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India will seek to impress upon US President Barack Obama during his Nov 6-9 visit that outsourcing has actually created thousands of jobs in the US, and not taken them away.

"The issue of outsourcing will obviously figure in the discussions," Foreign Secretary Nirupama Rao told reporters here, briefing on the contours of the US president's visit, while touching upon what has been a sensitive issue for the two sides.

"Recent studies by FICCI (Federation of Indian Chambers of Commerce and Industry) have shown that thousands of jobs have been created by our greenfield partnerships," said Rao, referring to the growing operations of Indian companies in the US.

She said while the US was the third largest investor in India with a cumulative inward investment of nearly $9 bn since 2000, India was also was contributing much toward the American economy.

"According to the US officials, India is the fastest growing source of foreign direct investment in the US. They are creating, saving or supporting tens of thousands of jobs in the US," the foreign secretary said.

"India's defence acquisitions and major purchases in energy and aviation sectors, for example, are contributing to the US economy."

As per the study by the leading industry lobby, quoted by the foreign secretary, Indians are not taking away jobs in the US but had created and saved 65,000 jobs in recent years through increased investments.

"Recent Indian acquisitions have created and saved 65,000 jobs in the US. A total of 374 acquisitions have been made and 127 greenfield projects have been set up in the US by Indian investors," FICCI secretary general Amit Mitra said Wednesday.

India's Ambassador to US Meera Shankar, who was also at the event Wednesday, said Indian companies invested $5.5 bn in US greenfield projects from 2004-09. "In mergers and acquisitions of US companies, Indian companies invested $20 bn."

Mitra said one area of outsourcing shouldn't be seen as a fulcrum of Indo-US engagement. "The relation need to be judged in its totality just as some European nations have begun to look at their engagement with India."

Obama, accompanied by a large delegation of over 200 corporate honchos, arrives in Mumbai this weekend on an official visit to India. Both sides acknowledged that business will be on top of the president's agenda during the visit.

Source: http://www.deccanherald.com/content/110366/outsourcing-has-created-us-jobs.html

* Sees NHS tenders, contracts towards end of Q4

* Says on track to meet own FY view

* Ups interim dividend by 22.4 pct to 6p

* Grows forward order book by 5 pct (Adds details)

Britain's Synergy Health posted a 22 percent rise in first-half adjusted pretax profit, helped by higher margins, and said it expected further outsourcing by the National Health Service to boost its business.

The provider of sterilisation services to hospitals raised its interim dividend to 6 pence from 4.90 pence and said forward order book grew by 5 percent to 890 million pounds ($1.44 billion).

"Our focus now is to convert the bid pipeline into further contract wins in the fourth quarter and into the next financial year," Chief Executive Richard Steeves said.

For the six months ended Sept. 26, adjusted pretax profit was 18.1 million pounds, compared with 14.9 million pounds a year ago.

Revenue fell 3 percent to 138.7 million pounds, but gross margins improved 2.1 percent, helped by winding down of non-core business.

The company's shares were flat since Synergy on Oct. 6 forecast first-half profit in line with its own view, compared with a 4 percent drop in the FTSE 350 Health Care Equipment & Services Index .FTNMX4530.

Synergy Health shares closed at 747.50 pence on Wednesday on the London Stock Exchange. ($1=.6201 Pound) (Reporting by Aditi Samajpati in Bangalore; Editing by Vinu Pilakkott)

Source: http://uk.finance.yahoo.com/news/update-1-synergy-health-sees-boost-from-further-nhs-outsourcing-targetukfocus-e4509c5b5921.html

Large-scale offshoring of IT and business processes is seen by many as the way government departments can cut costs, but the ineffective procurement of the past could mean there is an alternative way to reduce budgets.

In the government spending review last month, chancellor George Osborne outlined spending cuts of £81bn over four years.

Although the government will use IT to help cut costs across the public sector, Whitehall departments and their suppliers will be forced to offshore to reduce the amount of money spent on technology, some experts believe.

Sarah Burnett, analyst at Ovum, says demand for offshoring will increase as a result of the government's negotiations with IT suppliers to deliver the same for less. Business process outsourcing (BPO) is the area most likely to move overseas. "Offshoring is one way for suppliers to deliver the requisite cuts in prices," she says.

