Posts Tagged ‘Services’

Strategic outsourcing partnerships headed for a big shift

December 30th, 2013

In the past 10 years, outsourcing has evolved beyond being viewed as a purely tactical exercise to reduce cost and increase operational efficiency. With information technology moving from being a business enabler to the business core, the sourcing decisions and motivations have shifted widely. IT is no more a CIO’s bastion; CMOs/CXO’s, in many organisations, are making decisions on technology enablement.

There is a shift in the mindset – bringing strategic capabilities in, versus sending work out. This is one reason enterprises are balking at the word “outsourcing” to describe these sourcing relationships. According to an industry estimate 63 per cent of business and IT services consumers would like to drop the term ‘outsourcing’ entirely. CEOs rarely talk about ‘outsourcing’ these days. Their approach is now so integrated that there is no ‘out’ and no ‘in’ anymore. So how does the enterprise respond to the same and what is the relevance of a strategic outsourcing partnership? The strategic partners are now chosen based on their ability to help enterprises transform, and not just having competency in a specific area.

While the “why” behind sourcing has evolved considerably, the “how” still lags. To understand this, a strategic outsourcing at its best has not been a service offering that the enterprise customers have bought, rather it has been a response to the requirements (short/medium/long term) of the end consumer. I believe that the next wave of enterprise innovators would create partnerships that not only solve their needs to respond to the marketplace but also create competitive advantage.

Here are some examples that should put some context to the requirements: Indian banks are seeking for profitable operating model that allows successful access to basic financial services to unbanked geographical areas. The old paradigm of just focusing on operational costs or implementing core banking may not work. Mass segmentation and deep understanding of individual customers will drive profitable growth. A better measure for the banks is business productivity targets for employees that integrate processes and technology. It has a holistic impact on cost income ratios.

Similarly for the telecommunication players today, the business context is off-take of data services, value added enterprise services, segmentation of clients and an increase in ARPU (average revenue per user). The economies of scale models based on additional subscriber base will not fully capture the way forward for the business. In India we have an unique advantage that there is a significant number of emerging businesses that are focused on growth. The entrepreneur is always open for innovation and addressing scale. In industries as diverse as renewable energy and education technology is playing a huge role in changing the business model.

The partnering strategy may vary from one organisation to the other. While the majority of services buyers expect high-quality support, tailored business knowledge, customised services and the “best price”, a new breed of c-suite leaders are also asking for partners to have their fees lined to the promised business outcomes.

The key differentiators for the right partner for the enterprise innovator would need to demonstrate domain depth, process engineering skills, relevant intellectual property, utility models and the enabling financial construct, enterprise innovators who have extensively adopted long-term sourcing strategies for innovation as their key motivation have seen two times more revenue growth and three times more gross profit growth than those who have outsourced narrowly for short term operational efficiencies. After all, business transformation is a long-term journey, and not just a short term effort. In a world where barriers are disappearing fast, organisations would look to tap into an ecosystem of collective intelligence and distributed talent.

Source:http://www.business-standard.com/article/management/strategic-outsourcing-partnerships-headed-for-a-big-shift-113122900636_1.html

Outsourcing of services’ revenue may double in 2015

September 10th, 2013

China’s outsourcing industry for services may nearly double its revenue in the next three years amid rising domestic demand and government support, a KPMG report said.

By the end of last year, the industry’s totaled US$46.5 billion and is expected to hit US$85 billion in 2015, KPMG said yesterday.

“China continues to aggressively position itself as a top shared services and outsourcing destination and is making an effort to industrialize this sector.’’ said Egidio Zarrella, partner, clients and innovation consulting, KPMG China. “This has created a strong, domestically focused industry as well as an increasingly viable global and regional hub.”

He said that China’s supply and demand for outsourcing services may jump as the country may invest 154 billion yuan (US$25 billion) in cloud infrastructure.

China is seen as a market and a base for emerging service providers, offering opportunities to meet outsourcing demand by delivering business and IT services across  domestic and global markets, the report said.

In 2012, Chinese service providers signed 144,636 outsourcing contracts worth US$61.3 billion, up 37 percent from 2011, data from the Ministry of Commerce showed.

Source:http://www.shanghaidaily.com/Business/consumer/Outsourcing-of-services-revenue-may-double-in-2015-/shdaily.shtml

Wipro bags $125-mn Deutsche Bank contract

September 4th, 2013

Wipro, the Bangalore-based IT services company, is understood to have bagged a multi-year contract from Deutsche Bank valued around $125 million (around Rs 850 crore).

