Nearshore Outsourcing - Softtek

Softtek Ranks 30th Best Provider in the World by Prestigious IAOP 2013 Global Outsourcing 100 List ®

Wed, 08 May 2013 00:00:00 +0000

Softtek Ranks 30^th Best Provider in the World by Prestigious IAOP 2013 Global Outsourcing 100 List ®

Milestone marks a successful year of global expansion, client wins and corporate social responsibility

MONTERREY, Mexico – May 8, 2013 – Softtek, founder of the nearshore industry and leading global IT services provider dedicated to maximizing the value of applications, announced today that it has achieved the firm’s highest position to-date in the International Association of Outsourcing Professionals’® (IAOP®) prestigious Global Outsourcing 100 list. In addition to ranking as the 30^th best outsourcer in the world, Softtek is ranked in the Leader category, a designation that it has now received for 5 consecutive years.

Softtek was also chosen as a Best 20 Leader in 5 categories: Financial Services (Banking, Markets); Technology (Hardware & Software); Discrete Manufacturing; Information Technology Services and Transaction Processing Services. The firm was, moreover, chosen as one of the Best 10 Companies in South/Central America.

This ranking follows significant company achievements for Softtek, which recently acquired the Silicon Valley-based Systech Integrators, Inc., launched an Enterprise Mobility-specific Center of Excellence (CoE) in Beijing, China and was recognized by the Mexican Center of Philanthropy as a “Socially Responsible Company” for the 4^th year in a row.

Blanca Treviño, President and CEO of Softtek, said, “We are thrilled to be recognized by IAOP for the innovation and business value we bring to our clients. Not only does this ranking provide a comprehensive view of the industry, it shows our tremendous growth from last year, demonstrating our commitment to excellence. We’ve moved up by nearly 20 spots, making this our highest ranking to-date.” Treviño continued, “I would like to thank the IAOP judges and Softtek’s team of over 8,000 global associates who are responsible for the great work we do every day.”

“As applicants continually raise the bar and as the outsourcing industry continues to grow and mature in many markets, competition is tougher,” said Jag Dalal, Managing Director of Thought Leadership, IAOP and chairman of the judges' panel. “Being named to The Global Outsourcing 100 is a great achievement, particularly given the strong competition, and we are proud to recognize Softtek for their excellence.”

The 2013 Global Outsourcing 100 recognizes the world’s best outsourcing service providers and advisors. These rankings are based on applications received and are then judged by an independent panel of experienced outsourcing buyers on four critical characteristics: size and growth; customer references; organizational competencies; and management capabilities.

For more information visit www.softtek.com, follow @Softtek on Twitter, connect with Softtek on LinkedIn and read Softtek’s blog.

About Softtek:
Founded in 1982, Softtek is a global provider of process-driven IT solutions with 30 offices in North America, Latin America, Europe and Asia. With 10 Global Delivery Centers in the U.S., Mexico, China, Brazil, Argentina, Spain and India, Softtek helps improve time-to-business-solution, lower costs of existing applications, deliver better engineered and tested applications, and produce predictable outcomes for top-tier corporations in over 20 countries. Through on-site, on-shore and its trademarked Global Nearshore™ service delivery models, Softtek teams with CIOs to constantly increase the business value of IT. Softtek is the creator and a leader of the nearshore industry. Visit www.softtek.com, follow @Softtek, connect with Softtek on LinkedIn and read Softtek’s blog.

About IAOP:
The International Association of Outsourcing Professionals® (IAOP®) is the global, standard-setting organization and advocate for the outsourcing profession. With more than 120,000 members and affiliates worldwide, IAOP helps companies increase their outsourcing success rate, improve their outsourcing ROI, and expand the opportunities for outsourcing across their businesses. To learn more, visit http://www.IAOP.org.