Indian outsourcing companies are already positioning themselves to take a slice of the UK public sector market. Suppliers such as Mahindra Satyam, Wipro, TCS and HCL Technologies have declared their intent. "We can deliver twice the service quality and at half the price [of current providers]," says Vineet Nayar, CEO at HCL.

Doubts over offshoring

Public sector IT chiefs recognise the need to outsource but are less certain about offshoring work.

David Wilde, CIO at the City of Westminster, says outsourcing is likely to increase to maximise the benefits of large virtualised environments as well as helping to establish more shared services.

But he says government bodies should not treat outsourcing as a blanket approach to reducing costs. "It really depends on the specific service, and offshoring should not be looked at as an end in itself, just one of a number of business options," he says.

"I think there is a fundamental question about the extent to which offshoring actually does cut costs."

Many public sector outsourcing contracts have come under fire for proving too costly, with the government having lost billions in project overspends, delays and cancellations in the past. But the complexity of those projects could end up being a reason not to offshore, and to cut costs instead by improving what has come before.

Jos Creese, president of public sector IT user group Socitm, says offshoring is not always the best option. "Offshoring can work well for a clearly defined service or product, but the greater the complexity, the less likely remote delivery will result in a satisfactory outcome," he says.

Robert Morgan, director of consultancy Burnt Oak Partners, says, "Outsourcing is absolutely not the only way to meet spending targets. The waste is within the old system."

David Cameron's visit to India, where he declared that the UK was "open for business" suggested that the government has already positioned itself to outsource more of its contracts, says Mark Lewis, head of outsourcing at law firm Berwin Leighton Paisner.

But the issue of UK jobs vanishing overseas remains politically sensitive, he says. "The government will be looking at offshoring providers that have an onshore presence. Tata Consultancy Services, for example, has well over 5,000 staff in the UK and HCL also has several thousand. To talk about offshoring as an option is not just about seeing jobs disappear from the UK. And, of course, that is something the government can mandate on," he says.

Big businesses have been offshoring IT in increasing volumes for at least a decade. Although the government is the biggest business of them all, it is a different beast. Sending work offshore makes business sense, but it might not make political sense.

Source: http://www.computerweekly.com/Articles/2010/11/04/243756/Is-IT-offshoring-inevitable-to-meet-government-cuts.htm

As US President Barack Obama primes himself for his imminent visit to India next month, the question on everyone’s lips is whether or not he will be able to rebuild the bridges he burnt with the strong anti-outsourcing stance he has demonstrated in recent times.

By visiting India earlier in his presidency than any US leader before, Obama’s visit is intended to be symbolic of the new US-India relationship. There are, however, plenty of bumps in the road ahead which the President will have to negotiate before the trip can be classed as a success.

Indeed, ahead of the Obama visit, anxiety is cutting through India's outsourcing industry over the President's policies, which include a determination to block tax breaks to companies who choose to globalise their IT operations, along with the HB-1 visa which will restrict the hiring of foreign workers.

How fair are these measures, though?

It’s clear that organisations all over the world benefit from the value that India is adding - including those in the US. For example, Tata Consultancy Services, India's largest IT services firm, runs a project in Ohio that employs over 300 people, which, as it stands, could be in danger.

It’s true that the largest worry across America today is the nature of the economic recovery, which has seen unemployment levels reach close to 10%.

Ohio's struggling governor is up for re-election in November and with a Republican accusation that outsourcing has cost the state thousands of jobs during the Ohio governor's occupancy, he, issued an executive order banning outsourcing from his state.

The Ohio ban and the announcement of an end to tax breaks could impact across the entire Indian IT industry; a situation which will only become worse if other US states follow suit.

The industry has grown at a rapid pace for the best part of a decade, much of this stemming from US companies offshoring their back-office procedures.

Indeed, as much as 60% of India's IT operations revenue comes from outsourcing and a large chunk of it from the US. India is quickly becoming the world’s back office and as a result, the US has shifted jobs to India for lower costs and greater efficiency.

It’s important to remember, however, that before any decision is made to offshore services, all businesses - not just those in the US - will identify where their core competencies lie, and will only outsource processes where they are not efficient.

This means that by offshoring services, US companies are becoming more efficient at delivering the things they are good at, which can, in turn, mean more jobs are created as a result.

