Offshore Outsourcing: The Statistics
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Friday, September 30, 2005 |
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Offshore Outsourcing nonetheless has also truncated millions of job opportunities in the respective home countries. Over 2.2 million people in the US alone lost their jobs in the preceding four years.
US Senate is contemplating to ban Offshore Outsourcing of government contracts. This posits an ironic premise US, in theory, stalwartly campaigns for global acceptance of free trade practices, but in practice it mulls over legal restraints to offshore outsourcing from foreign lands. But the recoil may be puffed up. One of the hottest studies designates that the trend may actually be creating more jobs.
In the past decade, US companies single-handedly have devoted $7 billion in their ancillary operations in India, garnering a profit in excess of $26 billion. Telstra, an Australian telecom company, for instance, accumulated more than $75 million a year by outsourcing several assignments to Indian ventures proving an apparent clue that, notwithstanding separated outlooks in the US, Britain, France, Germany, and other first world countries, corporate administrations will persist favoring offshore outsourcing. On the employment side, there are two standpoints: first, deeming that outsourcing creates massive joblessness; and, second, contrariwise. Indeed, as pointed out in a report by the US Chamber of Commerce, the main reason of increased unemployment in the US, Britain and other developed countries is the augmentation in yield due to continuing advancements in technology. Quoting the instance of GM (General Motors) in USA three decades ago the report says that it used to engage larger than 4,50,000 workers to produce five million automobiles / year, and now it utilizes under 1,18,000 hands to manufacture the same number of vehicles. This reduction is attributable to the advancement of designing, mechanization, assembling and testing gizmology together with robotics.
US Senate is contemplating to ban Offshore Outsourcing of government contracts. This posits an ironic premise US, in theory, stalwartly campaigns for global acceptance of free trade practices, but in practice it mulls over legal restraints to offshore outsourcing from foreign lands. But the recoil may be puffed up. One of the hottest studies designates that the trend may actually be creating more jobs.
In the past decade, US companies single-handedly have devoted $7 billion in their ancillary operations in India, garnering a profit in excess of $26 billion. Telstra, an Australian telecom company, for instance, accumulated more than $75 million a year by outsourcing several assignments to Indian ventures proving an apparent clue that, notwithstanding separated outlooks in the US, Britain, France, Germany, and other first world countries, corporate administrations will persist favoring offshore outsourcing. On the employment side, there are two standpoints: first, deeming that outsourcing creates massive joblessness; and, second, contrariwise. Indeed, as pointed out in a report by the US Chamber of Commerce, the main reason of increased unemployment in the US, Britain and other developed countries is the augmentation in yield due to continuing advancements in technology. Quoting the instance of GM (General Motors) in USA three decades ago the report says that it used to engage larger than 4,50,000 workers to produce five million automobiles / year, and now it utilizes under 1,18,000 hands to manufacture the same number of vehicles. This reduction is attributable to the advancement of designing, mechanization, assembling and testing gizmology together with robotics.
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and application development outsourcing.
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Offshore Outsourcing : An All Win Premise
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The advent of internet, globalization, free marketing, and liberalization has turned the world into a small global village consequently destroying all trade barriers. The awareness that outsourcing can boost productivity sans forfeit of class has impelled MNC’s, in all segments, to endorse this loom. A good number of major IT companies do most of their business overseas and obviously want to have some of their employees in those markets. Lower wages in some countries are also a huge incentive to move operations, especially since high-speed communication removes many of the barriers to dealing with U.S.-based colleagues and customers. Therefore, numerous MNCs in USA, Europe, Australia, and Japan have initiated IPOs (International Procurement Organizations) in developing third world countries particlulary India, China, Mexico and Brazil.
Offshore Outsourcing ensues largely in the IT sector, followed by medical transcription and other health care-related jobs, automotive spares/components, engineering segment, and business processing, accounting, advertising, , Human Resource Management and Development, , financial investment and consultancy, legal services, and network security.
The theory of outsourcing is also technology- motivated anchored in the principle that one must outsource low-tech data entry jobs requiring more of manual labour and focus on central activities, exploration and advance of innovative gizmologies. While the proceeds generated from Offshoring be utilized for further expansion and technology innovation and specialization thus engendering fresh and superior employment openings.
An account primed by McKinsey Global Institute for the US Chamber of Commerce has avowed that: "A US company earns on an average a net profit of $1.12 to $1.14 by outsourcing work for which it pays $1.0 abroad." It additionally acknowledged that by offshoring low paid jobs abroad, US capital, fiscal or intellectual, can be exploiedt to spawn more lucrative and superior revenue generating jobs. The report also affirmed that by outsourcing assignments to India and other developing countries, many US / European companies are also establishing new markets in such countries. Call centers so grounded in India or other developing countries are being fundamentally outfitted with US or European gizmos like Compaq / HP Computers, Microsoft software, Lucent phones and Carrier air conditioners.
