Offshoring and Outsourcing headlines – May 4th
Headlines on TCS putting a break on their growth plans in Australia, Effect of Chrysler bankruptcy on IT vendors specially TCS, A couple of new deals and commentary on UK bringing back work from offshore.
TCS drops plan to raise headcount in Australia
DATE: April 30th, 2009
SOURCE: Rediff
Interestingly a number of the largest offshore players in India have severely cut back their expansion plans outside India and are focusing on bringing everything back to the Indian locations.
Global IT major Tata Consultancy Services is understood to have shelved plans to increase its headcount in Australia to around 2,000 by the end of this year. The reason: The ongoing financial crisis.
More..
SWIFT chooses MindTree as offshore service partner
Date: April 29th, 2009
SOURCE: Business Standard
MindTree Limited, a global IT Solution Company, today said it has been chosen as offshore service partner of SWIFT, the financial messaging provider for more than 8,500 banking organisations, securities institutions and corporate customers in over 200 countries.
MindTree will host a new secure SWIFT offshore delivery centre (ODC) here, providing SWIFT with the ability to control development costs and to modulate capabilities at short notice.
ANZ boosts Bangalore as IT costs rise
Date: April 28th, 2009
SOURCE: ZDNET Australia
Australia and New Zealand Banking Group today said it had continued to expand its Indian offshoring operation over the past six months, a move that came in the context of rising technology costs across the board.
ANZ will progressively consolidate support functions including technology and operations … to increase scale and efficiency
The bank’s Indian division performs a number of back-office tasks for it, including some technology work but also business process initiatives and more.
The company said in its financial results briefing released today for the six months to 31 March that total personnel numbers in its Europe, America and India division increased by 1240, “with the expansion of operations and technology support activities in India”. The bank’s unions have previously raised concerns about the movement of jobs to India.
Recession bringing offshored work back to UK
Date: April 28th, 2009
Source: Silicon.com
As the recession forces companies to become leaner and the comparative savings from offshoring diminish, banks and businesses are considering returning work back to the UK.
Speaking at the FT Global Outsourcing and Offshoring Conference yesterday, Ian Cramb, chief operating and technology officer for global consumer group for EMEA at Citigroup, said increasing efficiency at home has spurred the company to review which offshored work could be brought back in-house.
“A lot of the things that we sent away we are looking to bring back because we have made ourselves cheaper at home.
“Whereas [offshoring] might have been 50 per cent of the cost [of in-house] five years ago, that number is currently only 15 per cent cheaper because we have made ourselves more efficient at home.
Wipro wins Rs 2,500 crore order from Unitech
Source: StockWatch
IT major Wipro has won an order worth Rs 2,500-crore from Unitech Wireless, to provide IT services to the fledgling mobile operator.
The latest deal, which is considered among the biggest domestic IT contracts awarded till date, involves providing IT services and infrastructure to Unitech Wireless.
It should be noted that Unitech Wireless, controlled by Norway’s biggest telecom company Telenor, has licenses to provide telecom services in all of the country’s 22 telecom circles, but is yet to start operations.
Fall in licence revenue at SAP, Oracle to bite Indian software majors
Source: DNA India
DATE: May 4th, 2009
There seems to be no end to bad news in the information technology (IT) sector.
The latest is the over 32% plunge in the enterprise solution major SAP’s licence revenue in the fourth quarter to €418 million against €622 million a year ago.
This is the first drop in the German business software company’s licence revenue since the global economic crisis set in. Its American rival Oracle saw new licence revenue fall 6% to $1.5 billion (€1.13 billion) in the third quarter ended February. Oracle is yet to come out with fourth quarter results.
The slips at both firms will directly hit package implementation/enterprise solution income of Indian tech companies, which earn a significant portion of their revenue from this service line.
Indian IT service providers implement enterprise solutions for companies that buy licences from enterprise resource planning software providers.
Chrysler bankruptcy may hit Indian IT cos
Source: EconomicTimes
DATE: May 5th, 2009
Chrysler, the bankrupt US automaker, plans to scale down its offshore outsourcing of information technology projects to vendors such as TCS in the near term, as America’s third-largest automaker prepares to undergo a massive business transformation steered by the Obama administration and sell its assets to Italy’s Fiat.
Chrysler, which outsourced software and back-office projects worth around $200-250 million to India-based service providers last year, also shifted some customer service projects from its Bangalore captive centre in India to Rochester Hills, Michigan, and Salt Lake City in the US a month ago.
“TCS’ $120-million Chrysler contract is relatively small in the bigger scheme of things being worked out at the automaker. However, given the uncertainty around which product lines to continue with, some of the software application and maintenance contracts have become smaller,” said a US-based outsourcing consultant familiar with Chrysler’s offshoring initiatives. He requested anonymity because he is not an authorised spokesperson of his firm.
