The Outsourcing puzzle can be rather tricky indeed. Technology has impacted the way we operate our business processes and the how’s and why’s related to Outsourcing are evolving as a result. Three areas that are outsourced the most include IT and software development, call center support and BPO or back office functions. Outsourcing companies perform contract based work and perform designated tasks on a cost per transaction or for an hourly fee both offshore and domestically.

How is Outsourcing changing? Technology allows us to do more than ever from our desktop with integrated communications and managing users. Clients now have more options than ever that effect price and quality. One of the most innovative approaches to outsourcing is the “shelter” concept created by Vangtel for the service sector.

Vangtel offers clients the ability to maintain control of their IT and software development, call center support and BPO or back office functions. The client achieves a lower cost by establishing their operation in Hermosillo, Sonora in Mexico – one hour via air from either Los Angeles or Phoenix.

Why is Outsourcing changing? Clients want to protect their intellectual property and achieve a lower cost while achieving the quality they demand. Traditional Outsourcers simply cannot match all of these client demands. “With the US market and the huge ncrease in the Hispanic population will we see a trend where Mexico is the best choice to operate an in-house captive call center, thinks Larry Carlson, Vangtel’s Marketing Manager. He added, “now comes Vangtel offering clients the ability to house all of their Outsourcing functions with one operation – with the control including IT and software development, call center support and BPO or back office functions.” Clients are seeking operations that are more reflective of their actual corporate culture which in Vangtel’s case is delivered.

Vangtel, a proud member company of Tucson, AZ based The Offshore Group, is a provider of “business shelter services” that allow client companies to have total operational control while receiving the cost benefit of a nearshore operation.

Source:http://www.theopenpress.com/index.php?a=press&id=128800

Inflexi Technologies offers both IT outsourcing and offshore outsourcing services along with its ranges of web solutions for every clients.

India, —— 2011, As a leading web design development company,Inflexi Technologies providing websites with professional web design, content management and internet marketing services.

The Inflexi team is focusing on company’s professional web solution services, specific care for clientele requirement,premium quality services to meet international standards. They provide expert services including web design development, seo services, ecommerce web designing, online shopping cart with ranges of internet marketing strategies.

Along with IT outsourcing services, Inflexi Technologies is also emphasizing on offshore outsourcing services. The aim of providing offshore outsourcing is to develope and enhances the quality and efficiency of the core IT business. The other reasons which make clients to adopt offshore outsourcing services at Inflexi are domain and process specific knowledge, round the clock customer support management, high technological services with updated knowledge etc.

At Inflexi, the customer is important for us, whether the client belongs to small, medium or large sized business or having any national or international franchisees, we accept the web services according to clientele requirements. The proficient team also helps the new client business with good suggestions. With advent technology we design best websites and apply all possible strategies to increase web presence potentiality of the client.

Our provided outsourcing services are very much cost effective and it helps you to give the benefits of competitive IT solutions. Through IT outsourcing you can focuses on your core business areas.Both outsourcing services are providing tax benefits to its owners. Starting from hiring staff to solve technical tasks, preparing short term goals to long term costs, Inflexi is one stop solution for all web development services.

At Inflexi Technologies we are providing creative web design services according to our clientele requirement. We work rigorously to meet client’s exactexpectations.Perfection is our only aim to bring in our professional yet innovative web design development services. Unlimited web design revision to bring accurate results and build reliable relationship with clients. Round the clock technical support and secure functioning helps our company to build trust vote at global web market.

Source:http://www.addpr.com/articles/web_design_development/96945.html

India has been at the forefront of the development of the knowledge process outsourcing (KPO) industry and will remain so for the foreseeable future. However, in recent years a number of other viable KPO sourcing hubs have emerged in the Asia-Pacific region, according to Ovum.

In a new report*, the independent technology analyst firm finds that these new KPO delivery locations, including China, the Philippines and Sri Lanka, are unlikely to challenge India’s dominant position in the market, but they have enabled many vendors to pursue a multi-shore strategy.

Ed Thomas, Ovum analyst and author of the report, said: “Being able to deliver services from multiple locations means providers can offer existing clients greater flexibility and minimize the risks associated with having all their operations in one facility, while at the same time tapping into fresh labour pools”.

The KPO industry is maturing and the range of services being provided has expanded as the market has developed. From its initial beginnings in research and analytics, the definition of KPO currently includes a variety of services, such as legal process outsourcing and clinical trial management, among others.

On the latter topic, Ed Thomas said: “A major challenge facing life sciences companies is the growing cost of R&D and, as a result, a growing number of pharma companies are turning to

outsourcing and offshoring as ways of reducing these costs. China is an attractive location for companies that run and manage all phases of the clinical trial process, as it offers a significant pool of potential patients in an important emerging market.”

Along with China, the Philippines is also becoming an increasingly important player in the KPO market. It has started to carve out a niche for itself in a number of key areas, including healthcare outsourcing (providing industry-specific services to hospitals and healthcare providers). This market is expected to grow significantly during the next few years, with a notable increase in demand coming from the US as a result of the recent reforms in healthcare regulations.

Sri Lanka has also focused on developing skills around specific service lines. For example, the country has a significant number of qualified accountants, capable of providing the kind of high-end complex tasks associated with service areas such as equity and credit research.

The recent emergence of countries such as China, the Philippines and Sri Lanka as viable locations for KPO delivery has been a positive development for vendors, as it has enabled them to begin offering a blend of offshore and nearshore delivery while also giving them access to sizable and previously untapped talent pools.

Source:http://www.newsmaker.com.au/news/12720

Outsourcing is sometimes considered a bad word in the call center space. This perception is gaining traction as research firm Ovum (News – Alert) suggests outsourcing firms are treading lightly when it comes to expansion in the near term. The obstacles include perceived risks and low demand in major markets.

