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Market & outsourcing watch 2006


Find papers, articles, opinions - developed by and others  - as well as news and links on ICT and off-shore outsourcing market development in Europe and globally.

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Q & A With Kiran Karnik, President, Nasscom

  Kiran Karnik, President, Nasscom talks on the association’s new initiatives to promote the industry and the direction the Indian ITeS-BPO industry should take to see steady growth in the face of global competition

IT offshoring: It's not just for India anymore

  India once got 80% of U.S. spending on offshore work; now it gets about 59%

Dutch Agency Picks Annik For Trade Promotion

  As a part of a programme launched last year, CBI will help Annik enter the European Market.

Eastern Europe: outsourcing hotspot?

  Eastern Europe could soon become a favourite location for offshore outsourcing, with activity in the region estimated to triple between 2005 and 2008.

Rising wages forcing companies to look beyond India

  Skills shortages and rising wages in India will increasingly force UK businesses to look at alternative offshore outsourcing locations, according to the National Outsourcing Association (NOA).

Attitudes harden against offshoring

  Popular hostility towards offshoring and increasing economic globalisation is growing in the UK as a new survey finds that eight out of 10 Britons want to see a halt in jobs moving overseas.


Identifying the right outsourcing strategy

  For far too long, the issue of outsourcing versus insourcing has had the proportions of a religious debate between often fanatical supporters and opponents of both.

Filipinos expand U.S. outsourcing

  While India remains the country of choice, call centers in the Philippines are a booming business.

US firms turn to Israel as outsourcing alternative

  Besides lower costs, nation boasts pool of educated, English-speaking workers.

Contact Center Outsourcing: EMEA Bound

  The Middle Eastern and African contact center outsourcing markets will see tremendous growth, suggests a recent report by Frost & Sullivan. Following the successful growth of call centers in Central and Eastern Europe.

What You Need to Know to Avoid Outsourcing Risks in 2007

  Risk-mitigation practices for outsourcing for the coming year can be segmented into six categories.

Seven Trends in Offshore Outsourcing for 2007 and Why They Matter

  Here are seven trends among the dramatic changes that every large enterprise and mid-size business needs to understand when considering offshore outsourcing in 2007.

Trends Highlight Changes in the Way Companies Will Do IT Outsourcing in 2007

  In recent years, enterprises rarely approached IT outsourcing (ITO) as anything more than a commodity. Not any more. It's quickly heating up as a way to meet new challenges, and buyers are lining up.

Outsourcing in China

  Most providers target the burgeoning domestic market, but a few offer a hybrid approach that appeals to the West.

Poland is preferred outsourcing destination for HCL

  To deliver its clients multilingual and near shore business process outsourcing services, HCL, India based software and outsourcing company has zeroed on Poland as its next delivery center.

Vietnam ranks just behind India for global outsourcing

  HCMC, which edged out Manila and Shanghai, possessed a pool of high-caliber talent with more than 100,000 people graduating annually, the report said.

Tricks of the BPO trade

  Outsourcing is already commonplace, but as it stretches from the IT infrastructure into the back office, the next major upheaval for the CIO is likely to be in the form of business process outsourcing. Patrick O'Brien quizzes two industry leaders about best practice in BPO.


Market Overview of the Americas Region (pdf)

  Seven destinations for global services sourcing in the Americas region – Canada, Mexico, Brazil, Costa Rica, Chile, Argentina, and Nicaragua – in terms of five factors that affect a country’s overall suitability as a global services sourcing destination.

Global City Competitiveness (pdf)

  The Global City Competitiveness report provides enterprises a perspective on the current strengths and weaknesses of various cities in order to find a fit that meets their global sourcing requirements.

Mainframe outsourcing trend beginning to reverse

  For the last 15 years, the overall trend in IT has been towards outsourcing -- but that trend is apparently beginning to reverse.

Incentives mooted to lure outsourcing to SA

  The trade and industry department envisages sweeping legislative changes to improve SA’s competitiveness in a bid to attract business services to SA, boost job creation and foreign direct investment.

The TPI Index Europe - Q32006 (PDF file)

  The recent TPI Index report has pointed out a drop in global outsourcing contracts both in terms of value and volume claiming revised contract durations along with contract restructuring as the prime reasons. IT outsourcing (ITO) is predicted to drop by 3.6 this year but business process outsourcing (BPO) is seen rising by 10 pct.

EU ICT Market to Reach GBP 644Bn in '06 - Study

  According to a study by the European Information Technology Observatory (EITO), the Information Technology and Telecom (ICT) market in the European Union (EU) has grown by 3 percent to GBP 644 billion in 2006. Download

Offshore outsourcing in Denmark

  National report on offshore outsourcing in Denmark. Danish companies involved in offshore outsourcing.


