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CeBIT 2012, an Opportunity for Indian IT Companies to Showcase Their Services to the World

February 10th, 2012

CeBIT is an annual trade show exclusively for the digital industry. At this event companies from world over exhibit their products and services, showcase their innovative solutions and industry experts host conferences on prominent IT issues. This year CeBIT is organized in the city of Hannover, Germany from 6 March to 10 March 2012. Eric Schmidt, Executive Chairman of Google will be the keynote speaker at the opening ceremony of the event.

Over 20 years, CeBIT has emerged as a vital platform for businesses to meet clients, initiate deals, form synergistic partnership and a unique opportunity to network with top influencers of the digital industry. India is the global hub for offshore IT services. Around thirty companies from various states of the country are participating in CeBIT 2012 trade show. The interesting fact, however is that, about one third of these is from the western state Gujarat. Companies such as OpenXcell Technolabs, Cygnet Infotech, Elitecore Technologies and Radixweb are enterprise solution pioneers in their own rights and will showcase their services in the CeBIT IT trade show.

“It is exciting to know that most of the peer group companies such as Elsner Technologies, Hi-Tech Outsourcing Services, InheritX Solutions are going to exhibit in CeBIT 2012” says Mr. Jayneel Patel, Director of OpenXcell Technolabs, a software and consulting company in Gujarat. Last year the IT trade show attracted over 300,000 visitors from more than 110 countries among which were USA, Romania, Iran, UK, China, Egypt, Germany and Spain. Revealing his mind on such a positive participation of Gujarat based companies Mr. Jayneel Patel says, “This is a strong indication of Gujarat becoming the next big IT center after Bangalore.”

CeBIT is focused on encouraging innovation and developing rewarding solutions in the field of information and communication technology (ICT). This year the event will be organized under four theme-centric platforms such as Lab- for research, Life- for enhancing lifestyle, Gov- for public sector and finally Pro which is a dedicated platform for business operations solutions.

Participants can exhibit their products and services as a stand-alone presentation, in group pavilion or choose from special offer packages. The event attracted 500 top decision makers and CIOs from the world’s biggest companies the last year. Over a thousand journalists directly report about the event. Participation of Indian companies will get their efforts and good work noted by the top IT honchos and potential customers globally.

OpenXcell Technolabs will be presenting at CeBIT 2012 in hall 6, stand D44 all through 6 March to 10 March 2012. The India based company will showcase its premier CRM and ECM solutions along with cross platform mobile solutions at the event. It is an ISO 9001:2008 certified company.

Source:http://www.sbwire.com/press-releases/sbwire-126375.htm

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Cognizant: lessons for Indian IT

February 10th, 2012

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Indian second-largest software company, Infosys, found out last month that sometimes beating expectations on profits isn’t enough to please the markets.

On Wednesday, Cognizant – the US-headquartered competitor that’s making things tough for Indian behemoths like Infosys and Tata Consultancy Services – found out that sometimes projecting double-industry-standard growth just isn’t enough either, when its stock fell 1.75 per cent compared to a 0.41 per cent rise in the Nasdaq. What’s the problem? And what are the lessons for its Indian competitors?

The problem it seems is that Cognizant, after eight straight quarters of outperformance, merely met expectations. It saw a 16.4 per cent rise in net income to $240.1m for the quarter ending in December, on the back of a 26.9 per cent rise in revenues, to $1.66bn, just below the $1.67bn consensus. It forecast a minimum 23 per cent rise in revenues for 2012, to $7.53bn, according to results released on Wednesday.

Analysts told beyondbrics that the company will benefit from an improving economic environment in the US – where it earned nearly 80 per cent of its revenue in the quarter ending in December – but that its growth projection for the coming year, despite its 33 per cent increase in revenues for 2011, might be a tad ambitious, given the overall economic picture.

“Twenty-three per cent minimum guidance is a good number, but for the first quarter of next year, they are guiding at 2.2 per cent which means that the growth rate for the remaining 3 quarters would have to be at 6.8-6.9 per cent,” said Ashish Chopra, analyst at Motilal Oswal. “[That]is a strong number to assume in the current environment.”

But R Chandrasekaran, Cognizant’s chief executive for technology and operations, told beyondbrics that the company was confident that it could maintain much greater growth than the 11-14 per cent projected for the industry during the fiscal year ending in March 2013 by trade group Nasscom.

