From:	Baroni Limited [Baroni-Limited@tiscali.it]
Sent:	04 June 2008 08:48
Subject:	Baroni Limited - Offshoring Newsletter' - 07/08

Baroni Limited:
Outsource or not?:  Is it right for you. If so what, how, and with whom, and where.  Baroni Limited can help you make these decisions, deliver the proposition and help maintain it through life cycle.
For existing users of BPO and Outsourcing, Baroni can assist with benchmarking vendors, reviewing contracts, best practice and Right Sourcing. Skills based employment.

Gartner: Top 30 offshore locations for 2008
In 2008, Gartner predicts offshore spending to grow 60% in Europe, and 40% in the US. Gartner analysed 30 countries in three world regions that could address enterprise companies' outsourcing needs and assessed their suitability for offshore locations. The research firm released the data at its Outsourcing & Vendor Management Summit it is hosting in Washington, D.C., this week. Ian Marriott, research vice-president at Gartner says 'The aim of the study was not to rank each country, as every organisation will have a different view of which factors are the most important for their needs, but rather help sourcing managers determine which locations are right for their organisations,'.
Many organisations that choose to move IT services to lower-cost countries are daunted by the task of determining which country or countries would best host their operations. The location selection is a key factor companies need to consider when thinking of sending work overseas, Gartner says, and the city they choose will impact the success of the offshore engagement. 'Whether you have a country-led or vendor-led approach to offshore services, you must understand the offshore location landscape,' according to a presentation by Gartner research vice president Ian Marriott.
Considering 10 key criteria, Gartner scored the potential of numerous cities to provide the right mix of English language proficiency, local government support, infrastructure and technical considerations such as data security and privacy.
Gartner indicated Argentina, Brazil, Canada, Chile, Costa Rica, Mexico and Uruguay as the key locations within the Americas. In the Asia/Pacific region, Gartner listed Australia, China, India, Malaysia, New Zealand, Pakistan, Philippines, Singapore, Sri Lanka and Vietnam. In Europe, the Middle East and Africa, Gartner selected Czech Republic, Hungary, Ireland, Israel, Northern Ireland, Poland, Romania, Russia, Slovakia, South Africa, Spain, Turkey and Ukraine.
'While these 30 countries demonstrated their suitability to develop or enhance their offshore service credentials, another 35 countries were also considered,' said Marriott. These countries have exhibited initial activities to establish an environment that would be considered attractive for companies considering their own investments in a lower-cost country, or have external service providers located there that are beginning to sell services beyond their domestic market. However, they failed to make it into the top 30.
The 10 criteria Gartner used to rate countries ranged from language proficiency and availability, including written and verbal competency, to the local government support of offshore business to the potential labour pool available in the country. The infrastructure of the country including roads, rail service, air travel and ports into and around the country is also a key consideration, and the quality of the country's educational systems were also considered in Gartner's evaluation.
Costs of labour and other compensation, real estate and other considerations such as labour rate should be considered, as well as the political and economical environment, Gartner says. Companies considering offshore services must also consider cultural compatibility and the global and legal maturity of the country they choose to locate offshore services. And lastly, Gartner says data and intellectual property security and privacy must be considered from the effectiveness of legislation around data protection and privacy as well as the country's enforcement of such legislation.
'Determine which vendors are the right fit for your organization,' Marriott advises in his presentation. 'Don't just seek the leaders.'	

