Asia fuelling drug discovery outsourcing

We have repeatedly pointed out that research is being increasingly done overseas. This article makes a strong case that this is just the beginning. First, Asian companies are doing their own research for their own market and this is fueling more innovation. Second, contract research organizations are opening office there to capitalize on the low cost. www.in-pharmatechnologist.com

The future of outsourcing

Not a bad think piece on the future of outsourcing mainly about contract sales organizations. Computer Business Review

Infosys Chairman steps down

Infosys' co-founder and Chairman, Narayana Murthy, stepped down last Friday. He was truly a visionary and had a major impact on our industry. We tip our hat in recognition to his accomplishments.
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Global outsourcing for the little guy

Excellent first person article on how the owner of TechnologyTailor.com used Elance.com to build a website for a fraction of the cost of using a normal programmer. Excellent read. We have used Elance on a number of projects and found it to be an excellent service. Chicago Tribune

"Outsourcing cuts costs 50%"

It is common knowledge that outsourcing cuts costs. This article goes into more detail on how much is saved by whom.

Big Outsourcing Conference in Russia

R&D and technologies

Philipines running out of labor

The speed of growth of the Philippine's outsourcing industry has led to increasing labor power. Asia Times Online :: Southeast Asia news and business from Indonesia, Philippines, Thailand, Malaysia and Vietnam

Smaller Companies Join The Outsourcing Trend

Clearly, the outsourcing revolution has been won. Now, smaller companies are moving offshore to do their work. WSJ.com

Incentives for Pakistani information technology companies

Following on the last article, here is a list of just some of the incentives that the Pakistani government has given to help build the IT industry in Pakistan. Key incentives include tax exemptions until 2016 and 100% foreign ownership. Powerful stuff. PSEB

Pakistan promotes offshoring

The government of Pakistan has put together a package of initiatives that will significantly boost the offshoring business. These initiatives have already created over $2 billion in direct investment into Pakistan. For instance, the government has dramatically increased the telcom infrastructure that is so necessary for offshore work. The Prime Minister Shaukat Aziz and the Minister of Information Technology Awais Ahmad Khan Leghari have spearheaded this effort.

Our own take is that the Pakistanis are perfectly positioned to take away a lot of business from the Indians. As the Indians have moved upstream, the Pakistanis can move into that area left by the Indians. The cost structure of the Pakistani IT industry is must lower than that of India thus creating a strong value proposition for outsourcing clients.Daily Times - Site Edition

Banks send investment banking offshore

Shrinking profit margins and a shortage of skilled workers and increasing concern over Wall Street prima donnas is leading Wall Street firms to offshore companies. This even includes such high value added things as research analysis. CNN

Outsourcing industry faces consolidation

This important think piece contains some very important ideas and is highly recommended.

Forrester Research has released a new report that states that the global outsourcing industry could face consolidation due to low-cost global competition and broken business models.

It suggests that the current top line Indian companies will have to rely on acquisitions to compete with the global Western giants.

The report also delves into the role of the private equity funds in driving consolidation. The Hindu Business Line

Opportunity In Digital Content Outsourcing

Of course, there is no reason not to outsource certain kinds of content generation overseas. I have personally done this with sites that I am involved in (www.myhealthonline.com). The costs are obviously cheaper and the quality can be high. However, the topics need to be contrained to more technical items where cultural references are non-existent. In our case, we were looking for articles relating to health topics so there was no cultural knowledge needed, only technical knowledge and good writing skills. ContentSutra

Hybrid strategy

One of the key transformations currently taking place is the concept of the hybrid outsourcer. What if you are an American company threatened by a lower cost Indian competitor? Simply set up an Indian sub to provide the same services as the Indian competitor at the same price!

There have been a plethora of news articles recently outlining this strategy. One key announcement came from IBM which stated that it was going to be increasing its number of employees to 50,000 in India. Capgemini said it will be increasing its Indian employees from 4,000 to 10,000 by 2007. Line56.com: Outsourcing Strategy Shift

Westerners going to work in Indian call centers

Westerners are increasingly going to India to work in call centers. The National Association of Software & Services Companies estimates that there are over 30,000 expats working in Indian IT and offshoring companies, twice the number of 2 years ago. Does a job taken by an American in India count as a job taken FROM an American in the US? New America Media

Study: US Outsourcing Fears Greatly Exaggerated

A new study by the Association for Computing Machinery suggests that fears that foreigners would take US jobs are exagerated. In fact, the study suggests that outsourcing is a net contributor to jobs in the US. CRM News

India calls for opening up of service markets

It should come as no surprise that India has called for an opening of markets in computer services, health services, architecture, and engineering services at the current WTO in Geneva. India, and the other offshoring countries, need to make sure that other countries don't close their borders to the lucrative trade in offshoring. Financial Express

Study of pharma outsourcing to India

This is an excellent essay on the direction of outsourcing pharma research and development in India. Well written and, more importantly, well though out. Express Pharma

The Five Most Likely Outsourcing Trends of 2006

They are: 1. KPO jobs: in demand, 2. Consolidation and Fragmentation: hand-in-hand for KPO, 3. Small Towns will Join the Party, 4. Captives in India...for good, 5. Acquire to gain hold. NewswireToday

India launches outsourcing staff database

Recent scandels are leading Nasscom to start a national registry of IT staff. The 50 largest IT and BPO companies have already agreed to register their employees. vnunet.com

Outsource your lawyer!

