Posted on July 27, 2010 by Atul
From globalizationtoday.com.
IAOP’s Members Report a Very Important ‘Shoring’ Trend – There Is No Trend
As a global membership organization one of IAOP’ greatest resources is its ability to survey its members to capture the industry pulse – what’s hot, what’s not, and which way things are headed.
For example, as mentioned in my last column, it’s now clear from IAOP member surveys that the recent economic crisis has actually been good for outsourcing. In January 2009, 36 percent of our customer members said that their companies were actually expanding their future outsourcing programs as a result of the economic crisis. By September 2009 that number was at 47 percent. By January 2010 it was up to 56 percent. Then delegates attending the 2010 Outsourcing World Summit said that for them it was now 70 percent! A clear statement of where the industry is headed.
But when t comes to ‘shoring,’ these same customers tell us that it’s a much more fluid dynamic as opposed to a trend. In January 2009, 24 percent said that they were doing more offshoring as compared to only 9 percent who said they were doing less. By September 2009, 31 percent said they were more focused on offshoring while 33 percent said they were more focused on nearshore and onshore providers. By January 2010, the percent increasing their focus on offshoring was back down to 25 percent while the percent increasing their focus on onshore and nearshore providers was also down to 26 percent. More like a tide then a trend.
The simple fact is that everyone is getting more global. In September 2009, 47 percent of our provider members said that their firms were expanding geographically and 42 percent said the same thing in January 2010. In both surveys, about 30 percent of providers said they were establishing more local and rural centers from which to service their customers. So while it’s clear that the industry is getting more ‘global’ which ‘shore’ is shifting around a lot.
As both customers and providers become more global and distributed in their operational footprint and as the work becomes more fluid in terms of where it’s done, location distinctions are less significant in customer decision-making. Costs are becoming more blended as well in today’s virtual, cloud-like, delivery model, making a pure-play offshoring decision less of a driver for many companies than it was in the past.
Colombia: A Great Example
So, is the country of Colombia, where we just opened an IAOP Chapter, an offshore, nearshore, onshore, whatever-shore location? You bet, all the above.
Citi is supporting Spain from call centers in Bogota. Telperformance is supporting customers in Mexico. Bilateral has customers in the U.S. being supported in Spanish and English from centers in Barranquilla and Bogota. And there are many more examples, including the growing ‘onshoring’ of work for Colombian companies right there in Colombia.
So, the question is: Do we really want to keep talking ‘shore’ when we should be talking ‘solution’? Is all the talk about shore hiding what really matters – value?
Just a thought. But what do you think? Email me at michael.corbett@iaop.org with your thoughts about the affect of the recent financial crisis on outsourcing. Also, let me know about examples of thinking differently on any aspect of globalization and business that you’d like to see explored in a future column.
Michael F. Corbett is the founder, chairman, and chief strategy officer at IAOP. He believes it’s time think differently about the world we live and work in.
Posted on July 25, 2010 by Atul
Wipro Q1 net up 31% on outsourcing recovery-Earnings News-Earnings-News By Company-News-The Economic Times.
MUMBAI: Wipro delivered a thumping verdict for recovery in the outsourcing sector with a robust growth forecast and better-than-expected earnings for the first quarter to end-June as spending of clients on technology begins to swell.
The country’s third-biggest software services exporter said it expects revenues to rise between 4.1% and 6.1% in the next quarter on the back of increased spending by corporates that slashed budgets to the bone during the financial crisis.
Net profit in the first quarter grew 31% to Rs 1,319 crore on revenues of Rs 7,236 crore. Bangalore-based Wipro joins larger rivals Tata Consultancy Services and Infosys in handing out an upbeat outlook for the outsourcing industry, helping to erase some of the anxieties gnawing at it, including a sliding euro and rising wages.
Indeed, in the strongest statement made by an IT company chief yet on the demand environment, Wipro chairman Azim Premji said he does not foresee a double-dip recession.
“We are seeing traction; decision-making is on. We are now seeing reasonably sound indications that discretionary spending is back,” Mr Premji said. “We are not having any measure of concern.”
The soap-to-lighting company’s revenues from software services met expectations with a 14% rise to Rs 5,500 crore but the growth was softer than what TCS and Infosys reported earlier this month. Wipro’s revenues from IT products shot up 13% while those from consumer care and lighting were up 23%.
Wipro shares rose to Rs 433 before ending lower at Rs 412 on the Bombay Stock Exchange on Friday.
