3/31/2007

City’s outsourcing service attracts big brands

Katia Deng/ Shanghai Daily news

Shanghai provided outsourcing services worth more than 200 million yuan (US$26 million) to international brands last year, according to Shanghai Multimedia Industry Association.

Shanghai boasts a total of 7,000 digital media companies, whose services include developing games and producing animations with special effects.

Their popularity not only relies on low cost, but also on high efficiency and quality, said Ming Haoxia, secretary of the association.

Coca Cola Company’s latest television advertisement, shown on China Central Television during the Spring Festival, was produced by a Shanghai company within a month. The vivid image of pandas impressed many audiences.

Shanghai Animated Film Group has produced a 3D image of Garfield in an advertisement. Jim Davis, author of Garfield, marveled at the demanding work and highly praised the Chinese teams.

The Chinese media industry has established a high reputation in designing images for well-known brands.

A business magazine of Harvard University defined“outsourcing services”as the most important and original strategy in business. It shows great potential in specialized fields like digital media.

A report said 78 percent of European digital media companies will extend demands for outsourcing services in the following year, with 42 percent of them willing to cooperate with Chinese companies and 38 percent preferring India’s.

Xilinx testing out China training program

SHANGHAI — Xilinx Inc. is spinning up an experimental training program in China that aims to train 1,000 IC and system designers in the coming year to help seed local innovation and to win loyalty for its products.

Its initial effort is focused on Shanghai. The firm signed a deal with the Zhangjiang Institute of Innovation, a national outsourcing services training facility backed by the Ministry of Commerce and the Shanghai municipal government.

The Xilinx program is part of an effort launched last year, when Xilinx said it would spend $75 million to fund programmable logic-based system development in the Asia Pacific. China is one of the major targets.

FPGA rival Altera is also expanding its training programs in China, focsuing on the establishment of labs and training centers in local colleges and univeristies.

China Career Builder Corp. Announces New Corporate Information Website


TORONTO -- (MARKET WIRE) -- March 27, 2007 --



China Career Builder Corp. Announces New Corporate Information Website

Hong Kong, March 27, 2007. China Career Builder Corp., (Other OTC: CCBX) a Delaware Corporation, is focused on outsourcing human resource services and staffing in Hong Kong, China The company is pleased to announce today that it has allowed the set up of a new website www.ChinaCareerBuilder.com. The company spokesman stated that due to the high volume of inquiries received by the company, China Career Builder Corp. has authorized this new website www.ChinaCareerBuilder.com to better disseminate information about the company and communications with current and future shareholders.

ABOUT THE COMPANY

China Career Builder Corp. is a provider of outsourcing human resource services and staffing. The company provides recruitment services focusing on the professional, management, clerical, administrative, IT and industrial market in Hong Kong, China. Its services include screening, recruiting, training, workforce deployment, loss prevention and safety training, pre-employment testing and assessment, background searches, compensation program design, customized personnel management reports, job profiling, description, application, turnover tracking and analysis, opinion surveys and follow-up analysis, exit interviews and follow-up analysis, and management development skills workshops. The company markets its recruitment services through a combination of direct sales, telemarketing, trade shows, and advertising.

For further information please refer to the Company's website at www.ChinaCareerBuilder.com

If you would like to receive regular updates on China Career Builder Corp. please send your email request to info@ChinaCareerBuilder.com or contact the company's Investor and Public relations @ ir@ChinaCareerBuilder.com .

SAFE HARBOR STATEMENT

Certain of the statements set forth in this press release constitute "forward-looking statements." Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance or achievements, and may contain the words "estimate," "project," "intend," "forecast," "anticipate," "plan," "planning," "expect," "believe," "will likely," "should," "could," "would," "may" or words or expressions of similar meaning. Such statements are not guarantees of future performance and are subject to risks and uncertainties that could cause the company's actual results and financial position to differ materially from those included within the forward-looking statements. Forward-looking statements involve risks and uncertainties, including those relating to the Company's ability to grow its business. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance. The potential risks and uncertainties include, among others, the Company's limited financial resources, domestic or global economic conditions -- especially those relating to China, activities of competitors and the presence of new or additional competition, and changes in Federal or State laws, restrictions and regulations on doing business in a foreign country, in particular China, and conditions of equity markets. The Company disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

CONTACT:

China Career Builder Corp
Mona W. Y. Yim
852-3527-0661

Investor and Public Relations
Xara Group of Consultants Ltd.
Nixon Lau
302-261-2421

The best ways to renegotiate your outsourcing deal


If you have an outsourcing contract, the chances are that at some stage you will need to consider some form of renegotiation. Up to three-quarters of all outsourcing deals are renegotiated at some point, and this figure is rising.

This year, with a record number of contracts due to expire, the profile and importance of renegotiation

is set to rise. So what is renegotiation, what is driving its importance, and how can you take advantage?

Renegotiation is a dialogue aimed at agreeing major change with your existing outsourcing supplier. It represents the first step in trying to redefine an outsourcing contract.

Critically, renegotiation stops short of the “nuclear option” of going back to the market to retender your requirements. Given the massive cost and disruption that retendering and contract exit can entail (not only finding a new supplier, but simultaneously managing the exit of the old), renegotiation is usually the smarter way to fundamentally redefine a contract.

Four basic triggers underlie almost all renegotiation. First, and most obviously, is the timing factor. If contract expiry is imminent, the outsourcing client needs to either agree an extension with the current supplier, find a new supplier, or bring the work back in-house.

Second, there is the issue of under-performance. This is not always about pricing, although a recent Gartner survey showed that 40% of companies thought they were paying too much for outsourced capabilities.

Underperformance also covers persistent shortcomings in service, failure to meet key performance indicators over an extended period, and underperformance against the market.

Underperformance may or may not entitle the client to legal or financial recompense, but it undoubtedly provides a reason to renegotiate.

A third and related type of trigger is contract flaws, which often can only be resolved through renegotiation to address omissions in the original contract or unintended behaviours from poor drafting.

An example of this kind of trigger is the contract between EDS and the US Navy Marine Corps, which went through extensive renegotiations in 2004 to restructure and simplify the service level regime.

Finally, major business change is an important driver of renegotiation. Any good outsourcing relationship should be able to deal with day-to-day change, in terms of minor scope extensions or adjustments to service levels or pricing.

But when a proposed change could fundamentally alter the nature of the relationship, contract renegotiation can be essential. For example, when the client acquires a new business, moves into a new market or hires a new CEO, the basic assumptions of the existing deal may no longer apply.

This last trigger has resulted in a number of high-profile renegotiations, such as the JPMorgan Chase deal with IBM ITO where work was brought back in-house, and the Powergen deal with Vertex, which resulted in litigation.

This trigger can also encompass the need to apply technology or legislation not foreseen in the original deal, such as new compliance requirements (who pays for Sarbanes-Oxley or Mifid work?) or technology solutions.

Given these drivers, renegotiation is a complex challenge. Ideally, client and supplier will have a frank and constructive relationship, far removed from the brinkmanship and posturing that characterises so much of outsourcing deal-making.

Successful outsourcing relies on building sustainable relationships, not screwing out every last concession, and smart negotiators will seek to ensure the relationship is underpinned by clear mutual benefit on both sides.

Ultimately, however, the outcome of renegotiation will depend on the negotiating position of both parties, which will be largely determined by the options available to the client.

If, for example, the client could easily retender the work to a range of other suppliers, a failure to agree would still leave viable alternatives, which is a good basis for influencing the renegotiation outcome.

