Posts Tagged ‘Outsourcing’

Telco IT spending up as outsourcing increases

October 22nd, 2014

A new report says that while traditional telecom services are struggling, new offerings are showing promise and telco IT departments are doing the right things to support them.Telco

The survey by The Global IT Association for Telecommunications (ETIS) and The Boston Consulting Group (BCG) got responses from a mix of integrated, fixed and mobile operators from emerging and mature markets in Europe. It revealed that these operators are continuing to shift from IT cost reduction to focused IT investments in areas that can drive competitive advantage. Overall, IT capital expenditures rose 3.4 percent for survey participants, and, on average, respondents steered nearly one-third of their investment budgets to their top three initiatives — projects heavily skewed toward improvements in the network and the customer experience.

Of particular note, the study’s authors said, is that even as participants’ IT capital expenditures increased, they managed their IT operating expenses in line with their revenue decline — something that telcos have historically been unable to do.

“The idea that telcos can boost their IT investments yet at the same time lower their IT operating expenses is a powerful – and previously unobtainable – notion,” said Frank Felden, a BCG partner and co-author of the report. “It means they would be able, in effect, to have their cake and eat it, too — spending to foster novel new offerings yet controlling costs. But to do that on a sustainable basis, they will need to find a good mix of innovation-focused and efficiency-focused investments. That is the hard part, but this year’s results indicate that it may indeed be possible.”

The report’s findings on outsourcing were also interesting. It now accounts for 26 percent of study participants’ total IT spending (up from 23 percent in the 2013 survey). For the first time, this annual study did not find a direct linear correlation between a high degree of outsourcing and high IT spending.


Anger at outsourcing of staff survey at a greater cost

October 20th, 2014

THE Scottish Government has come under fire after a private firm was hired to carry out a health service staff survey, leaving the taxpayer with a larger bill than when an NHS body did the same job.Outsourcing32

Capita, an international business services firm based in London, won the contract to quiz health service workers earlier this year after the Scottish Government decided to put the work out to tender.

Despite Health Secretary Alex Neil saying the contract was advertised in a bid to “ensure best value for money”, it has emerged the Government has agreed to pay Capita £261,000 for carrying out the 2014 survey, 13 per cent more than the £231,000 that NHS National Services Scotland received for organising it last year when outside firms were not offered the chance to bid for the work.

The SNP’s move to outsource the work at an increased cost to the taxpayer sparked fresh accusations of hypocrisy, after it was claimed during the referendum campaign that only a vote in favour of independence would protect the NHS from privatisation.

Labour health spokesman Neil Findlay said: “The reality is that the only government that can privatise our NHS is the SNP and they are doing so under our very noses. It is ridiculous that Alex Neil is spending more Government money on a private company to carry out a task that the NHS has previously conducted itself. If our incoming First Minister is genuine about protecting our NHS then she should ask serious questions of her replacement as Health Secretary.”

National Services Scotland did not submit a bid for the survey following the decision to put it out for tender. The Scottish Government said the survey had been carried out by outside bodies in the past, most recently by a university business school when the contract was advertised in 2010. The staff surveys, which were previously carried out every two to three years but have now become annual, ask NHS workers a series of questions about the health service, including how they are treated by their bosses and whether they are concerned about staffing levels.

Conservative health spokesman Jackson Carlaw said outsourcing the staff survey was evidence of deception and “sheer hypocrisy”.

A spokeswoman for the Scottish Government said: “The staff survey will be conducted by Capita, following an open competitive tendering procurement exercise.”


India IT Powerhouse Tata Consultancy’s Income Rises 17.8%, Continues To Beat Market

October 17th, 2014

India’s largest information technology services provider, Tata Consultancy Services, posted a 17.8% gain in year over year net income on Thursday to keep Tata a market beater again this year.Outsourcing29

Despite slower economic growth in Tata’s core markets, the need for companies to use new technologies to gather and analyze data to stay competitive has kept outsourcing firms growing strong.

Tata remains a dominant player in the trillion dollar global IT services market.

The Mumbai based company said that the quarter ending September 30 registered net income of $872 million, up from $845 million in the previous quarter and $740 million in the same quarter last year. Shares of Tata Consultancy declined on Thursday by a little over half a percent, but are up 24.37% year-to-date. By comparison, the Wisdom Tree India (EPI) exchange traded fund, one of the most popular India trades on the NYSE, is up 23.21%. Meanwhile, Tata rivals Infosys and Wipro are mixed and underperforming. Infy is up 11.33% after getting clobbered in 2013. Wipro is down 4.53%. Tata Consultancy, which is part of the Tata Group of companies, has steadily outperformed its rivals and the Bombay Stock Exchange Sensex index over the last 10 years.

