NEW YORK: Six Indian cities -Bangalore, Delhi NCR, Mumbai, Chennai, Hyderabad, Pune - are among the eight top global destinations for outsourcing of services, according to a new survey released Tuesday.

The other two are the Philippines’ Manila NCR and Ireland’s Dublin city, according to the 4th Global Services-Tholons Top 50 emerging outsourcing destinations survey, jointly done by Global Services from CyberMedia and Tholons, a services globalisation advisory firm.

The Next 10 Outsourcing Destinations considered to be ‘Top 10 Aspirants’ from a total of 68 destinations is dominated by China’s Shanghai, Beijing and Shenzhen, Vietnam’s Ho Chi Minh City and Hanoi, Poland’s Krakow, Argentina’s Buenos Aires, Egypt’s Cairo and Brazil’s Sao Paulo.

Avinash Vashistha, CEO of Tholons says: “For a CIO today, finding a Centre of Excellence is more than just lower cost. It must consider location, risk mitigation for business, cultural affinity and scalability of the skilled workforce.”

“The service providers need to think through their offerings so as to differentiate as the competitive advantage is rapidly vanishing due to cut throat competition and market saturation,” adds Vashishtha.

India continues to top the list with revenues of $40 billion in IT-BPO export services in 2008. Indian IT-BPO export services posted 35 percent year on year growth rates in the last five years.

Interestingly India’s FDI inflows posted the largest increase globally at 46 percent in 2008 — from $25 billion to $46 billion even as global FDI flows decreased from $1.9 trillion to $1.7 trillion and several developing economies struggled to acquire investments from client nations.

Compared to the previous year’s rankings, this year’s study reveals minimal shifts in rankings because of the overall slowdown in the pace of outsourcing activity in the face of global recession.

Seven Chinese cities - Shanghai, Beijing, Shenzhen, Dalian, Guangzhou, Chengdu and Tianjin - and six Indian cities - Chandigarh, Kolkata, Coimbatore, Jaipur, Bhubaneswar, Thiruvananthapuram - make it to the list of next 60 outsourcing destinations.

The study lists India, Philippines, Ireland, China and Brazil among Top 5 Offshore Nations “with a high degree of maturity and record of successful delivery capabilities.”

Canada, Russia, Mexico, Vietnam, Poland are listed as Top 5 Emerging Nations. The difference between the Top 5 and the Next 5 offshore nations is most pronounced in the service level maturity, the study said.

Source:www.economictimes.indiatimes.com/

The IT company will absorb the Swiss financial company’s 2,000 associates based in Hyderabad

Mumbai: New Jersey, US-based Cognizant Technology Solutions Corp. has agreed to buy UBS AG’s India back-office operations for $75 million (Rs344 crore) to strengthen its financial services business, the latest is a lineup of such deals by other firms in India since last year.

Analysts expect more such deals involving the outsourcing units of global financial services firms caught in the slowdown and looking to re-focus on core operations. But they warn time may be running out as the global recession recedes.

As part of the agreement, Cognizant, an information technology (IT) consulting and services firm, has won a five-year contract worth at least $440 million from the Swiss financial services firm to provide it outsourcing, IT and remote infrastructure management services globally.

Cognizant will also absorb UBS India Service Center Pvt. Ltd’s nearly 2,000 associates in Hyderabad.

The company disclosed the value of the deal and the contract in a filing to US market regulator, the Securities Exchange Commission.

“This acquisition deepens our relationship with UBS and extends our leadership position in financial services,” Cognizant chief executive Francisco D’Souza said in a statement on Thursday.

“The acquisition gives Cognizant a good presence in the European market besides giving it BPO (business process outsourcing) capabilities, both of which were areas that the company needed to strengthen,” said Sid Pai, managing director of the India arm of global outsourcing advisory TPI.

More such deals are likely, he said. “(But) the window period for such deals are fast closing as we are getting out of recession and the valuations will now start going up.”

According to analysts, Cognizant has closed the deal at a reasonable price, especially when compared with other recent deals.

“At $440 million, the annual revenue run rate from this acquisition comes to nearly $90 million, which is more than the cost of the acquisition,” said Nitin Padmanabhan, an analyst with Mumbai-based Centrum Broking Pvt. Ltd.

Last December, Wipro Ltd, the country third largest IT firm, acquired Citi Technology Services Ltd, Citigroup Inc.’s technology arm in India, for $127 million.

