Posts Tagged ‘Outsource’

Indian Outsourcers Hope Budget Will Help Them Evolve

July 11th, 2014

India’s booming software services and outsourcing industry is hoping Thursday’s budget will give it the tools and tax incentives it needs to graduate from being just a big pool of inexpensive telemarketers and programmers.Outsourcing14

New Delhi needs to get behind the country’s biggest success story by committing  government money to rebranding the $110 billion outsourcing technology services industry as an innovation hub rather than just a cost arbitrage center, said Krishnakumar Natarajan, the chief executive of Indian software exporter Mindtree Ltd.

“For 20 years we were the back office of the world. I think we need to change from that to becoming the innovation hub,” said Mr. Natarajan, who was previously the chairman of India’s main software trade body the National Association for Software and Services Companies.

The future growth drivers for the industry will be high-end, high-margin businesses such as big data, analytics, cloud services and consulting, which many industry representatives say require a new kind of Indian company and a different nurturing environment.

Mr. Natarajan expects the government to create a technology investment fund of 10 billion rupees ($167 million) to 50 billion rupees to help support startups.

Nasscom president R. Chandrashekhar expects the government to announce an India Technology Entrepreneurship Mission which will support startups and simplifies the rules to set up business in India.

The organization also expects the government to announce measures to streamline the process of procuring technology products and services.


Top five reasons for IT directors to outsource IT services

September 26th, 2013

This article was written by Mark Walker, Business Development Director at Ubertas


Fear of surrendering control is probably the main factor holding many IT directors back from realising the benefits of outsourcing some IT services – or even their entire application or database management infrastructure.


But if you can find an IT services supplier who will work with you in a genuine partnership, understanding the specific needs of your business, it soon becomes clear that this fear is misplaced. It is perfectly possible to retain your strategic power while outsourcing the fundamental and mundane elements of your IT service and support. And in doing so, you can generate a host of business benefits.


The top 10 benefits of outsourcing


  1. Reduced service and support costs within a managed and predictable budget.

  2. Better quality of service, fewer IT failures and less downtime – thanks to well-defined SLAs.

  3. Access to the latest applications without high up-front license costs.

  4. Access to accredited engineers, skills and technical expertise without having to train your own staff.

  5. Reduce the risk of employees leaving and taking their knowledge with them.

  6. Round-the-clock access to a help desk primed to resolve problems remotely and rapidly.

  7. Compliance with the latest regulations.

  8. Guaranteed data security at remote, hosted data centres.

  9. Real accountability via contracted commitments from a third party supplier partner that wants to keep your business, rather than reliance on an in-house group that is hard to pin down.

  10. Remove high IT staff costs from your balance sheet and run an opex budget instead.


For some time, there have been signs that IT directors in smaller enterprises are increasingly receptive to these benefits – and are even embracing them with greater agility than their global counterparts. A 2009 survey from Computer Economics suggested that 27% of businesses now outsource applications management, while 21% outsource database management.


According to Information Week, as this level of outsourcing gains credibility and trust among SMEs, the benefits quickly accumulate in terms of greater flexibility (particularly for companies that are growing rapidly); access to cost-effective expertise, techniques and programs; access to third-party resources such as the help desk, which liberates IT staff to focus on more productive business-focused activities; and the wider savings achieved by not having to invest in infrastructure and licenses.

Take email services as one example: Gartner estimates that outsourcing just this one application could save businesses with fewer than 300 employees a significant amount, because an outsourcing partner has the dedicated infrastructure to manage it at a much lower cost.


Here are five good reasons why you should think about outsourcing your IT services:


1.       You could save significant staff costs.

Not just on the recruitment and hiring front – and skilled people with strong application-based credentials don’t come cheap – but in the longer term. Why spend time and money training somebody to support a core business application, only to see them poached by another employer and taking their expensively-acquired skills with them? And why not liberate your in-house IT staff to focus on projects that add value to the business rather than spending their precious time on firefighting duty?