According to sources privy to this development, as a part of the five-year contract, Wipro would primarily provide application maintenance services to Deutsche Bank even though there will a small component of application development services work as well.

In reply to an email query, a spokesperson of Wipro declined to comment saying that “Wipro does not comment on market speculation.”

This is the second major client win for Wipro in the banking, financial services and insurance (BFSI) space in the past three months. In June this year, Wipro had bagged a large IT outsourcing contract worth around $500 million from Citigroup (Citi), a leading global financial services company. The tenure of the contract was also for five years.

Frankfurt-headquartered Deutsche Bank is one of the major global financial services companies that actively outsource works to leading Indian IT services companies. According to industry sources, Deutsche Bank has outsourced a large part of its application development works to Infosys, India’s second largest IT services company.

Besides, HCL Technologies is also one of the IT services vendors for the bank. However, Infosys continues to remain as the preferred vendor for the bank, sources added.

The recent wins in the BFSI space are a major uplift for Wipro which derives about 26.5% of its overall revenues from this vertical. However, its exposure to the BFSI space is somewhat low as compared to its large Indian peers such as TCS and Infosys.

In January 2011 when Wipro decided to rejig the management by doing away with the joint CEO model, the company had made it clear that BFSI as well as Healthcare are going to be two major thrust areas.

Wipro’s chairman Azim Premji has said at that time that the company would focus on improving its revenue shares from both these verticals which was high for its industry peers.

“The fastest segments in the market where competition has been able to pull up the entire size of their companies have been financial services and healthcare. Though we are strong in the financial services area, relative to the total share of our top line, its contribution is 27 percent, whereas most of our competitors have done far better,” Premji had said at that time.

However, with the pickup in demand in the BFSI space, Wipro is aggressively pitching for large clients and largely succeeded in its effort, according to industry analysts. “Wipro’s renewed focus on winning new deals has started showing improved traction over the last two notes,” said a market analyst on condition of anonymity.

In the quarter ended June 30, 2013, financial solutions (BFSI) is the only vertical for Wipro which showed a sequential growth (0.8%).

New region head for Nordics

Plans to add 500 people in region over 3 years

Wipro, India’s second largest IT services company on Tuesday said that it was planning to strengthen its presence in the Nordic region.

The Bangalore-based company announced the appointment of Carl-Henrik Hallstrom as Regional Head for the region.
An industry veteran with over 20 years of experience in the IT and BPO industry, Carl-Henrik was previously heading Sourcing Advisory for Nordics region at research and analyst firm KPMG.

As the Regional Head Nordics region for Wipro, he will be based in Stockholm, Sweden and report to Rajat Mathur, Chief Sales and Operations Officer, Growth Markets, Wipro.

Wipro also said that the company was planning to increase its headcount in the Nordic region by 500 in the next three years. The company did not divulge its present headcount in Nordics, but industry sources pegs it around 400-500.

The company said its key focus verticals on the region would be Telecom, Manufacturing, and Energy & Utilities.

Computacenter beats giants to outsourcing satisfaction crown

August 2nd, 2013

Computacenter and TCS have topped an annual league table measuring customer satisfaction in the IT services and outsourcing sector.

The survey, from Whitelane Research, quizzed 230 participants from top IT spending organisations in the UK.

Overall, 85 per cent of respondents were satisfied with their outsourcing contract, which Whitelane said was a relatively strong score.

Despite its background in product resale, Computacenter – whose CEO recently spoke of its “uncompromising approach to customer satisfaction” – topped the standings alongside India-based provider TCS.

Each garnered a satisfaction score of 85 per cent, 19 percentage points ahead of Verizon, which ranked bottom of the list of 24 providers.

The study suggested that more UK firms are looking to outsource than insource in the future. Some 37 per cent said they will continue to outsource more while 37 per cent indicated there would be no change in their outsourcing activities. Just 13 per cent said they are planning to insource, or outsource less.

On the whole, the India-based providers showed strongly, with Mahindra Satyam placing third with a score of 77 per cent and Infosys in fifth on 72 per cent.

Big established IT services giants Atos Origin, HP, Fujitsu, IBM and Accenture fared less well, all scoring 63 per cent or below.

Source:http://www.channelweb.co.uk/crn-uk/news/2286366/computacenter-beats-giants-to-outsourcing-satisfaction-crown

The Debate: Outsourcing or shared services?