“While Wipro has a softer quarter versus TCS and Infosys in June, its 6.1% Q-on-Q revenue growth guidance for the September quarter makes amends, and indicates that demand is firmly on an uptrend,” brokerage CLSA said in a note.
“Note that Wipro has delivered around the top-end of its guidance for the last eight quarters,” CLSA added.
Wipro CFO Suresh Senapaty said the company was able to improve margins by 30 basis points sequentially because of operational improvements made in acquisitions and other efficiencies. That helped fend off cross-currency headwinds, a one-month impact of wage spikes and a higher percentage of onsite revenues.
Posted on July 16, 2010 by Atul
Tata Consultancy Services: Investors.
Yesterday, TCS announced a strong performance in the first quarter of the fiscal year. Is the market really improving dramatically or is this the pre-summer bump?
Revenues at $1,794 million
up 6.4% sequentially; up
21.2% Y-o-Y
Financial Highlights for Quarter Ended June 30, 2010:
- Operating Profits at $487 million; Growth 32.5% Y-o-Y and 5.1% Q-o-Q
- Profit After Tax at $403 million; Growth of 29.3% Y-o-Y and (4.9) % Q-o-Q
- Earnings Per Share at $0.21
Business Highlights for Quarter Ended June 30, 2010:
- Gross Addition of 10,849 Employees (Net Addition of 3,271 employees)
- 36 New Clients added
Please use the link below to view the entire press release.
http://www.tcs.com/news_events/press_releases/Pages/Q1-2011-Revenues-USD-1794-million-up-6.4-percent-sequentially-up-21.2-Y-o-Y.aspx <http://www.tcs.com/news_events/press_releases/Pages/Q1-2011-Revenues-USD-1794-million-up-6.4-percent-sequentially-up-21.2-Y-o-Y.aspx>
Posted on July 9, 2010 by Atul
I served on the board of Rural Sourcing Inc., which was founded by Kathy White, Former CIO – Cardinal Health, until this firm was acquired by Clarkson Consulting. A very viable alternative!
I was very impressed by the quality of resources in rural locations such as Jonesboro, Greenville etc. in states such as Arkansas, New Mexico and North Carolina.
Forget India, Outsource To Arkansas.
By CNN at July 08, 2010
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Looking for skilled, low-cost labor? Forget about India and China. How about Jonesboro, Ark.?
As the national unemployment rate hovers near 10%, some companies are starting to eye job-hungry areas of the country as prime candidates for the kind of outsourced work that once would have gone overseas.
Dubbed “ruralsourcing,” “rural outsourcing” and “onshoring,” the practice relies on two simple premises: Smaller towns need jobs, and they offer a cheaper cost of living than urban centers. So businesses that outsource work to these areas can expect to pay less — rates are often as much as 25% to 50% lower — than if they were hiring urbanites with comparable skills. More>>
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Tags: arkansas, india, outsourcing
Posted on July 5, 2010 by Atul
Danville Express : McNerney introduces bill to fight outsourcing.
Here we go again! Another politician working on making America less competitive and forcing American companies to have more disadvantages as they compete globally.
Jobs are not created by putting more hurdles in front of companies. Jobs are created by providing incentives for companies to invest in communities and new opportunities.
Has anyone done a study of how many jobs are being created by foreign outsourcing companies in the U.S.A.? Has anyone done a study to see what impact outsourcing is having on the fortunes of the buyers? Are they competing better and thus creating more jobs and better futures for their employees?
We are lot more connected than when most of these politicians started their careers. They need to spend more time understanding the connectedness of our world and how one needs to compete NOW!
Posted on July 2, 2010 by Atul
Pilot view: NBCs new comedy, Outsourced | Show Tracker | Los Angeles Times.
“You know something is mainstream, when it hits pop culture. This is going to be fun. The movie, Outsourced, was outstanding and if this series can carry that off, we are all looking forward to a fun series. I enjoyed working with the Producer etc. on the movie team to extend its applications to the corporate world. Loved the way the movie truly captured it all.” – Atul Vashistha
The following is from the LA Times Article
“Outsourced” is a single-camera comedy set in all-American company, Mid America Novelties, which sells anything from wallets made of bacon to whoopee cushions. Its call center has been outsourced to India, and 25-year-old Todd Dempsey has been transferred there to manage it. He quickly realizes his staff needs a crash course in all things American if they are going to help him increase sales, and he needs to learn more than a few things about India.
