From:	Baroni Limited [Baroni-Limited@tiscali.it]
Sent:	18 October 2007 16:49
Subject:	Baroni Limited - Offshoring Newsletter' - 30/07

Sensitivity:	Confidential

NelsonHall Research Shows Global Recruitment Process Outsourcing Market Will Reach $7 Billion by 2010
NelsonHall latest research entitled 'Targeting Recruitment Process Outsourcing,' authored by Gary Bragar, HR Outsourcing Research Manager at NelsonHall found that although RPO is still in its early stages compared to more mature HRO services such as Payroll and Benefits Administration, it is one of the key and fastest growing services emerging in support of organizations' talent management requirements. Talent management is the top HR issue faced by organizations today; consequently, a need for improved speed and quality of talent acquisition is the major driver for companies looking to outsource to providers with recruitment expertise.
Global RPO is forecast to see average annual growth of 37% to become a $7 billion market by 2010. Though growth is being led by U.S.-based companies, the 'war for talent' is impacting organizations in both the developed world and in emerging regions such as India and demand for RPO is global with high growth being seen in all regions.
Bragar commented, 'If vendors do not already have global RPO delivery capability, it would be prudent to begin developing a global delivery strategy now, whether it is building that capability themselves, through acquisitions, or partnerships.'
Distinct findings revealed in NelsonHall's research report include:
-- Vendors need to be able to perform an integral role in the development, implementation and execution of their clients' Talent Management and Workforce Planning strategy.
-- Standalone RPO represents a much greater share of the market than does RPO provided as part of a multi-process HRO offering; it is also experiencing the highest growth rates.
-- Clients are increasingly looking for a variable cost structure to pay for services based on usage. Vendors need to be able to scale their workforce to meet demand for peaks and valleys.
-- Most current activity is in serving large companies. However, as the market is beginning to mature, increased demand is being seen from small and mid-sized companies.
-- Service providers should provide a service that includes an on-site presence: today, globally, just 31% of service providers work onsite but this proportion is expected to increase in conjunction with talent acquisition demand.
-- Most RPO services are provided from onshore multi-client delivery centres, but offshore delivery is seeing high growth, in particular for non-client facing work.
-- Service providers are partnering for access to technology and for support services such as assessments and background checks. They are also partnering with other recruiting providers, in particular where they do not have a geographic presence.
-- Acquisitions are common as service providers look to increase their geographical expansion and to improve recruiting capabilities.
The study utilizes a combination of user interviews and vendor research to address topics such as recruitment issues and challenges faced by user organizations, usage of RPO, and benefits and vendor selection criteria associated with RPO.	

 	
 Top Stories	
 	
Research reveals IT outsourcing and offshoring are taking competition to a new high
Key findings from the reports, titled 'Canadian Perspectives on ICT Outsourcing and Offshoring' and 'Canadian Information Systems Outsourcing/Network and Desktop Outsourcing Services,' announced by ICTC a not-for-profit sector council, funded in part by the Government of Canada include: - Canadian buyers have become more comfortable with the notion of offshore services, more educated on offshore services and more firms have adopted offshore services. - Canadian buyers only require an average cost savings of 33% to source a service from offshore - Current levels of outsourcing IT/business services show that almost 50% of Canadian companies report outsourcing some aspect of IT or business process - While traditional IT outsourcing is not diminishing in value, managed services are gaining traction and appeal to more than 50% of Canadian medium and large companies.
Credit Suisse sets up KPO in Pune
'We are setting up our first KPO at the centre of excellence here. We have four such centres but this is the first where we are setting up a KPO,' Credit Suisse global head of Centres of Excellence Nick Bloom, said. He added that they will expand the KPO, perhaps at the CoE in Wroclaw in Poland, which is CS’s own facility.
UK Insolvency Service signs £20m IBM transformation deal
The UK Insolvency Service has signed a £20m transformation contract with IBM to upgrade its legacy systems. The five-year deal involves transforming the IT environment of the agency which administers and investigates the affairs of bankrupt individuals, companies and partnerships.
JP Morgan to open Philippines back office
JP Morgan plans to build a back-office workforce of 5,000 in the Philippines over the next two years.  The bank will develop credit card and treasury services in the Philippines. Western investment banks including Citigroup, Deutsche Bank, Goldman Sachs, Credit Suisse and UBS run back-office functions from India. JP Morgan was the first to offshore staff to the country in 2001 and has more than 8,000 staff in Mumbai, nearly 5% of its 170,000 employees worldwide.
AXA Group and IBM Extend Services Agreement
AXA Tech, the technology arm of AXA Group, has embarked on a program to consolidate, standardize and automate its IT infrastructure to reduce operating costs and improve service quality for its customers. Under terms of the contract, IBM will provide on demand mainframe, server and storage services and consulting to help AXA Tech transform their data centre and processes. By utilizing an IT infrastructure with variable cost structures, AXA Group expects to achieve significant savings and respond more quickly to changing market conditions.
UK Department of Innovation, Universities and Skills signs up Fujitsu
The Department for Innovation, Universities and Skills has signed Fujitsu to migrate its IT infrastructure and support services to a shared service. The contract is the second to be signed under the public sector Flex framework.
Commerzbank will have its PCs maintained by HP in future
For the next five years Hewlett-Packard will, in addition to the complete e-mail traffic, be maintaining the bank's 33,000 workstations and approximately 12,000 printers worldwide – and be taking care of the services associated with them. Within the framework of the outsourcing deal 100 employees of the bank's IT department will switch to the service division of the PC manufacturer.
Citi asks Genpact to match Firstsource bid
Citigroup has asked Genpact to match the higher bid put in by Firstsource Solutions for its captive BPO operations. The two players were in the final round of the race for Citigroup’s BPO, Citigroup Global Services, that was put up for sale earlier this year. Genpact was tipped as the favourite, but in the final round, Firstsource bid higher than Genpact, sources close to the development said.	
 	
