IT Outsourcing India

CHENNAI, India — The sari-clad graphics designer knows nothing about American football. But there she was, putting the finishing touches on an automobile dealership ad tied to the kickoff of the NFL season for a New York newspaper.

She goes by only one name, Vijayalakshmi, and she is the face of the new global worker. She and her colleagues at 2AdPro Media Solutions, a two-year-old start-up, create ads for scores of U.S. newspapers at assembly-line speed in this steamy, sun-beaten coastal city that aims to be a global publishing hub.

Across India, a new, sophisticated outsourcing industry is emerging, one that requires skills well beyond those needed for traditional call-centers. And it extends well beyond publishing work.

"Anything that can be outsourced is being outsourced today in India," said Rajdeep Sahrawat, vice president of Nasscom, or the National Association of Software Service Companies, an Indian software industry trade organization that closely monitors trends in outsourcing.

The emergence of this new outsourcing industry is a cause for anxiety among some American workers. The liberal think tank Economic Policy Institute said as many as 18 percent of all California jobs — mostly white-collar work — are candidates for offshoring.

The labor-backed California Fair Trade Coalition said virtually any job that uses a computer could be outsourced, and it argues that U.S. trade laws should be changed to make it more difficult for companies to send work overseas.

Imelda Abarca, director of the coalition, said the Internet increasingly enables near-seamless outsourcing of professional work to India, China, Eastern Europe and other regions, putting more and more high-paying American jobs at risk. "Those countries have large and rapidly growing pools of talented people with much lower incomes than people with similar skills in the United States."

But some experts say the threat to high-end American jobs is overstated.

India remains "an undergraduate factory," said Raffiq Dossani, a Stanford University researcher who studies higher education in the South Asian country. "This limits the kind of work that can be outsourced to India."

Whatever its ultimate impact, this next-generation of offshore work — some call it KPO for "knowledge process outsourcing'’ — is drawing business from across professional sectors in the United States. These new companies link the legions of highly trained graduates that India’s vast college system produces every year to U.S. companies eager to cut costs.

"A majority of Americans are not even aware of the type of high-end work being done in India — tax filing preparations, medical diagnoses, legal work, financial portfolio analysis." said Pervez Sikora, a former U.S. newspaper executive who is now chief operating officer for 2AdPro Media Solutions. "The types of services being offered here are mind-boggling."

While these highly skilled professionals currently represent only a thin slice of India’s 2 million tech and business outsourcing workers, their ranks are growing rapidly, industry experts say. Nasscom’s Sahrawat said the category is too recent for his organization to track. But Sikora, who said he’s been approached by Silicon Valley companies that want to outsource their marketing work, believes this new type of outsourcing will eventually grow to a multibillion-dollar industry.

"There is a talent pool in India beyond engineering," said Vani Kola, a Silicon Valley entrepreneur who is managing director of Santa Clara-based NEA-IndoUS Ventures, which invests in high-end outsourcing companies in India. "And this talent pool has never been tapped."

Increasingly, Western companies must turn to countries like India, where 50 percent of the population is under 25, added Kola, now based in Bangalore. "The world’s workforce will come from these countries because they have the masses. They are going to fill the gaps. Knowledge process outsourcing will change the role Indians play in the global economy."

Kola sees growth in many directions. "Disney and DreamWorks have large animation studios in India," she noted. ‘’Nobody is saying create the movie concept here, but part of the process is being done here."

One company Kola backs is PreMedia Global, a start-up that provides research, writing and editing services to publishers of U.S. textbooks. In two-and-a-half-years, PreMedia has grown from a brother-and-sister operation to a company with 900 employees, 600 of whom are based in Chennai.

Initially, the siblings considered launching a call-center operation, said co-founder Kapil Viswanathan, who studied engineering at Stanford University. However, they quickly saw that the nature of outsourcing was changing.

"High-end, knowledge-based services — that’s where the growth is coming from," he said. "We think this is just the tip of the iceberg."

In short order, Viswanathan and his sister lined up clients that produce textbooks for schools across the United States, including California.

"A publisher gives us the detail of the content — what they submitted to each state — and says, ‘You guys develop this into a book," he said. "It could be math, it could be science, it could be reading."

Not everything is easily transferred to India, though.

Employees at 2AdPro receive regular training in American culture, from Thanksgiving Day to the popularity of Harley-Davidson. Nevertheless, glitches occur, such as using a photo of a dancer from India for an ad calling for an American Indian, or placing a Philadelphia Eagles football player in an ad associated with bitter rival the Miami Dolphins.

