Planet Outsourcing

The next thing which will take the outsourcing world by storm is human resource outsourcing which will result in savings in operational costs. After IT now it’s the turn of HR to benefit from outsourcing due to the high volume of repetitive business it offers.

Rawdon Simon, Managing Director, Compass Consulting said:

This process is an overhead and the only way it can be done that adds value to an organisation is as efficiently as possible or not at all i.e. outsource it. The economies of scale available through outsourcing such functions make this an attractive option and most organisations will be keen to realise such benefits.

Outsourcing of HR is expected to generate savings to the tune of twenty to forty percent. Besides cost savings it will allow companies to focus on their core business and improve their product quality and customer service. Though every company can benefit from HR outsourcing but some say that only bigger companies have been able to benefit from HR outsourcing.

I simply don’t agree with it and feel that even smaller companies can gain from outsourcing and not just the larger companies can dominate it.

Via crn

It is expected that the market for Remote Infrastructure Management Outsourcing or RIMO will shoot past $8 billion in the next five years. This area is garnering a whopping growth of sixty percent per year. Most of the growth is being attributed to pilot contracts renewal and also to new contracts.

The growing popularity of RIMO can be attributed to the fact that it has improved the IT asset ownership arrangements flexibility and has improved control over IT service delivery. Though the Infrastructure Outsourcing market looks smooth on the surface and is progressing in line with the overall industry but there are certain changes in the market which are being driven by the birth of new technologies in infrastructure and fundamental changes in the Information technology asset ownership dynamics.

Via tekrati

Search engine optimization or SEO is an important part of online marketing since without proper promotion you cannot sell anything on the web. In case your company is feeling the load of SEO or does not have the skilled people required for the job then you can certainly go for SEO outsourcing.

The primary reason people opt for SEO outsourcing is that one can save on costs and utilize that money for other important events. With SEO outsourcing you would not be required to maintain a huge staff which can burden your company. Secondly there is a dearth of quality SEO professionals in the market therefore it would be better to opt for a SEO outsourcing company which would be responsible for giving you quality service on time.

Just see how a quality outsourcing service can help to increase the traffic on your website and bring higher sales to you therefore its better to go for SEO outsourcing.

Via a1technology

Up till now Pune and Bangalore used to be the preferred destination for companies to set up their outsourcing shops but these cities have not been able to keep pace with the development which has taken place and have taken a brunt. The infrastructure in these cities is crumbling under pressure, population is rising, basic amenities too are not good and the major reason behind this is that the administration never thought that these slow paced cities would start buzzing with activities and that too within a short span of time.

Now the time has come when we should think about other cities too. Kolkata is emerging as an important destination for outsourcing since it has a vast pool of talent and can certainly help in easing the pressure on Pune and Bangalore. Low costs and large pool of talent is attracting investments in Kolkata and it can certainly cash on the advantages that it offers but the city would have to keep in mind that in the process it should not follow the same path on which the cities mentioned above have reached as it would do more harm than good in the long run for the people of this bustling city.

Via nitawriter

India is witnessing a salary boom, all thanks to the shortage of skilled people in India and in 2007 Asian workers are expected to get the highest pay hikes in the world due to spiraling economic growth and mainly shortage of talent. Real wages are expected to rise sharply in 2007 with a fifty percent increase expected over the previous year.

Shortage of quality workers is affecting the quality of output from India and as a result work subcontracted from American companies is being further outsourced to other countries without the approval of the client in order to counter lack of skilled workers.

The salary boom is caused by the fact that workers are not viewing outsourcing industry as a permanent career option and see that they would be rendered unemployed over the next decade therefore they are asking for more salaries before getting trapped in outsourcing. I think they still can’t forget the scenario of the 30s and 40s which prevailed in India.

Via indiadaily

Now most of the companies are focusing on their core competencies and therefore they are moving towards outsourcing. Outsourcing has enabled them to focus on their major areas and that too at a fraction of a cost. One such area is logistic outsourcing and it is growing at the rate of ten to twenty percent each year.

Companies are moving from internal transportation to logistics outsourcing in order to unburden themselves. The logistics world is getting more complex and companies do not want to worry itself about these issues therefore they are moving towards logistics outsourcing.

Post 9/11 it has become a bit more difficult with new compliance laws coming in therefore companies are not willing to take any headaches in this regard and are therefore opting for companies which specialize in logistics outsourcing and hand over their worries to them.

Via crmbuyer

Companies opting for procurement outsourcing don’t seem to be happy with it and there are number of factors behind this dissatisfaction. Though they have struck good deals but still they still seem to be unhappy about it. There are a number of indirect procurement challenges which are causing dissatisfaction with regards to cost effectiveness of the indirect procurement services.

Even though companies have to reduce their cost of indirect goods and service still they are facing a lot of problems for managing their large number of suppliers due to a host of reasons such as lack of common indirect procurement, lack of adequate breadth of internal category management expertise and lack of common indirect procurement system.

Some of the other problems which are being faced are lack of information for managing suppliers and lack of market knowledge besides lack of visibility regarding indirect spending. Most of the companies are willing to access external expertise but the problems stated above need to be sorted out first.

Via echannelline

The Asian market seems to be leading in the demand for IT outsourcing services. These services are generally brought by North American and European firms but the trend seems to be changing and now these services are being used by companies within the Asia pacific region such as Japan, India and Australia. The figure of technology contracts for 2006 stand at $2.6 billion with the consumer list which includes Australia had a share of 32%, Japan had a share of 27% and India garnered a share of 25%.

India seems to be benefiting the most from this demand and has even beaten China in the process and most of the demand in the future is expected to come from India and Australia. The demand seems to be quite good but it needs to be seen whether IT outsourcing providers in the Asia region would be able to match the demand in the future or not.

Via ihotdesk

Data centre offshoring seems to be on the rise and is expected to grow in a big way in the next five years. Up till now companies were reluctant to take the benefits of data centre outsourcing but now the views seems to be changing and companies are willing to relocate their data centres for spreading their risks and pocketing significant savings.

David Elwen, Director, DMW said:

This research seems to show that the majority of IT managers believe that the trend is inevitable, but it is not a straight-forward process and it is vital that they make the right choices for their organisation and plan carefully for what would be a major change to a key service.

Some of the most cost sensitive sectors such as retail are quite enthusiastic about it and this seems to be a positive signal for the outsourcing industry which certainly stands to gain from it besides the companies which are opting for it.

Via itweek

Up till now megadeals ruled the roost in the outsourcing industry. These are deals which are more than worth $1 billion in value and act as a yardstick for acceptance of outsourcing in the industry. Now the scenario has changed and companies are adopting selective outsourcing and megascope deals are being regarded as the benchmark for big outsourcing contract signings.

If you would like to understand megascope deals then it refers to the enterprise wide scope of work which is to be outsourced and the work is offered on selective basis which matches the scope and requirements to the best fit provider.

Kurt Potter, research director, Gartner said:

Megadeals are still popular for large organizations, and megascope awards are gaining in popularity. However, such large deals are still only suitable for organizations that have mature sourcing processes and the experience to manage multiple providers. Fewer than one-third of organizations have a formal sourcing strategy, and many of them are using multiple providers and advanced sourcing practices

2007 will see the work being divided among a number of providers and bigger companies would be selecting smaller players for megascope deals which would lead to expansion of the scope of the services which are being delivered globally.

Via crm2day