Competitiveness, Not Offshoring, Is EU Weakness

  Data show the euro zone's failure to keep up with tech change, and its poor innovation rate, pose greater problems than cheap foreign labor.

Introduction to Outsourcing at Major Software Development Project

  The worldwide outsourcing market is expected to grow from $161.9 billion in 2002 to just over $235.6 billion in 2007 at a compound annual growth rate (CAGR) of 7.8 percent.

SMEs embrace hybrid outsourcing

  Survey: The Institute of Directors has found that most small firms see technology as critical to their future success. Download

TCS changes the rules of outsourcing

  Tata Consultancy Services (TCS), the largest software services company in the country, is changing the rules of the outsourcing game yet again.

CIO Forum: SMEs to ride next offshoring wave

  Small businesses will be the next to benefit from offshore outsourcing - but it might not be a route taken by every company.

CIO Forum: CIOs still split on outsourcing

  'It's mine and you can't touch it' versus 'why on earth would I still want to manage that?'...

Avoid the "curse" of cheap outsourcing deals

  Outsourcing deals based on selecting the supplier with the cheapest bid are the most likely to run into trouble, according to research by the London School of Economics (LSE).

Czech move as nearshore outsourcing grows

  Infosys last week became the latest Indian IT outsourcing specialist to bolster its presence in Europe, announcing plans to double the size of its Czech “nearshore” development centre to over 350 seats.

New Datamonitor report looks at future of outsourcing

  In its report, The Future of Outsourcing, independent market analysis firm Datamonitor examines what lessons from the past the new wave of outsourcing can learn from and what will drive its success going forward.

The future of outsourcing

  Outsourcing is increasing its reach in terms of vertical industry reach as well as geographic scope. While the firms investing in it are wide-ranging, their individual needs are all similar in that they need to reduce overheads as much as possible. Yet the outsourcing phenomenon is rarely understood.

IT offshoring set to grow

  UK companies will double offshore IT services staff numbers by 2008, according to analyst Ovum

Outsourcing Benefits Rarely Understood

  Outsourcing is one of nearly every industry’s necessary evils. Companies looking to reduce overheads costs often look to outsourcing options as a means to fit their needs at better costs. Yet the full scope of outsourcing, from its weaknesses to its potential is rarely understood.


Russian gov't to support country's outsourcing efforts

  Leonid Reiman, the Minister for Information Technologies and Communications (MinInformSvyazi) announced a new governmental initiative to support Russian software outsourcing companies.

Outsourcing moves towards multiple suppliers

  Many organisations are opting for multiple suppliers in outsourcing agreements instead of favouring a single service provider, new research suggests.

Expect Offshore IT Services Firms To Grow

  Indian companies in particular are investing in remote infrastructure management, onshore data centers, and tools to automate application development and maintenance processes.

Firms move away from single outsourcing supplier deals

  Companies outsourcing their IT and business processes are moving away from single-supplier deals and looking to spread their options, new research has revealed. Download more info

 Engineering Services Offshoring: Finally in the Limelight

  Cultural differences are one of the biggest reasons why offshore outsourcing deals fail or run into problems, according to new research.


Cultural differences cause offshoring problems

  Cultural differences are one of the biggest reasons why offshore outsourcing deals fail or run into problems, according to new research.

2006 Global Outsourcing Guide

  Risks, rewards, challenges and opportunities, country by country. More

Outsourcing market matures

  The outsourcing market continues to mature, as more first generation deals come up for renewal.

Study: Outsourcing Boom Is Over

  The outsourcing boom has passed and maturity is setting in, according to a new study from consulting firm DiamondCluster International in Chicago. Dowload

How to Avoid Intellectual Property Theft

  It is within your power to determine whether your enterprise will be a hard target or soft target for IP theft. The time for action is now. Here are recommendations for a comprehensive program.

Western Europe's top 100 outsourcing deals hit $40bn

  The total value of the top 100 western European outsourcing deals reached $40.5bn in 2005. This compares with $42.1bn in 2004.


Outsourcing growing in flexibility

  Once upon a time, if someone mentioned business process outsourcing (BPO), one would automatically think of India.

Dutch agency expands RP program to promote BPO

  The Center for the Promotion of Imports from Developing Countries (CBI) of the Netherlands is expanding its program in the Philippines to further enhance the competitiveness of its business processing outsourcing industry as an international supplier of BPO services in the European market.

