offshoreindianews.blogspot.com – moving to www.coreadvisor.com/globalwise

DATE: Feb 12th, 2008

MOHIT SOAPBOX:

For subscribers and regular visitors to  offshoreindianews.blogspot.com, the site has been down for a few days now and apologies for that. Thanks to google, the site offshoreindianews.blogspot.com has disappeared into the Internet blackhole and I have no idea what happened. Google , I bet is working hard to fight microsoft, yahoo so the priority of restoring my site is waaay down the list!! Lesson learnt is that free can be very expensive. I was using the free hosting and blogging tools available on the net.

I have been in the process of moving, creating a new hosted site with additional data, facts and deeper links since last couple of months and was hoping to switch to the new site sometime end March. Google has just accelerated the move for me!!  I will be releasing the new site with more detailed and in-depth commentary next three to four weeks.

This site is more experimental and may not have the regular updates and commentary but I am hoping that changes soon.

I want to thank all the subscribers to offshoreindianews.blogspot.com thank you and will reactivate the subscriptions once the new site is up and running.

I have spent the last couple of weeks  meeting up with some of the CIOs/CFO’/COO’s of the leaders in offshoring and outsourcing and it has been a fascinating insight into where they see the industry heading.  I am also travelling to some of the industry conferences (Mumbai, Orlando) and visiting some captives in the industry which are looking hard to see how to sail thru the US sub-prime crisis.

Please email me at offshoreindianews@gmail.comif there are things you would like to see covered more in depth or breadth in the fascinating world of outsourcing and offshoring.

A tough 2008 for infotech in India – You bet

Source: Times of India
Date: Feb 11th, 2008

Mohit SoapBox:
Yes.. I have been saying this all along that despite of the brave front the vendors have been putting, the global slowdown
is going to have a potential negative impact on growth in 2008. Then we had Gartner come up with a news release where they believe the IT spending will go up 3.3% this year. I respect Gartner as an analyst firm but am not sure where they are getting their #’s from. All the US based firms I have spoken with continue to see a slowdown in IT budget and steady budget if not a cut. A #  of recent presentations I listened into from the vendors – the question of the day seems to be – what are the levers the Indian firms have to deal with the slowdown. The answers are again consistent

- Increase Utilization
- Get more work offshore
- Reduce SG&A expenses
- Go deeper within existing clients
- Ask for price increases from customers
- Slow down hiring ( Or do right hiring)
- Right Skilling – Hire people with graduate degree for work which does not require enginering degrees
- Explore customers outside US

ORIGINAL SOURCE

This year will be an unusual year for the Indian technology industry. A slew of external and internal challenges – an impending US slowdown, subprime issues, rupee appreciation, soaring costs, pains of managing bulky-benches, billing pressures and shrinking margins/profitability – will place tech-dom on a market trajectory very different from what it has seen for the past five years.The industry is expected to come on par with its global counterparts in terms of salary increments and annual growth. The belt-tightening trend kicked off by TCS and IBM could soon find its way into other companies. And that could include staff rationalisation.

Libi Baskaran, a strategic advisor with a leading MNC firm said, “Not many fresh contracts are there in the pipeline. Billing pressures are at an all-time high. Per employee utilisation rates are much lower than the global levels. Overall costs are soaring. All these factors will force domestic enterprises into a major cost-cutting drive. Based on the available visibility, this calendar promises no significant momentum for the tech sector.”

Tech firms are increasingly contemplating downsizing their growth plans, physical and people-front expansions.

“TCS hired 6,000 people during the quarter ended December 31, 2006, while at the end of the corresponding quarter the next year, it hired only 4,000 people. A company that’s growing at 35% should have ideally hired 8,000 people, but recruited only 50% of that. This trend will gain visibility across the industry during the comingquarters,” said Avinash Vashistha, MD, Tholons, a global offshoring investment advisory.

Tech firms are also busy strategising ways and means to mitigate any possible revenue declines on account of the US slowdown. “One way of minimising the damage is by optimising the productivity and reducing the bench thereby keeping overheads down,” said Sabyasachi Satpathi, director, neoIT, an offshoring advisory firm.

“Most IT firms work with a 70-75% utilisation of workforce, which means the other 25% is cost to the company. However, this scenario cannot continue as margin pressures are soaring quarter on quarter. The only solution is to enhance utilisation,” said Harish Shah, IT research analyst with an angel broking firm in Mumbai.

“Traditionally we have seen IT companies such as Wipro constantly trimming 5-10% of their poorest performing workforce annually. Now with the margin pressure coming into play most companies will have to follow this course.

Rethinking the India Back Office – Wall Street Article

SOURCE: Wall Street Journal
DATE: Feb 11th, 2008

Mohit SoapBox:
The article explores the viability of Captives in India and are those the right model to go today. With a few captives looking to sell , or rumored to sell (Morgan Stanley denies their captive is for sale) this debate goes on. Are captives the right strategy for you at this mature stage of offshoring ?

ORIGINAL SOURCE

Many of India’s back-office businesses — the industry that propelled this nation onto the front lines of global commerce — may soon be changing hands.
 
Some of the largest outsourcing units are still those belonging to Western companies, including Wall Street’s biggest banks, which set them up here in recent years to take advantage of India’s low-cost, educated labor force. Now, many of the big companies could soon be looking to get out of part or all of the business by selling either to Indian companies that specialize in outsourcing services, to private-equity firms or through initial public offerings.
 
The reason: The costs for big companies of having their own Indian units are rising sharply — India’s skilled-labor wages are shooting up — and many, particularly financial-service companies, are looking to cut their overhead as the U.S. economy slows and the credit crunch takes its toll. The dollar’s weakness, which makes doing business in India comparatively more expensive, is another incentive for Western companies to leave the sector.
 
Moreover, a study by consultants McKinsey & Co. and Nasscom, the Indian tech and outsourcing industry group, found that, on average, company back offices — or “captives,” as they are referred to in the tech and outsourcing industry — were less efficient than companies run by outsourcing firms that specialize in the business. For some types of back-office work, captives’ costs are 30% higher. The survey found that the higher costs didn’t lead to lower staff turnover or better-quality work.
 
The scale of many of these individual deals is expected to be small, mostly in the range of $50 million to $100 million. But together they could total sizable numbers at a time when deals elsewhere are expected to become scarce because of the economic slowdown in the U.S. and elsewhere.
 
“As U.S. companies come under pressure, in a recessionary environment, I think this will be a good way to cut their costs — and also get some money,” said Amitabh Chaudry, CEO of Infosys Technologies Ltd.’s fully owned business-process outsourcing arm, Infosys BPO Ltd.
 
India’s tech and business-process outsourcing industry is growing fast and has been a big factor in boosting economic development here. Nasscom says sales for the industry totaled more than $47.8 billion in the year to March 31, 2007, up almost 10 times over the past decade. The Indian tech sector was 5.4% of the nation’s gross domestic product in fiscal 2007, up from 1.2% in fiscal 1998.
 
Four or five years ago, setting up a unit in India made sense: Shift the accounts, tech department or customer-care center to India and cut costs by 45%. Many American and European companies rushed to do it. Swiss bank UBS AG has a back office employing about 2,000 in tech hub Hyderabad. Goldman Sachs Group Inc., J.P. Morgan Chase & Co. and HSBC Holdings PLC have their own, too.
 
For some companies, such offices have now become a headache. Once the initial benefit was felt, companies found it hard to keep on top of their costs. Salaries and the cost of office space jumped. Staff turnover has been high, and companies are having to spend on headhunting fees and training.
 
