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Outsourcing News for February 2010 | MicroSourcing

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Most Multinational Firms Outsource IT, Study Shows

by: Karen Cayamanda

Friday, February 26, 2010 | Outsourcing News | Comments (0)

Survey Says: Partial IT Outsourcing Rising

Out of more than 600 IT decision makers from different multinational corporations surveyed by Orange Business Services, 93 percent said they are doing partial outsourcing or out-tasking projects. Data center-related tasks comprised 30 percent of projects being outsourced, followed by desktop management (14 percent) and data networks (14 percent).

Survey results also reveal that the top reason why multinational firms outsource projects is to gain access to specialized IT skills. This is followed by cost savings, while the third reason is to improve service delivery to end users.

When asked about the factors that hinder them from outsourcing, 65 percent of respondents answered “loss of control”, while security concerns ranked fourth. The firm said this shows that companies are “now focused on the more practical issues around moving to an outsourced model”.

According to Eric M.K. Ng, Vice-President, Global Communications Solutions, Asia Pacific, Orange Business Services, these results are very encouraging when it comes to the way companies view the outsourcing model. "Decision-makers clearly understand the benefits such models bring and have moved on from concerns around security and are now focused on ensuring that any investments realize not only the cost savings, but also the knowledge transfer promised by third party providers."



India may get Mega Deals this Year

by: Karen Cayamanda

Wednesday, February 24, 2010 | Outsourcing News | Comments (0)

Mega Outsourcing Deals

Outsourcing contracts worth $1 billion may be granted to India this year as companies from different industries such as retail, banking, and telecom and utilities aim to cope with increased service demand and to reduce operational costs.

Early this year, British Petroleum’s IT outsourcing contract worth $1.5 billion was awarded to TCS, Infosys, and Wipro.

 “We see both large and small deals coming back to the table. Although the traditional verticals like telecom, financial services and manufacturing have gained volume, it has been observed that new verticals like retail, media and entertainment, healthcare are also driving growth,” said Suresh Sundaram, HCL Technologies global head for marketing and strategy.

“Deal pipeline has picked up and 2010 is certainly a strong year compared with 2009,” said Managing Director Sid Pai of TPI, a global sourcing advisory firm. According to the most recent TPI Index, outsourcing contracts increased by 47 percent in the fourth quarter of 2009 compared to third quarter of the same year.




BPO Firm Says Training is Crucial to Sustain Growth

by: Karen Cayamanda

Monday, February 22, 2010 | Outsourcing News | Comments (0)

According to TeleDevelopment Services Inc. (TDS), the business process outsourcing (BPO) industry must focus on providing training to supervisors or frontline leaders. This is to improve productivity and sustain the growth of the industry which is estimated to increase by 25 percent this year.

More sophisticated BPO and KPO services

“The industry is growing to the tune of 2,000 new hires every week. It’s going to grow in ways we’ve never seen over the last few years in terms of more sophisticated BPO and knowledge process outsourcing services,” said TDS President Jon Kaplan. He added that supervisors can have a key role in minimizing turnover and increasing performance.

The country’s outsourcing sector currently employs 500,000 workers. With revenues reaching $7.3 billion in 2009, RP President Gloria Arroyo reported recently that the country is closely behind India’s outsourcing industry worth $9 billion.


BPO sector to expand to 7 new outsourcing cities

According to the Commission on Information and Communications Technology (CICT), the Philippines' business process outsourcing (BPO) sector will spawn 5 to 7 new outsourcing cities this year. This will bring the Philippines' Next Wave Cities count from 35 in 2009, to over 40, ABS-CBN reported.

Last year's next wave cities list included Metro Laguna, Metro Cavite, Iloilo, Davao, Bacolod City, Bulacan East and Bulacan West, Cagayan De Oro, and Lipa City in Batangas.

Although CICT Commissioner, Monchito Ibrahim, would not name which cities in particular were to be added to the list, he explained that the goal was to have the Next Wave Cities reel in 35% of  the total outsourcing investments in the Philippines – with the other 65% belonging to Metro Manila.

"Ideally we want a 50-50 percent ratio, but that might take another 2 to 3 years to accomplish," said Ibrahim.

The current ratio in outsourcing investments is currently 75% to 25% in favor of Metro Manila – short of the 2009 goal for a 70% to 30% ratio. According to Ibrahim, this is due mainly to cities having ceased investments in their ICT, which he hopes will change this year.

"The challenge is how to attract more locators. If there's anything those aspiring to become Next Wave Cities should focus on, it's improving the manpower to supply the demand from the firms," said Ibrahim.



EU Introduces Updated Data Outsourcing Rules

by: Karen Cayamanda

Thursday, February 18, 2010 | Outsourcing News | Comments (0)

In response to the changes in data management of businesses and for greater transparency, the European Commission had updated the standard contractual clauses on outsourcing data processing work outside the European Union.

Updated clauses on outsourcing data processing work

Under the updated clauses, outsourcing companies that provide personal data processing services to clients in EU should get a written consent first before subcontracting data processing work to another company. European market research firms that transfer data processing operations overseas such as in India will be affected by the updated rules.

“This updated version of the standard contractual clauses takes account of new business models and the growing trends to global processing and outsourcing. The updated standard contractual clauses ensure a balance between global business needs and protection of EU citizens’ personal data,” said Jacques Barrot, vice-president of the Commission.


Outsourcing Exports of India to Reach $50 B

India's National Association of Software and Service Companies say the country's revenues from IT and Business Process Outsourcing (BPO) are set to increase 5.5% to $49.7 billion in the fiscal year leading up to March 31, 2010, PC World reported.

The figure encompasses Indian services and software development subsidiaries of multinational companies (eg Dell, Microsoft, Oracle, etc) in addition to exports by Indian outsourcing providers.

India's outsourcing companies are expected to register direct employment of 2.3 million by March 31, 2010 with over 90,000 being added before year-end.

The 5.5% growth rate is a stark contrast to the 16% Nasscom predicted in 2009, before the outsourcing industry was hampered by the recession and a Satyam Computer Services scandal. India nonetheless remains the top outsourcing destination offering the full range of outsourcing services to the US and UK among others.



Employers Turn to HR Outsourcing as Economy Recovers

by: Karen Cayamanda

Wednesday, February 10, 2010 | Outsourcing News | Comments (0)

As the economy slowly bounces back from the crisis, human resources (HR) outsourcing has become the answer for thousands of small and medium-sized employers who want to reduce employment costs and HR risks, as well as improve employee performance. This is based on a recent white paper entitled “Preparing for the Rebound: How Human Resources Outsourcing Can Help Business Through Uncertain Economic Times” from CPEhr, a leading HR outsourcing firm.

Outsourcing human resources to reach goals

"Reports indicate that as the economy begins to recover and employers look to rehire lost personnel, their priorities will continue to focus on cost-containment and improving efficiencies," says Ari Rosenstein, CPEhr's Director of Internet Marketing. "Our research points to outsourcing human resources as a cost effective and efficient way to reach those goals in 2010."

The said white paper aims to determine the role of HR outsourcing in supporting three major employment factors: lowering operational costs, reducing employment risks, and improving efficiency.


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