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Skyline Business School |
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Skyline Business School |
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Issue:7
BPO, now for smart investments
Berg Wealth, a new BPO company that aims to service foreign investment banks, is
one of the newest entrants into the industry. With plans to offer technical analysis
services to investment banks, the primary target market is a bank abroad. The time
difference ensures Berg Wealth the opportunity to offer analysis of stocks each morning to
foreign investors. The company plans to begin work in the second week of March 2004 in
Bangalore, with a core team of 5 people. The company plans to scale this number up to 25
employees within the next six months. Investment banks usually employ people full time to
detailed stock analysis, which is the function Berg Wealth hopes to win contracts on. The
USP being: Berg shall provide detailed technical financial analyses while "their
clients sleep".
Source: www.ciol.com March 2nd 2004
IBM finalizing BPO deal with Procter & Gamble
Procter & Gamble is in final, exclusive negotiations to award IBM a business
process-outsourcing contract to provide human resources services to its employees. As part
of the contract, IBM would handle services such as compensation, payroll, employee
relocation and travel. No details about the duration or value of the contract were
provided. P&G has decided to outsource these business functions to reduce costs,
improve delivery and redirect resources to its core business, said P&G spokesman Damon
Jones. P&G estimated that around 700 of its employees will be transferred over to IBM,
although that figure needs to be finalized. Jones expected the contract to be signed
"in weeks".
Source: www.computerweekly.com
March 3rd 2004
BPO: Keeping a low profile may help
In an interview with The Economic Times, Richard Garnick, Chief Executive-Americas,
Wipro Technologies talks about the recent outsourcing backlash and its outcomes, future
growth trends and thrust areas.
Outsourcing shall from now
be natural. Nearly 30% of the organisations expenditure on IT can be reduced, the same
money can be used to reinvest in other areas.
Challenges to outsourcing: Intellectual
Property management issues. The US customer needs to be confident that IP is
protected. Indian companies need to be careful with security and related issues. Second
risk is Political, since current economic recovery in the US
is jobless companies are not announcing deals as many as they actually have made,
sensitive as the issue with the American workforce.
Consultancy, as a business, creates more value for the
organisation but the bulk of the Wipro business continues to be IT projects and services.
Source: The Economic Times March 8th 2004
Global executives say yes to outsourcing
A survey of 7300 senior executives around the world by McKinsey Co has found that four out
of five executives think outsourcing is good for the global economy. When queried on the
implications of outsourcing on their own business, 70 percent of the Europeans said its
good, 97 percent of Indians said the same, as did 86 percent of Chinese. But this figure
falls in America, which is home to the world's most globalised companies- only 58 percent
of the US executives were positive on the development.
Source: The Business Standard March 8th
2004
MIT shows the way with course on outsourcing
The Massachusetts Institute of Technology (MIT) has started a regular course on
outsourcing at its Alfred P. Sloan School of Management. The course got underway last
week, turning out to be very popular with business executives and management student. All
55 seats were picked up within 24 hours of the announcement, now creating a waiting list.
It's the first course of its kind in the US, but more business schools are expected to
follow suit. The course is the brainchild of two senior faculty members, one of whom is an
Indian American. Dr. Amar Gupta, a product of IIT Kanpur, has been on the MIT faculty for
the last 25 years. The course aims at making students aware of the positives and negatives
of outsourcing.
Source: The Hindustan Times March 3rd 2004
US IT players likely to feel backlash heat: Goldman Sachs
Anti-offshoring legislations and visa restrictions- a result of rising backlash in the US-
may buy some time for the local (US-based) IT services companies against their offshore
competitors. But the US IT firms will also feel the heat of backlash with falling billing
rates and high cost structure. According to a recent report prepared jointly by Goldman
Sachs and Kotak Securities, work will be performed at local sites at prices that is 50-60
percent lower than current levels. The other major challenge ahead for US companies is
their cost structure as many of them have not been able to make much headway in offshoring
their workforce so far. Most US firms that offshore services, are too small to make a dent
in their overall cost structure and delivery capability.
Source: The Financial Express March 2nd
2004
India Fortune 500 cos' BPO Mecca, pips China, Mexico
India remains the favorite destination for global outsourcing among the Fortune 500
companies. In a recent survey, over 60% of companies favored outsourcing from India, while
36% voted for China. Mexico trails at third position with 32%. The study shows that the
percentage of jobs being off shored will roughly double in the next three years, with an
average of 13% offshore jobs that each company has currently relocated and an additional
12% being considered for relocation within the next 3 years. IT operations are the most
frequently globally outsourced (67%) function, followed by Customer Relations (49%),
manufacturing (42%), and supply chain (41%). Three years down the line, IT will continue
to remain the most popular outsourced activity (63%) with companies increasing their level
of interest in offshoring work in finance and accounting (43%), customer relations (40%)
and human resource (31%).
Of the more than 500 senior finance and HR executives Hewitt surveyed, 45% said that their
firms are currently using a global outsourcing model or are considering implementing one
within the next three years. Although cost reduction is the primary driver (92%) and top
means of gauging success (95%), companies often overlook many people related costs. After
cost-reduction, productivity improvement (54%), focuses on core competencies (49%),
increased flexibility (45%) and 24/7 staffing (38%) are the most popular drivers of global
outsourcing.
Source: The Economic Times March 3rd 2004
Outsourcing jobs makes logistics a hot new career
Most economists maintain that globalization benefits the US, as old-economy jobs that move
abroad are replaces by better, higher-value jobs. Many Americans don't buy it. Contrary to
popular belief, the US is creating new high-paying jobs. Here is one growing field: logistics. The frenetic pace of global trade, coupled with
outsourcing of manufacturing around the world, has transformed delivery into a complex
engineering task. Companies enlist logistics consultants to untangle supply chains and to
monitor shipping lanes and weather patterns. The main reason for the complexity is the
increasingly uncertain and variable demand for products. Consumers want ever more
varieties of products and they want them immediately.
Source: The Asian Wall Street Journal March
3rd 2004
Prepared by - Abhimanyu Puri,
BBA-MAHE-LEVEL1
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URL: http://www.skylinecollege.com