India, however, remains a low-cost destination that offers a large quantity of people with the often-special skills required to make such businesses work, says Pankaj Kapoor, an analyst at ABN Amro Asia Equities in Mumbai. Although costs have risen, they remain substantially lower than in the U.S. or Europe. While some companies have begun to move their back-office operations to lower-cost countries such as Vietnam, Mr. Kapoor says he thinks many — particularly the more complex back-office functions — will remain in India. But at the same time, Western companies are still likely to look for ways of getting those functions off their balance sheets, he adds.
 
Not all back-office operations are suitable for sale or for operation by another company. Functions that are very central to a business or are too sensitive to be outsourced are likely to stay owned by the parent company, says Viju George, an analyst at Edelweiss Securities, a financial-services firm in Mumbai. Companies that market themselves as having an India presence, often as a low-cost benefit to clients, are also unlikely to sell, Mr. George says.
 
But already, sales are happening. Genpact Ltd., a business-process outsourcing concern, was spun out of General Electric Co. and listed on the New York Stock Exchange in August. GE and private-equity concerns General Atlantic LLC and Oak Hill Capital Partners remain big shareholders.
 
Travelport Group, a U.K. travel-services company that is owned by private-equity concern Blackstone Group LP, in December sold Travelport ISO, its Indian back-office operation, to Mumbai-based Intelenet Global Services Pvt. Ltd., a company 80%-owned by Blackstone. At the same time, Intelenet unveiled a deal to buy Upstream, an international outsourcing company, from its major shareholders based in Fargo, N.D. Together, the deals were valued at $75 million.
 
Back offices also have changed hands as part of bigger outsourcing deals. As part of a $250 million outsourcing contract last July, Infosys bought three back offices in India, Thailand and Poland from its client Philips Electronics NV of Amsterdam for $28 million.
 
Citigroup Inc. has eyed a sale of its Indian back-office unit, Citigroup Global Services Ltd., people familiar with the matter say. Citigroup declined to comment. And United Kingdom insurance giant Aviva PLC said a strategic review of its Indian offshore business, Aviva Global Shared Services Pvt. Ltd., had come to the early conclusion that partnership, in a variety of forms, could be a better alternative to its current back-office set up. Aviva is now in talks with “a very small number of parties before reaching a final conclusion,” the company said in a statement.
 
–Vibhuti Agarwal contributed to this article.
 
Write to Jackie Range at jackie.range@dowjones.com

Offshoring: Coping with U.S.-India culture clash – CIO news story

SOURCE: CIO
DATE: Feb 2008

MOHIT SOAPBOX:
Dealing with cross cultural issues is always a challenge in outsourcing and offshoring engagements. A # of companies still look at this as a training exercise where the senior management wants the cultural training to be done but is very rarely budgeted for beyond some earlier transition stages.
ORIGINAL SOURCE
Article by Denise Dubie

Sending IT jobs to Indian offshore service providers won’t deliver the cost-saving results North American companies want if U.S.-trained managers ignore inherent cultural differences between the two workforces.

Industry watchers report that many U.S. companies experience a culture shock of sorts when working with Indian employees educated and trained there, and often American businesses don’t immediately enjoy the expected benefits of an offshore engagement. The reason isn’t a lack of motivation, intelligence or effort on behalf of India-based workers. In fact, analysts say Indian workers are extremely ambitious and often job hop for more pay, causing the attrition problems many offshore providers are currently experiencing. Instead U.S companies run into management problems due to a deep cultural divide between North American-based businesses and the Indian talent pool.

“Many North American businesses offshore for cost savings and labor arbitrage, and that can pay off. But there are many challenges meshing how Americans perceive work should get done and how Indians work,” says Mindy Blodgett, a research analyst at Yankee Group. “Americans in particular expect a lot more initiative, independent thinking and pushback from their workers — for instance, everyone should be thinking of better ways to work together — and Indian culture is much more focused on process and procedure and strictly following the established steps along the way.”

For instance, Blodgett explains Americans typically work against deadlines and will change how they approach work when worried they may miss a deadline. An Indian employee might not veer off the set workflow and ultimately miss the deadline because the way work is done is perceived as more important than the time constraints put on the job. “American business culture is results-based, get the work done sooner so we can do more work and raise the bottom line,” she says.

Indian culture also often calls for putting relationships before business, says Amy Tolbert, principal of Concord Multicultural Services, an IT staffing and consultancy firm that specializes in building global teams. Typically, Americans would meet and “get right down to business” and discuss more personal topics when business is finished — which often doesn’t happen because there is another business function that becomes more critical to the U.S. worker. But a traditional Indian gathering of managers and employees or business partners might put more emphasis on the interpersonal relationships upfront and address business as a secondary priority.

“Americans are task-oriented. It’s about getting the work done. You don’t need to like your co-workers or have personal relationships with them as long as you all get the work done on time together,” Tolbert says. “India is a more relationship-based culture, in which they will do business with someone they trust without a contract. That seems appalling to litigious Americans who assume you can’t trust the person, but if they adhere to the contract you can work with them.”

Another pitfall U.S.-trained managers encounter is effective communications with India-based staff. Most American workers don’t fear losing their job for having a different opinion than their boss. Actually the opposite can be true. Many U.S. managers might find fault with an employee that can’t brainstorm or propose new ways of performing jobs that ultimately better serve the business, Yankee’s Blodgett explains. Yet in India speaking out of turn or going over a manager’s head would be considered out of line.

“American businesses tend to be a bit flatter; title and rank aren’t as important and go-getter attitudes are rewarded,” Blodgett says. “But traditionally in an Indian environment, it would be much more frowned upon if an underling proposed a better way to do things than the boss.”

That is not to say that India-educated and -trained employees don’t often think they have better ideas than their managers, but out of respect for the hierarchy, in many cases those opinions would not be voiced in the direct manner American managers expect. In fact, global employment specialists say they have heard U.S. managers report their Indian workforce “sabotaged” projects due to miscommunications. The problem is while the India-based employee may feel they are being respectful by delivering positive news, the American manager wants to hear the truth — good or bad.

“A worker raised and educated in India could think the boss should be told what they want to hear — that things are going well — and not want to point out the error that in fact things aren’t going as the boss thinks they should,” Tolbert says. “Americans would perceive that as being dishonest, but the Indian worker is simply respecting the cultural norm they grew up with and wouldn’t think of bucking that norm.”

Yet U.S-based managers can prevent such misunderstandings from hurting their offshore engagement if they address the cultural difference upfront. When deciding to outsource work to employees from another culture, managers must factor in education and training costs for both America- and India-based employees. Yankee’s Blodgett says cross-cultural training would help American companies train onshore and offshore staff how to better collaborate and work toward common goals.

“They might have to tweak processes early on and reassess the success of the processes or working relationships,” she says. “Don’t assume everything is going well because no one is telling you different.”

Tolbert suggests U.S. managers learn to request information from Indian workers differently. For instance, if an Indian employee finds it disrespectful to call out errors in how things are done, change the dialogue to a more hypothetical one to avoid the worker having to judge management’s approach. One method could be putting a group of workers on a project as a team and having the team present their findings as a job function, rather than calling out an individual to comment on how things could be done better.

“Remove the individual from the equation, prevent them from having to place judgment on the boss, the process or their co-workers. Instead of posing what may seem to be very direct and personal questions, facilitate it differently, make it about the work and workers will respond,” Tolbert says. “American businesses know now more than ever that a productive individual worker benefits the company’s success. Changing how they approach employees onshore or offshore will benefit business profitability.”

