Outsourcing of human resource (HR) processes is happening in a big way in India and many medium and large sized organisations use the services of external consultants to take care of their HR functions.

The recruitment process outsourcing (RPO) in the organised sector is growing at 40 per cent and many organisations are outsourcing their recruitment process right from the entry level jobs.

According to Asim Handa, Country Head of Futurestep, an outsourced recruiting subsidiary of Korn/Ferry International (a premier global provider of talent management solutions), the present value of the RPO industry in India was estimated at $2.5 billion and companies such as Futurestep provide customised solutions to suit clients’ requirements across all sectors.

‘Strategic RPO’

Recently Futurestep had introduced its new comprehensive talent acquisition solution ‘Strategic RPO’ aimed specifically at the business performance needs of enterprise organisations. He said it focussed on identifying and delivering strategic impact at the business level.

According to Mr. Handa, there was a huge opportunity for Futurestep and the organisation was growing at 100 per cent year-on-year in the last three years. RPO was a major component of the worldwide BPO market.

One of the major advantages to organisations, which outsource their recruitment process, is that it helped to save as much as 40 per cent of their recruitment costs. Also, outsourcing enables the human resource professionals of organisations to focus on the core and other HR and strategic issues.

In India Futurestep has a lot of clients including earthmoving equipment manufacturer Caterpillar.

related/ bookmark it/ readit

Obama’s rhetoric won’t change the facts

By Darrell Delamaide

WASHINGTON (MarketWatch) — One of the biggest bogeymen in the current campaign is outsourcing. During the primary fight, Barack Obama and Hillary Clinton pounded the drum about the damage done to American workers by outsourcing and outdid each other in promising to stop it through tax policies and renegotiating trade agreements.

Obama still inveighs against it in his stump speech, as he did on June 27 in his Unity, N.H. rally with Clinton. “We can keep giving tax breaks to companies that ship jobs overseas, or we can give tax benefits to companies that invest right here in New Hampshire,” Obama said.

On other occasions, as in a June 11 speech in northern California, the presumptive Democratic nominee is less dogmatic about free trade and outsourcing, acknowledging that globalization has irreversibly made the world a more competitive place. His solution is to make American workers more competitive in this environment, through education and fostering innovation.

No one can argue with that - it would certainly help the economy. And yet John McCain is derided by his Democratic critics if he suggests that outsourcing and globalization are good for the American economy. He is essentially saying the same thing as Obama without demonizing outsourcing or the companies that practice it the way that the Democratic candidates (think of John Edwards) have been wont to do.

A chief executive who recently outsourced his customer call center to the Philippines and his IT help desk to India says the main reason was the much higher efficiency of those service providers - resulting in huge savings for his customers and his shareholders.

Lower wages were not the motivating factor. Anyone who outsources abroad because of lower wages is being short-sighted, he says. Rather, for him, it was the performance of the provider on quality metrics like percentage of calls answered within 30 seconds - much higher than the in-house operation at the company.

When he visited the call center in the Philippines, this manager found that employees invariably had a college education, and were motivated in their work because the service provider offered them a career path based on their performance. By contrast, in the U.S., call centers are seen as a dead-end job and plagued by high turnover that is very costly.

Why don’t American companies offer the same efficiency at a call center? Well, this chief executive suggests, tax and regulatory policies in the U.S. can make it difficult for entrepreneurs to start up businesses. Also, it’s hard to find people qualified and willing to do this kind of work.

By the way, this American company didn’t get any tax breaks for shipping these jobs overseas. The savings were operational, and the decision was a simple business decision - the company’s customers and shareholders, and so ultimately its employees, benefited from higher quality at lower cost.

This is the kind of competition that will force American companies and American workers to be better. Tax incentives like those proposed by Obama may lead to some job creation, but not jobs that can be done more efficiently abroad. By the same token, some of the tax increases proposed by Obama - such as increases in the capital gains tax as well as higher income and social security taxes on high earners - may not facilitate business startups and job creation.

This is what happens when you let political rhetoric interfere with economic analysis. McCain, for all his professed ignorance of economics, seems to have grasped the basic facts of trade and globalization, while Obama, in his efforts to counter Clinton and Edwards, has gotten it only half right.

