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Monday, May 31, 2004 |
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Database Outsourcing
Nonprofits rely on information to guide programs, manage relationships with clients and constituents among other things. This information, often referred to as data, is an organizational asset that must be handled carefully so that it is useful. Database technology has become a common way for nonprofits to handle information, Due to the complexities of technology in general and databases specifically, nonprofits find they are challenged in how to select, use and maintain databases. One solution to this challenge is to outsource a portion of the database work to experts who can be helpful.
Nonprofits can outsource database support in a variety of ways. For instance, a volunteer or a software developer might create a custom database; a consultant might help select or implement a commercial software package; a freelance programmer might write complex reports; or a database hosting service might manage servers.
The process of selecting or building a database can be divided into seven areas, each of which could be outsourced:
1.system selection (if buying)
2.custom database development (if building)
3.implementation support
4.database customization, report development, and other enhancements
5.staff support (help desk, training, and documentation)
6.system support (database management, server management)
7.needs assessment (including the build vs. buy decision)
The issues involved apply to every phase of database outsourcing:
1.When should you consider outsourcing?
2.What should be included in the project?
3.Who should be involved in the decision?
4.What kind of expertise is needed?
5.What are the benefits of outsourcing?
6.What are the risks of outsourcing?
System Selection
System selection is the process of identifying which software product an organization should use for its database. An organization should undertake a system selection project after it has made the decision to look for commercial software rather than build its own database (for a discussion of the buy versus build decision see "Should Nonprofit Agencies Build or Buy a Database?") Using the information gathered during the process of deciding whether to build or buy a database, the organization can determine its needs for selecting a database and establish criteria to compare competing vendors.
The consultant's role is to help the organization envision how it will use a new database; prioritize its needs; distinguish mandatory requirements from its wish list; compare its list of requirements to what vendors can offer; assess the financial and human resources required to buy, implement, and support a new system; and, in the end, make a decision.
When should an organization consider outsourcing a system selection project?
It makes sense to seek help with system selection when:
The organization lacks the time and/or technical expertise to evaluate vendors.
The organization wants to draw on the experience of someone who has matched similar organizations with systems in the past and already knows what's available.
The organization needs help choosing between competing options.
The organization needs impartial help in evaluating and prioritizing its needs.
The organization lacks experience with other systems or ways of working.
The organization wants guidance that is free from office politics.
What should be included in an outsourcing project?
A system selection project can include any or all of the following:
1.interviewing key staff, board members, and volunteers to understand long-term goals and daily operating needs
2.identifying and prioritizing mandatory and optional features
3.creating a qualified vendor list
4.assembling a request for proposals (RFP) and evaluating responses
5.identifying technical infrastructure requirements
6.specifying integration requirements
7.developing scripted scenarios so all vendors show comparable features; for instance, when comparing fundraising databases, each vendor might be required to create two donor records, merge them and add some joint gifts, then separate them and show the effect on the gift records
8.identifying required resources, including budgets, staffing, policies, procedures, and training
Who from your organization should be involved in the project?
Begin by appointing a respected, neutral staff member to oversee the project and serve as liaison to the consultant. The liaison could be a knowledgeable staff member who does not have a vested interest in any particular outcome. The liaison should have sufficient stature to make recommendations to senior management. The liaison does not need to have a technical background. However, it's critical that this person be given the time to oversee the project (which may require shifting duties temporarily), and have a personal interest in seeing the project through.
Next, convene a selection committee representing each of the major groups that would enter data or receive reports from the system, such as fundraising, membership, marketing, finance, client intake, and information technology.
When you hold software demonstrations, invite all interested staff and volunteers. They should be given an opportunity to provide comments to the selection committee, preferably in writing. The selection committee's job will be to evaluate the demos, check references, compare costs, and make a recommendation to management. The internal liaison should oversee the decision-making process, though the consultant may facilitate the process. Under no circumstances should the consultant make the final decision -- the organization must control this.
Expertise required from a outsourcing partner:
1.experience helping comparable organizations solve similar problems
2.objectivity and communication skills
3.experience assessing business processes, database requirements, and organizational effectiveness
4.experience turning business needs into scenarios for software demos
5.experience working with committees and facilitating group decision-making
6.experience with a variety of database solutions
Benefits of outsourcing a system selection project:
1.getting it done: organizations are frequently not able to allocate the necessary time, or they lack the skills to manage the project and compare options
2.creating a sense of urgency: paying a consultant tends to make the project a priority for everyone, particularly senior management
3.getting access to expertise that the organization lacks
4.having an objective facilitator run the project
5.getting an unbiased assessment of the strengths and weaknesses of the systems under consideration and how well they'll meet the organization's needs
Risks of outsourcing a needs assessment
The natural resistance to change can be heightened by what's perceived as "interference" from outsiders.
The consultant may not understand the unique culture and needs of your organization.
"To a person with a hammer, everything looks like a nail." The consultant may have a bias toward one solution for all problems. If the consultant has a relationship with a particular software vendor, that vendor's product may be the only recommended solution.
For smaller projects or decisions, the cost of bringing in a consultant may exceed the benefit.
When considering this or any consulting project, be sure that you get to meet the people who will actually do the work, not just the charming sales people.
The consultant can facilitate the decision, but should not make the decision. If this happens, the organization may not feel the ownership and commitment necessary to follow through with implementation.
The consultant's expertise cannot take the place of having a staff member serve as advocate and champion of the process.
When buying products or services it always pays to check references. In this case, you need to get a sense of the consultant's style, approach, flexibility, communication skills, ability to diagnose problems and come up with workable solutions, and ability to meet deadlines and work within a defined budget.
Custom Database Development
Custom database development is undertaken when an organization has decided to build its own system rather than buy commercial software. It requires a detailed description of required features, reports, interfaces, and workflows; and the creation of a database that combines the required functionality with a user interface that staff find intuitive.
When an organization should consider outsourcing database development
Because database development is so expensive and time-consuming, it's important to make sure that this is the best approach. Before you start building a custom database, be sure you've compared the cost and functionality of commercial software. Will a custom solution provide mandatory functionality that commercial databases lack or significantly reduce up-front and long-term costs?
An organization should consider outsourcing database development when it has decided against buying a commercial database, and any of the following statements are true:
Staff lack the technical expertise in database design and programming.
Staff have the expertise but there aren't enough of them to get it done.
The project is urgent, and needs to be done without affecting the technology staff's current priorities.
A database development project can include any or all of the following:
1.developing a clear project scope and timeline
staff interviews
2.workflow analysis and process mapping
3.detailed specifications for every field, table, screen, report, and interface needed
4.development of one or more prototypes of the system for testing
5.delivery of a functioning system that meets the specifications
6.staff training
7.documentation
8.ongoing modifications, upgrades, maintenance, and training
Who from your organization should be involved in the project?
This type of project requires strong technical skills and knowledge of your organization's long-range goals and daily operations. Database development therefore usually requires cross-functional teams made up of staff members from different groups within your organization. You'll need one or more people at a management level who understand the goals and management reporting needs of the affected departments. You'll also need one or more staff members who understand the minutiae of daily operations. In addition to providing their own expertise, team members must be able to represent the needs of their peers. Finally, if you have your own technical staff you'll want to involve them in the project. They'll help translate between departmental staff and the database programmers, clarify technical issues, and specify any technical constraints or interfaces to other systems.
Expertise needed from a third party
Fundamentally, this is a technical project. It requires experience mapping processes, turning functional needs into technical specifications, and creating databases of similar complexity. Ideally, the programmers will have worked with similar types of databases, but this isn't mandatory as long as they demonstrate (in meetings with you and in prior work with other organizations) that they understand the issues involved and can meet the full range of requirements.
In addition to technical skills, the programmers must be able to communicate effectively with your staff and with your project liaison; help you make sure the project stays within scope, on time, and under budget; and turn what may start as vague wishes into an effective, functional product.
Benefits of outsourcing database development
Most nonprofits do not have sufficient technical skills on staff to allow development of sophisticated databases. Also, as with the needs assessment, the primary benefit may be creating a sense of urgency and getting the project done. You're accomplishing that by hiring the technical and project management expertise needed to make the project a success. In addition, you're getting a new set of eyes that can help you envision new ways of managing your data and analyzing your programs.
Risks of outsourcing database development
Any custom database development project can suffer from a variety of ailments: a slowly enlarging scope, timeline, and budget; eternal dependence on the programmer who created the system; and lack of documentation and training for the database.
Third-party developers can exacerbate these problems. Staff may come to feel that it's too much trouble or too expensive to call the programmer when something isn't working. Instead, they'll find ways of working around the database, resulting in shadow systems that undermine the usefulness and authoritativeness of the main database.
In addition, when the developer turns its attention to other clients, smaller fixes and problems in your database may not be addressed in a timely manner. There's also the danger that the developer could leave the company you've been working with, or the company could go out of business. Worst of all, the developer may fail to understand your organization's culture and needs, resulting in a failed project. When you hire a database developer, think of it as a long-term relationship, not a one-time project.
Summary
Database projects tend to require sustained periods of intense work followed by long periods of relative stability. Projects like this, which require specific technical skills for a defined time period, lend themselves well to outsourcing. While outsourcing database projects can be expensive, it's often cheaper than hiring a staff member with equivalent skills. A good consultant or developer can help you make decisions and solve problems that have stymied your staff. If you approach outsourcing projects strategically, involve staff appropriately in decision-making, understand what you're buying, and compare alternatives, outsourcing can save time and money.
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Source:http://www.techsoup.org
Nonprofits rely on information to guide programs, manage relationships with clients and constituents among other things. This information, often referred to as data, is an organizational asset that must be handled carefully so that it is useful. Database technology has become a common way for nonprofits to handle information, Due to the complexities of technology in general and databases specifically, nonprofits find they are challenged in how to select, use and maintain databases. One solution to this challenge is to outsource a portion of the database work to experts who can be helpful.
Nonprofits can outsource database support in a variety of ways. For instance, a volunteer or a software developer might create a custom database; a consultant might help select or implement a commercial software package; a freelance programmer might write complex reports; or a database hosting service might manage servers.
The process of selecting or building a database can be divided into seven areas, each of which could be outsourced:
1.system selection (if buying)
2.custom database development (if building)
3.implementation support
4.database customization, report development, and other enhancements
5.staff support (help desk, training, and documentation)
6.system support (database management, server management)
7.needs assessment (including the build vs. buy decision)
The issues involved apply to every phase of database outsourcing:
1.When should you consider outsourcing?
2.What should be included in the project?
3.Who should be involved in the decision?
4.What kind of expertise is needed?
5.What are the benefits of outsourcing?
6.What are the risks of outsourcing?
System Selection
System selection is the process of identifying which software product an organization should use for its database. An organization should undertake a system selection project after it has made the decision to look for commercial software rather than build its own database (for a discussion of the buy versus build decision see "Should Nonprofit Agencies Build or Buy a Database?") Using the information gathered during the process of deciding whether to build or buy a database, the organization can determine its needs for selecting a database and establish criteria to compare competing vendors.
The consultant's role is to help the organization envision how it will use a new database; prioritize its needs; distinguish mandatory requirements from its wish list; compare its list of requirements to what vendors can offer; assess the financial and human resources required to buy, implement, and support a new system; and, in the end, make a decision.
When should an organization consider outsourcing a system selection project?
It makes sense to seek help with system selection when:
The organization lacks the time and/or technical expertise to evaluate vendors.
The organization wants to draw on the experience of someone who has matched similar organizations with systems in the past and already knows what's available.