The legal outsourcing industry in Indian is $80 million industry already and looks to explode. Part of the trend is devoted to the legal issues surrounding traditional outsourcing but a lot of it is doing the heavy lifting of Western lawyers. IBNLive

Other Regions Chip Away at Asia's Contact-Center Outsourcing Lead

One of the key trends in offshoring is the development of outsourcing to nearby countries. As was mentioned in the previous story, Europeans are increasingly moving to Eastern Europe while Japan is moving to China. CRM News

Russian outsourcing convention

India gets most of the attention but lots of European and American companies outsource to Russia. The high skill level and closeness to Europe are typical reasons for liking the Russians. IDC says that the Russian IT market is about $1.9 billion. The St. Petersburg Times

China's SDRC to set up software-outsourcing jv with Microsoft and Tata

This interesting development has Microsoft and Tata setting up a software outsourcing joint venture in China. This pretty much sums up a lot of the trends going on now in the offshoring world. Forbes.com

Outsourcing in Asia Pacific will lose luster in 2006—XMG - INQ7.net

Canadian research firm XMG predicts that a lot of companies will take back certain key outsourcing functions as outsourcing contracts expire. In addition, growth will suffer in a mini-backlash against outsourcing. Outsourcing in Asia Pacific will lose luster in 2006—XMG - INQ7.net

Infosys Misses Earnings Estimate

Sales rose 31% and net income by 28% but that still was slightly below Street estimates. Infosys Misses Earnings Estimate

VOIP to spur more offshoring

The rise of the Internet was one of the major reasons why offshoring took off. Communication became easier and quicker and cheaper. VOIP is having the same impact. Skype to Skype "phone calls" are free, thus destroying another barrier to offshore work.

Outsourcing New Product Development

Highly educated Indians will likely continue to grow R&D in many areas. We have focused on pharma research and development but manufacturing will also be impacted. IndustryWeek

How to hire a firm for outsourcing

Simple clear concise advice on how to hire an outsourcing firm.
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BPOs will have to sharpen their new skills- The Economic Times

BPO's will have to go upstream to capture more business as their margins get squeezed. Billing rates for basic services have dropped to around $12 per hour for basic skills, down sharply from the $18 per hour several years ago. At the same time, labor costs have increased in the more expensive cities like Mumbai. Look for more skill based iniatives and for more focus on verticals. BPOs will have to sharpen their new skills- The Economic Times

Offshoring might head to Africa

The basic premise is that some offshoring may head to parts of Africa, such as Kenya, that have English language skills. Our take is that it is not likely to make much headway due to the poor communication infrastructure and education. Global Politician

Taro outsource pharma R&D to India

Israeli pharma company Taro Pharmaceutical Industries has created its first outsourcing deal with Alkem Labs in India. Alkem will use its expertise to enhance Taro's competitive position. Companies & Industry

How to keep data safe when outsourcing offshore

Data security has been a hot button lately after news that some Indian BPO workers had stolen identity information. This Computerworld opinion piece has some interesting insights into the issue. For example, laws in the EU protect consumers much more stringently than US laws thus making the problem appear to be less important. Also, many countries, such as India, China, and the Philippines don't have strong privacy laws which creates another opening for thieves to steal identity info "legally". Computerworld

Wipro targets latest outsourcing trend: R&D

We have highlighted the fast emerging trend of doing R&D offshore. Wipro, one of the world's premier outsourcers is now targeting that area. This company's credibility will accelerate the trend. EE Times UK - Wipro targets latest outsourcing trend: R&D

Outsourcing feels heat in US

There are 112 anti-outsourcing bills working their way through 40 states in the US, according to this article. There were 107 bills in 2004, of which five became law, according to the National Foundation for American Policy in a new study. The Times of India

BPO industry maturing through evolution

NASSCOM has just released a report on the BPO industry at the ITES-BPO Strategy Summit 2005 conference. The bottom line is that BPO remains a high growth industry with continuing high potential but that it will soon be maturing in the near future. BPO grew by over 56% during the last five years, faster than any other industry segment in India. Customer care remains the biggest segment but Finance is almost equal in revenue. Deccan Herald - Internet Edition

Prada ponders outsourcing to China

This is a good indication of how high the quality has become in China. FT.com

Cool new iPod colors

New iPod Mini Colors exclusively at JR.com

Outsourcing of tutorial services

Well, why not? With VOIP and webcams, what differenece does it make where the tutor is? Webindia123.com

Demographics boosting offshoring

One of the major boosts to offshoring comes from the aging population of the Western industrialized nations. This is particularly true in Europe where countries like France and Germany actually have declining local population. This means that there is a shortage of willing young workers for IT jobs. This gap is easily filled by offshore workers. Navhind Times on the Web: Business

Price falls on contract renewals in buyer's market

It looks like the acceptance of offshoring has opened the floodgates of competition. Prices are dropping! Price falls on contract renewals in buyer's market

Patent Search Outsourcing to India

This press release shows that just about any intellectual pursuit can be offshored. It looks like legal research will grow. Our take is that it will grow but will never approach the level of other offshoring projects. Patent Search Outsourcing to India

Chinese firms polish skills in outsource competition

We believe that the fastest growing country in outsourcing will be China. The main reasons are the sheer mass of programmers and the dramatic cost savings over other offshore centers. We have been outsourcing since 2000 and know that the Chinese are producing high quality programmers. True, they can't speak English very well but coding is done in programming languages. In addition, most communication we have with our coders is through written communication where their English is much better.