This is not the issue that will decide the election, but the winner may not decide the issue, either. When this chief executive, who is an Obama supporter, visited his call center provider in the Philippines, they asked whether an Obama victory would mean he would have to cancel his contract. No, he told them, that’s not the way our system works. End of Story

related/ bookmark it/ readit

One of Australia’s four leading banks, the National Australia Bank (NAB), Thursday announced it would outsource 500 jobs across several business units, including information technology, to India by the year-end to maintain a competitive edge.

As part of NAB’s technology transformation plan, the jobs to develop its several hundred million dollar, next-generation platform will be outsourced to Indian software service providers Satyam and Infosys.

“This is about change and not just offshoring. Change can be brought about by restructuring and also by outsourcing to local and international suppliers,” NAB spokeswoman Kerrina Lawrence told media.

“Since 2004-2005, NAB has been looking at the benefits of offshoring work, which together with other efficiency measures delivered the bank A$292 million ($279 million or Rs.12.09 billion) in cost benefits,” she added.

About 500 technology “roles”, including 200 permanent staff, will be impacted by the year-end. Over the past few years, NAB outsourced 500 back-office jobs overseas, a good proportion in Bangalore, Chennai, Jaipur and Hyderabad.

During this period, the bank also added about 900 jobs to its Australian regional workforce.

“Offshoring has improved NAB’s efficiency while employing more customer-facing staff to improve customer relationships,” Lawrence said.

“There has been a strong push towards specialisation in private and public banking for health, government, education and food and beverages,” she added.

NAB’s technology business unit is in the final months of transitioning the first wave of 264 roles (of which 111 are permanent staff and 153 are contract roles) to an India-based supplier.

Within NAB’s permanent workforce, about 70 have chosen to take redundancy compensation, with the remainder to be redeployed.

Another review got underway this week in the bank’s technology division. About 171 roles are under review made up of 85 permanent and 86 contract based roles.

“Technology staff were advised that the review will scope the benefits offshoring could deliver to NAB’s future capability requirements. A business case will be prepared at the end of the review outlining the next step,” Lawrence said.

Other Australian banks that have outsourced information technology jobs to India include ANZ, Westpac, St. George and the Commonwealth Bank.

related/ bookmark it/ readit

Source: economictimes.indiatimes.com

Ron Hira is a well-known expert on offshore outsourcing and has testified before the US Congress twice on its implications. He is also co-author of the book, Outsourcing America, which has generated a lot of debate. And Dr Hira is a man who many Indian and American companies love to hate.

Of course, he does not agree with the view that he’s anti-outsourcing. He feels that the discussion on offshoring should be much more nuanced to more faithfully reflect reality.

“Our book originates from how the nature of work and the economy and politics in America has transformed over the past 20 years. What’s good for America is no longer good for IBM (or take your pick of major US corporation) and vice versa. But IBM has enormous influence over the political process, ensuring that it gains even at America’s expense. So, offshoring has been - falsely- framed as America against the countries gaining from outsourcing, such as India. I am genuinely ecstatic that India as a country has the opportunity to improve the lives of its citizens. My concern is that America’s policymakers are working against what’s in the interest of the majority of Americans, making their lives worse. The problem isn’t about what India, or other low-cost countries, have done, it’s about what the US has not done in response to this economic change,” Dr Hira told ET.

He feels that Indian Americans are not monolithic on the issue of outsourcing. “Those who are most vocal in the discussion on outsourcing are benefitting the most - by being liaisons within corporations or by taking advantage as entrepreneurs. Since they are making a ton of money from offshoring it should be no surprise that they are promoting it. But just because the vocal portion of the Indian American community supports outsourcing doesn’t mean that a majority of the community supports it. I have received many emails from Indians in America who are being squeezed by outsourcing. Second, what is good for India isn’t automatically good for the Indian American community or vice versa,” says Dr Hira who is an assistant professor of public policy at Rochester Institute of Technology where he specialises in engineering workforce issues, high-skill immigration, and innovation policy.

He feels that Indian American organisations should go in for a major makeover, so that they represent the interests of Indian Americans rather than the interests of the narrow and deep pocketed corporates.

Dr Hira who recently served as a consultant to the US House of Representatives committee on science & technology and helped organise a series of hearings on the ‘globalisation of innovation & R&D’, feels that in the run-up to the US Presidential elections, the US electorate is considering economy as clearly one of the most, if not most, important issues.