Is India loosing it’s offshore advantage – Forrester

SOURCE: EconomicTimes
Date: Feb 8th, 2008

My Soapbox
This article has very credible points on issues and challenges India is facing but I believe that some of the concerns the article talks about are more perception than reality. I have heard people talk about terrorism, natural disaster, social tension as cause of concern but not to an extent that people stop giving work.  It is the same firms who are pouring in money in markets in India  to buy up equity in India and if the above three points mentioned were such big concerns we will not see a high uptick in the FDI flow.  I have not seen these three which the author highlights anywhere in the top
five reasons why customers are afraid of offshoring work to India. Yes for those, who believe that they need any reason not to offshore work and are looking for any possible reason, these reasons can always be used.

Indian vendors face huge challenges including dealing with infrastructure, attrition, rising rupee and the firms are working in dealing with these issues. I have yet to see a firm use terrorism, natural disaster and political tension to stop work to India.
ORIGINAL SOURCE

In an earlier article, this writer had elaborated how ‘India’ advantage in offshoring was taking a hit with every passing day, due to rising staffing costs, attrition woes and the falling dollar.

As if this was not enough, we now begin to observe that apart from these widely-known challenges, how a host of new issues, ranging from natural calamities, social tensions to unrealistic aspirations of staff, project scalability, expected tax revisions, are daring the age-old offshore story of low-cost and high-quality resources.

Let’s begin with the ultimate reality of offshoring, despite vendor rhetoric around innovation and moving up the value chain, most companies still state ‘cost cutting’ and ‘talent availability’ as the two top reasons to offshore work to India!

But in last 24 months, we see the two very same advantages are under siege. Sure, India continues, and will continue, to be the number one offshore destination. However, the worrisome part is, it remains so not anymore by choice, but simply due to lack of alternate scalable offshore location.

One of the most alarming findings from our recent interaction with more than 30 large firms is their steadily rising dissatisfaction with India as an offshore destination. All these firms, spread across various industry verticals, leverage India for a host of offshore work ranging from typical IT applications and infrastructure to BPO, and product development services.

Their top initiatives these days include fixing gaps in sourcing management lifecycle and push back Indian vendors’ attempts to mark up the billing rates. This is quite natural considering the industry issues such as attrition and falling dollar.

However, if inquired deeper, one starts sensing several other factors shaking their confidence and comfort in sending loads of additional work offshore. Their current and related offshore efforts are still intact, but are they as happy as they were few years back? Not really. Here’s why:

Natural disasters, social tensions, and terrorism cause work disruptions. During past 24 months, popular IT destinations such as Bangalore, Hyderabad, Kolkata, and Mumbai witnessed a range of disturbances bringing work to a standstill.

Not only terrorism, but various other reasons from increased rains to social tensions routinely upset Indian metros at least 3-4 times annually. Like a credit card company that faced the drop in service level to clients when its BPO facility in Mumbai was down for two days during heavy rains of 2006 and 2007.

Going forward, with Lok Sabha elections due next year, one can expect a flaring-up of rhetoric and disruption around widening economic divide and newly emerging socio-political equations. Clearly, India’s image of being a peaceful work destination is challenged.

Lack of development planning and vision suffocates growth. Barring New Delhi to an extent, no other Indian city today shows signs of overcoming the infrastructure challenges. How often we witness that by the time new infrastructure is in place, it’s already falling short of growth demands!

For India, it’s a damaging sign of clients’ prospects, frustrated with long delays and hassles in travel. Imagine spending endless hours for a few kilometers in your car en-route Electronic City in Bangalore.

Changed political agenda stopped pampering the sector and took away sops. In the days when balance of payment situation needed green currency, IT was one of the front runners and got all forms of sops from land to tax rebates. But with renewed focus on traditional sectors like agriculture, infrastructure and rural facing policies, IT industry has lost its pole position and lobbying leverage.

Possible non-renewal of STP Act which helped companies save a host of taxes, introduction of fringe benefits tax on almost all expenses firms incur, imposing service tax on various additional categories, and the government’s lack of active intervention to stop falling dollar clearly show yesteryear’s sun-rise industry is no more the darling of policymakers.

Many of these factors have direct impact on viability of the IT firms and may eventually leave their clients in the lurch if their business engagements suffer. IT jobs are loosing shine. A decade ago, IT services industry was the poster child of emerging India. Hefty pay-packages, western lifestyles, opportunities to travel abroad made IT industry jobs the most coveted.

But now, with several other verticals like banking & financial service, retail, and telecom growing faster and offering comparable benefits, IT firms are no more a default choice of the smartest and brightest talent in the country. As a result, several veteran clients have started noticing a significant drop in quality of fresh recruits.

Education and skill-building initiatives have not taken off the ground. Ever climbing attrition is now an established fact and there is no solution emerging on the horizon. Much talked about education system over-haul, opening up of private and foreign investments in education, and introduction of finishing schools to produce suitable resources quickly, are yet to show any results.

There’s a lot of work that can be offshored to India, but availability of right skilled people, in spite of over a billion population, is going to be the real bottleneck. Hiring enough workforce to meet the growth is a top challenge for most leading players, and the issue surely does not seem to disappear in the near future. Having empty seats on a project is not the situation that firms’ clients appreciate.

Add to the wage inflation, the unrealistic career expectations of Indian staff. The head-hunters and HR professionals we spoke to unanimously agreed that demands of the employees in experience band of one to five years are impossible to meet and unending.

These youngsters, who got the starting salary higher than what their parents made at the retirement stage, think one year for salary review or appraisal, and two to three years for a promotion is too long a wait! With almost everybody having alternate job offer in the pocket, employers are being pushed to the wall with unrealistic expectations.

This further fuels IT firms’ already high attrition rate upwards. And making matters worse, such firms then juggle with resources and end up either deploying poorly skilled people on the project or do too many reshuffles in the project team, both resulting in delays and sub-standard quality of work.

So clearly, it’s high time all the stakeholders get their acts in place, and work toward arresting this slide in India’s unchallenged position in offshoring. It calls for serious efforts and time, but that’s what required when you have a lot at stake!

Is Morgan Stanley captive for sale in India ?

SOURCE: The Hindu Business Line
DATE: Feb 10th, 2008

ORIGINAL SOURCE

Morgan Stanley has denied that it is planning to sell the BPO unit, Morgan Stanley Advantage Service (MSAS). Based at Goregaon, Mumbai, the center supports Morgan Stanley businesses across the world. 

Deutsche Bank is in talks to acquire land in India to setup IT support facility

Source: EconomicTimes
Date: Feb 10th, 2008

ORIGINAL SOURCE

The 30-billion-euro Deutsche Bank is said to be in talks with Karnataka government to acquire 100 acres of prime land in Mangalore to set up its world’s largest IT infrastructure support facility.The proposed facility will comprise the bank’s largest data centre, disaster recovery centre, global network support centre and back-end support centre, and is expected to support Deutsche Bank’s global operations and branch networks spread across 76 countries, said state government sources.

“Deutsche Bank has plans to set up a state-of-the art technology facility that will drive its global businesses in Karnataka. Top bank officials have approached us and we have shown them prime industrial land in Mangalore. We are ready with formalities and we will help the global bank with all clearances,” said the source.

“The bank officials have already visited Mangalore and are happy with the chunk of land shown to them,” the source added. Although Deutsche Bank is keen to finalise this deal in Karnataka, it is also exploring similar deals in other states.

