Posts Tagged ‘US’

Very Few CIOs Concerned by Risks of Outsourcing IT

September 12th, 2014

More than 75% of IT executives in the U.S. corporate world believe that their company’s decision to outsource IT infrastructure services will have no impact on their careers.outsourcing43

This was one of the findings of a recent survey of 1,014 IT executives in U.S. businesses by Information Week.

Only 3% of executives fear that outsourcing would lead to their dismissal, while a similar number of executives feel worried that they could be relocated as a result of such a decision. On the contrary, 19% of executives believe that their responsibilities will be expanded as a result of outsourcing.

Across North America, according to another survey from Information Week, businesses have continued to struggle to implement information technology, largely due to a lack of human skills and budget.

“CIOs pay top dollar for namebrand technology and believe it’s generally worth it because they do have limited staff and that staff has specific but limited expertise,” the report said.

Many CIOs surveyed for the report expressed concern that IT leadership would slip out of their hands because the decision for IT procurement typically comes from business units.

The swiftly advancing technology world has offered businesses with several alternatives to their in-house IT infrastructure: Software-as-a-Service, Infrastructure-as-a-Service, and other Cloud-based offerings.

“The bottom line, though, is that IT leaders need to change their outlook and tactics, and embrace today as a time of golden opportunity. They need to borrow tactics and strategies from digital-native businesses, and adapt them to their needs, to create an infrastructure that’s as responsive as the company demands,” the report noted.

With businesses increasingly aware of the need to adapt technology to stay one step ahead of their competitors, IT budgets are ballooning more than ever, with the majority of CIOs surveyed talking of increasing their IT budgets.


Google has to face US privacy suit over new user data policy

July 23rd, 2014

A California court has allowed a privacy class action suit against Google to continue, though only in part.
After evaluating each claim of each sub-class in the suit, Magistrate Judge Paul S. Grewal has allowed two claims of the “Android Application Disclosure Subclass,” which includes all persons and entities in the U.S. that acquired an Android-powered device between Aug. 19, 2004 and the present, and downloaded at least one Android application through the Android Market or Google Play.

On March 1, 2012, Google introduced a single, unified policy that allows the company to comingle user data across accounts and disclose it to third-parties for advertising purposes.

This move triggered the class action lawsuit in March, 2012 in the U.S. District Court for the Northern District of California, San Jose division, which argued that by switching to the less-restrictive privacy policy without user consent, Google violated both its prior policies and consumers’ privacy rights, according to court records.

The Android Application Disclosure Subclass claimed Google’s disclosures to third parties caused increased battery and bandwidth consumption as well as invasions of their statutory and common law privacy rights.

The suit was filed over two years ago and since then the court twice dismissed the plaintiffs’ claims. Google moved for a third dismissal.

The claims allowed by the judge includes a breach of contract claim that Google breached terms of the contract by disclosing user data to third parties following every download or purchase of an app, resulting in damages in the form of resource consumption. The second claim is under California’s Unfair Competition Law.

Claims by persons and entities in the U.S. that acquired an Android-powered device between May 1, 2010 and Feb. 29, 2012 and switched to a non-Android device on or after March 1, 2012 were dismissed.

Google could not be immediately reached for comment.


Is outsourcing killing us?

July 17th, 2014

The U.S. is experiencing a different kind of “reshoring.” China, the world’s largest air polluter, is sending us via the jet stream a fair amount of their harmful emissions. And, according to a recent study published in the Proceedings of the National Academy of Sciences, much of it is our own fault.Outsourcing25

Researchers say a large part of the emissions are due to Chinese manufacturers making goods for foreign consumption. For years, American companies have been outsourcing production to China to take advantage of low labor rates. So all the cheap appliances, toys, and electronics we’re hooked on may be coming back to bite us, in an indirect way.

Making many of these products takes a lot of energy. Chinese industry relies on coal as its main source of power, and emissions controls on power plants are often limited or outdated. Further, the general level of manufacturing technology and energy-efficiency standards in particular aren’t as advanced as in the west, so it takes even more energy to make these goods in China.

The study says 36% of the sulfur dioxide, 27% of nitrogen oxides, 22% of CO, and 17% of soot emitted in China are due to production of goods for export. About a fifth of those pollutants were attributed to goods headed to the U.S.

Atmospheric models used by the researchers indicate that this accounted for a quarter of the sulfate pollution over the western U.S. in 2006, and increased surface sulfate concentrations by up to 10% and ozone by 1.5%.

According to the U.S. EPA, scientific evidence links short-term exposure to high levels of sulfur oxides with an array of adverse respiratory effects, including bronchoconstriction and increased asthma symptoms, particularly in children and the elderly. Longer term, it can cause or worsen respiratory diseases such as emphysema and bronchitis, and can aggravate heart disease.