“I think most of the discussion is rhetorical so far. Job creation has been weak for this whole decade and people are rightfully feeling uneasy, even if it hasn’t showed up in traditional metrics like unemployment and inflation. Much of the presidential rhetoric has focused on free trade agreements such as NAFTA, yet even if NAFTA was renegotiated it would have zero effect on white-collar outsourcing,” he feels.

The first step, for him, would be to recognise that high-wage jobs for US workers don’t simply fall from the sky.

“The notion that more education will automatically generate success for US workers and for the US economy is downright dangerous. Not because more education is a bad thing, but because it gives us a false sense that we will be okay as long as we have more/better education. US workers are losing due to offshoring yet they have no voice in Washington policy-making. We know that outsourcing results in job loss and lower wages for US workers, yet we have no policies to redress this inequity,” he says.

As for immigration policy reforms, Dr Hira feels that while permanent immigration is good for Americans, guest worker programmes are vulnerable to abuse.

Source: www.prleap.com

GeBBS Healthcare Solutions, a leading provider of Healthcare outsourcing solutions, is pleased to announce that they have been once again ranked among the top 100 healthcare outsourcing providers in the country by Healthcare Informatics (www.healthcareinformatics.com) magazine. This appreciation confirms GeBBS’ elite position among companies providing outsourcing services to the healthcare industry today.

In its 15th edition, the Healthcare Informatics 100 list ranks the top 100 healthcare outsourcing providers by revenue. GeBBS is placed at the #87 spot and has been named to the list since 2007. The Healthcare Informatics Top 100 Companies ranking was published in the June 2008 issue of the magazine, which has a readership of nearly 50,000 subscribers in the healthcare and technology fields.

“GeBBS is honored to be recognized on this list. This confirms GeBBS’ position in the healthcare industry and the value our customers derive from our integrated global delivery framework.” stated Nitin Thakor, President and CEO, GeBBS Healthcare Solutions. “Healthcare providers are facing a challenging time managing costs while maintaining superior patient care. GeBBS’ continues to aggressively grow because of our ability to meet these challenges by providing innovative revenue cycle management and receivables management services.”

Randy Wall, VP BPO said “This acknowledgement further validates our deep commitment to re-engineering and maintaining a highly efficient delivery platform in support of healthcare provider organizations across the country.

Our clients recognize the cost and operational values of leveraging a global or ‘blended’ business model in support of a myriad of healthcare administrative functions.”

Source: economictimes.indiatimes.com

Outsourcing vendors could see more and more clients move back customer service work onshore or in-house, according to the Black Book of Outsourcing’s latest report.

While telecom firm Orange UK recently announced plans to stop outsourcing call centre work to India, banks like New Zealand’s ANZ National and UK’s Lloyds TSB have in the past said no to offshoring contact centre work.

In its 2008 State of the Industry Report, the Black Book noted, “Companies are bringing parts of their customer service back onshore and even in-house, because it is a key part of the customer experience.”

As part of its new strategy, Orange UK had recently announced that it would move back call centre work done in India to centres in the UK. Stating its goal of being the best-loved telecom company in Britain, CEO Tom Alexander said, “To reach that goal, we need to give our customers consistent quality, quality of network, products, service and experience.”

Says ExlService president & CEO Rohit Kapoor, “The India offshoring story is intact though companies will reshuffle processes and portfolio. Customer service has always been more sensitive and BPOs have to look beyond just voice based work to high end services like analytics and risk advisory services. This is absolutely key to retaining clients.”

related/ bookmark it/ readit

In recent years India has become an outsourcing Hub for the West, mainly because of lower costs and a good talent base available in the country.

The outsourcing services include customer care, BPO, medical transcription, telemarketing, market research , manufacturing, designing data management services, engineering services, financial services, creative services, web analytics services, healthcare services, ghost writing, digital image editing services, and software services.

So what exactly is outsourcing and why do companies do this, with India hogging the limelight? There are questions whether or not the economic slowdown will affect the outsourcing trend and even whether it will expand to other areas.

Outsourcing can be defined as a process in which a company delegates some of its in-house operations/processes to a third party. Thus, outsourcing is a contractual transaction through which one company buys services from another while keeping ownership and ultimate responsibility for the underlying processes. The clients inform their provider what they want and how they want the work performed. So the client can authorize the provider to operate as well as redesign basic processes in order to ensure even greater cost and efficiency benefits. Importance in outsourcing should be understood where the third party or partner company takes full responsibility of any part of operations undertaken.