The organization needs help choosing between competing options.
The organization needs impartial help in evaluating and prioritizing its needs.
The organization lacks experience with other systems or ways of working.
The organization wants guidance that is free from office politics.
What should be included in an outsourcing project?
A system selection project can include any or all of the following:
1.interviewing key staff, board members, and volunteers to understand long-term goals and daily operating needs
2.identifying and prioritizing mandatory and optional features
3.creating a qualified vendor list
4.assembling a request for proposals (RFP) and evaluating responses
5.identifying technical infrastructure requirements
6.specifying integration requirements
7.developing scripted scenarios so all vendors show comparable features; for instance, when comparing fundraising databases, each vendor might be required to create two donor records, merge them and add some joint gifts, then separate them and show the effect on the gift records
8.identifying required resources, including budgets, staffing, policies, procedures, and training
Who from your organization should be involved in the project?
Begin by appointing a respected, neutral staff member to oversee the project and serve as liaison to the consultant. The liaison could be a knowledgeable staff member who does not have a vested interest in any particular outcome. The liaison should have sufficient stature to make recommendations to senior management. The liaison does not need to have a technical background. However, it's critical that this person be given the time to oversee the project (which may require shifting duties temporarily), and have a personal interest in seeing the project through.
Next, convene a selection committee representing each of the major groups that would enter data or receive reports from the system, such as fundraising, membership, marketing, finance, client intake, and information technology.
When you hold software demonstrations, invite all interested staff and volunteers. They should be given an opportunity to provide comments to the selection committee, preferably in writing. The selection committee's job will be to evaluate the demos, check references, compare costs, and make a recommendation to management. The internal liaison should oversee the decision-making process, though the consultant may facilitate the process. Under no circumstances should the consultant make the final decision -- the organization must control this.
Expertise required from a outsourcing partner:
1.experience helping comparable organizations solve similar problems
2.objectivity and communication skills
3.experience assessing business processes, database requirements, and organizational effectiveness
4.experience turning business needs into scenarios for software demos
5.experience working with committees and facilitating group decision-making
6.experience with a variety of database solutions
Benefits of outsourcing a system selection project:
1.getting it done: organizations are frequently not able to allocate the necessary time, or they lack the skills to manage the project and compare options
2.creating a sense of urgency: paying a consultant tends to make the project a priority for everyone, particularly senior management
3.getting access to expertise that the organization lacks
4.having an objective facilitator run the project
5.getting an unbiased assessment of the strengths and weaknesses of the systems under consideration and how well they'll meet the organization's needs
Risks of outsourcing a needs assessment
The natural resistance to change can be heightened by what's perceived as "interference" from outsiders.
The consultant may not understand the unique culture and needs of your organization.
"To a person with a hammer, everything looks like a nail." The consultant may have a bias toward one solution for all problems. If the consultant has a relationship with a particular software vendor, that vendor's product may be the only recommended solution.
For smaller projects or decisions, the cost of bringing in a consultant may exceed the benefit.
When considering this or any consulting project, be sure that you get to meet the people who will actually do the work, not just the charming sales people.
The consultant can facilitate the decision, but should not make the decision. If this happens, the organization may not feel the ownership and commitment necessary to follow through with implementation.
The consultant's expertise cannot take the place of having a staff member serve as advocate and champion of the process.
When buying products or services it always pays to check references. In this case, you need to get a sense of the consultant's style, approach, flexibility, communication skills, ability to diagnose problems and come up with workable solutions, and ability to meet deadlines and work within a defined budget.
Custom Database Development
Custom database development is undertaken when an organization has decided to build its own system rather than buy commercial software. It requires a detailed description of required features, reports, interfaces, and workflows; and the creation of a database that combines the required functionality with a user interface that staff find intuitive.
When an organization should consider outsourcing database development
Because database development is so expensive and time-consuming, it's important to make sure that this is the best approach. Before you start building a custom database, be sure you've compared the cost and functionality of commercial software. Will a custom solution provide mandatory functionality that commercial databases lack or significantly reduce up-front and long-term costs?
An organization should consider outsourcing database development when it has decided against buying a commercial database, and any of the following statements are true:
Staff lack the technical expertise in database design and programming.
Staff have the expertise but there aren't enough of them to get it done.
The project is urgent, and needs to be done without affecting the technology staff's current priorities.
A database development project can include any or all of the following:
1.developing a clear project scope and timeline
staff interviews
2.workflow analysis and process mapping
3.detailed specifications for every field, table, screen, report, and interface needed
4.development of one or more prototypes of the system for testing
5.delivery of a functioning system that meets the specifications
6.staff training
7.documentation
8.ongoing modifications, upgrades, maintenance, and training
Who from your organization should be involved in the project?
This type of project requires strong technical skills and knowledge of your organization's long-range goals and daily operations. Database development therefore usually requires cross-functional teams made up of staff members from different groups within your organization. You'll need one or more people at a management level who understand the goals and management reporting needs of the affected departments. You'll also need one or more staff members who understand the minutiae of daily operations. In addition to providing their own expertise, team members must be able to represent the needs of their peers. Finally, if you have your own technical staff you'll want to involve them in the project. They'll help translate between departmental staff and the database programmers, clarify technical issues, and specify any technical constraints or interfaces to other systems.
Expertise needed from a third party
Fundamentally, this is a technical project. It requires experience mapping processes, turning functional needs into technical specifications, and creating databases of similar complexity. Ideally, the programmers will have worked with similar types of databases, but this isn't mandatory as long as they demonstrate (in meetings with you and in prior work with other organizations) that they understand the issues involved and can meet the full range of requirements.
In addition to technical skills, the programmers must be able to communicate effectively with your staff and with your project liaison; help you make sure the project stays within scope, on time, and under budget; and turn what may start as vague wishes into an effective, functional product.
Benefits of outsourcing database development
Most nonprofits do not have sufficient technical skills on staff to allow development of sophisticated databases. Also, as with the needs assessment, the primary benefit may be creating a sense of urgency and getting the project done. You're accomplishing that by hiring the technical and project management expertise needed to make the project a success. In addition, you're getting a new set of eyes that can help you envision new ways of managing your data and analyzing your programs.
Risks of outsourcing database development
Any custom database development project can suffer from a variety of ailments: a slowly enlarging scope, timeline, and budget; eternal dependence on the programmer who created the system; and lack of documentation and training for the database.
Third-party developers can exacerbate these problems. Staff may come to feel that it's too much trouble or too expensive to call the programmer when something isn't working. Instead, they'll find ways of working around the database, resulting in shadow systems that undermine the usefulness and authoritativeness of the main database.
In addition, when the developer turns its attention to other clients, smaller fixes and problems in your database may not be addressed in a timely manner. There's also the danger that the developer could leave the company you've been working with, or the company could go out of business. Worst of all, the developer may fail to understand your organization's culture and needs, resulting in a failed project. When you hire a database developer, think of it as a long-term relationship, not a one-time project.
Summary
Database projects tend to require sustained periods of intense work followed by long periods of relative stability. Projects like this, which require specific technical skills for a defined time period, lend themselves well to outsourcing. While outsourcing database projects can be expensive, it's often cheaper than hiring a staff member with equivalent skills. A good consultant or developer can help you make decisions and solve problems that have stymied your staff. If you approach outsourcing projects strategically, involve staff appropriately in decision-making, understand what you're buying, and compare alternatives, outsourcing can save time and money.
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Source:http://www.techsoup.org
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Sunday, May 30, 2004 |
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The Specter of Outsourcing
We Americans are drifting into a global labor market -- and don't like it. The latest fear is that hordes of white-collar jobs, from low-paid filing clerks to well-paid software engineers, will vanish into a giant global sinkhole of well-educated and underpaid workers, mainly from India and China. Although we knew that manufacturing jobs could be lost abroad, we imagined that service jobs -- most U.S. jobs -- were safe from international competition. The fact that they aren't could profoundly alter U.S. attitudes toward globalization, even though the danger is exaggerated and misunderstood.
Let's disentangle fact from fiction. It's true that many companies, facing relentless competition, will seize almost any approach to cut costs, including "outsourcing." The logic that applies to manufacturing is now spreading to many services as a result of trends that Americans have generally favored: (a) the ability to "digitize" information instead of using paper; (b) cheap international communications; (c) rising educational levels abroad (India now has about 9 million college students, compared with 13 million in the United States); and (d) more big countries -- China, India, Russia -- joining the world economy.
Jobs that involve collecting or analyzing information seem vulnerable, because wages abroad are so low. Compare the United States and India. For software engineers, it's $60 an hour vs. $6; for call-center workers, $10 an hour vs. $1.50; for insurance claim workers, $1,500 a month vs. $300; for accountants, $75,000 a year against $15,000. (These figures come from the Information Technology Association of America, or ITAA.) The easiest jobs to send abroad involve routine "back office" recordkeeping that's fairly labor-intensive: insurance claims, personnel and billing records.
"A lot of [insurance] claims processing is done in India," says Shailen Gupta of Renodis, a U.S. outsourcing firm. In the United States, claim forms are scanned and then zapped to India, where keypunchers read them off a screen and enter the information into databases. Easy communications means that more highly skilled jobs can also move abroad. Gupta cites a U.S. software company that plans to shift 80 percent of its workforce -- about 200 jobs -- to India. Computer programs would still be designed in the United States, but Indian workers would write the detailed software instructions and do the testing.
From India, it's possible to do market research, maintain financial databases and write patent applications. Evalueserve, a three-year-old company with 270 Indian workers, does all three. Robert Daigle, Evalueserve's U.S. vice president for marketing, describes its Indian workers as "eager and bright. Most have an MBA. We recruit from the India Institutes of Management and the India Institutes of Technology -- think of these as the Whartons, Harvards and MITs of India."
Sounds grim -- and if it's your job, it could be. But it probably won't be your job.
Like most new trends, this one inspires hype. No one knows how many service jobs have been "outsourced" abroad, but guesses cluster around 300,000 to 500,000. Harris Miller of the ITAA estimates that 2 percent of the 10 million computer-related jobs have been sent abroad. According to ITAA's surveys, 12 percent of information technology ("IT'') companies have "outsourced" work, as have 3 percent of non-IT firms. Of course, there will be more. John McCarthy of Forrester Research projects a loss of 3.3 million jobs by 2015, including 1.7 million back-office jobs and 473,000 IT jobs. But that's still a tiny fraction of today's 138 million U.S. jobs -- nevermind future growth.
The truth is that, for most Americans, the main sources of job destruction and insecurity remain domestic: Wal-Mart battering competitors; the dot-com and telecom collapses; the business cycle. More important, job losses have been offset by job gains. Manufacturing employment peaked in mid-1979 at 19.5 million; now it's 14.5 million. But over that period, total U.S. employment grew about 40 million, and manufacturing output rose more than 80 percent. American companies became more productive and shifted to more valuable products. Cheap foreign labor has threatened individual U.S. workers but not the economy as a whole.
The reason is that imports also create gains. Despite job losses, consumers or companies gain. Lower prices boost purchasing power or profits. That creates more demand at home. Consumers can spend more; businesses can invest more. As long as the economy responds by expanding production -- and offering new things to buy -- then most job losses, even if traumatic for individuals, are temporary. Similarly, what other countries earn abroad through exports they can also spend abroad. Their imports may not initially come from the United States, but if our products remain competitive, we'll get an adequate share of global trade.
