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GM invests $546 million in Michigan Data Centers, moving jobs back

May 13th, 2013 admin Posted in Uncategorized | Comments Off on GM invests $546 million in Michigan Data Centers, moving jobs back

SOURCE: Chicago Tribune

GM has been one of the few companies to repatriate jobs and move away from outsourcing to remote locations to getting jobs closer to home in Michigan.

GM has invested about $546 million in setting up two data centers in Michigan as per the article mentioned below. One in Warren, Michigan and the other in Milford, Michigan.

GM plans to get 90% of their IT back in house over the next five years.

 

http://www.chicagotribune.com/news/sns-rt-us-gm-technologybre94c0is-20130513,0,4206963.story

 

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2013 Top Outsourcing Advisors – Really ?

May 9th, 2013 admin Posted in Uncategorized | Comments Off on 2013 Top Outsourcing Advisors – Really ?

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7 Lessons from Offshore Pioneers

May 9th, 2013 admin Posted in Uncategorized | Comments Off on 7 Lessons from Offshore Pioneers

SOURCE: CIO

1. Captive Centers May Not Be Worth It

2. A Single Provider Is Not Enough…

3. … But Too Many Vendors Spoil the Model

4. Invest in Good Governance

5. Nobody Saves 70 Percent Offshore

6. Be Kind to Your Offshore Partners

7. Some Things Weren’t Meant to Go Offshore

 

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Wipro buys stake in Big Data Company Opera Solutions

May 9th, 2013 admin Posted in Uncategorized | Comments Off on Wipro buys stake in Big Data Company Opera Solutions

SOURCE: ZDNET

Wipro has spent US$30 million acquiring a minority stake in American big data analytics firm Opera Solutions. In a statement Tuesday, K.R Sanjiv, the Indian outsourcer’s senior vice president of analytics and information management, said the investment and strategic partnership allows Wipro to create industry-specific big data analytics solutions.

“It also enables our customers to maximize the ROI of big data analytics implementation through faster adoption,” Sanjiv said.
Opera Solutions has one of private industry’s largest groups of scientists specializing in machine learning, according to Wipro.
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Infosys Partners with SAP To build Retail Mobile Apps

May 9th, 2013 admin Posted in Uncategorized | Comments Off on Infosys Partners with SAP To build Retail Mobile Apps

SOURCE: DNA

Country’s second largest software firm, Infosys today said it has partnered with enterprise solutions provider SAP for developing mobile applications for the retail industry.

These efforts are focused on giving consumer packaged goods (CPG) companies anytime, anywhere access to sales representatives and merchandisers, enabling them to capture information from the field to make them more competitive and agile, Infosys said in a statement.

The application powers the work Infosys does for CPG companies, along with their merchandisers and promotions planners, it added.

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Cognizant Revenue exceeds $ 2 billion

May 9th, 2013 admin Posted in Uncategorized | Comments Off on Cognizant Revenue exceeds $ 2 billion

SOURCE: COMPUTER WEEKLY

Cognizant announced its results this week and reported sales worth over $2bn in a quarter for the first time ever. The company said its social, mobile, analytics and cloud (SMAC) services contributed to the sales growth as well as services that achieve non-linear growth.

This is interesting because it is the big challenge for the Indian suppliers. They have grown fat of offering more and more to corporate customers. They have been achieving linear growth by selling more and more of the same services. For example add 10 more offshore workers and you add the same amount of revenue, but there is a limit to how many workers you can sell. In contrast a cloud service can increase your revenue whenever the customer increases its consumption, but the cost of providing the service does not increase in the same way as adding workers would.

Rising costs in India as well as technology developments such as cloud computing and process automation software are putting the big offshore suppliers under pressure but they are reacting to it.

Cognizant said in its results announcement that it is benefiting from non-linear growth. I am waiting to hear more details about the services providing this growth and will blog about it when I get some details.

It is not alone amongst the big Indian players. Infosys recently partnered IT and business process automation software maker IPSoft to add value to its services. This means Infosys will be providing higher value work to customers in the form of managing the automation of processes that previously would have been completed manually by Infosys.

And for similar reasons Wipro partnered and took a stake in Big Data science company Opera Solutions.