For more information, please contact:

For Softtek:

Karen Liedl
Marketing Communications Manager
Softtek
karen.liedl@softtek.com
+1 763-291-1464

Radha Ahlstrom-Vij
Gutenberg Communications
radha@gutenbergpr.com
+1 212-239-8741

For IAOP:
Pamela O’Dell
IAOP Director, Corporate & Professional Development
+1.845.452.0600, ext. 121
pam.odell@IAOP.org

Nearshore Nexus

Wed, 24 Apr 2013 00:00:00 +0000

Nearshore Americas >> Hyatt Regency Jersey City

More information at: http://bit.ly/yMsuwt

Nearshore Americas Power 50 2013

Tue, 26 Mar 2013 00:00:00 +0000

Nearshore Americas - Three Softtek executives rank in the 2013 Nearshore Power 50: President & CEO Blanca Treviño, Chief Global Officer Beni Lopez and VP of Marketing & Communications Alex Camino.

Global Outsourcing Conference Powers Connections Between the U.S. and Latin America

Thu, 07 Mar 2013 00:00:00 +0000

TMCnet - Key themes for the conference include: ...How does LATAM compare to India, China or Eastern Europe Nearshore Nexus is organized by the independent online business news provider Nearshore Americas and supported by world leading BPO and IT service providers including Tata Consultancy Services, Softtek, Unosquare, Atento, Avasant, Wipro, and Belatrix; as well as trade promotion agencies from the region, including ProNicaragua, Invest in Guatemala, Mexico IT and Brazil IT.

Implementation of a Dedicated QA and Testing Team for Insurance Company

Wed, 06 Mar 2013 00:00:00 +0000

The Client

The company is a full-service, multi-line provider of insurance and financial services. Its
portfolio of products and services includes annuities & retirement, banking, life insurance,
dental and health insurance, as well as employee benefit plans, among others.

The Challenge

The client acquired a third-party application for managing claims and payments with
the objective of increasing profitability, productivity, flexibility; reducing expenses, and
minimizing overhead costs. Due to the complexity of the application, effective software
quality assurance (QA) was critical to the project’s success.

The nature of the customer’s competitive industry demanded a robust IT partner that could
deliver a flexible solution while adapting to continuous changes within the company. Key
features sought after by the client included fast delivery of solutions, strong knowledge
transfer (KT) processes and a mature testing methodology.

The Solution

Softtek ramped up, in four weeks, a dedicated QA team of specialized testing engineers
with knowledge of payment and claims business processes. The Team was allocated
primarily at a Near Shore® location (80%) with an onshore (20%) component at the
client’s site.

The team worked with a mature yet flexible methodology, which covered functional and
end-to-end testing, as well as automated testing. Softtek also coached the client’s test
leaders and managers to promote the QA culture in the organization.

Due to the lack of documentation and functional specification of the previous system,
the client initiated the project by incorporating its subject matter experts (SMEs) into
the QA team.

Softtek’s KT strategy included an intensive training, which was carried out at Softtek’s
nearshore facilities. Training was aimed at increasing understanding of the application’s
business processes and consequently being able to interact more efficiently with SMEs.
The services provided by the QA team included Verifications, Test Planning, Test Analysis,
Test Design, Test Execution, Test Reporting and Test Automation.

The Benefits

30% cost reduction through the Near Shore® model. After the initial phase, Softtek optimized the use of nearshore capabilities by increasing from 80% to 98% the allocation of team members at Softtek’s Global Delivery Center in Mexico, fully leveraging the advantages provided by proximity, cultural affinity and strong communication inherent to the Near Shore® model.

Creation of a solid knowledge base, providing a platform for future work with the application.

66% reduction in Regression Testing cycles due to Test Automation Implementation.

On-time production release of claims’ payment application.

SMEs were able to focus on business evolution, rather than validating the quality of the software.
Implementation of test metrics, which were used for decision-making and risk management.
Increase in quality through ambitious benchmarks to assure improvement in defect detection.

The Voice of the Customer
"I really enjoy working with the Softtek team
assigned to our project. They always go above and beyond.
Great communication skills as well."
QA Manager

About Softtek
Founded in 1982, Softtek is a global provider of process-driven IT solutions with 30 offices in
North America, Latin America, Europe and Asia. With nine Global Delivery Centers in Mexico,
China, Brazil, Argentina, Spain and India, Softtek helps improve time-to-business-solution,
lower costs of existing applications, deliver better engineered and tested applications, and
produce predictable outcomes for top-tier corporations in over 20 countries. Through on-site,
on-shore and its trademarked Global Nearshore™ service delivery models, Softtek teams with
CIOs to constantly increase the business value of IT. Softtek is the creator and a leader of the
nearshore industry.