“We are focused on supporting business growth by optimizing our operations and maintaining margins in our desired range. Our cash generation has been strong resulting and we continue to make investments for business growth,” said Tata Consultancy CFO Rajash Gopinathan in the company’s press release to the market today.

IT firms have been on wobbly ground over the last two years, particularly those with deep stakes in the eurozone. Tata has managed to outperform because of its closer ties with the Indian government, providing IT services to state entities, and a solid management team to back it up. FORBES ranks Tata Consultancy as one of the top 100 innovative companies in the world.  Last year, buy and sell side analysts ranked Tata Consultancy CEO Natarajan Chandrasekaran as the best IT executive in Asia, according to Institutional Investor.

As an equity investment, Tata has become the go-to IT stock for international investors with access to Bombay listed shares, while both Infy and Wipro, listed on the NYSE, have been undperforming on a regular basis. Infy has only started to beat the Sensex in the last six months.

Tata’s growth in its second quarter was “broad-based”, it said, with all industries served by the IT outsourcer growing on a sequential basis. The impact of the integration of newly merged entity in Japan also provided additional growth to units like manufacturing and technology. Core markets
like India, the U.S. and Europe also grew.

Tata said that revenue for the quarter hit $3.9 billion compared with $3.6 billion in the quarter ending June 30 and $3.3 billion in the same period a year ago.

Tata Consultancy is one of the world’s largest IT outsourcing firms, employing over 310,000 people worldwide including in the U.S. Last year it posted sales of around $13.5 billion.


Healthcare IT Outsourcing Market Accelerates as Payers Alter Operating Models

October 16th, 2014

Wide-sweeping regulatory reform mandates as well as a new phenomenon of demand consumerization are forcing healthcare payers to alter their operating models and rethink their technology initiatives. The duress they face is driven by a fundamental market shift in which individual consumers exhibit increased ownership of health outcomes.Outsourcing25

As a result of these converging forces, the healthcare IT outsourcing (ITO) market is accelerating. The global healthcare ITO market is expected to increase at a 12 percent compound annual growth rate from 2013 to 2020, reaching US$68 billion in 2020.

As in recent years, payers continue to form outsourcing partnerships to address remediation, claims processing and the modernization of legacy systems. Mid-sized providers are leading market activity and are increasingly looking to service providers for cost-effective ways to respond to regulatory demands as well as strategies for shifting from business-to-business to business-to-consumer marketing and service models.

These findings and more are discussed in the report, “IT Outsourcing (ITO) in the Payer Industry – Annual Report 2014: Regulations on Payers’ Mind.” An overview of the ITO market for the healthcare payer industry, this report analyzes market size and growth, forecasts (up to 2020), demand drivers, adoption and scope trends, key areas of investment, and implications for key stakeholders (buyers and service providers). The central theme of the publication focuses on the implications of the regulatory overhaul, which is fundamentally changing payers’ go-to-market strategies, operating models, current systems, interfaces, and vendor portfolios.

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“Two significant forces are fundamentally altering health plan business models, changing payers’ IT needs, and ultimately leading to a surge in adoption of IT and business process outsourcing,” said Jimit Arora, vice president at Everest Group. “First, the healthcare industry is grappling with the uncertainty of reform mandates such as the PPACA (Obamacare) and the transition to ICD-10.

“Secondly, as consumers assume greater ownership, control and responsibility for their health outcomes, payers need to revisit their customer acquisition strategies. They are looking to digital enablers of real-time consumerization—big data, analytics, cloud, and social media—to transform their marketing and customer service approaches to consumer-centric models.”

High-resolution graphics illustrating the report’s key takeaways can be included in news coverage, with attribution to Everest Group. Graphics include:

ITO in the payer industry – regulation on payers’ minds
Healthcare payers, weighed down by regulatory mandates, turn to ITO

Two converging forces—reforms mandates and consumerization of healthcare—are fundamentally changing payers’ operating models.


4 Steps to Leverage Offshore Outsourcing for Global Expansion

October 16th, 2014

Once upon time, multinational corporations are the only businesses that can expand offshore. Today, small businesses can expand globally without the need for a corporation-sized budget.Outsourcing23

Here are four steps that you can follow to maximise your outsourcing options and expand offshore:
Pick an offshore outsourcing partner.

