Offshore Outsourcing News & Articles

Outsourcing is the latest buzz word to hit internet marketing circles and niche websites. Internet has given rise to a new dimension to many of the popular techniques. Because of this, there are number of issues to keep in mind when looking at outsourcing as a viable alternative to doing it yourself.

For customers, Outsourcing brings innovative and streamlined products and services like billing, CRM and data warehousing. For employees, it brings enhanced performance critical applications like intranet, e-mail and online collaboration.

1) However, for a business enterprise, outsourcing will be definitely beneficial as their saving on manpower will be tremendous in the end. Besides saving on cost, outsourcing can help in time-saving for the enterprises.

2) As we all know that manpower is expensive in US and Europe compared to Asian countries, outsourcing jobs will bring huge saving on manpower for them.

3) Saving is not only the criteria; we must also look for quality output that we desired. Our Outsourcing will provide you with great quality of application developments, which fulfill your requirements.

4) Outsourcing is integrated easily if they provide specific and detailed instructions.

5) Time and skill level being the two primary factors that lead internet marketers to outsource. Outsourcing is mostly depends on the usage of time with effective skills levels.

6) Better infrastructure in terms of communications and relatively stable government.

7) Outsourcing only is meaningful if it is measured for the ROI. There are many top service providers in countries like India who offer outsourcing software measurements services.

According to Infrastructure Strategies, other important drivers for strategic IT outsourcing are focus on core competencies, access to special expertise, higher speed of delivery, and access to new technologies

India is probably the leader of offshore BPO outsourcing, and there are certain reasons why executives in American countries tend to entrust their BPO needs to their Indian colleagues.

Firstly, India possesses a well-developed system of higher education, which accounts for about 85,000 graduates each year, who can boast of a solid reputation in the international business community.

Secondly, with the help of BPO outsourcing to India an American firm can reduce their costs up to 40-50% percent in comparison with the sum of money they would have to pay to an American or European employee for a similar job. This gives an organization a great chance to stand out in front of their competitors. Thirdly, employees of BPO outsourcing companies are Indians, who strive for quality and carefully work with the customers’ data ensuring a perfect accuracy level.

Next, in comparison with many developed European countries, Indian BPO outsourcing resources luxuriate in computer literate workers, who speak English as their first language. This makes them cost effective compared to other outsourcing countries.

BPO outsourcing call centers are frequently located in India as the country has one of the biggest telecommunications networks in Asia, which counts around 25 million telephone cables, and is constantly expanding. Numerous companies, private owners and government agencies have installed around 8500 VSATs throughout India, making it easier to gather all the necessary information.

A BPO outsourcing company in India can help you effectively run business 24 hours a day, as the time zone difference between the two countries provides a chance for Indian colleagues to go on with the business, when their American colleagues go to bed. Quick turnaround time is a clear privilege of many BPO outsourcing companies.

Sharing business risks is one more reason for hiring a BPO outsourcing staff in India. When you delegate some of your tasks to your Indian partners, you do not have to think about the staffing problems at the peak of vacations, about the management and education of employees, as well as the probable renovation of technologies and equipment, which you may never use in future due to the constant development of the IT sphere.

Thus, for the reasons mentioned and not mentioned here, India can be considered an ideal place for the BPO outsourcing company to look for and is on top of the list of the most famous outsourcing countries.

BANGALORE, India (AFP) — India remains the favoured technology outsourcing destination, an industry report said Sunday, amid concerns a rising rupee and soaring wages would blunt the country’s competitive edge.

A study by industry publication Global Services and investment advisory firm Tholons put the Indian cities of Chennai, Hyderabad and Pune at the top of a list of 15 emerging outsourcing destinations for global companies.

Kolkata at number five and Chandigarh at number nine were the other two Indian locations on the list, which contained three Chinese and two Vietnamese cities as well.

The three hot cities for outsourcing from China were Shanghai at number eight, Beijing at 10 and Shenzhen at 13. Ho Chi Minh City and Hanoi were put at number six and number 12.

Cebu in the Philippines came in at number four, the Sri Lankan capital of Colombo at seven, Cairo at 11, Buenos Aires at 14 and Sao Paulo at 15, the study’s sponsors said in a statement released in Bangalore.

The list is based on criteria such as scale and quality of workforce, financial infrastructure, risk environment and quality of life.

But it does not include established outsourcing locations such as Bangalore, the New Delhi capital region, Manila, Mumbai and Dublin that have had a decade’s headstart.

