Greenwood Village, Colorado-based CIBER, a provider of IT outsourcing and software implementation services, said Thursday that its CIBER Federal division won a contract from the Administrative Office of the U.S. Courts (AO Courts). Size of the contract was not disclosed. The firm said that the contract allows it to provide provide software engineering, communications, and systems integration services to all Federal court divisions and units.
Source:http://www.techrockies.com/story/0026664.html
In a bad news for India’s IT-BPO sector, U.S. President Barack Obama said he would slash tax breaks to American firms that move jobs abroad.
“To encourage… businesses to stay within our borders, it is time to finally slash the tax breaks for companies that ship our jobs overseas and give those tax breaks to companies that create jobs right here in the United States,” he said in his first State of the Union address on Wednesday. Mr. Obama said: “Now the House has passed a jobs bill that includes some of these steps [to slash tax breaks]. As the first order of business this year, I urge the Senate to do the same… People are out of work. They’re hurting. They need our help. And I want a jobs bill on my desk without delay.”
Mr. Obama said: “Because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed.” Pushing for the bill, he said job creation would be the country’s number-one focus in 2010. The bill will provide for taking $30 billion of the money Wall Street banks repay and use it to help community banks give small businesses the credit they need.
“Now, the true engine of job creation in this country will always be America’s businesses. But the government can create the conditions necessary for businesses to expand and hire more workers,” Mr. Obama said.
Citing India and China as countries that were going ahead with economic revamp, Mr. Obama said the U.S. could not accept a “second place” and should get serious about fixing its problems since the worst of the financial crisis was over. “Washington has been telling us to wait for decades, even as the problems have grown worse. Meanwhile, China’s not waiting to revamp its economy. Germany’s not waiting. India’s not waiting.”
Source:http://www.hindu.com/2010/01/29/stories/2010012958090100.htm
IT employees stand a better chance of finding a job in India than in the U.S., according to quarterly reports.
IT companies in India had strongest quarterly growth last quarter, compared to previous dismal quarters, and expect to see it rising.
The largest IT services companies in India – , Wipro Ltd., Infosys Technologies Ltd., and Tata Consultancy Services – had around 359,000 employees last quarter, adding 16,700 employees from the previous quarter.
Meanwhile in the U.S., the IT work force, which peaked at just over 4 million in November 2008, has been on the decline due to the recession.
According to the TechServe Alliance, an industry group tracks U.S. labor IT-related occupational data month-to-month, only 11,000 jobs were added to the sector during the last quarter.
However, total IT workers in the U.S. were 3.81 million at the end of the quarter, considerably higher than in India.
Indian technology firms are heavily dependent on the U.S.’ tech sector and therefore, see the pace of outsourcing growing as U.S. companies start building new IT projects.
Tom Lang, a TPI Inc. partner and managing director for CIO services for the Americas, said in a statement that the outsourcing market is just starting to get back to normal, and still has a way to go. Last year “was a very dismal year,” he added.
Source:http://www.ibtimes.com/articles/5237/20100122/it-hiring-india-leaves-thes-dust.htm
IN retrospect, 2009 was a crucial year; a year of mixed fortunes, economic instability, elections in India and US. The year held much importance following the 2008 global meltdown. It was supposed to define if the world was indeed in slump or could try and shake the feeling of gloom and start on a path of recovery.
For the first time in the industry’s history, the Indian IT sector logged in negative QoQ growth. The year was further embroiled with immense debate and introspection on the issue of corporate governance, triggered by the Satyam Computers’ financial fraud; and to credit the government, quick reaction and efforts in constituting a new board to salvage Satyam’s customers and retaining the company’s staff helped.
Despite the setbacks, things did begin to look up, as elections brought political stability in India, reflected in UPA government’s coming back into power with a strong majority.
Elections in US caused a global stir; Election of Democrat leader Barack Obama was expected to usher in changes in the country’s foreign policy and economic strategy. While the bailout measures initiated by the Obama government were much needed, certain laws introduced by the administration raised concerns about protectionism and outsourcing even though they never directly impacted the Indian economy.
NASSCOM and the Indian IT-BPO industry are continuing to engage with the US government to create awareness about the value of the industry that contributes to the US economy.
The Indian companies worked towards improving their cost efficiency and driving customer behaviour. New business models emerged, as companies took the path of innovation attuning to customer needs and to remain competitive.
With such developments, towards the end of 2009, first signs of recovery from the global meltdown have emerged.
2010 will see a rise in hiring in the IT-BPO industry, accompanied by a renewed focus on employee engagement as organizations are looking at initiatives to strengthen the bonds with employees.
Companies will also look at expanding their manpower base and hire more domain experts with specialized skill sets.
The UID project under Nandan Nilekani was also launched in 2009.
E-Governance will be in focus in 2010, as many pilot projects will go live. Government departments and organisations are expected to launch several egovernance initiatives aimed at improving their interface with the citizens of the country.
And though the Budget 2009 was only a little boost to the Indian IT Industry, we at NASSCOM are hopeful that budget 2010 will be supportive of the ITBPO industry and create a regulatory climate which is even more conducive to doing business in and with India.
Source: http://www.expressbuzz.com/edition/story.aspx?Title=2010:+Hopes+of+a+boost+and+a+conducive+climate&artid=WcnvJUzA7qs=&SectionID=Qz/kHVp9tEs=&MainSectionID=wIcBMLGbUJI=&SectionName=UOaHCPTTmuP3XGzZRCAUTQ==&SEO=
Indian technology companies, who depend heavily on the western worlds financial
services industry, could be affected by an intense anti-Wall Street/big banks sentiment sweeping the US and the UK, said experts and industry executives.
More than $25 billion of software exports from India is contributing to big American and the UK banks such as JP Morgan, Citibank, Barclays and RBS. Companies such as TCS, Infosys and Wipro derive a large part of their income from these institutions by running their business and IT systems and doing integration projects for firms wishing to merge.
While nobody is talking about another meltdown or even the collapse of big banks, the increasingly strident anti-big banks tone being struck by politicians, former regulators and the public is arousing concern among Indian technology executives, industry associations and independent experts.