As a part of that deal, Wipro won a six-year software services and infrastructure management contract worth nearly $500 million. It also took on board Citi Technology’s 2,050 associates.

Similarly, Tata Consultancy Services Ltd, India’s largest IT firm, bought Citigroup Global Services Ltd (CGSL), Citigroup’s back-office centre in India, for $500 million with assured outsourcing revenues of $2.9 billion over nearly 10 years.

Earlier, in July 2008, WNS Global Services, one of India’s largest outsourcing firms, bought Aviva Global Services, the outsourcing arm of British insurer Aviva Plc, for $228 million. WNS had acquired nearly 5,800 personnel with the deal.

Source:http://www.livemint.com/2009/10/15222635/Cognizant-buys-UBS8217-Indi.html?h=B

IT leaders are increasingly turning to multiple outsourcing vendors to obtain application development and maintenance services. They’re finding that spreading their application development and maintenance work across, say, three vendors makes more sense than having a single provider perform all of the work.

Indeed, multisourcing, as the practice of using multiple vendors for one function is known, offers a number of benefits to the customer, says David Rutchik, partner with outsourcing consultancy Pace Harmon. For one, a portfolio approach to sourcing provides access to a wide, deep bench of resources that may not otherwise be available from a single provider. Moreover, it encourages competition among the vendors, which benefits the customer’s bottom line. It also keeps the vendors honest and hungry for the customer’s business.

“By avoiding minimum commitments of spend or services with any one vendor, each provider earns the business by providing ongoing, compelling value,” Rutchik says. “This can be more important than any outsourcing contract provision.”

Of course, using too many providers would spoil this outsourcing secret sauce: It would increase governance challenges and require the customer to smooth the ruffled feathers of vendors who might feel marginalized. That’s why the typical multisourcing recipe includes ongoing relationships with a couple of Indian providers and one U.S.-based multinational supplier. The domestic provider can perform the work offshore or access a pool of U.S.-based resources if necessary, whether for customer comfort, ease of collaboration or security reasons, Rutchik explains. And with potential changes to the H-1B and L-1 visa programs looming, having an American provider in the mix may become even more important.

As for the two offshore providers, clients should opt for vendors of different sizes–one large firm and a Tier 2 or 3 vendor, advises Rutchik. The smaller provider should keep pricing competitive, may offer specialization in certain verticals, and offer more individual focus and attention.

The Mechanics of Multisourcing

Here’s how a multi-sourcing agreement works. The client enters into agreements with the three providers upfront, establishing terms, service levels and pricing either for a specific project or projects in the future. However, these contracts should not guarantee future work to any provider.

Each time new development or maintenance needs arise, the client determines its requirements and issues a statement of work on which the vendors may bid. “As a best practice, a company should not award projects in a de facto manner,” says Rutchik. “A competitive process ensures the right pricing, skill sets, et cetera are secured for the particular project.

Multisourcing requires more work upfront, admits Rutchik. And no one wants to put together statements of work for every little project. “However, the structure and attention on the front end–which does add incremental resources and effort from groups such as IT and sourcing–actually enables less overhead on the governance side because projects requirements are scoped and resourced more appropriately,” Rutchik says.

More:http://www.computerworld.com

NEW DELHI: Hospital chain, Fortis Healthcare today announced a five-year outsourcing deal estimated to be over $15 million with IT major HCL Inf
osystems for implementing software solutions at all its facilities.

“The deal is part of a five-year agreement under which HCL will undertake complete outsourcing of IT systems and processes of Fortis Healthcare Ltd,” Fortis Healthcare vice-president Corporate affair G S Bedi said.

As per the deal, IT platform for all the hospitals in Fortis network will be standardised through the IT system installed by HCL within a period of twelve months and the first hospital will go live by the end of February 2010.

Asked about the size of the deal, Bedi said, the total size of the deal would be more than $15 million and actual cost depends upon the number of facilities group acquires.

As part of the deal, HCL would install software solutions at all Fortis hospitals and would also impart training to its employee, he said.

This deal makes Fortis the first healthcare delivery company in India to undertake complete strategic outsourcing for IT applications and infrastructure management, Fortis said.

“This tie up will create newer benchmarks in the quality of healthcare delivery and patient care and take it to the next level, IT forms the back bone for hospital operations and improved patient care,” Fortis Healthcare Managing Director Shivinder Mohan Singh said.

Source:http://infotech.indiatimes.com/News/HCL-Info-bags-outsourcing-deal-from-Fortis/articleshow/5090130.cms