Posts Tagged ‘Outsourcing’

How to effectively outsource IT projects

April 23rd, 2014

Besides humans, your company’s telecommunication network is your most important asset.outsourcing7

If you take a second to think about it, every aspect of your business is connected to a network. It allows your organization to seamlessly access the Internet, share use of application and storage servers, printers, and fax machines, and use of email and instant messaging applications. As such, it’s important you ensure everything runs seamlessly so your staff has zero unnecessary downtime.

Graham Tate, a technical consultant at Hyper Technologies, one of Toronto’s largest outsourced IT companies, has over 12 years experience as a help desk analyst, support specialist and server infrastructure automation. Graham took some time from his busy week to fill us in on the best practices, biggest mistakes and how to overcome obstacles to get the most out of your outsourced IT company.

4 new IT outsourcing models 4 new IT outsourcing models
In the traditional IT outsourcing deal, the vendor provides a service managing servers, developing applications, monitoring networks and the customer pays for it, whether at a fixed price, on a time-and-materials basis or

Q: So start things off, what’s the biggest reason why companies outsource IT?

A: Freeing up employee time is the biggest factor. With automation comes the removal of everyday repetitive tasks, allowing company employees to either create new avenues of business for the company, or more time for project work, which should increase revenue for the company.

Q: What is the biggest mistake you see companies make when outsourcing IT projects?

A: While not the most common mistake, the most impactful mistake I see is not understanding what the end state of a project will provide. I’ve been a part of a few projects that were very successful, extremely smooth and without few hiccups, however once we reached the end, the client was not clear on how to use what was built to it’s fullest potential. Truly understanding what you are asking of a contract IT company is very important. The easiest way to mitigate this risk is to have a solid, as simple as possible explanation of what is required at the onset of the project. Share this with the consultant company at all the meetings that occur at the beginning, not only with the sales guys, but with the techs as well.

Q: What can bigger and smaller companies do to ensure they’re running the best systems/projects and working with the right IT partner?

A: While having the right partner consultant company work with you is of course important, I’d have to say knowing which system you want is the most crucial part. There have to be thousands of consultant companies all wanting to take your money, and each company has knowledge of a multitude of systems or products. Usually we specialize in a few selected products, and those are the cornerstones of the company. Once you understand what product fits properly in your company and which will meet your end goal requirements, start researching for consultant companies that specialize in that product. Do the standard research on those companies, get references and check up on those references, the usual grind when it comes to selecting a consultancy company.

Q: What type of obstacles do you see most?

A: The most common obstacles revolve around preparedness. When starting a project, we usually send a list of requirements ahead of the kick-off or scheduled start date. We try to give as much heads up as possible about what we need the moment we get to your company and are ready to get to work. I can’t count the number of projects where we are told everything is ready, and then spend a few days to two weeks sitting around waiting for the list to get completed. Not only does this mean the project loses chunks of time from the schedule, but it’s never a good way to start a project and leaves a sense of negativity that will last throughout the project.

Q: How do you overcome major obstacles?

A: I believe that most obstacles boil down to one of two types; technological and emotional. Technological obstacles can usually be overcome with customizations to the products or systems. While customizations are possible for almost every situation I’ve come up against, they usually result in the addition of complexity to the end result, and also of course the amount of time required for the project. This is where ensuring everyone understands the end goal of a project is key, if we know these types of issues will arise, we will usually be testing a few solutions in our development labs ahead of time.

Emotional obstacles are those that have no basis in the functionality of a product or system, however is a personal/gut feeling held by anyone on a project. These are much more difficult to overcome in my mind, as it is completely dependent on the person being willing to either prove their point at a technical level, or accept someone else’s decision and let go of their emotional tie to their desire. While it’s understandable to hold on to something that you believe to be true, if you are proven incorrect, it is important to release that previous belief and accept the reality of that which is proven. There have been a few instances where this was not possible, some led to major delays and redesigns of projects, where there have been one or two that caused the cancellation of the project.

Q: Lastly, what do you wish all companies knew?

A: You get what you pay for. It seems simple enough, however too many times we have gone into a company to remove and read an incorrectly configured product to their environment. I don’t state this to make me or my company feel superior, as I’m sure other consultant companies have probably had to go in and fix a system we put in place, the numbers just make this an eventuality. This goes back to understanding what product you want, and then finding the correct company to contract the job to. No single company will be the best at everything. Find the right company to get what you need from them, unfortunately a lot of the time, the right company will also not be the cheapest.


Outsourcing Industry in Bulgaria To Garner Up To 3% of GDP

April 23rd, 2014

Within the next three years the outsourcing industry in Bulgaria would bring up to 3% of the country’s GDP, or around BGN 2 B, expect experts. outsourcing6

By the end of next year the turnover of this industry in Bulgaria was around BGN 1 B, said Vice Prime Minister Daniela Bobeva who took part in a round table, organized by the Bulgarian Outsourcing Association.