Select an outsourcing partner to help you settle in a new market.

Your offshore outsourcing partner should be able to measure success and provide a solution that meets your needs instead of just a cookie cutter approach. Plenty have been said about the need for innovation. But unless you have the right environment to foster transformational change, it will not happen.

Look at the bigger picture.

Consider the location of your offshore outsourcing partner in both the local and regional level.

Make sure that the location of your offshore outsourcing partner has a readily available workforce. This will enable you to easily attract new hires, who will find it convenient that they don’t have to endure hours of traffic to go to work.

Pick an emerging market where you can find opportunities once you have gained experience in doing business in the country. Take a hint from multinational corporations. They use a global service delivery model to streamline their business.

Start small.

Small businesses that are new to outsourcing can start with a simple arrangement to gain experience.

Outsource your non-core business processes through offshore staff leasing. This provides a good introduction to an outsourcing relationship, managing an offshore operation, and handling offshore staff. This will help you to familiarise yourself with local culture.

Set up a managed operation.

A managed operation is a middle ground between outsourcing and having your own company.

Your managed operations service provider will provide support (such as recruitment, finance, expat support, and facilities management) and infrastructure (such as office space, software, computers, and telecom). You and the service provider will work together to manage the operation.

You can customise your operations and implement the level of control that you prefer. If you have a big team, you can hire your own team of expats to oversee the operation. If you have a small team, the service provider can manage the day-to-day operations.

Offshore outsourcing doesn’t need to be just moving jobs overseas. With the right mindset, small businesses can accomplish more and level the playing field.


More IT Cos Now Screens Start-Ups For Partnerships

October 15th, 2014

Startups seem to be expanding and successfully attaining higher rates of success by building a larger consumer base not only in their own country, but around the globe as well. Startups are not only gaining the consumers trust but are making the mega corporations turn their heads towards them. It seems that after Infosys and Wipro more IT companies are investing in start-ups.Outsourcing22

Infosys and Wipro explored more in order  to pick up stake in startups focused on disruptive technologies have made investment bankers optimistic that country’s declining outsourcing sector could see more deals in the coming months.

However, both foreign and domestic bankers believe that the small acquisitions and partnerships would not be enough and a big buy-out has to be done before the rainmakers interfere and help companies merge and raise capital.

It sees that Wipro isn’t the only IT services company eyeing a model of acquiring a minority stake in a software product start-up, keeping it at arm’s length from its core business and, possibly, playing the role of a venture capitalist. There is company like Mindtree which is looking forward to explore this model.

This venture-capital model is in line with those of global technology companies. It is only in recent months that Indian IT services majors like Infosys and Wipro — announced setting aside $100 million each towards investment in start-ups. The way these funds will be utilized hasn’t been decided yet.

“This is certainly a trend that has picked up in recent days. Last year, when we were looking to raise funds for expansion, a few technology companies had approached us. Now, we are approached every day,” said Nishant Singh, chief executive of Noida-based CRMnext. “This is what I call ‘lazy innovation’.

A company with a size exceeding $1 billion finds it really hard to innovate. “Huge companies sitting on huge funds can easily keep some money aside and plant it into 20 different planters and wait for it to grow,” Adds Singh. CRMnext, is a cloud-based customer relationship management solution company, which works with several IT services companies such as Tata Consultancy Services, Wipro, Tech Mahindra and Polaris Financial Technology.


Outsourcing giant creates 300 coventry jobs

October 15th, 2014

Customer care provider Sitel UK is set to open a new branch in Coventry city centre creating 300 jobs.Outsourcing21

The US-headquartered company has taken 15,000 sq ft of office space on the fourth floor of Sherbourne House.

The deal was agreed by DTZ and Cushman & Wakefield, acting on behalf of Mapeley Estates, the landlord at Sherbourne House.

Sitel employs approximately 2,400 staff across six sites in the UK. The move will create 300 immediate new jobs with the expectation of a further 300 jobs in the medium-term.

Andrew Berry, associate director in DTZ’s office agency team, said: “This is one of the largest lettings in Coventry city centre in the last three years and demonstrates the renewed occupier enthusiasm for the city centre office market.”

Karl Brough, regional director at Sitel UK, added: “We chose Sherbourne House primarily based on its location as it offers a facility that can be easily supported from our head office in Stratford-upon-Avon.

“The excellent transport links available to the building via road and rail will facilitate staff recruitment whilst the quality of the building and the proximity to local amenity will enable their retention.”


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