"You get push back from some people, ‘Those ads from India, they don’t look right,’" said Austin Ryan, vice president of production for Gannett, the nation’s largest newspaper publisher and a 2AdPro client.

Two years ago, it was a tough sell to convince newspaper executives that someone sitting halfway across the globe could produce ads that are accurate and on-time, said Todd Brownrout, chief marketing officer at 2AdPro, which expects to expand from 350 employees to 1,000 next year. Now, he added, "We are getting multiple inquires a day."

Sanjiv Gupta, chief executive of Hyderabad-based Pressmart, which provides Internet technology services to publications, argues this outsourcing model can be applied to editorial content. "It’s outsourcing of creativity," he said.

Appert and others, though, think that day will never come. No amount of cultural sensitivity classes can compensate for direct understanding of local news, they say.

While debate continues over just which American jobs may be vulnerable to outsourcing, executives like 2AdPro’s Sikora acknowledge that the new global economic order is forcing Americans to reposition their careers.

"People have to understand how jobs are changing and start re-inventing themselves,'’ he said. "No one will be able to stop this now."

Source : http://www.mercurynews.com/

Indian IT services companies are losing their grip on the global outsourcing ecosystem, a new report has revealed.

Only 10 outsourcers from India made it to this year’s 50 best managed global outsourcing vendors for the 2008 Black Book of Outsourcing (PDF version), compared with about half in 2004. Nearly 25,000 outsourcing users participated in the Brown-Wilson Group survey, which ended in May.

The best Indian performers on the list were Wipro, Satyam and GenPact, which were ranked sixth, seventh and eighth, respectively. In 2006, five of the top 10 vendors on the list were Indian outsourcing service providers.

This year’s top honors went to Hewlett-Packard, which jumped from eighth spot in 2007. HP also topped the list of top 10 vendors for financial and accounting outsourcing.

Rounding up the rest of the global top five were all U.S.-headquartered companies–Perot Systems, CSC Unisys and EDS. The report indicated that the Black Book survey closed the day before HP announced its acquisition of EDS.

Indian dominance prevailed in the realm of business process outsourcing (BPO), with Genpact, Satyam BPO, Wipro and HCL BPO making up the top four vendors. Satyam also was placed fourth on the list of top 10 knowledge process outsourcing (KPO) vendors.

In a statement Tuesday, Satyam BPO’s CEO Venkatesh Roddam noted that the results as an affirmation of the company’s strategic perspective. "The categories in which we have been ranked this year–BPO and KPO–are the key growth areas that we have been focusing on and basing our ‘Specialty BPO’ positioning on," he said.

The 2008 Black Book of Outsourcing report singled out Infosys’ fall from the 50 best vendors list as "surprising". At No. 59, this year marks the first in five years that Infosys has failed to enter the top 50. It was ranked No. 10 last year.

Douglas Brown and Scott Wilson, authors of the report, noted that the company’s displacement was accompanied by "rising accounts of client discontentment".

They said: "Over a dozen major customers cited the fact that Infosys has not melded their consulting and service delivery well. U.S. clients cite a lack of American front office support with an imbalance of too much delivered from offshore."

Despite their slide, Indian players remain a major force in the outsourcing industry, and outsourcers in China are still nowhere close to replacing them. According to the report, Chinese outsourcing companies have failed to make the cut for the top 50 for a second consecutive year.

Brown and Wilson pointed out that despite highly skilled labor and solid infrastructure, "China is still risky" particularly in the areas of partnerships, business stability and distribution channels.

They said: "Revenues are increasing for China’s technology providers but hardly touch a fraction of the huge global offshoring market share.

"Based on recent client satisfaction outcomes, the majority of those outsourcing decision-makers will not rank China as their first choice for upcoming initiatives anytime soon. [They] currently agree that too many barriers exist for China to take India’s place as offshoring destination of choice."

Source : http://www.zdnetasia.com/

Tags: BPO Services | Freelance Projects | Multimedia Outsourcing | Bookkeeping Outsourcing | Business Consulting | CAD Outsourcing | Call Center Outsourcing | Data Entry Outsourcing | Internet Marketing Outsourcing | Software Development Outsourcing | Web Development Outsourcing | Translation Outsourcing | Handwriting Services | Legal Outsourcing | HR Outsourcing

Indian IT Major Reveals Unique FTO Package To Lead The Market

Offshoring - now seen by many as a strategic initiative for any software organisation that is serious about competing globally - was given a massive boost earlier today with a new initiative aimed at the critical "virgin" market - First Time Offshoring (FTO), launched by Zensar Technologies at the Gartner Outsourcing and IT Services Summit 2007.