“We are also entering 2012 with a great deal of confidence stemming from a very loyal customer base,” he said. “The traction we are seeing from some of the new [products] like consulting [and] infrastructure outsourcing… is really helping us.”

Cognizant, which has around three-quarters of its workforce in India, took over from Infosys in the north American market last year. It competes with the “big four” Indian IT services and consulting firms of Wipro, Infosys, TCS and HCL, and overtook Wipro in terms of reveune mid-2011.

Indeed, analysts told beyondbrics that what separates Cognizant from its Indian competitors is the way it reinvests in itself in order to build up the company’s front-end and sales operations.

“They’re much more market facing, their ability to understand clients’ needs is much higher, their ability to connect with clients is much better and they are more business focused,” said Sudin Apte, analyst at Offshore Insights. “That has helped them to bring in better returns.”

When it comes to tough economic times, IT companies like Cognizant can benefit as other companies need to save money, by outsourcing operations that would cost more to do in-house.

“Even if [a customer’s budget] remains flat… in absolute dollars he’s spending same amount on technology but wants to do more with the same budget,” said Chopra. “The only way to do that is to take out costs on the existing work – if it’s being done onsite then you have to move it off-shore, and that directly plays into the hands of the offshore providers.”

“That drives the growth for these guys even during the tough times,” he added.

It’s not necessarily a new lesson – just one that needs to be done better than before as competition increases and the market demands ever-better results.

Source:http://blogs.ft.com/beyond-brics/2012/02/09/cognizant-lessons-for-indian-it/#axzz1lxmYyVXN

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NZ ‘getting on with IT’, but caution prevails

February 10th, 2012

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According to a new report from analyst firm IDC, amid the threat of “another recession” the cautious optimism will continue in New Zealand and that the IT services market in the country will still grow by 3.8% to reach NZ$3.08 billion this year.

While many of New Zealand’s CIOs are reviewing all their IT spending, IDC predicts that many will continue to spend on strategic areas of investment, particularly on mobile devices, virtualisation and security, lifting the opportunity for service providers (SPs) in 2012.

“2012 looks set to be another economically uncertain year, but nonetheless organisations and SPs alike will need to seek opportunities that not only make business sense but also capture the innovative element that will make organisations stand out in the competitive ecosystem,” Rasika Versleijen-Pradhan, senior IT services analyst, New Zealand IT services market, said.

“Ultimately it will require SPs to rethink their aspirations and capabilities in the market, forcing some organisations to move out of their comfort zones.

“As the demand for technologies such as cloud computing, analytics, mobility and the rate of convergence accelerates, IDC expects to see a more fragmented ecosystem develop, resulting in the restructuring of business models for some SPs,” Versleijen-Pradhan added.

Other key predictions by IDC for the New Zealand market this year include:

• Cloud Will Move from a Cost Management to Innovation Driver Role: The role of cloud to help manage costs will shift towards one that will encompass cloud as a means to driving innovation within an organisation.

• Business Analytics Will Ride a New Wave, Sending “Big Data” Further in Motion: Big Data analytics will become critical in verticals that are challenged by the huge amounts of data sets and the widespread use of collaborative and mobile technologies.

• The Government Will Reduce and Reallocate IT Budgets: The government has stated that its initial focus will be on common capability, networks and infrastructure and the sharing of business systems resulting in greater shifts in IT spending allocations in 2012.

• The Services Ecosystem Will See the Formation of More Service Aggregators: This will be driven by customers who lack resources and will look for service aggregators as the external managers to their organisation.

• Market Pressures Will Reshape and Restructure Existing Outsourcing Contracts: The outsourcing market remains competitive, and existing customers continue to challenge their incumbent SPs to match the services and benefits offered by competitors, sometimes insisting on renegotiating an existing contract.

• Service Providers Will be Forced to Create Disruptive Business Units: If traditional SPs are to really compete in the cloud space they will need to make some radical changes to their business model. Subsequently this will, lead to the creation of a disruptive business unit.

• The Channel will Make Bigger Strides in Delivering Higher-Value add Services: IDC predicts that in 2012, the services component of partner businesses will be led by managed and cloud-oriented services as opposed to legacy maintenance and support services.