A second NAS study claims computer models show that pollution from Asia, particularly fine aerosols, could be intensifying Pacific storms headed to the U.S. and altering weather patterns over North America.

Simulations showed that aerosols alter the distribution of moisture and heat in the Pacific storm track, a relatively narrow zone where cyclones form and travel and a major driver of weather in the Northern Hemisphere. These tiny particles suspended in the air can change weather patterns because they scatter or absorb solar radiation; and water vapor condenses around aerosols, a process that alters cloud formation and makes them denser and higher. The results, according to the model, are more precipitation, stronger cyclones, and more heat moving from the tropics toward the arctic.

Researchers didn’t predict how this affects U.S. weather, so we have to cross our fingers that it doesn’t exacerbate the Southwest drought or Midwest storms.

What is pretty clear is that air pollution in China isn’t a regional problem. Thanks partly to outsourcing, what we save in cheap goods we’re paying for in lower air quality and, possibly, worse weather.


IT stocks in spotlight after positive US economic data

June 24th, 2014

IT stocks may gain on positive economic data in US. Data on Monday, 23 June 2014, showed US sales of existing homes climbed 4.9% to a 4.89 million annualized rate in May, the most since October. A separate report from Markit Economics showed a measure of US manufacturing growth rose to 57.5 in June from 56.4 in May. US is the biggest outsourcing market for the Indian IT firms.Outsourcing22

The board of Power Grid Corporation of India approved investments of about Rs 5500 crore for upgrading networks in about 4 years. The board approved strengthening the transmission corridor for independent power producers (IPPs) in Chhattisgarh at an estimated cost of Rs 5151.37 crore, Power Grid Corporation informed the stock exchanges. The commissioning schedule of the transmission project is 45 months from the date of investment approval, it said. The board also approved investment for upgradation of the transmission system associated with Lara thermal power project of NTPC at an estimated cost of Rs 400.47 crore, with commissioning schedule of 34 months from the date of investment approval, the statement said.

Adani Ports and Special Economic Zone (APSEZ) said it has completed the acquisition of 100% stake in the Dhamra Port Company from L&T Infrastructure Development Projects and Tata Steel. APSEZ had signed the share purchase agreement for the transaction with L&T Infrastructure Development Projects and Tata Steel on 16 May 2014.

Bajaj Hindusthan had issued Foreign Currency Convertible Bonds (FCCBs) worth $15 million to International Finance Corporation (IFC), Washington. The company has made repayment of $17.723 million, including the redemption premium of $2.723 million on the due date (16 June 2014), in accordance with the terms and conditions of the said FCCBs. With the aforesaid repayment, entire outstanding FCCBs held by IFC, Washington stands redeemed on maturity.

Kansai Nerolac Paints said that Dr. J. J. Irani has retired from the Chairmanship as well as the Directorship of the company with effect from the conclusion of the 94th Annual General Meeting of the company held on 20 June 2014. Mr. Pradip P. Shah has been appointed as the new chairman of the company.


IT stocks gain as Federal Reserve gives positive assessment on US economy

June 19th, 2014

Volatility struck the bourses in morning trade as the key benchmark indices retreated from intraday high hit in early trade only to regain strength later. The 50-unit CNX Nifty regained positive zone soon after reversing intraday gain to briefly turn negative. The barometer index, the S&P BSE Sensex, was up 51.93 points or 0.21%, off 127.67 points from the day’s high and up 50.68 points from the day’s low. The market breadth indicating the overall health of the market was positive.Outsourcing15

India’s largest oil exploration firm ONGC dropped. IT stocks gained after the US Federal Reserve on Wednesday, 18 June 2014, gave a positive assessment of the world’s largest economy and committed to retaining its accommodative monetary policy.

At 10:15 IST, the S&P BSE Sensex was up 51.93 points or 0.21% to 25,298.18. The index jumped 179.60 points at the day’s high of 25,425.85 in early trade. The index rose 1.25 points at the day’s low of 25,247.50 in morning trade.

The CNX Nifty was up 12.75 points or 0.17% to 7,570.95. The index hit a high of 7,606.45 in intraday trade. The index hit a low of 7,549.70 in intraday trade.

The market breadth indicating the overall health of the market was positive. On BSE, 1,197 shares gained and 970 shares fell. A total of 80 shares were unchanged.

The BSE Mid-Cap index was up 32.81 points or 0.36% to 9,068.06. The BSE Small-Cap index rose 47.94 points or 0.49% to 9,921.58. Both these indices outperformed the Sensex.

The total turnover on BSE amounted to Rs 863 crore by 10:15 IST compared to Rs 338 crore by 09:30 IST.