Blanca Treviño, presidenta y CEO de Softtek, apuesta al nearshore (Forbes)

Fri, 15 Feb 2013 00:00:00 +0000

Blanca Treviño, presidenta y CEO de Softtek, apuesta al nearshore (Forbes)

Business Applications Maximized

Fri, 16 Nov 2012 00:00:00 +0000

Softtek, a nimble global IT services partner

Thu, 15 Nov 2012 00:00:00 +0000

Nearshore – More Relevant than Ever

Tue, 13 Nov 2012 14:16:07 +0000

Nearshore Outsourcing

Dan Berthiaume

Nearshore locations are obtaining increasing relevance in the service delivery portfolios of global BPO buyers, according to new data from Everest Group. In a recent webinar covering notable Q3 2012 BPO trends, Everest Group zeroed in on some of the intriguing activity occurring in the nearshore BPO space.

Everest Group actually breaks its definition of nearshore into two separate categories: “near” nearshore with close proximity to source geography and similar time zone, such as Mexico to the US, and “far” nearshore with similar time zone to source geography but significant geographical distance, such as Argentina to the US. Everest Group also takes a global approach to the nearshore BPO phenomenon, looking at how clients in other regions of the world select nearshore outsourcing locations (such as France and Mauritius) as well as how US clients select locations in Latin America and the Caribbean.

Bigger Companies More Likely to Use Nearshore
Regardless of whether you’re talking about “near” or “far” nearshoring, the numbers suggest nearshore locations are a crucial component of many companies’ global service strategies. Fifty-seven percent of global companies with more than 2,500 full-time employees (FTEs) have nearshore outsourcing operations. This figure drops to 31% for global companies with 500-2,500 FTEs and only 14% of global companies with fewer than 500 FTEs.

As might be expected, the average number of nearshore locations in a global company’s BPO portfolio also drops with size. Organizations with more than 2,500 FTEs average 2.6 nearshore locations, which falls to 1.9 for organizations with 500-2,500 FTEs and 1.2 for those with fewer than 500 FTEs.

Nearshore Services Market Value Grows
The value of the global nearshore services market is growing dramatically, according to Everest figures. The total global services market has a value of $120 billion USD this year, with nearshore services representing more than a third (36-38%). And the global nearshore services market has been experiencing a compound annual growth rate (CAGR) of 5-6% for the past four years. In 2008, the global nearshore services market was valued at $37 billion USD. This amount reached $40 billion USD in 2010 and should total an estimated $45 billion USD this year.

Regional Differences Exist
Different regions of the world tend to employ nearshore services differently. For example, Everest Group finds that in North America, nearshore services predominantly serve the US across IT and BPO services and have actually seen stagnant growth in recent years. In Europe, BPO clients look for nearshore European language capability and domain- and industry-specific skills, and growth in new delivery centers is much more active.

Looking at source regions, the value proposition of Latin American nearshore services is mainly around bilingual support, but they are also leveraged for F&A and IT services. Delivery center growth is much greater in the rest of Latin American than in Mexico. And Africa is an emerging geography with healthy service center growth and high future growth potential, with differences across locations in functions and source markets.

So no matter what shore is “near” to you and whether you are interested in “near” or “far” nearshoring, the advantages of time zone, culture and cost offered by nearshore outsourcing are worth investigating. Considering the impressive CAGR of nearshore services, if you don’t investigate, your competitors probably will or already have.

October IT Job Growth Shows Tech Sector Still Strong

Fri, 09 Nov 2012 08:21:49 +0000

Nearshore Outsourcing

Clay Browne

Image by Lucian Savluc.

The recently released Bureau of Labor Statistics October jobs report showed that the IT sector added an impressive 12,500 jobs for the month, up from losing 1,700 jobs in September. This means that IT jobs accounted for almost 8 percent of the 171,000 jobs added to the U.S. economy in October.

Most industry analysts were not surprised by the strong job numbers. They had already discounted September’s poor numbers as a one-time even related to seasonal factors. According to David Foote, CEO at Foote Partners, "This October rebound in IT job creation is exactly what we predicted last month in our analysis of the September BLS jobs report.”