Offshore to Sri Lanka: Finding Sri Lanka’s off shoring niche launched this week

  An in-depth report on taking the advantage of the potential benefits of the newly established global trade services, branding as an off-shore destination of choice for international visitors and government policy measures will be launched this week.

Contract flaws increase offshore outsourcing risk

  Businesses are increasing the risk of offshore outsourcing disaster by failing to draw up tighter contracts when dealing with overseas service providers, according to analyst Gartner.

Unison condemns offshore medical transcription

  NHS trusts that outsource the transcription of medical notes to South Africa, the Philippines and India received a sharp rebuke from health union, Unison.

Outsourcing: The Russian Revelation

  When Daniel Marovitz sought an offshore partner, he scanned the globe. "We talked about Canada, Ireland and low-cost locations in the United Kingdom. But it really came down to India and Russia," said Marovitz, chief technology officer for global banking at Deutsche Bank's investment banking unit, in London.

Russia Navigates a Bumpy Road to Outsourcing Future

  Opinion: The Russian outsourcing industry, though small, is gaining maturity and shows promise.

Philippine government unveils new outsourcing plan

  The Philippine government plans to implement "overseas global outsourcing" -- a new marketing strategy that will tap Filipino managers based in the United States to convince American companies to outsource their back office needs here in exchange for financial incentives.

 In Depth: When Outsourcing Goes Bad

  Lawsuits, recriminations, millions squandered on failed projects--and outsourcing is supposed to be a good thing for businesses?

IT outsourcing 'no longer key industry growth area'

  Revenue from IT services reached $624.4 billion (£336.8 billion) in 2005 after a six per cent increase from 2004.

Offshore outsourcing upstarts bite at India's heels

  India may be the best known destination for offshore contact centres but 'nearshore' countries such as Egypt also want to get a piece of the action.

Datamonitor: Is Africa the new India for contact center outsourcing?

  Africa is becoming a hot spot as a business process outsourcing (BPO) destination, fueled in part by western investments and regional efforts by governments and private sector firms.


Offshoring to Romania: the right skills at the right price

  Countries in Central and Eastern Europe will become the favorite locations of Western European companies for the migration of some services, according to an Economist Intelligence Unit (EIU) study.

UK firms start to shun offshoring

  IT offshoring is an unpopular option for the vast majority of UK firms.

Assessing Geographic Risk in Global Outsourcing

  Probability is nothing but common sense reduced to calculation." Pierre Simon Laplace (Théorie Analytique des Probabilités, 1812)

China wants Indian outsourcing crumbs

  When there is a spillover effect of IT outsourcing from India, which is the country most likely to receive business?

India cracks down on offshoring data security

  India is creating a new regulatory body to improve the level of security for the country's offshore IT services and business process outsourcing (BPO) companies.

The Seven Deadly Sins of Outsourcing

  Outsourcing is a source of stress, struggle and angst for many IT managers, and no wonder: More than half of outsourcing agreements end up prematurely terminated, according to a study.

Outsourcing Survey 2006, Part 2: Why, Where, and Who

  We explore why organizations choose to outsource, where they move it, their use of multiple vendors, and success factors in choosing a service provider


International Investment Conference on ICT for West and Central Africa

  24-26 October 2006, Bamako, Mali

Southeastern Europe pitches for outsourcing

  neoIT, which advices on outsourcing issues, has issued a new white paper on the state of readiness of the Southeastern European (SEE) region.

UK firms to drive offshore outsourcing boom

  Demand for offshore outsourcing services among UK and European companies is set to increase by 50 per cent per year over the next two years, according to Gartner.

Good practice note on data protection in outsourcing

  This good practice note sets out what you need to do to comply with the Data Protection Act 1998 when you outsource the processing of personal information.

How to avoid an outsourcing disaster

  Good governance - and leave the techies out of it too?

Microsoft's Gates Sees Vietnam Outsourcing Potential

  Microsoft Corp. Chairman Bill Gates said Vietnam has the potential to develop as an outsourcing center similar to India, during the first visit by the world's richest person to the Southeast Asian nation.

Outsourcing Survey 2006, Part 1: What, How Much, and How Long

  We explore what IT is outsourcing, how much it costs, and the length of outsourcing contracts.

How to Choose an Outsourcing Partner

  When it comes to choosing an outsourcing partner, Google offers over 13 million Web pages of advice. Most outsourcing providers work hard to satisfy their clients, yet many fall short.

The Three- or Four-Year Itch

  To succeed, relationships require love and attention. That’s why CIOs - especially mid-market CIOs with limited resources - should factor in the costs of hand-holding when going offshore.


  Companies that have become expert procurers of information technology services on domestic shores need to be hyperdiligent when they contract offshore.