Ovum was quoted in this BWorld Online report after the firm released a poll of leading companies in Australia, Europe and North America. It appears companies providing offshore call center services have a tough battle ahead to win new business.
Only 2 percent of the firms polled indicated they would consider offshoring their call center in the next 12 to 24 months. Another 10 percent are planning a move to offshoring in the next 25 to 36 months. The vast majority, at 80 percent, indicated they have no plans at this time to offshore their call centers.
According to Ovum analyst Peter Ryan, the numbers captured in this poll are worrisome for companies providing offshore call center services that are hoping to win new business based on their ability to reduce overall costs for their clients. New barriers have come to light regarding offshoring call center work, increasing the risk for enterprises. Many execs feel the potential cost savings do not outweigh the risks.
Companies today are facing four key issues, including the quality of interaction between customers and agents; stability of the offshore call center location; pressures related to keeping businesses within the domestic country; and fears over the safety of data.
The low costs offered in offshore call center strategies has led to the establishment of locations such as India and South America as key offshore destinations. When a representative of a Philippine outsourcing industry representative was presented with the findings of this poll, she insisted the industry is optimistic regarding business prospects.
“We know that growth of contact center services will slow but the global market will still remain larger than what providers can supply,” Business Process Association of the Philippines (BPAP) Executive Director Gillian Joyce G. Virata said in the BWorld Online report.
“Growth… will be fastest in non-voice BPO (business process outsourcing) and IT (information technology) and in industry-specific services where Philippines has competitive advantages such as banking, financial services, insurance, health care, IT and creative services,” she added.
Revenues for the BPAP totaled $9 billion last year, with projections for this year at $11 billion. Growth for 2012 has been estimated at 20 percent in 2012.
Given the disparity between the estimates by the BPAP and the findings of the Ovum poll, there may be more opportunity in call center outsourcing than suggested, yet the very real fears expressed by execs still exist. This will put increased pressure on outsourcing providers to secure customer trust and demonstrate the value provided.

Source:http://www.tmcnet.com/channels/call-center/articles/236976-offshore-call-center-outsourcing-will-fear-risk-cause.htm

India’s demographics and history have positioned it well to take advantage of the new global IT services market. According to the National Association of Software & Service Companies, the Indian software industry lobby, almost half the Fortune 500 companies use Indian Software services.

The Americas and Europe are the largest customers for the Indian outsourcing industry and account for 60 percent and 31 percent respectively of IT and BPO exports.

India is the world’s second largest exporter of software (after the U.S.), and is the source of management and technical talent for over 40 per cent of new start-ups in Silicon Valley. Thanks to its large English-speaking personnel (second only to the USA), India has more software companies with ISO 9000 certification than any other country in the world.

Advantages of offshore outsourcing to India

· Low cost:Companies have been able to save 30-40 percent by outsourcing services to India. Infrastructure costs in India are lower thus saving significantly on capital. For organizations who are still in there initial days of operations, every penny spent, counts

· Time Zone Advantage:India, for example has a different time zone when compared to US and Europe. This has also increased the volume of job outsourcing to India. For India, this is a major advantage as jobs sent during the evening in the US can be completed in India during the day and sent back to the US. This has increased delivery time and organizations in the US are happy about this. The time zone advantage between India and US has increased job outsourcing to India.

· Reliable communication facilities:Excellent telecom, ISP, and cellular networks are available in all cities & towns in the country. India prides in the reliable satellite and submarine communication links that facilitate good band connectivity with the rest of the world. Thus, companies engaged in IT outsourcing to India can be in touch with the vendors without any connection hurdles. This plays a significant role in determining the success of offshore IT outsourcing.

· Educated and talented personnel:India has the largest English-speaking audience after the U.S. It has highly educated personnel that are talented, educated, experienced, technically-skilled and computer literate.

· Reach:India exports software to more than 95 countries. The number speaks for itself.

· Government’s support:India has a stable political environment and pro-IT government. IT is regarded as one of the top 5 priority industries in India. FDI investment from NRI’s including Overseas Corporate Bodies (OCB’s); owned by the NRI’s are warmly welcomed in India.

· Quality Service:Indian companies providing IT outsourcing services offer high quality work, meeting international standards and complying with the ISO & SEI-CMM standards. Three out of every four SEI-CMM 5 companies worldwide are located in India.

Future Trends in IT Outsourcing

Faced with a slow economic recovery IT leaders will continue to outsource in order to facilitate cost-savings. The market will also experience a surge in smaller IT service deals from first-time buyers.

Cloud sourcing which has often been predicted as the death of outsourcing, will soon merge with the existing outsourcing market and provide better opportunities for the entire industry.

Industry experts predict the emergence of a Latin America outsourcing boom especially in Brazil, Mexico, Chile, Colombia, Costa Rica and Peru. Service providers will also continue to shift their delivery centers to markets such as China, Philippines and Egypt, since these countries represent big markets with big demand for transformational and discretionary spend activity. Having said this, Indian outsourcing firms will still occupy the headlines as the world leader of outsourcing in the coming years. This is because its advantages over other regions still remain distinct. However, the Indian outsourcing industry will experience a significant change in the near future, with companies shifting to knowledge-intensive and value-added services that call for a new way of functioning.

The outsourcing industry will witness mergers between major Indian IT service providers and U.S.-based outsourcers, with the Indian companies on the buying end.

Industry experts also predict the emergence of a retail model in the outsourcing industry where service providers will be categorized into large operations offering reduced costs and middle- and lower-sized providers providing more customized service.

Leading countries will encourage multi-sourcing arrangements in future partly due to the socio-economic pressures and the economic incentives provided by local and federal government to encourage employment.

Source:http://www.businessreviewindia.in/technology/why-india-rules-the-offshore-it-outsourcing-market

The company is a professional and leading IT offshore outsourcing company, delivering services like effective web development, energetic web designing, enhanced software development, exhaustive mobile

HiddenBrains is a pioneer offshore service provider committed in providing reliable, effective and high quality Web Application development and Web Designing services to various clients located worldwide. Customization in the software development is very vital in the modern times. HiddenBrains is a robust IT outsourcing company that offers customized software development services to many offshore clients. It is an ISO 9001:2008 certified offshore Web Development Company with world class offshore development team in India.

We have proficient in Web Application Development in PHP, ASP, .Net & Java, Open Source technologies, Custom Software Development, Web Enabled Applications, Website designing, e-commerce Shopping Cart Development, Client Server Application Development, XML application development and thus has been aptly named as Web Development India and Web Designing India and also well known in today’s IT industry as Website Designer India. The company is serving especially offshore clients for the last many years and very proficient in understanding the technical and non technical needs that result in high quality offshore applications.