Analysts including Foote had pointed out that the weak September numbers resulted from nervousness related to the presidential campaign rhetoric surrounding the end of the Bush era tax cuts in January. They argued that this plus end-of-the-year fiscal planning activity at the start of the final calendar quarter caused many companies to step back and rethink their hiring plans.

Any way you look at it, the IT sector has shown impressive strength throughout 2012. The IT industry has added an average of 9,600 jobs per month this year, even with the -1,700 in September. Putting October’s strong performance in perspective, adding 12,500 jobs is a 23 percent improvement from the 9,600 12-month trailing average.

Tech Sector Leading Economy

Given that the trade association Tech America also just released a report mirroring the BLS data released this week, pointing to 3.3 percent job growth rate in the industry to date in 2012, there can be little argument that the tech sector is currently one of the bright spots of the still-recovering U.S. economy.

The Tech America report highlighted that U.S. tech industry jobs hit the 6 million mark at the end of June, and has added over 200,000 jobs over the last 18 months. The IT services industry was singled out for its exceptional two-year run of sustained growth.

Backing up the strong current and anticipated future growth in the IT industry in his press release, Foote also commented, “This was not just a reversal of September's dip, but a big statement that demand for IT professionals is unquestioned.”

Tech Industry Growth Across U.S. Heartland

One of the reasons that the tech industry (and the IT services industry in specific) continue to show relative resilience in the face of the long-running economic downturn is the fact that new tech start ups have been cropping up everywhere from Dayton, Ohio to Greensboro, North Carolina, to Austin, Texas.

A new joint study by the Bay Area Council Economic Institute, a nonpartisan research organization, and Engine Advocacy, a group studying policy issues facing tech startups, shows that over 70 percent of counties across the U.S. had one or more high-tech startups based there in 2009, and that high-tech startup creation has held steady during the recession, which makes it a source of strength in an economy where startups have decreased by an average of nearly 20% across the board (from 650,000 in 2007 to 500,000 in 2010). The report also pointed out that tech industry private sector employment is expected to grow by 16 percent over the next eight years, compared to just 12.8 percent for all industries.

Illumiti partners with Softtek to address growth in customer support services

Thu, 01 Nov 2012 00:00:00 +0000

Illumiti - “We are very pleased to be working with Softtek. It’s critical for our team to be able to provide top notch service, not just in North America, but every country in which our clients operate,” said Illumiti COO Dror Orbach. “Softtek’s 24/7 on-call support and large presence in Mexico and several other countries, will further strengthen our ability to serve our customers internationally, wherever they are, whenever they need help.”

Gartner Symposium/ITxpo 2012

Sun, 21 Oct 2012 00:00:00 +0000

Gartner >> Orlando, FL

More information at: http://bit.ly/xNNoUl

The Rise of Elastic ITO

Mon, 10 Sep 2012 13:48:10 +0000

Nearshore Outsourcing

Dan Berthiaume

Despite ITO’s reputation as a means of reducing cost, lowering the expense of maintaining in-house IT operations is not always the top priority for an organization purchasing ITO services. As a recent survey of CIOs and other top-level IT decision-makers from global consulting firm Bluewolf indicates, needs to increase IT agility and have access to specialized IT talent are becoming as or more important than cost reduction.

The Elastic Approach to IT Staffing
Bluewolf found that CIOs, directors, and managers are shifting away from traditional IT staffing methodologies and instead turning to what the consulting group terms an “elastic workforce.” This means embracing a multi-sourcing model where IT employees, services, applications and infrastructure are sourced from several different locations, which can include both in- and out-of-house options.

In addition to increasing the agility and fault tolerance of the IT department, multi-sourcing also allows IT decision-makers to have access to top-level experts on as “as needed” basis, gaining both expertise and outside perspective. Previously associated with cost-cutting, IT outsourcing is thus evolving into a strategic tool whose use Bluewolf predicts continue to grow as CIOs increase emphasis on customer service, employee engagement and the overall role human beings play, alongside technology, in driving innovation.

ITO Market Shows Real Growth
In addition to its own judgment, Bluewolf also has some real numbers to back up its assertion that the IT outsourcing market is growing. For example, 32% of survey respondents say they will increase IT outsourcing investments and 48% say they will hire more contractors rather than full-time staff, in the next 12-18 months.