According to Bobeva, in the past four years the incomes of the outsourcing industry grew by 60% and annually the sector generates around EUR 500 M. The sector employs 20 000 people and the expectations are their numbers to increase four times, according to Stefan Bumov, head of the Bulgarian Outsourcing Association.


Security services outsourcing goes hi-tech

April 23rd, 2014

An elderly gentleman, who walked into an ATM with family members in tow, was startled when the machine started talking to him, telling him that only one person can be in the cabin at any point in time.outsourcing5

That the family watched its head complete the transaction is another story. But the point is the ATM was being monitored by Zicom Electronic Security Systems from a remote location through cameras and two-way voice systems. This is the latest trend in outsourcing of security services.

Under this model, the outsourcer invests in equipment, technology and manpower. “This model entails a lot of savings for the client. Normally, it is the bank that makes the investment,” Zicom Founder and Managing Director Pramoud Rao told Business Line.

Zicom’s 12,000 clients across 1,000 cities include Federal Bank, Kotak Bank, HDFC, Punjab National Bank, HSBC, McDonalds, Dominos Pizza, Pizza Hut and Muthoot Finance. Its charges range from ₹500 to ₹50,000. The number of sites is expected to rise to 24,000-30,000 next year.

In a pattern shift from its earlier model of providing devices, the BSE-listed company is now banking on technology to aid security. Technology also enables Zicom go beyond pure-play outsourcing as it offers services such as business intelligence (BI), anti-theft and emergency response.

An alarm goes off at its control centre at Andheri in suburban Mumbai when an attempt is made to steal the cheque box, tamper with an ATM, to steal the air-conditioner or even the wastepaper bin.

“There have been many instances of garbage bin theft. We also have quick response teams on standby mode,” says Rao.

At night the cameras are on the motion detection mode. Rao cites an instance of the command centre detecting smoke and putting it out before it became a blaze.

The company has 2,500 buildings under surveillance across Mumbai, Pune, Thane and Vashi and gets an average of ₹3,500 per building. Zicom intends expanding this service to Bangalore, Chennai, Hyderabad and the National Capital Region by the second quarter of this fiscal. It earned about ₹18 crore from these services this year, and expects about ₹50-60 crore in FY15.

With every company, housing society and even streets being potential customers, the opportunity for the company is immense.


Tulsa Public Schools considers outsourcing transportation

April 22nd, 2014

Beginning Tuesday morning, the Tulsa Public School’s transportation department will be under new management. On Monday night, board members voted to turn the department over to TransPar, a Missouri based company that plans to make the job more efficient. outsourcing2

The district says the move will help them save $130,000 thousand dollars in the first year. The company will take full control of the department’s, and its $11.5 million dollar budget.

According to Ed McIntosh, President of the American Federation of Teachers local union 6049, the company has a history of cutting jobs, and other questionable practices. “For them to even think or suggest we transport our special needs kids in a cab or ride by day, is just appalling,” says McIntosh.

The district approved a two-month contract worth $57,000. The contract runs through June 30th. Board members are scheduled to meet again on July 1st, to approve a $254,000 with TransPar for the 2014-15 school year.

McIntosh believes the money spent on the contract is better served in Tulsa schools. “We had no problem with the group coming in and doing an assessment, but that savings should go back into transportation,” McIntosh says.

Tulsa School board member Gary Percefull says he’ll be waiting to see the company deliver on their promise.  “I’ll be anxious to see how this approves the operation of our transportation services,” he replied.

During the meeting, district officials said no jobs would be cut, and that drivers would remain employees of Tulsa Public Schools, but McIntosh says nobody has laid out how the company plans to deliver on the savings. “We didn’t see how it was feasible for them to make money off of the contract they’ve not explained in full detail the rewards that this contract will bring,” says McIntosh.

Some are worried if bus routes will be consolidated, and if class schedules could be changed in order to save the bottom line. With plenty of questions still lingering, McIntosh says he plans to look at other avenues to get answers.
“We’re in the process of reviewing our options, and I look forward to Dr. Ballard’s offer to sit down and talk about it.”


Airlines turn to outsourcing to keep lid on costs

April 22nd, 2014

Hand in your passport at the airport check-in desk and chances are the staff are not employed by the airline – despite the uniform they wear.outsourcing1
Neither will be the woman who checks your ticket at the gate, nor the man on the telephone when you change your flight booking, and probably not the many people who clean and maintain the aircraft, nor those who organise the sandwiches and perfumes on board.

In an attempt to drive down costs, airlines are scrutinising every part of what they do to see if someone else can do it more cheaply.