Offshore Outsourcing ensues largely in the IT sector, followed by medical transcription and other health care-related jobs, automotive spares/components, engineering segment, and business processing, accounting, advertising, , Human Resource Management and Development, , financial investment and consultancy, legal services, and network security.
The theory of outsourcing is also technology- motivated anchored in the principle that one must outsource low-tech data entry jobs requiring more of manual labour and focus on central activities, exploration and advance of innovative gizmologies. While the proceeds generated from Offshoring be utilized for further expansion and technology innovation and specialization thus engendering fresh and superior employment openings.
An account primed by McKinsey Global Institute for the US Chamber of Commerce has avowed that: "A US company earns on an average a net profit of $1.12 to $1.14 by outsourcing work for which it pays $1.0 abroad." It additionally acknowledged that by offshoring low paid jobs abroad, US capital, fiscal or intellectual, can be exploiedt to spawn more lucrative and superior revenue generating jobs. The report also affirmed that by outsourcing assignments to India and other developing countries, many US / European companies are also establishing new markets in such countries. Call centers so grounded in India or other developing countries are being fundamentally outfitted with US or European gizmos like Compaq / HP Computers, Microsoft software, Lucent phones and Carrier air conditioners.
The article sponsored by A-1 Technology Inc, dealing in software outsourcing and software development outsourcing.
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TCS, TTSL in $250 m outsourcing deal
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From Financial Express
Tata Consultancy Services (TCS) and Tata Teleservices (TTSL) have announced a $250 million outsourcing deal. As per the terms, TTSL and Tata Teleservice, Maharashtra will outsource their entire IT infrastructure management to TCS. The sum will be paid to TCS over a period of five years.
"The engagement with TTSL is another sign of the growing importance of the Indian market. TCS's knowledge of the telecom domain and its ability to provide best-in-class solutions will help TTSL sustain and grow its competitive advantage and deliver greater value to its stakeholders. TCS is committed to delivering world-class solutions for TTSL," TCS CEO and MD S Ramadorai said.
The scope of the engagement includes management of all IT-related activities including implementation, application development and maintenance as well as change management across the enterprise. TCS will also be responsible for the management of data centres, information security management, training end users on new applications and disaster recovery .
"The engagement with TTSL is another sign of the growing importance of the Indian market. TCS's knowledge of the telecom domain and its ability to provide best-in-class solutions will help TTSL sustain and grow its competitive advantage and deliver greater value to its stakeholders. TCS is committed to delivering world-class solutions for TTSL," TCS CEO and MD S Ramadorai said.
The scope of the engagement includes management of all IT-related activities including implementation, application development and maintenance as well as change management across the enterprise. TCS will also be responsible for the management of data centres, information security management, training end users on new applications and disaster recovery .
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and application development outsourcing.
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Why you should outsource to India
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The greatest benefits of offshore outsourcing to India are the significant savings and rapid results.
In India multi-lingual project managers and programmers, saves you from language and culture difficulties, not to mention global time differences unlike China.
By outsourcing projects you can save up to 30 to 40 % in the project cost. You can also have access to proven and standard quality of web and software solution.
By outsourcing the project to offshore outsourcing center, you don't need to spend your resources and can concentrate on the core development of the business.
By outsourcing projects you reduce investment for resources and their maintenance cost. There will be significant reduction in operating cost and project overheads.
In India multi-lingual project managers and programmers, saves you from language and culture difficulties, not to mention global time differences unlike China.
By outsourcing projects you can save up to 30 to 40 % in the project cost. You can also have access to proven and standard quality of web and software solution.
By outsourcing the project to offshore outsourcing center, you don't need to spend your resources and can concentrate on the core development of the business.
By outsourcing projects you reduce investment for resources and their maintenance cost. There will be significant reduction in operating cost and project overheads.
A-1 Technology ,an Offshore Outsourcing provides offshore software and application development outsourcing services for companies across the globe from it's software outsourcing center in India; where we are specifically focused in the fields of Web Design and Development, PHP Programming,.Net , E commerce Solutions, Web Application Development, Database Integration, Flash Development, Search Engine Optimization and Software Development Services.
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Bangalore Outsourcing Revenue Increases
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Thursday, September 29, 2005 |
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From: Washingtonpost
India's technology hub Bangalore experienced a 20 percent growth to 90 billion rupees ($2.05 billion) in its software and back-office outsourcing exports in the April-September half-year period, an official said Wednesday.