Survey results also show some tilt toward application services and cloud computing in the current ITO arena. Bluewolf research shows that on average, 48% of outsourcing budgets are allocated towards application service and 17% of all outsourced data center operations are managed in the cloud. Bluewolf says cloud computing is partially driving outsourcing growth, as more companies use applications from the likes of Salesforce, Google and Workday.

The Elastic Revolution: Join or Suffer the Consequences
All CIOs, whether they currently engage or are considering engaging in ITO, need to seriously consider joining the “elastic revolution.” Bluewolf is frank in its warning to companies that do not take this approach to ITO, stating that “companies who don’t modernize both their technology and how they access talent face the possibility of extinction” as a result of not being able to find talent fast enough in response to modern technology challenges such as cloud, Big Data, social enterprise and mobile.

Extinction may be too strong a warning, especially in the year 2012 when there are already so many doomsday scenarios flying around, but Bluewolf is correct in stating that the elastic workforce represents the future of IT staffing. The increased pace of technology development and global business competition means companies have to stay constantly at the leading edge of IT just to avoid falling behind.

And unless you have the in-house human, technical and monetary resources of an IT giant like Facebook, Google or Microsoft, this will require creative outsourcing that allows access to different specialized sources of talent and technology, when needed. Cost is always a prime factor in any business decision, but smart CIOs will start to think more “elastically” when evaluating ITO service providers.

Beyond Nearshore: The Next Wave for Latin America

Thu, 06 Sep 2012 00:00:00 +0000

Nearshore Americas - Softtek Director of Marketing for the U.S. Federico Ferreres explains why location’s relevance in outsourcing will diminish in the next five years.

Believing the Hype – What the Future Holds for CIOs

Wed, 29 Aug 2012 15:58:52 +0000

Nearshore Outsourcing

Dan Berthiaume

Predictions of where IT is headed, even in the fairly short term, are always tricky. Some trends, like the form factors of Internet devices continuing to get smaller and smaller, are fairly easy to spot. Others, like the rapid development of social media as a pervasive communication and collaboration tool, took the world by surprise.

However, Gartner has a pretty good grip on all the latest developments in IT, so CIOs should certainly pay attention to the predictions in the research group’s new “2012 Hype Cycle for Emerging Technologies.” They may not all come true, but they at least give a general indication of the IT landscape CIOs will be living in a few years from now. Let’s take a quick stroll through some of the more interesting predictions.

Big Data, Small Price – The Big Data phenomenon has gotten quite a bit of attention lately. While Big Data offers the opportunity to radically improve understanding of your customers and your company’s brand image, this opportunity usually comes with a hefty price tag. Gartner expects continuing developments in technologies such as quantum and cloud computing will drastically reduce the cost of collecting, sifting, storing and analyzing Big Data, and also scale Big Data so that even small enterprises can effectively use it.

Once Big Data becomes a standard, CIOs will have to focus on finding creative means of analyzing it, such as wide-ranging comparative analysis or the application of advanced algorithms to turn Big Data into a predictor of the future as well as an indicator of the present. In the meantime, CIOs should look into cost-effective Big Data outsourcing options to help get a leg up while Big Data is still somewhat exotic and mysterious.

The Personal Touch – Gartner also predicts that a vast collection of leading-edge technologies including human augmentation, volumetric and holographic displays, automatic content recognition, natural-language question answering, speech-to-speech translation, gamification, augmented reality, cloud computing, NFC, gesture control, virtual worlds, biometric authentication methods, speech recognition and yes, Big Data will create a world where humans interact with technology much more naturally.

This development will simultaneously make the CIO’s job easier and harder. IT departments will run more smoothly and cost-effectively as intuitive systems and employees who have literally grown up using technology on a constant basis drastically reduce the time and expense of training and error rates.

However, senior management may also conclude that there is less need for a formal IT department in this type of pervasive technology environment, cutting budgets and reducing the power and standing of the CIO role. CIOs need to focus on high-level strategic IT functions that require more than the knowledge of how to operate or maintain technology to ensure the value of the IT department is recognized. Outsourcing more routine IT functions is one way to help keep the department focused on higher-value activities that require specialized knowledge.