Deutsche Bank sources said the bank has earmarked Rs 500 crore towards buying land in India, but refused to divulge details on the purpose of the land acquisition.

Deutsche Bank employs around 80,000 people globally and operates close to 2,000 branches across 76 geographies. In 2007, the bank hired around 10,000 people. Of them, 1,400 were in Germany while Asia alone accounted for 40%.

Besides, the bank is believed to be doubling its headcount of 5,000 in the next two years. Deutsche Bank has 10 branches in India and its balance sheet size is over $4.2 billion.

The captive scenario is hotting up in India. The country has around 800 captives of which 600 are in the R&D space while the rest are BPO captives focused on banking, insurance or retail like Goldman Sachs, Tesco and Bank of America.

“The dynamics for captives is changing in India. Recession in the global markets is making the country more attractive in terms of scalability, productivity and talent availability.

Also, MNCs are willing to offer more ownership and controls to heads of their captives centres back in India. The situation was quite stiff-necked earlier,” said Pari Natarajan, CEO, Xinnov Management Consulting, an offshoring advisory firm.

Upcoming Outsourcing and Offshoring events – February 2008

Visit http://offshoreindianews.blogspot.com for updated info. 

February (Details on calendar on the blog: http://offshoreindianews.blogspot.com/
bottom of the page). This is a busy busy month for conferences. I am going to be in a few of these so a bit more travel

• 4th – 7th – Thomas Weisel Technology,Internet investor conference , San Franscisco,CA 
• 5th – Genpact CEO presenting at Sanford Bernstein, New York 
• 8th – Syntel Earnings
• 10th – Entrepeneur Summit – IIT Bombay, Bombay, India
• 11th to 14th – Shared Services Summit, Victoria Park Plaza, London,UK
• 11th – 12th – eServices: Global centers of excellence, SMX Convention Center,Manila, Philipinnes
• 12th – ET Private Equity Confluence – Roadmap to growth, India Habitat Centre,New Delhi, India
• 13th – 15th – NASSCOM leadership forum, Mumbai,India
• 18th – 20th – IAOP Global outsourcing summit, Orlando,FL
• 18th – 19th – Gartner India CIO Summit, Mumbai,India
• 19th -20th – Supply Chain Risk Management,Miami, FL – Marcus Evans events
• 21st – 22nd – Gartner Asian CIO summit, Singapore
• 27th – BRASSCOM 2008 Summit, Sao Paulo, Brazil
• 27th – India Private Equity Fair, Grand Hyatt, Mumbai
• 27th – 28th – Shared Services Eastern Europe – IQPC,Budapest, Hungary
• 28th – IDC Green IT Summit – New York

BPO markets are under penetrated – Pramod Bhasin, CEO Genpact

DATE: FEB 5th, 2008
http://offshoreindianews.blogspot.com

I listened in today to Pramod Bhasin, Genpact CEO’s speak in New York at the Sanford Berstein investor luncheon… The topic of the discussion was growth and opportunities in BPO markets of tomorrow. He was joined by Rod Bourgeois, Sanford analyst who talked about the BPO, IT Services markets in general and what they are recommending to investors as buys. Pramod is a dynamic speaker who brings in a lot of passion when he is talking about the company and the growth.

I am going to put out a brief on the Thomas Weisel conference presentations sometime later this week but I found that there are very similar trends in what Genpact is looking at the current market place and where other outsourcing vendors believe the market is.

Key takeaways from the conference seem to be that Genpact is well positioned to leverage the under penetrated BPO market and the current market conditions although cautious are not going to slow down the companies growth. Pramod believes that only 5% of the BPO market is yet penetrated so the upside is tremendous.

The message over the last month has been very similar in the marketplace although the stock prices for these company’s (Pure BPO players like WNS,EXL,GENPACT and IT services players like Infosys, Wipro etc..) have been hammered in the market.

Rob believed that the market sentiment is more to blame for the stock price and there is an upside in these stocks.

What I believe is happening in the marketplace is that the larger vendors are gearing up and identifying all the potential levers they have to fight the margin compression and revenue slowdown in 2008 and believe that they are ready to meet the challenge. (More on this in a later post)

One thing which I have been saying all along and Pramod seems to confirm is that the
Market will be broken into three categories of companies when it comes to who will leverage offshoring in a slowdown scenario:

The first set of companies are those which have built excess capacity and are looking inwards to either leverage the capacity to do additional work or optimize that more effectively. Basically that these firms will not do a big push on offshoring.
The second type of companies is those which have a fairly mature offshoring program and are comfortable with the global footprint and will leverage offshoring more aggressively. These are typically Fortune 100 companies and in the sweet spot for the larger Indian vendors. Companies like Genpact have taken a go to market approach where they have created anchored clients in each vertical and are leveraging those to go deep (Nissan, Wachovia, and GE).
Larger organization looking at strategic roadmaps and delaying their offshoring plan. These companies will delay their outsourcing and offshoring road map.

Genpact also believes that they have over 85% visibility into the customer budget and most of their customers will not slow down the type of work which they do as it required to keep the ‘lights on’. F&A work Procurement, HR, IT help desk support etc.

Genpact is also exploring growth strategies to grow domestically in India and China and penetrate the European markets. From a vertical expertise perspective Remote Infrastructure management is an area where not only Genpact but all vendors see a huge potential for growth (although the margins and the offshorable work get limited).

Genpact’s around 7-10% revenue is affected by discretionary spending. Another challenge facing the players today in the market is how you reduce the payback cycle for investments in offshoring. Genpact timeline on payback is around 18 months for US and 30 months for UK, European firms. This elongated period of payback will be a challenge for firms looking to do new deals in the offshoring space.

I believe that most of the players are going to focus on existing relationship and going deeper in their existing relationship rather than build new relationships.

There is a lot of talk about Convergence in the market place, not that Genpact talked a lot about that but as all players start looking at mid market deals to expand their customer base the competition is going to intensify. Now you have Unisys, EDS, ACS and other SI firms along with the traditional offshoring vendors and the consulting firms like Accenture, IBM all competing for the same type of clients.

With a lot of talk about technology supported BPO (platform BPO) Genpact does not look at that as their core strength.

Seems like Genpact is leveraging its GE, lean, six sigma, and process improvement heritage to create a unique USP.

Under penetrated or not seems like Genpact is fairly optimistic of continuing to grow in the BPO space. Only if the stock price will reflect that!

Outsourcing and Offshoring news – Feb 5th, 2008

BPO markets are underpenetrated – Pramod Bhasin, Genpact

DATE: Feb 5th, 2008
I listened in today to Pramod Bhasin, Genpact CEO’s speak in New York at the Sanford Berstein investor luncheon… The topic of the discussion was growth and opportunities in BPO markets of tomorrow. He was joined by Rod Bourgeois, Sanford analyst who talked about the BPO, IT Services markets in general and what they are recommending to investors as buys.

Pramod is a dynamic speaker who brings in a lot of passion when he is talking about the company and the growth.

I am going to put out a brief on the Thomas Weisel conference presentations sometime later this week but I found that there are very similar trends in what Genpact is looking at the current market place and where other outsourcing vendors believe the market is.

Key takeaways from the conference seem to be that Genpact is well positioned to leverage the under penetrated BPO market and the current market conditions although cautious are not going to slow down the companies growth. Pramod believes that only 5% of the BPO market is yet penetrated so the upside is tremendous.

The message over the last month has been very similar in the marketplace although the stock prices for these company’s (Pure BPO players like WNS,EXL,GENPACT and IT services players like Infosys, Wipro etc..) have been hammered in the market.