Also, 57 foreign companies opened offices in the city and had invested a total of 9.2 billion rupees ($209 million) through Sept. 27, when the figures were calculated, B. V. Naidu, director of the federal government body Software Technology Parks of India told reporters.
Naidu expected full year revenues to be at least $8.7 billion, or 30 percent higher than the last year's figure of $6.7 billion.
Industry leaders had feared that Bangalore's outsourcing revenue growth may slow down due to the city's sagging infrastructure and resistance from U.S. labor groups. But the latest growth figures suggest there has been no decrease in Western outsourcing.
Western companies save costs by farming out software development, engineering design and back-office functions to India and other countries where wages are low and skilled workers are plentiful.
Many of the world's largest technology companies including Microsoft Corp., Intel Corp., Oracle Inc., and Google Inc., have their offices in Bangalore. But many complain that the city's potholed roads, congested traffic, frequent power shortage, inadequate public transport and a cramped airport threaten their growth.
Labor groups in the U.S. and Europe have protested the practice of outsourcing, claiming it leads to job losses. But such protests have eased in recent months.
India's revenue from Western outsourcing was $17.2 billion in the fiscal year ended March 2005. It expects a growth of at least 30 percent in the current year.
Miscellanies
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India is the best bet for offshore IT outsourcing, advises Gartner
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Wednesday, September 28, 2005 |
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From: computerweekly.com
India offers significant advantages in terms of IT skills and infrastructure over other countries that provide offshore outsourcing, according to industry analyst Gartner.
India is "head and shoulders above the competition", said Gartner, which predicts worldwide spending on offshore IT will reach £27.6bn by 2007.
In terms of size and number of IT professionals, only China comes close to India in offshoring potential, said Gartner, pointing out that strong government support was playing a key role in boosting China's offshore IT capabilities.
But Ian Marriott, research vice-president at Gartner, sounded a note of caution about the strong interest in "nearshore" options from Western user organisations.
"Some Eastern European countries, particularly ones that are now in the European Union, are attracting attention," he said.
"However, the choice of local providers is limited. This may change as these countries become more mature members of the international business community.
"In the meantime, multi-national and leading Indian providers are establishing a presence there, mainly as nearshore locations for Western Europe."
India's success had also prompted a scramble by English-speaking countries to join the offshore IT market, said Marriott. "Although some of these countries seem promising on paper, Gartner advises companies to be extremely cautious during evaluation, paying special attention to the historical track record of these nations: specifically, low socio-political turbulence, physical and cyber security, and enforcement of intellectual property (IP) and patent law," he said.
Businesses selecting offshore service suppliers should look at factors such as the level of government support, English language skills, infrastructure and political and economic stability, as well as cost, in countries where they are considering outsourcing, Gartner recommended.
Although labour costs may be low, there were additional risks associated with offshoring, he warned. "Although infrastructure, process, project management and security risks are normal in any external service provider relationship, human capital consistency, socio-political bias or legal jurisdiction are not typically included in the due diligence process for vendor selection," said Marriott.
Offshore checklist
In selecting an offshore IT provider, users should investigate the following factors:
Government support
English language skills
Infrastructure
Educational system
Cost
Political and economic stability
Globalisation maturity (including legal system)
Labour pool
Security and privacy
Cultural compatibility
Miscellanies
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and software development outsourcing.
India offers significant advantages in terms of IT skills and infrastructure over other countries that provide offshore outsourcing, according to industry analyst Gartner.
India is "head and shoulders above the competition", said Gartner, which predicts worldwide spending on offshore IT will reach £27.6bn by 2007.
In terms of size and number of IT professionals, only China comes close to India in offshoring potential, said Gartner, pointing out that strong government support was playing a key role in boosting China's offshore IT capabilities.
But Ian Marriott, research vice-president at Gartner, sounded a note of caution about the strong interest in "nearshore" options from Western user organisations.
"Some Eastern European countries, particularly ones that are now in the European Union, are attracting attention," he said.
"However, the choice of local providers is limited. This may change as these countries become more mature members of the international business community.
"In the meantime, multi-national and leading Indian providers are establishing a presence there, mainly as nearshore locations for Western Europe."
India's success had also prompted a scramble by English-speaking countries to join the offshore IT market, said Marriott. "Although some of these countries seem promising on paper, Gartner advises companies to be extremely cautious during evaluation, paying special attention to the historical track record of these nations: specifically, low socio-political turbulence, physical and cyber security, and enforcement of intellectual property (IP) and patent law," he said.
Businesses selecting offshore service suppliers should look at factors such as the level of government support, English language skills, infrastructure and political and economic stability, as well as cost, in countries where they are considering outsourcing, Gartner recommended.
