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UTSOURCING. Unlike previous occasions big corps are not putting any fight to stop the bill. There is a heavy lobbying and pressure from labor groups in support of the bill.(Source: http://www.rediff.com/money/2003/jul/16bpo.htmSCJP 1.4
Originally posted by Greg Valenti:
Hi to folks in usa,
wht do u think abt the abolishion of H1-B visas alltogether.Dont keep saying that america can not survive with out H1's as that is not an option this time.
Originally posted by Greg Valenti:
My Question:
Now do you know how long does it take for a bill from a proposal stage to acceptance stage.
Outsourcing will not be the panacea companies think it is.
I'm going to be a "small government" candidate. I'll be the government. Just me. No one else.
I realized with some horror just this morning that at the most recent rates I've seen, an Indian computer programmer would have to have 3-4 years of experience (assuming no taxes, rent, etc.) just to have enough income to cover my household grocery bill. That's me, my wife and my cat. And I consider food to be CHEAP in this country!
SCJP 1.4
Originally posted by San Tiruvan:
Many engineers and programmers in Kuwait who make $200,000 per year would've gone mad seeing their projects being sent to United States where CHEAP programmers here do the same job for $60,000 per year.
Guess what, with 60,000 USD in Kuwait you can't do many routine things either.
It's all RELATIVE my friend.
Consider yourself lucky to have been born in a country where food is cheaper than most places. Don't abuse that privilege.
Just because people in India don't earn as much as you do RELATIVELY (yes, don't believe the media coz we arent' a developing nation anymore, we are a developed nation), doesn't make them or their work any smaller than yours.
Infact they say "Success of a person should be measured by the resources he has used to achieve it".
About programmers in India not doing a good job it is nothing but the usual tendency of a person to "generalize" while speaking. There are WORST, BAD, AVERAGE, GOOD and EXCELLENT programmers in every race, religion, region and community.
Sorry if I went overboard, I am just sick of people accusing us.
Originally posted by Paul Pullman:
My point is that I would not count on the failure or poor quality of products generated by the Indians to keep my career going.
... My claim is that any software project done overseas that isn't off-the-shelf is asking for trouble.
I'm going to be a "small government" candidate. I'll be the government. Just me. No one else.
Originally posted by Paul Pullman:
There are always troubles to do any non-trivial projects successfully, no mater where they are done. The infamous Chrysler Project came to mind. The soft side always is hard to grasp, either here or there. Correct me if I am wrong, the failure (or waste) of software development in the US has been historically about 75-80%, maybe even higher than that. I do not think that is a very high mark for anyone to hit.
Originally posted by Paul Pullman:
From what I see it, the corporate America will offsource some trivial off-the-shelf projects, learn a lesson, and then hit the gas pedal in 5 to 10 years. After all, we saw foreign-made products on the shelves of KMart, Wal-Mart, and the like first; now they are everywhere.
SCJP1.4, SCWCD
Originally posted by Natalie Kopple:
India does not want to send troops to Iraq. All India wants is U.S. jobs.
If US government instruct companies to stop outsourcing, then Indian Government will force cococola, pepsi, kfc, Mcdonals, pizza hut, ford etc to close their shops in India,
Michael
SCJP2
What was the Chrysler Project? I'm not familiar with it.
Originally posted by Paul Pullman:
It is considered to be the birth place of XP...
Originally posted by Paul Pullman:
No disagreement on your comments on the soft side of the software development, which differs from the traditional manufacturing. Is there something
in the cooking to better tackle this?
Well, my upcoming book comes to mind... :-)
Originally posted by Vinod Jon:
US business interest in India (on a long run) is more than India's interest in US.
In short, the only software that can be sent overseas is that which can be well specified.
Business Process Outsourcing: Should you believe the hype?
To BPO or not to BPO?