In theory, service imports (the result of outsourcing abroad) shouldn't be different. Although more workers may face the unsettling global competition, job gains ought to dwarf job losses. What's unknown is whether this theory -- which has worked for 60 years -- will continue to work.
Is America's economic vitality still suffering from the technology and stock "bubbles''? If companies won't expand -- if they're glum about the future -- then lackluster job growth will choke the recovery. And what about the trading system? In Asia, some countries hoard export earnings. They accumulate huge reserves of "hard" currencies (mainly dollars) rather than spend for imports. If too many countries do this, the trading system promotes stagnation and merely shifts jobs from one country to another. In a weak job market, outsourcing -- a small threat by itself -- could become a large lightning rod for anti-globalization discontent.
Sitemap
Ecommerce
Financial
B2B
Free Evaluation
Source:http://www.washingtonpost.com
We Americans are drifting into a global labor market -- and don't like it. The latest fear is that hordes of white-collar jobs, from low-paid filing clerks to well-paid software engineers, will vanish into a giant global sinkhole of well-educated and underpaid workers, mainly from India and China. Although we knew that manufacturing jobs could be lost abroad, we imagined that service jobs -- most U.S. jobs -- were safe from international competition. The fact that they aren't could profoundly alter U.S. attitudes toward globalization, even though the danger is exaggerated and misunderstood.
Let's disentangle fact from fiction. It's true that many companies, facing relentless competition, will seize almost any approach to cut costs, including "outsourcing." The logic that applies to manufacturing is now spreading to many services as a result of trends that Americans have generally favored: (a) the ability to "digitize" information instead of using paper; (b) cheap international communications; (c) rising educational levels abroad (India now has about 9 million college students, compared with 13 million in the United States); and (d) more big countries -- China, India, Russia -- joining the world economy.
Jobs that involve collecting or analyzing information seem vulnerable, because wages abroad are so low. Compare the United States and India. For software engineers, it's $60 an hour vs. $6; for call-center workers, $10 an hour vs. $1.50; for insurance claim workers, $1,500 a month vs. $300; for accountants, $75,000 a year against $15,000. (These figures come from the Information Technology Association of America, or ITAA.) The easiest jobs to send abroad involve routine "back office" recordkeeping that's fairly labor-intensive: insurance claims, personnel and billing records.
"A lot of [insurance] claims processing is done in India," says Shailen Gupta of Renodis, a U.S. outsourcing firm. In the United States, claim forms are scanned and then zapped to India, where keypunchers read them off a screen and enter the information into databases. Easy communications means that more highly skilled jobs can also move abroad. Gupta cites a U.S. software company that plans to shift 80 percent of its workforce -- about 200 jobs -- to India. Computer programs would still be designed in the United States, but Indian workers would write the detailed software instructions and do the testing.
From India, it's possible to do market research, maintain financial databases and write patent applications. Evalueserve, a three-year-old company with 270 Indian workers, does all three. Robert Daigle, Evalueserve's U.S. vice president for marketing, describes its Indian workers as "eager and bright. Most have an MBA. We recruit from the India Institutes of Management and the India Institutes of Technology -- think of these as the Whartons, Harvards and MITs of India."
Sounds grim -- and if it's your job, it could be. But it probably won't be your job.
Like most new trends, this one inspires hype. No one knows how many service jobs have been "outsourced" abroad, but guesses cluster around 300,000 to 500,000. Harris Miller of the ITAA estimates that 2 percent of the 10 million computer-related jobs have been sent abroad. According to ITAA's surveys, 12 percent of information technology ("IT'') companies have "outsourced" work, as have 3 percent of non-IT firms. Of course, there will be more. John McCarthy of Forrester Research projects a loss of 3.3 million jobs by 2015, including 1.7 million back-office jobs and 473,000 IT jobs. But that's still a tiny fraction of today's 138 million U.S. jobs -- nevermind future growth.
The truth is that, for most Americans, the main sources of job destruction and insecurity remain domestic: Wal-Mart battering competitors; the dot-com and telecom collapses; the business cycle. More important, job losses have been offset by job gains. Manufacturing employment peaked in mid-1979 at 19.5 million; now it's 14.5 million. But over that period, total U.S. employment grew about 40 million, and manufacturing output rose more than 80 percent. American companies became more productive and shifted to more valuable products. Cheap foreign labor has threatened individual U.S. workers but not the economy as a whole.
The reason is that imports also create gains. Despite job losses, consumers or companies gain. Lower prices boost purchasing power or profits. That creates more demand at home. Consumers can spend more; businesses can invest more. As long as the economy responds by expanding production -- and offering new things to buy -- then most job losses, even if traumatic for individuals, are temporary. Similarly, what other countries earn abroad through exports they can also spend abroad. Their imports may not initially come from the United States, but if our products remain competitive, we'll get an adequate share of global trade.
In theory, service imports (the result of outsourcing abroad) shouldn't be different. Although more workers may face the unsettling global competition, job gains ought to dwarf job losses. What's unknown is whether this theory -- which has worked for 60 years -- will continue to work.
Is America's economic vitality still suffering from the technology and stock "bubbles''? If companies won't expand -- if they're glum about the future -- then lackluster job growth will choke the recovery. And what about the trading system? In Asia, some countries hoard export earnings. They accumulate huge reserves of "hard" currencies (mainly dollars) rather than spend for imports. If too many countries do this, the trading system promotes stagnation and merely shifts jobs from one country to another. In a weak job market, outsourcing -- a small threat by itself -- could become a large lightning rod for anti-globalization discontent.
Sitemap
Ecommerce
Financial
B2B
Free Evaluation
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Thursday, May 27, 2004 |
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The Specter of Outsourcing
We Americans are drifting into a global labor market -- and don't like it. The latest fear is that hordes of white-collar jobs, from low-paid filing clerks to well-paid software engineers, will vanish into a giant global sinkhole of well-educated and underpaid workers, mainly from India and China. Although we knew that manufacturing jobs could be lost abroad, we imagined that service jobs -- most U.S. jobs -- were safe from international competition. The fact that they aren't could profoundly alter U.S. attitudes toward globalization, even though the danger is exaggerated and misunderstood.
Let's disentangle fact from fiction. It's true that many companies, facing relentless competition, will seize almost any approach to cut costs, including "outsourcing." The logic that applies to manufacturing is now spreading to many services as a result of trends that Americans have generally favored: (a) the ability to "digitize" information instead of using paper; (b) cheap international communications; (c) rising educational levels abroad (India now has about 9 million college students, compared with 13 million in the United States); and (d) more big countries -- China, India, Russia -- joining the world economy.
Jobs that involve collecting or analyzing information seem vulnerable, because wages abroad are so low. Compare the United States and India. For software engineers, it's $60 an hour vs. $6; for call-center workers, $10 an hour vs. $1.50; for insurance claim workers, $1,500 a month vs. $300; for accountants, $75,000 a year against $15,000. (These figures come from the Information Technology Association of America, or ITAA.) The easiest jobs to send abroad involve routine "back office" recordkeeping that's fairly labor-intensive: insurance claims, personnel and billing records.
"A lot of [insurance] claims processing is done in India," says Shailen Gupta of Renodis, a U.S. outsourcing firm. In the United States, claim forms are scanned and then zapped to India, where keypunchers read them off a screen and enter the information into databases. Easy communications means that more highly skilled jobs can also move abroad. Gupta cites a U.S. software company that plans to shift 80 percent of its workforce -- about 200 jobs -- to India. Computer programs would still be designed in the United States, but Indian workers would write the detailed software instructions and do the testing.
From India, it's possible to do market research, maintain financial databases and write patent applications. Evalueserve, a three-year-old company with 270 Indian workers, does all three. Robert Daigle, Evalueserve's U.S. vice president for marketing, describes its Indian workers as "eager and bright. Most have an MBA. We recruit from the India Institutes of Management and the India Institutes of Technology -- think of these as the Whartons, Harvards and MITs of India."
Sounds grim -- and if it's your job, it could be. But it probably won't be your job.
Like most new trends, this one inspires hype. No one knows how many service jobs have been "outsourced" abroad, but guesses cluster around 300,000 to 500,000. Harris Miller of the ITAA estimates that 2 percent of the 10 million computer-related jobs have been sent abroad. According to ITAA's surveys, 12 percent of information technology ("IT'') companies have "outsourced" work, as have 3 percent of non-IT firms. Of course, there will be more. John McCarthy of Forrester Research projects a loss of 3.3 million jobs by 2015, including 1.7 million back-office jobs and 473,000 IT jobs. But that's still a tiny fraction of today's 138 million U.S. jobs -- nevermind future growth.
The truth is that, for most Americans, the main sources of job destruction and insecurity remain domestic: Wal-Mart battering competitors; the dot-com and telecom collapses; the business cycle. More important, job losses have been offset by job gains. Manufacturing employment peaked in mid-1979 at 19.5 million; now it's 14.5 million. But over that period, total U.S. employment grew about 40 million, and manufacturing output rose more than 80 percent. American companies became more productive and shifted to more valuable products. Cheap foreign labor has threatened individual U.S. workers but not the economy as a whole.
The reason is that imports also create gains. Despite job losses, consumers or companies gain. Lower prices boost purchasing power or profits. That creates more demand at home. Consumers can spend more; businesses can invest more. As long as the economy responds by expanding production -- and offering new things to buy -- then most job losses, even if traumatic for individuals, are temporary. Similarly, what other countries earn abroad through exports they can also spend abroad. Their imports may not initially come from the United States, but if our products remain competitive, we'll get an adequate share of global trade.
In theory, service imports (the result of outsourcing abroad) shouldn't be different. Although more workers may face the unsettling global competition, job gains ought to dwarf job losses. What's unknown is whether this theory -- which has worked for 60 years -- will continue to work.
Is America's economic vitality still suffering from the technology and stock "bubbles''? If companies won't expand -- if they're glum about the future -- then lackluster job growth will choke the recovery. And what about the trading system? In Asia, some countries hoard export earnings. They accumulate huge reserves of "hard" currencies (mainly dollars) rather than spend for imports. If too many countries do this, the trading system promotes stagnation and merely shifts jobs from one country to another. In a weak job market, outsourcing -- a small threat by itself -- could become a large lightning rod for anti-globalization discontent.
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Ecommerce
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B2B
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Source:http://www.washingtonpost.com
We Americans are drifting into a global labor market -- and don't like it. The latest fear is that hordes of white-collar jobs, from low-paid filing clerks to well-paid software engineers, will vanish into a giant global sinkhole of well-educated and underpaid workers, mainly from India and China. Although we knew that manufacturing jobs could be lost abroad, we imagined that service jobs -- most U.S. jobs -- were safe from international competition. The fact that they aren't could profoundly alter U.S. attitudes toward globalization, even though the danger is exaggerated and misunderstood.
Let's disentangle fact from fiction. It's true that many companies, facing relentless competition, will seize almost any approach to cut costs, including "outsourcing." The logic that applies to manufacturing is now spreading to many services as a result of trends that Americans have generally favored: (a) the ability to "digitize" information instead of using paper; (b) cheap international communications; (c) rising educational levels abroad (India now has about 9 million college students, compared with 13 million in the United States); and (d) more big countries -- China, India, Russia -- joining the world economy.
Jobs that involve collecting or analyzing information seem vulnerable, because wages abroad are so low. Compare the United States and India. For software engineers, it's $60 an hour vs. $6; for call-center workers, $10 an hour vs. $1.50; for insurance claim workers, $1,500 a month vs. $300; for accountants, $75,000 a year against $15,000. (These figures come from the Information Technology Association of America, or ITAA.) The easiest jobs to send abroad involve routine "back office" recordkeeping that's fairly labor-intensive: insurance claims, personnel and billing records.