In cases where one or both of the parties have attractive alternatives, renegotiation is unlikely to get off the ground. In all other cases, the parties will need to spend time negotiating the point at which their interests and position intersect.

Improving your renegotiating power by developing alternative sourcing options is a long-term task that should start before the original contract is signed and continue throughout the deal. The following broad concepts are the most important considerations:

l Build competition and transparency into the contract: minimise your reliance on proprietary systems and software, and make use of industry-standard processes, tools and benchmarking. Wherever possible, try to promote a multi-sourcing approach by not relying entirely on a single IT provider to supply all your needs for a given function.

l Minimise the contractual barriers to exit: ensure that the master contract provides a clear and equitable basis for termination, both for “cause” and “convenience”. This should include providing a fair mechanism for compensating the supplier for the client’s premature exit. Clarify the responsibilities in terms of transfer or retention of intellectual property and personnel.

l Retain expertise: do not lose the ability to understand the functional and technical detail of the deal. Run a contract management office that retains a complete grasp of the outsourced activities.

In addition to building up your sourcing options over the long term, the actual process of renegotiation needs to be well managed. The first consideration is getting the timing right.

Considering that a renegotiation process can last from two to six months depending on the complexity of the situation, and that 12 to 18 months’ contingency is needed to run a retendering process, starting a renegotiation fewer than 18 to 24 months before the contract expiry date seriously reduces a client’s negotiating leverage.

The starting point for the renegotiation process is establishing a clear set of goals, and identifying those of the supplier – in some situations, it will be possible to agree a joint statement of shared objectives.

The objectives will provide an agenda for the renegotiation, and should focus only on the killer issues, underpinned by a clear picture of the longer-term requirements of the business, such as the IT, finance and HR services it will need in the next two, five and 10 years, and what its overall sourcing strategy is.

Finally, before starting to renegotiate, the client needs to plan the terms of engagement with the supplier, clearly setting out fair rules, such as the number of people who will be involved, and the timeline for concluding (or calling off) the renegotiation.

A clear and disciplined approach for the renegotiation sessions themselves is essential. Central is the use of a single, jointly edited version of the contract, capturing revisions to the agreement in real time.

Progress will rely heavily on the quality of the underlying relationship between client and supplier, as mistrust or tactical games will delay or derail agreement.

Senior client and supplier involvement is also vital, symbolically emphasising mutual commitment to the process, while minimising decision-making delays.

Renegotiation is not a panacea. Redrafting a contract is no substitute for maintaining a constructive relationship with your supplier. Where problems persist, termination and retendering may well be the right answer.

But although retendering continues to get all the headlines, dozens of forward-looking firms are turning to renegotiation to refine and extend their sourcing strategies.

As deals get shorter, and as firms get better informed and more sophisticated in their outsourcing thinking, a silent revolution will take place in attitudes.

Renegotiation will no longer be a niche activity; it will emerge as a central skill for all businesses engaged in outsourcing.

l Paul Morrison is a senior manager at outsourcing advisory firm Alsbridge

Don’t let the wheels come off your deal

China targets $40 bn trade with India by 2010

Idhries Ahmad

BANGALORE: Buoyed by the response of existing trade partnerships with India, Chinese government hopes to touch $40 bn worth trade with India by 2010.

Currently India-China trade is worth 19 billion dollars and is India's second biggest trade partner after the U.S.

This was revealed by Chinese Ambassdor to India, Sun Yuxi at seminar held here today. Sun Yuxi expected tech cities Bangalore and Suzhou to make a significant contribution to the trade pie between the two countries.

While China is considered as global hub for manufacturing, India has best of software expertise to complement it," said Sun adding that tech cities Bangalore and Suzhou have the infrastructure talent and resources to complement each other and drive the engines for trade growth between two countries.

Echoing his sentiments, Sun Yanyan, vice chairman of Suzhon Industrial Park(SIP) Administrative Committee, said, “ China and India share similar goals and face huge bilateral opportunities and we are looking forward for win-win cooperation with India.” Sun said adding Suzhau and Bangalore have been recognized as the one of the world’s top ten tech cities.

The seminar titled 'Suzhon Industrial Park (SIP): Gateway to Business in China’ showcased the contribution made by SIP to the Global manufacturing, design and IT industry and entice Indian companies and entrepreneurs to start shop in SIP

Chinese Ambassdor, Sun Yuxi, delivering speech at seminar in Bangalore, Suzhou Industrial Park started in 1994 as a joint cooperation between Chinese and Singapore Government is expected to be China’s biggest software outsourcing and BPO industrial base.

The park is home to 10000 local companies and 2700 foreign invested companies. The park hosts 60000 employees and is a abase for leading TFT-LCD manufacturers, OEMs and service-providers, including Samsung, AUO, Hitachi and manufacturing 200 software enterprises including Infineon, NTC and Suzsoft.

The park also hosts 40 pharmaceutical companies in SIP with a total investment of 0.9 billion USD Among them there are some world famous names like Pfizer, GSK, Lilly, Eisai, Johnson & Johnson, Baxter, BD and Herbalife

On the sidelines of the seminar Datamatics limited, IT consulting and services company signed an agreement with DarwinSuzsoft, ITO/BPO company in china. Datatmatics in partnership with DarwinSuzsoft has set up a 20,000 sq.mt software development center in SIP, to provide software design engineering and quality assurance services. The center would connect directly with the Datamatics’ US and Mumbai facilities to provide end-to-end solutions including BPO Data Capture/Entry work.

Rahul Kanodia, managing director, Datamatics Limited, said that the both the companies jointly would invest $15 mn on the development center over a period of two years. Currently, the center houses 50 software engineers, and it is looking to ramp up the headcount to 1500 employees in 18 months.”

Apart from Datamatics agreement this seminar also witnessed another agreement between Yanyan and A Selvadurai CEO of a consulting company in Singapore to work together to bring business in China.

India, China trade can cross $50 bn by 2010: Chinese envoy


Bangalore, March 29 (PTI): Bilateral trade between India and China is likely to exceed $50 billion by 2010 with Suzhou Industrial Park (SIP) in China playing a major role in it, China's Ambassador to India Sun Yuzi said on Wednesday.

"Though bilateral trade between India and China, which was $25 billion in 2006, is targeted to reach $40 billion by 2010, we expect it grow over $50 billion," he said addressing a seminar "SIP, Gateway to Business in China."

"SIP launched in 1994 with the cooperation of China and Singapore Governments is like SEZ (Special Economic Zone), a hotspot for global investment and will help boost trade between India and China," he said here.

Tracing the similarities between the two nations, he said "Not only both have huge populations, the two are in Asia and are developing countries, developing fast. The two must, therefore, develop together."

Sun Yanyan, Vice-Chairman of SIP, highlighted the huge demand for software products in China, where India can play a key role. Asia is emerging as a major market for China's outsourcing which calls for training of BPO and software professionals, she said.

Describing SIP as one of the "most open and export-oriented places in China," she said SIP has kept an annual growth rate of 30 per cent over the last 13 years.

Altogether, 420,000 jobs have been created.

In 2006, SIP recorded $8.5 billion in GDP, about $30 billion in industrial output and $50 billion in imports and exports, Yanyan said.

