What is Outsourcing?
‘You get what you pay for’ in Outsourcing Deals
by: Karen Cayamanda
Tuesday, January 26, 2010 | Outsourcing Research / Trends | Comments (0)
After studying different outsourcing deals, researchers at the University of Tennessee found out that there are several mistakes committed by companies when it comes to establishing outsourcing partnerships.
"One of the common mistakes companies make is that their business model and the outsourcing contract are not aligned," said Kate Vitasek, UT lead researcher and supply chain consultant. "Economist Steven Levitt states it best - one of the most powerful laws of the universe is the law of unintended consequences. And a key reason for unintended consequences is that people do what they are paid to do." Vitasek said buyers will only get what they contract for, and service providers will only do what is indicated in the legal agreement.
The research team had identified ten mistakes companies make in outsourcing deals. These include perception on outsourcing only as cost-cutting measure, outsourcing that is purely transactional, and the lack of mature processes to keep track of the service provider’s performance.
Source:
http://www.computerworld.com.au
Outsourcing posts highest growth in six quarters
by: Carlo Abadilla
Monday, January 25, 2010 | Outsourcing Research / Trends | Comments (0)
According to Sourcing Focus, recently released data from TPI and Information Services Group indicates that the fourth quarter of 2009 was the best performance the global outsourcing market has had in six quarters.
Data from the 4Q09 Global TPI Index showed the outsourcing market's total contract value is $24.7 billion – a 47% increase successively and 8% year-over-year. This is calculated based on commercial outsourcing contracts worth over $25 million.
“As we anticipated, 2009 marked a low point in outsourcing because of the recession in the general economy,” whilst “the global market bottomed in the first half of the year it now shows signs of recovering slowly and steadily, with the outlook for building on its second-half momentum positive,” commented TPI Global Operations president, Mark Mayo.
IT outsourcing was pegged as the main sector driving outsourcing growth - with Europe, the Middle East, and Africa its key players.
http://www.sourcingfocus.com/
Forrester: Security Outsourcing may be Newest Trend in 2010
by: Karen Cayamanda
Thursday, January 14, 2010 | Outsourcing Research / Trends | Comments (0)
As the number of companies that outsource their security tasks increases, Forrester Research said network security outsourcing may be the newest trend this year.
The new Forrester report indicated that even though a company outsources security, it is still “accountable for the protection of that data”. Also, service providers must be held responsible in case problems occur. "This is probably the most overlooked aspect of the outsourcing relationship," the Forrester report said. "On paper, you can terminate the relationship with the outsourcer as soon as the contract ends, but in reality, you invest a lot of time, effort and resources in a relationship - and it becomes very hard to change outsourcers quickly."
Security outsourcing is risky, and many companies are still not open to this idea, even as a cost-cutting measure. However, Forrester report said this can be studied by firms which are striving for improved network security at low costs.
Source:
http://www.fiercecio.com
Outsourcing costs expected to decline in 2010
by: Carlo Abadilla
Monday, January 11, 2010 | Outsourcing Research / Trends | Comments (0)
Industry experts are expecting that the downward trend in prices for IT services during 2009 will continue this year. According to CIO, the main causes for the trend are the global economic slowdown, increased offshoring activity, pricing pressure from buyers, and disaggregated vendor services.
Compass America calculates that the costs for a majority of infrastructure services-desktop, mid-range, and network services will decline at single-digit percentages this year. This excludes storage costs, however, which are expected to decline another 25% this year.
Ben Trowbridge, CEO of outsourcing advisor, Alsbridge, states that although providers will remain focused on cost cutting and avoiding future investments, "price pressure will be tempered by the need to ensure overall deal parameters do not jeopardize success".
Despite the forecasts on the trend prevailing in 2010, some believe that it will not be a “buyer's market” should the economy show signs of recovery. Chris Kalnik, partner and managing director of financial analysis for sourcing advisor TPI quotes:
"If the economy strengthens, TPI believes that the service providers will attempt to recoup some of the price concessions that they have made over the past year."
Source:
http://www.cio.co.uk/
RP welcomes Carbon Accounting Outsourcing
by: Carlo Abadilla
Tuesday, January 05, 2010 | Outsourcing Research / Trends | Comments (0)
Carbon accounting work has become a major obstacle for companies worldwide due to increasing regulatory and market forces, E-Commerce News reported. Carbon accounting outsourcing (CAO) may be the next big thing in the global outsourcing industry as companies worldwide adjust to an increasingly “carbon constrained” economy. The UN climate summit in December magnified the issue, discussing emission cuts on greenhouse gases.
The Philippines became the first offshore destination to offer Carbon Accounting Outsourcing solutions when global outsourcing service provider, ADEC Solutions, opened FirstCarbon facilities in the Philippines in June 2009. While there are green consultancies that offer advice on carbon reporting, FirstCarbon's facilities in the Philippines is the first to undertake the complex work necessary to collect and report on energy use and carbon emissions.
"ADEC's experience in BPO means we already understand how to handle much of the data that will be required, such as accounts payable information and fuel costs," said company director, Ian McGowan. "And by using our facilities in the Philippines we would expect to offer cost savings of 35 to 40 percent compared with doing the work in-house."
The global market for carbon accounting, collecting data and consulting services is expected to reach $7 billion to $9 billion by 2012.
Source:
http://www.ecommercetimes.com/