The offshore captive center was once the Holy Grail of offshore outsourcing. As companies got a taste of the cost savings possible by outsourcing IT and business process work to lower cost countries, they began to salivate over the thought of bypassing the offshore vendors (and their pesky profit margins) altogether and saving even more money by setting up their own service shops in India.
China may be rising as an offshoring destination, but many companies are outsourcing to multiple countries rather than just choosing between China and India.
Outsourcing experts, IT analysts (and optimistic vendors) are predicting an increase in IT services deals during the second half of 2009. They foresee an uptick in outsourcing driven by enterprises looking to increase IT efficiency and cut costs.
There has been much discussion about the global economic recession's impact on the price of IT outsourcing services. The consensus has been that buyers keen to cut costs coupled with decreasing demand for IT services would drive prices down across the outsourcing market -welcome news for IT executives under pressure to slash their budgets while maintaining quality.
Once upon a time, IT service providers demanded exclusivity from customers. As those early outsourcing deals wore on, clients grew weary of being locked in to a "one and only" provider. To keep their customers happy, outsourcing vendors began offering minimum volume and revenue commitment clauses, which gave customers some room to breathe while insuring a certain level of return for IT service suppliers.
Chinese outsourcer Neusoft is pushing to expand in Europe and the U.S. ahead of an upswing in outsourcing the firm expects after the global recession.
Nortel Networks has set up a Global Network Operations Center (GNOC) in Bangalore, to help remotely manage and support the networks of its carrier and enterprise customers in Asia, Europe, North and South America.
In the wake of events such as the admission of fraud by Satyam's CEO and recent terrorist attacks, sourcing professionals have been forced to consider whether they really enjoy the protections they thought they had already established contractually with their providers.
Singtel-owned telco Optus is provide telecommunications and managed networks service to the ANZ bank under a new $500 million, five year contract.
Reward good behavior and punish poor performance. Sounds like a commonsense approach to achieving results. And if that tactic works in the chaos of the kindergarten classroom, it seemingly couldn't hurt in achieving desired outcomes when outsourcing.
It's been 12 hours since your last bite to eat. Your stomach growls angrily as you meet the host who will take care of all your needs while you prepare to sign a big contract with his company. He takes you out to dinner at a nice restaurant--please tell me you didn't just order a steak!
Since Slumdog Millionaire took home eight Oscars earlier this year--inspiring increased interest in many things Indian--2009 has been dubbed by some as "the year of India." But, in terms of IT services, it probably won't be the year of India Inc.
Retaining strategically important IT staff in a recession can provide an organisation with competitive advantage. Outsourcing selectively now is a good option, but retaining in house project management skills is the key for IT leaders when the economic climate improves.
When Cisco celebrated the fifth anniversary of its New England Development Center last year - a ceremony attended by Massachusetts Congresswoman Niki Tsongas and a representative from Gov. Deval Patrick’s office - the company was quietly preparing to move several jobs from there and other locations to contractors in India and elsewhere, mostly in the company's Network Management Technology Group (NMTG).
If you have an outsourcing contract for work in Bogota, Colombia, Bangkok, Thailand, or Johannesburg, South Africa, you should be aware that they rank as the riskiest offshore outsourcing destinations in the world. Locations in India and Brazil also made this inauspicious list. Where do you outsource?