Negative public sentiment is a concern because they can drive regulations, said Girish S Paranjpe, joint chief executive of Indias third-biggest software exporter Wipro. People still think that the financial greed has led to loss of jobs and there are enough bonus stories coming out, causing more damage, he added.
Despite many banks returning the TARP funds, the regulatory environment is not going to be easy. There are elections next year and you will find more populist measures being introduced, Som Mittal, president of Indias outsourcing association Nasscom, said on Sunday.
Their worries are not without basis. Reports of the big banks giving large bonuses to their staff have not gone down well with the public. Anger is mounting on Capitol Hill and the White House over what they perceive to be reluctance of the banks to lend to small businesses and consumers leading President Obama to lash out at fatcat bankers recently.
The US Congress is likely to see the introduction of a Bill that seeks to bring back the provisions of the Glass-Steagall Act, the depression-era legislation that was repealed in 1999 when Bill Clinton was the president. The act separated commercial banking from investment banking and prevented banks that took deposits from the public from underwriting securities. Repeal of the act is widely believed to have made banks take large market risks leading to the financial crisis of 2008-2009.
The Republican Senator and the 2008 presidential candidate John McCain and Democrat senator Maria Cantwell are seeking to introduce a bill that would include provisions of the act. The bill does not enjoy popular support and is not guaranteed to pass, according to reports in the US .
But in what could be an ominous sign for the banks, the House of Representatives is likely to take up a similar legislation soon. Paul Volcker, the former Fed Reserve chairman, has publicly called for reinstating the Glass-Steagall Act and warned banks and finance companies that they are yet to realise the gravity of the problem. Wake up gentlemen! he recently wrote in a newspaper article, saying America needs to produce more, finance less.
Around a decade ago, the US had repealed the 1903s Glass Steagall law enabling the rise of large banking conglomerates such as Citigroup, JP Morgan Chase and Bank of America. If at all the act is reinstated, Bank of America and Merrill Lynch will have to be separated again, and JP Morgan will have to give up the trading business it acquired from Bear Stearns.
That will obviously affect the Indian IT companies which have recently bagged a number of orders relating to integrating systems and processes of firms who have concluded M&A deals. Indian IT firms could also be affected, if the banks are broken up and the balance sheet sizes become smaller. In the UK, there is a great clamour for the banks such as RBS to scale down and focus on a few geographies than be global players.
Source : http://www.siliconindia.com/shownews/UK_US_Financial_service_can_take_a_toll_on_Indian_IT-nid-63984-cid-3.html
As top Chinese enterprises such as Bank of China and China Telecom seek to globalise their operations, they are increasingly turning to multinational and Indian outsourcing firms including IBM and TCS for deploying and maintaining standard software solutions, giving them an edge over local service providers.
In many ways, Chinese customers’ shift towards global and Indian vendors is reminiscent of how top Indian customers such as Bharti Airtel preferred an IBM over domestic suppliers around two decades ago for modernising their IT and business systems.
While state-owned and local Chinese software services suppliers such as Digital China Holdings and Neusoft continue to work with the country’s large customers, IBM along with TCS and others are being preferred for large, complex outsourcing contracts by customers such as China Telecom and Bank of China.
“A fragmented local vendor landscape and a domestic market dominated by wholly foreign-owned enterprise customers means that it will be the major western and Indian outsourcing vendors that will reap the rewards,” said Patrick O’Brien, senior analyst at UKbased research firm Ovum. “Apart from scale, local service providers also lack experience in handling large outsourcing contracts – something global and Indian firms are really good at,” he added.
Source:http://economictimes.indiatimes.com/infotech/software/US-Europe-experience-helps-Indian-IT-companies-bag-major-deals-in-China/articleshow/5270592.cms
Leading Indian outsourcers such as Tata Consultancy, Infosys and Wipro stand to gain contracts worth about $1 billion in the next one or two years as US banks emerge from the troubled asset relief programme, the Economic Times reported, states Moneycontrol.
The newspaper said JP Morgan, Goldman Sachs and Morgan Stanley, which received approval to buy back government stake worth $68 billion earlier this year, are among the firms seeking operational efficiencies by outsourcing non-core IT and back-office projects to India.
American Express, Bank of New York Mellon and Capital One, which have started repaying government debt, were also considering outsourcing, it said.
RMG squeezes savings from IT
The Royal Mail Group (RMG) has cut its annual IT spend by 10% by paring back its outsourced services, according to BusinessWeek.Antony Hayes, commercial director for RMG, was appointed a year ago to reduce the £110 million (R1.3 billion) the RMG was spending on running its IT operation each year.
Faced with the need to make substantial savings, Hayes realised he was not going to make such large cuts by simply renegotiating a lower cost for the supply of RMG’s existing IT services. Instead Hayes initiated a root and branch review of the £1.5 billion (R18.6 billion) contract that Royal Mail Group signed with service provider CSC in 2003.
Insurer outsourcing deal saves millions
British life insurer Equitable Life said it expected savings of £8 million (R100 million) this year after appointing pensions firm HCL to administer its book of policies, replacing Lloyds Banking Group, says Forbes.
Customer-owned Equitable Life, which was forced to stop accepting new business nine years ago after the cost of paying guaranteed bonuses to some policyholders left it short of cash, said the switch to HCL would also allow it to cut its provisions for future costs by more than £100 million (R1.2 billion).
The insurer said up to 240 jobs could go as a result of the changeover, with HCL expected to retain about 100 of 340 Lloyds’ employees currently working on the Equitable contract.
Source:http://www.itweb.co.za/index.php?option=com_content&view=article&id=28355:us-banks-boost-indian-outsourcers&catid=118:financial&Itemid=66
In continuation of its pursuit to buy firms in niche areas, Infosys Technologies, the country’s second largest IT services firm, is actively looking at acquiring companies in the consulting and healthcare spaces in the range of $400-500 million.
“We are looking at spending up to 10 per cent of our revenues, which could be in the range of $400-500 million, to acquire companies in niche areas like consulting and healthcare,” Infosys CFO V Balakrishnan told Business Standard. He said the company was primarily looking at companies with a strong presence in Europe. “We are also open to the US if we get the right candidates,” he added.