Who’s in it: newcomer Ben Rappaport (off-Broadway’s “The Gingerbread House”) as Todd;Rizwan Manji (“Privileged”) as Ranjiv; Sacha Dhawan (BBC’s “Five Days II”) as Manmeet;Rebecca Hazlewood (BBC’s “Doctors”) as Asha; Parvesh Cheena (“Help Me Help You”) as Gupta;Anisha Nagarajan (Broadway’s “Bombay Dreams”) as Midori; Diedrich Bader (“The Drew Carey Show”) as Charlie; and Jessica Gower (Network Ten’s “The Secret Life of Us”) as Tonya.
Who made it: Robert Borden (“The Drew Carey Show” and “George Lopez”) created it and is producing it.
Thumbs up: It’s a workplace comedy with a relatable, topical bent. The cast is fresh and impressive. Rappaport is a charming lead.
Thumbs down: It hasn’t quite found its comedic rhythm, but when it’s funny, it’s funny.
Verdict: If we can’t beat the outsourcing, why not join it? Potential here.
– Maria Elena Fernandez
Posted on June 30, 2010 by Atul
Leading Virtual Teams to Real Results – The Conversation – Harvard Business Review. 11:23 AM Wednesday June 30, 2010
by Jeanne C Meister and Karie Willyerd |
If a leader is like a conductor, as Peter Drucker said, then are virtual leaders like virtual conductors? In this video, Eric Whitacre conducts a virtual choir in a performance of “Lux Aurumque.” This moving virtual symphony, a collaboration between more than 185 singers from 12 countries, has been viewed more than a million times since it was uploaded in March.
As Whitacre describes in his blog, “I made my own conductor track, filming it in complete silence, hearing the music only in my head. Then I watched the video and played in the piano accompaniment part to my conductor track. Then I offered the sheet music as a free download. As singers began posting their individual tracks, I called for ‘auditions’ for the soprano solo.” Whitacre had already created a different video, called“Sleep,” where he cut different tracks of remote singers together. The goal with “Lux Aurumque” was to have the singers — none of whom could hear each other, of course — actually responding to his direction.
“There is a lot of rubato in my conducting (slowing down, speeding up) and some very specific dynamic gestures. And the singers responded beautifully… When I saw the finished video for the first time I actually teared up. The intimacy of all the faces, the sound of the singing, the obvious poetic symbolism about our shared humanity and our need to connect; all of it completely overwhelmed me.”
If a conductor can work virtually, bringing over 100 musicians together in a way that recognized the individuals even more than a live performance might, what can virtual managers do to create such excellence of performance while touching our “shared humanity?”
The reality of virtual leadership is apparent. Teams are increasingly spread across space and time, providing the benefit of obtaining talent anywhere in the world and allowing 24-7 work progression. However, virtual workers can feel a sense of isolation, and building bonded teams becomes more difficult when there are few opportunities to meet face-to-face.
Bob Taccini, a 52-year-old vice president of finance at Cisco Systems, has faced this situation personally. Although self-described as one of the last people to adopt a new fad, he says, “When we cut our travel budgets, using social technologies helped meet my need for personalization with my team. Even when I had a travel budget, I could maybe only get to some of our sites once a year. Management now requires spanning distance, even though we can’t span time. Certainly, as we continue to build a multi-generation workspace, social technologies will become more and more the norm.”
For Taccini, the last five years — marked by constantly changing market conditions, the introduction of more distributed leadership throughout Cisco, and the increased availability of virtual meeting technologies — have demanded a change in how he leads. During this time, he has become an adept user of social technologies. Now he conducts virtual offsite meetings, using TelePresence and WebEx, with blogs, discussion groups, and online forums as needed. TelePresence is richer than e-mail or voice mail and feels more real and physical because participants are able to see the other people involved.
One of the most effective tools Taccini has used is a monthly video blog (vlog). “It has been one of the best ways to communicate, supplemented by calls with everyone in my reporting chain,” he said. “Even though it’s not two-way real time, I get more participation from the vlog. My team sends questions, and they also have Web spaces to create collaboration spaces.”
Here are some tips of how leaders are using social technologies to work virtually:
- Rich media, such as live video streams or virtual meetings, can make virtual interactions feel more realistic;
- Frequent contact keeps connections to virtual workers fresh;
- Mixing media, such as the use of forums, vlogs, blogs, and discussion groups allows people to interact in a style most comfortable to them
- Meeting face-to-face at least once helps create a bond that can be connected virtually;
- Simple technologies, such as a personal phone call can help motivate a virtual worker, knowing they are not out of sight, out of mind.
Surely many of you are facing this new world of either working or leading virtually. What has worked for you? What do you wish your manager/team leader would do to help you feel more connected to the rest of the team? Share your experience here so we can learn collectively on how to build a high-performing virtual team.