Costs are surging in the prime cities in India, which has earned a reputation as the world’s back office, as property values and rentals rise and wages increase at an annual pace of more than 15 percent amid a shortage of skilled employees.

Indian outsourcing firms are also feeling the pinch from an appreciating rupee, which dents dollar-billed earnings, forcing them to cut costs by expanding to less expensive locations.

“With the demand-supply gap widening, newer tier II cities will play a critical role in re-engineered globalisation models,” said Tholons chairman Avinash Vashistha.

“Destinations will need to provide greater level of cost effectiveness and operational efficiency.”

India’s outsourcing companies have thrived by winning work from companies in the US and Europe that sought to tap the country’s low costs and large employee pool by handing over jobs ranging from answering customers’ calls to risk management and financial analysis.

Pure-play outsourcing firms account for about 10 percent of the 50 billion dollars in revenue logged in the year ended March by the entire information technology industry, which also includes software giants

The software maker has been quietly outsourcing its back office operations to service provider Accenture over the past several months, Accenture disclosed Thursday.

Microsoft is doing some internal house cleaning.The software maker has been quietly outsourcing its back office operations to service provider Accenture over the past several months, Accenture disclosed Thursday.

The two companies struck a seven-year deal earlier this year, Accenture said. Under the pact, worth $185 million, Accenture will handle a range of finance and accounting functions for Microsoft, including accounts payable and travel and expense management and general ledger maintenance.

Accenture also is providing Microsoft with a number of procurement services, including requisition-to-purchase order processing.

Microsoft chief accounting officer Frank Brod said in a statement that the companies are “a few months into the program.” Brod said he is “pleased with the progress and speed of the transition.”

Accenture did not specifically disclose the location from which it’s providing the services, but the company has been aggressively building up its footprint in India in order to tap the country’s army of low-cost, white-collar workers. Accenture will have more employees in India than in the U.S. by year’s end, company officials have stated.

Outsourcing to India allows businesses to cut back-office costs by anywhere from 15% to 40% experts say, although the rising rupee has been gnawing away at those savings of late.

To provide some of the services, Accenture is using Microsoft’s own Dynamics AX platform, a multi-language, multi-currency ERP system that automates routine business functions.

Separately, Microsoft on Wednesday said it has boosted the quarterly dividend on its shares by a penny to $0.11 per share. The dividend is payable on December 13, 2007, to shareholders of record on November 15.

Microsoft has consistently raised its dividend over the past several years in one penny increments. In early trading Thursday, Microsoft shares were up slightly to $29.01.

India is considered the king of BPO outsourcing destinations around the globe. Now the question is, where do India Inc outsource to. This should be an interesting topic to look at. In the first half of 2007,BPO Services India outpaced Australia and Japan as the largest market for outsourcing contracts in the Asia Pacific region by awarding a total

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NEW DELHI: Everyone knows, how India’s retail sector is poised to take off and we will be among the top five retail markets in the world in the next 10 years. But that is only one part of the big story. For making the most of the retail boom worldwide is another sunshine sector that is — the IT and ITeS. While global retail chains are chalking out their India plans, Indian IT firms are quietly providing them back office and other core support from here.

Most top retail chains are either outsourcing their work to third parties in India or opening captives centres here.
And it’s been happening for sometime now. For example, UK-based chain Tesco, has set up a back office — Hindustan Service Centre in Bangalore — with a headcount of 2,000 people. Target, a US-based retailer has a captive centre in Bangalore and plans to expand it. Marks & Spencer, Sainsburys, Best Buy — all have outsourced their work to India.

Studies forecast, as retail business gathers momentum, retail will double in the next couple of years. Research done by Everest Group reveals, the global IT and BPO spend by retail firms is worth over $10 billion per annum as of now.

Nearly 75% of this relates to IT and the rest 25% is contact centre, HR, finance and accounts, procurement etc.
Already, business worth $1.5 to $2.0 billion is being offshored to India. Companies like Infosys, TCS, Wipro, Satyam, Cognizant see 6-12% of revenues coming from retail outsourcing services. This translates to over $1 billion per annum. And this is growing.

“Retail outsourcing spend on IT and BPO is growing rapidly. The volume and value of contracts globally grew at over 20% over the last few years. And Indian firms too could continue to see their revenues grow from retail IT and BPO increase,” says Gaurav Gupta, country head, Everest Group.