He expects the acquisition to either give it a geographical presence or a strong consulting base which can enhance its revenues from the enterprise solutions business going forward.
Balakrishnan simultaneously rubbished some reports that Infosys is planning to buy European consulting firm Ciber Novasoft. Balakrishnan said: “I completely deny this. We aren’t looking at this company.”
Infosys, for long, had been trying to strengthen its consulting practice as clients are now asking for more advisory-related work. Consulting and enterprise solution business together constitutes about 25 per cent Infosys’ business today.
In August last year, Infosys had offered to acquire European SAP consulting firm Axon Group, which could not materialise due to a counter offer by HCL Technologies [ Get Quote ]. HCL finally acquired the company.
Infosys, according to industry sources, is on the lookout for consulting firms in European countries. However, the process is getting delayed because of the fact that there are very few pure-play European consulting companies at the moment.
It is learnt that Infosys is scouting for acquisitions in continental Europe, as this would give it a platform to get into certain European countries which have been traditionally conservative in terms of outsourcing.
Infosys, which had a cash reserve of $2.8 billion (Rs 13,796 crore) at the end of September 30, 2009, has been traditionally conservative in its inorganic pursuit, as compared to its industry peers.
The company has so far made three acquisitions, including the recent acquisition of US-based insurance BPO services provider McCamish Systems for about $58 million.
Source:http://business.rediff.com/report/2009/nov/25/tech-infosys-may-acquire-european-cos-for-400-500-mn-dollars.htm
As America’s top banks emerge from the Troubled Asset Relief Program (TARP) and the economy shows signs of recovery, Indian outsourcing vendors
Tata Consultancy Services, Infosys and Wipro are set to gain new offshoring projects worth around $1 billion over the next 1-2 years.
Among the firms seeking operational efficiencies by outsourcing non-core IT and back office projects to India are JP Morgan, Goldman Sachs and Morgan Stanley—which received approval to buy back government stake worth $68 billion earlier this year, as well as American Express, Bank of New York Mellon Corp and Capital One—which have started repaying government debt. Many of these banks had deferred new offshoring decisions as they attempted to cope with TARP funding requirements and internal restructuring processes.
Experts such as Andy Efstathiou , director of banking sourcing practice at research & consulting firm NelsonHall, said US banks are increasing offshoring. “Since the beginning of the economic crisis, many of these contracts have been put on hold. That is beginning to change. It is looking like Q4 of 2009 is shaping up to be a 20% growth over Q4 of 2008,” he told ET in an interview.
The US government’s decision to allow these banks to repay TARP funds also reflects a growing pressure to operate independently devoid of any political and public interference.
In a September survey of around 480 firms by Efstathiou, only 2% said they plan to reduce offshoring, while almost 37% said they will increase offshoring. “The financial services firms we have spoken to intend to increase spending on offshoring. Specifically, in a survey of firms we did in September 2009, only 2% expect to spend less on offshoring, the rest expect to spend the same (61%) or increase spending offshore (37%),” he added.
The merger of the banking systems of Bank of America and Merrill Lynch, among many other such deals, is creating newer opportunities for offshoring and outsourcing vendors.
Source : http://infotech.indiatimes.com/outsourcing/US-banks-set-to-begin-offshoring-/articleshow/5261028.cms
Indian Prime Minister Manmohan Singh is in Washington for talks that many people see will shape foreign policy in the coming years.
So what can companies hope for, and what will better ties between the two countries mean as the US becomes evermore a key ally and trading partner for India?
Outsourcing
In the past decade Delhi and Washington have enjoyed close relations and India has been looked at as a rising economic power.
The United States was India’s largest trading partner and largest source of investment. The signing of the historic nuclear deal was the biggest victory for both sides.
Any perception that you might have that Barack Obama is not warm towards India, I think you should just forget it
Indra K Nooyi, US India Business Council
But when Barack Obama took office many in India were more cautious.
During his presidential campaign the 44th President took a tough stance on outsourcing and talked about taxing American companies who took their business abroad.
This issue is crucial for many companies in India.
In the business process outsourcing (BPO) sector, Indian companies have been hoping that more work will come to India as recession-hit American companies look to cut costs.
US investment
The purchasing of arms and defence equipment is high on the agenda for India.
But for trade in this industry to increase further, American #ompanies are demanding that India open up its foreign investment cap in sectors such as education, technology and defence from 29% to 49%.
Last year, an estimated $10.5bn (£6.3bn) was invested by Indian companies in the US which helped to create an additional 65,000 jobs.
Indra K Nooyi, chairperson of the US India Business Council spoke on the need for two-way flow of investment.
“The focus of both countries in the coming years must remain closely tied to three broad areas – job creation, infrastructure development and inclusive growth where collaboration is very much needed,” she said.
“Although we have made some great progress in recent years, a great deal more remains to be done. But with the vibrancy of our newly elected governments, we are tremendously optimistic that our nations’ two leaders will use the state visit to set a new course to fully capture the growth potential of our two economies.”
She dismissed fears within Indian industry that the Indian prime minister’s trip to Washington will not be successful, pointing out that the first state visit Barack Obama is hosting after becoming president is with the Indian premier.
That, she says, shows “his [Barack Obama's] tremendous warmth towards India.”
Anything that brings these two nations together, that allows a better perspective and sharing, will do well
Rajesh Sud, Max New York Life
“I think it shows his interest in India and I think this is a historic moment. So any perception that you might have that he is not as warm towards India, I think you should just forget it,” she insisted.
In the last couple of years, American companies have been increasingly interested in setting up shop in India.
The biggest hook is the rapidly growing middle classes who have deep pockets and are ready to spend.
And as the economy grows, Indian consumers are demanding more and more of the same kinds of goods and services that are available in the West.
‘Underpenetrated market’
Take life insurance for example. The country will soon have more than half of its population under the age of 25.
This is a lucrative market for companies like Max New York Life – a joint venture between Max India and New York Life Insurance Company.
They, like many others, are trying to capture one of the largest uninsured populations in the world.
Rajesh Sud, the company’s chief executive, says collaboration is a good way to enter the market.
“It requires people to come in and learn this market first hand. So anything that brings these two nations together, that allows a better perspective and sharing, will do well,” he said.