Jeanne C Meister and Karie Willyerd are cofounders of Future Workplace. Jeanne is the author of two books on corporate universities and hosts the blog newlearningplaybook.com. Karie was formerly the chief learning officer of Sun Microsystems and head of learning and development at HJ Heinz. They are the authors of the HBR article “Mentoring Millennials” and the book The 2020 Workplace: How Innovative Companies Attract, Develop, and Keep Tomorrow’s Employees Today.
Posted on June 11, 2010 by Atul
Come, join me at the Global Sourcing Forum in NYC from Oct. 13-14. I just agreed to Co-Chair it and am supporting find great speakers. Ideas welcome too!
Global Sourcing Forum GSF caters to the needs of senior business and sourcing executives charged with leading their organizations through change during an economic period that has undergone significant structural shifts.Over the last decade GSF has become the leading conference for outsourcing and globalization that goes beyond the common issues to provide insights and advice on improving competitiveness and increasing profit margins through strategic outsourcing. It provides a unique opportunity for decision-makers and management to evaluate strategic options, leverage global sourcing models and gain best practices knowledge from experienced practitioners and thought leaders.
via Global Sourcing, Outsourcing, Offshoring Strategies |Global Sourcing Forum.
Posted on June 7, 2010 by Atul
Nice to be recognized! The true recognition really goes to the countries like Mexico, Brazil, Chile, Colombia, Costa Rica, Nicaragua and others where business leaders and government are working together to be attractive locations for BPO, KPO and ITO. – Atul
THE POWER 50: Architects, Advocates and Visionaries | Nearshore Americas | Independent Reporting on Outsourcing in Latin America and the Caribbean.
Some have dedicated their professional lives to attracting investment into their home countries. Others are multinational executives determined to realize a bigger vision for the professional exported services sector of the Americas. These and a host of other professionals are responsible for putting Nearshore outsourcing on the global map. We celebrate these people in our special Nearshore Americas’ Power 50 Report, shining a bright light on an increasingly influential industry which for far too long has operated in the shadows of more dominant global delivery destinations in Asia.
Despite tumultuous economic conditions around the world, Nearshore providers continue to attract more and more buyers. Analysts cite the familiar reasons: geographic proximity, time zone, large number of English speakers, costs. Clients cite technical abilities, creativity, love of innovation, and willingness to engage as partners and not simply as drones—”How about if we try this?” rather than “Tell me what to do, boss.”
But none of this would have happened were it not for the courage, leadership, hard work, creative spirit, and enthusiasm of individual human beings.
Just as the pioneers of Silicon Valley could look at a microprocessor or lines of code and see a new market or product, the pioneers of Nearshore outsourcing could look at the skills and ambitions of their fellow citizens and see a new way to create opportunity, improve the national economy, and, as Globant co-founder Martin Migoya put it, “promote the professional development of people without [them] having to emigrate from their place of birth, and thus contributing to a sustainable growth of their communities.”
Our selection process was rigorous and took into account four main criteria:
- Personal impact on the growth and visibility of outsourcing in the Americas
- Record of achievement within the candidate’s own organizations
- Dedication to raising professional standards and performance quality
- A personal willingness to put industry over self in areas like corporate social responsibility, participation in local or region trade promotion and educational development groups and stepping-up into the spotlight as a thought-leader through live events and media engagement.
In the 2010 edition of the Power 50, we have representation from 16 different countries in the Western Hemisphere, including Argentina, Brazil, Chile, Colombia, Mexico,Costa Rica, Dominican Republic, Honduras, Guatemala, the United States, Canada, El Salvador, Nicaragua, Cuba, Barbados and Jamaica.
We salute these important professionals and continue to look forward to how they will contribute to the further growth of this industry which serves the larger cause of greater prosperity throughout the Americas. (And thank you to all who submitted nominations during 2009 ).
- The Editors at Nearshore Americas
Posted on June 5, 2010 by Atul
Global Services -Voice-based BPO Industry is Reviving.
Voice-based services or call center services– the offering that actually started it all for the BPO industry in countries like India and the Philippines, has changed a lot since inception. The very purpose of outsourcing this service has undergone a radical change.
“Initially, clients preferred to turn the work to service providers because the service providers offered a cost advantage or some type of ‘peak volume overflow’ capacity that the clients could not staff themselves,” says Sid Pai, Partner & Managing Director, TPI India.