Datamatics sets up dev centre in China

Datamatics Ltd, an IT consulting and services company, will set up a 20,000 square-metre software development centre in Suzhou Industrial Park (SIP) in China with DarwinSuzsoft, a BPO company.
The two companies have signed a memorandum of understanding in Bangalore on Monday. The centre, employing 50 engineers, will focus on developing software and enterprise technology solutions.
It will connect directly with the Datamatics' US and Mumbai centres to provide solutions, including BPO data capture/entry work.
The centre will ramp up its strength to 1,500 over the next 18 months.
“Datamatics will outsoure some of the development tasks to the centre in SIP while continuing involvement in high-end software design, custom application management and project management," said Datamatics Managing Director Rahul Kanodia.
The SIP, located close to Shanghai, is an industrial township, developed by China and Singapore.
DarwinSuzSoft works on BPO requirements of software, financial services, insurance, healthcare and telecommunications firms in the US, Europe and Asia.

Wipro to open third delivery centre in China

Wipro to open third delivery centre in China
29 March 2007

Mumbai: Information technology major Wipro Technologies will open its third global delivery centre in China to cater to the growing needs of its multinational clients.

Wipro already has operations in China's Shanghai and Beijing. The Wipro delivery centre has 250 employees in Shanghai and 50 in Beijing.

"We have aggressive plans for China," reports quoted Hiroshi N Alley, chief executive Japan & China operations and president Wipro Japan, as saying.

Alley recently joined Wipro in Tokyo to head China and Japan operations of the company.

"We are expanding our global footprints. We now have delivery centre in Shanghai and Beijing and once we scale up to about 400 to 500 people we are evaluating the third centre and are in the process of finalising it ," he said.

Wipro, which has been operating in Japan since 1995, is a late entrant to China, compared to other three top Indian IT majors - TCS, Infosys and Satyam.

Wipro is eying at eastern Chinese cities like Nanjing and Chengdu in southwest China as major Chinese cities are vying with each other to offer the best business terms to Indian software companies.

"We want to be close to our clients and many of them have major operations in China," Alley said, emphasising that Wipro wanted to serve the multinational clients from both India as well as China.

"This does not mean that we are taking away jobs from India to China," he said.

Hiroshi joins Wipro from BEA where he was their managing director, and headed their Japan operations.

Wipro is a $3.2 billion company, offering services in consulting, R&D, IT, BPO, testing and infrastructure outsourcing. Wipro has a strong presence in Japan and is the preferred partner of many leading corporations. Alley's role at Wipro will be to drive the growth strategy of its Japan and China operations, and provide leadership and guidance to the team in the areas of customer satisfaction, business understanding and quality.

send this article to a friend "We believe Alley's strong exposure to a global and multi-cultural work environment, and background in sales, strategy and operations will go a long way in maintaining our leadership position in Japan", said A L Rao, chief operating officer, Wipro Ltd.

These are India's 10 new BPO hotspots

Move over Bangalore, Delhi and Mumbai, lesser-known Indian cities, such as Kochi and Nagpur, have the most potential to be the next big outsourcing hotspots for major international corporations.

Alsbridge, the outsourcing experts, announced on Wednesday that its internal research shows India has more growth potential than just the usual top picks -- Bangalore, Delhi and Mumbai.

International companies can now start thinking beyond the three big cities and look at the top 10 up-and-coming cities of Ahmedabad, Nagpur, Pune, Chennai, Hyderabad, Kochi, Kolkata, Mangalore, Thiruvananthapuram and Visakhapatnam.

The Dallas-based firm ranks Ahmedabad as India's most attractive upstart. It's home to Gujarat University, and the local government is supporting widespread infrastructure improvements. Hewlett-Packard and Oracle are among the Western companies that have already discovered the place.

Top 10 Upcoming IT hubs

1

Ahmedabad

2

Nagpur

3

Pune

4

Chennai

5

Hyderabad

6

Kochi

7

Kolkata

8

Mangalore

9

Thiruvananthapuram

10

Visakhapatnam

These cities were chosen based on several factors including population, accessibility, education of the workforce and existing companies who have businesses in these cities.

"When most people think of India, they think of just one or two big cities like Bangalore or Mumbai," Ben Trowbridge, Alsbridge CEO, said.

However, the reality is that India is a very big and complex country with many cities that would be large enough to support an NFL franchise if they were in the US even beyond the next tiers that are commonly mentioned.

Alsbridge believes that in the next few years, providers will consolidate and move even more of their labour to India.

A report released by the company last week says the operating margins of American providers have hovered around 6 per cent over the last decade, whereas outsourcing providers in India are able to achieve operating margins up to 40 per cent.

Providers in India are also able to provide similar services as much as 25 per cent cheaper than in the United States.

"Some people have speculated that the future of outsourcing lies in China, but there are many challenges to be faced with this," Trowbridge said.

American corporations looking to outsource in China face many obstacles such as language barriers, intellectual property and other legal issues. India doesn't share these concerns. We believe that many companies that want to stay competitive will be focusing their outsourcing operations in one of these top cities in India, and they'll be very successful in doing so.

BPO sector seen employing up to 800,000 by 2010


MANILA, Philippines -- The country's business process outsourcing (BPO) sector can create jobs for up to 11 percent of the new labor force entrants between this year and 2010, a high contribution for a single economic activity, an Asian Development Bank study said.

A March 2007 working paper prepared by the ADB economics and research department projected that the total number of BPO employees could hit 600,000 to 800,000 by 2010, equivalent to seven to 11 percent of the expected new labor entrants during the period.

As of end 2005, the BPO sector employed 163,250 people.

The paper, "An Analysis of the Philippine BPO Industry," authored by ADB economists Nedelyn Magtibay-Ramos, Gemma Estrada and Jesus Felipe, was released at the sidelines of an ADB press briefing on its flagship publication Asian Development Outlook 2007.

ADB projection, however, was lower than the joint forecast of the government and the BPO industry at one million workers by 2010.

In 2005, the BPO industry generated total revenue of $2.4 billion, accounting for 2.4 percent of the gross domestic product.

The contact or call center subsector accounted for the bulk, posting earnings of $1.8 billion and employing 112,000 individuals or almost 70 percent of the BPO workers.

"Given improvements in human capital and the right policy environment, the Philippine BPO sector may indeed become an important employment-generating sector in the future," the study said.

To date, the ADB said, the BPO sector has had very little interaction with the rest of the domestic economy, which means that an increase in its output may not necessarily increase production in other sectors.

"Notwithstanding its low intersectoral linkages, the BPO sector has the potential of generating a significant increase in the total wage bill for the economy," the study said.

The biggest challenge is whether the Philippines can continue attracting fresh investments in BPO, given tougher competition from other locations, it said.

"Although the advantages of locating in the Philippines should be emphasized, constraints like low hiring rates, high attrition rates, high cost of electricity and weak governance must be addressed without delay," the study said.

The ADB said another challenge was how to move up the knowledge intensity ladder. It noted that while this is desired by the government and the industry, there is no specific strategy so far laid out to achieve this goal.

The third challenge is whether the sector would continue to require government support.

"If the government is seriously bent on moving toward knowledge process outsourcing (KPO), it is then important to identify strategies to entice more investors that are involved in KPO, as well as to encourage BPO firms to move into higher value-added activities," the study said.

Since the existence of a pool of educated workers with tertiary education is seen as a key to the development of the sector, the ADB study said the following two questions must be answered:

• Is it the right policy for a country like the Philippines to continue investing in tertiary education to satisfy the needs of the BPO sector?

• Are students who take degrees in disciplines such as engineering, statistics, economics, etc. to be blamed for their lack of appropriate skills to be employed in the BPO sector?