Among the 30-share Sensex pack, 22 stocks gained and the rest of them declined.

Tata Motors (up 1.29%), Bharti Airtel (up 1.22%) and Tata Power Company (up 1%) edged higher from the Sensex pack.

India’s largest oil exploration firm ONGC dropped 3.26% to Rs 428.75.

IT stocks gained after the US Federal Reserve on Wednesday, 18 June 2014, gave a positive assessment of the world’s largest economy and committed to retaining its accommodative monetary policy. US is the biggest outsourcing market for the Indian IT firms.

Infosys (up 1.63%), Tata Consultancy Services (TCS) (up 1.18%), Wipro (up 1.02%) and Tech Mahindra (up 0.59%) gained. HCL Technologies fell 0.45%.

GMR Infrastructure rose 2.32% after favorable verdict from an arbitration tribunal with regard to concession agreement for modernization and operation of Ibrahim Nasir International Airport in Maldives. GMR Infrastructure during market hours said that after detailed proceedings lasting for more than 18 months, the tribunal has now issued an award and declared that the concession agreement with Government of Maldives (GoM) and Maldives Airport Company (MACL) for modernization and operation of Ibrahim Nasir International Airport (INIA) in 2010 was valid and binding and was not void for any mistake of law or discharged by frustration.

The tribunal has directed GoM and MACL to pay $4 million by way of costs within 42 days to GMR Male’ International Airport (GMIAL), a subsidiary of GMR Infrastructure. GMR Male’ International Airport (GMIAL), a subsidiary of GMR Infrastructure had entered into a concession agreement with Government of Maldives (GoM) and Maldives Airport Company (MACL) for modernization and operation of Ibrahim Nasir International Airport (INIA). The contract was unilaterally terminated by the Government of Maldives (GoM) and GoM initiated arbitration proceedings seeking a declaration that the concession agreement was void ab initio on 29 November 2012. GMIAL had disputed this wrongful termination.

“It has always been our firm belief that the cancellation of our concession agreement amounted to wrongful repudiation by the Government of Maldives and the Tribunal has upheld this stand”, GMR Infrastructure said in a statement.

Key benchmark indices edged higher in early trade as Asian stocks after the US Federal Reserve on Wednesday, 18 June 2014, after a monetary policy review said a highly accommodative stance of monetary policy remains appropriate at this juncture. Volatility struck the bourses in morning trade as the key benchmark indices retreated from intraday high hit in early trade only to regain strength later. The 50-unit CNX Nifty regained positive zone soon after reversing intraday gain to briefly turn negative.

Brent crude rose as investors worried about exports from Iraq as militant violence in the country continues. Brent crude futures for August delivery were up 32 cents at $114.58 a barrel.

Increase in oil prices has triggered macroeconomic worries for India which imports majority of its crude oil requirements. Increase in crude oil prices have raised concerns of increase in fuel price inflation and increase in India’s current account deficit and fiscal deficit.

Foreign portfolio investors (FPIs) bought shares worth a net Rs 366.18 crore on Wednesday, 18 June 2014, as per provisional data from the stock exchanges.

In the foreign exchange market, the rupee edged higher against the dollar after the US Federal Reserve signalled that interest rates will stay low for a while yet. The partially convertible rupee was hovering at 59.98, compared with its close of 60.39/40 on Wednesday, 18 June 2014.

Asian markets edged higher on Thursday, 19 June 2014, on the optimism of Wall Street after the US Federal Reserve gave a positive assessment of the world’s largest economy and committed to retaining its accommodative monetary policy. Key benchmark indices in Singapore, Taiwan, Hong Kong and Japan rose by 0.1% to 1.63%. Key benchmark indices in Indonesia, China, and South Korea fell by 0.07% to 0.49%.

Chinese Premier Li Keqiang vowed that his nation’s economy will not suffer a so-called “hard landing,” a report said.

Trading in US index futures indicated that the Dow could rise 6 points at the opening bell on Thursday, 19 June 2014. US stocks rallied on Wednesday, 18 June 2014, gaining the most in four weeks, after the Federal Reserve chief signaled no hurry to raise rates.

The Federal Reserve said growth is bouncing back and the job market is improving as it continued to reduce the monthly pace of asset purchases. The Federal Open Market Committee trimmed bond-buying by $10 billion for a fifth straight meeting, to $35 billion, keeping it on pace to end the program late this year.