We have predicted in the past that the Indians and Japanese will increasingly outsource their commodity programming to China in the coming years. The Seattle Times

India, China can dictate terms in global outsourcing market

We have been talking for some time about how India and China will develop differing roles with India moving to the higher end of the value chain while China does the commodity development. We have also felt that the Indian should be using the Chinese and Pakistanis as their outsourcing partner.

This article talks about how India and China are working together and gives an excellent outline of the future. Highly recommended. Financial Express

BPO staffers hack bank accounts

This is clearly not going to help the case of offshoring. Still, it could have happened anywhere and just shows the need to create solid security processes. The Times of India

Gartner Outsourcing Summit: Reporter's notebook

Short wrapups of some of the presentations. Gartner Outsourcing Summit: Reporter's notebook

U.S., India open skies agreement to help outsourcing

This agreement will create more links between more cities in the US and India. Computerworld

Reuters U.S. Journalists to Protest Offshore Outsourcing of Jobs

I have a sneaking suspicion that the press coverage of outsourcing is either going to get much better or much worse!. Either the new journalists in India will be much more positive on the trend that created their jobs or the remaining UK journalists will now embark on a last ditch campaign to discredit offshoring. Extra! Read all about it! Yahoo Finance

China big threat to India on outsourcing says the Chairman of Wipro

It's fairly obvious that China will be the major competition to India in the coming years. However, it is interesting to read what a senior person in the industry says about it. Interesting insights. Financial Express

Russia bids for offshore outsourcing top spot

The government of Russia said that they are committing $650 million over the next five years to attract more foreign investment and the establishment of a local infrastructure as a way of boosting the offshoring industry. silicon.com

Report from Wipro's annual collaboration event

No real surprises here the detail is interesting. InformationWeek

Gartner Predicts Huge Increase In Offshore Outsourcing By 2015

The attention grabber is that Gartner expects 30% of IT jobs will be offshored by 2015. Gartner says that roughly 5% are offshored now.

They are also looking for an increase in offshore research and development to increase from the current $1.25 billion to as much as $12 billion by 2010. InformationWeek > Information Week

India can emerge as outsourcing destination for films

India has excellent IT talent and a huge movie making industry. Put them together and you can clearly see that India can become a major center of offshoring movie making.

Right now, the best computer graphics effects expertise is clearly in the US. But we look for India to start to move in that direction. The US will stay the leader for some time and we do not expect India to start to close the gap for a few years because it has so much more intellectual property right now.

Still, look for computer effects to be combined with the physical production facilities. For example, look for companies to do their miniature effects in India and then shift over to more and more computer effects over time. New Kerala

Outsourcing financial analysis

A hot trend in offshoring is the use of financial personal in India. Up til now, this has mainly been an offshoot of BPO where the Indian company moves up the value chain to not only process some back office documents but to all do some limited bookkeepping or analysis.

However, now the talk is to offshore true analysis, including such areas as financial analysis for stock brokers. Clearly, this will never be a huge market because the number of stock analysts in the world is small. But it will have an outsize impact on the financial markets.

We look for India to take an instant and large lead largely because of their educational system and language. The Telegraph

The New Tech Outsourcing Leaders: Bulgaria, Latvia and Romania?

Following on our article below on Eastern Europe comes this article on how many Eastern European companies are hotbeds of technical expertise. This is just another reason why we look for Eastern Europe to gain market share in the global market for offshoring. Always On

The coming explosive growth in pharma offshoring

We have talked about how pharma will be one of the major new trends in offshoring. This article goes into detail on exactly which parts of the pharna value chain will be the primary beneficiaries and what the cost savings will be. Financial Express

Outsourcing: The new phase of EU business

Discussions about offshoring are dominated by India, China, and a few other countries. Furthermore, virtually all discussions are about the impact on the US. But the dynamics of European outsourcing are different.

Much of European offshoring was going to such places as Roumania, the Ukraine, and Russia. However, the new Eastern European countries that have joined the European Union will now be the recipient of a growing market share. The advantages are that they are in the EU and are easy to visit and the time zone difference is trivial. Language is also a potential plus. New Kerala

China to overtake India as largest outsourcer

It has been out opinion for a long time that China would eventually overtake India as India moves upscale and more business moves to China.

Two strategic advisory groups have just published a study which suggests that China will become number one by 2015. IDM.net.au