“Particularly for American companies, [this is a] very large underpenetrated market which has the right kind of attitude, the right kind of income profile and the right kind of demographic profile. The ability to also use management talent which is local and which understands this profile will also grow the business.”
The 2009 World Trade Report suggests that global trade may shrink by an unprecedented 10% this year. With this kind of bleak outlook, it is all the more important that India and US engage in stronger trade ties.
Back in the factory the white tops are being packed off ready to be shipped.
And when the American consumers are ready to pay top dollar for these goods again, Indian manufacturers will be ready to deliver.
Source: http://news.bbc.co.uk/2/hi/business/8374050.stm
Two US senators have introduced a legislation seeking to prohibit companies that lay off large number of American workers, from subsequently hiring temporary workers (such as tech professionals) from outside the US.
The proposed ‘Employ America Act’, if passed, could severely hit tech companies that had resorted to axing jobs during the economic downturn even as they continued to file for H-1B visas.
The IT industry has expressed concern over the proposed legislation given its ramifications on businesses. But industry watchers also point out that the possibility of the new legislation being passed on a standalone basis may be somewhat low at a time when the US is slated to look at comprehensive immigration reform next year.
When contacted, Ameet Nivsarkar, Vice-President of Nasscom, said, “The proposed legislation will be painful for global companies, if it becomes a law. While it may not get cleared as a standalone legislation, what we need to watch out for is whether it gets tagged as a provision to other must-pass Bills. We are constantly monitoring the situation.”
The proposed Employ America legislation has been introduced by Senator Bernie Sanders and Senator Chuck Grassley – the duo had tagged similar provisions to the economic stimulus package with an aim to prohibit companies receiving bailout from the Troubled Asset Relief Program from replacing laid-off American workers with guest workers from overseas.
The Employ America legislation would require employers hiring temporary workers such as IT professionals to certify that they have not resorted to mass layoffs in the past 12 months and that they do not intend to fire in the future.
Companies that have announced layoffs of over 50 American workers in the past year could be subjected to the prohibition.
The two US lawmakers have claimed that the tech industry, a major employer of H-1B workers, has laid off over 3,45,000 workers since August 2008.
“With the unemployment rate still climbing and millions of people looking for work, we have a responsibility to ensure that companies do not use the temporary guest-worker programme to replace American workers with cheaper labour from overseas,” said Senator Sanders, a member of the Senate Budget Committee.
Earlier this year, Grassley, along with Senator Richard Durbin, introduced a legislation that, among other measures, proposed to prohibit employers from hiring additional H-1B and L-1 guest workers if over 50 per cent of their employees were already in that category.
The 50:50 provision as it was dubbed, raised the hackles of the Indian IT industry, which felt that such a clause would not only impact the outsourcing per se but also hurt competitiveness of the US.
However, the passage of the Durbin-Grassley legislation may be remote given that comprehensive immigration reforms appear to be just around the corner.
Source:http://www.moneycontrol.com/news/business/it-cos-voice-concern-over-proposed-us-lawhiring_426464.html
As America’s top banks emerge from the Troubled Asset Relief Program (TARP) and the economy starts showing signs of recovery, IndianIT outsourcing vendors, Tata Consultancy Services (TCS), Infosys and Wipro, are set to gain offshoring projects worth around $1 billion over the next one to two years.
JP Morgan, Goldman Sachs and Morgan Stanley, which received approval to buy back government stake worth $68 billion earlier this year, apart from American Express, Bank of New York, Mellon and Capital One – which also started repaying government debt – are among the firms seeking operational efficiencies by outsourcing non-core IT and back-office projects to India. Many of these banks had deferred new offshoring decisions, as they attempted to cope with TARP funding and internal restructuring of processes. Experts such as Andy Efstathiou, director of the banking sourcing practice at research and consulting firm NelsonHall, say the US banks are increasing offshoring.
“Since the beginning of the economic crisis, many of these contracts have been put on hold. That is beginning to change. It is looking like the Q4 of 2009 is shaping up to be 20%-plus over Q4 of 2008,” he told ET in an interview.
The government’s decision to allow these banks to repay TARP funds also reflects a growing pressure to operate independently, devoid of any political and public interference.
In a September survey of around 480 firms by Mr Efstathiou, only 2% said they plan to reduce offshoring, while almost 37% of the respondents said they will increase offshoring. “The financial services firms we have spoken to intend to increase offshore spending. Specifically, in a survey of firms we did in September 2009, only 2% expect to spend less on offshoring, the rest expect to spend the same (61%) or increase spending offshore (37%),” he added. Merger among banking systems of Bank of America and Merrill Lynch among many other such transactions, is creating newer opportunities for offshoring and outsourcing vendors.
As these banks merge, they face a huge task of integrating their software applications, consolidating their data centres and other trading platforms into a single entity, so that their customers are able to transact without having to face any merger-related issues. And since offshoring will help them save costs by 30-40%, these merged banking entities are seeking to partner with a vendor having significant offshore presence.
When contacted by ET last week, a JP Morgan India spokeswoman declined to offer any specific comments about the bank’s outsourcing plans.
Indeed, Indian tech firms such as Infosys are already seeing their revenues from banking customers grow. For Infosys, which derives around 33% of its revenues from BFSI (banking, financial services & insurance) customers, consolidation among the top US and European banks is bringing new business, with some of these individual contracts worth around $500 million each, potentially.
“There are six integration projects we are currently looking at,” Ashok Vemuri, senior vice-president and global head for banking and capital markets business at Infosys said in a recent interview. However, M&A practice is not an area where Indian companies have been positioned as leaders yet, especially with top consultants of the world, including Deloitte and Accenture, being the most preferred vendors.
“A year ago, Infosys was not among the ones to be called for such high-end M&A-related consulting, a Deloitte was called,” said Mr Vemuri who also heads Infosys’ strategic global sourcing business focused on large multi-year contracts.
Rivals, TCS, Wipro and Cognizant are also seeing more business from America’s top banks. In fact, Cognizant, which serves customers such as JP Morgan, outperformed peers helped by new business from BFSI customers. Cognizant’s BFSI revenues grew by 9.6% sequentially during September quarter, higher than Infosys’ 4.4% and TCS’ 6.5% sequential BFSI revenue growth during the same period.