The company deems in using all the latest core concepts and methodologies prevailing in the web development India and is dedicated for providing the most enhanced Web application development. The software developers/programmers of the company power themselves with a variety of software tools and technologies that ultimately enables high quality software development. Company is a professional Web Development India that offers affordable offshore development services according to the business or social requirements of numerous offshore clients.

Its Outsourcing Offshore Development India & Web Development India team work in a wide array of industries bringing unique combination of technical expertise, functional knowledge base, result oriented management and extensive expertise in order to evolve solutions that are always highly scalable and designed to handle big volumes of database load efficiently. Expert Coders of HiddenBrains are well advanced in the best utilization of all their programming skills, as they are specially trained to work independently and handle all the complex offshore projects and thus ensure 25% reduction in development time unique only to HiddenBrains.

A Look at the Wide Range of Offshore Development Services Offered by HiddenBrains:

• Web Application Development
• Offshore Project Development
• PHP Web Application Development
• .Net Application Development
• E-commerce Application Development
• Customized Software Development

Source:http://www.addpr.com/articles/programming/91244.html

Offshoring has become so engrained in IT processes that 65% of businesses now do it for some aspect of their business, according to an annual survey of IT budgets and technology trends by the Society of Information Management (SIM).

This survey, which is based on data collected from CIOs and senior IT leaders at 275 companies, found that nearly a quarter of the companies using offshore services did so to run existing systems applications. And another 20% said they used offshore services to manage their infrastructure.

This survey is wide-ranging and offers a number of findings about how corporations and workers are dealing with continuing economic problems.

For instance, employee turnover in 2010 was 5.5%, almost the same level it is this year. From 2006 to 2011, employee turnover averaged 5.92%, reported SIM.

“The boomers that were expecting to leave aren’t leaving,” said Jerry Luftman, a management professor at Stevens Institute of Technology who heads SIM’s survey project.

The average tenure of a CIO is 4.36 years, the survey reported. That finding lines up well with similar surveys.

Companies aren’t cutting IT. Last year, 65% of the firms responding to this survey said their budgets would be equal or greater to the previous year. That increased to 83% this year, and 85% of the respondents said next year’s budgets would be equal or better than their current budgets.

Although the timing of this report was before the stock market’s August-September swoon, Luftman believes that respondents weren’t necessarily optimistic about the economy. “Nobody is confident that the economy is turned around,” he said.

The top management concern, according to the survey, is business alignment; the last concern, in the list of 10, is IT cost reduction. The reason IT cost reduction is such a low priority is that many companies are trying to leverage IT to reduce costs instead of cutting IT to save money, said Luftman.

The other IT priorities, in order, were business agility, business process management, IT strategic planning, IT reliability and efficiency, enterprise architecture, security and revenue-generating IT innovations.

Of the firms using offshore outsourcing, 58% had turned to Indian-based companies, with the next largest segment, China at 10%. That was followed by Mexico, 7%; Western Europe, 6%; and Eastern Europe, Philippines and the Caribbean, all tied at 4%. Russia and Brazil were tied at 3%, the survey said.

Source:http://www.computerworld.com/s/article/9220476/Two_thirds_of_U.S._tech_firms_send_jobs_offshore_survey_shows

India seems to be an emerging hub of Custom application development of the world. Software development India is widely known for their best quality of service. With the development of the internet, many new areas in web application development have been opened in India to offer the best for clients at the best rates without compromising on quality.

Custom application development is simply a procedure that allows businesses to benefits from latest technology to make business process more efficient and functional. It allows you to have all the features you need and request for your business. There are various custom Software Development Companies in India that are committed to offer top quality Custom application product development solutions according to your needs and budget.

India has emerged as one of the top destinations for offshore software development due to various factors:-
1. Provides cost-effective & high quality business
2. Offers specialized technical skills & experienced expertise in various domains
3. Focus on its competencies & time

Outsourcing software Development India is popular destination of every company who outsource their works because of quality work and talent. India is a key player of such outsourcing product services in IT industry and most popular place because of their work commitment and quality work which they deliver in affordable and cheapest prices. Software development India gives us feasibility to develop software as per customer’s requirement, it’s as simple method as difficult to understand requirement, we first have to understand complete requirement of customers. Furthermore, customized applications are planned and executed by making use of the latest technology. They are exclusively developed according to current market needs without costing huge money.

Some important guidelines on choosing the right software development company India for best offshore services:-
1. It is necessary to know a company’s credentials and authenticity in the market. Check the testimonials and portfolio of a company along with its business goals, achievements and market reputation of the service provider before you enter into a business alliance.
2. Rich and wide experience in complete SDLC/SWDLC.
3. Questions related to communication, budget, support and timing can also be asked.
4. Identify Your Needs and fulfills your business requirements.

Source:http://stockmarketsreview.com/pressrelease/2011/10/03/choose-software-development-india-for-offshore-best-services/

Offshore outsourcing is expected to reach dizzying new heights, according to a report by analysts at Ovum.

It expects revenues will be as high as $93.4 billion in 2015, thanks to emerging superpowers like India and China waking up to the money in the business. Ovum expects a compound annual growth rate of 5.4 percent from $71.92 billion in 2010.

Although it calls it business process outsourcing, make no mistake – it means big manufacturing contracting. The reason for the growth is thanks to the looming threat of that double-dip buzzword and the grim spectre of recession refusing to leave the building. Businesses have noticed that, in order to keep competitive, they have to lower costs at every level, and outsourcing means a lot less pressure on a company’s workforce.

Outsourcing is not just popular in manufacturing, but gaining grounds in human resources, engineering design and R&D. It’s just like ARM says – outsourcing is penned in as the way forward for companies to cut costs as well as being able to pick and choose exactly how their company is run. If a contractor doesn’t please, onto the next one.

The analyst house reckons the enterprise has found tying itself into single-vendor deals is a bit like shooting itself in the foot, and is instead spreading investments across the sectors. The small and medium sized enterprise, in particular, is driving a lot of demand because there are very scalable options available for a relatively low price.

Ovum believes there is a market, too, in North America and the UK and Ireland which will see some growth. The compound annual growth rate is a little slower but it is there, at 2.7 percent and 4.1 percent respectively. North America’s slow growth is because of how long it has been in the market, with enterprises starting their offshoring projects decades ago, Ovum says.

Source:http://news.techeye.net/business/offshore-outsourcing-ready-for-boom

Pulse Structural Monitoring will release three new software modules for its DrillASSURE package at Offshore Europe in Aberdeen, UK, Sept. 6-8.