Perhaps it’s time that Obama was told that a ban on outsourcing is not necessarily the answer to his domestic troubles? Everyone understands that the economic downturn has seen the President come under increased pressure to protect US industry - but perhaps his visit will help him to see the bigger picture, as well as the wider ramifications of his actions.

Collaborative sourcing is a true transformational approach to an enterprise's applications development and maintenance strategy. In addition to providing the mechanism to realise the benefits of global delivery and continue significant cost reductions, collaborative sourcing creates the engine to accelerate time-to-value.

Since the early 1990s, companies have moved applications development and maintenance work to lower labor-cost countries, to varying degrees. Often referred to as "offshoring" or "outsourcing," this labor arbitrage has had an important effect on businesses' ability to reduce costs of ADM.

Although cost take-out continues to be a primary CIO focus -- and oftentimes is the principal yardstick by which ADM service providers are measured -- the market has matured to the point that such cost-savings initiatives, while important, are no longer strategic and offer little, if any, competitive advantage.

So, where are CIOs turning for the next wave of value creation from IT? A time-based competition strategy, supported by a quantitative outcomes-measurement process, has quickly become the foundation for an enterprise's "next generation" sourcing strategy.

What Is Collaborative Sourcing?

Application collaborative sourcing is a delivery framework that provides ongoing development and maintenance of an enterprise's full application portfolio. The framework model provides a platform to drive innovation and focuses on time-to-value while introducing working collaborative practices to get critical business functionality into production at a fast rate.

A core theme of collaborative sourcing is improving the business's capability to compete on time. The collaborative sourcing argument is that if we wish to accelerate time-to-value, we need to measure -- quantitatively, systematically and persistently -- factors of time at the lowest levels of granularity possible.

Collaborative sourcing accelerates time-to-value. Through a set of Web 2.0 technologies and an integrated set of processes, collaborative sourcing focuses on cycle time (elapsed time) and speed (hours versus estimate) as the principal metrics for measuring performance.

Staff behaviors are directed toward competitive, time-based outcomes when not only development methods, but also the talent model and recognition systems, are calibrated on time-based measures.

Collaborative Development

A core principle of collaborative sourcing is the notion that true collaboration among knowledge workers accelerates delivery while fostering innovation and reducing risk. Collaboration between IT (employees, contractors, partners, etc.) and the business (employees, contractors, partners, etc.) yields acceleration of time, improvements in quality and reductions in risk. While most executives -- IT or business -- will agree in principle with that assertion, such collaboration in a real and consistent manner has been largely an elusive goal.

Real collaboration requires both a mechanism to enable seamless, transparent communications and, perhaps more importantly, trust between the parties. These two ideas are inexorably linked. True collaboration will occur when parties share information and have a trust relationship that engenders that sharing. Trust will survive only when information is shared willingly and consistently in a truly transparent fashion.

Collaborative sourcing addresses this issue through delivery communities and an environment of pervasive transparency. Delivery communities are the basic governance construct of collaborative sourcing. The delivery community is organized around a business process and incorporates all the professionals -- business and IT -- who deliver value to the business in that business process area.

Business and IT professionals collaborate using the Web 2.0 technologies of the integrated platform in an environment of pervasive transparency -- where all work and all project artifacts, business and IT, are visible to all members.

The delivery community becomes the point of execution for work in the collaborative sourcing model, as well as for work in the IT governance model within the enterprise. Delivery communities are virtual organizations with membership spanning any number of operational and organizational boundaries to bring together professionals with work to do (creation of components), which creates value to the enterprise through application development and maintenance. While the constituency of the community is a virtual construct, the physical instantiation of the community is very much actual.

Software collaboration tools provide the infrastructure to enable real-time global collaboration, as well as component level transparency, to work. Members are assigned to the community, work items are managed and visible to all members across the community, and such performance metrics as component scores, reuse statistics and other time-based calibrations are aggregated to the community level.

Within these business-process-focused delivery communities, practices are optimized for the acceleration of time-to-value: These practices include component-based development project methods, digital reputation scoring systems, and systematic asset reuse and component catalogs.

Outcomes-Based Performance Evaluation

The collaborative sourcing model supplements the traditional methods of performance evaluation that rely heavily on consumption-based measures with a quantitative outcomes-measurement process. Outcomes have typically been thought of as high-level outcomes of a project or major project phase. Often, these outcomes are translated to service level agreements and serve as a mechanism for defining a project outcome or set of outcomes.