It's a market that was worth �3.5bn in 2001 and is predicted to be worth over �10bn in 2005... That's an annual growth rate of over 30 per cent. These are the kind of statistics that tend to grab the headlines, and business process outsourcing has certainly had its fair share in recent times.
But is the hype justified? Is it really 'the next big thing', or just another meaningless marketing term? Should your company be looking at it - and if so, why?
Ovum Holway, whose analysts came up with the figures for the UK market above, describe business process outsourcing (BPO) as "Long term contracting out to an external company of the management and delivery of business processes."
That may sound obvious, but it's reassuring to know that this is one three letter acronym that does exactly what it says on the tin.
So is it a new name for an old phenomenon? Not really. Banks have been outsourcing cheque clearing operations for years; HR departments have used third parties to provide payroll services for a long time; both examples of BPO, a term which has been knocking around in the industry for at least five years.
Nevertheless, the hype around it has definitely grown of late, it is certainly becoming more popular - and the state of the economy has a lot to do with that.
Every company is looking to cut costs these days, and it's the one factor you'll hear mentioned most often in any BPO discussion.
Liberata specialises in working with companies in the financial services sector. Mike Lusby, business development director of Liberata Life, Pensions & Investments, said: "Cutting costs is what it's all about. Five years ago, you wouldn't have found any life and pension outsourcing deals. But we're expecting a huge acceleration in growth over the next five to eight years."
Ramkumar Akella, regional manager for Europe of offshoring specialist Infosys, said: "There is pressure on the margins of all companies in terms of increasing competition. Everyone's looking to cut costs in the first year, and then gain year-on-year productivity gains. That creates a compelling business case [for BPO]."
Les Mara, executive director of Cap Gemini Ernst & Young UK, agreed: "When we talk to companies, it is usually an FD-led discussion. They want to reduce costs, or turn fixed costs into variable costs. Given the current state of the economy, all companies are trying to do this, while improving the efficiency of their administrative processes."
The latter point is crucial, despite the emphasis on bottom line issues. As Lusby also went on to say, cost isn't the only factor. BPO allows you to focus on your core activities and get rid of those you'd deem as a chore. Lusby said: "We prefer to talk about strategic and non-strategic. No company should be interested in retaining control over non-strategic activities."
That's partly a cost issue - a service provider which specialises in a particular process or a range of similar processes will give you access to economies of scale you couldn't possibly match in-house - but it's also about gaining access to specialist expertise and, hopefully, a better quality of service.
This recognition is helping the BPO bandwagon gather pace. Companies are becoming more sophisticated in working out what's core, and what's not, and are indeed looking at issues other than cost. Philip Heggie, VP UK and Europe Global Outsourcing, Unisys, said: "The use of BPO has become a legitimate business strategy. There are numerous examples in the UK of BPO deals that five years ago would have been considered 'sacred cows'. These include finance, HR, banking back office and insurance back office processes."
But now, all these are fair game - and all have something in common. When asked if certain business processes are more suitable outsourcing targets than others, Heggie said: "Processes that are structured and repeatable are particularly suitable for outsourcing, as are processes that would benefit from the economies of scale and scope that an outsource service provider is able to provide. I'd also include processes that are core but not critical and that are usually back-office oriented, for example cheque processing and claims processing."
There are many benefits to be reaped from a healthy BPO relationship. Ovum believes that freeing up management time, speeding up time to market, management of rapid growth, and better risk management are all key potential plus points.
Gartner also thinks the first of these is crucial. In a recent BPO report, the analyst house said: "An additional driver for BPO... and the motivation of the CEO to outsourcing business processes is the need to find a way of capitalising on their most scarce resource. What is this resource? Cash? Ideas? No, it's the time of good managers."
The report continues: "Management bandwidth is a scarce resource and CEOs want to free up the time of key managers so they may work on the issues that make a vital competitive difference to the business. In most organisations the managers are busy trying to juggle broken processes, dealing with day-to-day low-value issues rather than having time for vision and leadership. If this is not the case in your organisation, as your managers are able to focus on leading the company forward, perhaps you are not a good candidate for BPO."