 	
 Top Stories	
 	
Gartner: IT services market to grow despite recession
Over half of IT companies (55%) surveyed by Gartner, for a report related to the conference, said their organisations will increase their IT spending on external service providers, such as outsourcers, in 2008, while only 10% will decrease it. # When it comes to outsourcing, 65% of respondents to the Gartner survey said managing the performance of their service providers was their 'most critical outsourcing management issue in 2008'. # The survey showed that 44% of respondents are considering changing their service providers and over half (58%) are considering changing or renegotiating their existing outsourcing contracts.
Unisys Study: Leading Organizations Move Beyond IT and Business Alignment to Drive Results
The study shows that leading organizations focus their priorities beyond cost-cutting, which is conventionally viewed as the primary business driver of IT best practices. They create service delivery models that employ a balanced mix of practices involving people, process and automation to execute, adjust and innovate in achieving multiple important business objectives. Leaders are also more likely to look outside the organization and draw from outsourcing partners to improve their best practices.
Barclays to set up captive BPO in India
British banking giant Barclays is setting up a 5,000-seat captive BPO unit in India, at a time when the global financial turmoil is forcing many companies to defer their outsourcing decisions. The bank, which sold its 50% stake in BPO firm Intelenet Global Services last year, had earlier asked the BPO firm to set up a 1,000-seat BPO facility under the build-operate-transfer (BOT) model. However, it has now decided to go on its own.
Lloyds TSB to offshore 450 IT jobs
Lloyds TSB will offshore up to 250 permanent and 200 contractor posts in the technical delivery department from the UK to India from June this year. A Lloyds TSB spokesman said: 'This is not done for cost savings, it is about making sure our IT service delivers the best. Group IT is the backbone of the business and we need to deliver a service that is second to none.'
AstraZeneca simplifies outsourcing rules
AstraZeneca has outsourcing contracts with a range of providers including BT, Cognizant and IBM across 61 centres globally. The company's CIO Richard Williams speaking at the FT Global Outsourcing and Offshoring Conference, said the company has set detailed objectives for its £680m, seven-year global outsourcing agreement with IBM, but leaves it to the provider to decide how to reach them, focusing on monitoring outcomes rather than processes. He said this approach had simplified the outsourcing process by reducing numbers of SLAs from 'thousands to hundreds'.
City bank outsources IT to Capgemini
As part of the deal, the 336-year-old London-based bank will see its main IT hardware taken out of its Fleet Street headquarters and relocated at a Capgemini data centre elsewhere in the UK.
Brandon's Coca-Cola Back Office Looking At Outsourcing Jobs
Overall, Coca-Cola Enterprises employs about 2,400 people in the Bay area. Its Brandon back-office centre, known as a 'shared services' centre, has 1,100 employees. They perform many of Coca-Cola Enterprises' back-office finance functions. Coca-Cola Enterprises, is considering outsourcing some its work force, among other options, the company said.	
 	
 Service Provider News	
 	
Indian IT services sector grows 18% in '07, outperforms APAC
The Indian domestic IT Services market grew 18% in 2007 clearly outperforming overall Asia/Pacific IT Services growth rate, according to a report by Gartner. Worldwide IT services revenue totalled $748bn in 2007, a 10.5% increase from 2006 revenue of $677bn. 
HP to buy EDS for $13.9bn
Hewlett-Packard (HP) will buy the US-based Electronic Data Systems (EDS) by paying $13.90bn, or $25 a share. Mphasis, which provides information technology solutions and business process outsourcing, is 61% owned by EDS. The Plano, Texas-based company (including MphasiS) employs more than 27,000, whereas HP India has an employee base exceeding 29,000. The acquisition was approved by the boards of the two companies.
Firstsource, India's Bharati Airtel in 3-yr outsourcing partnership
India's largest private telecom services provider Bharti Airtel Ltd. said it has signed a three-year outsourcing agreement with Firstsource Solutions Ltd. Firstsource will provide a suite of BPO services covering both voice and back-office in areas such as customer accounting, VAS provisioning, fraud and credit monitoring, a press release issued stated.
Big 5 Indian IT firms garner major market share during slowdown
When IT budgets are generous, small IT service providers gain. But during a slowdown, customers prefer to stick to the top five Indian IT service providers and cut down business to smaller vendors, a study of the quarterly results of 100 Indian IT firms seems to indicate. For the fourth quarter of FY08, the big five increased their share in total software revenues compared to the corresponding quarter of the previous year. However, this expansion came at a cost of lower profitability. The big five includes TCS, Infosys Technologies, Wipro, Satyam Computer Services and HCL Technologies, all of which are listed on the Indian bourses. The sample doesn't include Cognizant Technolgy Solutions, which is bigger than Satyam in terms of annual revenue.
HR outsourcing provider Capita to double India workforce in 2008
HR outsourcing provider Capita plans to double the number of people it employs in India by the end of 2008, according to its annual corporate responsibility report.
Convergys Philippines to hire 7,000 more employees
Convergys Philippines will open the facilities — three in Metro Manila, one in Laguna and another in Cebu City — and will create 3,995 more seats for 7,000 new employees within the next 12 to 18 months.
Kenexa opens $10m India centre
Kenexa Corp., an American firm that specializes in helping other companies attract and retain employees, has expanded its footprint in India with the recent opening of a new $10M software-development centre in the eastern Indian port city of Visakhapatnam.
MindTree acquires over 14 pc in Aztecsoft
IT research and development firm MindTree said it has acquired over 14% stake in Aztecsoft through market purchase transaction route for Rs 52.75 crore, ahead of its open offer for acquiring 20% stake
Tech Mahindra reports Q4 loss on exclusivity payment
Tech Mahindra Ltd, joint venture between Indian auto major Mahindra & Mahindra and the BT group, posted a loss of 2.21bn rupees in the fourth quarter after it accounted for one-time expense of $109.9M (4.68bn rupees) as exclusivity payment to a customer. The telecom software firm did not disclose the customer's identity, but Vice Chairman Vineet Nayyar said the customer would help add significant revenue for the next few years.	

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