Developed in conjunction with 2H Offshore, the interfaces are designed to help operators and contractors optimize the usage of their drill joint inventory, identify optimum operating windows and drill within safe parameters by constantly analyzing conditions in real time.

DrillJOINT is a complete inventory detailing the location, availability, technical specification, previous usage and maintenance history of the owner’s drill joints. Using this software, an operator or contractor can source riser joints and assemble a robust drilling stack on screen prior to drilling, saving time and ensuring optimum safety and efficiency throughout the campaign.

DrillWINDOW offers pre-drilling analysis of static and dynamic operating windows and hang-off envelopes. The user inputs known environmental data, such as wave height, current velocity and mud density, then the software evaluates these against approved safety margins to calculate the fatigue life of the drill stack.

DrillADVISE calculates parameters such as vessel position, flex joint angles and environmental conditions, then presents easily interpretable data in real time to guide the user on proceeding safely and efficiently. Feedback is presented in a simple traffic-light format – green shows all parameters are within thresholds, amber indicates caution or corrective action are required, while red is an instruction to disconnect immediately.

Source:http://www.offshore-mag.com/index/article-display/7388688873/articles/offshore/oe2011/offshore-europe__pulse.html

The President’s recent focus on job creation is on target with 15-20 million Americans currently out of work. His bus tour earlier this month was well timed and the President said a great many powerful and logical things to an important group of voters. He has finally latched on to the single most important topic facing America today. Unemployment. However his job creation efforts are facing some very strong headwinds. Case in point: Thousands of federal, state, and local governments are shedding jobs because of budget shortfalls and the private sector continues to expand the practice of offshore outsourcing. In essence, while President Obama helps to promote jobs coming in the front-door, the private sector continues to outsource jobs through the back-door.

Job Losses: Government & Information Technology

By most estimates America lost over 1 million IT jobs since 2000, which was due in a large part to offshore outsourcing. In addition, federal state, and local entities have reduced their payrolls by approximately 500,000 to 750,000 since the start of the financial crisis. With a Federal deficit projected to be around 1.3 trillion dollars for 2012, it is not likely that Washington will go on a hiring spree any time soon. In addition, the states are projected to have a 125 billion shortfall over this time period and expected to hemorrhage 15,000-25,000 jobs per-month over the next 12-24 months.

IT Jobs & India

The sad fact remains that American companies are accelerating their use of offshore outsourcing to places like India while millions of Americans remain unemployed. However, Washington can make important changes by imposing a tax on companies who fire American workers and replace them with foreign hires. Washington could impose a tax on the company outsourcing an American job, which carries with it a one-time charge of one year’s salary of the employee. For example, if a Java programmer on Wall Street making $55,000 was replaced by a person in Mumbai, then the company would be required to pay an up-front fee of $55,000 to the Federal government. The new tax would help to slow down this practice, while adding needed dollars to the Federal coffer. Why should Washington continue to allow private companies to give domestic jobs to foreign workers, or move them to foreign nations? There is little question that a strong lobby group hired by the outsourcing companies has had a great deal to do with it, but now with the 2012 Presidential Election coming up, it could be an excellent political topic to run with.

Presidential candidates from both parties have an excellent opportunity to bring the outsourcing topic into focus from now until November 6, 2012. While many consider it a political football, it will no doubt spark voter interest. Bottom line, it is time for Washington, both Democrats & Republicans to act and not turn a blind eye to this unfortunate practice.

Source:http://www.examiner.com/jobs-in-washington-dc/washington-conflict-creating-jobs-offshore-outsourcing

Dispute resolution is always an important consideration when outsourcing IT. If that fails, however, you can always sue if your provider has breached the contract.

“Yes, you can litigate,” says Edward Hansen, partner with law firm Baker & McKenzie. “But you probably shouldn’t.”

Outsourcing lawsuits are notoriously difficult to prosecute, can create such a distraction that it puts the organization at operational risk, and rarely benefits either party in the long term. Offshore outsourcing litigation is even more complicated.

“Sometimes, however, litigation is necessary to resolve outsourcing disputes when all other reasonable or contractually obligated means of solving the problems in the business relationship have been exhausted,” says Shawn C. Helms, attorney in the technology transactions and outsourcing practice at Jones Day.

How do you know if it’s time to take your offshore outsourcing provider to court? Ask these six questions first.

1. What is the nature of the dispute? “There is a huge difference between discussing litigation in the context of a vendor who is underperforming versus one who has been negligent or violated a trust,” says Hansen. “For example, breaching the privacy provisions of an agreement is very different from failing to deliver on transformational savings.”

A well-drafted contract will contain remedies for a privacy violation. Underperformance can be murkier. There may be something about the underlying economics of the deal that encourage bad performance, says Hansen, or you may have chosen the wrong partner. In either case, litigation is unlikely to solve your problems.

2. Do you have informal dispute resolution processes at your disposal? “A good contract will provide many alternatives to a suit,” says Brad Peterson, partner in the business and technology sourcing practice of Mayer Brown. Look for dispute resolution provisions within your deal’s project management or governance mechanisms.

In addition, most contracts will layout “mandatory, mandatory, detailed, multilayered and gradually escalating dispute resolution processes,” says Shawn C. Helms, an associate with law firm Jones Day, starting with informal dispute resolution procedures all the way up through litigation. “Most outsourcing disputes are resolved confidentially through out-of-court settlements so that service providers can protect their business interests and customers can maintain an ongoing relationship with the service provider.”

3. Can you withhold payment? Customers may seek to use financial leverage to right a wrong. Some contracts will contain a provision call “Right of Set-Off” or “Right to Withhold Disputed Payments.” These allow the customer to deduct from payments otherwise owed to the service provider amounts of money representing damages that the customer claims the service provider caused as a result of failing to perform its obligations under the contract.

“If the service provider disputes the amount of the deduction, it may be required by a forum selection clause in the contract to file a lawsuit in the U.S. to have a court resolve the dispute, or it may be required by an arbitration provision to arbitrate the dispute in the U.S.,” explains Robert Kriss, a partner and litigator at Mayer Brown. “In the meantime, the customer holds onto the disputed amount or deposits it in an escrow account, depending upon the terms of the contract.”

