Posts Tagged ‘Outsourcing’

Study Predicts Further Growth of IT Outsourcing in the United Kingdom

July 3rd, 2015

A new study of IT outsourcing customers and contracts in the UK projects that demand for IT outsourcing services in the UK will grow, and shows that some service providers meet customer expectations more consistently than others. The study—conducted by Whitelane Research in collaboration with PA Consulting Group and published on June 11—surveyed top sourcing executives from 260 of the UK’s biggest consumers of IT services that hold more than 800 contracts with a collective value of more than £15 billion.Outsourcing26

Among other questions, respondents were asked to describe their company’s future IT outsourcing plans and to rate their satisfaction with their service providers.

Key findings from the study include:

69% of survey respondents reported that their companies will maintain or increase the IT services they receive from service providers, and 40% of respondents said that they intend to outsource more.

15% of respondents said that they will outsource less. According to the study’s authors, anecdotal evidence suggests that companies are selectively in-sourcing certain services, particularly customer interaction functions.

More than half of respondents are using (or intend to use) public cloud vendors such as Amazon, Rackspace, and SAP.

86% of respondents report satisfaction with their IT outsourcing service providers.

When asked for the key drivers of their needs for IT outsourcing, 68% of respondents cited a need for their companies to focus on core businesses. However, respondents also expressed the need for better resources or a business transformation more frequently than in past Whitelane Research studies on the UK (Whitelane annually conducts studies on the market for IT outsourcing in 14 European countries). More UK companies are looking to service providers to help drive change in their company’s business model, not just its IT services. Vassilis Serafeimidis, Head of IT Sourcing at PA Consulting Group, describes the heightened demand for business transformation through outsourced IT services as a move by customers toward “digital everything,” such as offering their customers seamless service across multiple channels, including mobile.

The study includes a point-system ranking of IT service providers based on customer satisfaction. According to the authors, some respondents expressed frustration with service provider shortcomings in innovation, proactivity, and ability to drive change—critical competencies in a business transformation. While choosing a service provider should always be a careful decision, companies that intend to rely heavily on outside providers (especially those that seek business transformations through IT outsourcing) should do their due diligence and consider the strengths and weaknesses of various providers. Serafeimidis suggests that price may not be the most important factor, depending upon the particular IT function(s) to be outsourced.

Of the various sectors of the IT outsourcing market studied, telecommunications companies were among the most maligned. However, the authors argue that customers may have “unrealistic expectations” of low prices, customized services, and service levels from providers of commoditized, large-scale IT services.


Sebi plans new outsourcing policy for exchanges, key entities

July 3rd, 2015

To safeguard capital markets from outside risks, regulator Sebi will soon issue a new set of guidelines to govern outsourcing by stock exchanges and other key entities in the marketplace.Outsourcing25

The new guidelines will ensure that exchanges, clearing corporations and depositories do not outsource their core and critical activities to third-parties, while they would need to put in place a robust system to monitor outsourced activities on a real-time basis.

The outsourcing policy for stock exchanges and clearing corporations has been discussed by Sebi’s Technical Advisory Committee (TAC), while its Depository System Review Committee has also given its recommendations on the need to regulate outsourcing by the depositories, a senior official said.

Consequently, Sebi has decided to issue a consolidated circular on outsourcing for stock exchanges, depositories and clearing corporations, he added.

Major exchanges in the country include BSE and NSE, both of which have their own clearing corporation arms. The two depositories registered with Sebi (Securities and Exchange Board of India) are NSDL and CDSL.

It has been felt that there is a need for further focus and strengthening of guidelines in the area of outsourcing by depositories.

In its recommendations, the Depository System Review Committee said that caution should be exercised while outsourcing and wherever possible depositories should put in place various controls to ensure that there is check on the activities of outsourced entity, especially to monitor that outsourced activities are not further outsourced downstream.

Besides, core and critical activities of depositories should not be outsourced, while similar recommendations have been made for the exchanges and the clearing corporations.

It has also been suggested that the core IT support infrastructure and functions for running core activities of these market infrastructure institutions should not be outsourced to the extent possible.

Wherever outsourcing is allowed, the key market entities will need to ensure that risk impact analysis is undertaken, only reputed entity with proven high delivery standards are selected and appropriate back-up and restoration systems are put in place.

Besides, they would need to monitor and have checks and overall controls over the outsourced entity on a real-time basis.

The depositories and other key market entities would also need to ensure proper audit of the implementation of risk assessment and mitigation measures listed in the outsourcing policy document, the outsourcing agreement and the service- level agreements pertaining to IT systems, among other measures.


Tech Mahindra posts profit warning: The end for Indian outsourcing?

June 30th, 2015

Indian outsourcer Tech Mahindra, which bought disgraced rival Satyam in 2012, has issued a profit warning — the first sign of trouble in the buoyant market for some time.Outsourcing23

In a regulatory filing to the Bombay Stock Exchange, it blamed a “seasonally weak” mobility business for dragging down first-quarter revenue, with shares falling over seven per cent to 482 rupees ($7.54).

