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Skyline Business School |
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Skyline Business School |
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Issue:10
HP Leaps into Business Process Outsourcing
On its first foray into the business process-outsourcing world, Hewlett-Packard has
landed a plum contract with Procter & Gamble. The deal expands HP's existing
relationship with the consumer-goods conglomerate, which began last year with a US$3
billion, 10-year global I.T. outsourcing assignment. The expansion "is a very
important piece of business for us," HP spokesperson Brad Bass told NewsFactor.
"It is our first big BPO deal and an area in which we intend to focus more and
more." Also, it signifies that Procter & Gamble has been happy with the
relationship thus far, he noted. In this contract, HP will be
working on finance and administrative business processes.
BPO Supply and Demand
Companies tend to want to ease into a BPO relationship. "They might start
with finance and accounting or accounts payable to see how it goes," Gartner research analyst Lisa Stone says. Then they would expand
from that base. When shopping around for a BPO provider, companies "typically want
vendors that can provide more than just the services for which they have an immediate
need," she adds.
That said, there is not a great supply of providers to whom companies can outsource
enterprise-wide business processes. In fact, the original incarnation of the Procter &
Gamble mandate was supposed to be far more encompassing, Stone says. It covered a huge
number of business processes that stretched across multiple functional areas. "But no
provider was willing to sign up to do all of that. That is why P&G had to chop it into
pieces."
"HP's expertise in finance and accounting stems from its acquisition of Compaq
Computer and the consolidation of four disparate units into a shared service center,"
Stone explains. "By being HP's first external BPO client, P&G gets the advantage
of helping to shape the service."
Source: www.ciotoday.com
March 24th 2004
NIIT nominated for outsourcing award
Indian IT training and software major NIIT's Learning Business Process Outsourcing
solution for a US customer has been nominated for the prestigious Outsourcing Excellence
Awards, 2004, dubbed as the "Oscars of Outsourcing". According to sources in the
company here today, NIIT was the only company chosen for its e-Learning solution.
Knowledge Solutions Business creates learning content and learning delivery solutions for
publishers, education and training corporations, governments, Fortune 500 businesses, and
IT companies across the globe. NIIT and Gateway Inc. had jointly filed their entry for
outsourcing relationship. Gateway is one of America's most admired computer companies and
its products and services received more than 130 awards and honors last year. The
Outsourcing Excellence Awards is an annual programme sponsored by Outsourcing Center,
Everest Group, Forbes, and this year, Wharton Executive Education.
Source: www.sify.com/news
March 25th 2004
275000 jobs queue up for India, China
Global telecom companies to offshore 5% of jobs by 2008 to
save approximately $14.5 billion and improve quality of support service
The global telecommunications industry will shift 275,000 jobs countries like India and
China over the next four years to cut costs and enhance services, according to a recent
study by Deloitte and Touche. By the year 2008, global telecom operators will move 5
percent of their 5.5 million-person labor force to save $14.5 billion, improve the quality
of call center capabilities and offer better higher-speed Internet and mobile data
services. "For most companies, it's not a question of whether to offshore, but what
functions to offshore, and how," Deloitte & Touche's deputy managing director,
Phil Asmundson, said in a statement. "Additionally, operators with more experience
are reviewing what operations they should offshore next. The push for lower costs, and
better services and customer support is leading to the trend, Asmundson said. India is the
current destination of choice, but countries such as China, Estonia and Argentina are
coming online as well, Deloitte said. Benefits to the practice cited
in the survey include cost reduction of as much as 30 percent or more, enhanced high-speed
Internet and wireless data services, and accelerated time to market for such services as
multiple time zones allow teams to work around the clock, according to Deloitte.
Top processes being shipped overseas include information technology services, call
centers, accounting and finance, and operations and application service development,
Deloitte said.
Source: Reuters March 25th 2004
'Tap European Markets for Outsourcing Deals'
Indian business process outsourcing (BPO) firms have just touched the tip of the
iceberg of worldwide BPO market. And, they should tap huge business opportunities
available in the European market as well as local markets in India. This was stated by
Wipro Spectramind chairman and managing director Raman Roy while addressing a session on
BPO industry at Euro India 2004, organised jointly by the Confederation of Indian Industry
(CII) and the European Commission. According to National Association of Software and
Service Companies (Nasscom), the worldwide ITES-BPO market is estimated to be at around
$773 billion in 2002 and expected to grow to $1 trillion by 2006. However, India's
ITES-BPO industry is expected to touch only around $3.6 billion market in fiscal 2003-04.