Although labour costs may be low, there were additional risks associated with offshoring, he warned. "Although infrastructure, process, project management and security risks are normal in any external service provider relationship, human capital consistency, socio-political bias or legal jurisdiction are not typically included in the due diligence process for vendor selection," said Marriott.
Offshore checklist
In selecting an offshore IT provider, users should investigate the following factors:
Government support
English language skills
Infrastructure
Educational system
Cost
Political and economic stability
Globalisation maturity (including legal system)
Labour pool
Security and privacy
Cultural compatibility
Miscellanies
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and software development outsourcing.
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Reuters on Indian call centre helps Texans deal with Rita
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Monday, September 26, 2005 |
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It is interestingly unique story that outsourcing critics like to ignore.
A call centre in Gujarat has been fielding scores of distress calls from Texas residents about Hurricane Rita, the unit's director said on Sunday.
The call centre run by Effective Teleservices is informing affected Texas residents about safer locations, evacuation and relief operations.
The call centre located in Gujarat's capital, Gandhinagar, started fielding around 20 calls an hour after the U.S.-based firm's two call centres in Texas were temporarily shut down due to fear that they could suffer damage from Hurricane Rita.
"I received a frantic call from Robert Hurst, a senior judge in Texas on Friday night," Jim Iyoob, the centre's director in Gujarat and a resident of Texas.
"He requested me to set up a helpline at the Business Process Outsourcing centre to help evacuees in Texas find a temporary shelter from the hurricane."
The officials immediately started the helpline with nearly a dozen agents providing information sourced from the Internet.
"All calls from our Texas office are being diverted to India," says Iyoob who is helping anxious callers and updating them on the situation by monitoring various Web sites and maps.
Hurricane Rita left the U.S. Gulf Coast, reeling from two powerful storms in less than a month, with renewed flooding in New Orleans, widespread power outages and hundreds of miles of roads closed by debris.
Helped by cheap telecoms and English speakers working for a fifth of Western wages, India's back-office services industry employed 348,000 employees at the end of March and posted revenue of $5.2 billion in the year to March 2005.
The article sponsored by A-1 Technology Inc, dealing in offshore software development and software outsourcing.
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Thailand Taps the Minds of Indian Knowledge Workers
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Saturday, September 24, 2005 |
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An interesting article from Asia Pulse discusses Thailand’s recent interest in recruiting experienced Indian knowledge workers to help jump-start the country’s outsourcing industry. This would also further deepen the Indo-Thai relationship under the FTA.
From the article:
"We want knowledge workers from India. We want them to train our people in IT and other knowledge-based skills...we wanted multinational companies to use Thailand as a hub for their R&D activities," Prachuab Chaiyasarn, Thailand Trade Representative and Head of Thai Negotiating Team on Indo-Thai Free Trade Area (FTA), told a seminar here…He said Thailand was keen on "importing brain workers" from India to educate its people, especially on IT skills.”
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development.
From the article:
"We want knowledge workers from India. We want them to train our people in IT and other knowledge-based skills...we wanted multinational companies to use Thailand as a hub for their R&D activities," Prachuab Chaiyasarn, Thailand Trade Representative and Head of Thai Negotiating Team on Indo-Thai Free Trade Area (FTA), told a seminar here…He said Thailand was keen on "importing brain workers" from India to educate its people, especially on IT skills.”
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development.
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UP gets North India's largest technology park
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From: hindustantimes
As India leads the trail in becoming the best global outsourcing hub, Information Technology knows no bounds in this part of the world. The latest being the setting up of software technology parks (STP) across the country.
The state of Uttar Pradesh is fast growing as an IT hub, with the mushrooming of BPO and ITeS centres. The recent addition is the upcoming Logix Techno Park in sector 127 of Noida city. This is the largest STP in whole of North India, covering the total area of six lakh sq ft. The projected cost to design this park is 75 crores with 50 crores already invested.
The place will be used by 5000 IT professionals and will be inaugurated by President APJ Abdul Kalam in first week of October.Blue-chip companies like HCL {NEC}, Mentor Graphics, Patni, Citi.fifteen have already moved in, occupying 75 per cent of the site even before its completion.
The Park aims to provide world class infrastructure to small, medium and big size companies and at the same time promoting UP as an IT hub, says Managing Director Logix Techno Park, Shakti Nath.
The article sponsored by A-1 Technology Inc, dealing in application development outsourcing and software outsourcing.
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Outsourcing : A good flip
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Friday, September 23, 2005 |
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Reaction by some US customers has also been negative.