Then you have TCS, India’s biggest IT services firm. TCS’s deal with the Home Office to run the Disclosure and Barring Service (DBS), is interesting because when TCS takes over the contract there will be fewer of the delivery staff working offshore than there was under the previous supplier Capita. This is because TCS is increasing the amount of automation and digitization, which requires less people.

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Data Center Outsourcing – Three Ways to Reduce Cost

May 9th, 2013 admin Posted in Uncategorized | Comments Off on Data Center Outsourcing – Three Ways to Reduce Cost

SOURCE: CIOZONE

When organizations look to reduce costs by following an outsourcing strategy, it’s easy to think about reducing capital expenditures by avoiding purchases of hardware, software licenses and networking bandwidth. But IT executives and their finance colleagues often believe it’s even more important to use outsourcing to reduce operating expenses, because those costs usually recur and often increase over time even without increases in business activity.

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Fedex Shift in Outsourcing

May 9th, 2013 admin Posted in Uncategorized | Comments Off on Fedex Shift in Outsourcing

SOURCE: Information Week

As part of a broader strategy to cut costs and modernize its IT, FedEx offered a voluntary buyout to IT and select other workers as it adjusts its talent mix by giving more work to service providers.

FedEx is moving a larger percentage of its IT work to service providers as it looks to cut costs and shift to more “variable capacity” amid a strategic modernization of its applications and tech infrastructure.

FedEx CIO Rob Carter, as part of a broader discussion with InformationWeek editors and his senior executive team at the company’s Memphis headquarters, estimated that IT service providers will handle 25% to 30% of the company’s IT needs, compared with less than 10% today. As part of the shift, FedEx offered voluntary buyouts to its entire IT team and those taking the buyout will spend a month to as much as a year transitioning work to outsourcers. FedEx offered buyouts to select employees in other departments as well.

FedEx has long used IT services vendors such as Wipro, Infosys and IBM for project work, but “we were going from zero to 60 to zero with these providers,” Carter said. By giving a group of service providers more steady work (he didn’t disclose which specific vendors FedEx will now be working with), including ongoing operations of some IT systems, those outsourcers will have the incentive to invest in staff with expertise in the systems used by FedEx and the broader transportation industry, he said.

FedEx gave managers the choice to let people leave in one of three waves. The first wave will end on May 31, the close of FedEx’s fiscal year. The second will end on Nov. 30 and the third on May 31, 2014. “It’s more costly to do it this way,” Carter said of the staged departure and voluntary buyout, but it’s more “people-friendly,” it’s non-discriminatory and it protects the business from disruption by allowing for an orderly knowledge transfer.

The buyouts are structured to be more lucrative based on how long a person has been with the company. FedEx had hoped that IT pros who have managed IT systems the company is sunsetting would take the buyout option. CIO peers warned Carter against offering the buyout to everyone, he said, since the risk is that the best people will leave. But Carter maintains that the buyout couldn’t have gone better. “We just aren’t very mercenary around here,” he said. “People weren’t just taking the money and running.”

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IT Outsourcing Coming back to the US – P&G repatriating some jobs ?

May 9th, 2013 admin Posted in Uncategorized | Comments Off on IT Outsourcing Coming back to the US – P&G repatriating some jobs ?

SOURCE: Times of India

One of the world’s biggest technology spenders is having an outsourcing rethink that may result in some work moving back inhouse when contracts come up for renewal this year. Any decision by Procter & Gamble not to entrust a part of its information technology requirement to software services companies is bound to cause nervousness among Indian and multinational outsourcers.

P&G, whose products include Tide detergent and Duracell batteries, is contemplating the shape and size of the $3-billion (Rs 16,000-crore) contracts that it awarded in 2003 to EDS, which is now owned by HP. People familiar with the US-based company’s plans said the reason for P&G’s rethink is that it wants to have direct control over crucial portions of the technology piece with implications for its competitive positioning.

While P&G’s move does not indicate a trend against outsourcing, the fact that a major technology spender is considering such a move is not good news for India’s IT industry, which is forecast to grow just 12-14% in 2013-14.

So far, the part US government-owned General Motors and credit card company American Express are the only other big MNCs that have taken outsourced work back inhouse.

P&G’s decision to explore the possibility of reducing outsourcing comes at a time India’s $76-billion (Rs 4-lakh crore) IT exports sector is facing uncertainties in the US, its biggest market that contributes about 60% of revenues.