Meanwhile, these banks are also seeking newer engagement models in order to lower their capital expenditure in any new technology initiative. “They have a greater desire for transaction-based pricing, due to the need to convert fixed-base cost into variable cost. Anything else that supports variable cost and reduction of capital investment is of interest to them,” added Mr Efstathiou.
Banks emerging from the recession still do not want to commit high capital investments; therefore, they are asking vendors to share outsourcing costs. “The banks need to shore up capital so they need to reduce their own investment. They are willing to lease the service back (pay for the services and required investment over the life of the contract), but they cannot put a lot of capital into operations investment at this point,” said Mr Efstathiou.
Source: http://economictimes.indiatimes.com/infotech/ites/Tech-companies-eye-1-billion-pie-on-US-recovery/articleshow/5258746.cms
Bodhtree Consulting, a leading provider of innovative consulting and technology services world wide, has signed a strategic partnership with silicon valley based Plaksa, Inc., (employer work force development solution provider – https://jobs.plaksa.com ) for its CoE (Center of Excellence) for SaaS and Cloud Computing.
This partnership enables Plaksa to leverage Bodhtree’s CoE for SaaS and Cloud Computing to design, develop and maintain its SaaS based products and applications. It will help Plaksa to expand its market reach and help deliver significant customer benefits which include much lower cost, faster time to market, and opportunities for creating new avenues of value. Gartner forecasts the 2008 cloud number at $ 46 billion, climbing to $ 150 billion by 2013.
Making the announcement, Sanjiv Gupta, Chairman of Bodhtree, said “Bodhtree eyes the US market as a major opportunity to expand our SaaS and Cloud Computing business. Our goal is to ensure customers like Plaksa, Inc. successfully leverage cloud technology in achieving their time to market and ROI objectives.”
Bodhtree’s CoE for SaaS and Cloud Computing identifies technology trends and provides thought leadership, sets direction refine methodologies and processes for SaaS based solutions for various verticals and horizontal businesses, that enables companies to leverage cloud computing services and share best practices.
“We are looking forward to a long association with Bodhtree by partnering with their CoE ecosystem. Their core competency in and customer success with CoE, SaaS and cloud computing will certainly bring a greater value proposition to our customers” Mohan Sivasankar –CEO of Plaksa, Inc. said.
“We expect to deliver a basic version of SaaS application in 90 days to Plaksa, since swift delivery is our CoE’S USP,” Raghavan Madabhushi, Head – SOA&DW, Bodhtree said. “Bodhtree’s dedicated CoE for SaaS and Cloud Computing is aimed at bringing significant business value to existing customers and future partnerships in all markets in which we operate. We are confident that our existing and new customers like Plaksa, Inc. in the US will experience associated benefits and economies of scale. Bodhtree’s (CoE) offers its customers to rapidly define build and deploy SaaS solutions in the cloud cost effectively.”
Source:http://www.theopenpress.com/index.php?a=press&id=62031
Wipro, India’s third largest IT services provider, is seeing an improvement in the prospects for the IT sector. The company expects IT spends in the US to go up in 2010.
“The situation continues to look good,” said Suresh Senapathy, CFO of Wipro on the IT sector. “IT spends will be up by 2-3 per cent in the US for 2010,” he said.
Indian software services exporters rely on the United States and, on an average, 70 per cent of their revenues comes in from US-servicing multinationals across various verticals, including financial institutions, airlines, technology and automobile sectors.
The Indian software services sector had been on tenterhooks during the past 18 months and had resorted to cutting billing rates to keep alive their engagements with US companies.
The indication by Wipro’s CFO that that there will be a 2-3 per cent increase in IT spends in the US will come as a morale booster for the sector, which is looking at clocking in total exports of $50 billion during the current financial year.
After the US market, Indian software services exporters derive the next major chunk of their business from the European Union.
Senapathy further added that Wipro is increasingly looking at India and China as the two growth markets in the coming years.
He also said that the trend of clients wanting more services for the same amount of money continues to prevail, although pricing was stable. However, he expects the currency market to remain volatile.
The company is learnt to be looking at more opportunities to work with airports, like the current project it has with the Delhi airport (DIAL).
Wipro has signed a 10-year outsourcing agreement with DIAL to provide IT infrastructure and services at the Indira Gandhi International Airport in New Delhi.
Source:http://sify.com/finance/wipro-expects-us-it-spend-to-rise-by-2-3-news-technology-jlvb4vbfbaj.html
OTS Solutions LLC, a leading provider of outsourced software development services, today announced that it has shifted its regional Sales office from Burbank to Glendale in US, while the company continues to enhance its focus on outsourced product development; custom development and IT outsourcing services.
“OTS Solutions found its existence more than seven years ago and we have witnessed quality growth year on year in India and US. The shifting of our office from Burbank to Glendale is aimed to enhance not only the reach to potential clients but also to serve our existing clients better,” stated Hemant Madaan, Director & CEO of OTS Solutions. “Nowadays, companies want to build high-end products and services which involve complexities and OTS Solutions ramps up to enhance its global presence in order to address its clients’ need better.”
Source:http://www.sbwire.com/news/view/34214
If you sign up for an outsourcing contract when your own house is not in shape, you are in trouble, according to Discovery Communications CIO David Kline. Speaking at the Global Sourcing Forum and Expo in New York City on Nov. 11, Kline said it’s important for companies to virtualize and streamline before going outside.
“If your mess is a mess, and you turn it over, it’s still going to be a mess,” Kline said. “You could do an offshore…where your management staff is saying, ‘It’s over there. It’s not my problem anymore.’ And that’s not true. IT’s still your mess. Get it as clean as you can get it.”
He said that virtualization and consolidation are key to getting a company’s IT infrastructure “clean” for outsourcing. Part of the process is making sure employees are in the right place. And it may be preferable to locate key workers in other parts of the United States or overseas with the outsourcing center.
Nevertheless, an article by eWeek.com warns that the very idea of outsourcing will present an emotional reaction from U.S. workers. It cites a September survey by Amplitude Research, which found that nearly two-thirds of the 350 IT professionals surveyed reported an unauthorized intrusion in their outsourced systems in the last two years.