3/28/2007

Software Industries in Ireland and China

Intel confirmed yesterday its 2.5B$ commitment to build Fab68 in Dalian, China Apparently it is the first green field development since 1992 when Intel came to Leixlip Ireland. Dalian is one of China’s greener cities, and set in Liaoning Province near the border with North Korea.

By complete coincidence, there is a large delegation of Chinese software companies and associated Government officials visiting Ireland at the moment, with many of them from Dalian. I attended a meeting yesterday morning hosted by the Department of Enterprise, Trade and Employment, along with the IDA, Enterprise Ireland and the Irish Software Association for the visiting delegation.

Listening to the alternate presentations – Irish and Chinese – it struck me how different our two software industries are at this time.

The Irish software industry focuses on the global export market, because the home market is so small. From the figures presented this morning, most Chinese software companies currently focus on their domestic market, and do not export very much at this time by comparison.

The Irish software industry has six times as much revenue generated by multinationals operating in Ireland as by indigenous Irish companies. The Chinese numbers are the converse: more indigenous activity than multinational at this time.

The Irish software industry is primarily focused on the creation of new software products, and associated services. The Chinese industry at this time is focused instead on software outsourcing and business process outsourcing.

One can understand the Chinese focus, given the need to create employment, particularly in the private sector. At the same time, it was interesting to hear an official from Dalian readily admit to staff shortages, leading to upwards cost pressures: in fact the local government is apparently offering housing subsistence allowances and tax breaks to software professionals, so as to keep labour costs down in the area. It would be wonderful if our own Government in Ireland took such an enlightened view!

One wonders how these positions will change over, say, the next five years. The Irish industry may need to become less dependent on foreign direct investment and more focused on its indigenous companies. The Irish Software Association is strongly lobbying the Irish Government to considerably increase its IT procurement from indigenous Irish software companies: it is very ironic that many Irish companies in general have much more success selling to Government agencies outside of Ireland than within it. Maybe the Irish domestic market can be grown for the indigenous companies.

The Chinese focus on outsourcing and BPO is also interesting. We were told this morning that in the same way that Bangalore is a centre for outsourcing and BPO for the US and the English speaking world, Dalian is as successful as a centre for outsourcing and BPO from both Japan and South Korea. However, I suspect the Irish appetite in general for outsourcing is more focused on central Europe, driven by the expansion of the European Union last year and the availability of low cost air connections directly out of Ireland to a large number of central European destinations.

Some Irish agency officials pitched Ireland as an opportunity for investment by Chinese companies as a gateway to Europe. In return, some Dalian officials pitched Dalian as an opportunity for investment by Irish companies as a gateway to both Japan and both Koreas. I think this reciprocal perspective holds a mirror to both arguments: frankly I suspect most Irish companies will chose to invest directly in Japan or a Korea and choose to bypass Dalian to do so; I suspect most Chinese companies may think the same in regard to the rest of Europe and using Ireland as a gateway.

A little bit of Yin and Yang this morning. The true opportunity for collaboration comes from a closer working relationship, and working together to deliver whole products jointly together to specific market niches and opportunities. There are many commercial opportunities in China, and my own experience shows that a visible commitment on the ground – for example by opening a development centre – reassures Chinese customers and prospects that a company is in it for the long haul.

Asia BPO market to hit US$15B by 2011


By Isabelle Chan, ZDNet Asia

Wednesday, March 28 2007 11:42 AM

Finance and accounting, customer care and HR (human resource), will continue to be the main drivers of business process outsourcing (BPO) in the Asia-Pacific, a new report reveals.

In its updated report on BPO trends in the Asia-Pacific region, excluding Japan, research house IDC forecasted the market to rise from US$7 billion in 2006 to US$15 billion by 2011, recording a compound annual growth rate (CAGR) of 16 percent.

IDC's previous report in 2006 also identified the finance and accounting and HR sectors as the main market drivers.

Australia will continue to be the biggest market for BPO in the Asia-Pacific region, said Conrad Chang, research manager for IDC Asia-Pacific's BPO services research, in a statement.

According to IDC, businesses in the region appear to have a better understanding of BPO. There is now a greater alignment of BPO solutions with business objectives, resulting in performance benchmarking and ROI (returns on investment) analysis as important deal clinchers in BPO project tenders, IDC noted.

3/27/2007

Outsourcing boom seen to continue

Business process outsourcing (BPO) in the Philippines is showing clear indicators of a strong and steady boom. Not only does it continue to generate more jobs. It also powers a host of other industries — real estate, transportation, communication, food, personal care and even entertainment.

From 2,000 employees in 2001, the BPO sector registered 250,000 workers in 2006 with -billion worth of generated revenues, according to figures presented in February by the Department of Trade and Industry’s e-Services Philippines. Analysts project that the number of BPO workers will further grow to 1 million in 2010.

Such a phenomenon has significantly driven the success of the property industry, which is now in a frenetic pace of construction due to the large demand for office spaces.

"The steady growth of the BPO industry in the Philippines increased the demand for more offices," said Frederick Salcedo, senior vice president for Commercial Services of Century Properties Management, Inc.

Citing the latest study of the property research and consulting firm Colliers International, Salcedo said that office space vacancy rate has dropped to 3.9 percent in the last quarter of 2006, and is expected to further dip to 2.7 percent at the end of the year.

As this happens, the bullish BPO sector is estimating a requirement of 3 million square meters of office space by 2010, states a property industry report by a local newspaper. More than half of this demand will be met as the sector presently occupies "700,000 square meters in Makati and Ortigas" and several property firms are constructing, and committed to build about "900,000 square meters" more. Still, there is an expected shortage of about "1.4 million square meters of office space by 2010."

3/26/2007

No outsourcing of responsibility

Not long after I arrived in Vietnam, I was grateful that I had not developed a taste for fine food. I learned quickly that, with rare exceptions, C-rations were an agreeable alternative to meals prepared by Army field cooks.

Even so, Uncle Sam made sure none of us went hungry. New replacements, however, soon saw the long-termers frequently resorting to the canned cuisine, which was abundant, rather than eating at the "mess hall."

That's not to say the meals weren't nutritious, at times even more than palatable, especially those Thanksgiving and Christmas spreads that helped to lift morale. Much of the time, though, the GIs in my outfit looked elsewhere to satisfy their appetites, perhaps skeptical of the cooks' motivations but also aware that lowered expectations were better than no expectations.

Besides, adequate rations of dime-a-can beer took care of the morale part, at least to the extent life in the remote central highlands of Vietnam provided morale-lifting opportunities.

In other words, the Army provided whatever the Army considered essential, and that was that. Either Army cooks fed us, or Army supply clerks distributed cases of C-rations.

No one apparently had yet conceived the modern management tool of contracting those services to private vendors, as has become the norm for the U.S. armed forces in Iraq, Afghanistan and elsewhere across the globe.

Outsourcing has become a given in applied management strategies, designed to maximize efficiency in achieving the designated goals and objectives. This approach has been a mainstay for years as corporations have outsourced certain functions to enhance their return on investment.

Successes in stimulating such bottom-line increases have not entirely dispelled some clamor against the consequent loss of American jobs replaced by those shipped overseas, but as that gentle humanist Benito Mussolini put it, every omelet requires some broken eggs. So deal with it.

The same principle now applies in the outsourcing of private contracts, not only to the care and feeding of combat troops but also to related functions such as civil reconstruction in the after-action phase of military campaigns.

Once upon a time, the Army Corps of Engineers and Navy Seabees saw to such logistical programs. Now, under the strategic doctrine of outsourcing, such opportunities fall to subsidiaries of politically favored U.S. construction firms selected without the burdensome bother of competitive bids.