When a company decides to concentrate on what it’s best at, it decides to subcontract some of the process such as testing, manufacturing, development to a certain extent to a vendor company to reduce the overhead costs of the main company and make more efficient use of land, labour and resources for more important activities.

A classic example is the Tata Nano car which has stolen the headlines in recent times. Tata Motors has outsourced the body manufacturing responsibility of the Nano to the Lord Swaraj Paul a London based NRI who also runs the Capro group. Many of the information technology companies in the hardware sector have outsourced customer care work and BPO to India as the cost savings are huge due to the abundant supply of talented man power and labour costs when compared to their home countries. Some get their act together and set up their own customer care base in India, examples being Dell and HP, while others outsource the services to partner companies like Infosys, Transworks, and TCS, which reduce the overhead costs and responsibility of the parent company to a large extent.

India has been the favorite destination for BPO, customer care and IT services for a long time now. The country enjoys a commanding 63% share of the offshore market. The estimated revenue figures for the financial year 2008 and for BPO in India is $10.9 billion and combining the IT sector the revenue generated has been put at around $30 billion. This 63% is a decline from 70% a year back, despite the industry growing at 38% a year back. That’s because of competition from countries such as Eastern Europe, Philippines, Morocco, Egypt, South Africa and China. India is still going to see good growth in the future as the companies in India offer talent with experience of over a decade in the IT and BPO sector and communication has been the strong point of Indians comparatively.

The global economy has faced gloomy days from the beginning of 2008 and the US - from which nearly 80% of IT revenue in the country is generated - is the worst hit. Questions have arisen about the future of IT services outsourcing to India as America is in economic recession. But India offers quality IT, BPO, customer care services to companies outside India, so the future might swing either way with companies outsourcing projects to India and the other developing economies more than before to cut costs.

It’s possible that India might see a slowdown in outsourcing of projects with companies themselves entering Indian shores to set up operating bases in the country leaving only the core competency behind, but that is highly unlikely. If the latter happens and we might see Indian IT majors shifting their priorities to consultancy which has been dubbed the future.

According to a silicon.com report, over the next six years, research and analysis outsourcing is poised to outstrip the growth of BPOs with revenues growing to the tune of $17 billion. India is still going to be the favourite due to the talent and the high education levels, capturing nearly 70% of the market share - $12 billion.

If India keeps up its competitive edge as one of the first in the outsourcing industry, the growth story may well continue, braving the threat of losing market share to the newcomers.

related/ bookmark it/ readit

Source: news.zdnet.co.uk

European companies signed more than a third of all outsourcing deals during the first quarter of 2008.

EU business accounted for 36 percent of all contracts signed, according to Everest Research, with most contracts for the outsourcing of IT and business processes.

The Market Vista report showed that the credit crunch and recession were not having a significant impact on the offshoring industry.

Financial services dominated the offshoring market, accounting for more than 14 percent of transactions.

About 12 suppliers expanded their operations, with offshore activity concentrated in India, the Philippines, Czech Republic and Romania, and potential destinations emerging in Thailand, El Salvador, Paraguay, Uruguay, Honduras and the Dominican Republic.

Global businesses have set up more than 20 captive units worldwide, while organisations such as AOL, Shell and Unilever have announced plans to dispose of their offshore captives.

Source: www.baltimoresun.com

Think only celebrities, high-ranking professionals and the wealthy can enjoy having personal assistants at their beck and call? Not necessarily.

A growing number of Web sites are making it easier to outsource virtual errands overseas, making it cheaper to indulge in the luxury of never having to write another thank-you card or sit on hold with the department of motor vehicles.

Those who use the sites, for everything from ordering takeout to managing online dating, say the cost is affordable and a small price to free up their time — even in the face of a sputtering economy.

Andrea Forker, a 28-year old auction planner for a New York-based nonprofit performing arts organization called the Kaufman Center, travels often for her job and uses a site called AskSunday.com to deal with lost luggage, security issues with credit cards and reservation problems — all behind the scenes as she concentrates on work.

“These are the little nagging things that really suck up your time,” said Forker, who is living temporarily in Argentina. “For what I consider my time is worth per hour, what they save adds up to hundreds or even thousands of dollars in the long run. I can give my undivided attention to my job.”