Rob believed that the market sentiment is more to blame for the stock price and there is an upside in these stocks.

What I believe is happening in the marketplace is that the larger vendors are gearing up and identifying all the potential levers they have to fight the margin compression and revenue slowdown in 2008 and believe that they are ready to meet the challenge. (More on this in a later post)

One thing which I have been saying all along and Pramod seems to confirm is that the
Market will be broken into three categories of companies when it comes to who will leverage offshoring in a slowdown scenario:

The first set of companies are those which have built excess capacity and are looking inwards to either leverage the capacity to do additional work or optimize that more effectively. Basically that these firms will not do a big push on offshoring.
The second type of companies is those which have a fairly mature offshoring program and are comfortable with the global footprint and will leverage offshoring more aggressively. These are typically Fortune 100 companies and in the sweet spot for the larger Indian vendors. Companies like Genpact have taken a go to market approach where they have created anchored clients in each vertical and are leveraging those to go deep (Nissan, Wachovia, and GE).
Larger organization looking at strategic roadmaps and delaying their offshoring plan. These companies will delay their outsourcing and offshoring road map.

Genpact also believes that they have over 85% visibility into the customer budget and most of their customers will not slow down the type of work which they do as it required to keep the ‘lights on’. F&A work Procurement, HR, IT help desk support etc.

Genpact is also exploring growth strategies to grow domestically in India and China and penetrate the European markets. From a vertical expertise perspective Remote Infrastructure management is an area where not only Genpact but all vendors see a huge potential for growth (although the margins and the offshorable work get limited).

Genpact’s around 7-10% revenue is affected by discretionary spending. Another challenge facing the players today in the market is how you reduce the payback cycle for investments in offshoring. Genpact timeline on payback is around 18 months for US and 30 months for UK, European firms. This elongated period of payback will be a challenge for firms looking to do new deals in the offshoring space.

I believe that most of the players are going to focus on existing relationship and going deeper in their existing relationship rather than build new relationships.

There is a lot of talk about Convergence in the market place, not that Genpact talked a lot about that but as all players start looking at mid market deals to expand their customer base the competition is going to intensify. Now you have Unisys, EDS, ACS and other SI firms along with the traditional offshoring vendors and the consulting firms like Accenture, IBM all competing for the same type of clients.

With a lot of talk about technology supported BPO (platform BPO) Genpact does not look at that as their core strength.

Seems like Genpact is leveraging its GE, lean, six sigma, and process improvement heritage to create a unique USP.

Under penetrated or not seems like Genpact is fairly optimistic of continuing to grow in the BPO space. Only if the stock price will reflect that!

Aurangabad to host IT meet

SOURCE: The Hindu

DATE: Feb 4th, 2008

ARTICLE

Aurangabad is gearing up for the IT Business Leader Summit 2008, due to be held there from March 13 to 15. The findings of the NASSCOM – A.T. Kerney Research Report on the 50 top emerging IT & BPO destinations in the country will be released at the event that has been jointly organised by NASSCOM, Aurangabad Municipal Corporation and the Chamber of Marathwada Industries & Agriculture (CMIA) amongst others. With IT business leaders from across the country expected t o attend the conclave, the local organisers are pulling out all stops to make this, the first event of its kind at the national level, a grand success. This includes keeping a chartered aircraft on standby to ferry important guests to and from Mumbai, an official said. Recently, Aurangabad has been witness to a tremendous boom in new IT Parks, and at least five new state-of-the-art IT parks are shaping up in the city.

IT workers aplenty – but true talent “lacking”

SOURCE: Canada Business News
DATE: Feb 5th, 2008

This is an interesting take by Don on the lack of IT talent. Is there a lack of qualified talent and is there an entitlement mentality which companies have to battle when hiring IT talent ?

ARTICLE
by Don Tennant

It’s not that there aren’t people out there in the IT field that are willing or able to work. It’s: Do they have the aptitude, the ability to learn and work at the capacity that you know you need in your organization? That’s the biggest problem: qualified talent vs. talent.

So, where’s the disconnect?
I posed that question last week to a number of people to help me prepare for a panel discussion that I’ll be moderating at Computerworld’s Premier 100 IT Leaders Conference next month. Kristen Lamoreaux, an IT recruiter and founder of SIM Women, an affiliate of the Society for Information Management, was blunt.
“One of the sad things is that there is this entitlement mentality,” she said, noting that the market has changed. “There are plenty of IT professionals out there. But the truly talented people that clients are seeking — that’s the pool that’s shrinking.”
DeAndre Hodo, global director of IT infrastructure and operations at Littelfuse, a circuit protection products manufacturer, was even more blunt.
“It’s not that there aren’t people out there in the IT field that are willing or able to work,” Hodo said. “It’s: Do they have the aptitude, the ability to learn and work at the capacity that you know you need in your organization? That’s the biggest problem: qualified talent vs. talent.”
Hodo said he’s found that qualified workers are a comparatively small subset of IT professionals, and that they have to be lured away from other companies. “They aren’t those folks who are sitting on the bench,” he said. “Because, quite frankly, that’s probably why [those other people are] sitting on the bench.”
According to Hodo, too many IT workers think they’re qualified just because they have certifications or credentials. Citing the example of a company’s network going down, he jokingly pointed out that there’s no such thing as a network reinstallation disk that workers can turn to.
“It’s a very dynamic and fluid situation, and … you’ve got to be able to think on your feet. Cisco can’t teach you that. Microsoft can’t teach you that,” Hodo said. Consequently, the IT profession isn’t necessarily a good fit for everyone who goes into it. “I know plenty of IT professionals who have completely left the field,” Hodo said, “and are now truck drivers, mail carriers, doing somewhat more manual-labor jobs or jobs where you don’t have to be thinking on your feet as much.”
Lamoreaux, meanwhile, said she’s seen a lot of people “bail” from the profession because of what she called “offshoring panic.”
“One guy is now selling awnings, and he loves it,” she said. “He’s having a great time and making a success of it.”
Is it a problem that so many people are leaving the IT field? Professor Ravi Aron of the University of Southern California Marshall School of Business doesn’t think so.
Last October, I moderated a discussion on the future of the IT profession in the U.S. at the fall meeting of the UCLA Anderson School of Management IS Associates. Aron, who was one of the participants, was outspoken on the acceptability of IT jobs leaving the U.S. and moving offshore. He argued that the market should decide the composition of the country’s IT community.
“Will it mean that some talented, bright folks will move from IT into [other fields] as they’re now doing? Yeah, of course,” Aron said. “So what? That is the strength of the U.S.: Constantly reallocate people and talent where it is most rewarded. We do not want to be North Korea.”
Whether or not you agree with Aron, the fact remains that the competition for IT jobs is a global one, that quality is king and that you’re entitled to nothing. The disconnect lies in the failure of too many IT workers to recognize that.
Don Tennant is editorial director of Computerworld and InfoWorld. Contact him at don_tennant@computerworld.com, and visit his blog.

TCS shows exit door to 500 employees

SOURCE: The Hindu
DATE: Feb 4th, 2008

This is right at the heels of the uproar on IBM cutting 700 staff in India.
Big Blue give pink slips to 700 (Jan, 2008)

ARTICLE

Within days of cutting salaries of its employees, the country’s largest software exporter TCS has shown the doors to 500 employees after their performance was found wanting.
Tata Consultancy Services, which employs over 100,000 workers, has said it would cut 1.5 per cent from employees’ salaries in the fourth quarter, as it fell short of certain financial targets following a sharp rise in the value of rupee against dollar and the slowdown in the US economy.
“Employees with experience of two years and above across the company who were unable to meet the performance requirements of our company are asked to look for other jobs commensurate with their abilities,” TCS spokesperson Pradipta Bagchi told PTI.
He, however, asserted that no employee has been sacked or fired. As a policy the only time when TCS dismisses people is for disciplinary reasons, he added.