4. Do you have a binding arbitration clause in your contract? A well-written deal will contain a provision obligating parties to arbitrate any disagreements through a neutral arbitration body such as the American Arbitration Association or the International Chamber of Commerce. That becomes especially important with offshore outsourcing, says Helms, “because foreign courts are often more likely to enforce an arbitration ruling against a local provider than a ruling by a U.S. court.”

Many countries have agreed by treaty to enforce arbitrated judgments. Just make sure the arbitrating organization is one whose awards are enforceable in the country where the outsourcer’s assets are located.

5. Where is your offshore provider based? “You have to determine first how you would enforce a judgment,” says Kriss. “If the offshore outsourcer’s assets are located in a country that will not enforce judgments rendered by U.S. courts, then you will have to bring suit in the country where the assets are located. Indian courts, for example, will not directly enforce the U.S. judgments because the U.S. is not a “reciprocating territory” under Indian law. And pursuing litigation in India can be painful. “The Indian court system is infamously slow,” says Helms. And bringing a suit against a vendor in its own country may not be worth it anyway. “The outsourcer may have a home court advantage,” adds Peterson.

6. Is there money to collect? Should you decide to sue your provider, a court may decide in your favor, but you remain responsible for collecting your judgment. And there may be little money to chase. A court may decide in your favor, but it won’t collect the judgment for you. “Offshore outsourcing companies often have few assetsthey may be leasing their facilities and equipment and paying out cash to the owners as soon as it is received. The offshore outsourcing companies with assets may have those assets pledged to first-priority lien holders,” says Peterson. “Thus, even if the U.S.-based customer manages to get a judgment against the outsourcing company, there may be little or no cash to collect.”

Make sure your vendor is not what the legal community calls “judgment proof” before you look to the courts for restitution.

Source:http://www.networkworld.com/news/2011/082611-should-you-sue-your-offshore-250160.html?page=1

To those who know their IT outsourcing history, GE and offshoring are practically synonymous.

The colossal conglomerate—which Forbes named the third largest company in the world—first began offshoring IT and business processes to its own center in India in 1996. Even after spinning off its shared services division, renamed Genpact, in 2005, the offshoring pioneer has continued to aggressively pursue the costs benefits of outsourcing to third parties overseas. (GE maintains a minority stake in Genpact.)

But recently GE CEO Jeffrey Immelt has been touting the company’s plans to hire 1,100 technologists and researchers—not in Mumbai or Manilla—but in Van Buren Township, Michigan. In a recent interview with Bloomberg News, Charlene Begley, president and CEO of GE Home and Business Solutions and senior vice president and CIO, indicated that the offshore outsourcing model may have lost some of its luster for the $150 billion company.

“About 50 percent of the IT work was being done by non-GE employees,” Begley told Bloomberg News. “That strategy may have had its time, but there was a lot of downside. We lost a lot of the technical capabilities that we have to own.”

So is this trailblazer of the offshore outsourcing model reversing course? Not exactly, say outsourcing industry experts.

Hiring 1,100 technology workers is a large undertaking; if the company were outsourcing that many jobs to one provider, it would be considered a big deal. But GE employs 9,600 IT professionals in 40 countries around the world, according to Deia

Campanelli, global communications leader for GE-IT. The company also has 3,000 to 4,000 IT roles outsourced to India, according to Ben Trowbridge, CEO of outsourcing consultancy Alsbridge.

GE would not confirm how many of its IT positions are filled by third parties offshore, but Campanelli did say that the professionals it’s hiring to work at its Advanced Manufacturing and Software Technology Center will be filling new roles, not replacing the company’s offshore workforce.

“In a prior decade, GE’s strategic sourcing intent was to outsource 75 percent of their IT jobs and locate 75 percent of those jobs in India,” says Trowbridge. “Hiring 1,100 IT professionals to work outside Detroit represents an effort to balance the percentage of staff that is outsourced and offshored.”

David Rutchik, partner with outsourcing consultancy Pace Harmon, believes GE’s decision to recruit local IT workers points to its desire to bring architecture, product and program management, and other strategic roles in-house to drive differentiation in products and services.

GE, like many heavy users of offshore outsourcing, may have begun to suffer the limitations of the offshore model. “Speed to market, flexibility, leveraging of resources across the enterprise—without all the statements of work and red tape [that accompanies outsourcing]—is something that is hard to quantify until you’ve lost it,” says Adam Strichman, founder of outsourcing consultancy Sanda Partners. “The reality is that for IT to become a real differentiator in business, the personnel must be stakeholders of some kind.”

GE’s Economic and Political Motivations
GE’s stateside hiring is a sign of the economic times, says Phil Fersht, founder of outsourcing analyst firm HfS Research. “GE has always been willing to be innovative with their global operations,” Fersht says. “This move shows that their global operations management strategy is changing as wages in the US continue to fall, bringing something closer to parity with low-cost locations such as India. As arbitrage disappears, companies have to compete on quality and competency.”
In addition, notes Fersht, Michigan has been aggressive in offering incentives for employers to set up shop there.

The information technologists outside Detroit will help GE develop new manufacturing software and processes, says GE spokesperson Campanelli, from industry-specific diagnostic tools to new data architecture and IT security systems. Also working at GE’s Advanced Manufacturing and Software Technology Center will be scientists and engineers from GE’s global research group. They will be designing new technologies for everything from aircraft engines to renewable energy. The center marks “a significant investment in IT and in regaining some of the technical [intellectual property] we had outsourced in the past,” says Campanelli. “It also marked a commitment to bring 1,100 jobs to hard-hit Michigan.”

So far, the center has 660 employees, and GE says it’s averaging two new hires a day.
It’s certainly good PR for the company and its CEO, who happens to be the head of President Barack Obama’s Jobs and Competitiveness Council and has taken heat for occupying that seat even as his company outsources thousands of jobs offshore. But no Fortune 500 CEO today can afford to simply play politics when making job location decisions.

“All business is guided by some sort of direct or indirect political pressure. This is certainly impacted by the current high unemployment numbers,” says Fersht. “[But] GE will have to do what is best for the clients and be careful to create the right numbers of jobs in the US to accomplish their mission.”
More Companies Will Look to Create IT Jobs in the U.S.