Source:http://www.fiercecio.com/story/clean-your-company-outsourcing/2009-11-14
India’s second largest IT company by revenues, Infosys Technologies, says it has agreed to pay upto $58 million for Atlanta-based McCamish systems, adding some 300 U.S. staffers to its payroll, and increasing its presence in what is commonly known as back-office operations, or business process outsourcing.
The deal, which includes $38 million in cash, and another $20 million if the privately held, unprofitable McCamish is able to achieve pre-set targets in the next three years, is an acknowledgement that Infosys needs to ramp up its game in the BPO business, which currently contributes less than 1% to its revenues.
Infosys executives have said in the past that they hope to have that contribution reach as much as a fourth of the $5 billion outsourcing giants revenues.
But business process outsourcing requires a different skill set than the nearly 100,000 engineers that Infosys has, who spend most of their days developing software that allows companies in the U.S. to run their billing, inventory and manage systems like data from cell phone networks.
McCamish, for instance, handles some operations for U.S. insurance companies like the Nolan Financial Group and Heritage Union. Infosys will retain the employees at McCamish, but one can expect to see a lot of work-sharing between U.S. and Indian workers at Infosys.
Interestingly, even though Infosys has consistently said it is looking for acquisitions overseas, this is the first move it has made in the past two years to buy anything, despite the fact that it is sitting on around $2 billion of cash, all thrown off by the highly profitable tech service work it does for western clients.
When I met with Infosys executives in June, they had already been thinking about ways to diversify their revenues. Most of its customers had cut back on discretionary spending in 2008, during the recession, and the slowdown in its revenue growth – much of which is from short-term, piecemeal projects – had reminded Infosys leaders that it must step up its hunt for what the industry calls mega-deals, which are signed for 5 or ten year operations and measure in the hundreds of millions of dependable revenue, recession or not.
The BPO world in India is actually pretty scattered, compared to the tech industry, where the majority of work is shared between the three top players – Tata Consultancy, Infosys and Wipro – and a handful of smaller players like HCL. The BPO industry in India has few clear leaders, and none with the size and pull of the IT leaders. So for IT companies, already seeped in the culture of outsourcing technical work, it makes sense to grab a bit of BPO business, especially since foreign companies like CapGemini have done a great job of cornering the high-value deals in back-office work that flows to India.
Perhaps more importantly for Infosys, this acquisition helps show Americans that it is serious about investing in the U.S. and creating jobs there, considering the amount of flak that outsourcing companies have drawn in the past two years as U.S. employment numbers started to plunge.
Source:http://www.businessweek.com/globalbiz/blog/eyeonasia/archives/2009/11/infosys_acquire.html
IN an effort to expand its services, international business process outsourcing (BPO) firm Integreon, partly owned by the country’s oldest conglomerate Ayala Corp., acquired Grail Research, a US-based research and decision support firm.
Integreon is considered a leader in knowledge process outsourcing (KPO), which offers “higher-value” products such as market research, legal, financial as well as accounting services.
In a filing to the local stock exchange on Wednesday, Ayala Corp. said Integreon acquired Grail from the Monitor Group, a multinational advisory firm, which also agreed to buy research services from Integreon for the next five years. Integreon is owned by its management team and LiveIt Investments, Ayala Corp.’s BPO investment arm.
“Grail will enable Integreon to further climb the value chain, and will strengthen its position as the leading KPO company,” LiveIt Investments chief executive officer Fred Ayala said in a statement yesterday.
“This acquisition accelerates the expansion of our business intelligence, research and analytics business with high-end, custom market research,” added Integreon chief executive Liam Brown.
The addition of Grail is seen to strengthen Integreon’s capability to meet the research demands of its corporate clients, while expanding its presence to “strategic” markets such as South Africa and China. At present, Grail services leading multinationals such as Microsoft, Estée Lauder and most of the “top 10” pharmaceutical companies.
Integreon provides a range of services using document, research, legal and business knowledge process outsourcing. Its customers include many top US and United Kingdom based law firms and corporations, almost all of the global investment banks, several top-tier private equity firms and hedge funds, among others.
Source:http://businessmirror.com.ph/home/companies/18413-ayala-unit-buys-us-research-firm.html
US economy said to be improving as the number of applications for US H-1B visas increases.The number of outsourcing firms applying for H-1B visas for foreign workers is expected to increase in line with the recovery of the US economy.
Outsourcing firms are currently the highly skilled US work visa scheme’s top users and they claim the dip in demand that is currently being experienced in the US will not last.
Peter Bendor-Samuel, the founder of outsourcing consultancy Everest Group, said, “unless we are heading into a Great Depression, pressure on the H-1B visa program will increase as the economy rebounds.” He continued, “it’s almost impossible for me to believe demand will lessen long term. I find it mildly surprising there are some extras left now.”
The impending retirement of skilled workers currently working in the US, along with a greater number of foreign students studying in the US for subjects including maths and science, are both factors that will lead to an increase in H-1B petitions.
Indian technology firms are especially keen to use the US skilled work visas to enable their staff to travel back and forth to the US to consult on major projects. Som Mittal, from trade group NASSCOM, supported Bendor-Samuel’s comments, claiming “the reduction in applications is completely linked to the economic downturn. I think that as the economy turns around, the cap will again be reached quickly.”
Source:http://www.globalvisas.com/news/outsourcing_firms_set_to_demand_us_visas_for_foreign_workers_during_recovery1773.html
Some 28% of US companies and 22% of UK companies are cutting pre-trial costs by working with legal process outsourcing (LPO) providers, a new report has shown. The Sixth Annual Litigation Report,released by international law firm Fulbright & Jaworski, indicates that LPO partnerships are helping in-house counsel control their spend on the research and review of electronically stored information (ESI) – essential, but time-intensive tasks that are key to the document-heavy early stages of IP litigation
In its survey of 408 UK and US corporate lawyers, Fulbright found that 77% of US respondents want the pre-trial document disclosure process to be reworked in order to make it more affordable – up 14% on last year. Pre-trial disclosure can pose particular problems in the US, where Federal rules compel lawyers to follow numerous steps for discovering and disclosing different kinds of information. While courts are allowed to alter these terms in specific cases in order to simplify proceedings, many lawyers still favour a streamlining of the rules at Federal level.