“We outsource everything that we can outsource,” says Warwick Brady, chief operations officer at easyJet. “As long as we can manage it and control it, it gets outsourced.”

The market in services provided to airlines, excluding back-office functions such as IT, is worth more than €200bn globally and growing, according to estimates by KPMG.

Typically, budget airlines such as easyJet and Ryanair are the biggest outsourcers as they look to keep a tight lid on their costs.

Only staff in easyJet’s core functions, such as its crew and its pilots, are on the payroll, leaving services such as passenger helplines and crew rosters to specialists in Montreal and Krakow respectively. With the aviation market set to grow at about 5 per cent a year, according to industry estimates and the global rise of low-cost carriers, opportunities for companies providing airport services are plentiful.

“If you look at the development of Ryanair and those companies, if you look at how many engines a company like Rolls-Royce is producing, if you look at the amount of aeroplanes a company like Airbus is producing – those are things which clearly point to a lot of growth,” says Tim Scharwath, executive vice-president of logistics provider Kuehne & Nagel, which has developed a global business to transport spare aircraft parts around the clock.
We outsource everything that we can outsource. As long as we can manage it and control it, it gets outsourced

- Warwick Brady, chief operations officer at easyJet

John Menzies, the world’s second-biggest provider with a 3 per cent share of the global ground handling market, is targeting 10-15 per cent growth in its aviation division, covering cargo and ground handling spanning check-in to aircraft preparation services.

“We have targeted 150 of the top airports [globally] and we’d like to open in about 50 of those within the next five years,” says Craig Smyth, managing director of Menzies Aviation.

Demand for airport services has also spurred consolidation in the sector, as the bulk of providers are usually small local operators. “It’s a bitty business, it’s airport by airport, and the opportunities are not always known to everybody across all airports,” says Eduardo Junco, director of aviation strategy at KPMG.

Deregulation and the privatisation of airports have opened up competition and are helping providers increase market share. In 2000, airports worldwide provided almost a fifth of ground handling, but by the end of this decade that will have shrunk to 5 per cent, according to data from Menzies.

“There’s still a massive amount done in-house, within the airlines and airports, and it varies by region,” says Jon Lienard, analyst at N+1 Singer. Some estimates suggest only a third of handling has been outsourced by the airlines.

But while outsourcing saves money, it can come with big risks. “Being in an airport environment the security aspect is important,” says Coolin Desai, transport and logistics lead partner at PwC. “Staff must be vetted. Because of heightened terrorism threat the need for an outsourced provider to demonstrate high-quality security credentials has become more important.”

Things do go wrong, says Mr Brady of easyJet, which has 20,000 people working for the airline across 140 airports that are not on its payroll. “That’s the big challenge for us – we need to deliver excellent customer service at the right cost, very efficiently in a very friendly way, even though it’s outsourced.”
But taking staff off the books does not eliminate risks of industrial action. Airlines, for example, have still had to cancel flights when their ground handling contractors strike.

Painfully for the airline and airport outsourcers, who often make narrow margins of 5 per cent or less, the profits of the suppliers are considerably fatter. That has pushed some airlines to work out new ways to recapture those margins.

“The future for the airlines is driving out cost by closer co-operation,” says James Stamp, global head of aviation at KPMG. “It might mean that some of the things that have previously been outsourced are better done in-house once they’ve achieved scale. Alternative models are emerging.”
International Airlines Group, parent of British Airways, says it has made savings through synergies such as sharing fleet orders, combining staff and renegotiating handling contracts to save €410m last year.

And sometimes outsourcing does not work – as easyJet grew bigger the engineering team that carried out engine maintenance work grew from 7 to 140 people so the airline insourced all the work as it was more cost-effective.

Who does what
Ground handling – Menzies staff do much of easyJet’s ground handling, working on check-in desks, at departure gates and directing passengers to aircraft. As part of that the company undertakes a range of services including de-icing aircraft in winter, cleaning toilets and manoeuvring aircraft into position at airports.
IT – German flag-carrier Lufthansa last year outsourced maintenance and support of its ticketing and reservations booking system. It saw money-saving benefits as well as a more efficient use of resources, as workers would be on hand when needed rather than being in-house and on standby at all times. The airline pushed through a cost-cutting strategy in 2012 that shed 3,500 jobs.

Retail – Spanish airports authority AENA tendered out a concession to run 80 duty-free shops at 26 of its airports just over a year ago. World Duty Free, the winner of the contract, paid €1.96bn to run the stores until the end of the decade.