Outsourcing is the need of the day as the business world is facing some realities in the
form of skill shortages, need to reduce costs and focus on core operations, technological
changes.
Source: www.financialexpress.com March 26th 2004
Reliance to set up domestic call center in Chennai
Reliance Infostreams, the BPO arm of the Reliance Group, is setting up a large call
center in Chennai to provide customer relationship management services to Reliance
Infocomm for all the four circles in the south. Reliance Infostreams has taken on
long-term lease of a one-lakh sqft property in the city for establishing the domestic call
centre with a capacity of 800-1,000 seats. This facility will be a 24/7 centre handling
primarily customer calls of Reliance Infocomm in Tamil Nadu, Andhra Pradesh, Karnataka and
Kerala. The center is expected to commence operations by June-July 2004. The BPO arm is in
the process of creating a team of 1,000-1,200 professionals for the new facility, which
requires people well versed in regional languages as well. Reliance Infostream's portfolio
of services includes customer acquisition, customer service, retention and life cycle
management by providing multimedia and multi-language based, inbound and outbound customer
support through various customer touch points like phone, fax, email and letters.
Source: Times News Network March 26th 2004
IBM clinches Bharti outsourcing deal
Bharti has awarded a 10-year IT management deal worth $700-750m to IBM. Pegged as
one of the largest deals in the domestic IT market, the figure for the first five years is
estimated to be in the range of $250-275m, and for the 10-year period, the total deal is
likely to be in the range of $700-750m, according to terms agreed upon between Bharti and
IBM. In addition, Bharti would transfer about 200 employees to IBM. The deal involves
Bharti outsourcing its hardware, software and IT service requirements to IBM. This
includes IT applications, including billing, customer relations management and data
warehousing. IBM will also consolidate Bharti's data centers, IT help desks and enhance
its disaster recovery capabilities.
IBM India has also identified Bharti Televentures as a preferred supplier of telecom
services like bandwidth, satellite connectivity, last mile wireless and wireline access
and national and international long-distance communication solutions.
Source: www.economictimes.com March 26th 2004
US kids spooked by outsourcing
Fearing job losses due to outsourcing, undergraduates in the US have begun to
abandon their studies in computer technology and engineering, says a new study. Conducted
by the Washington-based Computing Research Association, the study will be published in
May. It shows there is a dramatic drop-off in the enrolment of the two subjects - 19% -
even as some educators warn about the potential consequences for America's global
competitiveness. The Computing Research Association's annual survey says the number of
undergraduates enrolled showed a fall from 94,461 to 76,844. Microsoft chairman Bill Gates
went on a tour of major university campuses last month to encourage students to stick to
their studies despite the exodus of computer-industry jobs overseas.
Source: IANS March 29th 2004
Outsourcing joins the MBA curriculum
20 odd MBA students from the Indiana University's Kelley School of Business are
spending their spring break this year traveling around India. It is required under their
MBA program to spend 10 days learning about outsourcing from local and global firms in
cities like Bangalore, New Delhi and Mumbai. "outsourcing is a subject we need to
know about if we want to be competitive in future," said Elissa Dvorak who has just
finished an eight-week course in outsourcing that she was required to take before the
trip. Other business schools besides Indiana are offering courses or other instruction in
offshore outsourcing, and students are signing up in an effort to add to their managerial
tool kits. Bentley has just began a course called "I.T. offshoring," to be
followed by a 14-day trip to India. At MIT's Sloan School of Management, two professors
Amar Gupta and Lester Thurow have added a course called "Offshoring" to the
spring curriculum. University of Chicago Graduate School of Business and the Stern School
of Business at New York University say they address outsourcing when necessary in classes
about international economics.
Source: The Times of India March 29th 2004
Capital One ends deal with Spectramind
US based Fortune 500 company Capital One Financial Services has discontinued the
use of Wipro Spectramind's telemarketing servicing, citing slips in the quality of service
rendered by the Indian call center. It has emerged that the Indian workers has misled the
US credit card company's customers with unauthorized offers of credit. Wipro Spectramind
discovered the offers in a routine inspection and disclosed the evidence to Captial One,
which promptly decided not to renew its telemarketing based contract with the Spectramind.
Raman Roy, president and CEO of Wipro Spectramind confirmed that Capital One had
discontinued the use of his company's services. At its peak at the turn of the year, 600
staff at Wipro Spectramind worked on the Capital One contract.
Source: Financial Times London March 25th
2004 and Business Standard March 24th 2004
Prepared by - Abhimanyu Puri,
BBA-MAHE-L1-S2
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URL: http://www.skylinecollege.com
