Outsourcing web solution

Financial Services Outsource Web Solutions Instead of Buying Software
With Jake Rohn, executive vice president of corporate development at Albridge Solutions, and Stuart Tarmy, the company's vice president of marketing. Albridge Solutions provides enterprise data consolidation and Web-based portfolio accounting and performance reporting solutions to the financial services industry.
Question: The financial services market has been slowly moving more toward using Web-based applications over software. What exactly are companies outsourcing through Web-based solutions, and what are the advantages of outsourcing Web-based solutions over buying software?
Rohn and Tarmy: Financial institutions are outsourcing a wide variety of application and data services across their technology platforms. This is being driven by the growing realization that Web-based applications are simpler to run (data updates can be applied by the host rather than the user), simpler to maintain (upgrades and bug fixes can be applied instantly without users applying new software), easier to access (anywhere with public Internet access), and not prone to personal computer problems. Most importantly, because Web-based solutions are more efficient to build and maintain on a total cost basis, it is more economical.

Question: What issues are financial services firms having with making the switch from software to outsourcing Web-based applications?
Rohn and Tarmy: Among the most prominent concerns are data migration, integration, replication and storage. Migrating to a new solution means that a significant data transfer project must be productively completed first. Successfully integrating data throughout an enterprise is critical to ensuring a seamless transition that enables a firm to maximize its investment and utilize the data more efficiently. As such, it is vital to find a partner that is experienced in managing these transitions and also has a strong commitment to ongoing investment in customer support and technology enhancements.

Question: Albridge Solutions has recently confirmed a number of partnerships that allow it to continue to ramp up its Web-application offerings to financial services companies. What trends do you plan to focus on to remain a top vendor in the financial services Web-application field?
Rohn and Tarmy: Performance reporting is gaining momentum as something that was once a value-added service, but is becoming a competitive "must have" that regulators will increasingly focus more attention on to provide improved transparency to investors. Also, heavily influencing our development strategy is the need for Web services and data replication to drive compliance needs, cross selling and the "virtual office," where an advisor can easily access their portfolio accounting, performance reporting, financial planning and analysis, and CRM solutions on their computer.
source:[itbusinessedge.com]

Offshore software business growth

The Indian Outsourcing giant Wipro has announced reenue of $378 million for the quarter ending 31st March. This quarter result is 31 percent up over last year. Total net income has also increased to $102 million which is up from $74.3 million last year. Wipro was started in Banglore and currently has head-office in US. Its full year revenue reached $1.87 billion which is a rise of 39% compared to last year and net profit for full year increased to $363 million which is 58% higher compared to last year.

Mr. Azim Premji of said : "Considering the emerging opportunities in the Global market and our unique business model, the future outlook looks as exciting as the journey has been so far." Company also mentioned that, its outlook for the next quarter is positive and revenue will see rise of 5%. Although, company faces some challenges now a days including managing salary bills, higher man power turnover rate and stronger performance of Rupee against dollar. Also, company facing stiff competition in offshore outsourcing market.

Outsourcing to India

The technology lead prized by the US, Europe and Japan could come back to haunt the regions as nations such as India and China progress without the shackles of old fashioned hardware and software, according to Sun Microsystems President Jonathan Schwartz.

"My view is that (India and China) don't have to deal with all the legacy systems that Western Europe, the US and Japan do," Schwartz said in an interview with The Register. "There are no mainframes. Microsoft Exchange doesn't have the same presence in the IT landscape. Windows isn't nearly no entrenched."

Developed nations must spend an excessive amount of time focused on reworking old systems to work on modern computing tasks. In addition, customers are hampered by a lack of innovation - the result of bloated, lethargic companies that own huge markets such as the mainframe, desktop or browser, Schwartz said.

As a result, India and China could well dominate something Schwartz sees as the next-wave of computing, which is a scenario that takes millions of networked devices, high bandwidth and web services for granted. While the US is busy paying cheap coders to fix PeopleSoft applications, savvy folks in India could be plowing ahead on a fresh infrastructure.

Schwartz admits that this forecast may well be thwarted by innovation here and in other established IT regions. Still, Sun Microsystems has decided to up its presence in India and China to make sure it understands the business and technology climates in these burgeoning markets.