It said: “Some headwinds and tailwinds could see a risk of marginal decline in both revenue and EBITDA on a sequential basis.”

Anthony Miller, analyst at TechMarketView, said the warning was noteworthy given the pace of growth in most Indian outsourcing outfits.

“I can’t remember seeing a profit warning from an Indian pure-play,” he said.

Tech Mahindra had recently announced a £50m, 10-year deal with CircleHealth which operates a network of NHS and private hospitals

The firm first bought a controlling stake in Satyam in 2009 after the firm became embroiled in one of India’s biggest ever corporate scandals.

Last month the former chairman of Satyam, Ramalinga Raju, was jailed for seven years for his part in a $1.4bn (£953m) accountancy fraud scandal.


Getting A Piece Of Business Process Outsourcing

June 25th, 2015

The intersection of technology and globalization has changed the way business is done and created new business opportunities in the international marketplace.Outsourcing22

Business process outsourcing (BPO) has evolved with time and the rampant innovation in technology. The BPO trend is accelerating. It is a subset of outsourcing that involves the contracting of the operations and responsibilities of a specific business process to a third-party service provider. Originally, outsourcing was associated with manufacturing firms, such as Coca-Cola, that outsourced large segments of its supply chain.

BPO is typically categorized into back office outsourcing, which includes internal business functions such as human resources or finance and accounting, and front office outsourcing, which includes customer-related services such as contact center services. In addition, other outsourcing segments within the global industry include business services, energy, technology, healthcare and pharmaceuticals, retail, travel and transport, and telecom and media.

The revenue of the global outsourced services industry rose steadily year over year from $45 billion in 2000 to just under $100 billion in 2012.

India is a clear leader in this area, offering a highly skilled, educated, cost effective, English-speaking labor pool. Still, many organizations are understandably apprehensive about having people on the other side of the world support critical business functions. However, some of the best outsourcing providers have mitigated the risk and addresses the concerns that clients may have about placing their work offshore through their innovative project management strategies.

WNS Holdings (WNS) operates in two segments: WNS Global BPO and WNS Auto Claims BPO. Its clients are primarily in the travel, banking, financial services, insurance, healthcare and utilities, retail and consumer product industries. WNS Global is a global business process management company headquartered in Mumbai, India. It has more than 29,000 employees working in 37 “delivery centers” across the world, including India, the U.S., United Kingdom, China, Costa Rica, Philippines, Poland, Romania, South Africa, and Sri Lanka.

Another company that has embraced the BPO model is Accenture (ACN). One of the top multinational management consulting, technology services, and outsourcing company, ACN reported revenues of over $30.0 billion with approximately over 330,000 employees, serving clients in more than 200 cities in 56 countries. In 2012 Accenture had about 80,000 employees in India, more than in any other country, about 40,000 in the US, and about 35,000 in the Philippines.

While there has been push back from U.S. consumers regarding poor service at certain international call centers, it is clear to me that the more a company is willing to think globally, they open themselves to greater profits. The BPO model should be expected to grow for years to come.


Eisai Signs Global IT Outsourcing Contract With Accenture

June 24th, 2015

Accenture ACN, -0.34% today announced that it has signed a contract to provide information technology (IT) system maintenance and operations, as well as monitoring and operations of servers and networks for Eisai Co., Ltd. in the U.S. and Japan.Outsourcing21

Under this contract, Accenture will deliver services including operations, maintenance and monitoring of Eisai’s applications and infrastructures (excluding a portion of research and development) in the U.S., and a part of Eisai’s enterprise resource planning systems including accounting, production management and related systems, as well as its IT infrastructure, such as servers and networks in Japan. This contract runs for seven years in the U.S. from April 2015 until March 2022, and for nine years in Japan from April 2015 until March 2024.

The global pharmaceutical industry is undergoing significant standardization in areas of new drug development, medical practices, and regulations for new drug review and approval. This contract will enable Eisai to strengthen its global competitiveness by further reducing global IT costs and enhance its global IT solution delivery framework. This, in turn, will enable Eisai to build a global IT governance structure that is more efficient and effective.

“During Eisai’s recent growth, Accenture has been supporting Eisai in many initiatives, and it is our pleasure to have this opportunity to play an important role in this key project that is designed to ensure even greater growth for Eisai in the future,” said Atsushi Egawa, senior managing director, Products, at Accenture in Japan. “We will use our experience accumulated in the pharmaceutical industry, our IT operational processes that are standardized globally, and our deep expertise in continuous business improvements to support Eisai’s successful business.”

These contracted services will be delivered from the Accenture Delivery Center for Technology in Manila, Philippines, and a part of application services for the U.S. will be delivered from the Accenture Delivery Center for Technology in Pune, India. These are both part of Accenture’s Global Delivery Network, which is comprised of more than 50 locations around the world.


Outsourcing key to rising security threats, staff shortages

June 24th, 2015

It’s no secret that more organizations are turning to managed IT services.Outsourcing20

A recent report from Frost & Sullivan uncovers one reason why managed security services, specifically, are taking off like wildfire: a shortage of security professionals. According to the report, businesses are feeling the strain of that shortfall already.