Amount of work to be shifted undecided
“P&G relies on a global network of strategic partnerships. The work evolves regularly to best meet the needs of our business, and ultimately, our consumers. Given the vast and varied relationships, we do not comment or speculate on specific partner contracts or negotiations,” a P&G spokeswoman told ET.

A person familiar with the ongoing contract renewal negotiations – Tata Consultancy Services, Infosys and Wipro are in the running for deals – said the final percentage of work to be shifted inhouse is yet to be determined. Only a small portion of finance and accounting-related BPO work had been awarded so far, to EDS.

Contracts worth nearly $100 billion (nearly Rs 5,40,000 crore) are up for renewal this year, according to outsourcing consultancy Everest Group, and companies such as Tata Consultancy Services, Infosys, Wipro, Cognizant and HCL Technologies are hoping to wrest away chunks of the deals from multinational incumbents, including HP, IBM and Accenture.

A senior sourcing advisory executive said that as the multi-billion dollar technology contracts outsourced in 2000-03 come up for renewal, some companies are not averse to revisiting the ‘build versus buy’ proposition, especially as enterprise technology is changing rapidly and external service providers too are going through a learning curve.

“General Motors did it. And now P&G is considering it. There is a rise in this kind of job patriotism over there (in the US). This is the shape of things to come,” said a person familiar with the developments through conversations with senior Indian IT industry executives. He spoke on the condition of anonymity.

General Motors said in January it would hire 10,000 IT professionals over 3-5 years. The company had previously relied heavily on outsourcing, signing about $7 billion worth of contracts in 2003.

There is a fundamental change underway in the nature of the Indian IT services industry, said Kumar Parakala, head of IT advisory at consulting firm KPMG. To be able to make more persuasive offers to clients, Indian IT companies would need more local presence in the US, he observed.

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New American Bill Threatens Indian Outsourcing Companies

May 9th, 2013 admin Posted in Uncategorized | Comments Off on New American Bill Threatens Indian Outsourcing Companies

SOURCE: New York Times
DATE: May 6th, 2013

A new American immigration bill threatens the future of Indian outsourcing, Indian companies say, because it will limit the number of foreign workers they can bring to the United States.

The Senate immigration bill, which is currently pending in the United States Congress, would make it more expensive for foreign outsourcing firms to bring over temporary foreign workers on H-1B visas, while giving American companies access to a larger pool of those visas to bring over their own foreign workers.

Under the bill, which is being backed by executives from American technology firms, the total number of H-1B visas will increase to 110,000 from 65,000. However, the bill will limit the overall percentage of foreign workers that outsourcing companies like Wipro, Tata Consultancy Services or Infosys can have in the United States, and will require companies that have 30 to 50 percent of their workforce on temporary visas to pay $5,000 for every new foreign worker they hire.

After 2014, companies that employ more than 75 percent of their workers in the United States on temporary visas will not be granted new H-1B visas, and by 2016 that threshold will be brought down to 50 percent.

The bill does not specifically target Indian outsourcing companies, but because foreign workers typically make up 50 to 75 percent of these companies’ staff in the United States, the legislation will greatly limit their hiring practices.

Many Indian outsourcing firms have been expanding their operations in the United States, even as the economy there has slowed in recent years. Indian companies have invested $5.9 billion in the United States to set up offices closer to their American clients, according to a survey of 35 Indian companies by the Confederation of Indian Industry and the India Business Forum published last year.

“The people who have drafted this bill have rightfully looked at the needs of the United States, but they have also tried to create discriminatory conditions which act like trade barriers and inhibit the free movement of people between the United States and India,” said Som Mittal, president of the National Association of Software and Services Companies, known as Nasscom, a group lobbying Washington for modifications to the bill. “If the bill does go through with the conditions that it has today, it will significantly impact our businesses and our capability to compete.”

The bill presents another significant problem for Indian companies: foreign workers on temporary visas would not be allowed to work on “outplacements,” which means working at the offices of their customers, a practice that analysts say is essential to their model.

The bill also has provisions for visa fee of $10,000 for companies that have temporary foreign employees making up over 50 percent of its workforce in the United States, and it requires companies to follow strict guidelines when advertising jobs in the United States.

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