The company had said that the salary cut would be in the variable component, which accounts for 30 per cent of the total pay of the employee.
In the third quarter ended December 31, TCS’ net profit rose 18.86 per cent to Rs 1,326.67 crore from 1,116.1 crore a year ago, while total income increased 23.04 per cent to Rs 6,041.98 crore from Rs 4,910.53 crore a year ago.
The rupee has risen more than 12 per cent in 2007 against the US dollar, leaving software firms to battle the impact as a majority of their revenues come from America.
TCS’ decision comes on the heels of global IT major IBM getting rid of a large number of its entry-level trainee programmers across major offices in the country on the grounds of performance.

‘A vote of confidence in the Indian operations’ – Interiew with Arvind Mathew , MD Ford India

SOURCE: The Hindu
DATE: Feb 5th, 2008

ARTICLE

“We are all very pumped up about the investment and with what is going on,” says Mr Arvind Mathew, Managing Director and President, Ford India Pvt Ltd, as you sit down for an appointment with him. Ford Motor Company recently announced its decision to invest another $500 million (about Rs 2,000 crore) in its Indian operations, expanding it substantially — car manufacturing capacity of 200,000 units a year and an engine plant with an ultimate capacity of 250,000 units.
It is a definite vote of confidence, not just in the Indian operations but also for the Indian market and the economy, says Mr Mathew, a Masters in mechanical engineering and in business administration. He has been with Ford since 1990 and took over his present position in 2005. Ford India made a net profit for the first time in 2006-07, although, according to Mr Mathew, it has been making profits by US accounting standards for two years. In an interview, he answers a range of questions on the fresh investment and what it means for the company.

Excerpts from the interview:
What prompted this additional investment? Is it because of confidence at last in the Indian operations or in the market?
Ford has decided to invest $1.5 billion in the region — China, Thailand and India. The investment is driven by the trajectories of the three economies. Ford looked at them and wanted to make sure that it was not just a flash in the pan, that it was stable and that growth was guaranteed. They said the Indian economy is growing and how can Ford take advantage of that, recognising that there is a proliferation of free trade agreements also. Thailand has done a great job with FTAs. China has got a big enough market by itself. India has got a big enough market by itself and is also developing its own FTAs. The engine plant will export at least 50 per cent of its capacity. Then, we will start expanding the supply base.
How much of the engine would you still import?
The engine plant comes in three phases. In the first phase, I start using locally-assembled diesel engines from April. It will satisfy my Fiesta and Fusion requirements. At that point in time, my localisation in the Fiesta jumps, because that was the most expensive component I was importing. Then, I put in my machining lines for crankshaft, head block and morph it into a 250,000 units engine plant. By that time, my small car will also be there. The plant will have flexibility to make diesel or petrol engines. If there is a significant shift between gasoline and diesel or displacements, I can do it. This will be the first Ford-owned diesel engine plant outside Europe.
What kind of cost-advantage does this engine plant offer you?
With the engine plant, I get out of the problem of a long supply chain. People keep saying aren’t you going to become a hub, but you have got to make sure that you are in total cost control, which includes freight, carrying cost for having a part on the waterfront for six weeks… (From a customer’s point), only getting scale there will be benefit. With 50,000 units, you don’t get that scale. You really get scale when you do 200,000 units…
You will see serious change not just at our operations, but also in our supplier base and at the dealerships. You will see a lot more automation come in (at the assembly line).
Would the critical components for the diesel engine still be imported?
Pretty much. But the rest of it will come locally. Over time we will push for more localisation. Those components are built in such high volume. This 250,000 is gas and diesel, I won’t be doing all diesel. You really need about 250,000-300,000 all diesel to justify the injection systems.
Diesel engine cars account for close to 70 per cent of your sales. Could we assume that it would be at the same level once you expand capacity?
I don’t think so. That was one of the reasons why we went in for a flexible plant. If you hardwire for 70 per cent diesel, and if there is a change then you are in trouble. Today, it is 70 per cent, but there is enough discussion at different levels about renewable fuels and emissions and all that, today most renewable fuels are gasoline based. You might see a change in that mix as time goes by.
There is always the perception that Ford has been rather slow in either launching products or reacting to market developments. Is this just a perception or reality?
This is just a perception because I think other companies such as Honda have never been asked this question. If you look at Honda’s line up and my line up, they are similar. But the perception is, Hyundai and Ford came into Chennai at the same time.
Hyundai went into the small car segment, look at their volumes. Ford didn’t get into the small segment, something must be wrong. But you are basing your assumption that to be able to say you are competing in the Indian market, you must be in the small car segment. That is not entirely true. There are enough manufacturers — Toyota, Honda — who are not in that segment. Yet, I don’t hear the same comments being made about those manufacturers.
Our approach is whichever segment you go in, you better win it and win it robustly. We didn’t think that until now, it was worth to go into this segment. We changed our mind in terms of our priorities, may be it is worth it, that the growth is there, that more customers are going to come in and it is going to be a fairly big segment. In terms of priorities, we have decided to go into the small car.
How do you think the Nano is going to impact the industry?
I think they (Tata Motors) did an outstanding job. I always said they will do it. Do you know that Tata is a household world in the US after the Delhi auto show. How does it impact me? What they have done is create a new pool of customers. I don’t think any of my customers are going to migrate to him. The expectations of a car owner/user today are not satisfied in a Nano and that is okay. That was their target.
My car buyer would not step back. But we would see a fairly significant shift up. There has been a lot of noise about pollution. With every motorcycle that is replaced with a Nano, the emissions will reduce. Traffic, however, is going to be a disaster. That could have a knock-on effect on the total industry because if you get into a serious congestion issue, you are going to say, I don’t need to buy a car. But in terms of hitting their objective, bulls eye. Huge respect. You now have others saying they will come with a cheap car. All the same guys who said it could not be done.
As you get ready for a major expansion, what do you think will be the biggest speed breakers?
The biggest speed breaker continues to be people. You are seeing tremendous growth in Chennai and Tamil Nadu. I have not been able to find the kind of people to do the kind of jobs we have.
The job market is so hot that they keep coming and going. But the amount of time and money I invest on training because I can’t put a guy on the line straightaway, it takes six months. Externally, I think electricity would become an issue. Infrastructure continues to be an issue. Those things all add to cost on doing business.
I am going to start exporting engines and I have to be globally competitive. I have got to compete with Thailand and China and all the other factories, and I have got to compete with input costs, cost of logistics, cost of steel and still be globally competitive. That is an area of worry that India is not looking at all these things. We have some people talking about it, but we don’t have anybody looking at it from a total manufacturing cost perspective.
Our biggest cost is electricity. The cost of transporting material is another major issue. I can’t put a number on that because I can’t project the delays in the system. I can get a container out of Thailand quicker than I can get a car shipped from here to Delhi.
Salaries have increased by 15 per cent year on year, which is not sustainable. We are quickly pricing ourselves out of the market and if we don’t stop and slow down, I think all the business will move somewhere else. IT jobs will be first ones to go and they have already started going. That was actually the warning shot across industry. It won’t happen that easily in manufacturing.
My attrition rates are — in the IT business, BPO or manufacturing — much lower and would be running at about 8-9 per cent for salaried employees, 5-6 per cent for the workforce and 15 per cent for the IT business.