"You can't huddle in Mountain View and expect to be able to understand the market in China," Schwartz said. "You have to be there."

Sun employes between 6,000 and 7,000 software developers in 28 countries. It has just under 1,000 of these staffers in Bangalore and about 500 in Beijing.

Like many major IT vendors, Sun has faced a backlash for its use of offshore software labor.

"One moment, we are subject to a reduction in force (RIF) in order to cut costs, and before that exercise is even complete, Sun are saying that they need more people in China," a former Sun employee wrote to The Register, adding that he found such actions "insulting."

Sun has gotten off lighter than companies such as HP and IBM in the pubic offshoring/outsourcing debate. This, however, could change as the onetime high-flyer struggles to keep staffers happy and, er, employed. Schwartz, however, isn't apologetic about Sun's decisions.

"We have been doing this for 200 years," he said. "We go around the world and try to identify pools of talent. You have to ask yourself if you're a global company then what is offshore.

"I am just as worried about the morale of my employees in Beijing or Bangalore as I am about the ones in Mountain View. The luddite view is that they are just a great source of cheap labor. This is about creating services and businesses in those economies."

An effective partnership Sun has already managed to form in China comes via its relationship with networking firm Huawei. Sun has found that the margins on some of the networking gear are much higher than low-end servers. And, in fact, Sun is hiring more support staff in China just to manage its Huawei sales.

Where the rest of us dream of sugarplum fairies, Schwartz tends to get lost in visions of device-rich networks and dancing web services. It's a sickness that consumes many Sun executives as they try to own a chunk of the next big computing buy. It's this mentality that makes Sun staffers talk in such flowery language about a "networked India" or "web service-centric China."

Will the next Google or Napster or Salesforce.com come out of Beijing while US staffers are busy installing the latest Windows Service Pack? Probably not in the near future. But we'll chat again in ten years.
author:Ashlee
source:theregister.co.uk

Offshore software development business

Business Process Outsourcing: The Vendor's Perspective

Applying technology to business improvement

Most businesses are under intense pressure to cut costs, cut resources, cut headcount and improve their use of capital. Although these short-term goals can be achieved through outsourcing, they should not be pursued in isolation. Economic theory and history both show that when an industry embarks on this kind of cost reduction, individual firms always end up in the same place: The market eventually equalizes, but with a lower price for everyone.

Long-term competitive advantage is more affected by the now systemic and aggressive reduction in what economists call transaction costs. From the 1960s to the 1990s, organizations drove down production costs to the extent that blue-collar productivity increased 40-fold in Western economies. However, over the same period, transaction costs, and therefore white-collar costs, varied by only two percent. This massive difference was partly because the technology was focused on automation and basic accountancy; and partly because we had a lot to learn about how to apply technology to business improvement.

Today’s technology — pervasive computing, the Internet, mobile technologies and business process management — is geared to driving down transaction costs. Two things will emerge. One is the same kind of 40-fold improvement in white-collar productivity that we saw in blue-collar productivity; the other is that businesses will disaggregate where it costs less to perform an activity outside the organization than inside it. So if a 40- to 50-fold improvement in transaction costs occurs, we should expect to see new kinds of organizations, and all the assumptions that we make currently about industry configuration, company organization and achievable levels of productivity will change radically.

Managing at the level of business processes

We are already beginning to see a move toward looser, more disaggregated organizational structures. As transaction costs fall further, more companies are becoming capability-based organizations. This new form of disaggregation suggests that as transaction costs become sufficiently low, organizations can afford to be world-class at everything.

For activities at which it is world-class but not profitable, a business should look for partners; and for activities at which it cannot be world-class, it should devise a sourcing strategy. The choice is no longer a stark one between insourcing and outsourcing, but involves weaving a much smarter strategy about what should be done internally, and what should be sold — outsourcing, partnering, and in some cases, monetizing assets.

The skills that are required to manage disaggregated organizations go way beyond today’s concepts of vendor and partner management. Aggregation and orchestration must be undertaken at the process level, and management must cover process collaboration and process synergies, which is a much more sophisticated requirement than simple vendor management.

To buyers, it would appear there is a wide choice of solutions. However, there are two considerations to take into account. The first is that, even if this market grows as fast as predicted, it is not a single, monolithic, distinguishable market like ITO. BPO, for all the processes on offer, represents probably 20 to 30 immature markets.