The IP-rich sectors of energy, healthcare and manufacturing have joined the financial sectors of insurance and real estate in the camp that backs a rethink. ‘More than half of the public company sample favours reconsideration,’ added the report, ‘while the privately held group favours it by about three to one.’ According to Fulbright, only 21% of UK respondents called for changes to disclosure rules, ‘possibly because pre-trial disclosure [in the UK] is less fulsome already’.
Among the respondents who had worked with LPO providers in order to cut costs, loyalty emerged as a key factor. ‘More than half … have preferred provider relationships for [document] collection and processing,’ said the report, ‘while a little more than a third have such relationships for preservation and review.’
Fulbright’s findings arrive in the wake of a rise in recession-related lawsuits. Of the US respondents, 83% reported that their firms have been subject to new litigation in the past year, while 42% of the same group anticipated an onset of legal action against their firms in the year to come.
‘Litigation rises in an economic downturn,’ explained Stephen C Dillard, head of the Fulbright’s global litigation practice. ‘Regulators tend to step up enforcement, laid-off workers head to court and companies need to file more suits in order to collect on money owed. Perhaps most telling about this year’s results,’ he added, ‘is that companies across the spectrum expect no substantial decreases in any area of litigation.’
Dillard said that, while corporations have not reduced their overall spend on litigation, their in-house teams have been busy ‘finding other ways to cut costs’ in efforts to make the most of existing budgets. Among the solutions they favour – such as outsourcing key document tasks, or ‘in-sourcing’ them to specially hired, in-house staff members – corporate counsel are also taking stricter views on their own document retention policies. Popular methods of enforcing these policies include more regular destruction of redundant data and shortening periods in which documents are retained.
In-house counsel also said that they are reducing the volume of discovery in legal cases by increasingly negotiating with the other side on what should and should not fall within the scope.
Source:http://www.cpaglobal.com/ip-review-online/4197/us_and_uk_companies_turn_outso
Pacific Ventures (www.pacificbpo.com), a leading healthcare outsourcing company of India today announced the company has secured an agreement to be the exclusive provider of medical coding, billing and transcription services to a large chain of ambulatory surgical centers of the US.
“We are thrilled to add this chain of surgical centers to our client’s list. The expertise of our people combined with the latest technology used by Pacific Ventures has always ensured the world class service delivery to our healthcare clients” said Vivek Gaur, CEO of Pacific Ventures. “In last 8 years, Pacific Ventures has seen tremendous growth in healthcare Revenue Cycle Management business and we are poised to become one of the top three healthcare BPOs of India”.
As per Mr. Gaur, Pacific Ventures is among the first companies of India to start healthcare outsourcing business way back in 2001 and being one of the oldest and most experienced BPOs in this field, Pacific Ventures has developed expertise in this highly knowledge based outsourcing field and is a preferred outsourcing partner of US based healthcare companies for all their outsourcing needs.
Pacific Ventures is one of those very few outsourcing companies of India which can provide end to end healthcare outsourcing services to the US based healthcare companies. Its area of operations is spread across Revenue Cycle Management (Medical Coding, Medical Billing, Accounts Receivable Follow Up, Coding Audits, Medical Summaries etc.) and medical transcription services.
Source:http://www.1888pressrelease.com/pacific-ventures-announces-medical-billing-outsourcing-contr-pr-157971.html
According to Gary Pisano and Willy Shih, the U.S. has lost or is in the process of losing the ability to manufacture many cutting-edge products because of the outsourcing of development and manufacturing work abroad, which has caused a damaging deterioration in the collective capabilities that serve high-tech industries. This is a disturbing hypothesis backed up by anecdotal data about a variety of high-tech products that can no longer be manufactured in the U.S. As someone who has worried about the global competitiveness of U.S. high-tech industries for years, I find their analysis chilling — but not entirely convincing.
A look at some of the recent data on global market shares supports a more nuanced and optimistic assessment: The U.S. retains significant shares of global markets for high-tech products and services. And the reduction in costs and prices made possible by outsourcing upstream component production to low-cost foreign locations has helped U.S. companies maintain their competitiveness in high-value-added downstream products.
According to the O.E.C.D.’s latest Science and Technology Indicators, on a value-added revenue basis the U.S. continues to have the largest share of global markets in both knowledge-intensive services (business, communications, financial, education, and health services) and high-tech manufacturing industries (aerospace; computers and office machinery; communications equipment; pharmaceuticals; and scientific instruments).
Between 1995 and 2005, the U.S. maintained about a 40% global share in knowledge-intensive services and about a 35% global share in high-tech industries, keeping the lead in four of them. Indeed, despite the high value of the dollar and the rapid growth of emerging markets between 1995 and 2005, the U.S. increased its global share in all but the aerospace industry. The U.S. share in communications equipment increased by more than 20 percentage points as Japan’s share plummeted, and the U.S. doubled its share in computers and office equipment, although it was overtaken by China in 2003. These are the two sectors that encompass most of the products and companies that are the focus of the Pisano and Shih analysis.
The increase in China’s share in computers and office machinery — from 2% in 1995 to 46% in 2005 — was remarkable, but it is not a sign that China has gained on the U.S. in innovative capacity in this sector or others. China’s exports of high-tech products turn out to be not very high tech and not very Chinese: 80%-90% of China’s high-tech exports come from firms that are partially or wholly foreign-owned — in many cases by American or Japanese companies — and 95% are processing exports, the high-tech components of which are produced elsewhere and imported into China. China accounts for about 35% of the value added in its exports — and considerably less in many of its high-tech exports sold under the brand names of U.S. high-tech companies like Apple, Microsoft, and HP.
Pisano and Shih also argue that the national identity of high-tech companies is meaningless — that U.S. multinational companies are no more important to the innovative capacity of the U.S. than foreign MNCs. Again the data suggest otherwise.