Alas, outsourcing of contracts in Iraq was considerably more vigorous and effective than achieving the still-elusive peace and stability essential to allow those contractors to actually do what they've been paid considerable sums of taxpayer money to do.

In recent days, unpleasant reports have exposed certain shortcomings at U.S. medical facilities -- some critics characterized them more accurately as moral outrages of heinous neglect -- particularly the Army's Walter Reed Medical Center, that treat the American wounded from Middle East battlefields.

Extended care of combat veterans has always fallen short of the ideal, but news reports about neglect and systemic breakdowns included revelations that the Walter Reed system had come under the strategic mandate to outsource major functions.

The announcement last year that the federal work force would be replaced by a private contractor struck the facility's employees at the time as a repudiation of their value to the medical services, so large numbers of them left to find other jobs.

The further administrative breakdown from the drain of caretakers and supervisors resulted in the predictable mess now being reported. Basically, the outsourcing imperative trumped the care of the wounded. So much for the administration's support of the troops.

Such outcomes arising from a commitment to the profitable privatizing of public responsibilities should surprise no one. Private contractors supposedly responsible for shipping desperately needed vehicle and body armor to the troops in Iraq and Afghanistan repeatedly missed production deadlines.

Federal no-bid contractors covered the government of the United States in shame after Hurricane Katrina.

Walter Reed's systemic failures arise from the civilian leadership's ideological determination to reward politically motivated corporate benefactors.

Certain public responsibilities -- war, natural or man-made catastrophes, urgent human needs -- require a vigorous commitment to the ideal of public accountability. Substituting slavish devotion to corporate bottom lines has never been sufficient to serve that end, as the series of recent fiascoes continues to bear out.

Revenue from healthcare BPO to triple by 2011

Healthcare BPO service provider Zavata India's $80 million contract with four major US hospitals in November last year is a healthy example of the booming healthcare BPO services sector. Offshoring of healthcare revenue cycle management services is set to gain traction this year, with Zavatas deal likely to set a strong precedent for more contracts involving turnkey end-to-end revenue cycle management (RCM) services.

A range of services beginning from the admission to post-discharge of a patient including medical coding, billing, medical transcription, claims generation, patient follow-up, et al are referred to as revenue cycle management. More than half of the US hospitals are directly or indirectly offshoring various components of healthcare services, offshore vendors can now expect more end-to-end work, according to a recent report by Pune-based market research firm ValueNotes.

The study says the share of work from hospitals forms 20% of the total medical billing and coding work offshored to Indian vendors. Although the market is currently small, total revenue earned by players in 2006 was $125 million.

This is expected to more than triple by 2011, while the number of employees engaged in billing and coding will increase to 17,500. Rising cost pressures, coupled with increasing workload are forcing healthcare institutions to explore outsourcing and offshoring options. At present most offshore vendors focus on either large hospitals or the physician market space.

In future, vendors offering RCM services can look to tap a huge opportunity from the relatively un-addressed and large segment consisting of midsize hospitals in the US. So far, this segment had been beyond the radar of most vendors, but the Zavata deal, which demonstrates the rising comfort level with offshoring by mid-sized hospitals, is likely to spark off a new wave of deals. Arun Jethmalani, CEO of ValueNotes, says, A trend we are seeing is the increasing ability of Indian vendors to provide end-to-end services for healthcare RCM. Related to this is the likely increase in penetration of offshore vendors into the hospital segment.

Pfizer inks IT outsourcing deal in China

08/03/2007 - Pfizer is consolidating all its IT helpdesk operations in the Asia-Pacific to a central site in China under a new outsourcing arrangement with Hewlett-Packard.

Hewlett-Packard''s newly-established Global Solution Center in Dalian, northeast China, will be used to house the new setup.

The company is already in the process of moving all of Pfizer's helpdesk operations in Japan to the site, which will be up and running by mid 2007.

Following this, Hewlett-Packard will then also migrate the helpdesk outfits of 13 other countries in the Asia-Pacific to the Chinese site, over three stages.

The countries involved in the reshuffle are Thailand, Indonesia, Pakistan, Australia, New Zealand, China, Korea, Taiwan, Hong Kong, Malaysia, Singapore, Philippines and India.

Hewlett-Packard said the consolidation effort will allow Pfizer to reduce the number of staff required to run its Asian-Pacific helpdesk services, as well as benefit from the use of shared facilities.

Pfizer was asked by Outsourcing-Pharma.com to comment on the scale of cost and other savings that such a consolidation effort is expected to bring, however, the firm failed to do so.

Indeed, Pfizer has been chasing a number of cost-cutting initiatives of late in the face of looming patent expiries for its biggest-selling drugs as well as the recent high-profile failure of a late-stage pipeline project, torcetrapib.

As part of this, the world's biggest drugmaker announced plans in January to axe 10,000 jobs and close facilities by the end of next year and indicated it would also step up its outsourcing efforts.

Hewlett-Packard has been providing Pfizer with IT support services, such as helpdesk, data centre, network and server management, since 1999. All terms of this latest, substantially-sized deal, however, remain undisclosed.

China to continue to do 5% of Airbus' outsourcing business for A350 planes

Chinese enterprises will continue to undertake five percent of Airbus' outsourcing business for A350 planes, sources with Airbus China said on Thursday.

The Europe-based company believes China will be the world's second largest aviation market and one of its most important partners around the globe in the next two decades.

The A350 is Airbus' latest long-distance, double-aisle, wide-fuselage model. The company predicts that over the next 20 years this type of aircraft will account for 40 percent of global demand for civilian planes.

In October 2006, Airbus and China Aviation Supplies Import & Export Group Corp. signed a letter of intent for the purchase of twenty A350s.

In July 2005, the Airbus Beijing engineering technology center was opened and began to recruit Chinese engineers for research and development work on A350s.

At the end of last October, the center became a joint venture between Airbus, China Aviation Industry Corp. 1 and China Aviation Industry Corp. 2. The European company took 70 percent of the new entity, CAIC 2 took 25 percent and CAIC 1 the remaining five percent.

Sources said that 105 Europe-trained Chinese engineers have joined the Airbus Beijing engineering technology center. According to the center's plan, the number will reach 200 by the end of 2008.

There are 300-plus Airbus planes operating in China. Last October Airbus inked a framework agreement with Tianjin Freetrade Zone, CAIC 1 and CAIC 2 to jointly establish an A320 assembly facility in China.

