UK Government redefining Outsourcing Trends

Category Financial Service Offshore Outsourcing, ITES Offshore Outsourcing, Legal Process Offshore Outsourcing, Outsourcing, Software Offshore Outsourcing l by Guest Bloggers l November 9, 2011 l No Comments »

From the latest TPI figures indicates that the UK government is changing the way it buys IT services. The figures reveals that the number of outsourcing agreements signed by the UK public sector in the first half of 2011 was about 70% greater than the same period in the year 2010, however the total value of these contracts was 47% less.

Equally, the quantity of public sector outsourcing agreements sanctioned within continental Europe improved by about 70%. Conversely, in difference with the UK, the entire worth of agreements also raised by 40% on previous year.

Study from TPI exposed this was the results of the reformation of current contracts within the UK, while continental European public sector organisations have been adopting sizeable outsourcing projects for the very first instance.

Demanding enhanced value for capital

Compass, an IT benchmarking company Compass UK president Steve Tuppen, said he expects more contract re-evaluation within the near future.

“With all the current transformation in government within the UK along with accompanying public sector funding shifts, outsourcing have been re-evaluated,” he said. “Service providers now recognise the necessity for providing better value for money. Although these same providers have previously offered cost reduction and changes to their delivery models, it is only now pressure to reduce costs across the public sector has heightened that authorities are taking a step back to evaluate outsourcing activity and have the clarity to review the objectives, targets and outcomes.”

Tuppen predicted of the fact that widespread reformation of outsourcing agreements within the public sector will lead to added revolutionary contracts as well as service integration. “Looking ahead, we expect to see an increase in the standardisation of public sector outsourcing contracts and increased use of multisourcing, both of which will result in a strengthening of service, as well as greater flexibility,” he said.

Government adopts novel ways of outsourcing

He said you will find already certain illustrations, but he expects several additional within the near future.
The latest agreement sanctioned by Department of Work & Pensions (DWP) in its IT transformation map is one paradigm. The agreement was divide into five lots, with HP, IBM, Capgemini along with Accenture giving out deals. This might not have been divided into five in the past.

Tuppen said the standardisation of IT services as well as contracts will shift power towards the centre of government as well as enhance governance.

An alternative example of an innovative method to outsource is illustrated with the arrangement of the civil service pension management. My Civil service Pension (MyCSP) was announced earlier this year as the very first instance of a government organization spun out into a mutual and joined with a non-public sector corporation. MyCSP will administer 1.5 million civil servant pensions. It is going to be owned by three groups: the 475 employees, the government along with a non-public company which will run the service.

An Outlook For Outsourcing In 2011

Category Knowledge Process Offshore Outsourcing, Outsourcing l by Sweta l March 16, 2011 l No Comments »

In recent years the outsourcing industry has raised certain concerns and received much attention. In 2011 when the global economy recovers slowly, the outsourcing industry would too feature some new highlights particularly in the Knowledge Process Outsourcing industry.

With the economic downturn reducing gradually, things are turning back to normal. Business will continue to escalate either in scale or to some extent. Outsourcing, especially offshoring as a selection of cost-reducing and quality-improving will be still considered by majority of decision-makers. More deals and agreement will be signed this year.

There will emerge a large number of outsourcing destinations. India is not the only outsourcing service base, some Latin-American countries and Asian countries, particularly China are coming in second position in the BPO list. Emerging outsourcing destinations are budding markets due to its highly-skilled but cheap labor force. Many experts and specialists predict that China will replace India for the top spot. Therefore outsourcing will truly go global this year.

In 2011 the great outlook of outsourcing, a batch of outsourcing vendors will debut, competing with old ones. With competition becomes harsh in a particular industry, only innovators help enterprises get the foothold and win victory. Basically emphasis will be laid on innovation.

The benefit that data solution outsourcing will bring to outsourcers will be immense. These data solutions include data collection, data entry, data research, data mining, data cleansing, data capture, etc. The trends of outsourcing data solutions will not disappear, and inevitably data security will be an important aspect. In all probability, it might even be protected by laws and regulations launched by different governments.

Lastly, cloud computing which was a hot topic in 2010, will be an important subject of discussion this year too. A strategic advisory board member IAOP predicts, cloud computing will be simplified. Specific services could be standardized but also number of providers might be increased which can complicate the service architecture. In 2011 cloud outsourcing might either take off or step down from the stage.

Will Medical Outsourcing Grow Vastly In The Coming Years?

Category Health Care Offshore Outsourcing, Outsourcing l by admin l March 3, 2011 l No Comments »

After the success of business process outsourcing models, medical outsourcing has become the next big thing. In recent years, large organizations located in the U.S. and the UK have been steadily outsourcing employee healthcare to offshore locations.

The main reason for this rising trend in medical outsourcing is that, big organizations in the U.S would be roughly spending around $8,000 for each employee, for healthcare. This would amount to a shocking total of $8 billion for the total number of employees. But by outsourcing healthcare services to offshore locations around 90 % of this amount can be saved.

In the U.S. the cost of healthcare insurance is rising, therefore this could be another reason of why organizations have been outsourcing to offshore destinations. With the cost-factor working in the organizations’ favour, it has become more profitable to outsource medical services than to carry out in their own country.