The move could inspire other big users of offshore talent to rethink their sourcing strategy, says Trowbridge. “It is no longer a simple decision driven by massively cheaper India labor costs,” he says. “CIOs today need to take into account the location, configuration and the scope of work they need to be able to provide for their clients.”

Many CIOs are “fed up” with their own overreliance on offshore support, says Fersht. “I think you can expect to see more companies finding ways to create IT jobs in the US&and some activity moving work to locations such as Mexico, Argentina and Brazil, but it’s still on a small scale.”

Low-cost, rural locations are also growing more attractive to American CIOs due to high unemployment rates and an increased interest in supporting U.S. job creation, says Rutchik.

It’s unlikely, however, that GE or any other early adopter of offshoring, will bring the entire IT function back in-house or even onshore. “While this is a bold move from GE, I think you will see GE continue to be a heavy offshorer,” says Fersht. “GE has made a lot of money over the years since it pioneered the outsourcing concept, and I don’t think it wants to see operating margins decrease.”

Meanwhile, notes Rutchik, CIOs in industries that are newer to offshoring—such as healthcare and retail—are increasing their investment in overseas deals. Should the U.S. fall into another recession, adds Fersht, many companies may maintain or increase their offshore presence in order to cut costs.

Above all else, GE’s move may be a milestone in the maturation of the offshore model. “Clients have gotten a lot smarter about outsourcing over the last 15 years, and GE is probably smarter than most,” says Strichman. “The reality is that a more targeted approach to offshoring makes sense. It is about optimizing for strategic imperatives, not just optimizing around lowest cost.”

Source:http://www.cio.com/article/688326/Offshore_Outsourcing_Pioneer_GE_to_Hire_1_100_American_IT_Workers?page=1&taxonomyId=3195

Companies are increasingly turning their attention towards offshore outsourced IT, recent research revealed.

Some 50 per cent of chief information officers (CIOs) will be boosting their spend on offshore IT support services this year, compared to just 20 per cent last year, according to the latest Harvey Nash and PA Consulting survey, published by ComputerWeekly.

The majority of CIOs will choose to outsource their IT to India, which has seen its popularity as a managed services destination rise over the past year.

However, Brazil, China, Malaysia, the Philippines, Russia and Vietnam are also making their mark on the outsourced IT market now as well, the research showed.

Companies are increasingly under pressure to reduce their costs and they need access to a wider skillbase, which is why outsourced IT is experiencing such a boom, the survey found.

Recent documents obtained by the BBC revealed that the UK government will not be moving as much of its IT services from the public to private sector as was originally planned.

The government reportedly plans to scale back on its outsourcing plans.

Source:http://www.codestone.net/news/story/offshore-outsourcing-is-growing-trend/800547591/

U.S. insurers are becoming increasingly reliant on business process outsourcing providers, a new study from Boston-based Celent finds.

Celent anticipates a combined annual growth rate of 10% in the North American core insurance BPO market, with insurer expenditures growing from an estimated $2.3 billion in 2011 to $3.7 billion by 2016.

The report, authored by Celent Senior Analyst Mike Fitzgerald and Analyst Karen Monks, also expects that BPO revenue growth in life/annuity/health sector will be slightly higher than the P&C industry given the larger average deal size in that sector.

The new report augments finding from a November 2010 survey of insurers by Celent which found that 49% of respondents expected their company’s use of BPO to remain level in 2011, while 36% expected it to increase.

Fitzgerald and Monks note that BPO activity has most frequently been seen in non-core processes such as claims management, customer service, billing and payments, and imaging. However, in light of the budget restrictions faced by insurers following the financial crisis, they may be begrudgingly acquiescing to the use of BPO in more core insurance functions.

“It was expected that the economic events of 2008 through 2010 would force many insurers to rethink their views on business process outsourcing,” the report states. “As cost containment became a mandate and insurers looked for ways to manage costs, business process outsourcing experienced growth over the past two years, but adoption of BPO by insurers for core insurance services progressed at a slower rate than expected in North America.”

The authors predict that as insurers slowly use BPO for more core functions, BPO providers will have to adapt.

“BPO vendors will continue to expand their onshore and nearshore operations in response to customer/prospect demand, particularly for processes requiring customer-facing voice support,” Fitzgerald and Monks state. “As outsourcing of core functions expands, Celent expects they will be managed onshore. Every vendor interviewed reported some level of capability in this area. Political pressure and tax policy in the United States accelerated a “mixed shore” model in some instances, but cost pressures will still require that back office functions are processed offshore.”

Source:http://www.insurancenetworking.com/news/insurance_technology_business_process_outsourcing-27944-1.html

The Indian government has finally taken a step toward creating a comprehensive set of data protection rules to safeguard privacy, but the proposed regulations released this spring are likely to have a major impact on the global enterprises doing business with Indian outsourcers.

The draft regulations, which deal with the protection of personal information, are more stringent than either the Gramm-Leach-Bliley Act in the U.S. or the EU Directive in Europe and would create new requirements for companies that outsource to service providers in India or maintain their own operations there, say Miriam H. Wugmeister, partner in the law firm Morrison Foerster and Cynthia J. Rich, senior international policy analyst with the firm.

“Given all the personally identifying information, confidential information, and sensitive data collected by organizations, both purely online and in the course of doing business, it was about time that the Indian government took action to update its policy,” says Tony Filippone, research vice president with outsourcing analyst firm HfS Research. He notes that India’s privacy legislation has remained largely unchanged for more than 100 years.

The entire offshore outsourcing industry has been slow to protect personal data, says David Rutchik, partner in outsourcing consultancy Pace Harmon. Offshore outsourcing companies’ lack of urgency around data protection has created a lot of uncertainty for outsourcing customers. (For more on China’s draft data privacy regulations, read IT Outsourcing in China: What CIOs Need to Know About New Data Privacy Guidelines.)

The new rules are intended to showcase a new commitment by India to rigorously protect data, but they could dampen offshore outsourcing business. Most notably, prior written consent will be required-without exception-to collect and use sensitive data about Indian citizens and about any person who’s personal information is collected within the country.

The specifics and timing of implementation and enforcement have not been clarified-and may not be for some time, “which puts every outsourcing client in limbo in the interim period,” Filippone says. Companies with operations or data in India should take the following seven steps to prepare for possible implications.

1. Review current data protection policies and procedures. What data is being captured and stored in India? What opt-in or opt-out policies are in place? Document all existing internal rules.