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2.       An outsourced call centre/help desk frees your resources.

Providing round-the-clock support for your users in-house is expensive. Depending on the size of your business, you might need a dedicated facility that is operated by key IT support staff and is a significant cost centre in terms of facilities management overheads. Even in a smaller IT operation, somebody – it might even be you – has to be on call outside office hours to provide IT support for an increasingly mobile workforce. Thanks to its greater economies of scale, a dynamic IT services partner should provide a superior help desk at a greatly reduced cost.

3.       You can save money all round – with the right outsourcing strategy and partner.

A good IT services partner will work with you to identify the pressure points at which it makes sense for you to outsource aspects of your IT service and support. These can vary tremendously from one business to another, as consultancy points out. But they could depend on the number of employees who need support and to what degree, the number of devices involved, the types of applications that you use, the ratio of employees using office space to remote workers, and even your geographic location when it comes to the price of on-site support. These are complex calculations that deserve patient analysis.

4.       Your business will be more flexible in its use and consumption of IT services.

Infrastructure is expensive. Why invest in servers, complex networks and other hardware, just to deliver vital but everyday applications to your users, when you can have those applications managed and distributed as a service direct to the desktop without the expense of hardware maintenance? Because your applications are being managed and hosted by a third-party, they can be scaled up or down to meet fluctuating demand – and your costs will be more tightly controlled as a result.


5.       Peace of mind.

Why let worries about more complex issues such as data security or disaster recovery keep you awake at night, when they can be managed and supported by a third-party who has all the necessary expertise and infrastructure to meet your security and business continuity requirements? Yes, they are important – but by choosing the right partner to provide relevant support services, you are prioritising them rather than allowing them to become distractions that need constant attention from your in-house IT team.


This is the key to getting your relationship with your IT services supplier off to the best start – and making sure you realise the business benefits that you have in mind. And it starts long before the contract is signed.

As Forrester analyst Wolfgang Benkel says in his useful report, Negotiate a Successful  IT Service Outsourcing Contract, ‘Renegotiating during an existing outsourcing relationship requires time and effort, decreases agility, and is always based on less competition, which influences the provider’s motivation and the price.’

In other words, you’ll get more bang from your buck – and keep a tight hold of your IT service strategy – if you decide what you want from your contract before you choose your supplier.

Matching goals

Combine your goals with an IT service partner who has the vision to match them and deliver the latest service desk technologies, provide you with complete visibility of the way your service strategy is performing – including measurable indications of performance quality – and you’ll soon become part of the rising tide of SMEs that are living proof of the benefits of outsourcing.


  • Outsourcing IT services does not mean all or nothing.

  • Fear of surrendering control is the main factor holding many IT directors back from outsourcing IT services ‒ but you can keep control if you wish.

  • You can deliver genuine benefits to your business by outsourcing IT services if you negotiate service levels that are customised to your company.

Top Brit biz giants love to outsource IT so much, they’re gonna do it more

August 8th, 2013

Most UK businesses involved in outsourcing IT are planning to either increase or maintain the current levels to which they outsource, according to a new survey.

A survey of more than 230 of highest spending UK businesses on IT by Whitelane Research revealed that more than a third of those businesses are planning to increase the amount of IT outsourcing they do.

“The results show that 37 per cent of participating companies will continue to outsource more while another 37 per cent indicate that there will be no change in their outsourcing activities,” a Whitelane statement said. “Whitelane’s study reveals that 13 per cent of organisations are planning to insource (or outsource less).”

The promise of reducing costs is the main driver behind most businesses’ decisions to outsource IT, according to Whitelane’s survey. Of those organisations surveyed, 85 per cent said they were satisfied with their outsourcing contract, although 22 per cent of businesses said they had not renewed at least one contract with incumbent suppliers in the past year, Whitelane said. Almost half of the businesses surveyed said they had renegotiated contracts with IT suppliers in the last 12 months and more than 80 per cent reported that they were “successfully able to achieve cost reductions and better terms and conditions” as a result.