"A lot of [insurance] claims processing is done in India," says Shailen Gupta of Renodis, a U.S. outsourcing firm. In the United States, claim forms are scanned and then zapped to India, where keypunchers read them off a screen and enter the information into databases. Easy communications means that more highly skilled jobs can also move abroad. Gupta cites a U.S. software company that plans to shift 80 percent of its workforce -- about 200 jobs -- to India. Computer programs would still be designed in the United States, but Indian workers would write the detailed software instructions and do the testing.
From India, it's possible to do market research, maintain financial databases and write patent applications. Evalueserve, a three-year-old company with 270 Indian workers, does all three. Robert Daigle, Evalueserve's U.S. vice president for marketing, describes its Indian workers as "eager and bright. Most have an MBA. We recruit from the India Institutes of Management and the India Institutes of Technology -- think of these as the Whartons, Harvards and MITs of India."
Sounds grim -- and if it's your job, it could be. But it probably won't be your job.
Like most new trends, this one inspires hype. No one knows how many service jobs have been "outsourced" abroad, but guesses cluster around 300,000 to 500,000. Harris Miller of the ITAA estimates that 2 percent of the 10 million computer-related jobs have been sent abroad. According to ITAA's surveys, 12 percent of information technology ("IT'') companies have "outsourced" work, as have 3 percent of non-IT firms. Of course, there will be more. John McCarthy of Forrester Research projects a loss of 3.3 million jobs by 2015, including 1.7 million back-office jobs and 473,000 IT jobs. But that's still a tiny fraction of today's 138 million U.S. jobs -- nevermind future growth.
The truth is that, for most Americans, the main sources of job destruction and insecurity remain domestic: Wal-Mart battering competitors; the dot-com and telecom collapses; the business cycle. More important, job losses have been offset by job gains. Manufacturing employment peaked in mid-1979 at 19.5 million; now it's 14.5 million. But over that period, total U.S. employment grew about 40 million, and manufacturing output rose more than 80 percent. American companies became more productive and shifted to more valuable products. Cheap foreign labor has threatened individual U.S. workers but not the economy as a whole.
The reason is that imports also create gains. Despite job losses, consumers or companies gain. Lower prices boost purchasing power or profits. That creates more demand at home. Consumers can spend more; businesses can invest more. As long as the economy responds by expanding production -- and offering new things to buy -- then most job losses, even if traumatic for individuals, are temporary. Similarly, what other countries earn abroad through exports they can also spend abroad. Their imports may not initially come from the United States, but if our products remain competitive, we'll get an adequate share of global trade.
In theory, service imports (the result of outsourcing abroad) shouldn't be different. Although more workers may face the unsettling global competition, job gains ought to dwarf job losses. What's unknown is whether this theory -- which has worked for 60 years -- will continue to work.
Is America's economic vitality still suffering from the technology and stock "bubbles''? If companies won't expand -- if they're glum about the future -- then lackluster job growth will choke the recovery. And what about the trading system? In Asia, some countries hoard export earnings. They accumulate huge reserves of "hard" currencies (mainly dollars) rather than spend for imports. If too many countries do this, the trading system promotes stagnation and merely shifts jobs from one country to another. In a weak job market, outsourcing -- a small threat by itself -- could become a large lightning rod for anti-globalization discontent.
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Wednesday, May 26, 2004 |
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Outsourcing + Insourcing Key to Smartsourcing
In today's high-speed global business environment, every organization is out to maximize its profits, enlarge its market share, and above all, put a check on ever-increasing costs. Management gurus are undertaking every effort and every possible mantra is being applied to re-think and re-adopt new processes, especially the buzzwords "outsourcing" and "insourcing."
Outsourcing is the process of procuring services or products from an external service provider with a view to curb costs, replace in-house capabilities, and thereby reduce the time period of projects. Outsourcing is thus a full transfer or delegation of an organization's facility management functions to an external firm. Outsourcing has emerged as an effective tool to revamp the strategies and benefits of business in a financially viable and pro-active manner.
Fundamentally speaking, outsourcing may be classified into two types: traditional outsourcing and Greenfield outsourcing.
a. Traditional outsourcing means that the staff of the organization does not perform the same jobs or tasks. Here, tasks to be performed are identified and the service provider usually hires the staff. For instance, IT outsourcing may include a transfer of responsibility for management of data centers and networks. In the field of facility management, the people working as property managers might become the staff of a facility management company.
b. Greenfield outsourcing, on the other hand, means that the organization can change its business processes without any hiring of staff by the service provider. The organization, for instance, may hire an up-and-coming company to provide a new service such as wireless remote computing, which was not previously handled internally.
Insourcing Challenges
Insourcing is a common approach where facility management officials reach out to external facility management firms as process experts. Here, the organization hires the professional help of an external service provider as a consultant to measure the scale of its operations levels and recommend necessary improvement measures. The internal staff, from this point onward, implements the suggested recommendations.
Today's IT and HR managers face several hard realities. In the first place there is an acute shortage of suitably qualified candidates to fill the available vacant positions. As a matter of fact, at any given time, according to reports, 10 to 15 percent of all IT positions are unstaffed and the growth rate of job openings exceeds the growth rate of the labor force in the IT industry. The US government alone estimates a shortfall of 1.3 million workers over the next 10 years.
The second factor involves economics. The cost of acquiring high-tech experts is growing, thereby maintaining consistency in the law of supply and demand. For instance, salaries of IT workers are increasing by as much as five times the rate of salaries of non-technical staff!
Insourcing has been instrumental in creating a viable supply of IT workers -- in fact, a better quality workforce combining both technical and business skills. Moreover, there has been a reduction in the cost of recruiting as well as the cost of integrating IT workers into the corporate culture. Above all, it has been helpful in stabilizing salaries and, finally, has resulted in an upswing in retention.
Outsourcing: The Perfect Motivator
Curbing costs and saving money have always been the perfect motivator for organizations to consider outsourcing options. Outsourcing revenues in the financial services sector are likely to soar to $30 billion by 2006, with companies in North America and Europe leading the way, estimates Boston-based research firm Celent Communications.
IT outsourcing is a fast-growing industry since it provides firms access to state-of-the-art technologies and is accompanied by the overall guidance of experts, thus curtailing the need to open up expensive in-house departments.
According to a report by IDC, global spending on IT services will soar to $700.3 billion by 2005, an increase from $439.9 billion. Many factors have converged to prompt firms to outsource.
The need to cut costs, globalization, and the increase in the number of ever-demanding clients mean that investment managers must revamp their operations, and thus outsourcing is high on their priority list.
Yet another trend is the emergence of offshore outsourcing and using organizations from developing countries to write code and develop applications. These organizations mainly perform mainframe programming for their clients and some related maintenance work. This practice is proving to be very cost effective. For any organization, IT involves huge costs, and by outsourcing these functions, internal IT staff can be deployed on new projects.
Organizations today are looking at outsourcing as an important option for leveraging resources and cutting costs, and the focus is on strategic and value-added services. Numerous countries have substantially well-trained IT professionals and clerical staff who have lower salary expectations compared to their US counterparts. Global outsourcing has thus become a small but rapidly growing sector in the overall outsourcing market.
Outsourcing - a New Surge
Recent trends clearly indicate that companies are generally avoiding traditional outsourcing risks and forming a deeper relationship with their offshore partners by setting up dedicated centers. A dedicated center is an extension of an organization abroad.
The dedicated center devotes all its efforts to the host organization and, to maintain consistence with the organization's standards, it follows their culture and methodologies to produce immediate results. The center enhances overall productivity, and more importantly, it results in considerable long-term cost savings.
Countries like China, India, Israel, and Russia, which possess highly skilled labor forces as well as outsourcing capabilities, have been the major gainers. Despite the fact that each of these countries has its own advantages or drawbacks, there has been a sudden upsurge of dedicated centers in these countries.
Smartsourcing: The Next Stopover?
Outsourcing and insourcing can be thought of as two sides of the same coin. Many analysts believe that if companies judiciously mix both outsourcing and insourcing properly, they will be the key to the next buzzword: smartsourcing. Today, numerous chip design companies are setting up developmental centers in India, striking the right balance between outsourcing and insourcing by designing and developing chips in-house while outsourcing the actual manufacturing of the chips.
Smartsourcing is yet another substitute for the basic challenge of outsourcing as a management technique. Smartsourcing can best be explained as the tactical use of specialized external resources to perform core and non-core SAP Basis activities, which were originally carried out by internal staff and resources. Smartsourcing provides the best available technology, services, and management to optimize network availability, performance, and reliability on a subscription basis. For those customers who want to out-task the design, management, and ongoing maintenance of their networks instead of relying on in-house network support resources, smartsourcing is perhaps the most lucrative option.
IT managers today are faced with increasingly complex technology, dwindling resources, and limited budgets. They are constantly on the lookout for alternative solutions for the success and growth of their business. Perhaps the answer lies in a delicate combination of outsourcing and insourcing, leading to the perfect solution: smartsourcing!
Sitemap
Ecommerce
Financial
B2B
Free Evaluation
Source:http://www.seguejobs.com
In today's high-speed global business environment, every organization is out to maximize its profits, enlarge its market share, and above all, put a check on ever-increasing costs. Management gurus are undertaking every effort and every possible mantra is being applied to re-think and re-adopt new processes, especially the buzzwords "outsourcing" and "insourcing."
Outsourcing is the process of procuring services or products from an external service provider with a view to curb costs, replace in-house capabilities, and thereby reduce the time period of projects. Outsourcing is thus a full transfer or delegation of an organization's facility management functions to an external firm. Outsourcing has emerged as an effective tool to revamp the strategies and benefits of business in a financially viable and pro-active manner.
Fundamentally speaking, outsourcing may be classified into two types: traditional outsourcing and Greenfield outsourcing.
a. Traditional outsourcing means that the staff of the organization does not perform the same jobs or tasks. Here, tasks to be performed are identified and the service provider usually hires the staff. For instance, IT outsourcing may include a transfer of responsibility for management of data centers and networks. In the field of facility management, the people working as property managers might become the staff of a facility management company.
b. Greenfield outsourcing, on the other hand, means that the organization can change its business processes without any hiring of staff by the service provider. The organization, for instance, may hire an up-and-coming company to provide a new service such as wireless remote computing, which was not previously handled internally.
Insourcing Challenges
Insourcing is a common approach where facility management officials reach out to external facility management firms as process experts. Here, the organization hires the professional help of an external service provider as a consultant to measure the scale of its operations levels and recommend necessary improvement measures. The internal staff, from this point onward, implements the suggested recommendations.
Today's IT and HR managers face several hard realities. In the first place there is an acute shortage of suitably qualified candidates to fill the available vacant positions. As a matter of fact, at any given time, according to reports, 10 to 15 percent of all IT positions are unstaffed and the growth rate of job openings exceeds the growth rate of the labor force in the IT industry. The US government alone estimates a shortfall of 1.3 million workers over the next 10 years.
The second factor involves economics. The cost of acquiring high-tech experts is growing, thereby maintaining consistency in the law of supply and demand. For instance, salaries of IT workers are increasing by as much as five times the rate of salaries of non-technical staff!
Insourcing has been instrumental in creating a viable supply of IT workers -- in fact, a better quality workforce combining both technical and business skills. Moreover, there has been a reduction in the cost of recruiting as well as the cost of integrating IT workers into the corporate culture. Above all, it has been helpful in stabilizing salaries and, finally, has resulted in an upswing in retention.
