Accenture Should Lead Near-Shore Trend

At a Senate roll call on Tuesday, all forty Republican senators, joined by four Democrats and one independent, voted against advancing to a full debate on legislation that proposed tax benefits to companies that did not outsource jobs and brought jobs back to the United States. Fifty-three senators voted in favor of advancing the proposed bill and 45 against; 60 votes were need for it to advance. While many had been expecting this outcome, outsourcing companies were still waiting anxiously for the result. Meanwhile, the global consulting and outsourcing giant Accenture (NYSE:ACN) continued to deliver a performance far exceeding market expectations. >>>

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Outsourcing: Peter Harrison, CEO Of GlobalLogic (Part 1)

By guest author Tony Scott

Introduction and Background to GlobalLogic

I recently had a conversation with Peter Harrison, the CEO of GlobalLogic.  GlobalLogic provides research and development (R&D) services for software products through their team of over 3,000 software engineers based in the U.S., India, China, Ukraine, and Argentina. Their value proposition is to work as a collaborative partner with their clients on both context and core product engineering through a range of R&D services, including advisory, customer research, ideation, product engineering, QA/IVT, support and maintenance, and product line management. The company has ongoing partnerships with more than 150 clients in markets such as digital media, electronics, finance, healthcare, infrastructure, retail, and telecom. GlobalLogic’s investors include New Enterprise Associates, Sequoia Capital, Goldman Sachs, and Draper Atlantic/New Atlantic Ventures.

My discussion with Peter touched on how the technology and outsourcing industries are changing; his perspectives on perceived wage inflation in emerging economies; and his insights on the challenges of building a global organization with a consistent culture that encourages innovation. >>>

In Its Haste to Gouge India, Congress Neglects To Consider The TN Visa

By guest author Kirk Laughlin

[Writer and video correspondent Kirk Laughlin is the newest contributor to my blog’s coverage of outsourcing, onshoring, and ways to create jobs and opportunities for people in the United States, India, and elsewhere. Kirk’s article, originally published on Nearshore Americas, explains why he thinks Senator Charles Schumer’s proposed immigration bill will fail to protect U.S. jobs, which is ostensibly its purpose. To get a sense of my thoughts on the many-sided debate over outsourcing and immigration, I encourage you to take a look at the recommended readings below. Tony Scott’s interviews, most recently with Sierra Atlantic’s Raju Reddy, add another dimension to the online discussion.] >>>

Outsourcing: Raju Reddy, Chairman And CEO Of Sierra Atlantic (Part 1)

By guest author Tony Scott

From Intel to Outsourcing

Tony Scott: Before we talk about where you are today, can you tell me a little about how you came to found Sierra Atlantic?

Raju Reddy: Sure. I spent about ten years at Intel in a variety of engineering and marketing management roles before I started Sierra Atlantic.  My background is engineering, and I later moved into marketing. I helped to start marketing programs for the first generation of Pentium processors. >>>

Outsourcing: Vivek Chopra of Computer Sciences Corp. (Part 1)

By guest author Tony Scott

I recently interviewed Vivek Chopra, one of the early employees of Wipro, former head of IBM’s Daksh services business in India, and now president of CSC’s India operations. Vivek has a long and deep history in the IT industry in India and in the global outsourcing and off-shoring arena. His insights into how this market has evolved and is still evolving are fascinating. >>>

Outsourcing: Tata Communications Interview (Part 1)

By guest author Tony Scott

Introduction and History

So, after reading a few of my previous interviews, do you still think that “outsourcing” is just about labor arbitrage of low-level tasks?

I recently interviewed David Wert, global head of managed services at Tata Communications, and Niraj Sridhar, who leads Tata Communications Transformation Services (TCTS). They provide outsourced network and communications infrastructure services to global telecommunications companies and global enterprises such as Microsoft, Google, and Yahoo! – definitely not “low-level” activities to “basic industries.” The question is: Why do sophisticated, well-established companies at the cutting edge of technology choose to use companies like Tata Communications to handle very complex technological tasks? >>>

Accenture Can Be Near-Shore Leader

After five successive quarters of revenue declines, Accenture’s (NYSE:ACN) Q3 revenues finally grew, by 8% over the year to $5.57 billion to exceed the market’s projected revenues of $5.46 billion. On a constant currency basis, revenues grew 4% over the year. EPS for the quarter of $0.73 was significantly higher than the market’s expected $0.69. >>>

Outsourcing: Persistent Systems Interview (Part 1)

By guest author Tony Scott

Company Introduction and History

I recently interviewed Dr. Anand Deshpande, the founder and CEO of Persistent Systems. Persistent, based in Pune, India, has the tag line “Partners in Innovation.” Persistent believes that its outsourced software product development services allow its customers to minimize time-to-market, improve the quality of their products, reduce the risk of failure during the engineering development process, and improve the predictability and reliability of the engineering process. By outsourcing portions of the development process, Persistent allows customers to focus on their core competencies while helping them to minimize overall product engineering costs.