• Datacentre Services Will Experience High Growth: IDC’s Asia-Pacific Continuum survey in 2011, revealed that 40% of organisations surveyed plan to utilise third party datacentres by the end of 2012.

• Business Continuity and Disaster Recovery Will Maintain its Priority Level: IDC believes that business continuity will remain a key component of the executive agenda, regardless of the next upheaval.

Source:http://www.itwire.com/it-industry-news/market/52705-nz-getting-on-with-it-but-caution-prevails-report

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VA accused of excessive outsourcing of vets’ jobs

February 10th, 2012

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The Veterans Affairs Department is being accused of undermining its own goal of hiring more veterans by expanding its outsourcing practices that eliminate many federal jobs currently, or historically, held by veterans, according to the union representing 205,000 employees at the VA.

In November, President Barack Obama signed into law the “VOW to Hire Heroes Act,” which included language to set up an expedited process for hiring returning solders for federal jobs.

But the VA’s own outsourcing, which began to grow under the Bush Administration and are continuing to expand, are abolishing many federal jobs currently held by veterans, the American Federation of Government Employees (AFGE), an AFL-CIO union, said in a Feb. 8 news release.

For example, the Veterans Benefits Administration recently entered into a $54 million three-year contract with ACS Government Systems to perform claims processing work.

That work currently is being performed by “large numbers of veterans,” the union said. “To add insult to injury, the VBA employees are being asked to volunteer to train the contractors to do their work.”

“Contract claims processors working for profit will now handle the most personal information of our veterans.” AFGE National President John Gage said in the release.

In several other outsourcing contracts in recent years, the VA also has gotten rid of many government jobs historically held by veterans, AFGE said.

Other jobs recently outsourced by VA medical centers and cemeteries, which historically had been held by veterans, included cemetery caretakers, laundry and food service workers, housekeepers, groundskeepers and transportation assistants.

The VA also has failed to comply with a 2009 law that requires the agency to do a cost-benefit analysis before each outsourcing contract is awarded, to determine whether the contract is cost-effective for taxpayers, the union said.

“The agency continues to violate federal law by contracting out work that has been traditionally performed by veterans,” the union said. “The outsourced jobs include many entry level jobs that disabled veterans rely on to get back on their feet after returning from the battlefield.”

The union also claimed the VA conducts “excessive contracting” of physician and nursing services rather than hiring clinicians from within the military.

“Contract physicians and nurses lack the specialized skills and best practices of clinicians who dedicate their lives to serving the veteran population as VA employees,” said AFGE National VA Council President Alma Lee.

VA officials did not immediately respond to requests for comment on Feb. 9.

Complaints about VA outsourcing have arisen on a regular basis in recent years. In 2009, the president reversed course on a proposed third-party billing initiative for veterans medical care following negative media attention about it.

Source:http://fcw.com/articles/2012/02/09/va-accused-of-excessive-outsourcing-of-va-jobs-held-by-vets.aspx

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Cognizant Technology is just $50 million behind TCS in the US

February 10th, 2012

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In the world’s biggest outsourcing market US, Cognizant Technology Solutions is now only $50 million behind Tata Consultancy Services, according to the October-December quarter revenues earned by these companies.

TCS, which counts General Electric and Citibank among its top US customers, earned $1.37 billion during the quarter ending December from the country, compared to Cognizant’s $1.32 billion.

From a gap of around $150 million in quarterly revenues from North America in March 2010, Cognizant is now looking set to become the biggest India-based outsourcing firm in the region.

On its part, TCS has a much more diversified client base when compared with Cognizant. For instance, while Cognizant gets almost 80% of its revenues from the US, TCS’s North American business contributes 53% of the total revenues. TCS has UK and Continental Europe customers contributing a quarter of its total revenues.

Cognizant, which counts JP Morgan, Merck and 3M among its top US customers, grew its revenues from the country sequentially by 6.1% and 31.2% compared to the December quarter of 2010.

TCS reported a 2.2% sequential growth in its America revenues and 20.2% compared to the same period last year.

Analysts tracking the sector said Cognizant is expected to narrow its gap with larger peers by growing its share of spend from top healthcare customers-a segment where others are not as strong.

“Its well-entrenched position in the healthcare segment (27% of revenue, which grew at 37% in FY11), where we see limited competition from tier-1 IT peers, and continued growth, motivated by regulation-driven spending, help the company,” Nomura Research analysts said in a note on Wednesday.