Configuration mistakes and oversights, for example, were cited by 65 percent of survey respondents as a “top” or “high” concern. In addition, “remediation time following system or data compromises is steadily getting longer”, the report read.

“The net result is that information security professionals are increasingly cornered into a reactionary role of identifying compromises, recovering from mistakes and addressing security incidents as they occur rather than proactively mitigating the contributing factors.”

More than 60 percent of respondents to the survey – a joint effort by Frost & Sullivan, the International Information System Security Certification Consortium (ISC2), consultancy Booz Allen Hamilton and security professional placement firm Cyber 360 – said their companies have too few information security professionals, compared to 56 percent in the 2013 survey. Frost & Sullivan estimates that the shortfall in the global information security workforce will reach 1.5 million jobs by 2020.

The 2015 Global Information Security Workforce Study, conducted online from October 2014 to January 2015, polled almost 14,000 security professionals from small, midsize and large companies in a number of industries.

The security staff shortage, coupled with a growing number of security threats, is posing a tricky situation for organizations across the board. They plan to respond by increasing their investment in security technology, in-house personnel, and outsourced security services.

About 30 percent of survey respondents said they plan to increase spending on managed or outsourced security services in the next 12 months. Aimed mostly at augmenting security teams, rather than replacing them, outsourcing is an increasingly popular option for a number of reasons, including a “lack of in-house skills” (49 percent), a “temporary need for flex force capacity” (30 percent) and “recruiting limitations” (26 percent).

The rising cost of security operations is playing an important role as well. “It is less expensive” was cited as a reason to outsource by 30 percent. Twenty-three percent named outsourcing as a means of “alleviating the burden of tedious tasks”, and 18 percent cited “difficulty in retaining staff”.

Of course, outsourcing one’s security operations requires due diligence and caution. The service provider needs to be reliable, trustworthy and qualified.

Respondents to the Frost & Sullivan survey looked at a number of factors when sizing up security service providers. The number one criterion in selecting a provider, cited by 55 percent, was pricing. Next, they want a provider to stand behind its product with a service-level agreement (cited by 50 percent).

Forty-nine percent of respondents said they choose a provider based on the quality and number of security people, 33 percent use the number of years in business as a key criterion, 30 percent cited breadth of service, and 22 percent cited brand name.

And the security operations most outsourced by survey respondents? Threat intelligence, research, detection, forensics and remediation (40 percent). Number two, with 37 percent, was security asset management and monitoring (firewall and intrusion prevention systems, for example), and number three, with 28 percent, was risk and compliance management.

Here are the top three ways that survey respondents said they’re using professional security services:

– Implementation services (integration, installation, migration, lifecycle management) – 34 percent
– Technical services (audits, breach management) – 34 percent
– Security advisory services (strategy, governance/compliance, training) – 26 percent

Cloud-based security services, otherwise known as SECaaS, were placed in their own category in the Frost & Sullivan report, although they’re still considered part of the outsourced security services landscape.

There’s no question that more organizations perceive the cloud as a priority, but security concerns around cloud services persist.

Among survey respondents, 43 percent said using cloud services is currently a “top” or “high” priority, while 57 percent said it will be so over the next couple of years. Yet concerns are legion, with the most prominent being data breaches (76 percent), data loss (73 percent), account hijacking (61 percent), malicious insiders (59 percent) and insufficient due diligence (57 percent).

Ultimately, service providers hoping to win new contracts – and mindshare – will need to allay organizations’ concerns about using the cloud to manage security operations.

Respondents said they’d like to see providers acquire specialized cloud security skills. “Application of security controls to cloud environments” was named by 66 percent, “knowledge of risks, vulnerabilities and threats” wasn’t far behind, with 65 percent, and an “enhanced understanding of security guidelines” was cited by 62 percent.

The old adage positing that “knowledge is power” holds sway here, as it does elsewhere, and one of the best ways for MSPs to assuage fears will be to gain as much expertise as they possibly can.

The more confident businesses are in a service provider’s ability to keep their systems and data safe and secure, the more likely they’ll be to hand over the keys to their security operations.


Wipro wins best outsourcing thought leadership award for 2015

June 15th, 2015

Wipro, the IT bellwether, won the best outsourcing thought leadership award for 2015 from a US-based leading institute, the global software major said on Tuesday.Outsourcing17

“The Outsourcing Institute, the largest neutral professional association dedicated to outsourcing, selected us for our thought leadership article showcasing a real world use case encompassing innovation, creativity and results,” the city-based company said in a statement here.

The institute’s eight-member sourcing executives from Fortune 1,000 enterprises were the judging panel.

“The business process leadership awards the Wall Street technology innovation showcases the most innovative work from providers’ across the outsourcing industry,” the statement noted.

The company’s seminal piece was recognised for its innovative work titled “Semantics and Ontology – The Future of Data Aggregation”.

“Financial institutions are giving more attention to improving quality of data and turning it into a strategic advantage, owing to competitive, regulatory and business pressures,” Wipro’s global head for securities & capital markets Roop Singh said on the occasion.


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