The second consideration has to do with critical employees. In ITO the service provider can replace just about any employee without affecting the service. This is not the case in BPO because processes are never fully documented or fully automated. They consist of a mish-mash of automated, semi-automated and manual processes with workarounds and fixes, because nobody knows how to do them any other way. The people who know how the processes really work are important. Their knowledge cannot be uncovered by due diligence as it can be for ITO. Potential BPO clients must not undersell their knowledge of their processes.

Knowing your business processes
True process outsourcing and true process transformation demand a level of industry knowledge and domain skills that make it extraordinarily unlikely that, at least under the current model, the equivalent of IBM, CSC or EDS in the ITO market is going to materialize in BPO. Disaggregation and BPO are going to mean managing 30, 40 or even 50 providers of business process services, and processes will span many organizations.

The issue is not one of management, because no organization can manage 40 of anything, but is about aggregation and orchestration. Outsourcing to different vendors complicates the realization of synergy. Once organizations have outsourced six processes to six companies, how do they exploit the synergies?

A potential solution is emerging in the form of an Enterprise Process Repository. This enables both customers and vendors to understand the current state and the planned future state of all processes, so that they can identify synergies, collaboration opportunities and consequential opportunities. Once customers have that plan, they can source more intelligently and vendors can understand the potential for the future.

Different deals, different approaches

Because continuous fundamental change and innovation are crucial to successful BPO, BPO deals cannot be handled in the same way as ITO deals. The approach is different, the outcomes are different and the value drivers are different — so don’t treat them the same. Every ITO deal that we have witnessed has featured heated debate about who controls architecture, who controls strategy and who decides if the vendor should buy from Dell or HP; but none of this actually affects the success of the deal.

BPM as the enabler of BPO

If vendors are to offer BPO at anything approaching world-class level, they need outsourcing “science.” Vendors should be more interested in business process management (BPM), which gives them a method for managing collaborative processes and a method for managing processes across multiple clients and multiple enterprises. BPO is impossible without a method for intelligently aggregating, orchestrating and controlling processes. Thus BPM is the enabler of BPO.

BPM enables the process outsourcer and process aggregator to discover, design, deploy, execute and redesign business processes. Running processes that were designed for single company operation and getting economies of scale and scope across multiple clients is a nontrivial task. BPO vendors need to demonstrate mastery of complex program management, including the ability to manage people, behavioral and cultural issues. If vendors do not understand change management and behavioral management, they should not be offering BPO.

BPM and BPO should be key parts of every business’ sourcing strategy. The strategy should recognize that successful BPO requires a very different approach to ITO and facilities management. BPO is about continuous innovation, collaboration, iteration and co-creation. It needs a process aggregator. Smart vendors should be working on exactly how they will fulfill that role.
source:csc.com

Offshore outsourcing

A government report will be published soon with in-depth analysis on kind of IT work less likely to be offshored. Kind of work which is less likely to be offshored can include :
- large-scale system-integration projects
- highly iterative development processes
- work that crosses multiple disciplines
- work that requires a high degree of interaction with end-users or clients
- applications with complex procedures, such as those that require frequent manual intervention and data fixes
- Projects requiring high degree of integration with onshore operations
- Work requiring deep cultural understanding
- work with much of the knowledge exists only in the minds of onshore IT staff
- Projects that require a high level of creativity, insight, innovation, and thinking outside of the box
- Jobs requiring process design and business analysis, technology and systems integration, and infusion of industry knowledge with a high level of IT skill

Most of the above points have in common is, they involve creating innovation, making nonroutine decisions and fusion of business process with IT. Report is created in close agreement with Mahoney, Gartner chief of research for IT service. He has predicted that, by 2010, large organizations will employ half of the number of poeple compare to 2000. And 50% of the jobs large organizations will outsource to external providers will be filled by providers in same geographic region.