In a statement the Federal Open Market Committee (FOMC) said that if the incoming information broadly supports the committee’s expectation of ongoing improvement in US labor market conditions and inflation moving back toward its longer-run objective, the committee will likely reduce the pace of asset purchases in further measured steps at future meetings. However, asset purchases are not on a preset course, and the committee’s decisions about their pace will remain contingent on the committee’s outlook for the labor market and inflation as well as its assessment of the likely efficacy and costs of such purchases. To support continued progress toward maximum employment and price stability, a highly accommodative stance of monetary policy remains appropriate at this juncture, the FOMC said. In determining how long to maintain the current 0 to 1/4 percent target range for the federal funds rate, the committee will assess progress–both realized and expected–toward its objectives of maximum employment and 2% inflation, the FOMC said. The committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the committee’s 2% longer-run goal, and provided that longer-term inflation expectations remain well anchored.


Why ‘Nearshoring’ Is Replacing ‘Outsourcing’

June 5th, 2014

I do think that manufacturing has a chance to stage a comeback in the U.S.. The cost discrepancies that made the economics of outsourcing manufacturing to far-flung places have changed dramatically. In the case of China, for instance, rising inflation and wage expectations have decreased the cost advantages the country’s manufacturers enjoyed over U.S. firms and some estimate that by as soon as 2015, the U.S. could be in a cost parity situation with Chinese manufacturers.Outsourcing18

As U.S. firms are becoming increasingly concerned about protecting their intellectual property, “nearshoring”—or bringing production closer to the point of use—becomes attractive as the risk of having important intellectual capital stolen is decreased. Having the capability to manufacture close to where customers are located can also increase customer responsiveness and decrease turnaround times, making the supply chain more predictable.

Being physically close to customers is also very positive for innovation. We’re also seeing a rethink of some of the taken for granted assumptions that led to so much manufacturing outsourcing, for instance, the assumption that a leaner supply chain is always a better one.

Natural disasters such as the Tsunami in Japan can knock out a supply chain that is insufficiently diversified, making redundancy in the system and the capability to manufacture in a number of places more attractive. And as we see advances in automation and digitization, personnel cost as a fraction of total value created can be decreased, again making the economics of offshoring less compelling.

Of course, challenges remain. Companies would have to rebuild their supply chains and identify people with the right skills to handle increasingly sophisticated automated operations. U. S. Tax policy makes firm reluctant to repatriate profits earned elsewhere, making it more difficult to find the resources to invest in manufacturing operations.


US manufacturers’ shift from China to benefit Indian technology outsourcing firms

March 28th, 2014

As more and more American manufacturing companies shift production to the United States and reduce their reliance on low-cost labour in China, Indian technology outsourcing companies are expecting a big boost in revenues from their manufacturing clients.Outsourcing25

The country’s top software providers, which work with the world’s largest manufacturing companies, believe these enterprises will spend more on building and maintaining new systems for technology and supply-chain as they move production to the US. “This is an extremely important opportunity as more manufa ing arrives in the United States,” said Sanjay Jalona, senior vice president and global head of manufacturing and engineering services at InfosysBSE -0.50 %, India’s No. 2 IT services provider.

A rising number of companies in the US have been rethinking production strategies and this would see them ramping up investments in technology, giving more work to software outsourcing companies such as Infosys, said Jalona, who counts Volkswagen AG’s US business as a client.

From Apple to General Electric, a growing number of US companies have been moving part or all of their production to the US for reasons including political pressure to bring jobs home. These companies also say they no longer see China as a cheap manufacturing hub due to wage inflation and rising real-estate costs.

A survey by The Boston Consulting Group in September last year found that 21 per cent of a sample of 200 executives were actively relocating manufacturing from China to the US, while 54per cent said they were planning to do this. Nearly half of the respondents cited rising costs and proximity to end consumers as the primary reason.

GE moved production of some of its washing machines from a factory in China to Kentucky last year, and Apple has been gradually expanding its manufacturing in the US after poor working conditions inside Chinese factories drew global attention. Others who have brought manufacturing to the US include homeappliance maker WhirlpoolBSE -1.49 %, mining equipment maker Caterpillar and auto-major Ford Motor.

Technology industry experts say moving production from China, where most of the IT work is outsourced to state-owned companies, to the US, where working with third-party software companies is a norm, may put pressure on Indian IT firms to hold down their prices. “There will pressure to price low manufacturif the support was being provided from a low-cost location,” said Ben Trowbridge, founder and chairman of Alsbridge, a Texas-based outsourcing advisory firm.

Aloke Palsikar, global manufacturing head at Tech MahindraBSE 0.59 % said two of his top manufacturing customers have started shifting some of their work to the US. “The opportunities for Indian IT companies will be in areas of shop floor automation, high-end robotics and new generation technologies such as 3D printing, which will take the manufacturing to an entirely different level,” Palsikar said. “Another set of opportunities would be in area of recreating the supply chain back to the US which has been hitherto China centric.


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