A professional's percentage of utilization -- the percentage of a theoretical maximum available number of hours -- acts as a surrogate measure of performance. This measure, combined with annual or semi-annual performance reviews that attempt to take into account other less-quantitative measures of performance, form the basis of most talent-management models.

These measurement systems and performance review processes do little to support a time-based competition strategy. The reward mechanism favors high utilization -- not necessarily being the most productive and certainly not being the fastest.

Collaborative sourcing defines outcomes at the component level. A fundamental principle of collaborative sourcing is the discipline of component-based development: Any project artifact that can be time-boxed and defined as a discrete deliverable is a component.

Components become the building blocks of ADM, and by emphasizing the quantitative evaluation of these components -- based primarily on time -- the enterprise creates not only an effective scoring and incentive system for talent management, but also a core asset in the component catalog for ongoing development and maintenance.

The Big Picture

Collaborative sourcing is a true transformational approach to an enterprise's applications development and maintenance strategy. In addition to providing the mechanism to realize the benefits of global delivery and continue significant cost reductions, collaborative sourcing creates the engine to accelerate time-to-value.

Rather than focusing almost exclusively on cost takeout, collaborative sourcing refocuses a CIO's capabilities and resources toward adding value to the business through accelerated time-to-value and outcomes-based measurement processes.

While continuous improvement in cost management will always be important in IT, significant returns on IT investment can be realized when tied more directly to business benefits. First-mover advantage in a market, premium price leverage, rapid response capability -- all enabled by accelerated IT delivery in collaboration with the business -- have significant revenue- and profit-enhancement potential.

The next-generation sourcing strategy is here, and enterprises are already beginning to realize its transformational potential.

Source: http://www.ecommercetimes.com/rsstory/71165.html?wlc=1291801536

Unlike US President Barack Obama, European lawmakers find outsourcing jobs, products or services to India mutually beneficial, creating a win-win situation.

'Outsourcing is now seen more as a partnership than losing jobs. Success of Volkswagen cars in India provides more opportunities for our firms back home in a big way,' European parliament member Barbera Weiler said here Wednesday.

Weiler, who represents the German Socialist Party, is in India as part a nine-member European parliamentary delegation to understand how this country deals with regulatory issues such as services, standardisation, customs and consumer protection.

Admitting that outsourcing of IT jobs from the European Union (EU) to India did evoke protests in Germany initially, Weiler said they were, however, becoming shriller as there was greater realisation on the benefits of such engagements.

'Protests against outsourcing to India were natural earlier as job losses were feared in Europe. It is not a price argument anymore. It has now come to mean selling our products in India and helping trade grow between the European Union (EU) and India,' she told reporters at an interaction with the delegation.

Noting that the Indian IT industry had expertise in automation and was using information and communication technology (ICT) in the administration productively, Weiler said such domain knowledge would be of immense help to some of the European countries lagging behind in e-governance.

Echoing Weiler, British lawmaker Malcom Harbour said that outsourcing helped the EU countries in product engineering and design.

'The whole process has matured and aerospace majors such as Airbus and EADS (European Aeronautic and Defence Space) are doing product engineering and design work using local skills in India,' Harbour pointed out.

Allaying fears over outsourcing, the British member said in a globalised world, skills had to be used successfully as they were scarce in Europe.

'Outsourcing to India helps us to sustain jobs as there is a resource scarce across Europe,' Harbour, who is the chairman of the committee on internal market and consumer protection in EU, asserted.

The delegation is on a two-day visit to Bangalore to find new solutions in transport, health and green technologies for the 27-member EU states.

'Sharing and joint development of technologies should be encouraged. Cross border trade is given a push as we are bullish on global trade revival and economic cooperation with India,' Harbour added.

Source: http://economictimes.indiatimes.com/infotech/ites/European-lawmakers-bat-for-outsourcing-to-India/articleshow/6867807.cms

Prime Minister David Cameron has ruled out restricting the main route into the UK for IT workers from overseas under his government's crackdown on immigration.

Cameron said intra-company transfers "should not be included in what we are looking at".

His brief comment during Prime Minister's Questions followed the publication of a report from the Commons Home Affairs Committee warning that the crackdown is doomed to fail without additional measures. It argued that because most incomers come from the European Economic Area they are not subject to UK government control under EU rules.