Outsourcing savings average 15 percent

  Widespread claims that IT outsourcing contracts deliver cost savings of over 60 percent are grossly exaggerated, according to a new report today from outsourcing advisory firm TPI. Related article

Poor controls raise outsourcing risks

  A new survey indicates few companies have the right systems to manage outsourcing deals with multiple suppliers.

Higher costs, old woes erode offshoring savings

  India's labor market tightens: India has become the location of choice for offshore outsourcing, but that status may be fading as companies confront old realities and new problems that are cutting into hoped-for savings.


  Companies need to stop outsourcing information technology the way they do today or face serious business disruption.

Managing the risk of outsourcing in the financial services sector

  With ever-greater competition in the financial services sector, financial institutions are increasingly outsourcing non-core business processes and functions in order to find new efficiencies, reduce costs and increase shareholder value.


Knowledge management success story

  India’s Scope e-Knowledge Center has been chosen as one of the "100 companies that matter" in the knowledge management industry worldwide by KM World Magazine.

Outsourcing: Minimizing the Data Security Risks with Secure Collaboration

  With the promise of cheap labor and increased efficiencies, outsourcing of product manufacturing and business processes has become increasingly attractive for a wide range of industries.

NASSCOM and CBI sign breakthrough agreement on offshore outsourcing

  Business process outsourcing finally within reach of small-, and medium-sized enterprises.

Outsourcing: Keeping the relationship alive

  Many major outsourcing deals entered into around the millennium are not ageing well; renegotiation presents an opportunity for parties to get their relationship back on track.

Offshore Outsourcing: Why Russia?

  Russia is about to become one of the most popular destinations for offshore software development.

McKinsey Global Institute looks at the workforce in India and China

  Both India and China have profited handsomely from their young, able, and seemingly unlimited workforces over the past two decades.

The Implications of Medical Outsourcing

  Hundreds of hospitals across the country are now outsourcing certain medical services overseas - to countries such as India, Switzerland and Australia.

Outsourcing used to drive down costs

  Most organisations resort to outsourcing as a short-term tactical measure to lower costs rather than as a strategy in its own right. More about this subject.


  A new survey shows that many CIOs are still focused on short-term savings rather than long-term business success when establishing outsourcing relationships -- and that it's costing them in the long run.

Is Offshoring Coding Yesterday’s Fad?

  Outsourcing your code development makes a lot less sense with the radical changes in the way innovators now create software

 Outsourcing: The Quiet Revolution

  By 2010, outsourcing for most video-game publishers will represent about 40% of development money spent

European outsourcing sees strong growth

  The number of European outsourcing deals rose 25 per cent in the last quarter of 2005, compared to the same period of 2004, according to analyst Forrester Research.

DIRECT DOWNLOAD: Political instability in the Philippines - impact on offshore outsourcing industry

  The report examines Affect of Philippines State Of Emergency on Service Providers and Buyers. According to neoIT CEO Atul Vashistha, "The current situation in the Philippines heightens the need for companies to have multiple global sourcing locations and to have multi-country, multi-location disaster recovery plans in place."

Union warns of new wave of offshoring

  Financial services union Amicus is warning that a new wave of offshore outsourcing is about to take place in the UK's financial sector, despite rising labour costs in countries like India.


Offshoring for SMEs

  How small and medium-sized enterprises can get into offshore; a twelve-step guide

Pakistan aims to become major IT outsourcing destination

  Pakistan is geared to be a major destination for software and business process outsourcing.

Why offshoring fails

  Statistical data about offshoring failures is controversial, making it difficult to say how the failure rate of offshored projects compares with that of onshore projects.

Outsourcing from Europe looks strong

  Large outsourcing opportunities are opening up in Continental Europe in areas such as infrastructure management, business process outsourcing and the public sector.

Software vendors face rising offshore costs

  The majority of software companies now do offshore software development, but rising prices and managing far-flung teams is posing new challenges, a study has found.

Egypt's goal: To be the land of offshoring

  Egypt is making a pitch to be the next offshore outsourcing hot-spot, claiming that its foreign language skills and low labor costs put the country in a strong position to compete with India and Eastern Europe.

Subject revisited: Why offshoring fails?

  Statistical data about offshoring failures is controversial, making it difficult to say how the failure rate of offshored projects compares with that of onshore projects. What we can say is that going offshore is a trend on the rise. Since there are successful long-term offshore projects, there must also be a recipe for how to deal with the ensuing challenges.

Offshoring - it ain't easy

  Outsourcing IT work to an offshore location is hardly a new phenomenon - yet that doesn't make it any easier to decide whether to do it and, if so, to manage the process effectively.