2. Create a response team. Identify who would be involved with defining and implementing a response to India’s privacy act once the details are clarified, says Stan Lepeak, director of research in KPMG’s shared services and outsourcing advisory group. Team members might include CIO, legal counsel, outsourcing governance teams, and external consultants.

3. Take a closer look at customer-facing activities in India. Processes like order entry, customer service, collections, and outbound sales will be hardest hit if the new privacy law is enacted. “[Companies] will need to secure prior written consent from customers prior to collecting personal data over the phone, and even then, sensitive personal data won’t be permitted to be shared unless it is deemed necessary,” says Rutchik. “These types of issues may significantly impede an enterprise’s ability to properly and efficiently interact with its customer base.”

4. Consider the impact on IT’s internal customers. Little notification is given to employees regarding collection and use of their personal data, even though systems supporting human resources, payroll, and help desk operations all contain sensitive personal data that could fall under the new privacy regulations. “I doubt every organization makes notifications to employees or writes privacy policies to include employee data so some back office operations are likely exposed to risk under this law,” says Filippone.

5. Get on the same page with providers. Review all data protection policies and procedures in your offshore outsourcing contracts. “Obtain the service provider’s interpretation of the act and have the providers explain how they plan to respond to the act’s requirements,” says Lepeak.

6. Prepare for increased standardization.”With these new regulations in place, offshore providers will likely become more rigid in how they operate and more reluctant to tailor their processes to meet customer needs,” says Rutchik. “These restrictions could, in fact, make offshore providers less attractive as a result.”

7. Protect yourself. IT outsourcing vendors may seek to impose data security obligations on their customers to ensure that the customer complies with Indian law, say Wugmeister and Rich. “The new regulations may begin showing up in offshore outsourcing contracts as enterprises will want to be indemnified from specific actions by offshore providers,” Rutchik says.

Source:http://www.itworld.com/business/164977/offshoring-preparing-indias-proposed-privacy-rules

Cognizant is the final IT services firm in India’s top five to reveal a return to stability in spending among global corporations.

The IT services company announced a 43% increase in sales for its latest three-month period, compared to the same quarter last year. It reported a 4.6% increase compared with the previous quarter.

Cognizant completed $1.37bn sales and made $208.3m profit.

Although a US-listed company, Cognizant – which has most its staff in India – is widely considered an Indian player. The results are another indication businesses are spending on IT services again after a recent slowdown.

Its results echo those of the other major Indian suppliers. Infosys, HCL, TCS and Wipro have all announced results showing significant growth in the last quarter, compared with the year before, with steadier growth compared with the preceding three month period.

Cognizant also joined other Indian players in increasing the size of its workforce. It added 7,200 workers in the last quarter and now has a total of 111,000.

Source:http://www.computerweekly.com/Articles/2011/05/05/246591/Cognizant-joins-offshore-IT-services-firms-in-return-to-stable.htm

OK, if that first sentence meant nothing to you, make sure to check out this YouTube clip of one of the more famous scenes from the hit television show South Park. What does this South Park clip have to do with supply chains, you’re wondering?

According to a report in the Wall Street Journal, new data from the U.S. Commerce Department shows that multinational corporations in the United States trimmed their domestic workforce by nearly three million jobs during the last decade.

Where are all the jobs going? According to the Commerce Department, they’re moving overseas in a massive offshore outsourcing fad. Of the 2.9 million jobs lost over the past decade domestically, the same multinational corporations have increased their overseas workforce by 2.4 million.

This offshore outsourcing trend doesn’t look to be slowing down, either. U.S. multinational corporations employed 21.1 million people in the United States last year and 10.3 million people outside the country in 2009, and that number figures to increase as more and more jobs are outsourced as large U.S. multinational corporations continue to look for ways to trim the budget.

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The current outsourcing trend from the U.S. multinational corporations is a stark contrast from the trends in the late 1990s, when the same multinational corporations were focused on creating more domestic jobs rather than outsourcing overseas.

According to the chart seen here, the U.S. has cut domestic jobs in almost every year from 2001-2009. Over the same time frame, offshore outsourced jobs from these multinational U.S. corporations grew in each year, save for a slight decrease from 2008 to 2009.

Therein lies the hope for domestic U.S. workers who are looking for work. The curve from the chart looks to show that the offshore outsourcing fad is fading, and could start a downhill trend over the next decade.

If that’s not the case, domestic U.S. workers will have to stick to a familiar mantra.

Source:http://www.supplychaindigital.com/sectors/outsourcing/us-offshore-outsourcing-trend-continues

Setting up offshore IT services and business services subsidiaries has once again become a preferred route for multinational companies wanting to tap talent in low-cost locations, analysts said. The subsidiaries are known in the outsourcing industry as “captive centers” because they meet the in-house services requirements of companies.
The focus of these centers has shifted from mere cost-cutting to innovative development and building deep business expertise which local outsourcers are not always able to provide, according to a report this week by Forrester Research. Companies are adopting a hybrid model for offshoring that combines captive centers with outsourcing to local service providers, it added.

Captive centers continue to be a key element of the global sourcing strategy of organizations, according to Everest Group. Some 62 new captive centers were set up and 70 existing facilities were expanded in 2010, up from 47 new centers and 67 expansions in 2009, Everest said. These centers came up mainly in Asia, it said.

When companies like Citigroup and UBS started selling off their BPO and IT services operations in India in 2008 and 2009, it appeared that companies were increasingly going to pull out of offshore IT and BPO operations, and outsource their work to third-party providers, as they focused on their core business.

In 2008 and 2009, 25 services subsidiaries were sold off, according to Everest.

Forrester said in a report in 2007 that the majority of the reasons firms cite for building their own facility offshore instead of outsourcing to a third party are flawed. As a result of lack of management support, spiraling costs, skyrocketing staff attrition, and a lack of integration, more than 60 percent of the captive centers in India alone were struggling, it added.

In 2007, the analyst predicted that some captive operations would close down or sell out, while others would enter into agreements with service providers to take over their staff in return for work. Some companies with captive centers would however look at a hybrid model that included both captive centers and outsourcing to third-party providers.

Interest in setting up captives had never decreased, and after the divestments in 2009, there were far fewer companies selling off their offshore subsidiaries, said Amneet Singh , vice president for global sourcing at Everest. Companies were looking to monetize their earlier investments in captive operations to raise cash during the economic recession, but they did not sell out all their captive operations, Singh said.

