Outsourcing Blog

Application Integration Outsourcing: Will your provider manage it?

Software development outsourcing is a good alternative to in-house development when you plan and use specific talents of niche providers instead of training and hiring in-house expertise. The wealth of knowledge and practice in different software technologies and platforms is essential to make an application integration initiative a success. Hiring an offshore company can be very beneficial and returns reduced costs in both time and resource. To achieve this, the outsourcing partner should be carefully selected under a well-thought matching process.

Offsite software implementation and integration solutions requires a highly skilled partner to collaborate with your team and build a design that integrates easily into existing applications without any major changes. Skilled partners can also integrate proper security, which should not be overlooked.

Key signs of provider’s capability

The developers’ expertise in diverse technologies, along with practical experience and analytical skills is the key to a sophisticated solution. Utilizing differently priced products and carefully selected open-source software cuts down overall development costs. For the outsourcing providers create a short list of things you can evaluate such as which technologies were applied in similar projects before to address customer’s needs. Make sure that they can support and offer diverse resources. Ask if the engineers performed proper evaluation of how the technologies fit the software solution. This information can typically be found in case studies or by inquiring directly.

When placing your order with niche professionals, expect they know the industry novelties that can best address your needs. If you want to benefit from new options provided by emerging technologies, inquire how software developers gain practical skills with such technologies and if they exercise by performing training projects, they will better understand related limitations and opportunities. The prototyping is a tool that helps to explore alternatives and how technology matches to your needs. And never agree to straightforward projects where new solutions are planned to be used without any proof-of-concept.

The developers’ technical participation is crucial to project success, and the ability to provide recommendations for product enhancements or streamline software design adds value to your outsourced project. It is essential to evaluate implementation alternatives to achieve the best functionality and reduce software development costs. Ask your candidates which options they have considered and see if their proposal offers several choices with advantages and disadvantages outlined. Also, make sure that they will evaluate a couple of the most promising implementation options at the stage of software design.

Integration means that the developers will deal with existing corporate applications and should interact with your IT leaders to build an adequate solution. Do your bidders show a good understanding with your developers? Are they able to communicate and address technical issues effectively?

Integration of different applications brings security on the top of the solution design. The platforms and application servers usually cover company’s critical security needs, but the developers’ design craft lies in the use of these techniques. If the provider doesn’t address software security issues in their technical proposal, this should make you cautious. At minimum ask how they will ensure a secure data exchange. Read more about possible software security vulnerabilities here to ensure that they will be addressed by your outsourcing partner.

Quick Assess Check List:
Use this check list to rate capability of the outsourcing partner to complete the application integration project:

Did they complete similar projects before?

Do their skills cover a range of integration products and technologies?

Do they identify possible technical issues?

Do they offer software design alternatives?

Will they do prove-of-concept for the most critical issues?

Does their proposal address security issues?

How easy do your IT leaders and offshore developers understand each other?

Optimized design helps the company integrate and streamline business processes, and eliminate redundant data entry; and it also reduces software maintenance costs. Invest time and effort to perform due diligence and assess the offered technical solution in detail to select developers who have extensive experience in application integration and advanced software engineering skills.

Antenna firm Sarantel makes outsourcing move

Sarantel, an antenna firm has signed a memo of understanding ith Sanmina-SCI, acontract manufacturer.

This contract allows the manufacture to produce the firm’s antennas at its Singapore-based facilities at the beginning of 2007.

Sanmina will also offer procurement and logistics services.

"Sarantel said the move would not have an impact on staff and that it had been reducing its headcount already in October and September.

The firm said the deal would help reduce costs and take manufacturing closer to Asian customers.

David Wither, CEO of Sarantel, said: “We are very excited by this partnership with Sanmina-SCI and are confident that they will provide Sarantel with the credibility we need to further our relationships with major OEM customers."

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Myer inks five year outsourcing deal with IBM

IBM and Myer are connecting....

Myer, the retail giant has outsourced a five year IT deal with IBM Australia.