Whether this applies to your company or not, most analysts and industry experts warn against a blinkered focus on monetary issues. According to Gartner, European businesses wasted around E6bn on badly structured outsourcing deals in 2002, largely because so many were designed to save money in the short term and ignored longer-term business requirements. Remember, cheaper isn't always better.
And there are some other traps lurking to catch the unwary. Unisys' Heggie warns: "Failing to have a clear sourcing strategy is one potential pitfall... as is not being adequately prepared for the long, complicated procurement process involved and misunderstanding the real 'partnership' needs of each partner."
Indeed, that procurement effort should span many months. Liberata's Lusby said: "Don't under-estimate the amount of time it takes to go through the whole process."
Ovum again has something to say on the risk front. Its list of thorny BPO issues includes: supplier survival, change management, contract lock-in, security/confidentiality, decline in performance, and a loss of control - all familiar arguments to the anti-IT outsourcing brigade, but worth repeating.
Gartner identifies another potential problem. Just as the recession is affecting end user organisations, the suppliers are also having to take drastic action - and over-selling has become a very real issue. Its report advises: "Understand what BPO is - an increasing number of vendors are using it as a 're-labelling' exercise... Know the market - there are a few 'old hand' BPO vendors in Europe. Sales prowess may outstrip delivery capability."
To avoid many of these traps, Gartner has come up with a simple, three-point plan to improve the structure of an IT outsourcing deal, but which apply to BPO deals as well:
* Take a long-term view and look at your service provider as part of your company (what Infosys' Akella calls the "extended enterprise" concept)
* Build deals that can cope with continuous change
* Invest in the skills, resources and processes needed to manage the contract.
Sounds easy? Clearly it's not, but with some good planning, careful management and maybe a little luck, BPO could well work for your organisation.
But who will work well with your organisation? As the focus of BPO is on the BP bit and not IT, there are some new names to conjure with, although Ovum's list of the likely winners on the supply side of the equation do include the usual suspects with a background in 'traditional' IT outsourcing - hardly surprising given the IT-intensive nature of many of the processes companies are outsourcing these days. Capita on its own accounts for 15 per cent of the market, while Cap Gemini Ernst & Young, CSC, EDS and IBM are all extremely active. Unisys employs around 6,000 BPO staff.
But then the business service players are joining in (Amey, Hays, Serco); the consultancies too (Accenture, Deloitte et al); the transaction processing specialists are taking a slice of the pie (ADP, Centrefile, Ceridian); and last but not least are the new breed of pure-play BPO outfits (e-peopleserve, Xchanging).
Come 2005, Ovum reckons there'll be even more new names near the top of the supply side list: pure-play BPO outfits such as Exult; new UK entrants such as ACS and Convergys; and offshore players such HCL, Infosys, Satyam, and Tata.
So, come 2005, will your organisation be on the BPO end user list? Is it all hype, or is it the next (old) big thing? Only you can answer that... and, as ever, we'd be delighted to hear your views on the subject. Email us at editorial@silicon.com.
Graham Hayday
I think we should nominate Tim Holloway to Washington DC for snapping those guys head a little bit.
If H1-B program stopped, so what? The overseas professional will not come to US, is that going to bring back employment that you lost? Remember the seed of offshoring indisguise of outsourcing already been implanted. Western countries may well admitted that we lost to India over global strategies. The only way out is more regulations into offshoring, some companies still do because they are the underdog. But we try to prevent or at least discourage the topdog companies to follow the same path.
On the LA Times today, the Washington top economics wonder about the new phenomenon that economy growth but job is not gained.
SCJP1.4, SCWCD
Originally posted by Matt Cao:
Every Friday the company is so quiet you can hear coworkers heartbeats because it is the time for the loud speakers anounce employee id(s) come to conference room and wait for HR rep.
| Don't get me started about those stupid light bulbs. |