2006-2007 Annual Report on IT Application Market in China's Banking Industry

In 2006, IT application got into the maturity period in China's banking industry, experiencing the gradual transition from the stage of data concentration to application integration and financial innovation. Being aware of the importance of IT planning and integration, banks embarked on overall planning on IT application and deep exploration, with growing demand for professional services, such as IT consulting, education and training. In 2006, hot spots in IT application mainly included online banking, follow-up systems for data concentration, disaster backup, information security and IT outsourcing. Upgrade of core business system remains the key area of IT investment.
From 2007 to 2008, IT investment is expected to keep growing in the banking sector. Large projects such as banks' data concentration in the final stage, and the deployment and upgrade of banks' core business systems ensure continuous growth of IT investment in this sector. With the entry of foreign banks, Chinese banks need to invest heavily to implement IT application.
To answer hot issues such as the present situation of IT application in the banking industry, market situation and future market opportunities, We releases the 2006-2007 Annual Report on the IT Application Market in China's Banking Industry. It is aimed to help IT vendors, banks' clients and investors grasp more accurately the situation and basic characteristics of the IT application market in China's banking industry, and provide strategic recommendations for IT vendors to better seize opportunities:
The report sums up the development environment of the IT application market in China's banking industry in 2006 in the respect of policy environment, business development, and competition and economic operation situation in the industry.
On the basis of scientifically designed and prudently implemented market surveys, it presents exhaustive analysis of application of IT products in China's banking industry, including the size and structure of investment in key products, brand distribution and application characteristics. It also analyzes and sums up the deployment of IT systems in the industry in 2006.
Moreover, it examines the present situation and future trend of IT application market, and assesses the market competitiveness of leading vendors and growing vendors.
After analyzing the present situation of the market and assessing opportunities and vendors' competition behavior, the report puts forward highly operable and feasible recommendations for IT vendors in mapping out competition strategy.
Enterprises involved: IBM, HP, Sybase/Digital China, Pansky, Hisuntech, Nantian, Lenovo-AsiaInfo, Sunyard, Longtop, FounderOrder, Unifisoft, etc.

perspective China versus India: which one is destined to rule the 21st century?

When it comes to divining the future, only a sucker or a veritable oracle would dare handicap that burgeoning geopolitical rivalry. Ignoring my own warning, let me try to give it a shot.

The conventional wisdom is that the Middle Kingdom is the rabbit in this race, destined to leave the tortoise that is India in the dust. At first blush, that sounds like the more plausible outcome.

Clearly, China's post-Mao transformation is the story of post-war economic history. The nation's economy has grown more than 7 percent annually for the last couple of decades. China's emergence as a manufacturer of high-tech goods is equally impressive with a roster of companies featuring the likes of Lenovo, Baidu.com and Huawei Technologies. But China's hyper-growth has disguised several increasingly pronounced blemishes.

After spending nearly a month traveling throughout China, a friend wrote me how hard it was for a visitor to comprehend the magnitude of all one encounters.

"The multitudes of people, the size of their building projects, and the sheer audacity of their vision to transform this country into a mega-powerhouse," the friend wrote. "What do you do with an infrastructure that is developing so rapidly, that there are more than 160 cities with populations over 1 million each and no fewer than 10 cities with populations over 10 million?"

Talk about an understatement. That mind-numbing question is as big as all of China.

He also could have added that almost 15 million people in China each year move from the countryside to the cities. With so vast a population in transition, the absence of a safety net carries with it the ever-present potential for social unrest.

So far, things have worked out. After Deng Xiaoping came to power following Mao's death in 1976, the government made a covenant with the rising entrepreneurial class. To put it simply, it went like this: "We'll let you get rich, but leave the politics to us." Of course, the state has had to deal with occasional turbulence, such as the rebellion at Tiananmen or the northwestern province of Xinjiang.

But these rate as momentary detours on an otherwise unimpeded march toward superpower status. Meanwhile, India has had its own issues. The state doesn't invest enough in vital infrastructure while it spends too much money subsidizing agriculture.
India's political power doesn't emanate from the barrel of a gun.

"China's invested more in infrastructure than India, which is in a big catch-up situation," said Michael Spence of Stanford University, who won the Nobel Prize for Economics in 2001. "If they don't do that, they won't grow at the rates being projected."

Nobody knows whether India's leadership will act on that warning. But if I were a betting man, I'd say there's a lot to like here.

For all the mess that is India, it's still one heck of a productive mess. In its latest five-year plan, the country forecast average growth accelerating from 9 percent to more than 10 percent. That's a breathtaking climb. And consider the following: In 2002, the country's annual GDP growth was lower than that of China, Vietnam, Sudan, Tanzania, Uganda and Bangladesh. Within a year, India had closed to No. 2 behind China, largely on the strength of its emerging IT and business process outsourcing sectors.

India also reaps benefits from an excellent educational system that's generated thousands of graduates who work for overseas American corporations.

Above all, India's political power doesn't emanate from the barrel of a gun. On Tuesday, the U.S. statement included China with the likes of Iran, Zimbabwe, Cuba, North Korea and Myanmar as a country where human rights protections routinely get violated. Compare that with India.

The system may sometimes be raucous and inefficient, but it remains the world's largest functioning democracy. That counts for a lot and helps feed into a touchy-feely attribute that can't be measured like a dry economic input.

Spence summed it up this way: It has a lot to do with a sense of optimism and momentum, a feeling that today will be better than yesterday and tomorrow will be better than today. It's a very American way to explain India's phenomenal growth, but I think it helps fill in some of the gaps. In China, you can dream of being rich, but it then behooves you to keep your opinions to yourself. The average Indian can also dream about making her fortune--and then figure out how to apply those lessons to building a better society.

What could be more Indian? What could be more American?
Biography
Charles Cooper is CNET News.com's executive editor of commentary.

The Future of Software Outsourcing

According to the report issued by Forrester Research, software-jobs are getting lost in the United States because of Software Outsourcing conditioned by low salaries of IT jobs such as software programming or computer support. Nevertheless, still high paying analytical jobs such as system, network and research analysts stay in-house and dominate the market. Actually, there is observed a steady growth of jobs at rate of 4 to 5% every year in this market sector. Typically, these jobs require excellent knowledge base and idea about internal structure of IT systems and business processes. Software outsourcing not always can guarantee these qualities.
Jobs that not get affected by software outsourcing

Positions requiring higher skills such as system analysts and application developers are constantly increasing by 6 per cent a year. This situation is conditioned by increasing demand for these jobs. As an option software outsourcing can be delegated to to India or any other offshore software development country.
Reasons for decrease in Software outsourcing in future

There are no reasons to be afraid of this boom of Software Outsourcing. Analytical reports state that cost efficiency of software outsourcing is yet very high and exactly due to this fact growth in jobs like software programmer will be very insignificant. This will next result into very low increase in software programming jobs, in the next several years salary rise will also hardly reach 1 per cent. Actually, computer operators’ and database administrators’ rates will also rise at the minimal rate of 1 per cent. However, wages of computer research scientists and information system managers will rise highest at around 3.5 per cent every year, while salaries of analysts will grow 2 to 3 per cent yearly.
Offshore software development

Market researchers also forecast that software outsourcing market, which is currently still very cost efficient, will decrease by 2008. The basic cause for this trend is decreasing of salaries gap in the US and outsourcing countries. As the gap decreases, there will be no difference whether to outsource software development offshore or develop it in-house. In such a way will be reduced the basic advantage of offshore software development – cost efficiency. Ultimately, most companies will use their highly manageable in-house resources rather then offshore Software Outsourcing.

Outsourcing as division of labour

UP until now, the Indian populace has looked upon outsourcing just as one of the bastions of the export driven IT enabled service industry. The centres set up in the new urban conglomerations, that is, to service the ever expanding needs of the US and European consumer over a phone line to India. Unfortunately, that would be both a naïve and dated opinion. Neither outsourcing nor off-shoring, delivering service from lower cost centers, are a new phenomenon. Both have existed ever since people wanted to delegate activities they chose not to do themselves and latterly when they knew other nations could do it cheaper still. Adam Smith’s The Wealth of Nations in 1776 talked about the import of cheaper food produce from other nations. Being a passionate proponent of free trade, he felt this was for the greater good for both nations. It is surprisingly that this debate continues over 230 years later!