IBM will offer IT support, midrange services, data networking, desktop, applications maintenance and development as well as the expected help desk services.

"Announcing the deal, Myer CEO Bernie Brooks described the deal as a significant step for the Myer business under the new ownership of TPG Newbridge.

The company purchased Myer from Coles Myer Limited (CML) earlier this year. Previously, CML provided Myer with IT support and services, this continued under a transitional arrangement.

Brooks said CML provided assistance during the tender process and will continue to work with Myer over the next 12 months as IT moves over to IBM."

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Son of Adobe India CEO is kidnapped

Abduction.....The son of Mr N.Gupta, the CEO of the Indian operations of Adobe Systems was kidnapped Monday in Noida near Delhi by two aunidentified persons.

He was on his way to school with a maid, when the abduction occured and Mr Gupta is not in India at the moment.

"The boom in the IT and business process outsourcing industries in India has created a large economic divide -- and resentment -- between literate Indians and the large number of illiterate people in the country.

The motive for the abduction is not known as yet. The abductors have neither requested a ransom or tried to contact the child's family, police said."

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CSC Wins $180 Million Outsourcing Dea

A 7 year, $180 million IT outsourcing deal between Computer Sciences Corporation and Newmont Mining Corp. has been signed.

Newmont Nining Corp. is one of the world's largest gold mining companies and CSC will
CSC will manage IT operations for alll shared services operations and regional gold mining facilities.

"The contract includes responsibility for Newmont's enterprise-wide infrastructure, which includes help desk, desktop, network and telecommunications, and security services, as well as server support and applications maintenance.

"This contract underscores the business value CSC brings to large-scale global mining companies such as Newmont," said CSC Chairman and CEO Van Honeycutt, in a statement."

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A little less accent, a little more customer service

Offshoring, it can be great but it can also be not so when the customer service people cannot speak proper English.

"IBM is looking to change that. Researchers at Big Blue’s India Research Laboratory recently announced that they have developed a Web-based, interactive language technology to help people who speak English as a second language improve their speaking skills.

The technology evaluates grammar, pronunciation, comprehension and other spoken-language skills, and provides detailed scores for each category.

The program uses specially-adapted speech recognition software to score the pronunciation of passages and the stressing of syllables for individual words."

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India must maintain edge in outsourcing: Fernandes

India will loose its outsourcing share to China and others if it does not continue with low costs the Minister of State for Labour Oscar Fernandes said.

"If outsourcing is favouring India today, it does not mean it will always be in favour of India," he said, adding "the time any country provides labour even for a rupee cheaper than us, outsourcing will move to them".

When asked about who these countries could be, he said that presently "China is the biggest threat".

He also stated that China is ahead in the technology sector.

"India has a reservoir of highly technically qualified professionals," he said at a workshop on 'the role of trade unions in globalized economy'.

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FDA's thumbs up to PFI reverberates through outsourcing industry

The US FDA has approved in only 11 months a first DMF (drug master file) of this kind.....

It has said "yes" to the sale of metformin hydrochloride tablets.

Thye are manufactured by Grandules India, an Indian company using a pharmaceutical formulation intermediate (PFI), an alternative to sourcing active pharmaceutical ingredients.

"The PFI is based on a "ready to compress" mix of APIs and excipients that can be directly fed into a hopper for compression of tablets.

However, Granules claims that its PFI model results in enhanced productivity, avoidance of granulation bottlenecks, significant lowering of manufacturing costs and less need for regulatory compliance.

“We always wanted to improve on our outsourcing offerings and this has provided us with a strong opportunity to do so,” said Krishna Prasad, managing director of Granules India."

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IT Outsourcing here to stay

Outsouring of IT support is still needed.

Allowing a company to concentrate on the main tasks rather than all the little things around it, is essential.

General Motors (GM) is a prime example which sees an external IT service as crucial to its business growth.

"Outsourcing the department has taken away the administrative headache and with one main firm supplying IT support, GM can continue with its primary business function.