The committee recommended intra-company transfers of up to two years should be exempt from the crackdown. This is despite criticism from professional staffing body APSCo, which argues that many hundreds of staff are being brought into the country via intra-company transfers but are not subject to the same employment laws as are faced by staff originating in the UK.

Cameron did not refer in his brief comment to a particular limit for exempt intra-company transfers.

Over the next five years the call/contact centre industry will undergo enormous change. Consumer and business customers will no longer have to deal with accent problems and call queue waiting. The cost of customer service, technical support, telesales and telemarketing will be greatly reduced while being enhanced with more efficiency and control. Today’s labour-intensive environment will change dramatically and will be augmented by a new state-of-the-art Artificial Intelligence (AI) technology based on the latest research and government security applications.

Within the next year a few early adopters - mostly savvy outsource vendors as well as self-source companies - will implement the use of AI within their call/contact centres and will expose the industry to its true power and capabilities. I predict that within two years 25% of call/contact centres will be employing some level of AI. Within five years, the industry will become reliant on AI as a resource for servicing customers. Yes, there will still be the need for human agents; however, AI will reduce that number greatly from today’s market size at a much reduced price and cost. And most human agents will be providing back-up to the AI front-end contact systems versus being on the front end today. No, the AI system won’t provide for all calls, so back-up to a human agent is required for a portion of the contacts. But in time, the AI system will learn and be modified to accommodate a majority of the calls through fruition.

What will drive the adoption of this new flavour of AI? The same two dynamics that have driven changes in the past: lowering overall cost and improving the customer experience.

Today’s Environment

The technology and practices employed today for servicing customers are not much different from what they were 15-20 years ago. Yes, technology has evolved and the systems employed are more advanced, but still it’s basically the same. This holds true for operational practices as well. Bottom line: we’re still completely reliant on human labour forces to deliver customer service for most of the industry.

There are Interactive Voice Response systems (IVRs) which provide a low percentage of coverage beyond traffic management, but these are limited in function and restricted by how far they can maintain required customer satisfaction levels. Most IVRs only provide front-end traffic management to a human agent today and the percentage of full customer service is very low for IVR-only support.

The Internet also offered some advancement in operations and technology but we’re still doing the same basic things that we did 15-20 years ago. Internet, or Voice Over IP (VOIP) has lowered the cost of communications, but this still has not changed the industry.

There has not been a “Next Big Thing” in the customer service and call/contact centre market within the past 15-20 years. Some would argue that offshore, springing forward some 8-10 years ago was a big thing, but it didn’t really move the market forward into a changing evolution. Offshoring merely lowered the cost to a degree - but also introduced problems related to accent, attrition and control. Bottom line: the customer service and call/contact centre footprint hasn’t really changed much during the past 15-20 years.

The Next Big Thing

A definition of a Next Big Thing would include something employed on a grand scale which would change an industry completely. Current AI technology which is available today for call/contact centres and customer service will do just that. This technology has been under development for decades for various other reasons, such as national defense, national intelligence, national security and some commercial applications.

Today, there is an offering available which is designed to replace the human agent in a multitude of applications in the customer service arena. This technology is basically an avatar which sounds, speaks, listens, thinks and reacts much like a human. Designed to function like an agent or rep within a call or contact centre, this technology can perform at amazing levels today for a fraction of the cost of a human agent, while still providing acceptable customer satisfaction.

AI goes way beyond IVRs and Interactive Virtual Communications (IVCs), which are basically script-oriented and deal with fixed responses. Even the smartest IVRs today can’t match up to the AI solution available now. AI passes the IVR by speaking, listening, thinking and reacting to the responses outside of standard fixed scripting and responses. AI does this within conversational modes and does not sound like an automated IVR or recording.

AI also resides in a cloud and eliminates reliance on high-cost communications, which eliminates standard clogs in an Automated Call Distributor (ACD), eliminates most metric problems in a call centre and can eliminate most brick and mortar costs associated with human labour. AI can eliminate most Key Performance Indicators (KPIs), including abandonment rates on an inbound queue, average speed of answer (ASA), average hold time (AHT), etc. because it resides in the cloud and can answer almost any number of calls coming in at the same time without hold time. This also applies to outbound calls, as AI can make thousands of calls at the same time versus having to trudge through an agent available queue to do an outbound call. AI can be used in a mixed inbound and outbound scenario within the cloud or within an ACD, where outbound calls can be made during light inbound periods according to scheduled time zones. Most important, AI can solve most of the unpredicted inbound call waves which can bury a call centre in an instant.