According to ValueNotes, a Pune-based research firm, traditionally, retailers started by outsourcing their IT functions to India but gradually they have embraced BPOs as well. “Typically, a retailer looks at improving the level of customer satisfaction, which means offering better service to the customer while keeping expenses under check. Amongst the BPO services, customer relationship management is the most commonly outsourced function,” says Neeraja Kandala, senior analyst, ValueNotes.

With growing competition, retailers are adding newer channels to sell their products, she explains. The accent of outsourcers to stay ahead of competition will accelerate offshoring in the retail space.

Besides offering HR, finance and accounting services, Indian ITeS companies are now also doing a lot of research and analysis-based work. They provide retailers an insight into buying patterns of shoppers, give information about products, pricing and distribution. KPOs like Evalueserve, Manthan and Integrated Retail are offering retail analytics, which include merchandise planning, training, supply chain management.

Gupta feels top Indian retailers could learn a few things from the retail outsourcing experience of international players.

sujata.sachdeva@timesgroup.com

Wipro’s and other outsourcers’ expansion moves show a tech industry that’s becoming more committed to local markets rather than just touting a ”presence.”

By Rob Preston
InformationWeek
August 11, 2007 12:00 AM (From the August 13, 2007 issue)

Several outsourcing industry deals last week show that the world of business technology is indeed getting flatter–but also that tech globalization is a multidimensional thoroughfare, not a one-way street out of the United States.

The biggest deal is Wipro Technologies’ $600 million acquisition of Leonia, N.J.-based Infocrossing, planting the huge Indian outsourcer firmly on U.S. soil, complete with expansion and hiring plans. Infocrossing operates five data centers in the United States, providing hosted and managed IT services. As Wipro extends its U.S. footprint, including opening software development centers in Atlanta and three other cities, the company says it’s looking to hire hundreds of Americans with associate’s degrees in tech-related fields, train them, and pay for the best to earn bachelor’s degrees in technology–much like it does with tens of thousands of locals back home.

It’s by no means a U.S. hiring spree for Wipro, whose employees in the States are mostly Indian nationals, notes senior writer Marianne Kolbasuk McGee in our cover story this week. But it’s at least a sign of long-term investment in the domestic market.

And those expansion and hiring plans aren’t just opportunistic PR for an offshore company (and industry) that strikes fear into the hearts and minds of the American IT rank and file. They’re also smart business, as Wipro appeals to U.S. customers as a full-service IT outsourcer rather than a bit player that merely picks off low-hanging business and ships it back to India. Before it had U.S. data center and development operations, Wipro was probably a legitimate option for two in 10 U.S. companies, says Dean Davison of consulting firm NeoIT, while now it’ll be an option for seven of 10 companies.

The tech globalization road also is leading to China, as evidenced by two other outsourcing industry deals last week. Under one, private equity firm Francisco Partners is investing $48 million in DarwinSuzsoft, a U.S. company that specializes in outsourcing to China. DarwinSuzsoft, which employs 800 of its 1,000 people in China, does both business process and IT outsourcing, mainly for financial, insurance, technology, and health care customers. CEO Dan Ross says companies are looking to China to access tech talent that’s up to 40% cheaper than in India, with less turnover. “It’s a massive phenomenon,” Ross told editor at large Mary Hayes Weier. “I don’t know any large company that is not considering China at this point.”

Also last week, Sierra Atlantic, an IT services provider with operations mainly in India, said it’s acquiring ArrAy, a Boston-based company with 200 engineers in Guangzhou and Shanghai. The biggest tech vendors have their sights on China as well: IBM, Oracle, Tata Consultancy Services, and others plan to hire thousands more engineers and developers in that country.

None of these moves is evidence of a kinder, gentler technology industry. Disruption will define the tech profession for many years to come. But what these moves do show is a tech industry that’s becoming more global rather than merely international, the difference being the level of commitment–not just “presence”–that offshore-based employers must prove locally.

In the United States, despite the often painful upheaval of tech globalization, especially as jobs and competencies are scattered worldwide, services exports still exceed imports. In the category of “professional, technical, and other private services,” U.S. exports (which include IT work done in the States for offshore companies) rose $2.2 billion between May 2006 and May 2007, while imports increased only $1.1 billion.

Granted, there’s a dozen ways to slice and dice trade figures to make them look good or bad, depending on your world view. What’s fact is that tech globalization isn’t slowing down. The enormous challenge is to anticipate and adapt, or get left behind.

Rob Preston,
VP/Editor in Chief
rpreston@cmp.com