Bring Your Own Everything – Last week, Felipe Pacheco wrote an excellent column outlining the “BYOD” (Bring Your Own Device) trend, and there is no need to rehash what he already said. However, Gartner does predict employees will continue increasing the amount of corporate work they perform on personal devices. CIOs need to develop comprehensive strategies now and also start considering the impact of the mobile form factor on things like user interfaces, intranet portals and data storage.

Declining Consumer Confidence Increases ITO Value

Mon, 27 Aug 2012 21:48:04 +0000

Nearshore Outsourcing

Dan Berthiaume

As US consumer confidence continues declining in the face of economic and sociopolitical uncertainty, the value of ITO as a way to internally adjust to uncontrollable external factors grows. A recent second quarter report from The Nielsen Company, “Consumer Confidence, Concerns and
Spending Intentions around the World,” demonstrates the falling confidence and changing spending habits of US consumers that make ITO an attractive option for maintaining profitability even as revenues decline.

During Q2 2012, Nielsen’s US Consumer Confidence Index declined five points to 87 after a nine-point increase the previous quarter. Nearly six in 10 Americans (59%) were pessimistic about job prospects over the next 12 months, 63% indicated spending will be restrained and 30% reported they have no spare cash, a rise of seven percentage points from Q1. Almost eight in 10 Americans (78%) believe the country is still in a recession. Accompanying the restraint in spending is a renewed focus by US consumers on saving money and paying down debt.

ITO To The Rescue
In this harsh consumer climate, any company which provides a product or service (and that pretty much encompasses all companies) is likely to feel at least some economic impact. Even providers of B2B products and services will still feel the effects of declining consumer confidence, as somewhere down the line their clients or clients’ clients inevitably provide something bought by consumers who will probably buy less for the foreseeable future.

Cutting prices is one option, but there is no guarantee that business will pick up enough to offset the resulting loss of topline revenue. In addition, once customers (whether of the B2C or B2B variety) get used to paying lower prices, they will not necessarily accept a price increase once the economy rebounds.

Another option is wholesale layoffs. This definitely reduces internal costs, but also negatively impacts employee morale and can reduce operational efficiency. Widepsread layoffs have become the de facto response of American business at the first sign of economic trouble, but a look at the track records of companies that engage in this type of cost-cutting strategy shows mixed results at best.

This is where ITO comes in. Carefully evaluating your company’s internal IT environment and capabilities and determining which portions could be performed less expensively in an offshore location allows you to cut internal costs while maintaining existing price levels. In addition, by ensuring that only non-“mission critical” IT functions are outsourced, companies can minimize any negative impact on operational efficiency and effectiveness.

Furthermore, while layoffs often result from outsourcing initiatives, they tend to be carefully targeted and sometimes employees even have the opportunity to maintain their jobs with the new IT services provider, or at least have a transitional phase. Thus the impact on morale is much smaller than that of across-the-board layoffs which cause a substantial portion of a company’s staff to lose their jobs in one fell swoop.

Companies investigating ITO as a means of maintaining profitability even as consumers tighten their purse strings should also keep an open mind when it comes to selecting a sourcing destination. While “farshore” locales such as India and China are traditionally the most popular choices for ITO service delivery, “nearshore” locales in Latin America and the Caribbean are quickly becoming strong competition for US business.

Nearshore providers are especially making a name for themselves in areas such as software development and website design/hosting, and advantages such as minimal time zone and cultural differences further enhance the value nearshore ITO providers can deliver. ITO is not a magic bullet for the problem of sagging consumer confidence, but it can give companies something to lean on when their customers pull away.

One Thing IT Leaders Are Learning: Don’t Fight BYOD

Fri, 24 Aug 2012 00:20:29 +0000

Nearshore Outsourcing

Filipe Pacheco

The concept of BYOD, or “Bring Your Own Device” (), has commonly been viewed through one of two lens: Either an opportunity to accelerate productivity and worker satisfaction or a threat brought to the enterprise by workers themselves.. Those same letters, when rearranged, ironically make up the word "body". No wonder: frequently a smartphone, a tablet or a netbook can be part of the body of a workaholic professional, and that does not change much from region to region.