Offshore outsourcing

10 CRITICAL FACTIORS TO EXPLORE WHEN CHOOSING AN OUTSOURCING PROVIDER FOR FOREIGN EXCHANGE SERVICES

Outsourcing FX is No New Trend for Banks

While today's competitive financial market demands that banks respond to market needs quickly and efficiently, there was a time when only the largest money centers could afford to offer foreign exchange (FX) services. Technological advancements have made a foreign exchange product line accessible to banks of all sizes. However, in today's economy, banks have to consider the feasibility of offering foreign exchange products and services. As a fee-based product offering, foreign exchange services can enhance a bank's revenue stream while meeting a market need. Yet, the costs for creating a FX processing environment can be enormous. It is for this reason that foreign exchange is an area that numerous banks outsource to correspondent banks or non-bank providers in order to compete in today's financial market. Outsourcing FX products and services allows banks to offer an advanced technology solution, industry expertise and superior customer service without the cost of back office investments. Art Gillis, principal of Computer Based Solutions, Inc. in Dallas, Texas, reported, "About 43 percent of America's 9,355 banks and thrifts currently outsource some of their operations."

When choosing an outsourcing solution, banks should focus on the services that will allow them to keep overhead costs to a minimum yet enable them to focus on business development opportunities.

Top 10 Reasons to Outsource FX:

Increase revenue and profits derived from fee-based services
Improve operational efficiencies and productivity levels by automating administrative tasks
Deliver value to customers to enhance business relationships
Expand service lines to capture more business from existing customers
Achieve more competitive exchange rates through wholesale purchasing
Control costs. If cash is not tied up in capital expense, it can be reinvested in areas offering the greatest return on investment.
Leverage the Internet to streamline and automate products, services and processing of transactions
Acquire industry expertise and expedite market entry
Enhance the ability to manage the rate spread on transactions
Enhance account management through real-time management reports on the purchase and sales of foreign currencies and the income generated from each product.

10 Questions to Ask When Evaluating a Foreign Exchange Online System
1. Is the system networked from the parent bank to branch banks?

2.Does the system provide flexibility for your bank to share revenue with the provider or to mark up rates and still have the ability to remain competitive?

3.Is the system integrated seamlessly with your bank's other systems?

4.Does the system allow your bank to retain control over profit margins, processes and account management procedures?

5.Can the bank re-brand the system for its bank and subsidiaries?

6.What capabilities are available to store, track, and send your customers information?

7.How are investigations handled?

8.What are the security features?

9.Can your bank create a centralized or decentralized process for managing its foreign exchange transactions?

10.Does the system enable your bank to provide customers real-time market information?

Choosing The Right Financial Institution
The notion of giving an outsider access to highly sensitive information can initially stir reluctance among banks. Banks often evaluate the competitive threat a correspondent bank provider poses when outsourcing because they often have access to a customer's confidential banking information. Therefore, companies must carefully assess the offerings, experience, credibility and demonstrated capabilities of potential bank and non-bank service providers.

Banks have numerous choices and an effective solution needs to do more than address current business functions. They should evolve as new technology evolves and business objectives develop over time. Here are a few criteria to keep in mind when choosing a provider.

Check the financial strength of the provider.
The financial health of your provider is critical. Established providers with a history of profitability are the safest bet, particularly if the provider is less than two years old.

Check the provider's record of success. Ask prospective providers to furnish you with a representative sampling of their customer base and speak with customer references.

Establish whether the financial institution has a clearly defined account management plan.

Account management is a critical factor in the outsourcing relationship. Some of the questions you should ask include: 1) Will a single account manager serve as your point of contact on all of the details of your account; 2) Will you be able to meet with that person often, and 3) Will you meet with your future account manager and other support staff before the relationship begins?

What security measures does the financial institution have in place and have they been tested?
You should settle for no less than a detailed outline of the security measures that protect a provider's facility from outside intrusion. Ask about the types of firewalls and related programs a provider uses and ask if they have experienced security problems. Find out what recovery plans are in place in case there is a security breach. Also pay close attention to the potential threat of internal security violations.

Make sure the financial institution offers a training plan and continued support.
Make sure the service provider offers formal training for systems and technology and how to use it efficiently.

Explore in-depth the quality of the financial institution infrastructure and the personnel charged with managing it.
Find out who its technology component partners and Internet backbone providers are. What are the key metrics, including reliability, availability, and scalability? An on site inspection is mandatory in establishing your confidence in both the provider's physical infrastructure and its management expertise. Ask about current and planned investments in infrastructure. You want to ensure that you benefit from continued upgrades and new technologies.