According to an article published at bambooweb "Many customers of Dell complained of an inability to effectively communicate with their support staff, which Dell outsourced to India, because of their heavy Indian accents. Due to negative customer reaction and negative publicity, Dell moved some of its tech phone support jobs back to the US, most notably for corporate customers, though they stated they still plan to augment their Indian staff. "
But what I want to convey us that "Outsourcing needs to be considered as an appreciator of assets inspite the apprehensions that keep arising due to some examples that are quoted against the concept of outsourcing. This is because outsourcing is not only a progressive approach towards consolidation of any business offshore but also helps is bringing together the best of both worlds at a proficient platform at highly reasonable rates. Outsourcing is a concept that is no longer new .It has been tread safely by many successful businessmen to seek more success for their big and small businesses alike. As they say that there are two sides of each coin. Similarly outsourcing cannot be casted as an adverse phenomenon in the global market just because of some instances of a bad flip. We started the discussion from a negative mark now lets proceed to viewing the other side of the coin which is more positive.
Other companies report favorable results, however. One company said that the low cost of his Indian development team allows him to hire higher-paid American lead developers."
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development.
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India, Canada top outsourcing destinations: Study
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Thursday, September 22, 2005 |
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From Manorma Online
Silicon Valley: US businesses looking to place their technology operations offshore should give strongest consideration to India, Canada, or China, said a report released by outsourcing consulting firm neoIT. India, which took the No. 1 spot in neoIT's ranking of 14 possible IT outsourcing destinations, offers "cost competitiveness, a highly skilled labour pool ... and a high level of service maturity," it said in its annual report 'Mapping Offshore Markets Update 2005.' The country's skilled labour pool and mature level of services helped it provide $12 billion in outsourced IT services last year. It also leads the world in IT services exports, with sales topping $12 billion last year. To help companies evaluate potential offshoring location, neoIT has ranked countries based on the neoIT 'Offshore Attractiveness Index,' which rates each country's characteristics to generate a quantitative net cost benefit of outsourcing to that destination. The five factors are: financial benefit, service maturity, people, infrastructure and catalyst.
The article sponsored by A-1 Technology Inc, dealing in application development outsourcing and software outsourcing.
Silicon Valley: US businesses looking to place their technology operations offshore should give strongest consideration to India, Canada, or China, said a report released by outsourcing consulting firm neoIT. India, which took the No. 1 spot in neoIT's ranking of 14 possible IT outsourcing destinations, offers "cost competitiveness, a highly skilled labour pool ... and a high level of service maturity," it said in its annual report 'Mapping Offshore Markets Update 2005.' The country's skilled labour pool and mature level of services helped it provide $12 billion in outsourced IT services last year. It also leads the world in IT services exports, with sales topping $12 billion last year. To help companies evaluate potential offshoring location, neoIT has ranked countries based on the neoIT 'Offshore Attractiveness Index,' which rates each country's characteristics to generate a quantitative net cost benefit of outsourcing to that destination. The five factors are: financial benefit, service maturity, people, infrastructure and catalyst.
The article sponsored by A-1 Technology Inc, dealing in application development outsourcing and software outsourcing.
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India still first choice for offshore outsourcing
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From Silicon.com
India remains the top global offshore outsourcing destination but China is catching up fast on the back of strong governmental support, according to the latest research from Gartner.
Only India currently has the right combination of cheap resources and robust technology infrastructure for an offshoring destination. Gartner predicts it will continue to pick up the lion's share of global offshore spending on IT services, which is predicted to total $50bn by 2007.
Despite India's dominance, Gartner is advising organisations looking at offshore outsourcing to consider multiple locations around the world.
India will face increasing competition from Brazil, China, Mexico and the 'nearshore' eastern European countries such as the Czech Republic, Hungary, Poland and Russia but Gartner says only China comes close in the potential to match India in terms of size and the number of IT professionals.
Ian Marriott, research VP at Gartner, also warned that while the cost of labour will remain a major factor in the choice of offshore location, organisations need to do a detailed cost-versus-risk equation.
In the report he said: "Organisations must understand the various types of risks when using global software teams or offshore outsourcing, and assess each through a more rigorous due diligence of the short-listed offshore firms."
Some of the emerging offshore countries highlighted by Gartner, which do not yet have the sufficient resources and infrastructure to deliver services on a profitable level include Belarus, Estonia, Latvia, Lithuania, Mauritius, New Zealand, Slovakia and the Ukraine.
A separate report by analyst Forrester shows the UK leads the European outsourcing market on the back of strong activity among public sector and financial services and organisations. BT Global Services headed the vendor chart for deal value after landing a €2.2bn deal with the Ministry of Defence.
Forrester's figures also showed a decline in the level of infrastructure outsourcing, while telecoms and network outsourcing grew 18 per cent on last year and accounted for almost a third of all the deals.
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and offshore software development.
