The State of Sourcing

U.S. Internet users spent more time on Facebook than Yahoo and Google combined this past year (Nielsen, 2011). Following users, companies are also on track to spend 13.7 percent of their marketing budget on social media advertising (Borrell Inc. , 2012). Traditionally, small businesses advertised in local papers to drum up sales for their businesses. In the current scenario, Facebook and Twitter accounts threaten to usurp the place that newspapers had in selling the business to its readers.

Continue reading ‘Newspapers need to effectively monetize social media if they want to sustain their business’ »

If you ask any energy & utilities (E&U) industry expert on the most transformational technology to hit the industry in the past five years, the resonating answer would be the smart grid. Companies and policy-makers are working round the clock to roll-out this technology on a global scale. Benefits of the smart gird are aplenty, the most important being the information extracted from each meter providing valuable insights on domestic and commercial energy consumption patterns. A long-term analysis of this data will help save power and reduce energy loads for consumers and industries alike. However, over the past couple of years, a less unsavory aspect of the grid has emerged – potential gaps in the grid for commercial hacking of the grid to disrupt the grid and steal personal information.

Our recently released report on outsourcing in the utilities space predicted a “data deluge” of sorts with the amount of information generated from smart meters attached to every home. All this information will be sent along the grid to the utility for analysis and billing purposes. To prevent misuse of this data, utilities service providers, meter/grid component manufacturers and the utility companies are collaborating with regulators such as the US Federal Energy Regulatory Commission (FERC) and UK’s Ofgem to address security concerns and strengthen the smart grid itself through more effective security solutions.

Continue reading ‘Smart grid security measures – How worried should we be?… and other outsourcing insights’ »

Service-level agreements (SLAs) are the backbone of any system. SLAs are defined and measured to quantify IT efficiency into business value. SLAs defined between customer and vendor do not just add contractual value but ensure critical business applications are running at all times and at high levels of performance.

ValueNotes and Anunta in a recent study found that CIO/CTOs  of the banking and financial sector feel the need to improve their IT performance. However, they do not consider service level agreements important. SLAs are treated as compliance and not as an integral part of IT operations.

Continue reading ‘Negligence in monitoring SLAs hurting banking and financial sector’ »

Analytics is a relatively new buzz-word in the outsourcing industry with a lot of service providers offering these services, either as a pure horizontal across industries or as a vertical specific service. With marketing services being outsourced, usually in a bundled format with customer support and other BPO offerings to “sweeten” the deal, there are elements of marketing analytics coming into the outsourcing foray. In a new HfS Research report co-authored by ValueNotes, titled ‘Where Offshore Analytics is Heading in 2011’, we have focused on the emergence of ‘horizontal’ analytics across services such as sales and marketing.

To define marketing analytics, let’s take a look at these two terms separately –

Continue reading ‘Defining Marketing Analytics’ »

The decade from hell. That’s what TIME magazine called it in 2009- what with terror attacks, two terms of GW Bush, the great big downfall of Fannie Mae / Freddie Mac and subsequent real estate fiasco– it’s no wonder that Americans are really tired.  Well, that and no more MJ!The first decade of the 21^st century is over. So how did outsourcing fare ?

Since so much of what we do consists of looking at trends, here are some of the top of the hat trends that breezed around and then hung like a fog over the decade.

Continue reading ‘2010 is dead. Long live outsourcing’ »

In the recent months, we have been studying the effect of the digital market on the publishing industry. Across segments and geographies, publishers are experiencing challenges centered on costs, resources and technology that have made it necessary for them to re-invent their business models.

Of the 200+ publishing professionals we interviewed, we found that close to 4 in 5 publishers are either outsourcing or considering outsourcing publishing services. So, if the whole industry is pretty much outsourcing technology, back office processes and industry specific publishing services, why is it still taboo? Perhaps some context would help.

Continue reading ‘Why is the outsourcing of publishing services still taboo?’ »

Some recent news on the Indian publishing scene inspired me to explore how the market is emerging in the trade category, especially in the English language.

• The Tata Group is aggressively focusing on their book publishing business. The company aims to be amongst the top five in India within the next three years.
• Penguin India has chosen one of the most popular Indian writers, Shobhaa Dé, to acquire a new line of books for the publishing house. The imprint – Shobhaa Dé Books – to be released in 2011 will cater to an urban English speaking audience.
• Penguin-India has been recording approx. 25% growth in sales. Random House, Harper Collins, Rupa and some others have been increasing their titles each year.

Outsourcing destination! That’s the foremost identity while referring to ‘India’ and ‘publishing’ together. India has emerged as a key destination for sourcing publishing services for US and UK based publishers for over two decades. But publishers viewing India as a potential market ? – It’s a different ballgame!

Continue reading ‘India: From a service hub to a potential market?’ »

Finance Minister, Pranab Mukherjee emphasized on ‘inclusive growth’ in this year’s budget. The focus was more on the education, infrastructure and social sector development.

From the IT-BPO industry’s perspective, the budget did not provide a reason to celebrate. There were no long term benefits announced for the IT and BPO industry. While there were no major positives for the industry, these are some of the recommendations by the Finance Minister of relevance to the BPO/IT sectors.

Increased outlay for education and infrastructure: The Finance Minister has given special attention to the education and infrastructure sectors. This will benefit the IT-BPO industry in the long term (provided it is implemented properly) by way of availability of a larger and employable talent pool and better infrastructure.

Continue reading ‘Budget 2010-2011: No reason to celebrate?’ »

“Rio Tinto legal chief quits for a new role at CPA Global”, read today’s headline. This does come as a surprise but surely great news for CPA Global and the LPO industry.

Leah Cooper is the managing attorney at the mining giant Rio Tinto. She is responsible for the overall management of Rio Tinto’s multinational legal department (comprised of over 100 lawyers). Leah was the driving force behind the Rio Tinto-CPA Global deal. In May 2009, Rio Tinto awarded a contract to CPA Global. Rio Tinto offshored contract review and drafting, legal research and document review to CPA Global. When I spoke to Leah two weeks back, she sounded quite upbeat about the LPO industry. Talking about the outsourceability of the services, Leah said “Initially, the work undertaken by CPA Global included contract review and drafting, legal research, and document review. However, the scope of work is expected to expand to cover other routine legal services work.”

Cost control has become a pertinent issue across businesses. Corporate counsels have been worried about managing their external counsels and are building cost effective systems to handle their ad-hoc legal needs. Corporations are increasingly exploring alternatives such as contract attorneys and offshore service providers (LPOs), especially for certain services that require junior associates. Said Leah, “Cost was an issue but not the only issue to consider offshoring. We contracted CPA in May 2009. Since then, we have saved US$13.9 million. However, the main reason to offshore was the increasing work load. There was a point when the in-house lawyers were inundated with work and we thought that contracting an offshore service provider will help them reduce their workload.”

Continue reading ‘Winds of change?’ »

US President Barack Obama announced his decision to end tax breaks to American firms that ship out jobs abroad. In his first State of Union address, he said “To encourage… businesses to stay within our borders, it is time to finally slash the tax breaks for companies that ship our jobs overseas, and give those tax breaks to companies that create jobs right here in the United States of America.”

Since this announcement, there have been speculations about the impact of this move on the offshore service providers (especially the Indian IT and ITES industry) and the future of the outsourcing industry.

Continue reading ‘End of tax breaks! – Can outsourcing be wished away in this era?’ »