However the concept of medical outsourcing has confronted criticisms. This is due to the fact that healthcare outsourcing does require in maintaining close ties with patient. Nevertheless, if organizations do not outsource their healthcare services, they would soon find their profits getting a major hit. Some concerns regarding medical outsourcing looms around the quality of services. An offshore destination like India (one of the best for offshore medial outsourcing) will provide efficient and cost-effective healthcare services.

In such case of medial outsourcing can be dated back to Britain’s National Health Service’s decision to outsource in India. The public was not in favour of this decision as they didn’t wish to call up an operator located in Delhi to book an appointment with their GP or having their medical notes stored on overseas databases. But Director of NHS Shared business services (SBS) suggested this was the only alternative to cut costs.

With medical outsourcing on the rise, the Indian healthcare industry has been predicted to double in a few years time. When it comes to medical outsourcing the two main issues confronting it is, sensitivity and cost-effectiveness.

Malaysia Finding Its Niche In Today’s Global Outsourcing Industry

Category Call Centre Offshore Outsourcing, ITES Offshore Outsourcing, Knowledge Process Offshore Outsourcing, Outsourcing, Software Offshore Outsourcing l by Sweta l February 24, 2011 l No Comments »

Malaysia has been recognized as a preferred destination for outsourcing. Government support, domain knowledge and industry expertise are some of the main drivers that benefit the outsourcing industry in Malaysia. Businesses from Asian markets like China, Japan, Southeast Asia and the Middle East are attracted towards this destination due to the different kind of cultures and languages found here. All these factors have their own share when it comes to increasing the popularity of IT centers and BPO services in Malaysia.

However Malaysia does face one challenge; it has to overcome the constraints concerning scalability. The total number of employees in the industry is roughly comparable to the number of new employees by a leading Indian IT service provider of outsourcing, stated on outsourcing analyst. Personnel costs, too, are 15% to 20% higher compared to other popular destinations like India.

Another important task at hand for Malaysia would be to specify its very own niche. The Malaysian companies have started to focus on delivering business value to customers through a package of ITO, BPO and KPO. This should be and will be a way forward for Malaysian companies to differentiate itself from long-established outsourcing destinations. In this way realizing its strengths coupled with a niche will enable sustained growth for Malaysia. For example, it has become a favorite destination for offshore services for companies in the Middle East, particularly in key sectors such as oil and gas and Islamic finance. Therefore increasing expertise in these areas will only benefit Malaysia. More importantly, the outsourcing industry there needs to focus on its cultural and linguistic strengths to carter to the Asian markets as well.

Given the scale, a targeted approach supported by government initiatives and the outsourcing industry will certainly bring long-term success to Malaysia. It continues to occupy the third leading position, after India and China, in the list of the world’s leading offshoring destinations, according to global management consulting firm A.T. Kearney’s latest Global Services Location Index (GSLI). Hence, Malaysia amongst ASEAN member countries is fiercely competing for a slice of the global offshore outsourcing pie.

Attractive Offshore Outsourcing Locations Listed By A.T. Kearney

Category Call Centre Offshore Outsourcing, Financial Service Offshore Outsourcing, Health Care Offshore Outsourcing, ITES Offshore Outsourcing, Knowledge Process Offshore Outsourcing, Legal Process Offshore Outsourcing, Outsourcing l by Sweta l February 16, 2011 l No Comments »

According to global management consulting firm A.T. Kearney’s latest Global Services Location Index (GSLI), Malaysia continues to occupy the 3rd leading position, after India and China, in the list of the world’s leading offshoring destinations. This Asian country is implementing different techniques to secure a spot in the global outsourcing industry.

In the GSLI list, the top ten positions have been secured by Asian countries. The rankings however may change drastically due to the changes in the global business economy, increasing wages and currency fluctuations. The list indicates a slow recovery among countries that are crucial for the outsourcing business.

Since GSLI’s inception in 2003, India, China and Malaysia have maintained their first three spots. The combination of skilled man power coupled with low-costs has made these three countries the most attractive spots for offshore outsourcing.

Other spots such as Indonesia, Thailand and the Philippines came in at number five, seven and nine respectively. It is surprising to see the Philippines at number nine spot since it was perceived to be an ideal destination for offshore outsourcing. Besides that, Vietnam is country one might want to pay attention on as it has made it way on number eight, up two spots from last year’s list.

However, currency movement has helped strengthen the competitive position of states whose costs had earlier kept them far down on the list, this includes the Baltic States, the United Kingdom (UK), Mexico and the United Arab Emirates. The list also mentions the Middle East and North Africa as becoming increasingly attractive spots due to its talent pool and proximity to Europe.

Each country’s score is composed of a weighted combination of relative scores on 39 criteria which are categorised into three segments – financial attractiveness, people and skills availability, and business environment. A.T. Kearney states that the nature of outsourcing itself is in transition. Hence the changes in the outsourcing industry business model and other temporary setbacks are only the bearing of an era of globalization. “IT and BPO offshoring are early manifestations of a larger trend that, in the long run, means that more functions can and will be considered for localization in countries outside of which end-customers reside.