IT Outsourcing India

Egypt is the latest in a long line of countries to set up a government agency to sell its IT services to businesses overseas.Countries such as the Philippines, Russia and Kenya have sent out similar delegations, envious of the spectacular overhaul of Indias economy in the past 10 years, led by technology investment.Amin Khaireldin, a board member of Egypts Information Technology Industry Development Agency, said the country has learned from Indias example.

We studied India carefully and learned two things ­ we need to focus on our talent pool keeping supply ahead of demand, and we need to have a reliable infrastructure, he said. Khaireldin insists Egypt has done both these things.

The government has approached universities, and along with industry help designed an IT curriculum that it hopes will train 40,000 graduates a year over three years.

Significant infrastructure investments, along with the construction of a technology village near Cairo, have attracted the likes of Orange, Vodafone and Alcatel to outsource business processes there.

Internal IT infrastructure investment has grown from USD4bn GBP2bn to USD12bn GBP6bn in the past three years, in part because a strong rupee and rising labour costs in India have led costcutting outsourcers to look elsewhere.

A McKinsey study found that Egypt was the 13th best outsourcing destination globally, and on average 14 per cent cheaper than India.

As well as trying to attract outside investment, the Egyptian government is encouraging internal innovation.

The government has cut corporation tax from 42 per cent to 20 per cent and begun customs reforms to improve trade.

And a competition prize offering three startups a year USD 50,000 GBP 25,000 and free resources has led to a number of innovative new firms.

Raya, an Egyptian startup that began converting voicemails into text then moved into IT services, was launched in 1998 and recently floated on the Cairo stock exchange for about GBP180m.

Stephen Page, chief executive of hardware manufacturer Sapphire, said he has been happy with his companys recent outsourced operations in Egypt.

It has good value, good workers and not too much red tape, he said. We have found the infrastructure is at least as reliable as in India.

But Mark KobayashiHillary, director of the National Outsourcing Association, said there was no noticeable trend of UK companies going to Egypt yet.

They paint a rosy picture but what they have to offer in terms of value and infrastructure is similar to many other countries around the world, he said.

Source : http://www.offshoringtimes.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/

Increasing numbers of businesses are choosing to outsource their development overseas, for either smaller, defined projects or through a long-term outsourcing partnership model. The main reasons cited for outsourcing include a desire to increase company productivity and efficiency, while simultaneously lowering operating costs in an increasingly competitive economy.

But with outsourcing, whether overseas or locally, comes risks. Five major risks of outsourcing have been identified in recent years:

• Communication/cultural barriers
• Misunderstanding of requirements
• Quality assurance
• Concerns about intellectual property security
• Differences in company infrastructure and processes

In this article I’ll discuss each risk in turn, as well as methods of mitigating the risks when outsourcing offshore.

Risks during outsourced project development are related to three factors: people, processes and policies.

By identifying where these risks can occur and taking steps early to mitigate them, your firm can enjoy an outsourcing relationship that is of high value to all parties involved. In the next section, we will describe what these risks are, and specific steps you can take to address them.

The Most Common Risks Encountered When Outsourcing
If you have concerns about outsourcing, you have plenty of company. When the management of several hundred companies in the United States was surveyed recently, they noted that their primary concerns included:

• Communication difficulties. This consistently came in as the #1 concern
• Quality of the development provided
• Lack of physical proximity to the development teams
• Concerns about the protection of intellectual property

Many times, managing the risks involves managing the expectations on both sides, to paint a realistic picture of what the outsourcing relationship will look like. From the deliverables that are expected to the methods used to create source code, you need to know that the firm you’re outsourcing to understands clearly your expectations. This is why risk number one is critical: Poor communication of project requirements is deadly to any project.

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Fewer global delivery centers were opened in India by the United Kingdom’s 20 largest IT services suppliers than in each of the three countries over the last year.

The competitive Indian labor market is driving companies to alternative destinations, say Pierre Audoin Consultants (PAC) in its report.

The 20 largest U.K. companies analyzed in the report included Accenture, BT Global Services, Capgemini, Capita, CSC, EDS, Fujitsu, HP, IBM and Logica.

Of the 21 centers opened since January 2007 by the big 20, only two were in India, while four were in China, with three were Eastern Europe and Morocco respectively.

Nick Mayes, senior consultant at PAC, said there is no "serious threat" to India’s outsourcing dominance in the short term but companies are looking to reduce their reliance on "India’s heated labor market".

China’s emergence as a global sourcing hub has traditionally been slow but the report found that BT Global Services, EDS, IBM and Tata Consultancy Services (TCS) have all opened sourcing facilities in the country in the last 18 months.

The two facilities launched in India were both outside the traditional hotspots of Bangalore and Mumbai—IBM’s new center in Noida and TCS’s expansion site in Hyderabad.

Source : http://www.businessweek.com/