Last month IT contracts expert Iain Monaghan of Pinsent Masons, the law firm behind, said that IT buyers should not feel they cannot update existing agreements with suppliers.

“Contracts need to change to reflect customer circumstances, the economic environment and developments in technology,” Monaghan said. “That requires a degree of engagement between buyers and suppliers so buyers can keep suppliers informed of their business needs, and suppliers can best deliver services to their clients and inform them of the limits of what they can supply at the price customers are willing to pay.”

“Suppliers are less resistant to renegotiating existing contracts if buyers can show that there is a reason for change and that the change offers a new business opportunity to the supplier. This is why constant engagement with suppliers is important. The contract is meant to embody a relationship with the supplier,” he added.
Customers may feel locked in to contracts

IT and telecoms contract specialist Clive Seddon of Pinsent Masons recently said that well drafted outsourcing contracts can help smooth the process for renegotiations.

“Customers may feel locked in to contracts, but well drafted IT outsourcing contracts are designed in such a way that they allow both parties flexibility in recognition of changes that can arise during the course of the contractual relationship,” Seddon said.

“From the perspective of customers, renegotiations can be necessary to account for changes to their business, advancements in technology or because of economic pressures. Suppliers also need to be able to alter the way they deliver services and it is in the interest of buyers to offer an element of flexibility in this regard to ensure that they continue to receive the best value service.”

“There are several contractual mechanisms that can be used to trigger or promote renegotiation discussions, besides standard benchmarking of service delivery,” Seddon added.

Specialist in dispute resolution in the ICT sector David Barker of Pinsent Masons previously told that potential conflicts will arise with suppliers if the misalignment of business needs and the provision of IT services is allowed to drift.

“If poor alignment is not tackled promptly you can reach a point where relationships between businesses, the in-house IT community and third party suppliers become extremely strained,” Barker said. Barker said that the most effective renegotiations involve suppliers and customers to finding ‘win-win’ solutions, such as by enabling suppliers to sell, and customers to gain access to, new technology.


Pro’s & Con’s of Outsource Marketing

July 23rd, 2013

With so many companies and professionals offering a wide range of marketing services these days, it is very easy to outsource the marketing needs of your company.

Although outsourcing can provide many benefits, it may not be a suitable option for every company.

If you are wondering whether or not you should outsource your company’s marketing tasks, it is recommended that you spend some time considering the following pros and cons.

Pros of Outsourcing Your Marketing Functions

Outsourcing Reduces Costs

It may not be cost-effective to hire too many full-time employees, because you have to pay them the same salaries even when there is not much work to do.

Outsourcing your marketing tasks enables you to reduce the need to hire full-time employees and pay for only the specific services you need.

For instance, you can save a substantial amount of money by hiring a freelance blogger instead of a full-time writer. Most freelance bloggers charge their clients on a per-post basis, meaning they are paid according to the amount of work they deliver.

Provides Access to Specialized Marketing Expertise

There are many marketing channels that you can use to promote your products or services.

If you are planning to use several marketing channels, it may be a good idea to leave your marketing tasks in the hands of companies or individuals who have specialized knowledge on those channels.

Specialized marketing experts are able to determine which marketing strategies are most suitable for your company and choose the right combination of strategies to produce the best results possible.

Gives You a Fresh Marketing Perspective

Specializing in a certain niche can cause you to lose sight of the big picture.

After some time, you may find that your marketing strategies are no longer as effective as before.

Outsourcing your marketing functions can help you gain a fresh perspective on your brand identity and marketing plan. Companies and professionals who are not constantly doing work related to your niche can look at your marketing needs from a different perspective and come up with new approaches to inspire your target audience.

Cons of Outsourcing Your Marketing Functions

Risk of Hiring Unreliable or Incompetent Professionals

It is easy to find companies or professionals to handle your company’s marketing tasks, but there is no guarantee that you will get the results you want.