According to a study by Matthew J. Slaughter of Dartmouth’s Tuck School of Business, in 2007 U.S.-based MNCs accounted for 19% of private-sector employment, 25% of private-sector output, 31% of private sector investment, 48% of exports, 37% of imports, and an amazing 74% of U.S. corporate R&D spending in the U.S.
U.S. MNCs are especially important in manufacturing, accounting for 61% of manufacturing value-added and 49% of manufacturing employment in the U.S. And within manufacturing they are particularly important in high tech, accounting for 85% of value-added in computers and electronics, 76% in transportation equipment, 73% in chemicals/pharmaceuticals, and 49% in electrical equipment, appliances and components And despite outsourcing, most of the activity of U.S. MNCs remains at home: they purchase 89% of their intermediate inputs from other companies in the U.S. and their U.S. operations account for 70% of their worldwide employment, 72% of their worldwide output, 75% of their worldwide investment, and 87% of their worldwide R&D.
Nor have these shares declined meaningfully in the last decade. Moreover, the evidence suggests that the offshoring of activity by U.S. MNCs — either to reduce the costs of their supply chain or to serve foreign customers — increases rather than decreases their U.S. activities. According to a recent study by Mihir A. Desai and C. Fritz Foley of Harvard Business School and James R. Hines Jr. of the University of Michigan at Ann Arbor Law School , both the domestic and foreign investment and the domestic and foreign employment of U.S. MNCs move together.
Overall, the data do not indicate that the U.S. has lost its innovative capacity or that the outsourcing of production to low-cost locations has undermined the global competitiveness of U.S. high-tech companies — at least not yet.
Source: http://blogs.harvardbusiness.org/hbr/restoring-american-competitiveness/2009/10/according-to-gary-pisano-and.html
1) Will the howling from nativists in labor unions, lobbying firms, and the U.S. Congress eager to curry favor with those unions persuade President Obama to pursue the devastating protectionist measures he has advocated recently based on his faulty presumption of the existence of something he calls “our jobs”?
2) Will CIOs and CEOs have the vision and the wisdom to leverage this heightened competition not just to pound on suppliers for lower prices but instead to pursue new types of outsourcing engagements that help transform their companies into agile, flexible, and customer-driven organizations?
First, here’s what the Journal had to say about the huge transition major Indian IT services companies have begun to undertake:
Indian technology-outsourcing companies no longer just want to serve their clients’ computing departments—they want to be them.
… They are aggressively pursuing on-site work like managing companies’ entire information-technology departments, networks and help desks. They are looking to run external data centers for customers — a foothold that would help them expand into the hot new area of “cloud computing,” where all of a company’s critical software is hosted remotely. And they are trying to tie all of their services into end-to-end outsourcing packages for clients.
How well the Indian firms manage to upgrade to this more sophisticated work in the next few years could determine whether India’s $58.8 billion-a-year technology services industry — a flagship of the nation’s economic surge in the past decade — will see even brighter days or become a back-office also-ran to more sophisticated tech companies in the West.
So, based on that description, this isn’t some one-off project or a single company looking to extend its reach: this is a broad-based initiative that puts many tens of billions of dollars up for grabs. This is how it’s going to be; this is, in fact, what’s already happening. Here’s why:
Products continue to be enormously important, but services and industry knowledge and expertise have become the levers with which CIOs and other business leaders are transforming the world.IBM (NYSE: IBM)’s and Accenture are long-established powerhouses, HP (NYSE: HPQ) is getting there via its EDS (NYSE: EDS) acquisition 18 months ago, and Dell (Dell) (Perot Systems) and Xerox (NYSE: XRX) (ACS) are looking to raise the value of what they do by coming closer to offering end-to-end services.
In the Journal piece, Siddharth Pai of the well-known outsourcing-advisory firm TPI said, “The Indians still aren’t top of mind when it comes to that high-value work. To bump back up to the 30% growth range they need to transform their businesses.”
And Infosys executive Amitabh Chaudry said that while the challenge of taking on major infrastructure deals and even huge parts of IT organizations is steep, progress is being made. “The mindset required for how to run it and price it is very different. We’re learning along the way.”
One thing that’s beyond question is that the top Indian firms will show massive commitment to making this transition rapidly and effectively. What’s not so clear is whether those companies will have to do so under some competitive restraints that could be imposed by the the Obama administration. The president has talked on a number of occasions about his intention to “protect our jobs,” although he’s been far from clear on just how he would define “our jobs” in a global economy.
IBM has 70% of its employees based outside the U.S.; are those “our jobs”? Oracle has about two-thirds of its workforce outside the U.S., and for Microsoft the number is more than 40%. “Our jobs”? What does that mean anymore?
For the past couple of years, the big Indian IT-services companies have been making some so-so efforts–not exactly aggressive, and not exactly strategic — to open up some facilities around the U.S. for various types of development and support work. Those were undertaken to support their traditional model of doing software work and development projects, rather than full-scale outsourcing mega-projects such as the kinds they’re looking for now.
They’ll need to hire workers based in the U.S. to handle projects based in the U.S., and I doubt the White House will try to interfere with that. I only hope they are allowed to compete level footing with U.S. firms, and are not saddled with any sort of tariff penalties—because those penalties will ultimately be felt by potential customers and prospects who are now eagerly awaiting the full arrival of several more well-heeled and aggressive suppliers from which to choose.
Meanwhile, those CIOs would do well to make this extended competition about much more than just price-arbitrage. While looking for every fair cost advantage is essential, the real value to be gained by the larger pool of competitors is innovation: which of the companies bidding for CIOs’ business have special expertise in your industry? Which have special technological expertise in the area of greatest concern to you? Which have the demonstrated the ability to optimize business processes that will get you closer to your customers, allow you to move at the speed of the markets in which you operate, and redefine your value proposition based on what your customers want instead of just on what you happen to be selling?
The prospect of great new ideas and capabilities pouring into the enterprise IT space has enormous potential, and we can only hope that politicians will resist their recent tendencies to muddle. “Our jobs” will be much safer if the free market is left to fend for itself, if competition is open to all with great ideas and initiative, and customers have full freedom to choose the partners whose capabilities best match their needs.
Source: http://www.informationweek.com/news/global-cio/interviews/showArticle.jhtml?articleID=220600197
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