Outsourcing: The Perfect Motivator
Curbing costs and saving money have always been the perfect motivator for organizations to consider outsourcing options. Outsourcing revenues in the financial services sector are likely to soar to $30 billion by 2006, with companies in North America and Europe leading the way, estimates Boston-based research firm Celent Communications.
IT outsourcing is a fast-growing industry since it provides firms access to state-of-the-art technologies and is accompanied by the overall guidance of experts, thus curtailing the need to open up expensive in-house departments.
According to a report by IDC, global spending on IT services will soar to $700.3 billion by 2005, an increase from $439.9 billion. Many factors have converged to prompt firms to outsource.
The need to cut costs, globalization, and the increase in the number of ever-demanding clients mean that investment managers must revamp their operations, and thus outsourcing is high on their priority list.
Yet another trend is the emergence of offshore outsourcing and using organizations from developing countries to write code and develop applications. These organizations mainly perform mainframe programming for their clients and some related maintenance work. This practice is proving to be very cost effective. For any organization, IT involves huge costs, and by outsourcing these functions, internal IT staff can be deployed on new projects.
Organizations today are looking at outsourcing as an important option for leveraging resources and cutting costs, and the focus is on strategic and value-added services. Numerous countries have substantially well-trained IT professionals and clerical staff who have lower salary expectations compared to their US counterparts. Global outsourcing has thus become a small but rapidly growing sector in the overall outsourcing market.
Outsourcing - a New Surge
Recent trends clearly indicate that companies are generally avoiding traditional outsourcing risks and forming a deeper relationship with their offshore partners by setting up dedicated centers. A dedicated center is an extension of an organization abroad.
The dedicated center devotes all its efforts to the host organization and, to maintain consistence with the organization's standards, it follows their culture and methodologies to produce immediate results. The center enhances overall productivity, and more importantly, it results in considerable long-term cost savings.
Countries like China, India, Israel, and Russia, which possess highly skilled labor forces as well as outsourcing capabilities, have been the major gainers. Despite the fact that each of these countries has its own advantages or drawbacks, there has been a sudden upsurge of dedicated centers in these countries.
Smartsourcing: The Next Stopover?
Outsourcing and insourcing can be thought of as two sides of the same coin. Many analysts believe that if companies judiciously mix both outsourcing and insourcing properly, they will be the key to the next buzzword: smartsourcing. Today, numerous chip design companies are setting up developmental centers in India, striking the right balance between outsourcing and insourcing by designing and developing chips in-house while outsourcing the actual manufacturing of the chips.
Smartsourcing is yet another substitute for the basic challenge of outsourcing as a management technique. Smartsourcing can best be explained as the tactical use of specialized external resources to perform core and non-core SAP Basis activities, which were originally carried out by internal staff and resources. Smartsourcing provides the best available technology, services, and management to optimize network availability, performance, and reliability on a subscription basis. For those customers who want to out-task the design, management, and ongoing maintenance of their networks instead of relying on in-house network support resources, smartsourcing is perhaps the most lucrative option.
IT managers today are faced with increasingly complex technology, dwindling resources, and limited budgets. They are constantly on the lookout for alternative solutions for the success and growth of their business. Perhaps the answer lies in a delicate combination of outsourcing and insourcing, leading to the perfect solution: smartsourcing!
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Friday, May 21, 2004 |
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What is BPO (Business Process Outsourcing)?
Today's competitive marketplace demands operational productivity, administrative efficiency, business agility, shorter turnaround times and increased shareholder value. Business Process Outsourcing (BPO) is the survival key in transforming processes to achieve these end results.
"Business Process Outsourcing (BPO) is the delegation of one or more IT-intensive business processes to an external Provider that, in turn, owns, administrates and manages the selected process(es) based upon defined and measurable performance metrics."
As the modern enterprise seeks to focus ever more narrowly on its core activities, BPO increasingly is being considered as a business strategy that provides access to 'best in class' processes and cost predictability. This growing trend for enterprises to review their internal operations to more fully understand what their true core competencies are and to focus only on these core competencies is the primary driver behind the growth of the BPO market.
"Only 25% of organizations using BPO services are satisfied with their current service providers."
'Computing' Supplier Survey 09/01
To ensure they are well placed to address this market growth, BPO Service Providers are facing a number of challenges:
1.Visibility of ongoing improvements in operational efficiency
2.Reducing processing costs through continuous process improvements
3.Maximizing BPO revenues within shortening BPO contract terms
4.Increasing customer satisfaction by realizing business benefits sooner
5.Improving service levels through accurate process monitoring and reporting
6.Avoidance of long and costly development cycles to achieve a faster ROI
7.Defining and enforcing 'best practice' processes
8.Implementing effective change management capabilities.
As the number one global provider of business process technology, Staffware has an excellent track record for delivering high performance process solutions in the BPO market.
"Staffware has long recognized that business is not about technology - it is about people and processes. Staffware lets organizations focus on building their value network and deepening their stakeholder relationships."
Who is Staffware?
Staffware is the leading Business Process Management specialist with 1,500 enterprise customers across the Banking, Insurance, Telecommunications, Utilities, General Commercial, Manufacturing, and Government sectors. Staffware has offices in 17 countries and employs approximately 370 people. The company is the leading global vendor focused exclusively on providing BPM solutions.
Staffware's BPM expertise has evolved over 15 years of automating and managing processes, so the interaction of people and processes has remained central to its philosophy. Unlike the majority of its competitors, it has a deep understanding and unique insight of the complex people-to-people, people-to-application and application-to-application interactions that make up business processes.
What is the Staffware Process Suite?
The Staffware Process Suite provides a complete set of tools to create, transform and streamline the internal and external processes and tasks of an organization. The solution is a multi-component suite of application modules designed to provide a complete end-to-end process integration solution on an enterprise level. Staffware has built its Process Suite on an open architecture so that it can be seamlessly integrated into existing IT infrastructures. The layered architecture builds increased functionality, robustness and scalability for deploying an enterprise-wide solution that leverages current IT investments.
Moreover, the Staffware Process Suite provides market leading BPM and CRM technologies as a foundation for improvements in organizational productivity; adherence to statutory, industry and management regulations; increased levels of customer service and greater competitive advantage.
Available on a variety of platforms, the Staffware Process Suite provides the best in process automation.
The Staffware Process Suite - Staffware's market-leading BPM technology - is aimed specifically at helping the BPO Service Provider (SP) address the twin challenges of:
Improving customer satisfaction levels and their returns from existing BPO contracts;
Gaining a competitive differential when bidding for new business.
Sitemap
Ecommerce
Financial
B2B
Free Evaluation
Source:http://www.staffware.com/
Today's competitive marketplace demands operational productivity, administrative efficiency, business agility, shorter turnaround times and increased shareholder value. Business Process Outsourcing (BPO) is the survival key in transforming processes to achieve these end results.
"Business Process Outsourcing (BPO) is the delegation of one or more IT-intensive business processes to an external Provider that, in turn, owns, administrates and manages the selected process(es) based upon defined and measurable performance metrics."
As the modern enterprise seeks to focus ever more narrowly on its core activities, BPO increasingly is being considered as a business strategy that provides access to 'best in class' processes and cost predictability. This growing trend for enterprises to review their internal operations to more fully understand what their true core competencies are and to focus only on these core competencies is the primary driver behind the growth of the BPO market.
"Only 25% of organizations using BPO services are satisfied with their current service providers."
'Computing' Supplier Survey 09/01
To ensure they are well placed to address this market growth, BPO Service Providers are facing a number of challenges:
1.Visibility of ongoing improvements in operational efficiency
2.Reducing processing costs through continuous process improvements
3.Maximizing BPO revenues within shortening BPO contract terms
4.Increasing customer satisfaction by realizing business benefits sooner
5.Improving service levels through accurate process monitoring and reporting
6.Avoidance of long and costly development cycles to achieve a faster ROI
7.Defining and enforcing 'best practice' processes
8.Implementing effective change management capabilities.
As the number one global provider of business process technology, Staffware has an excellent track record for delivering high performance process solutions in the BPO market.
"Staffware has long recognized that business is not about technology - it is about people and processes. Staffware lets organizations focus on building their value network and deepening their stakeholder relationships."
Who is Staffware?
Staffware is the leading Business Process Management specialist with 1,500 enterprise customers across the Banking, Insurance, Telecommunications, Utilities, General Commercial, Manufacturing, and Government sectors. Staffware has offices in 17 countries and employs approximately 370 people. The company is the leading global vendor focused exclusively on providing BPM solutions.
Staffware's BPM expertise has evolved over 15 years of automating and managing processes, so the interaction of people and processes has remained central to its philosophy. Unlike the majority of its competitors, it has a deep understanding and unique insight of the complex people-to-people, people-to-application and application-to-application interactions that make up business processes.
What is the Staffware Process Suite?
The Staffware Process Suite provides a complete set of tools to create, transform and streamline the internal and external processes and tasks of an organization. The solution is a multi-component suite of application modules designed to provide a complete end-to-end process integration solution on an enterprise level. Staffware has built its Process Suite on an open architecture so that it can be seamlessly integrated into existing IT infrastructures. The layered architecture builds increased functionality, robustness and scalability for deploying an enterprise-wide solution that leverages current IT investments.
Moreover, the Staffware Process Suite provides market leading BPM and CRM technologies as a foundation for improvements in organizational productivity; adherence to statutory, industry and management regulations; increased levels of customer service and greater competitive advantage.
Available on a variety of platforms, the Staffware Process Suite provides the best in process automation.
The Staffware Process Suite - Staffware's market-leading BPM technology - is aimed specifically at helping the BPO Service Provider (SP) address the twin challenges of:
Improving customer satisfaction levels and their returns from existing BPO contracts;
Gaining a competitive differential when bidding for new business.
Sitemap
Ecommerce
Financial
B2B
Free Evaluation
Source:http://www.staffware.com/
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Wednesday, May 19, 2004 |
|
Outsourcing the IT Infrastructure
Information technology experts find it convenient to discuss the advances of computing in terms of technology "generations." There is a generally acknowledged evolution from the mainframe to the minicomputer, microcomputer, client/server and Internet stages of development. Yet defining IT strictly in terms of electronics doesn't necessarily offer an insight into economic gains.
Technology, in isolation, doesn't give us an understanding of the ideas that have propelled the progression from one stage of development to the next stage. For that, you need to consider the ideas of the 1991 Nobel Prize economist Ronald Coase, which are likely to guide the formulation of IT investments in the future.
The management of IT has always been steered by assumptions about economics. Grosch's Law, formulated by Herbert Grosch in 1953, stated that the power of computers grew as a square function of their costs. For almost 20 years, that simple conjecture (ultimately proven to be incorrect) dictated investments in corporate computing. Whenever possible, you upgraded to the largest mainframe computer you could afford. It was this compulsion that drove IBM to increase its manufacturing capacity for bigger mainframes until this strategy reached its economic limits and drove the company to the brink of bankruptcy.
Of all the computing "laws," I consider only Moore's Law to be based on verifiable evidence. It stated that the power of microprocessors would double every 18 months without corresponding increases in costs. The explosive proliferation of desktop (and laptop) computing propelled the practice of corporate IT for 20 years until it reached its current conditions, where the total costs of ownership have reached economic limits and the growth rate has leveled off, thus driving most suppliers out of business.