July 29th, 2013

Today, it is less an either/or proposition, and more about finding a custom blend. The trick is to educate yourself on the expanded offerings of BPOs (business process outsourcing) and determine the optimum time to partner with them.

The traditional outsourcing arrangement has been that your company engages a BPO to take on a significant portion of your work for less cost. That model is changing.

Several factors are affecting the decrease in demand for the old model: shared services organisations are becoming more independently resourceful; automation solutions are winning against traditional BPO set-ups; and wages in BPO heartlands such as India are rising. This means that traditional BPO is taking a hit.

BPOs are evolving. Smaller deals in higher numbers are becoming the norm, and, increasingly, there’s little or no outsourcing in the deal. BPOs now offer consulting, implementation of technology, analytics and working capital services.

It is also lower-risk to customise a set-up in which BPO services and shared services converge.

Source:http://business-reporter.co.uk/2013/07/the-debate-outsourcing-or-shared-services/

The Aldridge Company Acquires IT Services Division of The Harding Group

July 17th, 2013

The Aldridge Company (www.aldridge.com), a leading provider, consultant, and integrator of information technology (IT) and cloud computing solutions for small and medium-sized businesses (SMBs), today announced the completion of its acquisition of the IT Services division of The Harding Group, a leading Information Technology provider in Dallas/Fort Worth. The acquisition is part of The Aldridge Company’s 10-year plan to grow aggressively in order to ensure new and existing customers have access to the latest advances in IT systems and an expanded pool of talented employees.

The Aldridge Company has appointed Yaser Wassef, IT Director, Professional Services, to lead Dallas operations. He will report to The Aldridge Company President and COO Patrick Wiley. The company plans to retain all Dallas sales and technical staff.

“Acquiring the IT Services division of The Harding Group immediately establishes a strong presence for The Aldridge Company in DFW, and our new concentrations in education and municipal governments nicely complement our historic focus on SMBs,” said Wiley. “After close examination, we determined that The Harding Group’s strong, engaged team brings a great deal of value to our clients and will be a nice fit in our client-focused culture.”

The acquisition expands both the size and breadth of expertise of The Aldridge Company’s IT staff and strengthens its portfolio of service offerings. New strengths that will benefit all customers include storage solutions, collaboration, access/identity management and network infrastructure, including clustering, data backups, remote connectivity, large-scale technology rollouts, and the products that support these services.

It is a good time for IT service providers with technology spending on an uptrend, according to the recently released State of SMB IT survey from Spiceworks. The average annual IT budget for SMBs in the United States saw a dramatic boost of nearly 17 percent during the first six months of 2013. The survey found that more than two thirds (68%) of SMBs expect to use cloud-based/hosted services by the end of this year.

The Aldridge Company’s hosting services include cloud hosting, dedicated servers and colocation, which provide constant and current data availability, security and stability, thus giving customers peace-of-mind and allowing them to focus on their business. The Aldridge Company’s IT solutions include complete management of servers, PCs and networks coupled with rapid and accurate technical support. The company also provides audits of security and disaster recovery readiness.

Source:http://www.itnewsonline.com/news/—–The-Aldridge-Company-Acquires-IT-Services-Division-of-The—————————Harding-Group/30272/8/3

Stefanini Announces Renewal of Global Service Contract with Deere & Company for IT Outsourcing Services

June 25th, 2013

Stefanini (http://www.stefanini.com), a global IT infrastructure outsourcing and application development services company, announced today that it has renewed its service contract with Deere & Company through 2017.

Under the agreement, Stefanini will continue its strategic partnership to provide IT service desk support, desktop support, and additional IT outsourcing support services for Deere. This includes the Deere locations in North America, Europe, the Middle East, South America, and Asia Pacific. Stefanini provides support for more than 70,000 Deere employees and suppliers across 25 countries and responds to approximately 40,000 service requests in 11 languages each month.

Using global best practices and a model of continuous improvement, Stefanini has delivered consistent rapid response to incidents, as well as proactive incident and problem reduction. These efforts have resulted in substantial cost savings for Deere over the past 14+ years.

“We are pleased to continue our longstanding relationship with Deere & Company, and we are proud to provide agile and responsive support for their operations around the globe,” said Antonio Moreira, Stefanini CEO of North America and Asia Pacific. “Stefanini and Deere will continue to work closely together to drive continuous improvement, resulting in cost savings and improved user support on a global scale.”

Source:http://www.prweb.com/releases/2013/6/prweb10853738.htm

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