The business process outsourcing (BPO) industry witnessed buyouts and PE deals worth almost $3.9 billion between January and October this year. Read more
Advanced and pervasive virtualization and cloud computing trends are driving the need for a better, holistic approach to IT support and remediation. Keeping virtualized servers that support mission-critical applications and databases at top levels of performance 24 x 7 is a much different problem than for maintaining physical servers in traditional configurations. Read more
Recently Forrester Research published a report on offshore vendor innovation. According to the report, close to 41% of companies using offshore outsource providers are not getting any innovative solutions from their providers. Read more
Capgemini announced that as an early participant in the SAP-MICROSOFT Unite Partner Connection program, which drives interoperability and collaboration among SAP, Microsoft Corp. and participating partners, has re-launched its ERP+ solution portfolio and has created a dedicated development center in support of Duet® Enterprise software. Located in Mumbai, India, the engineers at the center will help build IP sector and industry solutions in the form of business packages, tailored to clients’ specific needs to run on the Duet Enterprise platform. Through these custom-made business packages, Capgemini aims to help customers drive sales productivity, develop market opportunities, streamline processes and reduce costs by extending and leveraging SAP® applications through Microsoft SharePoint 2010. Read more
Analysts Discuss Key Issues Facing the IT Industry During Gartner Symposium/ITxpo 2011, November 21- 23, in Mumbai. India and other emerging markets continues exercising strong momentum despite inflationary pressures and appreciation of local currencies, which are expected in rising economies. Gartner’s forecast shows that worldwide IT spending will reach nearly $3.7 trillion in 2011. From this amount, emerging economies will account for $1.013 trillion.
IT spending in India is projected to total $79.8 billion in 2012, a 9.1 percent increase from 2011 spending of $73.1 billion, according to Gartner, Inc. Despite global economic challenges, enterprises will continue to invest in IT. Read more
Recent,ly Business Week published an article that predicted that slowly American manufacturing jobs are coming back to US, and that the rate will accelerate in the coming years. The article explained various anecdotal evidences and statistics to prove the point.
Following are some of the evidences for outsourced manufacturing jobs are coming back to US:
The Institute for Supply Management (ISM) reported that manufacturing companies in the US have expanded for the past 24 consecutive months.
The Federal Reserve reported that US manufacturing jobs gained year-over-year 3.8%.
Following are some of the reasons quoted for manufacturing jobs coming back to the US:
The labor cost in China has been growing by 15%-20% on a yearly basis; this is 30% lower than low-cost cities in US. It has been predicted that the manufacturing cost in China will equalize with the American manufacturing cost by 2015.
Similar to manufacturing jobs coming back to the US, ITO and BPO jobs are coming back from India to the US. Several new names are formed to denote this phenomenon, such as onshoring, insourcing, and US rural sourcing. The big question is how it will affect India’s status as the only country for ITO and BPO jobs? At this time no one knows the extent to how much it will affect India. Also, in the US the current unemployment rate in IT is less than 4%. Still, companies are having a tough time finding qualified IT workers in hot technologies like web design, Java, cloud computing, and mobile technology.
McKinsey did a research report on onshoring. In the report they found out that the IT wage in smaller US cities are 30% lower than in bigger US cities. Meanwhile in India both attrition rate and wages are increasing sharply, which puts pressure on big Indian outsource companies like TCS, Wipro, and Infosys to maintain their profit margin. These Indian outsource companies’ business model is to hire more IT workers early and make them work in an outsourced project. So with less quality workers in India, a high attrition rate, and a steep wage rise, it will be difficult to keep the profit-margin without rising their client engagement fee.
American companies are watching the trends in India, and are making wise decisions on their sourcing strategies, choosing from various sourcing strategies like onshoring, ruralsourcing, closeshoring, nearshoring, and offshoring. However, the current demand for IT workers make American companies look to India as their preferred offshore destination for their large-scale IT needs in which cost arbitrage is the main requirement in their projects. This trend will continue until the cost of IT workers India is less than in US. No one knows how long it will take for Indian IT salaries to be comparable to American IT salaries and when cost arbitrage will no longer be possible. Until that day, India can enjoy large scale ITO and BPO projects coming their way.
National Association of Software and Services Companies (NASSCOM) presented a preview of the two-day NASSCOM Product Conclave 2011 scheduled to be held on November 9 and 10 at the Vivanta by Taj, Yeshwanthpur, Bengaluru. Read more
Wipro Technologies, and Diversey, a leading global provider of commercial cleaning, sanitation and hygiene solutions, have jointly won the ‘IT Outsourcing Project of the Year’ award at the eighth annual National Outsourcing Association (NOA) Awards ceremony. Read more