Some professionals may not be as competent or reliable as they claim to be, and they may produce low quality work, miss deadlines or even fail to deliver their assignments. If you wish to outsource your marketing needs, it is very important that you have a proper process for selecting the right professionals.

Jeopardize Relationship with Your Customers

Certain marketing tasks may require the companies or professionals you hire to communicate directly with your customers.

If they are not committed or well-trained enough to meet the expectations of your customers, they can cause your customers to feel alienated and damage the reputation of your company.

If you want to make outsourcing work for your company, you need to know how to strike the right balance between outsourcing and in-house marketing.


Nokia Cuts 300 Jobs, Outsources Up To 820 More To HCL And Tata To ‘Align IT With Its Business Focus’

January 17th, 2013

Here’s the cloud to Nokia’s silver lining statement the other day of better than expected handset sales: it is cutting IT 300 jobs, and outsourcing 850 more, with Indian outsourcing giants HCL and Tata Consultancy Services picking up the reigns for the latter. The newswas announced this morning by the company as it gears up to report Q1 results January 24.

Nokia says that these are part of a bigger set of cost reductions that it announced in June 2012. At the time it had announced it would lay of 10,000 people as part of that process.


Nokia says that these are the final layoffs related to that announcement. But that doesn’t mean that it’s finished cost cutting altogether; there may yet be further cuts as the company continues to reduce costs and downsize to fit the fact that it is no longer the world’s biggest handset maker, and that its device sales have, overall, declined significantly in the last several years. Nokia has in total laid off nearly 16,000 people in its mobile and location division since CEO Stephen Elop took over in 2010; it now has around 44,600 employees working in it.

There are small signs that Nokia is slowing turning things around: on January 10, the company released preliminary Q4 numbers that indicated that it had sold 4.4 million units of its new line of Lumia Windows Phone devices in the quarter, roughly twice the number of smartphones built on its legacy Symbian platform that it has slowly been phasing out of use. But given that the quarter covering Thanksgiving and Christmas is traditionally a strong period for handset makers, Nokia also warned of tough times in Q1 .

While June’s announcement referred to jobs in handset operations in Canada, German and its home market of Finland, today’s round of cuts is around the company’s IT operations, which are now being right-sized to the new remit of the company, Nokia says.

“Nokia believes these changes will increase operational efficiency and reduce operating costs, creating an IT organization appropriate for Nokia’s current size and scope,” the company writes in its statement. The majority of these cuts announced today will be in Finland.

As with those engineers and others that have already been cut from operations like Nokia’s now-outsourced Symbian mobile platform, and its abandoned MeeGo effort, IT employees, it says, will also be eligible for funds from its Bridge program — an incubator Nokia has created specifically for funding laid off workers’ ideas for new businesses. Employees get €25,000 to start, with the possibility of funding up to $185,000.


S’pore firms to outsource IT infrastructure

September 20th, 2012

Mr Smith: Security, flexibility, reliability are priorities for the financial sector when it comes to IT outsourcing.

Virtually all – 98 per cent – of Singapore’s IT decision makers will outsource the bulk of their IT infrastructure and move it to the cloud in the next five years, says hosted infrastructure solutions provider Savvis.

The prediction is based on a new study that the company, which is part of the CenturyLink group, commissioned research firm Vanson Bourne to do. And for the study, the latter conducted a survey – the fourth of such so far – of senior corporate IT decision-makers in Singapore, Hong Kong, Japan, the United States, United Kingdom and Germany.

Speaking to BizIT, Mark Smith, Savvis’ managing director for Asia, said Singapore IT leaders’ top three reasons for increasing outsourced infrastructure are: the need to choose operating expenditure over capital expenditure (58 per cent); to eliminate dependence on legacy infrastructures (56 per cent); and to gain transparency and control over cost models (52 per cent).

He said chief information officers (CIOs), who used to focus on minimising costs, now play a more strategic role in creating value for their business.

