Planet Outsourcing

This is one of the biggest questions on everybody’s lips - Has security outsourcing really arrived? Some of the big names in the outsourcing industry are claiming that it has arrived and they are supporting these claims with people, money and research. A recent study conducted by CompTIA states that security will be one of the major drivers in the managed services market and firewall and security are the two services which are among the top managed services which have been employed by various organizations.

Richard Rysiewicz, V.P, CompTIA stated:

While there’s still some skepticism out there — security was also cited as one of the top three factors keeping companies from engaging a managed service provider — there are some providers that have reached a kind of ‘trusted advisor’ status, and they are being engaged more and more frequently to deliver security services.

It is expected that companies are going to entrust their security to third parties but it needs to be seen whether these security outsourcing companies will be able to stand the test of times or not since security is a sensitive issue and any mistake can have serious repercussions.

Via darkreading

The Indian pharma companies are banking on global pharma outsourcing for future growth. Big names in Indian pharma industry such as Nicholas, Dr.Reddy’s are looking forward to leveraging their global strength in formulation services.

Companies such as Dr. Reddy’s are in the process of developing of active pharma ingredients and formulations for pharma companies worldwide. Novartis too has entered into an agreement with Genpact for outsourcing some of its processes. TCS too has landed up with an agreement with Novo Nordisk. As per an estimate the global pharma outsourcing is estimated to be around $35 billion and Asian companies are all set to get a bigger pie in this game.

It is expected that the share of India in the global outsourcing market is expected to cross the mark of $1billion from the current figures of $ 400 million.

Via indiaoutsourcewatch

There is some more encouraging news for the Indian outsourcing industry. Indian software companies have stated that they are in a very good position to get a bigger share in the aerospace market as aero plane manufacturers are looking forward to controlling their costs since competition is hotting up. Aerospace accounts for eight percent of the market and this figure is expected to reach $1.1 trillion by 2020.

M Ashok Kumar, Exec V.P, HCL states:

Aerospace as a vertical is being focused more than the others, especially by companies like ours whose core strength lies in engineering.

If we look at the current scenario then aerospace outsourcing has a very bright future and some say that in this sector sky is the limit. Indian outsourcing companies have been offering a number of services such as on-board electronics systems development, air traffic management, engine control and aircraft design. With the Indian offset policy requiring foreign airplane companies to spend a percentage of their Indian orders on buying services from local Indian companies the Indian outsourcing companies are expected to get a further boost.

Via economictimes

Russia is making big strides in the outsourcing market but this growth is facing roadblocks due to negative international perception about Russia. Though Russian IT services industry is growing at the rate of ten percent yearly and Russia has achieved the top ten positions in the near shore outsourcing locations list, experts are saying that companies are still fearful of sending the outsourcing work to Russia.

Ian Marriot, V.P, Research, Gartner said:

One of the biggest challenges is global public perception of Russia as a place to take work to. If you look at what companies are doing, they are saying they are happy to do business in Eastern Europe - but not Russia. That’s going to take years to break down.

On the other hand Russian deputy IT Minister Dmitry Milovantsev said in an interview that the scenario is changing and we are witnessing the rebirth of the Russian economy as an economy of high technologies even though they still cannot compete with low cost countries such as India and China. At the end of the day it is the Russian outsourcing industry which is suffering.

Via: businessweek

A number of small to medium sized businesses are looking to outsource their IT management processes in the future and it is expected that the integration of IT support in to SMEs would become a high growth area for IT outsourcers over a period of next five years.

Companies looking to offer IT support services would have to adapt their business models for meeting the expected influx of SMEs requiring outsourcing services. It is expected that private contractors would increase the implementation and support of IT management processes.

Andrew Parker, V.P, Forrester stated:

We’ll see stable operations farmed out to third parties, new IP sourced from open communities and solution brokers, emerging technologies going to market wrapped in process bundles and new software investments based on subscription rather than ownership.

Improved cost savings and greater efficiency is the reason behind SMEs turning to IT outsourcers besides offering expertise that professional IT support firms can offer.

Via ihotdesk

Finance and accounting outsourcing is rising in countries such as China, Sri Lanka, U.K and India. The capital of India, Delhi is emerging as an attractive alternative since it offers skilled workforce among all the major offshore destinations. Already a number of countries are operating out of Mumbai with a number of top names such as Citibank, Morgan Stanley, JP Morgan and WNS.

India is gaining ground due to a number of factors such as scalable talent pool, labor cost arbitrage, cultural compatibility, F & A process capabilities along with financial centers proximity.

After software outsourcing this is one area which is expected to bring lot of revenues for the country and also bring employment for the number of unemployed in the country. India certainly stands to gain from this area.

Via economictimes

Clinical research outsourcing is gaining steam but certainly not in India as it is suffering here due to infrastructure bottlenecks, lack of awareness and skilled people. This seems to be stunting the growth of clinical research outsourcing in India. The figures are pretty disturbing since just two hundred and fifty of the half million clinicians are trained in conducting trials.

A Ramamurthy, Chairman, Huclin Research said:

CRO is an integration of doctors, pharmacists and pharma companies. The demand is huge but the supply is low. General hospitals do not have adequate infrastructure to support the activity, thus causing a slump in the industry growth

Above all social activists are protesting clinical trials since they are against the idea of using Indians as guinea pigs and they are probably right. It seems that it will take a while before clinical research outsourcing catches up in India.

Via economictimes

Outsourcing has reached every department of a company and is serving their needs too. Now companies have even includes indirect procurement function to their outsourcing menu which includes functions such as repair and operating, maintenance and contract services. This has enabled companies to focus on their core competencies.

Companies are adopting indirect procurement outsourcing in order to focus on innovation, brand building and capabilities which will help them in achieving long term sustainable growth.

Companies are probably outsourcing almost of all their function because competition is getting tougher and if they have to survive then they need to cut their costs which would only be possible with the help of outsourcing and it will help them to achieve their targets.

Via industryweek

Costs are rising in India and realizing this Indian companies are looking for other low cost destinations in order to remain competitive. TCS which is one of India’s largest outsourcing companies has struck an outsourcing joint venture deal in China which also includes Microsoft as a minor partner.

The major stake is held by TCS followed by three Chinese companies. This joint venture will be addressing the needs of the Chinese domestic market and the global markets. Indian companies are entering China in order to not only service the domestic markets but also meet the requirements of neighboring markets such as Japan.

This step will not only benefit Indian companies but even the Chinese who also wants to lead in the software outsourcing market. Let’s see who emerges as a leader in this outsourcing race.

Via cio

The fourth quarter of 2006 was one of the worst for the outsourcing industry when compared to last five years in terms of value of outsourcing contracts. The value of the contracts was worth $78 billion. What caused this poor performance were shorter contracts of small value. This is not expected to cause a slowdown for the Indian outsourcing market since the Indian companies have made a name for itself in the outsourcing arena and with the size of the deals getting smaller Indian companies have been able to create value for themselves due to the availability of skill sets.

A number of Indian companies such as TCS, Infosys and Wipro have been gaining from single process and specialist deals and therefore have been eating into the market share of traditional service companies. As compared to 2002 India has garnered 7% of the market share which is quite good.

India is expected to emerge stronger over the next three to five years but competition is hotting from other Asian countries and Europe too therefore it needs to prepare itself for it well in advance.

Via financialexpress