Infosys and US based Provenir announce global relationship

SOURCE: Press Release
DATE: Feb 4th, 2008

Infosys Technologies Limited (NASDAQ:INFY), a world leader in consulting and information technology services, and Provenir, Inc., a leading provider of enterprise customer lifecycle management software to the financial
services industry, today

announced they have entered into a global relationship in which Infosys will deliver professional services to Provenir. In a separate agreement the companies have agreed to jointly offer information technology services and solutions. “We are delighted to have Provenir as both a client and a teaming partner,” said Ashok Vemuri, senior vice president and head of Infosys’ Banking and Capital Markets. “This relationship is an important part of our strategy which will enrich our offerings and deliver clear competitive advantage to our clients.” This relationship between Provenir and Infosys will enable clients to take advantage of Infosys’ best practices, consulting capabilities and technology expertise to quickly implement solutions that enable clients to fully leverage the broad capabilities of the Provenir Platform. As a teaming partner, Provenir will have access to product expertise and strong application development and integration capabilities to help validate its product offerings. The partnership with Provenir will further enhance Infosys’ superior industry expertise while working with one of the leading solution providers in the financial services industry. “As our business continues to grow, particularly outside of North America, it is important for Provenir to be able to find ways to help our customers maximize the value and competitive advantage they can get from the Provenir Platform,” said Jeffrey Oulton, chief operating officer, Provenir. “Our partnership with Infosys demonstrates our commitment to this objective. We look forward to leveraging Infosys’ understanding of the financial services industry, deep client relationships, and global resources to deliver even greater value to our clients.”

Alsbridge Inc. Brings In Michael Farley for Shared Services and F&A

SOURCE: Press Release
DATE: Feb 5th, 2008

Alsbridge, the award winning outsourcing, shared services and offshoring advisory firm, today announced that Michael Fraley will join the senior leadership team of the company’s Shared Services, offshore and Finance Process Optimization division.

Fraley, a former partner with CSC’s Strategic Services Group has twenty three years of engineering and management consulting experience with multi-billion dollar companies in a variety of industries including Insurance, Utilities, High Tech Manufacturing, Automotive, Hotels and Hospitality, Distribution, and Staffing Services to name a few. Fraley has built over 25 Shared Service Centers around the world (e.g., Memphis, Miami, White Plains, London, Singapore, Hong Kong, Shanghai, Sydney, Budapest) leading all work phases including building the justifying business case, SSC site selections, process activity mapping and “best practices” optimization, detailed transition and implementations and the hiring and training of SSC staff. Mr. Fraley’s clients have typically saved 20% to 65% of Finance related FTE and technology costs post these SSC optimizations and implementations.

“Michael is one of the strongest advisors in the global shared services and offshore market today. We are very excited about Michael joining our team at Alsbridge,” says Ben Trowbridge, CEO of Alsbridge. “He will add depth to our already strong foundation in F&A and Shared Services. The Alsbridge brand has significant momentum in the industry and Michael will guide continued growth and awareness.”

WNS Appoints Alok Misra as Chief Financial Officer

SOURCE: Trading Markets Press Release
DATE: Feb 4th, 2008

WNS (Holdings) Limited (NYSE:WNS), the parent company of WNS Global Services, a leading global business process outsourcing (“BPO”) provider, today announced the appointment of Alok Misra , as Group Chief Financial Officer with effect from February 18, 2008.
“We are delighted to have Alok Misra join our senior management team. Alok is an accomplished finance professional with eighteen years of public company experience, with a track record in the BPO industry. We see Alok playing a critical role in WNS’ continuing growth as a leading global BPO company,” said Neeraj Bhargava, Group Chief Executive Officer.
Alok Misra joins WNS after holding the Group CFO position at MphasiS, an Electronic Data Systems Corporation company, where he has been a key member of the leadership team for the last seven years and helped grow the organisation in that period into one of the larger players in the information technology and BPO industry including the strategic alignment with EDS.
Prior to MphasiS, Alok worked with ITC Limited, where his last assignment was as the Financial Controller of a US$110 million project involving the relocation of ITC’s factory at Bangalore, India.
He is a frequent speaker at industry events and CFO forums and is a Fellow of the Institute of Chartered Accountants of India.
Alok holds an honours degree in Commerce from Calcutta University and has been a rank holder throughout his academic career with several merit scholarships.

Learn how to stand in queue: New immigrants to be told in UK

SOURCE: Times of India
DATE: Feb 5th, 2008
I would think the lesson should be how not to break a queue rather than learning to stand in queue. The Indian service industry has made people very comfortable with how to stand in long lines for lousy services!!With all the globalization come some do’s and don’ts. Here is one about how to behave when you are in the UK! Hmm.. I wonder if there are similar rules on how to behave in India. I had come across this really strange list put together by someone on do’s and don’t in India.

Lighter Side: Do’s and Don’t in India (Oct, 2007)

A # of change management consultant have their own do’s and don’t which will be more relevant. This is another list from military games

Do’s and Don’t in India
I remember reading a couple of the Xenophobe guides (LINK) but treat those as light reading and not your authoratative study guides to a country. There are wonderful things within each country and providing a generalistic view on a country creates uneeded stereotypes specially when you are working globally. So experience the joys and pains of a country on your own! Extracts from the Xenophobe guide books: Xenophobe guide to English Never overstep the mark
Moderation – a treasured ideal – means a lot to the English. Their respect for it is reflected in their shared dislike of any person who ‘goes too far’. Irrational rationality
The English can admire something without enjoying it, or enjoy something they suspect is fundamentally reprehensible. You can never be sure which stance they are going to take – the reassuringly reasonable, or the wildly irrational.
I’m fine, really
Stoicism, the capacity to greet life’s vicissitudes with cheerful calm, is an essential ingredient of Englishness.
Push-me, pull-you
Two equally fundamental but contradictory English characteristics are a love of continuity and a yearning for change. In the English character these two opposite desires vie with each other constantly, which produces some curious behaviour patterns and several characteristics most usually observed in the classic split personality.
ARTICLE

Britain is planning to come up with an etiquette guideline for new immigrants, who will be told not to spit in the streets, grope women, or litter and learn how to stand in queues. Communities Secretary Hazel Blears said immigrants should be given information packs explaining British customs and containing advice on social rules such as “not littering, not spitting and queuing in shops”, media reports said. Immigrants would also be advised not to touch people without permission or play loud music.

The government’s plans — which are being published for consultation — is an effort to avoid community tensions and help newcomers integrate. Blears said Britain had a proud tradition of welcoming new arrivals to the UK, and “it is only right that we expect migrants to play by our rules. In return we have a role in explaining just what those rules are.” “Information packs are a way of getting that info across – providing a rough guide to the country, the county and the city and helping to ensure that new arrivals avoid doing or saying things that might upset local settled communities or getting into trouble with the law,” she said. While making the ‘welcome packs’, local authorities are being told to include details such as how to access local provision like English language classes, waste and recycling services and employment services; practical information on rights and responsibilities including national laws and rules around paying taxes.