 Service Provider News	
 	
Business Objects Opens India Development Centre in Bangalore
Business Objects, a provider of Business Intelligence (BI) solutions, has opened its India Development Centre (IDC) in Bangalore. 'Our Bangalore site reinforces our focus on India and our commitment to tapping India's excellent intellectual capital,' said Keith Budge, Senior Vice President and General Manager, Asia Pacific and Japan, Business Objects. 'In addition, it extends our aim of operating on a truly global delivery scale both from a research and development (R&D) and a business perspective.'
Atos Origin wins application management deal from Dresdner Bank
Atos Origin announced that it has won a 7-year deal from Dresdner Bank in which Atos Origin will take over the maintenance and development of IT applications of the bank's private and business banking. Under the agreement, more than 200 IT experts will transfer to Atos Origin. The deal's value is in the lower three-digit Euro million region.
IBM and Orkla's Daughter Sapa in 500 Million Kroner Deal
IBM has won a 7-year, SEK 500 million ITO contract from Sapa Profiles to offer various IT services including infrastructure and application maintenance services to support 2,500 Sapa users. IBM will use its worldwide delivery capabilities including delivery centres in the Nordic region to provide these services
Electronic Data Systems Wins Contract From ArvinMeritor To Manage IS Environment
Electronic Data Systems Corp. (EDS) revealed that it has won a six-year contract from ArvinMeritor Inc. to manage the automotive supplier's United States and Canadian Information Systems infrastructure services.
Sirti wins €1bn outsourcing contract with Ferrovie dello Stato
Sirti has won a 6-year outsourcing contract worth €1bn from the Italian rail operator Ferrovie dello Stato (FS) to manage its IT infrastructure, network, and software development operations. According to the contract, Sirti will pay EUR 107.5 million to FS to acquire Tele Sistemi Ferroviari (TSF), which is the joint venture between FS and AlmavivA.
Zensar Wins $11M in Oracle Business
The company has won an Oracle e-Business Suite implementation for a leading electronic manufacturing services company. The company is also implementing an 11.5.10 EBS suite for a venture backed hi-tech airport security company on the East Coast.
Accenture, Wipro eye Dell’s non-US BPO business
IT services majors Accenture and Wipro have evinced interest in acquiring Dell’s captive BPO business outside of the US. The world’s second-largest PC maker has put its contact centres across India, Philippines, El Salvador and Canada on the block with a valuation estimated to be around $4 billion, multiple sources familiar with the situation said.
3i Infotech signs agreement to acquire US firm
In a move aimed at penetrating the BFSI segment in the US, IT major 3i Infotech on Monday announced the signing of an agreement to acquire American firm J&B Software Inc and its subsidiaries.	

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