“Indian IT companies have grown 10-15% slower than Cognizant through good and bad times, and we do not see that changing anytime soon,” CLSA analyst Nimish Joshi said. Cognizant surpassed Infosys’ US revenue during March 2011 quarter.

Source:http://economictimes.indiatimes.com/tech/ites/cognizant-technology-is-just-50-million-behind-tcs-in-the-us/articleshow/11829314.cms

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British experts say PHL BPO industry outlook very positive

February 10th, 2012

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British experts have a “very positive” outlook of the Philippines’ business process outsourcing (BPO) industry, the Department of Foreign Affairs said.

The DFA said British-Philippines Outsourcing Council (BPOC) Board Members Ian McGowan and Richard Patterson disclosed this to Philippine Ambassador Enrique Manalo early this month.

“(They said) that while most BPO clients served from the Philippines were American, there has been a ‘noticeable increase in interest’ from British, Australian and Asian firms wanting ‘extraordinarily high skill sets and competitive pricing,’” the DFA said.

McGowan and Patterson had paid a courtesy call on Manalo at the Philippine Embassy on Feb. 2.

During the call, the two said outsourcing was “not bad” for developed economies, such as the United Kingdom, emphasizing that companies outsource to the Philippines “to compete globally and be successful.”

Also, they said their extensive experience with various British companies with BPO services in the Philippines showed that “for every job created in the Philippines several more jobs are created in Britain.”

For his part, Manalo expressed support for BPOC’s efforts to promote the Philippines as an investment destination.

“The Embassy, as part of its economic diplomacy program, will continue to work with organizations such as BPOC to actively showcase the Philippines as a prime, value-for-money business location. The BPO industry is one of the country’s leading lights, especially here in Britain where the Philippines has been regularly adjudged Best Offshoring Destination thrice over the past few years. BPOC will be an important partner in developing a bigger market in this country,” he said.

BPOC is a non-profit, independent organization based in London. It was established in 2009 to promote the Philippines as a BPO destination to British businesses.

Its membership is open to all companies with a base in the United Kingdom who either operate outsourcing services in the Philippines, outsource work to the Philippines or provide advisory services to the outsourcing or buyer communities.

Estimates by the Business Process Outsourcing Association of the Philippines (BPAP) show the BPO industry grew by 22 percent to US$10.9 billion in 2011, employing 640,000 people.

Source:http://www.gmanetwork.com/news/story/247507/economy/business/british-experts-say-phl-bpo-industry-outlook-very-positive

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IT service vendors eye African expansion

February 9th, 2012

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On the back of the telecommunications boom in Africa, more IT service vendors are moving into the continent in search of new opportunities.

So says Brent Flint, services executive at Dimension Data MEA, who believes this trend is also driven by the maturation and growth of competition in the South African IT services market.

“This expansion is often on the back of clients’ businesses expansion into the rest of Africa,” he explains. “More businesses are moving into Africa and require IT service providers that will help drive IT efficiency as a key strategic business enabler and also an engine of innovation.”

Flint explains that organisations are looking for infrastructure, desktop, database and application support, as these play a key role in enabling business.

“Without a large IT department or justification for big expenditure on technology, businesses are looking for solutions that will get the job done cost-effectively and simply, while delivering a rapid return on investment.”

However, Flint says there is a shortage of specific skills in the African IT services market, and this is resulting in companies not always being able to efficiently provide the IT services needed to enable business.
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He adds that there is, therefore, a demand for IT service providers with experience and knowledge to enable business strategy, improve competitiveness, and drive business outcomes.

“Businesses are moving from ‘out-tasking’ discrete managed and professional services to a complete IT outsourcing solution.”

Garth Hayward, regional manager, Africa, at Kaseya, also cites skills shortage as one of the challenges besetting managed service providers in Africa.

“Finding and keeping good staff in the managed services industry is a challenge,” says Hayward. “There’s also a perception by business that IT companies don’t need to pay their staff.”

Hayward adds that the managed service providers are also finding it tough to craft value propositions that have relevance within their target markets.

Source:http://www.itweb.co.za/index.php?option=com_content&view=article&id=51416:it-service-vendors-eye-african-expansion