We began to outsource from the day we chose to stop hunting our own food or growing our own crops. How many urban Indians have grown their own vegetables, picked them and eaten them? Try it—somehow the food tastes better! So the concept of outsourcing is simple but the application is vast. One relies either on other people because they are trained experts or have lower costs or both. This, of course, extends to companies looking to service their ever increasing legions of customers, who in turn expect service as a norm. The issue is of how far one can reasonably extend that.

Service providers have been servicing companies for years, whether they were called vendors or suppliers is irrelevant. Assorted functions of sourcing, design, production and customer contact have sat outside companies as they focused on their core competency. This does give rise to 'virtual' companies that provide nothing more than the brand, with all functions being delivered by other providers. There is nothing wrong with this, if the arrangement maximises customer value and comfort. The US customer need not know that the motor car he/she drives is just an assembly of components from around ancillary service providers, that the design was undertaken by immerging engineering services firms in India, that the marketing was handled by a European concern, and so on. If the feel at the wheel is fine, that’s all that matters —driving the American dream. The same applies to any product and service. Ultimately, what a consumer is looking for is a level of brand comfort, even engagement (say, of one's finer faculties), backed by an assurance of quality and value for money. How the product/service companies put this together is increasingly not the consumer's concern, so long as the brand—in the sense of a consumer interface rather than just logo —remains trustworthy.

If a company or individual wants to get the best out of a finely honed skillset, you need a partner to make up the balance. The deal has to be economically viable and the quality good. The two are not mutually exclusive. Yet, just as a cheap tailor will give you an ill-fitting shirt, very cheap suppliers can be of poor quality. Diligence is required to hit the right cost-quality balance, since identifying quality providers is never easy. Having advisors to help in this process in not just convenient, but critical. The worst a company could do is to throw the work activity ‘over the wall’ and hope blindly for the best. It doesn't work, and the fault is not of outsourcing, but of the selection process.

What connects the raw product to the end customer is fairly uniform around the world, so why not manage that part of the chain from India?
So what is the extension of this sort of wide-ranging outsourcing that is visible in India? Airline companies that lease the plane, the staff and the technology, too? That sounds far-fetched, but it occurs here as it does elsewhere. So, I think it is time to move away from viewing this just as a call center-driven activity but as a phenomenon much broader. Activities which support the local business are becoming critical to underpin the successes being seen in industries like retail, pharmaceutical as well as energy. These are also leading to the development of skillsets which can further be enhanced to global markets. The dynamics, for example, in the retail logistics supply chain. What connects the raw product to the end customer is fairly uniform all over the world, so why not manage that from India? It coud well be done. Likewise, in several other sectors. The needs of midmarket businesses in this country in engineering services and healthcare services, as well as education, all touch similar areas of common ground with their counterparts elsewhere.

As end users, there are elements which we don't really care about, as we will view the service of our own providers and act accordingly. There are elements that count which are about our behaviour and acceptance of help. I used to be forever frustrated when some of my senior Indian team members would spend hours preparing simple presentations, rather than recruit help and focus on the area of their core skills. I say, be clever, use your potential. However, retain sufficient control, especially over quality.

All said, outsourcing is good. There exist services in the US that convey break-up messages on behalf of feckless individuals, but this, really, is going a little too far. In itself, outsourcing is about forging mutually beneficial relationships that last, and the concept is known to make for positive outcomes.

—Dan Sandhu sits on a number of Indian company boards in the outsourcing, media and retails sectors. These are his personal views.

Issues of Software Outsourcing

IT community constantly debates regarding the fact that http://www.software-outsourcing.name">software outsourcing being cheaper in terms of cost-reduction involved, grants access to blue-chip, real-time and specialized knowledge that are especially inviting demands from corporate management and boards. Now administrative bosses of multinational enterprises are considering the security practice for global network services. The risks encompassed by the software outsourcing are higher in terms of outsourcing, whether the questions involving outsourcers can be trusted? Just the idea of delegating control of thickheaded but purely professional procedure to a third party group – is a guaranteed recipe for trouble. How to make sure that the customer is rendered the optimum set of services?

The Meta tendency of this structure will certainly continue in a larger number of infrastructures with value services, meeting client’s demand. Entrepreneurs must not worry if they hold thorough analysis before approaching things in a sensible manner. These security precautions are obligatory to be taken not to fall into trouble.

It is of primary importance for an entrepreneur to undertake a site-check to ensure that company’s management is not just a couple of losers with in a rented office, testimonials, references and feedback will also be good.

A company dedicated to software outsourcing must constantly get updated with the latest industry publications, magazines and a bulk of sites so that the Information Technology Outsourcing research to have sound knowledge base of the grounds of software outsourcing. An IT analyst must be proficient and in the know about the market and the trends commonly practiced by large corporations to increase their output index. Talking over and discussion of various IT related issues will also give better notion about the general state of the business.

Organization’s entrepreneur should make sure that the security provider is to a high degree honest; the enterprise must make certain that it’s getting both the service it wants and needs. The service-level agreement must be picked to pieces to sustain. Before the commencement or agreement execution one should carry a complete security check.

Analyst used to cultivating the idea that «the threat to internal security conditioned by social aspects is possibly migrated with an outsourcer and is caused by the lack of social interaction with employees».

It is essential and in some cases vital to consider the following security factors before opting for outsourcing: insurance and third party suppliers, software licenses, ownership information, contract commencement, term and termination. The outsourcer you choose should have adequate public liability insurance against risks and loss or material liability through injury or damage. There is a barest need for an agreement re which party will mediate and administer between the purchaser and other third party suppliers. A third party developer or vendor should have software licenses to render outsourced services. Contracts concluded should be maximum flexible so that licenses currently held by the purchaser and related to services provided may require extension or prolongation.

In order to minimize transition difficulties, the contract commencement date should be stipulated before hand. The contract term will wholly depend upon the nature of the offshore outsource services and the buyer’s business requirements. The historical roots concerning the security procedures should encompass plenty of financial businesses outsource both its security and transportation security to companies dedicated to these services.
System specification, Access and Service level agreements

One must certainly define the specification regarding the functionality, performance and availability of the system. The service level reliability much depends upon the system specification.

Examination and analysis of performance data will aid in determining and managing service levels, namely a system response and job turn around times. However these documents may be ineffective unless buyer provided practical and realistic remedies in the event of non-performance. The contract should envisage a review period to cover possible change requests and integration of new technology provided by the software outsourcer.

The degree of security about the disclosed information is required to be to the extent of security used within the outsourcer organization or sufficient to protect confidential information. Illegal access to sensitive data will require severe planning, implementation and management. The last on the list but not least in value for software outsourcing service is to make sure that the documents and data will be protected and kept confidential and agree upon parties responsibilities and obligations.

10 do's and 5 dont's for successful outsourcing

I wrote a post earlier this week about our success in building an outsourcing partnership with our team in Russia. We’ve built a strong partnership with our team, and I mentioned some of our success factors: trust, respect, and team. Today, I want to share a list of more actionable dos and dont’s for building a successful outsourcing partnership.

