♦  Outsourcing Research

Offshoring

Offshoring extends the potential of the standard outsourcing model to add value through specialisation, addressing further needs such as access to round-the-clock services via use of time zone differences, saving cost, and having a delivery presence in regional markets globally without repeated infrastructure cost within end-user companies. Establishing offshore delivery capability within an end-user organisation itself (rather than outsourcing the responsibility) can involve language and cross-cultural recruitment issues that divert resources from working on what really makes the business tick, whereas an outsourcing provider can not only set up and manage the deployment, but assume all the risks of training, resource availability, and arrangements of travel and visas, that are required to maintain an ongoing offshore capability.

Managed Services are generally technical in nature, and so tend to be less language-dependent than some services in the outsourcing market. Although this reduces the potential problems that might be experienced in remote delivery of Managed Services from an offshore location, cultural differences can still get in the way of doing business, and any difficulties that do persist can still come through in dayto- day interaction as part of Managed Services. However, these matters are never insurmountable, and generally Butler Group believes that most types of Managed Services are suitable for offshore delivery.

from Managed Services - How Managed Services Can Help IT Departments Deliver Greater Value and Flexibility (BG-0040)

Contact Center Outsourcing in Mexico

The large call centers in Mexico are equipped with the most advanced hardware and software technologies. Outsourcing service providers will continue to incorporate new technologies to increase their efficiency and services for customer support and sales promotion. For example, American Express, operate an in-house call center in Mexico and offers local and international services. However, rather than investing heavily in new call center infrastructure they are contracting with outsourcing service providers.

Existing call centers have focused their investments in maintaining their technological edge, but not in expanding their operations or establishing new call centers. An explanation given by analysts in the sector indicates that some of these companies are considering relocating to other Latin American countries that offer more cost-effective alternatives, especially labor cost savings. To date, all outsourcing call centers that are established in Mexico maintain their operations in the country and have not migrated. Qualfon, a leading local service provider is an exception, with additional centers in Argentina, Costa Rica, Guyana and the Philippines.

from Mexico Executive Call Center Report 2007: A Bilingual Oasis (ZA-4804)

Indian Outsourcing Industry

The Indian IT export industry consists of approximately 3,300 companies exporting to 150 countries.

The industry has a pyramid structure, with a select number of companies having revenues above one billion USD. However, the sector is maturing and the number of companies with revenues exceeding 100 million USD is rapidly increasing.

The industry can be broadly divided into five different groups: Tier 1 vendors (45% of IT services exports revenue), Tier 2 vendors (25% of IT services exports revenue), offshore operations/global IT majors (10-15% of IT services export revenue), and others dedicated to BPO operations.

India’s IT services exports grew by over 33 percent in FY 2005-2006 with revenues of US$17.7 billion. This growth was led by a strong demand for traditional services like Application Development and Maintenance (ADM), new services such as Enterprise Application Integration (EAI) and package implementation, and new areas such as engineering services. The industry has been able to maintain growth, through large client contract successes, cross-border mergers and acquisitions, and the movement of the industry towards a stable pricing model. Some of the elite IT Software and Service exporters in India (excluding ITES-BPO revenues) in FY 2005-2006 are Tata Consulting Services (TCS), having retained its lead and followed by Wipro, Infosys, Satyam and HCL Technologies respectively.

from India IT Services Executive Report 2007: Depth and Completeness (ZA-4805)

Infrastructure Outsourcing and Managed Services

The increasing alignment of the network to business operations will ensure that the networking services market will remain healthy in the coming years. The network is now viewed as a revenue generating stream, indicating that continued investments will be made to ensure flexible, agile networks that can react to and support business change. Managed and outsourced network services have been evolving to encompass other important infrastructure elements. As more intelligence is built into enterprise networks, so the logic of hosting enterprise applications and data becomes more compelling and Datamonitor foresees more offerings from services providers that contain both networking and hosting services.

There are number of factors dictating enterprises’ decision to engage in third-party networking services. Among others the demand for managed and outsourced networking services may stem from a need to reduce complexity, an inability to undertake complex integration, the fact that IT is seen as business critical and an attempt to achieve competitive differentiation, as well as a desire to focus on core competencies. In addition, enterprises are looking for third parties that can help them to keep up with changing business dynamics, relating to areas such as mergers & acquisitions and changing partner/supplier ecosystems.

from Infrastructure Outsourcing and Managed Services (Market Focus) (DB-1470)