Planet Outsourcing

Year 2006 was not a good year for the outsourcing industry but 2007 surely looks a promising year for it. With US economy slowing down the India BPO industry is all set to benefit from it even though it may be for a short period of time. Companies looking to tied over the recession are expected to increase the outsourcing of IT services. It might see a revival of the long term deals in the industry but with US presidential elections lined up for 2008 it outsourcing to India could emerge as a serious political issue.

K Sridharan, Chief mentor, Hexaware stated:

What really drives US firms is their bottom line and they will only increase outsourcing to cut on cost as employee cost accounts for around 40 per cent of their operating costs.

The Indian BPO sector is expected to grow at the rate of 28% this year and generate revenues worth $47.8 billion in 2007. Indian companies are looking forward to further incentives from the government since they have been facing increasing competition from other countries in the Asia Pacific region and since it is an industry which revolves around costs it may emerge as the deciding factor between the leader and the follower.

Via rediff

It’s praiseworthy if you would like to emulate the success of a particular company but it is deplorable if you would like to achieve it by riding on the success of that company. Abacus Outsourcing and Consultancy Pvt Ltd, a Hyderabad based company has been barred from using the trademark and trade name Tata or distinctive Tata ‘T’. The company has also been barred from using www.tatalimited.com and its account too has been freezed.

All this happened because it was found out that the company was using the trademark of Tata and announcing itself as a subsidiary of Tata Group with the promise of offering jobs with the esteemed Tata Group of companies. The company was collecting money on the pretext of offering jobs in the Tata Group and when it came to the notice of Tata it approached the court for seeking to stop this illegal activity. The High Court decision has saved hundreds of youths from getting duped and I hope people reading this would avoid getting in the trap of this company.

Via domain-b

The Indian animation industry has matured and now it is looking forward to reverse outsourcing in order to fill the talent shortage being faced in the country. Up till now Indian companies were dependent on production works outsourced by companies such as Sony or Disney but now Indian companies have reached a stage where they are willing to take up pre and post production work.

Now the Indian industry is churning out animation films independently with some acclaimed films such as Ramayan and Hanuman. Up till now they have ten films to their credit. Though the demand is rising but the industry is facing lack of talented professionals for this field and therefore is opting for reverse outsourcing.

India is looking to outsource their production work to countries such as Malaysia, Philippines and Taiwan since the country is facing dearth of talented professionals. India has been able to attract work from other countries but the lack of talent in the country is acting as the biggest roadblock and if this weakness is countered the animation industry might be churning comparable number of movies to Bollywood.

Via hindu

Its not just employees but even students who now fear outsourcing. The number of students enrolling for IT courses has been declining since they fear that may end up either losing their job or may never find a job in the IT industry which has increased dependence on outsourcing. This has caused various IT departments across colleges in US to come up with an image building exercise and they are trying to convince students that there is a shortage of IT professionals in the country and in no way they would have to suffer if they opt for IT.

A number of colleges are trying to promote the field of IT and clear the various misconceptions which have cropped up in the minds of youngsters due to outsourcing. University of South Florida IT department is trying to attract students by offering technology based movie nights coupled with free popcorns. It hopes that it will be able clear the misconceptions in the minds of the students. It looks that the government would need to step in with a brand building exercise or its pool of IT talent may keep on shrinking hence leading to increased dependence on other countries.

Via zdnet

Baseball is one of the most favorite games among the Americans and when this game comes to your mind you cannot forget names such as Frank Robinson, Lou Brock, Joe Black and Monte Irvin to name a few. In the 2007 basketball season there were a few African Americans on the playing field and now you see a mix of people from various ethnicities comprising of Asians, Latinos and of course whites.

Outsourcing has struck baseball too and now major league baseball are setting up their training camps in Latin America since it becomes easier and cheaper to find out and sign up budding talent. Some experts say that baseball is now outsourcing Black talent. Latin athletes are dying to make it to baseball and players from countries such as Colombia, Dominican Republic and Cuba want to make into this sport.

I never thought that outsourcing would reach the field of sports too and with it making a mark in baseball the day is not far off when we will see other popular sports too taking the route of outsourcing.