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Review: Managing the Outsourcing Relationship
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Wednesday, September 21, 2005 |
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This book abounds with clear and concise concepts and is extremely well structured. This book is a comprehensive and practical guide leading companies through this confounding maze. One of the distinctive bonuses of this book is the application of sound business principles and common sense to this admittedly sophisticated concept.
This book is a good source of information for every organization's senior management team or for anyone interested in contemporary business issues and solutions. Whatever it is that you are looking for to learn about outsourcing, this book will definitely brush up a few of your managerial skills.
The article sponsored by A-1 Technology Inc, dealing in application development outsourcing and software development outsourcing.
This book is a good source of information for every organization's senior management team or for anyone interested in contemporary business issues and solutions. Whatever it is that you are looking for to learn about outsourcing, this book will definitely brush up a few of your managerial skills.
The article sponsored by A-1 Technology Inc, dealing in application development outsourcing and software development outsourcing.
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Outsourcing benefits IT budgets
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From AmericanCity and County
As information technology salaries continue to skyrocket, the bidding war to hire and retain top computing talent remains in full swing. IT staff outsourcing serves as a practical, cost-effective hiring alternative for budget-conscious CIOs who are struggling to complete Y2K-related projects and keep up with new developments in information technology.
According to a 1998 salary survey conducted by the System Administration, Networking and Security Institute, a Bethesda, Md.-based educational organization, the average raise for IT professionals was 11.9 percent last year. More than 7,100 public- and private-sector IT professionals participated. The median salary was $60,991, and more than 75 percent of respondents indicated a salary between $40,000 and $90,000.
While contract staff are used primarily to provide support for permanent IT staff at large organizations, they also serve as an effective remedy to the salary concerns at small to midsize organizations. In addition to relieving human resources departments of the burden of recruiting, screening and evaluating IT talent, using contract employees eliminates the paperwork and costs associated with health and disability coverage and other benefits extended to full-time staff.
"Our primary goal in outsourcing IT staff has typically been [getting people to] handle certain tasks that require an unusually quick response or [gaining] extra resources for short periods of time," says Haldis Toppel, information systems manager for Los Angeles. "As a publicly funded institution, we're not in a position where we can hire and dismiss staff easily for short-term projects."
According to Toppel, the meteoric rise in salaries in recent years also has presented a problem regarding permanent hires. She says that the city's salary scale does not always meet the requirements of IT professionals surfing the market for the best offers. "Our problems were exacerbated by a recent two-year hiring freeze," she says. "We weren't able to continue building our staff from the bottom up, and we're currently looking at a big void in staff development. It's really unfortunate because experienced and accomplished people are necessary to most of our projects.
"Because of the hiring freeze, we've basically split up our experienced staff and 'backfilled' positions with contract programmers rather than filling them with permanent staff," she adds. "[Most] contract programmers on our staff right now are working on Y2K compliance."
Outsourcing fills immediate needs but also eliminates much of the difficulty of employee-employer compatibility, which can often be difficult to assess until an employee has worked several months. Many organizations also offer lease-to-hire programs that make it possible to permanently retain contracted employees who prove to be a good fit.
One of the drawbacks of outsourcing work to employees who take the "highest bidder" approach is that it can affect an organization's bottom line. Instead of hiring people who are focused on long-term growth, building their skills and gathering experience, agencies end up with people who are more focused on money. Employers in turn will expect more from their contracted employees in terms of commitments, hours and productivity.
Despite the drawbacks of outsourcing, Toppel does not hesitate to label IT staff outsourcing as cost-effective. With the constraints placed on her department over the last few years, she says it could not have achieved the business goals of the city with the same level of results without contract staffing.
The article sponsored by A-1 Technology Inc, dealing in software outsourcing and offshore software programming
As information technology salaries continue to skyrocket, the bidding war to hire and retain top computing talent remains in full swing. IT staff outsourcing serves as a practical, cost-effective hiring alternative for budget-conscious CIOs who are struggling to complete Y2K-related projects and keep up with new developments in information technology.
According to a 1998 salary survey conducted by the System Administration, Networking and Security Institute, a Bethesda, Md.-based educational organization, the average raise for IT professionals was 11.9 percent last year. More than 7,100 public- and private-sector IT professionals participated. The median salary was $60,991, and more than 75 percent of respondents indicated a salary between $40,000 and $90,000.
While contract staff are used primarily to provide support for permanent IT staff at large organizations, they also serve as an effective remedy to the salary concerns at small to midsize organizations. In addition to relieving human resources departments of the burden of recruiting, screening and evaluating IT talent, using contract employees eliminates the paperwork and costs associated with health and disability coverage and other benefits extended to full-time staff.