Lisa Gage, a director for a GM group, told Computerworld: "We are in the business of building cars and trucks.

"We shouldn't be spending tons of time trying to manage tons of IT suppliers."

A large number of firms are choosing to outsource IT support in London and throughout the UK."

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Kanbay to provide services to Liberata

Kanbay International Inc., has obtained a $12.5 million contract from Liberata to provide servicing capabilities together with technology support.

The British outsourcing company, Liberata will use Kanbay's offshoring and outsourcing services to help its legacy systems decrease the total administration cost per policy for business acquisition and subsequent servicing.

"Last month Kanbay agreed to be acquired by French computer services company Cap Gemini SA for $1.25 billion, or $29 per share in cash, subject to Kanbay shareholder and regulatory approval.

Shares of Kanbay added 12 cents to $28.48 in afternoon (tuesday) trading on the Nasdaq."

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AT&T Targets Outsourcers With India Long Distance Service

AT&T is going to start a venture with an Indian company to provide network services to multinationals.

"Under the plan, AT&T will take a 74% stake, the maximum allowed by Indian law, in AT&T Global Network Services India, which it will operate in partnership with local firm Mahindra Telecommunications.

AT&T officials say the newly formed company will target U.S. and foreign multinationals that have farmed out business functions to low-cost subsidiaries in India.

"Outsourcing is big business in India, so that is our target market," says Sanjiv Baghat, CEO of AT&T Global Network Services India."

Voice, video, and data services over virtual private networks that businesses can use to create secure links will first be offered. Internal long distance services within India to multinationals operating within the country will also be suppied.

"Many of our international customers [in India] want the same company to handle domestic services," says Baghat.

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Outsourcing: Bangalore by any other name would be…Bengalooru

Banglore is changing.....changing its name to Bangalooru.

Bengalooru is the original dialect name and the change comes to mark the 50th anniversary of the formation of Karnataka state, where Bangalore is the capital.

It still needs to be approved by India’s federal government, a process that may take more than a month.

"Other Indian cities have changed their names in recent years to appease local groups -- Bombay became Mumbai and Madras became Chennai.

Bengalooru is derived from Bendakalooru, meaning a town of boiled beans, and was founded in the 14th century.

Critics wonder if the name change coupled with recent political events in the area could put a dent in the city’s outsourcing machine."

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CSC gets extension on Whitbread outsourcing contract

CSC (Computer Sciences Corporation) has been granted an extension on Whitbread outsourcing contract, valued at about $48 million.

In this new 5 and a half year contract, CSC will provide India-based applications support through its World Sourcing operation.

It will also keep offering desktop support for all of Whitbread's central information systems and technology, including data centre services, e-mail, Internet and intranet.

""Over recent years, Whitbread Group Plc has undergone significant change in terms of acquisitions, divestitures, integration and growth," said Ben Wishart, group IT director for Whitbread Group Plc. "After a thorough review of our operations, we felt that the previous contractual arrangements were fit for a different Whitbread and that change was required. It is a credit to CSC that they were able to present a more flexible model."

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CSC gets extension on Whitbread outsourcing contract

CSC (Computer Sciences Corporation) hass been granted an extension on Whitbread outsourcing contract, valued at about $48 million.

In this new 5 and a half year contract, CSC will provide India-based applications support through its World Sourcing operation.

It will also keep offering desktop support for all of Whitbread's central information systems and technology, including data centre services, e-mail, Internet and intranet.

""Over recent years, Whitbread Group Plc has undergone significant change in terms of acquisitions, divestitures, integration and growth," said Ben Wishart, group IT director for Whitbread Group Plc. "After a thorough review of our operations, we felt that the previous contractual arrangements were fit for a different Whitbread and that change was required. It is a credit to CSC that they were able to present a more flexible model."

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Pharma not using outsourcing to its fullest, says report

Outsourcing has not been grasped fully by the pharmaceutical and biotech companies.