Via thesop

With the need to bring websites among top ranks in a search engine webmasters have been using search engine optimization or SEO to achieve the same but since this work requires lot of efforts therefore now they are outsourcing this work in order to improve upon their search engine ranking. By outsourcing SEO to a third party it relieves you of the pressure for bringing your site among the top ranks and since these are specialized companies therefore you can be sure of some good rankings for your websites.

These companies have specialization in the area of SEO and can help you in getting a better Google page rank which everybody dies for. Though its is emerging a good option but fingers are being pointed at the techniques being used by these companies for improving the rankings of the websites and it is being said that this could be harmful in the long run for the existence of the site. Also you might lose control over your website therefore discuss all the terms clearly with your SEO company before handing over the job to them since its you who might have to suffer in the long run if things go haywire.

Via market-day

Wen Jibao plans to visit Japan on a relation mending mission and this is also expected to give a further push to the already rising software outsourcing trade between the two countries. China has been handling more than sixty percent outsourcing business of Japan and since 2006 has become the biggest software outsourcing base for them. China has generated revenues worth $ 1.43 billion in 2006 and Japan was responsible for more than half of the revenues. Big Japanese names such as Mitsubishi, Hitachi, NEC and Sony are already utilizing the outsourcing services of China.

Japanese have preferred China over India for outsourcing since it is geographically closer and have a cultural background which matches to that of China. The visit of Chinese premier is being seen as a confidence building measure so that more Japanese are willing to establish business links with China and end the animosity which had prevailed over the past. It now looks that outsourcing will bring the two nations closer which up till now had not been getting along politically.

Via people

Asia is getting competition from South America in the arena of IT outsourcing. It is expected that Brazil would give a tough fight in IT outsourcing arena and remove its label of being a hub for automotive components. A latest report from Frost & Sullivan states that the IT infrastructure outsourcing market of Brazil will register a stupendous growth in the years to come. By 2012 the IT outsourcing industry of Brazil will garner revenues worth $3.3 billion. All this will be possible as a result of introduction of open communication networks coupled with opportunity for managing a number of networks remotely.

In the future IT outsourcers would have to fight for contracts as rising competition has increased the number of players in this arena with diversified portfolios. Now IT infrastructure outsourcing providers are in search of complete end-to-end outsourcing contracts in order to overcome price deflation in the market. Countries such as India and Philippines would surely have a tough time fighting Brazil in this arena.

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Via ihotdesk

U.S airlines are increasing their dependence on outsourced and overseas plane maintenance shops and this resulted in a lot of criticism but this action of airlines received support from the aviation regulators and they stated that due to this there had been a decline in the number of airplane crashes. Though outsourcing has increased over a period of time but it has brought down the rate of accidents. Now airlines don’t have to bother themselves for aviation safety since there are outsourced companies to do that job.

As per FAA statistics:

Major carriers’ maintenance costs performed by outside companies have risen from 38 percent a decade ago to 64 percent in the first three quarters of last year, according to the inspector general’s report. Over the same period, the number of fatal crashes for every 10 million flights dropped from 6 to 2.

It is being said that the maintenance related safety record of the U.S airline industry is the best which has been seen and we can safely conclude that outsourcing can be really beneficial for companies.

Via canadianbusiness

Up till now big Indian companies were major attraction for outsourcing but now smaller cities such as Vizag and Kochi are emerging as the next hot destinations for outsourcing. Some of the cities which have the potential to emerge as BPO hotspots are Hyderabad, Ahmedabad, Chennai, Kolkata, Kochi, Thiruvananthapuram, Pune, Visakhapatnam and Nagpur. What serves as major attraction for these cities are accessibility, population, education and companies who are already operating in these countries.

One of the main reasons behind this is the cost factor since bigger cities involve heavy expenses as compare to smaller cities and are more congested. The infrastructure costs are pretty low and even labor is available as lesser prices as compared to cities.

Same quality at half the cost is the reason why companies are shifting to smaller cities in India since outsourcing is more about saving costs.

Via domain-b