Globalization Offers Opportunities to Successfully Manage Economic Uncertainty

SOURCE: Press Release
DATE: Feb 5th, 2008

The systematic implementation of globalization initiatives can help companies manage today’s economic uncertainty and lay the foundation for the next generation of opportunities in services globalization, according to a new report by neoIT, the world’s premier corporate globalization advisory firm.
“Companies that move aggressively to reassess their globalization initiatives, re-balance their portfolios and ensure that these initiatives are well-aligned with business objectives will manage the current economic slowdown in the U.S. more effectively,” said neoIT CEO Eugene Kublanov. “Organizations that don’t take advantage of this opportunity or delay will face mounting financial and operational pressures in the next few years.”
The report, Navigating Economic Uncertainty: Leveraging the Services Globalization Advantage, noted that in the U.S. economic slowdown of 2001 to 2003, most globalization agreements were for staff augmentation that allowed companies to quickly scale up or down. Since then, most global services contracts have shifted to managed services projects designed to deliver specific results or service levels.
The report emphasized the importance of executing services globalization more strategically and in a less piecemeal fashion than in years past. The immediate benefits of successfully implementing an enterprise-wide approach are lower costs and increased efficiency, both of which can mitigate the impact of the current economic downturn.
To succeed in the short term and to seize the longer-term opportunities in services globalization, the report urges the Global 2000 to implement the following Five Business Imperatives:

1. Resize your globalization initiatives to the current economic slowdown and reduce costs immediately. Review all globalization initiatives to determine if the programs address the economic realities of today’s marketplace.

2. Increase operational efficiency between business units, IT infrastructure and applications. A full audit of the Demand Management Process can produce substantial opportunities to reduce cost and eliminate waste.

3. Review globalization initiatives to ensure that optimal results are being delivered. Update performance metrics after every program.

4. Identify opportunities to restructure or acquire new lines of business. Economic slowdowns can often translate into opportunities to transition to new technologies or processes at bargain prices.

5. Renegotiate outdated contracts or those disadvantageous in the current slowdown. Standardize your contracts or include provisions that insulate the company against a downturn.

“The economic uncertainty in the U.S. represents an opportunity for global companies to move beyond a casual or inconsistent approach to global services to a more systematic focus on services globalization,” Kublanov said. “Those organizations that take advantage of the opportunity today will fully realize their return on globalization and emerge measurably stronger.”
Navigating Economic Uncertainty: Leveraging The Services Globalization Advantage is the latest research brief from neoIT. To obtain a copy of this report, go to: http://www.neoit.com/PDFs/Whitepapers/OIv6i01_0208_economic_uncertainty.pdf

TCS Appoints Ajoy Mukherjee as Global Head of HR

SOURCE: Press Release
DATE: Feb 5th, 2008

Tata Consultancy Services, aleading IT services, business solutions and outsourcing organizationannounced that Ajoyendra Mukherjee, has been appointed as the global head of human resources, following S. Padmanabhan’s move to Tata Power as anexecutive director, operations. Ritu Anand has been appointed as the deputy global head of human resources and will report to Ajoy Mukherjee in her new role. A key member of the corporate leadership team, Mr. Mukherjee, was theVice President and head of operations, eastern region. He has successfully handled various managerial roles in the company. He has been a key architect for TCS’ growth in eastern India and has led the delivery of a number of challenging programs for TCS customers world-wide from the delivery centers located in eastern India. “S. Padmanabhan (Paddy) has been an integral part of TCS’ success and growth in the last two decades. We are particularly appreciative of the tremendous leadership and contribution he has made in the area of HR, a function he took over four years back. On behalf of all TCSers, we wish Paddy every success in his new assignment,” said S. Ramadorai, CEO and MD.”We would like to welcome Ajoy Mukherjee in his new role which he is well equipped to perform given his vast experience in this company and industry.” A graduate of BITS (Pilani), Mr. Mukherjee joined the company in 1980.He has held key leadership positions and headed TCS operations in Switzerland and South Africa. Mr. Mukherjee is on the board of AP Online, a joint venture between TCS and Government of Andhra Pradesh. He is also a director on the WEBEL board,a Government of West Bengal enterprise responsible for the development of Electronics & IT Industry in West Bengal. He is a member of IEEE and CSI(Computer Society of India).

MindTree expands Middle East operations

SOURCE: Press Release
DATE: Feb 5th, 2008

MindTree Consulting Ltd, IT and R & D services provider, on Monday announced its expansion plans in the Middle East region with the opening of its office in Dubai Airport Free Zone. The new office will help the company further strengthen its presence in the Middle East as well as serve its regional customers better by offering more local support. “The Middle East is growing at a rapid pace with a high demand for IT services in the region. Dubai, being centrally located, acts as the gateway between the East and West and hence, it is an ideal location for our new office,” MindTree Consulting Regional Director and head of Middle East operations Arif Irfanullah said. “MindTree has been highly successful in this region and we plan to continue to invest and expand to meet client demand. We already serve customers such as Emirates, Dubai World, Dubai Customs, and Qatar Petroleum, to name a few,” he added. “We have chosen DAFZA as our base in the Middle East as it provides the best business-environment coupled with state-of-the art facilities, including the most advanced online services. Which are crucial to our growth in the region,” he said

Private-equity funds can outsource their grunt work

SOURCE:AsiaInvestor.net
DATE: Feb 6th, 2008
ARTICLE
Orangefield Trust builds its Asia presence through acquisition and new offices to support private-equity and real-estate fund administration.
Specialisation has become the byword for trust companies. Orangefield Trust is no exception: it is building a niche providing administration for private-equity firms, with a focus on Asia and global emerging markets.Orangefield is the restructured entity once known as ING Trust, which in July 2007 was bought by Foreman Capital, a Dutch investment group, and ING Trust’s management.The buyout accomplished, its senior executives then decided their best opportunity for growth was to diversify beyond its core businesses of fiduciary and trust services into fund administration for private-equity funds, real-estate funds and to some extent hedge funds, with an emphasis on business in major emerging markets such as China, India and Brazil.

Charles Kwun joined in December as managing director for Asia. Based in Hong Kong, he will be responsible for business development in the region. He previously ran the Mandatory Provident Fund business of Bank of East Asia.The fund-administration business brings a stable, visible cash flow, explains Eelko Bronkhorst, Orangefield’s Amsterdam-based CEO. Bronkhorst has a long banking career with ABN Amro, including a decade in Asia that included stings in Jakarta, Seoul and Singapore.“Most of the Asian private-equity business invests in China and India,” he says. “These funds want to structure their investments in an efficient way.”Private equity or real-estate investors tend to operate out of small teams based in a central location, and can’t afford to have multiple offices in investee countries. For example, funds investing into India may do so from Mauritius, thanks to its double-taxation treaty with New Delhi.Orangefield has an office in Mauritius that can run the investment company there, handling tasks such as documentation and reporting for legal, accounting and other regulatory purposes, as well as managing the company’s annual records, reporting board resolutions and the administration around any investment decisions.To improve its Asian capabilities it is also preparing to open an office in Singapore as well as acquire a fund administration company that is based in Asia and already specialises in private-equity businesses. Bronkhorst declined to name the target company.“We see investment flows between developed and emerging markets have changed,” he says. Five years ago, four times as much money was invested into emerging markets as the other way around. Now it’s less than two times and will soon hit parity, particularly with sovereign wealth funds snapping up distressed investment banks. “We want to position ourselves to follow the investment streams,” Bronkhorst says.Orangefield has a number of other ambitions tangential to fund administration. It wants to expand its business outsourcing capabilities for European corporations that need, say, to shift work in areas such as accounting to places such as India. And it is now getting a trust license in the British Virgin Islands – a popular haven for wealth among rich Asian families – in order to help sources of private wealth structure their estates in offshore locations.
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