Offshore call centers offering voice-based services were the perfect answer to this and one saw a massive build up of call centers in the early part of the decade. Very soon, the industry matured. Many call centers reached a point where they couldn’t scale up or they couldn’t retain key clients. This led to a shake-up in the call center industry, especially in India, where many of them were snapped up by IT services companies ( e.g. Infosys-Progeon, Wipro-Spectramind, IBM-Daksh, etc) seeking to enter the BPO industry.
BPO’s addressing the voice market had growth challenges. The way out was to shift the focus to other areas of BPO like finance/ accounting, mortgage, insurance and other niche sectors like KPO and LPO. Says Atul Vashishtha, CEO of Neo Advisory, “The market for non-voice services was expected to grow faster, as the call center sector was more mature and significantly developed .”
Revival and New Hope
The voice-based BPO industry is reviving. “Investments in technology platforms, process improvements, equipment and facilities and acquiring specific vertical capabilities, made by the service providers are outpacing those by the client. Service providers are moving up the value chain,” says Pai.
Voice- based services continue to expand their domain and tailor their offerings according to the needs of their clients. “Today customers are looking at unified communications to integrate various communication systems with their business applications to improve their business processes. These improved business processes lead to higher productivity for employees and greater customer satisfaction which in turn results in higher revenues and profits,” says Minhaj Zia, National Sales Manager, Unified Communications, Cisco India & SAARC.
Expanding scope of services
Clients today have access to a wide spectrum of services under voice. “Cisco subscribes to a range of services covering the entire gamut from technology services desk for customers and employees, human resources support for employees , escalation options for customers for quick access and marketing access to and from Cisco,” says V.C. Gopalratnam, Vice President (IT) and Chief Information Officer, Globalisation, Cisco, on the internal deployment of voice services in the company.
Providers are also developing expertise in niche areas within voice services. Andrew Kokes, Vice President of The Americas, Sitel, cites an example. “Revenue generation is one of the key metrics that Sitel is measured against for most customer care programs (revenue per month, revenue per call), and is a large part of our core expertise. More than half of all Sitel-managed inbound programs incorporate some form of upsell or cross-sell offer.”
The maturity of this segment allows outsourcing to many more locations as compared to emerging areas of BPO and thus finding price points and capabilities according to the specific needs of the client. “In all cases the services (we subscribe to) have a “follow the sun model” with sufficient geographical spread to cover all time zones effectively,” says Gopalratnam.
Collaboration and integration- the new formulas of growth
Collaboration and integration of communication platforms and capabilities are the new formulas of growth in this sector. “Collaboration is slowly moving towards new forms such as Enterprise Social Software, UC as a Service, TelePresence etc. Cisco’s Unified Contact Center solution…. provides a VoIP contact center solution that enables organizations to integrate inbound and outbound voice applications with Internet applications, including real-time chat, Web collaboration, and email. This integration provides for unified capabilities, helping a single agent support multiple interactions simultaneously, regardless of the communications channel the customer has chosen,” elaborates Zia.
Voice services are set to move to a higher degree of integration at multiple levels. Kokes says, “Voice-based contact center services are rapidly moving beyond traditional “voice” communication to include a blend of voice and live-chat (i.e., text based) engagement. In such arrangements, contact center agents are provided with real-time indicators of a website visitor’s propensity to purchase, and can invite that online consumer to chat via IM before the customer navigates away from the site. Such a model also opens the door to Pay-for-Performance client arrangements, whereby the call center fees for service can be aligned with the program’s overall success in producing incremental online sales.”
Zia also sees integration and improved technology as growth drivers for this sector. He says, “Enterprises will move beyond contact center to a customer interaction network with hosted contact centers for both enterprise customers and service providers. In a central office or data center, service providers will host the contact center infrastructure software, which will be shared by multiple business customers. Subscribing business customers will have IP or time-division multiplexing (TDM) infrastructures or a combination of the two.”
A suite of integrated services can also be introduced, he says, like virtual call centers, network routing with computer telephony integration (CTI), networked interactive voice response (IVR), intelligent call routing (routing calls between contact centers based on call context information, agent availability, and customer information from databases) and multimedia applications such as Web collaboration and e-mail response management.
With so much innovation happening and set to happen in this ‘traditional’ sector of BPO, analysts are optimistic of its transformational capabilities for businesses. “(Its potential to transform) looks evident given the investments made by the service providers on technology and platforms. In addition, leading service providers have built modern global services delivery infrastructures and implemented best practices that allow them to effectively and efficiently leverage their scale, volume, global capacity and technology to better serve their clients.” says Pai. To this, Atul Vashishtha adds that this is a market that will become increasingly global and Tier 2 players will need to specialize to succeed.
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