How are services priced?

Make sure you know what you are buying. You should also get a clear idea of how pricing will change as your needs scale up or down over time. Ask if the provider's pricing practices are flexible or rigidly set.

Conclusion

Numerous banks face the following dilemma: 1) Have a critical process whose usage is falling but will never go away. 2) Need significant investment in new technology in order to compete. 3) Faced with making the decision to spend money on technology investments or outsource a core process.

Today, approximately 95% of medium sized and community banks in the US outsource foreign exchange services to financial institutions. And the majority of banks in the US outsource processing for a variety of bank services. Many have learned that it's best to give the process to someone who specializes in it. After all, it's the provider not the customer, that's making the resource investment. The provider is also assuming the responsibility for managing these resources and for much of the business risk inherent in doing it well.

Whether businesses embraced the potential of e-business or not, they found that the new technology in the hands of their suppliers, customers and competitors compressed business cycles. Some companies struggle to keep up with the rapid rate of technological changes. By outsourcing, a company can benefit from technology's cutting edge without large capital expenditures.

Outsourcing and enabling a provider that specializes in a service to manage resources allows the bank to not only focus on its core competencies but also increase its bottom line. If operating costs are reduced, it's because of the specialized knowledge and economies of scale of the provider's resources. If capital costs are reduced, it's because the provider is making those capital investments, not the bank. Similarly, when speed and flexibility are enhanced, it is because it's faster and less expensive to leverage another firm's existing resources than it is to build one's own from scratch. When outsourcing is credited for focusing the business on its core, it is specifically because the bank will now be able to invest more of its internal resources in those areas where its unique capabilities produce exceptional returns.

It is imperative to choose a service provider that can put all the pieces together, regardless of how complicated the tools and processes become. Ultimately, by developing the necessary tools and processes into a comprehensive, fully integrated solution that fits together seamlessly, the bottom line will benefit and your bank will remain competitive in the 21st century.

Offshore Development India

Outsourcing IT Development: Advantages

You can outsource almost anything. Maybe you don't know it yet, but it's true. A couple of days ago, when I was drinking coffee in the kitchen, my wife pointed at the faucet that was leaking big time. The good ole faucet was there when we moved in about ten years ago, and trying to fix it again didn't make sense any more. Since I religiously believe in DIY, I bought a new faucet and set about working. When the old faucet was gone, I found out the metal pipe under the sink had to be replaced, too. There was no way I could do it without recourse to welding. I realized I was ready to outsource that part of the project, so I called the plumber.


IT development outsourcing isn't much different than any other kind of outsourcing. When you face an insistent need to start a new IT development project, you have to weigh your current in-house capacity first. If your experience and budget allow you to cope with the task without resorting to any outside expertise, you should probably take full advantage of your potential and do it yourself. However, if there's danger that you'll bite off more than you can chew, it's about time to consider the advantages and disadvantages of outsourcing.

Advantages
Basically, outsource service providers offer you higher quality services at a lower cost. This makes the advantages of IT development outsourcing obvious, so let's have a look at just a few of them.

Outsourcing IT development is a most effective way to stretch your budget. When managers plan IT development outsourcing, they usually make it their aim to cut down the company's expenditures by 30%. This is a figure that speaks for itself. Of course, there's always the risk of failure, but if you outsource prudently, you'll afford to implement projects of such a scale that would be impossible for you to reach on your own.

If you need to have state-of-the-art IT solutions worked out and innovations implemented with small losses, outsourcing may be the only way out. It will save you from the nightmare of retraining your employees (or even hiring new ones) and/or paying for re-equipment.

Cutting your costs and upgrading the quality of the services you offer will allow you to expand the competitive capacity of your business. I suppose the state the IT market is in today makes this simple argument a crucial one.

When you outsource IT development to an outside company, you can concentrate on your core activities. You won't be able to completely forget all about the project or its part that you have chosen to outsource as soon as you sign a contract with an outsource service provider, but you won't have to get scattered, either.

If you deal with an experienced and highly qualified vendor, you'll be able to gain valuable expertise in support of your IT capacity. Almost any vendor will surely try to set a dependency trap for you, but it doesn't mean you have to acquire the dependency pattern instead of learning everything you can derive from the vendor's expertise.