When you start outsourcing, DO:

1. Write great specs - Have the discipline to clearly define what you want from your outsource partners. Great specs will help you clearly define what you want, and once you have them, communicating what you want it easy.
2. Evaluate references - Check their prior work, talk to their previous clients. Nothing is a better indicator of future success than past performance.
3. Assign a project manager on both ends - Designate one person on each team responsible for all communication between each side. Without clearly defined project managers communication will break down.
4. Make deadlines matter - Let your outsourcing partner give you their estimation of when the project will be completed. Then make this deadline matter by applying financial bonuses for early completion and penalties for late.
5. Agree on communication methods ahead of time - If you will need to talk to them on the phone, make sure everyone agrees to this ahead of time. A mix of email, instant messenger, and a project management tool like Basecamp with occasional Skype calls will probably work out great.
6. Get to know each other personally - Send pictures to each other, hook up a webcam to Skype for videoconferencing. Go see them if you can. Building personal relationships will help you get through the stresses that come with outsourcing.
7. Be a good client - Respect the constraints of your relationship. You probably aren’t their only client. Their time is valuable too. Have the discipline to know what you want, write it down in a clear way, and stick to your own deadlines.
8. Keep the ball in their court - Never let a feedback request or question from them linger in your email inbox. If there is an open issue on your end, it means something is not getting done on their end. Work to keep the ball in their court at all times.
9. Pay on time - Nothing will cause a partnership to go downhill faster than not paying the bills.
10. Remember what you’re in it for - Hopefully you are getting great work at a great price. Outsourcing can be stressful at times, but remember why you are doing it. Outsourcing works.

When you start outsourcing, DON’T:

1. Just go for the cheapest provider - Too many people think outsourcing is just about saving money. Go for the mix of high quality product at a cost that works for you.
2. Be lazy - This goes along with being a good client. If you don’t work hard on your end, they won’t either. The old saying about computers applies: “garbage in, garbage out.”
3. Let the project hit the death spiral - If things seem off course from your end they probably are. You need to take back control of the project. Most often this is caused by a communication breakdown.
4. Rush them - You should have established a project deadline based on their estimate. This is the most realistic delivery date you have. Rushing them will lead to quality problems.
5. Pull the plug - Successful outsourcing is a lot of work. And you’ll learn and grow the more you do it. Don’t pull the plug on the project at the first road bump. Work through it, you’ll be glad you did.

These tips were culled from our experience in working with our team at Flatsourcing. We’d love to hear any of your thoughts and ideas. If I’ve missed something let me know. Good luck and happy outsourcing!

Neusoft Remains No. 1 in Market Share of Offshore Software Outsourcing in China

CCID Consulting Released 2005-2006 Annual Report on China's Software Outsourcing Market

BEIJING, March 1 /Xinhua-PRNewswire/ -- According to 2005-2006 Annual Report on China's Software Outsourcing Market released by CCID Consulting Co., Ltd., a leading market survey consulting company in the information industry in China, the China software outsourcing service market reached USD1.43 billion in 2006, with an increase of 55.4% compared to the last year. As is shown in the report, Neusoft Group Ltd. continued to hold the title of No.1 offshore outsourcing in China with its outsourcing revenue of USD101 million at a growth rate of 61.1% and a market share of 7.1%, becoming the first software enterprise whose offshore outsourcing revenue has exceeded USD 100 million in China.

(Logo: http://www.newscom.com/cgi-bin/prnh/20061219/CNTU012LOGO )

Neusoft has intensified its expansion in the Japanese market in 2006. Besides the branch in Tokyo, more offices have been established in Osaka and Nagoya to better provide Japanese clients with high quality outsourcing service. At the same time, Neusoft vigorously developed its outsourcing service market in Europe and America. Up to now, Neusoft offers offshore outsourcing service for over 30 clients abroad. Meanwhile, Neusoft has successively established international software and service outsourcing bases in Shenyang, Dalian, Shanghai, Chengdu, and Nanjing to accelerate its development of offshore outsourcing business and to create better space for larger scale of outsourcing service. Also, Neusoft has dedicated itself to strengthening the core competencies in the field of outsourcing. In 2006, it has become the first software enterprise with more than 10,000 employees in China, and the only software enterprise that has passed the certification of ISO27001 both in software outsourcing and business process outsourcing (BPO) operations.

Dr. Jiren Liu, Chairman and CEO of Neusoft Group Ltd., said that Neusoft has made outstanding achievements in the Japanese market in the past years and accomplished a high-speed growth in its European and American offshore outsourcing operations in 2006 for having gained trust of more and more clients from the regions. Neusoft will further enhance its investment in the European and American businesses in near future.

About Neusoft:

Neusoft Group Ltd. is a leading software and solution provider in China. Founded in 1991, Neusoft has three inter-promoting business units that are engaged respectively in software & services, medical systems and IT education & training, supported by a total staff of over 10,000. In addition, the Company has set up software parks in Shenyang, Dalian, Chengdu and Nanhai for further R&D and HR reserves. After successfully constructing a complete sales & service network covering over forty cities around China, it has further extended its branches to the US and Japan. At present, Neusoft offers products and services to over 8,000 large customers, maintaining leading market shares in telecommunications, social insurance, enterprises, electric power and other sectors. It is also China's largest offshore outsourcing service provider. For more information, please visit http://www.neusoft.com/ .

TEDA Vigorously Develops the Service Outsourcing Industry by Building Cooperation and Communication Platforms Between Government and Enterprises

TIANJIN, China, March 21 /Xinhua-PRNewswire/ -- Tianjin Economic- Technological Development Area (TEDA) announced today that the TEDA Outsourcing Industry Development Commission was established today to provide support for enterprises engaged in the service outsourcing of software development, financial background services, pharmaceutical R&D, finance & accounting, administration and human resources, and customer service centers.

At present, TEDA has preliminary been equipped with the fundamental conditions required for the development of the service outsourcing industry. An array of operators in ITO, BPO and software outsourcing sectors are now based there, including, Affiliated Computer Services (ACS), Computer Sciences Corporation (CSC), I@T Technology Co. Ltd., Neusoft, Eteda Technology Company, CS&S Cyber Resource Software Technology Ltd., Newpalm, Palm Commerce Information Technology (China) Co., Ltd., Nankai University General Data Technologies Co., Ltd., Shenchi Software and Fujitsu.

With the increasing demand for service outsourcing business in the Binhai New Area (BNA) in Tianjin, TEDA has witnessed the rapid emergence of a cluster of new enterprises operating outsourcing services in areas like information, human resources, financial management, logistics, after-sales and product R&D. For example, the software development and service field had over 100 outsourcing companies registered at the end of 2006. Another 43 software enterprises have passed authorizations, and three companies have been awarded their CMM2 authentication or higher.

Meanwhile, TEDA has begun the building of a service outsourcing industry base with the first phase covering an area of one square kilometer. The base will offer all-round services for enterprises in terms of talent recruitment and training to address the needs of the service outsourcing providers who plan to land in TEDA. Also, TEDA plans to build white-collar apartments in the base, which will be rented to enterprises at low prices. The initiative aims to provide the living establishment with low cost but complete supporting facilities for new employees who work for service outsourcing providers.

About Tianjin Economic-Technological Development Area (TEDA)

Tianjin Economic-Technological Development Area (TEDA) was established in 1984 with the approval of the State Council of the People's Republic of China. It is one of the first state-class economic-technological development areas in the country.

TEDA is located in the center of a larger area bordering Bohai Sea and the east of the Asia-Europe Land Bridge, thus serving as the gate to the two super cities of Beijing and Tianjin, and the throat connecting the northeast of China. By the end of 2005, 4,067 foreign companies have landed in TEDA. Of the Fortune 500 companies, 57 multinational companies, from 10 countries and regions, including such well-established multinational giants as Motorola, Samsung and Toyota, invested in 123 enterprises in TEDA. In 2000, "Fortune" listed TEDA as one of the most highly recommended economic areas in China. In 2002 UNIDO listed TEDA as one of the most dynamic areas of China together with Shenzhen, Suzhou, Wenzhou, Shanghai Pudong and Xi'an High-tech Park.