What is Outsourcing?
BPO executives voice concern over upcoming elections
by: Carlo Abadilla
Wednesday, March 10, 2010 | Outsourcing Research / Trends | Comments (0)
An industry survey conducted by TeamAsia for Outsource2Philippines and the Business Process Outsourcing Association of the Philippines (BPA/P) indicates that BPO executives believe credible elections are a critical factor that can shape investors' perception of the country, Manila Bulletin said.
Responding to the statement: “In terms of investor and client perception of the Philippines, it is important that the national election is conducted in a peaceful, credible, and transparent matter”, 90% of executives responded “very significantly” (49%), “significantly” (31%), or “somewhat significantly” (13%), and the remaining six percent responded “somewhat” (4%) or “not at all” (2%).
Many issues currently loom over the upcoming presidential elections as an automated voting process has raised concerns regarding a lack of audit trail, possible hacker intrusion, and reliability of data transmission.
The full results of the survey will reportedly be presented at a CEO Breakfast briefing two weeks before the election. The briefing will gather outsourcing executives and possibly representatives of presidential candidates.
Source:
http://www.mb.com.ph
Swedish outsourcing doubles
by: Carlo Abadilla
Wednesday, March 03, 2010 | Outsourcing Research / Trends | Comments (0)
Data from PAC's Worldwide Deal Tracker revealed that Swedish IT outsourcing contracts reached 46% in 2009 – double the 23% recorded the previous year, Waters News reported. The data covered all publicly disclosed IT service deals worldwide worth at least $1.35 million.
According to PAC London consultant, Dominic Trott, Swedish firms are becoming increasingly aware of the effectiveness of outsourcing non-core activities to offshore locations:
"The use of global delivery for IT outsourcing contracts in Sweden had been limited up until 2008, with challenges such as language difficulties and proximity to the customer preventing wider take-up," he said.
"However, the global economic crisis proved to be a significant disruptive factor for companies in Sweden, and the growing requirement for cost reductions meant that the issue was re-visited. The benefits available through global delivery, such as 24/7 support, labor arbitrage reductions and wider skill sets, were viewed as means by which efficiencies could be achieved."
The majority of outsourcing processes involved applications outsourcing - accounting for 65% of Swedish IT outsourcing contracts signed in the last two years.
Source:
http://www.watersnews.com
Outsourcing sees uptick in contract renegotiations
by: Carlo Abadilla
Thursday, February 25, 2010 | Outsourcing Research / Trends | Comments (0)
A survey by Gartner Inc. indicates that out of 1,073 outsourcing organizations surveyed worldwide, almost 50% of them experienced a sharp increase in contract renegotiations. The survey further revealed that the majority of the renegotiations involved bids to cut costs due to the recession.
Gartner analyst, Allie Young, warned that these renegotiations only leave room for mistakes on both ends of an outsourcing deal.
Young says that the major complaints he hears from CIOs is the lack of innovation from outsourcing deals.
“My question is, What did you think you were going to get? There is no provision in the contract for innovation” Young commented in response.
Young further explained that successful outsourcing contracts depend on documentation. Citing Apple's $100 million investment in an outsourcing provider in hopes of acquiring innovative services, Young argued that the documentation of innovation is very difficult and rare in the industry.
"About the best we have been able to do is dedicate a pool of resources from the supplier side, whose job is to sit in the client's business and look for new opportunities to bring new projects to bear," stated Young.
Source:
http://searchcio.techtarget.com
Asian ITO spending trend to be reversed
by: Carlo Abadilla
Wednesday, February 17, 2010 | Outsourcing Research / Trends | Comments (0)
Experts predict that Asia's spending on information technology outsourcing will grow faster than their western counterparts this year, Financial Times reports. Dell Services chairman, Jim Champy sees this as a reversed trend in outsourcing spending from the recent trend of western groups buying services from Asian outsourcing locations such as India and China.
"We see, as most providers do, the Asian markets growing faster - clearly more than Europe, and certainly faster than the US," stated Champy. "What it would feel like to me is two to three times faster, percentage-wise."
A report by KPMG and Asian-Oceanian Computing Industry Organization projected a significant increase in Asia's share of global IT services spending – an estimated 26.3% compared to the current 20% in global IT and business process outsourcing services consumption.
The trend represents a complete reversal of the trend of Asian IT companies sending executives to developed markets to purchase business from western outsourcing consultancies.
Source:
http://www.ft.com
‘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