Source:http://it-news.webspacestation.com

Survival Strategies: The BPO route

In a sluggish economy, Indian IT companies played it smart and quickly capitalised on the scotching pace of growth offered by ITES. In the earlier issue of Tattler, AssureConsulting.com had argued that ITES is not IT. ITES players cover a wide range of multiple verticals, constituting banking and insurance telecom, retailing, utilities back roll processing are poised for immense growth. This has little in common with traditional IT constituting software development, testing and maintainance. Dismayed industry observers are crying foul, over the industry's shifting focus from high end products and services. But for IT service companies, whose growth rates were painfully crunched by the downturn; ITES offered a humongous growth opportunity too good to be bypassed. Consider these factoids.

ITES grew at a rate of 73 per cent in 2001-02, as against 14 per cent for the overall IT industry.
The ITES industry is expected to grow to Rs. 81,000 crore in 2008; from Rs. 7,100 crore in 2001-02. The sector is expected to contribute 37 per cent of total software and services exports in 2000.
Forex inflows will increased ten-fold from $6.2 billion in 2001-02 to $60.72 in 2008 (IT plus ITES)
World-class IT infrastructure, idle capacity, flat growth, pricing pressures, tight squeeze on IT budgets and declining profits have accelerated beleaguered IT sector's pace towards ITES. In the last six months, Indian service icons have announced their BPO foray to shore up margins and improve top line growth. Wipro acquired a majority stake in Spectramind, Infosys launched Progeon, Satyam ventured into the BPO space with Nipun, HCL launched E-Serv, Polaris floated Optimus to execute back office operations and Hughes also made a departure from its positioning of high value-added R&D work in the Telecom sector to debut in the BPO space. Certainly considering the success of BFL Mphasis, the strategy appears to be paying at least in the short term. MsourcE, the company's BPO arm was the main driver of growth and pulled in Rs 14.5 crore in revenue and a profit of Rs 2.2 crore. Though the software business remained flat, Mphasis delivered another quarter of growth when most companies registered a decline in quarterly profits. Lessons from the Mphasis story are now being emulated across companies.

Indian IT companies are capitalising on the track record in delivering world class services to global icons and established SEICMM level processes to bag orders. Infosys' one quarter old BPM venture Progeon Limited, has bagged a contract worth approximately $30 million from GreenPoint Mortgage, one of the largest US wholesale mortgage lender. The contract, the second for Progeon, will run through five years. Indian companies are also tapping established marketing networks, as they provide an opportunity for strategic cross selling between the IT and IT enabled businesses. For instance GreenPoint was already an Infosys client before Progeon bagged the order. And pre-established relationships from the IT services era are helping companies to reduce sales cycles in their ITES ventures from 6-9 months to three months. MsourcE, the BPO venture of MphasiS-BFL Ltd currently has 10 active clients, five of whom were MphasiS clients and outsourced work to MsourcE based on their earlier interaction. Two MsourcE clients also became MphasiS clients after they began outsourcing IT projects. Kshema Technologies is another company gearing up for its BPO venture to focus on requirements of existing clients.

The long-term impact of the strategy to move to low-end services is debatable. In a recent report, Gartner compared the ITES scramble to the dotcom boom but later withdrew the report. According to the report the size of the ITES opportunity is grossly overestimated.

"A lot of people are touting the entire global BPO market of $127 billion in 2002 as the potential market for Indian BPO companies. Of this $127 billion, 60 per cent is in the US. As of now the trend for BPO going offshore is evident primarily in the US and of the companies in the US that we surveyed only 5 per cent said they were going offshore for their BPO work. So we estimate that the offshore opportunity that Indian companies can tap into is about $6 billion, and Indian companies are competing for this business with near-shore companies in countries like Mexico and Canada, and offshore companies in the Philippines and Ireland." The report was later withdrawn but many are questioning the hype around IT.

However the Indian IT industry influenced by global market trends is loathe to let go the short term benefits and healthy profits offered by ITES. Also companies such as Spectramind are making strong attempts to expand the scope of services offered by entering the high-end BPM segment. Spectramind is setting a knowledge center for one of its clients and hiring Ph.Ds. If IT companies are to pull it off in the long term, they must quickly ramp up the BPO chain.