The initials stand for the idea spread through many different professional environments that allow (and many times even incentivize) workers to bring their own technology and mobile devices to work. A recent report provided by Juniper Research shows that the use of BYOD is more intense, curiously, in Emerging Markets such as China, Brazil and Mexico than in developed economies like Great Britain, France and the United States.

The same idea is reinforced by Gartner. According to an analysis done by the research company, emerging economies, especially the BRIC countries (Brazil, Russia, India and China) have a higher percentage of “Y generation” employees, which are those more fond of the “BYOD philosophy”.

During a Gartner conference which took place in São Paulo this month, Gartner shared results of a global study (participation came form 900 companies with more than 500 workers each including Brazilian ones) showing that 90% of the repliers use their own devices at work, and that 86% plan on adopting tablets for professional tasks.

The main message after the panel "Architecture of applications, development and integration", given by Van Baker, was "fighting BYOD is a crazy battle” -- as published in the local branch of Computer World.

From Mr. Baker’s speech, bosses in general (which include those of BPO/Outsourcing companies anywhere in the world) can infer one simple thing: it doesn't matter where you are, do not waste energy and time trying to get rid of it -- even though some security concerns might be considered. Instead, make BYOD an ally at your enterprise.

Gartner suggests that, beyond creating security measures to avoid the leak of confidential data, companies should also create multidisciplinary teams with mobility strategies, to work alongside IT. Another measure would be to establish policies to ensure the reimbursement of costs regarding BYOD.

In the next two years, the number of mobile devices inside the corporate environment will more than double, predicts Juniper Research. Today, they are around 150 million and should rise to about 350 million by 2014.

The same study shows that the most reluctant "bosses" are those from the public sector. Two main reasons: worries regarding the security of confidential data and less pressure to be competitive in comparison to private companies.

Time to Cast Deeper Nets When Making Global Sourcing Predictions

Wed, 22 Aug 2012 19:20:21 +0000

Nearshore Outsourcing

Luke Bujarski

Tracking the global outsourcing industry is something akin to regulating commercial tuna fishing. Ask any of the five international fishery management bodies to tell you the size of the worldwide tuna population, and you’re likely to get five different answers. That’s because there are over 50 species of tuna, varying in size and domicile dispersed across most of the world’s oceans. And like tuna, outsourcing deals are plentiful, diverse in size and function, and widely distributed throughout the globe. This makes forecasting especially tough work for research advisory firms like Ovum and Everest that often depend on company press releases for their deal tracking data. Press releases catch the big fish, but what about the deals slipping through our nets? If we want to understand the future direction of the outsourcing industry, we should also cast deeper nets and pay closer attention to what’s happening with domestic outsourcing deals in China, India, Brazil and other emerging economies.

The pervasive and often subversive nature of the outsourcing industry makes it difficult to track. Most customers (particularly North American and European customers) are camera shy, preferring to stay out of the business & popular media spotlight. Only when deals get too big to push under the public relations boat, do we discover outsourcing mega arrangements like IBM’s recent 1billion dollar partnership with Mexican cement maker Cemex.

So when making forecasts, the research community typically looks at company press releases from publicly-traded companies. These companies have a responsibility to stakeholders to report on any major operational changes. These companies also tend to be American or European so naturally our perspective on the future of the outsourcing industry is based on the trends occurring in mainstream channels.

But what about domestic outsourcing deals in places like China and India? We rarely hear the details about how these markets are adopting outsourcing into common business practice. One recent example of this western-centric perspective is the Everest Group Q2 2012 Market Vista report that noted “the pace of growth [global outsourcing] is slowing down partly because of the debt crisis in Europe; the number of contracts has been sliding for some time now”. This may be true for U.S. and European firms outsourcing to eastern markets, but what about all of those deals swimming below the nets in countries like Mexico, Brazil, and Indonesia?

As we pontificate on the ‘future of outsourcing’ and point to public opinion and political backlash in the U.S. as the main threats to the industry, we need only to remember that the United States and Europe combined only make up about 15 percent of the global population. Today’s emerging markets will make up more than 50 percent of global GDP by 2020.