Catering – Delta Air Lines signed a deal in January that increased services from its long-time provider Gate Gourmet. The catering company, which produces the foil-topped meals served up in plastic dishes to airline passengers, will now add Düsseldorf, Manchester and Santiago to the list of airports where it provides for Delta.
Security – G4S last year won a three-year contract to provide security for British Airways at Heathrow and Gatwick airports. The outsourcing specialist will screen bags and passengers, provide document and biometric verification and respond to incidents on site, with 600 staff across the two airports.


Benefits of Outsourcing Appointment Setting Services

April 21st, 2014

Many businesses are turning to outsourcing because of the benefits that are provided when they do so. It cuts down on the amount of time that they spend on areas like marketing or  product support and allows them to focus on the more important tasks, such as closing the deal.outsourcing61

Although there are numerous ways for you to outsource, one that should not be overlooked is outsourcing your appointment setting. In order to meet or exceed lofty sales goals, businesses need to efficiently manage dozens of meetings, presentations and appointments with potential clients. An outsourced appointment setting service can help you in several ways:

Increases Revenue

You would hate to lose out on a lucrative contract or sale due to a scheduling mix-up. If you use a quality service for appointment setting, you can rest assured that all your appointments and meetings are scheduled correctly. Eliminating possibilities of a missed sale will help you see an almost immediate boost in your revenue stream. From that point, you can scale your business in order to increase the revenue substantially.
Lowers Your Costs per Sale

When you have a qualified outsourcer which is taking care of your appointment setting, it will help to lower your cost per sale. That is due to the fact that they will be able to generate more appointments from qualified leads.
Gives You Additional Time

One of the most difficult parts of operating a business is taking care of everything that needs to be done. You may find that you are struggling until you begin to outsource and take some of the weight off of your shoulders. By outsourcing the appointment setting services, you will be able to focus on more important parts of your business that need your personal attention (Source).

Displays the Benefits of Outsourcing

Outsourcing your appointment setting services can show you just how powerful a tool outsourcing can be. Companies have seen tremendous success outsourcing aspects of the business like lead generation, marketing, and product support. For business owners new to the concept, starting out by outsourcing appointment setting services is a perfect stepping stone towards using outsourcing to their advantage in other areas (Source).


Ukraine Moves to Support IT Outsourcing during Crimea Crisis with Russia

April 21st, 2014

The Ukrainian Embassy to the United States will begin a campaign to support IT outsourcing to the country during its crisis with Russia. The slogan of the campaign, set to begin with an event at Ukrainian embassy in Washington, D.C. on April 29, is “Increase Profits. Support Democracy. Cloudsource to Ukraine.” outsourcing60

IT outsourcing has become a significant source of revenue for Ukraine. According to the embassy, the campaign is an appeal to Western businesses to increase outsourcing IT services to the Ukraine as a way to maintain global stability. “Russia’s aggression against the Ukraine seeks to destabilize the Ukrainian economy and threatens to start a new Cold War and lead to global economic recession,” the campaign’s website says, adding, “Ukraine needs your help to withstand this assault.”

When businesses outsource to any low-cost destination, they always weigh risk and benefits, say outsourcing experts. Risks can range from natural disasters such as last year’s typhoon in the Philippines, to violence and political instability in Egypt. In many cases, businesses are willing to take a certain amount of risk to save 50% or more on the cost of labor.

The benefits of outsourcing to the Ukraine, according to the campaign’s website, are savings from 40% to 75%, a low tax rate of 5% for IT firms operating in the country and a large pool of software developers.

The biggest risk now is the political unrest with Russia and what may happen to corporate intellectual property outsourced to the Ukraine if Russia is successful in annexing all or part of the country, said David Rutchik, a partner who specializes in outsourcing at management consulting firm Pace Harmon Inc. Laws in the Ukraine better protect intellectual property, he said, than laws in Russia.

The Russian Embassy in Washington, D.C. did not respond to a request for comment regarding intellectual property laws.

The Ukrainian Embassy says that Russia’s annexation of Crimea and Moscow’s involvement in the turmoil in the Eastern areas of Ukraine have impacted business life in those regions. “At the same time, Ukrainian regions not affected by the separatist movement continue to work in the ordinary course,” said a spokesperson for the Ukrainian embassy. The country is also hoping to persuade Western companies to switch the location of outsourcing projects from Russia to the Ukraine, said the spokesperson.

To mitigate the perceived risk, the embassy said it is partnering with, a service that lets remote managers monitor work performed in the Ukraine and see the status and cost of every task and project.

The country has looked to IT outsourcing as an important source of revenue. Its schools, which once turned out Soviet rocket scientists, now produce about 30,000 IT graduates each year. In 2013, the Ukrainian IT outsourcing market topped $1.5 billion. It’s still a small fraction of the global IT outsourcing market estimated at $288 billion. In 2011, Ukraine’s IT services exports exceeded the volume of its arms exports for the first time ever, according to the Financial Times.


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