contact with your clients. However, it is also a fact that putting up your own call center for your company can be very costly. It will oblige you to purchase the technology needed for it, such as computers, software, and it will also require you to hire additional employees to act as call center agents.

This is why companies these days are now considering hiring call centers offshore. If your company needs a call center, you can outsource your call center in other countries in order to cut some operational costs. Outsourcing your call centers in other countries, particularly developing countries, is very cheap because of the difference in the minimum salary rates with a particular developing country. You will see that the minimum wage is far lower than in your country.

Your company should prefer an offshore call center that hires staff with good English speaking skills in order to communicate with your clients better. Developing countries, such as China, Philippines and India are three of the most popular countries that provide great quality services for a call center. They have a lot of talented individuals with great English skills that will be able to communicate effectively with your customers.

Source:http://callcentersindia.wordpress.com/2010/06/08/offshore-outsourcing-call-center/

Offshore outsourcing is a business activity that is adapted to avail many businesses related benefits like cost benefit, technological development, managerial support or best customer services in offshore areas. In offshore outsourcing, a business tends to transfer some of it works even an operation to a third party in offshore areas so that it may concentrate on its key responsibilities.

In the near business history offshore and outsourcing were two different terms and with the passage of time business people moved towards taking advantage from both terms at a time and started outsourcing their operations offshore. Doing this they achieved their targets well and then they started this activity as a routines. In the beginning there were more risks but with passage of time business people succeeded to prevent these risks to significant extent.

If we talk about the statistics of offshore outsourcing then we will come to realize that many countries are earning a major part of their annual revenue from providing outsourcing services. It has been observed that less developed or developing countries are showing more interest in offshore outsourcing. These countries include China, Philippines and India.

In statistical overview of offshore outsourcing it is also necessary to consider which services or functions are usually outsourced. In the statistical survey it is observed that business practice Business Process Outsourcing (BPO), Information Technology Outsourcing (ITO), Offshore Software Development (OSD), and Knowledge Process Outsourcing (KPO). These are most commonly practiced outsourcing services.

If statistical importance of any issue is under discussion then it is necessary to have a discussion about numerical value about that particular issue. As we discussed above that three developing countries are offering the offshore outsourcing services. Let’s take an overview of statistical results of Outsourcing services provided by China, Philippines and India.

In the very beginning of its introduction business people did not accept this practice happily but with 1990s and this practice attained an immense growth. As per the results of research study it has been observes that IT offshore outsourcing has a big contribution in offshore outsourcing that is almost 30%. After IT the next mostly outsourced service is Human Resources related services and their share is nearly 18%, financial services are nearly 10% and sales and marketing services within 14%.

Remaining 34% of offshore outsourcing has been recorded in other administrative activities. The percentages mentioned here may differ from other studies because of change in parameters or population being studied or may also differ due to change in point of view of researchers.

Source:http://www.letsgooffshore.com/offshore-outsourcing/offshore-outsourcing-statistics.html