AI will also eliminate the need for workforce management systems at the level required today, as well as workflow management as this can be “trained” into the AI system and modified more easily than training a huge human work force. The AI’s modifications can be a fraction of the cost of training human agents as well as much less time to train hundreds or thousands of agents. Human Resource expenses, recruiting costs and attrition management costs will be greatly reduced due to less human agents required, as well as customer satisfaction management, or quality control, as AI can record every session and literally learn from its experiences with guidance, approval and modifications from management. Current AI technology can also communicate over various channels, such as voice, chat, e-mail, text and IM.

Summary

AI will be the next big thing in the call/contact centre and customer service industry. This is not Star Wars, nor some other fictional high tech dream. It’s here today and is growing like wildfire. The adoption rate of those business, education and government organisations that have conducted pilots has been very high due to a ROI of less than six months and a TCO that has been documented to be as high as 60%.

Like most unusual technologies, it will start out slowly but will take the market by storm once the early adopters prove its true value. These adopters will be the big winners in this technology infusion, getting a jump on their competition. Especially in the outsourcing industry. It is already being used by many of the early adopters in the self-sourcing community and has proven itself quickly. The capabilities and cost savings will drive this new technology forward on a natural course. This will only take one to two years from today to get established and within five years will encompass the entire market.

Source: http://www.outsourcemagazine.co.uk/articles/item/3601-the-next-big-thing-to-hit-callcontact-centres-and-customer-service

Electricity North West has outsourced its IT to Indian offshorer Wipro Technologies in a five-year deal.

The utility firm owns, operates and maintains the electricity distribution network throughout the North West of England.

Wipro will set-up new data centres and configure "high availability infrastructure" for the electricity firm's operations.

Electricity North West will move to a more virtualised infrastructure, and upgrade key business applications.

Wipro will provide the fully managed IT services using remote infrastructure management systems, based on the ITIL v3 service integration model.

The value of the deal has not been disclosed. The contract comes as another utility, Anglian Water, has chosen to drop CSC after a 15-year relationship and sign-up Capgemini for a new five-year IT services contract.

Utility companies are increasingly looking towards implementing smart grids to control the distribution of gas and electricity. But a recent survey found that many are not yet ready to support smart grid intelligence, reaquiring better systems integration for the masses of data they will have to manage.

Anglian Water has dropped CSC after a 15-year IT outsourcing relationship, and chosen Capgemini to run its IT infrastructure and core business applications.

Anglian, which serves 6m homes and businesses in eastern England, has signed a five-year contract with Capgemini for an undisclosed sum.

CSC signed its original ten-year contract with Anglian in 1995 for around £200 million. It was then paid a greatly reduced £38 million to run Anglian's systems for a further five years in 2005. Phil Carnelley, analyst at TechMarketView said, “The deal with Capgemini is also for 5 years, so we can assume that ‘even more for even less’ will be the name of the game.”

The contract involves both cash and intellectual property. Capgemini had studied the way Anglian had rolled out its core SAP business platform, and the two organisations had agreed a commercial arrangement to enable Capgemini to utilise Anglian's intellectual property within Capgemini's SAP UK Water Template, designed for use in deploying SAP at other water industry clients.

The transfer of Anglian’s IT to Capgemini has already begun and is scheduled to be completed by February next year.

Chris Boucher, director of information services at Anglian Water, said, "Capgemini clearly has the business and technical skills and experience, and the capacity for innovation that can help drive our business forwards."

Other factors behind Anglian Water’s decision, said Boucher, included Capgemini’s "collaborative approach, its commitment to quality and its cost-effective proposals".

Capgemini will look after Anglian Water's IT infrastructure from its data centres in Swindon and Bristol. Applications management will be managed from sites in the UK and India, and a dedicated IT help desk will be located at a Capgemini facility in Romania.

Source: http://www.computerworlduk.com/news/outsourcing/3247161/anglian-water-cuts-off-csc-after-15-years/