The ethics of corporate offshoring: Exploitation or emancipation?

  The offshore sourcing of IT and back office services to distant locations such as India is transforming the world of business.

Managers call for rethink on offshoring

  Failure to involve human resources (HR) professionals when moving IT and business functions offshore is contributing to low staff morale at many firms that have adopted the model, according to a new survey. Direct download here

Outsourcing becoming knowledge outsourcing

  Embracing technology as a driving force, knowledge and transaction outsourcing is changing the way businesses conduct themselves in the global marketplace.

Processes key to outsourcing, banks told

  Companies must have a thorough understanding of their business processes if they are to realise the full business advantages of outsourcing, financial services firms were told last week.

Outsourcing Market Losing Some Steam

  While some areas are growing at a healthy rate -- such as revenue from business-process outsourcing deals -- other areas suffer from anemic growth rates. For example, over the past few years, the value of traditional I.T. outsourcing deals has been marked by steadily declining, single-digit growth rates.


Diminishing Returns for Outsourcing?

  The benefits may be harder to come by than is widely assumed, and they could become even more elusive if a new international rule is embraced by the Financial Accounting Standards Board.

Deutsche Bank's Outsourcing Imperative

  As far as Daniel Marovitz is concerned, offshore outsourcing no longer a cost-cutting option for the world's biggest financial institutions. Nor is it even a source of competitive advantage. "The issue is that if you don't do it, you won't survive," says Marovitz, chief operating officer for technology at Deutsche Bank's global banking unit.

Cebu more attractive than Manila for BPO firms

  Cebu is a more cost-effective place to set up a business process-outsourcing company compared to Metro Manila, said Cebu representative.

French see offshoring as remote threat to business

  French businesses are offshoring more of their IT functions, but this is not a threat to French systems integrators, and the number of IT workers in France will continue to grow, according to the French association of the software and computing services companies.

Indian outsourcers to launch European invasion

  Offshore suppliers to win onshore contracts in 2006, says NOA.

Worldly Lessons for Wolters Kluwer

  At first, the publisher micromanaged offshore work. But stronger partnerships are now helping it trim costs and expand product offerings

 Major Players in Outsourcing

  An expanded look at Gartner Inc.'s analysis of the who, what, where, and how much of offshore outsourcers

The Future Of Outsourcing

  How it's transforming whole industries and changing the way we work

How to win in a global economy

  Being a global company used to mean being a big company, but today even the smallest ecommerce firm is a global player by default.

India sets up IT worker database to vet offshore recruits

  India is to set up a national register of IT professionals to help companies vet employees and carry out background checks on new recruits working in the offshore IT and BPO industry.

TPI Index Q4 2005

  The TPI Index provides detailed analysis of the current state of the global outsourcing market. Every quarter, TPI executive leaders host the TPI Index in the Americas and Europe, inviting members of the global equity research community, the press and other key audiences.

$100 billion in contract renewals could challenge “BIG SIX” of outsourcing

  The ‘Big Six’ of outsourcing – Accenture, ACS, CSC, EDS, HP, and IBM – could see their dominance challenged, with almost $100 billion worth of major outsourcing contracts due for renewal internationally in the next two years, according to the latest Quarterly Index from TPI.

Firms offshoring to India urged to review security

  UK firms using Indian IT and back-office facilities are being urged to upgrade their security in the wake of a suspected terrorist attack on Bangalore, the country’s technology hub and a popular offshore destination for Western firms.

Report: 2005 A Record Year For Outsourcing

  Workers loathe it, politicians rail against it, and one TV newsman vilifies it almost nightly. Despite it all, companies are outsourcing work at record levels, according to new data released Wednesday.

India launches outsourcing staff database

  Indian IT trade group Nasscom will next week launch a national registry of IT staff designed to tackle concerns over data security and corruption that are estimated to cost the country's IT and business process outsourcing (BPO) industry up to $8bn a year.


  While Gartner Research is busy conducting a 10-million baht study into drafting a roadmap of business process outsourcing (BPO) for Thailand, Post Database has done its own straw poll of three successful software outsourcing companies in Thailand, asking them about the pros and cons of running an IT company here.

Forecast 2006

  What does the new year hold for IT? Expect project management to be your growing vexation, security lockdowns your No. 1 task and RFID your biggest disappointment. Plus, bold predictions from the industry’s top luminaries.


  The forces are massing for some big changes in IT industry dynamics. We need this. The tech landscape has been pretty dry these last few years. It won't be a year of epic events, but change that is already under way will accelerate.

Strong Demand Powers Rise of Indian Outsourcing Providers


The Indian outsourcing industry has been growing due to surging global demand for its services.



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