"Our primary goal in outsourcing IT staff has typically been [getting people to] handle certain tasks that require an unusually quick response or [gaining] extra resources for short periods of time," says Haldis Toppel, information systems manager for Los Angeles. "As a publicly funded institution, we're not in a position where we can hire and dismiss staff easily for short-term projects."
According to Toppel, the meteoric rise in salaries in recent years also has presented a problem regarding permanent hires. She says that the city's salary scale does not always meet the requirements of IT professionals surfing the market for the best offers. "Our problems were exacerbated by a recent two-year hiring freeze," she says. "We weren't able to continue building our staff from the bottom up, and we're currently looking at a big void in staff development. It's really unfortunate because experienced and accomplished people are necessary to most of our projects.
"Because of the hiring freeze, we've basically split up our experienced staff and 'backfilled' positions with contract programmers rather than filling them with permanent staff," she adds. "[Most] contract programmers on our staff right now are working on Y2K compliance."
Outsourcing fills immediate needs but also eliminates much of the difficulty of employee-employer compatibility, which can often be difficult to assess until an employee has worked several months. Many organizations also offer lease-to-hire programs that make it possible to permanently retain contracted employees who prove to be a good fit.
One of the drawbacks of outsourcing work to employees who take the "highest bidder" approach is that it can affect an organization's bottom line. Instead of hiring people who are focused on long-term growth, building their skills and gathering experience, agencies end up with people who are more focused on money. Employers in turn will expect more from their contracted employees in terms of commitments, hours and productivity.
Despite the drawbacks of outsourcing, Toppel does not hesitate to label IT staff outsourcing as cost-effective. With the constraints placed on her department over the last few years, she says it could not have achieved the business goals of the city with the same level of results without contract staffing.
The article sponsored by A-1 Technology Inc, dealing in software outsourcing and offshore software programming
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Outsourcing From Korea to Korea
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Tuesday, September 20, 2005 |
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Newsweek just published an article on the outsourcing of work from South Korea to its Stalinist neighbor to the north. The reasons: cheap labor and real estate, geographic proximity, and the possibility of closer ties between Pyonyang and Seoul. Kaesung in the North is being touted as a potential Shenzhen, China’s storied “special economic zone.” While the relationship is far from off the ground, if it does develop, there are two potential and contradictory outcomes: (1) it could shore up Kim Jong Il’s impoverished slave state and prolong its reign; (2) economic liberalization could lead to some measure of political liberalization as North Korean workers are increasingly exposed to the ways of the South and, by extension, the ways of the rest of the world. If the business is lucrative, the South could potentially require further reforms as a sine qua non for further investment, thus exposing North Korea to political and economic daylight. A combination of carrot and stick, in other words. However, there are major obstacles: “The main problem is Washington's economic sanctions against Pyongyang, which prohibit the sale or shipment of key strategic goods, such as computers, to the North. For the same reason, high-tech firms don't invest in the zone. Telephone calls from Kaesung to nearby Seoul are expensive because they're patched through Japan. What the zone needs more than anything to succeed is a genuine political thaw between North Korea and the United States. Without that, its dreams of hot growth will cool fast.”
The article sponsored by A-1 Technology Inc, dealing in software outsourcing and offshore software programming
The article sponsored by A-1 Technology Inc, dealing in software outsourcing and offshore software programming
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10 ways to get offshoring right
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Monday, September 19, 2005 |
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CRM News offers “10 ways to get offshoring right”:
1. Never Outsource Your Core Value
2. Get Boardroom Ownership
3. Forge Internal Competencies
4. Fix Your Process Before Offshoring It
5. Demand Domain Expertise
6. Require Evidence of Best Practices
7. Write Talent Into the Contract
8. Investigate Pricing Models
9. Acclimate to Cultural Differences
10. Get Your Feet Wet
Click here for the full article.
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and software development outsourcing.
1. Never Outsource Your Core Value
2. Get Boardroom Ownership
3. Forge Internal Competencies
4. Fix Your Process Before Offshoring It
5. Demand Domain Expertise
6. Require Evidence of Best Practices
7. Write Talent Into the Contract
8. Investigate Pricing Models
9. Acclimate to Cultural Differences
10. Get Your Feet Wet
Click here for the full article.
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and software development outsourcing.
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Financial Services Offshoring to Double by 2008
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A PricewaterhouseCoopers survey, titled “Offshoring in the Financial Services Industry: Risks and Rewards,” finds that India is the most popular offshoring destination because of the following: macroeconomic stability, regulations, labor costs and skills, among other things. It is also poised to grow in the financial services sector, which is expected to double by 2008. Reads the survey: "Thanks to its combination of an educated, English-speaking population, low costs and highly-skilled workforce, India's BPO market has grown at an annual rate of between 40-50% over the past few years. So far offshoring has been centred round a few key cities in India such as Bangalore, Delhi-NCR, Chennai, Hyderabad and Mumbai. As costs in these places rise, others are likely to come into the frame, maintaining the country's overall competitiveness…" Thus gains are expected to percolate down to second and third-tier cities as the larger ones reach a saturation point.