Although 92 per cent of Singapore respondents in the survey mentioned that the CIO makes the final decision to outsource infrastructure, 94 per cent said the vice-president/director of infrastructure influences the final decision to outsource infrastructure.

“Companies like Savvis can be partners to CIOs by taking charge of activities that they used to concentrate on in the past and allow them to focus resources on activities that provide competitive advantage to the business.

“Additionally, by partnering CIOs, Savvis helps create value for the businesses through improved agility, scalability and productivity. CIOs are beginning to understand that cloud computing helps gain efficiencies throughout the company and increases collaboration across the office.”

The study indicates that Singapore is leading the trend towards IT infrastructure outsourcing.

Organisations that still have most of their IT infrastructure in-house are in the minority (42 per cent) here. Globally, however, they remain in the majority (56 per cent).

Mr Smith said Singapore companies are among the first in the world in cloud adoption – and their willingness to improve and transform the way IT is managed has spurred Savvis to invest here.

The company announced in March the investment of US$100 million (S$122.35 million) in a second data centre (SG2) facility in Singapore.

Savvis will use this 53,000-square-foot facility, including 32,000 sq ft of raised floor space and IT capacity of 3.6 MW of power, to offer a full suite of enterprise-class colocation, managed hosting, cloud computing and network services.


Fujitsu nabs Perpetual IT outsource deal

September 3rd, 2012

Financial services firm Perpetual has signed a 5-year, $68 million deal with Fujitsu Australia for outsourced IT infrastructure and application services.

About 100 internal IT staff will be affected by the agreement “post full transition”, with only a “small retained IT team focused on governance and vendor management”, Perpetual said (pdf).

An undisclosed number of Perpetual’s IT staff have been offered work with Fujitsu.

“We have worked with Perpetual and they’ve advised us of a number of key personnel that are required, and we’re making those people offers of employment,” Fujitsu NSW general manager of sales Martin Clarke told CRN sister site iTnews.

It was unclear how many would be made redundant.

Perpetual told analysts today that it had adopted a new “take not make” approach to IT systems, and moved to make IT a “more variable cost base”.

The IT outsourcing agreement is to be executed in three stages.

Migration of infrastructure and applications to Fujitsu is to occur in the send half of FY13, with final transition and handover completed by the fourth quarter of that year.

A two-stage IT system simplification program of work is to follow in FY14.

Fujitsu’s Clarke told iTnews that while there would be some “lift-and-shift” of Perpetual’s existing environment into the outsourcer’s data centres, certain platforms had been earmarked for a more immediate transformation.

“As we start running the services there is transformation required of the existing environment,” he said.

“There are some environments that we will transform in situ, before we move them, there’s some which are lift-and-shift and some we’ll actually build a new environment for and sunset the [existing] platform.”

Clarke said Fujitsu “had an idea” which platforms were candidates for in situ transformation, but noted decisions were yet to be finalised.

Perpetual’s data would be migrated either over-the-wire or by being physically moved into the new data centre environment.

The outsourcing agreement followed a “formal evaluation of all … existing IT arrangements” that Perpetual kicked off in the second half of FY12.

Perpetual called a request for proposals to manage its IT infrastructure “including hardware, networks and application software”, it said in financial statements.

Aiming for 2015

The IT outsourcing agreement forms part of Perpetual’s Transformation 2015 strategy, which is primarily aimed at cutting costs.

Perpetual said at the unveiling of Transformation 2015 in June that it would see “around 580″ full-time equivalent roles cut by the end of FY13.

“The initial priority of the Transformation 2015 is to achieve a simpler, leaner and more efficient corporate structure and refocus the company on activities where Perpetual has a substantial competitive advantage,” CEO Geoff Lloyd said at the time.

The Fujitsu deal did not appear to be the end of outsourcing under Transformation 2015.

“The Group is also reviewing options to outsource its unit registry operations,” Perpetual said.


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