Robert Metcalfe's and George Gilder's formulations extended Moore's Law into the realm of communications. They stated that the value of interconnectivity would grow as a square of the number of connected devices, while the available bandwidth would expand much faster than the capacity of computing.
The multitrillion-dollar collapse of the technology bubble can be best explained as an unwarranted extrapolation of these concepts beyond any sustainable economic limits. Followers of Metcalfe's and Gilder's conjectures have induced the economic collapse of many communications companies. They bet shareholders' money on business that didn't materialize.
The problem with the Grosch, Moore, Metcalfe and Gilder formulations was that they concentrated only on the supply side of IT and paid little attention to the demand side. Those men were IT insiders who became wealthy from the rising prosperity for which they acted as prophets.
This is where a modestly compensated academic, Coase, comes in. He is the first economist of any consequence who has anything useful to say about information economics.
Coase studied why organizations are formed, what guides their growth and what leads to their demise. He observed that companies will expand until "the costs of organizing an extra transaction within the firm become equal to the costs of carrying out the same transaction on the open market." That is now known as Coase's Law. It represents an Information Age reformulation of the law of diminishing returns, which applied only to capital assets.
As organizations grow, they become complicated and find it costly to coordinate what they do. Coase observed that there are always companies that can deliver goods and services more economically than the dominant enterprises. If the more efficient companies become organized, they'll squeeze out those that have been unable to manage their resources. The only recourse for the inefficient companies is to shift inefficient functions to external suppliers. Thus, a carmaker will buy batteries from a supplier rather than manufacture them in-house if that's more cost-effective.
IT executives will have to accept that Coase's Law argues for outsourcing every IT function that can be delivered more efficiently by others. Corporate executives will demand that CIOs demonstrate how each element of their in-house IT spending has a lower cost than what's available in the marketplace. Farming out some of the labor to countries whose wages are a fraction of compensation in the U.S. is a relatively easy decision. The tough questions will concern whether to outsource a part or all of the company's computing infrastructure.
CIOs will have to justify contracting for the management of desktops, laptops or cell phones and having contractors provide security assurance, and they'll have to show that a commercially available standard application service can substitute for the legacy systems that have become unmanageable.
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Information technology experts find it convenient to discuss the advances of computing in terms of technology "generations." There is a generally acknowledged evolution from the mainframe to the minicomputer, microcomputer, client/server and Internet stages of development. Yet defining IT strictly in terms of electronics doesn't necessarily offer an insight into economic gains.
Technology, in isolation, doesn't give us an understanding of the ideas that have propelled the progression from one stage of development to the next stage. For that, you need to consider the ideas of the 1991 Nobel Prize economist Ronald Coase, which are likely to guide the formulation of IT investments in the future.
The management of IT has always been steered by assumptions about economics. Grosch's Law, formulated by Herbert Grosch in 1953, stated that the power of computers grew as a square function of their costs. For almost 20 years, that simple conjecture (ultimately proven to be incorrect) dictated investments in corporate computing. Whenever possible, you upgraded to the largest mainframe computer you could afford. It was this compulsion that drove IBM to increase its manufacturing capacity for bigger mainframes until this strategy reached its economic limits and drove the company to the brink of bankruptcy.
Of all the computing "laws," I consider only Moore's Law to be based on verifiable evidence. It stated that the power of microprocessors would double every 18 months without corresponding increases in costs. The explosive proliferation of desktop (and laptop) computing propelled the practice of corporate IT for 20 years until it reached its current conditions, where the total costs of ownership have reached economic limits and the growth rate has leveled off, thus driving most suppliers out of business.
Robert Metcalfe's and George Gilder's formulations extended Moore's Law into the realm of communications. They stated that the value of interconnectivity would grow as a square of the number of connected devices, while the available bandwidth would expand much faster than the capacity of computing.
The multitrillion-dollar collapse of the technology bubble can be best explained as an unwarranted extrapolation of these concepts beyond any sustainable economic limits. Followers of Metcalfe's and Gilder's conjectures have induced the economic collapse of many communications companies. They bet shareholders' money on business that didn't materialize.
The problem with the Grosch, Moore, Metcalfe and Gilder formulations was that they concentrated only on the supply side of IT and paid little attention to the demand side. Those men were IT insiders who became wealthy from the rising prosperity for which they acted as prophets.
This is where a modestly compensated academic, Coase, comes in. He is the first economist of any consequence who has anything useful to say about information economics.
Coase studied why organizations are formed, what guides their growth and what leads to their demise. He observed that companies will expand until "the costs of organizing an extra transaction within the firm become equal to the costs of carrying out the same transaction on the open market." That is now known as Coase's Law. It represents an Information Age reformulation of the law of diminishing returns, which applied only to capital assets.
As organizations grow, they become complicated and find it costly to coordinate what they do. Coase observed that there are always companies that can deliver goods and services more economically than the dominant enterprises. If the more efficient companies become organized, they'll squeeze out those that have been unable to manage their resources. The only recourse for the inefficient companies is to shift inefficient functions to external suppliers. Thus, a carmaker will buy batteries from a supplier rather than manufacture them in-house if that's more cost-effective.
IT executives will have to accept that Coase's Law argues for outsourcing every IT function that can be delivered more efficiently by others. Corporate executives will demand that CIOs demonstrate how each element of their in-house IT spending has a lower cost than what's available in the marketplace. Farming out some of the labor to countries whose wages are a fraction of compensation in the U.S. is a relatively easy decision. The tough questions will concern whether to outsource a part or all of the company's computing infrastructure.
CIOs will have to justify contracting for the management of desktops, laptops or cell phones and having contractors provide security assurance, and they'll have to show that a commercially available standard application service can substitute for the legacy systems that have become unmanageable.
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Tuesday, May 18, 2004 |
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Outsourcing – A positive approach for Small Businesses
Summary:
Outsourcing is a ploy that is being successfully used by small businesses to complement their resources. The support services offered by Virtual Assistants play a key role in contributing to the growth and success of small businesses.
Complete Text:
Outsourcing is the strategic use of outside resources to perform activities traditionally handled by internal staff and resources. Small business owners can outsource non-core functions to specialized and efficient service providers. It is required of businesses to hire special contractors for particular types of work or to meet the demands put forth by sudden spurts in the workload. Recently, the trend of partnering with firms whose capabilities complement their own giving them an access to resources that were beyond their individual reach has come up. The difference between simply subcontracting and outsourcing is that outsourcing involves the wholesale restructuring of the corporation around core competencies and outside relationships.
As a consequence, has emerged a new class of skilled entrepreneurs – the Virtual Assistants.
What is a Virtual Assistant?
A Virtual Assistant (VA) is an independent entrepreneur providing administrative, creative and/or technical services. Utilizing advanced technological modes of communication and data delivery, a professional VA assists clients in his/her area of expertise from his/her own office. A VA completes your projects using his or her own equipment, and carries out the work through email, fax, telephone and postal service. Therefore, the location of your VA is not important. This gives you a liberty to look for professionals best suited to your needs located anywhere on the globe. Since they're paid only for time-on-task, businesses can hire several VAs in dispersed locations and have 24-hour support -- paying far less than an employee or temporary would cost for such comprehensive assistance.
The services offered by each VA differ according to his/her skills. The list of services includes general administration services, database and website development, graphic design, internet research, sales support, presentation preparation, telephone answering, bill payments, travel arrangements, bookkeeping, desktop publishing, computer training, medical/legal transcription… the list is endless! Not all VAs offer all of these services. However, by being part of VA Networks, your VA can guarantee client satisfaction by a qualified VA. If your VA cannot complete your task, he/she will find another VA who can.
Why to outsource the work to a VA?
1. The primary benefit of outsourcing is economizing since the VA can do it cheaper. VAs only charge for actual time worked.
2. By outsourcing to a VA rather than hiring an in-office assistant, you will never need to pay employment insurance, vacation pay, sick pay, or contribute to retirement plans and worker’s compensation.
3. A VA has his/her own hardware, software, training, etc. thereby reducing your capital investment. So there is no wear and tear on your office equipment or a need for special equipment.
4. Engaging a VA gives you time allowing you to do what you do best. You can focus on delivering the higher value and service to your customers.
5. As skilled VAs are chosen to perform particular tasks, they can do it better as they do it all the time. It is their business.
6. Like you, VAs are entrepreneurs and understand the needs of businesses today, ensuring the success of their clients. VAs value each and every client; it is because of these clients that VAs can ensure the success of their own businesses.
7. The resources of the VA can give your business access to technical advances you would not normally have access to.
With modern day communication, projects can be accomplished without ever having to meet the client face to face. With the growing ease of the Internet, finding a VA almost anywhere in the world is quite simple to accomplish. More so in the developed nations like USA, Canada, Australia, UK and many other European countries the VA industry is highly organized. The potential of developing countries like India can too be exploited to provide skilled VA services.
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Summary:
Outsourcing is a ploy that is being successfully used by small businesses to complement their resources. The support services offered by Virtual Assistants play a key role in contributing to the growth and success of small businesses.
Complete Text:
Outsourcing is the strategic use of outside resources to perform activities traditionally handled by internal staff and resources. Small business owners can outsource non-core functions to specialized and efficient service providers. It is required of businesses to hire special contractors for particular types of work or to meet the demands put forth by sudden spurts in the workload. Recently, the trend of partnering with firms whose capabilities complement their own giving them an access to resources that were beyond their individual reach has come up. The difference between simply subcontracting and outsourcing is that outsourcing involves the wholesale restructuring of the corporation around core competencies and outside relationships.
As a consequence, has emerged a new class of skilled entrepreneurs – the Virtual Assistants.
What is a Virtual Assistant?
A Virtual Assistant (VA) is an independent entrepreneur providing administrative, creative and/or technical services. Utilizing advanced technological modes of communication and data delivery, a professional VA assists clients in his/her area of expertise from his/her own office. A VA completes your projects using his or her own equipment, and carries out the work through email, fax, telephone and postal service. Therefore, the location of your VA is not important. This gives you a liberty to look for professionals best suited to your needs located anywhere on the globe. Since they're paid only for time-on-task, businesses can hire several VAs in dispersed locations and have 24-hour support -- paying far less than an employee or temporary would cost for such comprehensive assistance.
The services offered by each VA differ according to his/her skills. The list of services includes general administration services, database and website development, graphic design, internet research, sales support, presentation preparation, telephone answering, bill payments, travel arrangements, bookkeeping, desktop publishing, computer training, medical/legal transcription… the list is endless! Not all VAs offer all of these services. However, by being part of VA Networks, your VA can guarantee client satisfaction by a qualified VA. If your VA cannot complete your task, he/she will find another VA who can.
Why to outsource the work to a VA?
1. The primary benefit of outsourcing is economizing since the VA can do it cheaper. VAs only charge for actual time worked.
2. By outsourcing to a VA rather than hiring an in-office assistant, you will never need to pay employment insurance, vacation pay, sick pay, or contribute to retirement plans and worker’s compensation.
3. A VA has his/her own hardware, software, training, etc. thereby reducing your capital investment. So there is no wear and tear on your office equipment or a need for special equipment.
4. Engaging a VA gives you time allowing you to do what you do best. You can focus on delivering the higher value and service to your customers.
5. As skilled VAs are chosen to perform particular tasks, they can do it better as they do it all the time. It is their business.
6. Like you, VAs are entrepreneurs and understand the needs of businesses today, ensuring the success of their clients. VAs value each and every client; it is because of these clients that VAs can ensure the success of their own businesses.
