Planet Outsourcing

Philippines is catching up with India in the outsourcing arena and since it has a vast pool of English speaking population along with a cultural affinity with United States. This has enabled Philippines to emerge as the second strongest contender in the field of outsourcing just after India. Some time ago the country was facing difficult in selling itself as an outsourcing destination but now it does not need any introduction.

Now a number of clients are flocking Philippines to set up their business. Even a number of Indian firms are moving some of their operations to Philippines. A number of companies from Unites States have already set up their shops in Philippines.

The President of India’s software and service industry group, Kiran Karnik stated that for some businesses Philippines was a good choice since it had strong cultural ties with U.S. Is India losing out on its business to Philippines? It seems so and it needs to figure out why this shift is happening and the steps it should take to prevent out on losing its business before it’s too late.

Via zeenews

UK has seen a significant jump in the number of product recalls and this is being linked to outsourcing to developing countries. Experts say that since most of the manufacturing is being outsourced to China and other nations it is becoming quite difficult to maintain control over quality.

The trade associations of US and Europe have taken a serious note of this issue and they are condemning the regulatory authorities for poorly regulating the foreign active pharmaceutical ingredient manufacturers. The pharma industry has taken the biggest hit in this regard.

As a result the credibility of the companies are taking the toll and with the market being highly completive they risk losing their customers and even their brand image could be hit badly. I believe the outsourcing companies should pull up their socks or risk losing their business as no company would like to sell products which start affecting their markets.

Via drugresearcher

The trend is changing in the field of outsourcing. The time of mega deals seems to have ended and they are being replaced by smaller deals. The reason being attributed is that the outsourcing market has matured. The verdict is that mega deals seem to have taken a hit and now smaller deals are in vogue having duration of around two years now.

This does not mean that outsourcing is losing its charm but now companies are less committed to enter into long term deals. The new mantra in the outsourcing industry is flexibility. Probably outsourcing has taken a blow on the issues of security and data privacy and this could be one of the reasons that companies are now less committed for mega deals. Let’s hope that the outsourcing industry strengthens itself in the areas mentioned above and reverses this trend.

Via playfuls

The construction industry is suffering at the hands of outsourcing as engineering jobs are getting outsourced. Important construction jobs overseas are being outsourced since it is cheaper to get engineering projects in China which is causing trouble for a lot of companies.

A lot of efforts would be required by property managers, building owners and contractors to find out why the particular industry is suffering. Companies are looking forward to sacrifice their highly skilled workers in order to save on money by contracting out to smaller firms.

Though it might not lead to shortage of labor but it is surely expected to cause productivity problems for sure since nowadays everybody is looking for cheaper and better work but at the end of the day the construction industry will bear the brunt.

Via businessledger

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