So while today’s deal sizes in countries like China and Brazil are smaller in terms of revenue, we should pay close attention to the deeper implications and analyze how domestic enterprises are
adopting the outsourcing model in these markets. Brazil is an example: Outsourcing IT services is common custom among Brazilian companies, but they don’t like offshoring and almost exclusively outsource to local partners. And while they’re accustomed to outsourcing IT, they’re not yet comfortable with back office functions. This in no way suggests that opportunities will not open up in Brazil BPO. Research advisory firm IDC believes the market will grow by 5 percent in 2012 alone, and sees BPO as an opportunity for vendors that can clearly define their value proposition.

Most experts agree that outsourcing has become the new standard practice in global business. There’s always the debate whether to in-house or outsource - like GM’s recent decision to reign in IT functions - but these are micro-level strategic matters. At the macro/global level outsourcing isn’t going anywhere. If anything it will evolve and take on unique forms across different domestic markets, particularly as cost arbitrage dwindles. So as we blaze forward with globalization let’s keep in mind that the outsourcing industry’s fate will largely depend on what’s happening in deeper uncharted waters.

Treading Carefully with the Insourcing Option

Thu, 16 Aug 2012 15:19:05 +0000

Nearshore Outsourcing

Dan Berthiaume

“Insourcing,” or bringing work based offshore back to the US, has been receiving increased attention recently. Politicians in both parties have made outsourcing a hot-button campaign issue,
and as domestic wages and operating costs have dropped during the economic crisis of the past few years, the cost advantage of outsourcing does not seem quite as dramatic.

However, as demonstrated in a new white paper from sourcing advisory group Alsbridge, “Insourcing 2012 – Pros, Cons and 10 Things to Consider,” the decision to insource is not one to be made lightly or quickly. Even if an outsourcing buyer can identify specific benefits such as cost savings or improved public image, insourcing is an expensive, time-intensive process that can have disastrous results if not performed properly. Let’s take a quick review of Alsbridge’s advice to prospective insourcers.

Assessing the Situation
Alsbridge recommends companies considering insourcing assess factors such as why in-house IT processes were originally outsourced, whether an outsourcing provider is willing/able to restructure and/or reprice an existing agreement, the full slate of risks (including possible changes in business direction during transition and in-house knowledge gaps), readiness to fully manage IT operations, and capability to rehire outsourced staff.

Looking more closely at some of these factors, it becomes apparent that insourcing involves a lot more than canceling or declining to renew a contract and restarting IT operations in-house. For example, outsourcing IT is not something companies do for the fun of it. Generally IT is outsourced due to some sort of problem with properly managing processes in-house. And even if IT was outsourced solely due to cost issues and now the price of talent and equipment is lower, even the most pessimistic observers do not expect the current recession to last forever. Companies that insource due to current low operational costs may find themselves facing high operational costs again within a year or two.

Also, most outsourcing providers are reasonable companies that understand sometimes circumstances change and agreements need to be modified. It is definitely worth it for a company considering insourcing to sit down with their ITO provider and discuss the reasons they many want to bring IT operations in-house. It is very possible the provider will work to accommodate their issues and maintain the outsourcing relationship.

And as Alsbridge points out, insourcing requires a full risk assessment that goes beyond obvious “front of mind” risks and also requires readiness to manage IT in-house. That requires implementing and maintaining an in-house IT platform and data center, hiring technical and managerial staff with specific IT expertise, and also managing a whole new set of IT vendor and maintenance contracts. While rehiring outsourced staff with this knowledge base can greatly ease these burdens, insourcing companies will need to check their contract termination language to see if it is permissible and even then, there is no guarantee outsourced employees will want to return.

Selective Insourcing
So insourcing is a complex, multifaceted task involving many challenges. And when a company is nearshoring IT processes, the benefits of insourcing become even smaller as nearshoring offers added value in terms of time zone and cultural similarities, relatively strong English capabilities, etc. However, as Alsbridge suggests, the best route for companies who are considering bringing outsourced IT activities back in-house is to “selectively insource.”

That is, if the skillsets and supporting architecture for certain processes are readily available, it may make sense to include insourcing them as part of a broader multi-sourcing strategy. And in some cases, insourcing most or all of outsourced IT processes will prove the best option. But an insourcing decision should only be made after careful and thorough review of all the mitigating factors, and always driven by internal needs and not in response to fluid external situations such as exchange rates or political opinions.

Corporate Backgrounder

Fri, 10 Aug 2012 00:00:00 +0000

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