7. The resources of the VA can give your business access to technical advances you would not normally have access to.
With modern day communication, projects can be accomplished without ever having to meet the client face to face. With the growing ease of the Internet, finding a VA almost anywhere in the world is quite simple to accomplish. More so in the developed nations like USA, Canada, Australia, UK and many other European countries the VA industry is highly organized. The potential of developing countries like India can too be exploited to provide skilled VA services.
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Monday, May 17, 2004 |
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5 Top Trends in Offshore Outsourcing
Analysts and offshore outsourcing experts gathered at the recent U.S.-Russia Technology Roundtable in San Jose, Calif., identified five major trends in offshore development.
Here's a summary of those trends, as well as some of the factors driving them:
1. More and more IT jobs will move overseas in the coming years
Forrester Research estimates that the demand for offshore outsourcing will account for 28% of IT budgets in Europe and the U.S. within two years. Further, the number of offshore IT workers worldwide (software developers working overseas on projects for Western firms) will go from 360,000 today to more than 1 million by 2005.
"Clients are now banging on our doors demanding data on where they should go for offshore development," said Rita Terdiman, an analyst with Gartner Group. "We tell them to go where they can find the best resources and the highest quality for the lowest price."
2. More corporate giants opening dedicated software development centers in places like India and RussiaWhile most companies tend to test the offshore waters with a small project or two, the big names tend to cement these relationships by setting up huge dedicated development centers in their countries of choice.
Microsoft and GE, for example, built campuses in India several years back. Over the past couple of years, though, Intel, Boeing and Motorola have preferred Russia as the best place for dedicated centers. Intel has 400 workers at one Russian center working on wireless LAN and modem projects. It plans to ramp this up to more than 1,000 staff over the next couple of years.
Dell, too, just established a dedicated software engineering center in Moscow. Unlike Intel's, this one is managed and staffed by Russian outsourcing vendor Luxoft. It is a scalable-upon-request team of software developers, with every member being selected by Dell based on relevant experience, domain knowledge and educational background. Dell views this center as a way to focus internal IT resources on specific core areas while scaling up the pace of IT deliverables, and at the same time reduce costs.
"Having delegated some projects to the Moscow Center, we intend to free up the time and energy of our IT departments to enable them to focus on value-added technology tasks, while keeping the scale of IT deliverables at the current and even higher pace," said J.R. Carter of Dell Computers.
Tom Sundsboe, a director of Luxoft, explained that such centers tend to evolve once companies gain confidence in the ability of their offshore partner.
"After you demonstrate first class ROI and rapid time to market with a Fortune 50 company during your early projects, they tend to want to consolidate the relationship by utilizing your skills and resources in the establishment of a dedicated center," he said. "That has been our experience with Boeing and Dell."
3. The gradual acceptance of Western intellectual property (IP) standards
Some companies are understandably hesitant to develop software in countries where software piracy is rife and where IP legislation is in its infancy.
"Russia today is like the U.S. in the early '80s in terms of intellectual property rules," said Russian academician Eugeny Velikhov. "We have a lot of catching up to do but we are working hard to do so rapidly."
But with leading global corporations now heavily involved in Russia and India, the legislative picture is changing. Intel's Richard Wirt believes that while it is essential to take effective IP protection actions in these countries, he has found governments receptive to changes that will encourage greater business cooperation. As a result, he feels that great strides have already been made in Russia and other countries.
"Russian law is starting to resemble American law in the IP field," said Wirt.
4. Offshore sourcing moves up the value chainNot so long ago offshore software development dealt with mainframe maintenance, Y2K fixes and general IT grunt work.
"Originally, the offshore industry inherited labor intensive body shop type IT tasks such as printer drivers and Y2K," said Stephan Lane of Aberdeen Group.
These days, he says, the picture has changed. Java, XML, Oracle and higher-end work has now become the order of the day -- at least in those countries where the resource base possesses the requisite skills.
"Offshore resources in places like Russia are accomplished in high-end and complex algorithm-intensive projects," said Terdiman.
5. Stratification of offshore countries based on cost and skill setsIndia and Ireland were once the rising stars of offshore outsourcing. Both offered very low rates and an available resource pool. More recently, though, these advantages have diminished, largely as a result of their rise in popularity. Ireland, for example, can no longer compete on price with most countries. And India now finds itself sub-contracting work to China and Malaysia in an effort to stay competitive, added Lane.
To survive, these countries must move up the value chain while others take their place as the place to go to find an abundance of highly skilled programmers at low rates. China and Russia are the two he taps to replace Ireland and India as the darlings of the offshore world.
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Analysts and offshore outsourcing experts gathered at the recent U.S.-Russia Technology Roundtable in San Jose, Calif., identified five major trends in offshore development.
Here's a summary of those trends, as well as some of the factors driving them:
1. More and more IT jobs will move overseas in the coming years
Forrester Research estimates that the demand for offshore outsourcing will account for 28% of IT budgets in Europe and the U.S. within two years. Further, the number of offshore IT workers worldwide (software developers working overseas on projects for Western firms) will go from 360,000 today to more than 1 million by 2005.
"Clients are now banging on our doors demanding data on where they should go for offshore development," said Rita Terdiman, an analyst with Gartner Group. "We tell them to go where they can find the best resources and the highest quality for the lowest price."
2. More corporate giants opening dedicated software development centers in places like India and RussiaWhile most companies tend to test the offshore waters with a small project or two, the big names tend to cement these relationships by setting up huge dedicated development centers in their countries of choice.
Microsoft and GE, for example, built campuses in India several years back. Over the past couple of years, though, Intel, Boeing and Motorola have preferred Russia as the best place for dedicated centers. Intel has 400 workers at one Russian center working on wireless LAN and modem projects. It plans to ramp this up to more than 1,000 staff over the next couple of years.
Dell, too, just established a dedicated software engineering center in Moscow. Unlike Intel's, this one is managed and staffed by Russian outsourcing vendor Luxoft. It is a scalable-upon-request team of software developers, with every member being selected by Dell based on relevant experience, domain knowledge and educational background. Dell views this center as a way to focus internal IT resources on specific core areas while scaling up the pace of IT deliverables, and at the same time reduce costs.
"Having delegated some projects to the Moscow Center, we intend to free up the time and energy of our IT departments to enable them to focus on value-added technology tasks, while keeping the scale of IT deliverables at the current and even higher pace," said J.R. Carter of Dell Computers.
Tom Sundsboe, a director of Luxoft, explained that such centers tend to evolve once companies gain confidence in the ability of their offshore partner.
"After you demonstrate first class ROI and rapid time to market with a Fortune 50 company during your early projects, they tend to want to consolidate the relationship by utilizing your skills and resources in the establishment of a dedicated center," he said. "That has been our experience with Boeing and Dell."
3. The gradual acceptance of Western intellectual property (IP) standards
Some companies are understandably hesitant to develop software in countries where software piracy is rife and where IP legislation is in its infancy.
"Russia today is like the U.S. in the early '80s in terms of intellectual property rules," said Russian academician Eugeny Velikhov. "We have a lot of catching up to do but we are working hard to do so rapidly."
But with leading global corporations now heavily involved in Russia and India, the legislative picture is changing. Intel's Richard Wirt believes that while it is essential to take effective IP protection actions in these countries, he has found governments receptive to changes that will encourage greater business cooperation. As a result, he feels that great strides have already been made in Russia and other countries.
"Russian law is starting to resemble American law in the IP field," said Wirt.
4. Offshore sourcing moves up the value chainNot so long ago offshore software development dealt with mainframe maintenance, Y2K fixes and general IT grunt work.
"Originally, the offshore industry inherited labor intensive body shop type IT tasks such as printer drivers and Y2K," said Stephan Lane of Aberdeen Group.
These days, he says, the picture has changed. Java, XML, Oracle and higher-end work has now become the order of the day -- at least in those countries where the resource base possesses the requisite skills.
"Offshore resources in places like Russia are accomplished in high-end and complex algorithm-intensive projects," said Terdiman.
5. Stratification of offshore countries based on cost and skill setsIndia and Ireland were once the rising stars of offshore outsourcing. Both offered very low rates and an available resource pool. More recently, though, these advantages have diminished, largely as a result of their rise in popularity. Ireland, for example, can no longer compete on price with most countries. And India now finds itself sub-contracting work to China and Malaysia in an effort to stay competitive, added Lane.
To survive, these countries must move up the value chain while others take their place as the place to go to find an abundance of highly skilled programmers at low rates. China and Russia are the two he taps to replace Ireland and India as the darlings of the offshore world.
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Sunday, May 16, 2004 |
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OUTSOURCING - COSTS OF OUTSOURCING
The Myth of Lowest Bid = Lowest Cost
A large number of companies in the insurance sector, today, are driven by the "lowest bid" mentality. Many have gotten it down to a science in terms of their purchasing departments literally dictating the price points for different services. Such practices do work well for routine, time and material consulting situations. These consulting engagement are "retail" by nature and are tactical steps towards lowering overall consulting expenditures. Further, these engagements usually do not require high-end services management or well-defined service level agreements, which are core features of strategic outsourcing. But the trend is now towards the outsourcing of knowledge-centric business processes and IT applications which require development / maintenance of complex solutions and experimentation with new ideas than just hiring bodies. Applying the same "retail" yardstick to outsourcing is detrimental to deriving greater value out of each dollar that is spent. Thus, for knowledge centric and strategic outsourcing ventures, it really comes down not to costs alone but the value that the end-user must benefit from in terms of real financial savings, customer satisfaction, certainty of outcome, scalability, predictability, deployment of competent staff and velocity.
Based on my experience and observation, many organizations tend to take a narrow view of costs in terms of dollars only. The fact of the matter is that real costs are a function of time and dollars that an organization is willing to invest or spend in improving its revenues or profitability. Akin to the "total cost of sale" for a vendor, clients also need to put a value to the time that is spent right from preparations for outsourcing to a steady state of affairs.
The Importance of Customer Satisfaction
Smart organizations have a strong desire to derive a high level of customer satisfaction from their outsourcing activities. Consider your own personal lives. How many times you have been willing to pay more for goods or services because you experienced a high level of customer satisfaction? Well, the same applies to insurance companies, as well. The level of attention that buyers get, dictates their behavior. Good examples to see are the CEOs of several successful, large offshore outsourcing vendors who have been in the forefront selling their services to CXOs. Clients also have to do the same internally. They must take a "customer-centric" view and insist upon the outsourcing providing giving you the same commitment - at no extra cost.
Defining the SLA and measuring it
Defining service level agreement and measuring how it is being met may sound basic and obvious. Even with the maturation that offshore outsourcing enjoys today, one is surprised to see the obvious being omitted with frightening regularity. Without the right metrics and measurement of SLAs, any outsourcing venture is bound to fail resulting in cost over-runs. Clients have to see themselves as enablers for exceeding customer expectations. It is only then that they will get more value for each dollar that is spent for outsourcing activities.
Watch Out for the Pitfalls
In most cases, offshore outsourcing is a financially compelling and prudent alternative to providing services in-house. Let us say that reducing cost year over year is a key measure. It is critical that the outsourcing partnership is crafted in such a manner that the provider has the incentive to help you meet your goals.
Like most companies, the provider's goals are to grow their revenues with existing clients and increase profitability. For existing relationships, changing the mode into year-on-year cost reduction is difficult to achieve. The first reaction from vendors will be to rotate out their more experienced and marketable staff leading to service degradation and no prizes for guessing, potentially increased costs to the client!