Persistent went public on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) on April 6, 2010. Its offering in the outsourcing world is far more advanced than what most people perceive outsourcing to be about. Persistent provides the potential for companies to focus on their real core competencies and is one of the real opportunities to create value through outsourcing high-level but non-core activities. >>>

Deal Radar 2010: Rural America OnShore Sourcing ,Ohio,Kentucky

Rural America OnShore Sourcing, Inc. (Rural America) is a U.S.-based onshoring company. Through its offices in Ohio, Kentucky, and Wisconsin, it provides the same outsourcing services performed by offshoring companies, except it uses professionals based in rural parts of America instead of overseas, hiring these professionals for 25% to 40% less than the cost of U.S urban labor. The goal is to offer clients the advantages of using U.S.-based labor while reaping the cost benefits equivalent to offshoring. >>>

Indian Outsourcers Should Look At Rural Talent

According to recent Forrester research, technology spending in the United States is expected to grow 8.4% in 2010 and global market IT spending is projected to rise 7.7%. But, while IT spending may be better, the $60 billion Indian IT industry has a tough challenge in maintaining margins. The sector earns the majority of its revenues from the United States, and with the rupee growing stronger against the dollar, margins are being hurt. The Indian rupee appreciated 4% over the dollar in the quarter ended March after registering a 5% gain in the previous year. Additionally, with the job market opening up, players are resorting to double-digit salary increases to retain offshore staff and are taking a hit on their margins; the increasing costs are making traditional outsourcing a less attractive alternative. As I wrote in my Forbes column today, Indian IT majors should look very seriously at rural and small-town outsourcing, and soon.
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Outsourcing: West Corporation Interview (Part 1)

The Future of Call Centers

Last week I talked about the double-edged sword facing outsourcing companies that are playing a pure labor arbitrage game because of lower cost of communications and the potential to virtualize call centers. This week I’d like to share with you some of my interview with several senior executives from a company that has taken advantage of the opportunity to virtualize call centers – West Corporation. >>>

Is Outsourcing Dying Or Thriving? (Part 1)

By guest author Tony Scott

Almost exactly two years ago, Sramana Mitra wrote an article titled “The Death of Indian Outsourcing.” That article created quite a bit of controversy and stimulated a lot of conversation. Companies providing outsourcing services, companies using outsourcing services, and people in general in the United States and India often had a reflexive and somewhat knee-jerk reaction to her article (or at least its title) based on their personal biases for or against the entire concept of outsourcing. >>>

Deal Radar 2010: Fieldglass

Deal Radar continues its coverage of the changing labor landscape with Fieldglass, which provides a SaaS platform, InSite, that helps global 2000 corporations acquire and manage contingent or contract workers, outsourced services, and direct hires so that firms can better understand and use their workforces. >>>

Infosys Moves Beyond Body Shopping

In a recent discussion of Accenture, I talked about the recovery in the IT services and consulting space, which was driven by small and medium-sized deals in application maintenance and development, infrastructure outsourcing, risk management, data analytics, cost cutting, and business process outsourcing (BPO). The recovery seems to continue, judging from recent results. On January 14, SAP announced that it beat its revenues and margins forecast for 2009, signaling a recovery in demand. In December, Oracle reported a strong second quarter and gave guidance that exceeded expectations. With positive announcements by SAP and Oracle, there is increasing confidence among IT services companies on the pickup in discretionary spending. >>>

Indian Outsourcers: Cognizant Leads The Brigade

The $60 billion Indian IT industry is optimistic about the economic recovery, and the players have not only improved on their quarterly performance, but are also raising their outlook for the coming quarters. Analysts suggest that the recession in the United States has bottomed out and recovery is expected in 2010, which should translate to an outsourcing market growth of 4%-5%. Personally, I am somewhat skeptical about the recovery because the unemployment number sits at more than 30 million, which means that we’re having a jobless recovery of sorts, and this is very fragile. Nonetheless, prices and volumes are stabilizing for the outsourcing industry, resulting in revenue growth. Further, it looks as though the focus on operational efficiency parameters, especially utilization improvement, has enabled big players to improve margins despite the strengthening Indian rupee. >>>