Companies that tried outsourcing to third-party outsourcers in the mid-2000s also found that outsourcers were spread too thin across vertical markets, and as a result their business expertise was still not deep enough to advise their clients on specific industry challenges, Forrester said in its report this week.

The vendor’s leadership teams close to the customers’ operations have been more focused on selling rather than on building deep relationships. As the vendor’s onshore leadership teams aren’t trusted advisors, customers won’t reveal their key strategies and initiatives to them, Forrester said.
The new hybrid models that combine captive centers with outsourcing to third-party providers are now allowing for the best of both worlds, said Jan Erik Aase , principal analyst at Forrester, and a co-author of the new report on captive centers. People are now more willing and able to make captive centers work, he added.
The setting up of new captive centers, and expansion of existing ones, will happen in multiple markets and will often be driven by the opportunity for companies to push their products and services in those markets, Aase said. The captive center has the skills in-house to hire staff, and knowledge of the market it operates it, making it more suitable for launching domestic sales operations, Singh said.

Customers’ need for control and confidentiality around their core IT platforms, algorithms, and business processes has also influenced their decision to have a hybrid model, Singh said. Offshore outsourcers tend to do work for a number of customers in the same industry, such as financial services, which tends to put off clients who want to do business critical work in offshore locations, he said.

As a result companies focus on core business processes and software development in their captive center, while outsourcing some of the work that is not considered critical such as call centers and software maintenance, Singh said. Having a captive center in the country also gives the company better control over the supplier, he added.

The nature of the captive center is also changing, according to Forrester. By positioning more senior technology leadership within the captive center, companies ensure better alignment with corporate headquarters and better control of technology initiatives within the captive center and at the offshore vendor’s centers, it added.

Source:http://www.networkworld.com/news/2011/042011-offshore-it-and-bpo-services.html?hpg1=bn

StanCorp Financial Group quietly notified employees in recent weeks that it is considering outsourcing a portion of its 350-employee information technology division.

The Portland insurance company has already decided to eliminate eight backshop technology jobs and farm out those chores to an IBM subsidiary in India. Over the next two to four months, StanCorp will make the call on the rest of the jobs, said company spokesman Bob Speltz.

Speltz added that it’s highly unlikely the company will outsource all of the remaining positions.

“Our core business is not IT,” Speltz said. “It’s insurance and financial services. The company has had to make some very difficult decisions to ensure our long-term viability.”

StanCorp earned $189 million in 2010 on revenue of $2.76 billion, continuing a solid run of strong profits barely impacted by the recession.

Yet, many corporate chiefs feel that to remain competitive they have no choice but to tap highly skilled overseas workers in places like India and China. Rich Pierce, who runs a Beaverton IT staffing and software development company, said the going rate for experienced software developers and IT workers is $52-an-hour in the U.S. vs. $10-$12-an-hour in Vietnam.

Pierce, of CorSource Technology Group in Beaverton, predicted outsourcing jobs, even high-skill computer jobs, is a trend that is here to stay. “If it can be done better, cheaper and more efficiently, and the technology and trust is there, it’s going to happen,” he said.

Workers in the insurer’s information technology department manage all the behind-the-scenes digital operations that help the business to function, from writing code for its IBM mainframe to keeping the company’s network of PCs functioning properly.

In September, trucking company Con-Way eliminated 200 administrative and IT jobs at its Northwest Portland offices and outsourced them to domestic and Indian contractors.

Outsourcing has long been a hot-button issue in the debate over globalization. Defenders argue that outsourcing is, on balance, a positive trend. Corporations save money, boost profits and theoretically invest that money in other pursuits that create jobs.

Meanwhile, young overseas technology workers get good jobs, helping build a new middle class that will buy American goods.

But the benefits of moving American jobs overseas is hard to accept for the newly unemployed.

Mitch Bessie started working as a programmer at International Game Technology in Corvallis in August 2008. Bessie and his 56 co-workers spent much of the next 18 months training 150 Chinese colleagues from IGT’s new Beijing office.

In January 2010, IGT announced that it was closing the Corvallis office and moving the work to Beijing.

“It’s the old cliche, the race to the bottom,” said Bessie, who has moved to the Portland area and is still looking for a job. “I’ve lived through it directly. I’ve seen it happen to my brother, my friends. I hope it bottoms out soon.”

Early proponents of outsourcing argued that it made sense to farm out difficult, low-paying factory jobs to overseas subcontractors while U.S. companies kept hold of the higher-paying, design, marketing and executive jobs.

But over the years, the emerging countries have successfully gotten high-skill manufacturing jobs as well as service-sector jobs.

In 2007, personal computer maker Dell rocked Roseburg when without warning it shuttered a 225-employee call center, the city’s fourth-largest employer. The company said at the time that disappointing sales had forced the decision. Stamoulis claims Dell moved the jobs to El Salvador.

Boston-based consultancy Forrester estimates that 400,000 service jobs have been lost to offshoring since 2000.

The U.S. Department of Labor has certified more than 50,000 lost jobs in Oregon due to trade since the passage of the North American Free Trade Act in 1994, said Arthur Stamoulis, of the Oregon Fair Trade Campaign, a non-profit group backed by labor, environmental and human rights groups. That number includes positions that have been outsourced or jobs simply lost as local companies succumb to foreign competition.

StanCorp is the largest private employer in downtown Portland. As of Dec. 31, 2010, the company employed 3,091 full-time employees, 78 percent of them in the city.

Regardless of how many IT jobs it ultimately relocates, “Portland is still a net winner in jobs,” Speltz said. The company’s strong earnings has allowed the creation of 435 new jobs between 2005 and 2009.

The eight jobs Stancorp has already decided to outsource are software development positions on the company’s IBM mainframe computer. Speltz said it is difficult these days to find Americans interested in and familiar with mainframe technology and its relatively ancient COBOL programming language.

Nevertheless, the company’s plans have left company workers unsettled about the future.

“The news has been difficult for employees, but we think that telling them was the right thing to do,” Speltz said. “We know that people are upset and concerned. They wonder what this means for them.”

Source:http://www.oregonlive.com/business/index.ssf/2011/03/stancorp_considers_moving_it_o.html