Krishna Ramaswami, Head of Operations for Global Outsourcing Services at Zensar Technologies, revealed to an audience of leading UK and European companies a unique FTO package designed exclusively for organisations who had either yet to offshore or who had done so but had been less than satisfied with results achieved.

Mr Ramaswami, speaking at the sixth annual Gartner Outsourcing and IT Services Summit in London, told his audience that many companies across the world were aware of offshoring but had not taken the first step, for a variety of reasons, ranging from whether the time was right for them to outsource, to how they would retain control, whether there might be a cultural mismatch, what implications there might be on security and how the whole process would be managed.

"Promoting wage disparity to achieve cost savings has been a significant contributor to failed offshore initiatives, primarily because other hidden costs of infrastructure, due diligence etc are not articulated. They believed they must achieve massive, often unrealistic, cost savings on outsourcing. The real savings however come on achieving steady state,12-18 months into the engagement," said Mr Ramaswami.

"As the confidence builds, we also see relationships build from just cost saving to more value adding services that include key BPO (Business Process Outsourcing) areas and KPO (Knowledge Process Outsourcing)," he added.

To address potential barriers to achieving FTO, Zensar had completed several months of obtaining customer opinion and feedback. From this research it had developed a process to provide reassurance and reinforce the offshoring message, demonstrate expertise and support the decision-making process, as well as achieving buy-in from users in addition to decision makers.

Zensar’s view of the offshoring market segments comprises three major categories - First Time Offshorers, Dissatisfied Offshorers and Educated, Experienced Offshorers. The First Timers need reassurance and guidance; the Dissatisfied need a guarantee of success and customer references and the Experienced need to move to the next level of the value chain, with continuous productivity and cost improvements through proactive initiatives.

Zensar’s answer has been to produce its five-stage FTO Service Pack. The five stages making up the FTO are:-

• Leadership Team Imperatives Workshop (LT1) - agree on the need for FTO, identify expectations, educate and draw up an Action Plan
• Offshore Readiness Study - assessing the customer’s readiness, looking at its applications, people, processes and technology, looking at risks and presenting a high level business case for offshoring
• Application Portfolio Assessment - Mapping applications, categorizing them and giving priority to applications best suited for FTO
• Offshore Analysis Study - Defining a roadmap and offshoring plan, with strategy, timelines, transitioning and defining business benefits and ROI 

Phase 1 identification - Deciding on the first implementation, building a plan and team and formulating a contract

"We believe our approach gives first timers a unique chance to learn and better understand what they are getting into. They control their involvement and can then feel much more confident as they move forward. This approach will be an important milestone in the concept of FTO being introduced to a vast new range of organisations".

Zensar employs over 3,800 people globally with nearly 200 people based in the UK and Europe. It has a robust customer base, and has formed strong partnerships with Sun Microsystems and Oracle. Zensar opened its new European headquarters in the UK last Autumn, where its customers include Marks & Spencer, National Grid, Cisco Systems, and Electronic Arts.
End.

Source : http://www.it-analysis.com

As IT outsourcing of all types and across all industries and geographies becomes pervasive, operational complexity and risk increase accordingly. Some types of risks are extremely familiar to CIOs. Securing a more extended enterprise, for example, is always front of mind. Meeting a business case, achieving a return on investment — these and other financial and economic risks are also major preoccupations. Some other risks are less understood and, thus, more potentially damaging because traditional risk mitigation in these areas may not be in place.
 
One of the lesser-known risks in a complex outsourcing environment is the potential loss of institutional knowledge and insight. With an outsourcing model, companies often lose ready access to the individuals most knowledgeable about the business; some are lost to the new outsourcing units, others to turnover. Companies also risk losing opportunities for insights and innovations born of collaboration, because fragmentation of a strategic and unified view across the organization inevitably occurs in a multiple-provider model.
 
Lost Knowledge
 
Consider the parable of the fire station that caught on fire. Its crews were all out fighting blazes elsewhere; no one with firefighting expertise or tools was back at the station, so the firehouse burned down.
 