The article sponsored by A-1 Technology Inc, dealing in software outsourcing and offshore software programming
The article sponsored by A-1 Technology Inc, dealing in software outsourcing and offshore software programming
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SURVEY: RETENTION HOT, BI NOT
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Friday, September 16, 2005 |
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From: searchcio
Polling some 90 IT executives from its roster of members, the Society for Information Management (SIM) announced some surprising preliminary results to a crowd of 600 at its annual SIMposium event this week. The most surprising was the absence of business intelligence (BI) -- which ranked second in 2004 -- from the list of the Top 6 Application and Technology Developments of 2005.
Another surprising result was the percentage of IT budgets allocated for offshore outsourcing in 2005 versus 2004. In 2004, 73% of the more than 300 respondents said they wouldn't be allocating any money for offshore outsourcing. That number fell to 63.9% in 2005. In addition, 3.14% of IT budgets were allocated for offshore outsourcing in 2005, but 4.22% was projected for 2006.
"People are starting to engage a little more in offshore outsourcing. They're starting to try it with some small projects, which I think is the right thing to do," Luftman said. "I think we should be experimenting to see where it might or might not fit. It's clearly an indication that offshore outsourcing is on the rise."
The article sponsored by A-1 Technology Inc, dealing in software outsourcing and offshore software programming
Polling some 90 IT executives from its roster of members, the Society for Information Management (SIM) announced some surprising preliminary results to a crowd of 600 at its annual SIMposium event this week. The most surprising was the absence of business intelligence (BI) -- which ranked second in 2004 -- from the list of the Top 6 Application and Technology Developments of 2005.
Another surprising result was the percentage of IT budgets allocated for offshore outsourcing in 2005 versus 2004. In 2004, 73% of the more than 300 respondents said they wouldn't be allocating any money for offshore outsourcing. That number fell to 63.9% in 2005. In addition, 3.14% of IT budgets were allocated for offshore outsourcing in 2005, but 4.22% was projected for 2006.
"People are starting to engage a little more in offshore outsourcing. They're starting to try it with some small projects, which I think is the right thing to do," Luftman said. "I think we should be experimenting to see where it might or might not fit. It's clearly an indication that offshore outsourcing is on the rise."
The article sponsored by A-1 Technology Inc, dealing in software outsourcing and offshore software programming
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Beginning to Offshore: clichés, outlook and a realistic suggestions
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Wednesday, September 14, 2005 |
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By Bharat Khatau From Dmreview
Many persons opine that you can't simply name a venture and "throw it over the wall" to an outsourcer. Still there is a widespread misconstruction that you set off by making a product pattern for outsourced development.
There cannot be any document, however all-inclusive you think it to be, that one might simply pass to an outsourcer and be sure to get the desired results. The authentic, efficient product spec, the document used as the source of design, will be the result of a course of progressive scrutiny and analyses, often discernible by a succession of documents:
• Request for proposal (RFP)
• Proposal or statement of work (SOW)
• Business requirements specification and a functional specification
Outsourcers will desire to undergo this process, and so should you. You may be skilled in writing product specs for your own development grouping. But, flourishing outsourced development engages more than defining a product spec. Success necessitates fastidious description of the way your company and the outsourcer will interrelate - and the right character leading those interactions.
Firstly, your and outsourcer’s purpose must be to make your opening project a success. This goal is a precondition for reaching your other targets for outsourcing, like cutting costs or getting to market sooner. One approach to succeed is choosing the appropriate pilot project - one acquiescent to success - so you can create a relationship and learn how to work most efficiently together. First-rate projects for triumphant pilots rivet least risks to the business strategy or core product. They are fairly easy to define and break down, and have little reliance. For example product development, testing, APIs, interfaces or bug fixing.
Regardless of simplicity or complexity of the project, to thrive you must communicate - not only about the daily particulars and strategic tricks, but at the managerial level, regarding strategy. Justifiably, numerous corporations are disinclined to disclose business strategy. But remember: the more an outsourcer comprehends the milieu, the better prepared it will be to resolve problems, suggest counsel that can get you more for your investment and help you to accomplish your long-term purpose.
The article sponsored by A-1 Technology Inc, dealing in offshore outsourcing and software development outsourcing
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Benefits of offshore outsourcing in different fields
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Tuesday, September 13, 2005 |
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