"Outsourcing is seen as the future of an increasingly innovation-driven R&D industry in which drug firms are having to think outside the box in order to keep spiralling costs down while producing better quality data.

In addition, the high level of generic competition, with an expected $80bn (€63.7m) of 2005 branded sales that will be exposed to generic competition between 2006 and 2010."

There are added benefits that companies can gain by further moving towards a fully integrated outsourcing model, according to Datamonitor.

"These models can vary but Datamonitor believe that secondary core functions such as manufacturing, clinical trials and sales can be successfully outsourced, as could non-core functions such as human resources, finance and IT."

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Is outsourcing ideal for early phase clinical studies?

Is the best solution to outsource early phase clinical studies?

This is the question asked by the Head of Clinical Pharmacology Unit at Roche, Dr C.Kirkpatrick.

He said it would be a mistake to assume that outsourcing is the ideal solution for every company and its requirements.

"Global drug development spending is expected to top $105bn (€82bn) by 2010 with 40 per cent of this business expected to be dished out in outsourcing contracts.

CROs' reputation has been earned solely on the back of the quality of work they do. In explaining the advantages of outsourcing a whole program, Kirkpatrick spoke of, “off-loading all the hassle, making full use of the partner's expertise.”

“It also works well if you have a trusted partner in whom you have confidence,” he added."

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Vodafone rings in outsourcing changes

Vodafone is outsourcing.

It has asked EDS and IBM to take over its application development and maintenance in order to reduce its cost base.

"The contracts, which are expected to help the company shave up to 30 per cent from its overheads, will be finalised in the coming weeks, according to the mobile phone giant.

Once the ink is dry on the deal, both EDS and IBM will look after some of Vodafone's core IT systems, including compiling code to manage the company's customer relationship management (CRM) and billing components.

"The outsourcing of this application development and maintenance work complements a series of other projects designed to reduce group overheads including the regional consolidation of data centres and the centralisation of network supply chain management," said Arun Sarin, Vodafone's chief executive."

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Outsourcers Induslogic, Bonus Technology merge

Induslogic is merging with Bonus Technologies and the new company will be called GlobalLogic.

The reason for this is to allow Induslogic a provider of outsourced software product development services access to Bonus' operations in the Ukraine.

"Induslogic, of Vienna, Va., has about 90 customers, and delivers most of its product development offshore from India.

Bonus Technology of New Jersey in contrast has focused on the Ukraine for the delivery of product development services to its approximately 10 customers of which the largest is Telecordia Technologies, a provider of software and services for IP, wireline, mobility and cable networks."

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HP to open second India plant on strong PC demand

HP building up a second computer manufacturing facility in India to meet with increasing demand in the country.

The new facility will be able to produce 300,000 computers per month when it starts operations in March next year.

"It will manufacture HP’s desktop PCs, notebook PCs, workstations and servers, and provide employment directly or indirectly to about 1,000 staff when it's fully operational, HP said on Wednesday.

It's being set up with an investment of about $20 million."

The new facility in Uttaranchal will allow HP to service customers quickly and more cost-effectively in the north and north-east, where the market is booming for HP, according to Swaminathan.

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India's new outsourcing remedy

Drug testing is now being outsourced by big pharmaceutical companies.

In Bombay, India Mr Ginde is working in his lab analysing patient data so that
other pharmaceutical companies can get products to market faster.

"An experienced clinical researcher who started his career with Eli Lilly, he is among a new breed of technicians responding to a global call for low-cost human drug trials at internationally regulated standards.

This is outsourcing with a twist.

The cheap “workers”, one of India’s main selling points, are not required to input data or answer phones, but to donate themselves to medical science by testing drugs."

Clinical research outsourcing (CRO) is "new" and fast growing industry worth $118 million.

The prediction is that CRO will be worth $380 million by 2010 as companies look to India to cut the cost of drug development.

"With costs ranging between $800 million and $1.2 billion from patenting to approval, reducing the length of expensive research means more time to sell the drug before the patent expires and it can be copied by others."

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