By analogy, think about what often happens when a company outsources several IT functions — say, telecom to a niche provider, data center to a multinational and applications to an offshore provider — while keeping the remaining infrastructure in-house.
 
With a blended sourcing model, a CIO overseeing a staff of 500 might keep 20 to 30 people and transition the other 470 or 480 staffers to the various outsourced entities. Such a ratio might work if one could be assured that those retained were the right ones, or if those kept on were sure to stay with the company through the life of the outsourcing arrangement. Both presumptions are extremely tenuous.
 
As roles and responsibilities shift, the teams most knowledgeable about processes, outsourcing contracts, and the terms and intent of the various deals often end up in different roles in the company or elsewhere. Executives managing the outsourcing relationship risk losing negotiating leverage with their providers as their outsourcing teams transition to other roles. When these people disperse, their vital knowledge and skills disperse as well.
 
The considerable turnover that typically occurs when a company outsources complicates matters further. What remains, ultimately, is an in-house team without the skills and capabilities to protect the firehouse.

To combat the risks of lost knowledge, a CIO must carefully consider existing staff and retain highly skilled individuals to serve on the two remaining teams — the retained operating staff and the outsourcing governance team. The retained operations staff will own the strategy, control policy-setting and retain expertise in every area being outsourced: the data center, infrastructure, telecom and so forth. Ideally, the retained governance team would be in place during the service provider evaluation and negotiation process, and would continue in this role after the transaction is executed and complete. The professionals on this team should include a combination of excellent project and program managers, strong financial analysts and strategists, and individuals capable of handling the complex environment of managing multiple suppliers to keep each one focused on common goals.
 
Lost Collaboration
 
The importance of growth and innovation has not diminished for organizations in either the public or private sector. What the best innovators know is that breakthrough insights are most likely to arise out of the interaction among people and groups collaborating on a day-to-day basis. When IT processes are segmented and assigned to multiple providers through outsourcing, companies face the risk of lost information and insight across the organization.
 
As more organizations migrate to a multiprovider model, they find it increasingly difficult to establish an organizational view of performance, produce detailed cost and budget analyses, evaluate service levels and effectively resolve performance problems. The risk of not having the information necessary to do this inhibits an organization’s ability to appropriately develop plans and budgets. Creating an enterprisewide view can be labor-intensive and costly.
 
Too many organizations realize too late that the fragmented governance teams they have established to oversee multiple providers of IT services have yielded siloed views of those functions. Performance and service-level agreements have been defined within each of the particular IT worlds, and no incentives exist for working closely with the other functions.
 
To combat the risk of lost institutional insight, most companies that outsource successfully work to ensure collaborative operational excellence across the various entities and service-level agreements. Companies in such multiprovider environments should create a centralized governance team or a center of excellence for the IT organization, and implement governance best practices that will provide frameworks for the management of operations, finance (including contracts) and the overall relationships among the providers. Ideally, these teams would be in place during the service provider evaluation and negotiation process to ensure continuity of the team and to help mitigate the risk of lost knowledge and insight.
 
Mitigating Risks
 
New technology-based tools can help manage performance in a multiprovider environment and protect against lost knowledge and insight. Integrated governance and communications tools can help CIOs manage and view a portfolio of shared services and outsourcing relationships across the organization. More to the point, these tools can also provide ongoing and rapid insights into the health of the key management areas of all outsourcing relationships in a collaborative environment across multiple service towers. These tools can provide a cross-enterprise view of performance, budget, business case and cost tracking and planning. They can also provide a near-real-time view of service levels and critical outsourcing contract terms.
 
Especially important to mitigating the risks of lost knowledge and insight is the ability of governance tools to capture institutional knowledge over the life of the outsourcing contracts, and then to serve as a learning resource for onboarding and transitioning governance staff. Governance tools can support effective two-way communication among business users about requirements, successes, value, performance reporting, chargebacks, demand forecasts and issues relating to the various service providers.
 
Many companies have cobbled together a set of tools and governance teams in an attempt to address and mitigate their risks. A fragmented governance approach often leads to a failure to realize the full value of the outsourcing business case, because the hidden costs of lost knowledge and insight have not been adequately addressed. If governance teams and tools are implemented properly as part of an outsourcing strategy, companies should no longer have to worry about becoming an "outsourcing failure" statistic because they will have effectively managed a large share of their risks.

Source : http://www.offshoringtimes.com