Source: www.itweb.co.za

STEPHEN FLOYD : The concept of outsourcing is not new; it has been around for years in the form of one party contracting another to manage a business process more effectively and efficiently than it could be done in-house. IT outsourcing, on the other hand, is a relatively new discipline.

“Today’s IT outsourcing is different from the computer bureau services of the 1960s and 1970s because information technology plays a central role in almost every facet of business today,” says Stephen Floyd, head of core services at Fujitsu Services South Africa. “The bureaus of old mostly processed simple billing functions and had no idea of managing the complex, integrated applications, networks and servers that are common today. And let’s not mention the Internet.”

A decision to outsource IT processes in the 21st century will place a much greater reliance on the quality of the service provided by the outsourcer than ever before. This means the process of choosing a supplier is just as important to the outsourcee as is the reason for wanting to outsource in the first place and the fundamentals of the contract.

“Outsourcing can be a spectacular success if it’s done correctly and for the right reasons, follows due process and is based on realistic expectations and a clear understanding of where the benefits are likely to be experienced,” Floyd adds. He suggests companies thinking of outsourcing should understand and take note of the following points as they form the basis of a good strategy:

* The importance of following a sound process in selecting the provider and designing the contract.
* The critical role played by the service provider’s infrastructure management methodology - or lack of it.
* The importance of developing an appropriate focus on costs and benefits, and understanding what and how benefits may emerge.
* The need for both parties to dedicate resources to properly manage the relationship.
* The need for new incentive models that reward both individuals and organisations for success.
* Understanding that failure is always a joint responsibility.
* And above all, understanding that outsourcing driven by price alone almost certainly leads to disappointment.

Read More

Source: www.newindpress.com

First there were the common consumer solutions and business processes that were outsourced. Next came research and knowledge, followed by e-learning with the West outsourcing its teaching needs to countries like India.

The latest in line is the Legal Process Outsourcing, a one that is estimated to be a $640 million industry in India by 2010. As many as 1,800 people are involved in legal outsourcing in the country, an industry that is said to be worth $146 million currently.

Clutch Group with 300 plus lawyers involved in litigation support, contract management, real estate legal and legal research all over the world, set up shops in Bangalore a couple of months ago.

Speaking to this website’s newspaper, Abhi Shah, CEO of Clutch Group said that the global LPO market is worth $250 billion.

“Of this, 77 per cent is from the US, 18 per cent from the UK and 5 per cent is contributed by the rest of the world. It is also estimated that the top 200 companies in the US spend about $ 120 billion every year on legal services alone, $ 10 billion of which is the outsourcing sector,” he said.

Shah, forseeing the potential for the industry in India, further said that well over 70,000 English speaking advocates graduated every year in the country, contributing to the talent pool needed for the industry to grow.

The underlying potential is also estimated to increase India’s market share in the global scenario from the present 3-4 percent to 6-7 percent in the next two years. LPO saves up to 70 per cent in legal services cost to the company, say industry experts.

With outsourcing processes taking over in the e-learning, equity research and legal sectors, next in line would be outsourcing of blueprints in the architecture sector.