Vendors' failure to scale is another potential pitfall related to costs. Your outsourced provider's ability to scale is critical to your changing business needs. Inspite of claims to the contrary, vendors are loath to carry an on demand "bench" of skills that the client can pick from at will. If they do, I can guarantee you that the client is paying for it in some hidden costs. The inability of the vendor to scale can affect your time-to-market for products or services and result in lost revenue opportunities.
Key Best Practices
Fashioning multi-year, multi-million dollar spends with outsourcing vendors is a smart way to ensure predictability of costs for the client. It is good for the provider, too, since they can count upon these revenues year-on-year. Several application management outsourcing (AMO) contracts signed between insurance companies and providers in the US and the UK are good examples of cost predictability.
Large insurers like AIG have found the offshore outsourcing model financially compelling. Not too long ago, went in for a "Build, Operate, Transfer" (BOT) model, acquired the staff from their offshore provider and set up large captive units. These units are now providing new, value-added services to other global entities within the parent corporation.
New grounds are being broken daily by smart outsourcers. Large and even medium-sized Insurance companies now see intelligent outsourcing as an important lever to reduce costs. Claims processing, claims adjudication, travel and expenses and several other business processes have been successfully outsourced to offshore providers. Many of the new business process outsourcing pilots that have been proven to be successful are now being scaled into full production mode resulting in significant cost savings and increasing the profitability of insurance companies in Europe and the US.
Reaction to Change
Finally, a key aspect of cost is an outsourcing venture is "velocity" - that is, it's ability to react to change in business conditions. Events like terrorism, wars, political disturbances and weather (hurricanes, storms, etc.) have a direct and measurable impact on the business of insurance companies. Outsourcing partnerships must be able to react to such changes in business swiftly and effect dramatic (and sometimes, traumatic) corrections in scale of operations. The build-up of cost structures for outsourcing ventures should allow for flexibility on both sides to increase or reduce the size and scale of the venture.
Remember, that these are your systems that are being built. It is all about the money - and yet not about it only!
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Source:http://www.fsoutsourcing.com
The Myth of Lowest Bid = Lowest Cost
A large number of companies in the insurance sector, today, are driven by the "lowest bid" mentality. Many have gotten it down to a science in terms of their purchasing departments literally dictating the price points for different services. Such practices do work well for routine, time and material consulting situations. These consulting engagement are "retail" by nature and are tactical steps towards lowering overall consulting expenditures. Further, these engagements usually do not require high-end services management or well-defined service level agreements, which are core features of strategic outsourcing. But the trend is now towards the outsourcing of knowledge-centric business processes and IT applications which require development / maintenance of complex solutions and experimentation with new ideas than just hiring bodies. Applying the same "retail" yardstick to outsourcing is detrimental to deriving greater value out of each dollar that is spent. Thus, for knowledge centric and strategic outsourcing ventures, it really comes down not to costs alone but the value that the end-user must benefit from in terms of real financial savings, customer satisfaction, certainty of outcome, scalability, predictability, deployment of competent staff and velocity.
Based on my experience and observation, many organizations tend to take a narrow view of costs in terms of dollars only. The fact of the matter is that real costs are a function of time and dollars that an organization is willing to invest or spend in improving its revenues or profitability. Akin to the "total cost of sale" for a vendor, clients also need to put a value to the time that is spent right from preparations for outsourcing to a steady state of affairs.
The Importance of Customer Satisfaction
Smart organizations have a strong desire to derive a high level of customer satisfaction from their outsourcing activities. Consider your own personal lives. How many times you have been willing to pay more for goods or services because you experienced a high level of customer satisfaction? Well, the same applies to insurance companies, as well. The level of attention that buyers get, dictates their behavior. Good examples to see are the CEOs of several successful, large offshore outsourcing vendors who have been in the forefront selling their services to CXOs. Clients also have to do the same internally. They must take a "customer-centric" view and insist upon the outsourcing providing giving you the same commitment - at no extra cost.
Defining the SLA and measuring it
Defining service level agreement and measuring how it is being met may sound basic and obvious. Even with the maturation that offshore outsourcing enjoys today, one is surprised to see the obvious being omitted with frightening regularity. Without the right metrics and measurement of SLAs, any outsourcing venture is bound to fail resulting in cost over-runs. Clients have to see themselves as enablers for exceeding customer expectations. It is only then that they will get more value for each dollar that is spent for outsourcing activities.
Watch Out for the Pitfalls
In most cases, offshore outsourcing is a financially compelling and prudent alternative to providing services in-house. Let us say that reducing cost year over year is a key measure. It is critical that the outsourcing partnership is crafted in such a manner that the provider has the incentive to help you meet your goals.
Like most companies, the provider's goals are to grow their revenues with existing clients and increase profitability. For existing relationships, changing the mode into year-on-year cost reduction is difficult to achieve. The first reaction from vendors will be to rotate out their more experienced and marketable staff leading to service degradation and no prizes for guessing, potentially increased costs to the client!
Vendors' failure to scale is another potential pitfall related to costs. Your outsourced provider's ability to scale is critical to your changing business needs. Inspite of claims to the contrary, vendors are loath to carry an on demand "bench" of skills that the client can pick from at will. If they do, I can guarantee you that the client is paying for it in some hidden costs. The inability of the vendor to scale can affect your time-to-market for products or services and result in lost revenue opportunities.
Key Best Practices
Fashioning multi-year, multi-million dollar spends with outsourcing vendors is a smart way to ensure predictability of costs for the client. It is good for the provider, too, since they can count upon these revenues year-on-year. Several application management outsourcing (AMO) contracts signed between insurance companies and providers in the US and the UK are good examples of cost predictability.
Large insurers like AIG have found the offshore outsourcing model financially compelling. Not too long ago, went in for a "Build, Operate, Transfer" (BOT) model, acquired the staff from their offshore provider and set up large captive units. These units are now providing new, value-added services to other global entities within the parent corporation.
New grounds are being broken daily by smart outsourcers. Large and even medium-sized Insurance companies now see intelligent outsourcing as an important lever to reduce costs. Claims processing, claims adjudication, travel and expenses and several other business processes have been successfully outsourced to offshore providers. Many of the new business process outsourcing pilots that have been proven to be successful are now being scaled into full production mode resulting in significant cost savings and increasing the profitability of insurance companies in Europe and the US.
Reaction to Change
Finally, a key aspect of cost is an outsourcing venture is "velocity" - that is, it's ability to react to change in business conditions. Events like terrorism, wars, political disturbances and weather (hurricanes, storms, etc.) have a direct and measurable impact on the business of insurance companies. Outsourcing partnerships must be able to react to such changes in business swiftly and effect dramatic (and sometimes, traumatic) corrections in scale of operations. The build-up of cost structures for outsourcing ventures should allow for flexibility on both sides to increase or reduce the size and scale of the venture.
Remember, that these are your systems that are being built. It is all about the money - and yet not about it only!
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Friday, May 14, 2004 |
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Offshore outsourcing is relentless
Offshore outsourcing is so mainstream that by next year, more than 80% of U.S. companies will have had high-level discussions about the topic. And 40% will have completed some kind of pilot program or will be using near-shore or offshore services.
Despite that assessment, made by Gartner Inc. at an outsourcing conference here last week, offshore outsourcing remains a difficult issue for executives to talk about. In fact, many attendees were skittish about responding to questions for this article, except in the most general terms.
Corporate officials did, however, acknowledge trends related to the politically charged issue. For instance, BP PLC in London is discussing offshore work with its existing outsourcers, IBM and Accenture Ltd. "They are offering us an opportunity to have consistent performance at a lower cost," said Russell Taruscio, downstream chief financial officer at the oil company.
Adding offshore components to outsourcing contracts is on the rise, according to IDC. In a report last week, the Framingham, Mass., research firm said offshore outsourcing is the dominant trend in the IT services industry, with 42% of the application management contracts now having some offshore component. A big reason is cost.
Bob Walters, IT director at supply chain system provider Intermec Technologies Corp. in Everett, Wash., surveyed development costs recently at an SAP AG user conference. He determined that U.S. companies are charging $80 to $120 per hour for programming work, while the fee for offshore providers is about $40.
When you can pay a third of the price, offshore is "something that has to be considered," said Walters.
As offshore business grows, so does competition for it. Pioneering India-based offshore companies, such as Tata Sons Ltd., are facing increasing competition from the large U.S. IT consulting firms. Accenture CEO Joe W. Forehand, who spoke at the Gartner conference, compared the trend to the previous exodus from the U.S. of many manufacturing operations. "The way we look at it, the industrialization of IT is a reality, and we have to embrace that," he said.
Competition is also becoming more global. In the vendor exhibit hall, Bamboo Networks Ltd.'s mere presence raised eyebrows. Some rivals said it was the first China-based outsourcer to set up a booth at a U.S. outsourcing conference.
China is considered something of a sleeping giant in the offshore world that isn't quite ready to compete with India. China "represents the next wave" in offshore outsourcing, said Traci Gere, an IDC analyst.
Rajesh Rao, chief operating officer at Hong Kong-based Bamboo, which operates an offshore development center in Guangzhou, China, said the company believes it has developed its offshore processes sufficiently to compete for U.S. customers.
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Source:http://www.computerworld.com
Offshore outsourcing is so mainstream that by next year, more than 80% of U.S. companies will have had high-level discussions about the topic. And 40% will have completed some kind of pilot program or will be using near-shore or offshore services.
Despite that assessment, made by Gartner Inc. at an outsourcing conference here last week, offshore outsourcing remains a difficult issue for executives to talk about. In fact, many attendees were skittish about responding to questions for this article, except in the most general terms.
Corporate officials did, however, acknowledge trends related to the politically charged issue. For instance, BP PLC in London is discussing offshore work with its existing outsourcers, IBM and Accenture Ltd. "They are offering us an opportunity to have consistent performance at a lower cost," said Russell Taruscio, downstream chief financial officer at the oil company.
Adding offshore components to outsourcing contracts is on the rise, according to IDC. In a report last week, the Framingham, Mass., research firm said offshore outsourcing is the dominant trend in the IT services industry, with 42% of the application management contracts now having some offshore component. A big reason is cost.
Bob Walters, IT director at supply chain system provider Intermec Technologies Corp. in Everett, Wash., surveyed development costs recently at an SAP AG user conference. He determined that U.S. companies are charging $80 to $120 per hour for programming work, while the fee for offshore providers is about $40.
When you can pay a third of the price, offshore is "something that has to be considered," said Walters.
As offshore business grows, so does competition for it. Pioneering India-based offshore companies, such as Tata Sons Ltd., are facing increasing competition from the large U.S. IT consulting firms. Accenture CEO Joe W. Forehand, who spoke at the Gartner conference, compared the trend to the previous exodus from the U.S. of many manufacturing operations. "The way we look at it, the industrialization of IT is a reality, and we have to embrace that," he said.
Competition is also becoming more global. In the vendor exhibit hall, Bamboo Networks Ltd.'s mere presence raised eyebrows. Some rivals said it was the first China-based outsourcer to set up a booth at a U.S. outsourcing conference.
China is considered something of a sleeping giant in the offshore world that isn't quite ready to compete with India. China "represents the next wave" in offshore outsourcing, said Traci Gere, an IDC analyst.
Rajesh Rao, chief operating officer at Hong Kong-based Bamboo, which operates an offshore development center in Guangzhou, China, said the company believes it has developed its offshore processes sufficiently to compete for U.S. customers.
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Financial
B2B
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Source:http://www.computerworld.com
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Thursday, May 13, 2004 |
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