Most people are hesitant to consider having a personal assistant because they don’t think they can afford it, Forker said. But she and others argue that tedious tasks and inconveniences can be eliminated for the same cost as cable TV.

They may be right. The prices and packages vary from site to site: On AskSunday.com, users can pay $29 a month for 15 “requests,” while the site GetFriday.com offers pay-as-you-go and monthly plans, in increments of 10 or 15 minutes. The monthly plans start at $120 a month for 10 hours.

Tim Ferriss, author of “The Four-Hour Workweek,” uses what he calls a “small army” of virtual assistants for everything he can think of — checking his e-mail, screening his phone calls, sending gifts to family and friends. He has even had a team find and schedule dates for him online.

Ferriss, who runs a pharmaceutical company, estimates that the services are affordable to anyone who makes more than $30,000 a year.

“When you look at something as simple as scheduling an appointment, it can take as many as four to five calls or e-mails,” said Ferriss, 30, who lives in San Francisco. “These things always add up to about eight hours, or a day’s work.”

For someone who makes a salary of $30,000 a year, a day of their time would be valued at more than $100 — making outsourcing well worth the investment, according to Ferriss.

“It’s like having a three-day weekend every week, for the rest of your life,” said Ferriss. “The payoff in terms of breathing room to focus on the things you want to do is incredible. But I think that right now, most people are not aware that this possibility exists. They assume it’s a script for a comedy, but it’s a very real option.”

Ferris said he realizes people may be wary of giving strangers their online banking and credit card passwords. He said that in the five years he’s outsourced he has never had problems with security issues — but acknowledged that like shopping and banking online or over the phone, there is a chance of identity theft. He suggests using trusted sites like PayPal.com when possible, and using credit cards instead of debit cards to minimize any potential damage.

Some sites, like AskSunday.com, keep logins and passwords in a secured database so that its employees can use certain accounts but cannot see login or password information. All of the sites say the information they receive is protected.

Demand for virtual assistants — for individuals and small businesses — is climbing, according to research firm Evalueserve, which estimated revenue from such sites last year at $250 million and anticipated it would grow to $2 billion by 2015. The popularity of online outsourcing has sprouted successful sites including YourManInIndia.com, Elance.com, and Guru.com.

Small business outsourcing became popular in 2002. But person-to-person offshoring for personal errands has boomed in just the past two years, according to Alok Aggarwal, Evalueserve’s chairman, adding that even the bleak economy won’t slow the sector’s growth.

“If you look at the people who use these sites for personal reasons, they aren’t likely to stop doing what they’re doing because of inflation,” Aggarwal said.

Not all of the sites are based overseas. Elance.com, based in Mountain View, Calif., matches its users with American freelancers who register through the site. Rates are based on what the individuals charge.

Antonio Thornton, a 34-year-old marketing consultant, uses Elance.com to find graphic designers for his Web site. But he’s also used the services to find vegetarian-friendly restaurants, organize his Netflix account and to plan a baby shower. Recently, he had a virtual assistant bid for swimming gear on eBay.

“I tend to be competitive when it comes to bidding, and it becomes totally insane,” said Thornton, who lives in Atlanta. “I end up spending twice the amount I wanted to because I am emotionally attached. Having someone else bid for me saves me not only money, but time and anxiety. I know they are looking for the best deal.”

For Ferriss, life is bliss without that very everyday aggravation, and he’s seen at least one long-term benefit from using virtual assistants — they found him a girlfriend. And, of course, they’ve allowed him time to pursue his hobbies of scuba diving and tango dancing.

“Ultimately, time is the most valuable, nonrenewable resource that we have,” he said.

Source: sify.com

The West’s drive to save money has helped seven individuals in the world, including five Indians, make their billions by setting up shop to meet outsourcing needs.

Wipro Chairman Azim Premji, Infosys’ N.R. Narayana Murthy, Nandan Nilekani and Senapathy Gopalakrishnan and HCL Technologies’ Shiv Nadar are among the world’s top outsourcing billionaires named by Forbes magazine.

According to N.R. Narayana Murthy, chief mentor, Infosys Technologies, India should look at the possible recession in the US as an opportunity as domestic IT companies are more cost effective. “The focus on better allocation of money means a greater opportunity for India,” he said adding Indian IT companies were reasonably well placed to withstand the shocks.”