Demand for multi-skilled IT workers knowledgeable in business and big-data specialists, huge spending on cloud and a new era of outsourcing will characterise the year ahead, says market analyst IDC. IDC Australia chief of research Matt Oostveen said in-demand IT workers would need business skills and would increasingly compete with an international pool of highly trained workers operating in cheaper labour markets.

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Talent2 International Limited (ASX: TWO) announced today that it had been selected by the Queensland Government, through a competitive tender, as the ICT Contractor Resource Manager. The three-year contract will see Talent2 take responsibility for the implementation and management of a Managed Service Program (MSP) across all 13 Queensland Government Agencies. This program will cover the procurement and performance management of all ICT contractors and suppliers that provide services to the Queensland Government. This program will improve the economy, effectiveness and efficiency of ICT contractor resource management for the Queensland Government.

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SonicWALL, Inc., the leading provider of intelligent network security and data protection solutions, today announced it has expanded its suite of firewall security services with the addition of Kaspersky Anti-Virus to its Enforced Client Anti-Virus and Anti-Spyware solution. SonicWALL® Firewalls ensure easy deployment, provisioning and enforcement of the client on endpoint devices through a unique policy-driven engine. SonicWALL Next-Generation and Unified Threat Management firewalls already provide gateway anti-virus through SonicWALL’s proprietary reassembly-free deep packet inspection anti-malware solution, protecting the perimeter, wireless and VPNs. But viruses can still enter the network through other entry points, including laptops, thumb drives or other unprotected systems. While protection at multiple layers is the best defense against sophisticated modern threats, deploying, maintaining and enforcing the right security software on endpoint devices can strain IT resources and budgets.

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New Release of Unisys Secure Cloud Computing Solution Gives Clients Better, More Cost-Efficient Resource Management New dashboard capability gives administrators a single, integrated view to better manage their cloud resources and control costs. Release 2.1 includes a new dashboard capability that gives administrators a single, integrated view of all cloud resources: servers, networks, storage systems and more. They can use the dashboard to determine the operational status of specific resources and take necessary actions to respond to business changes in real time, deliver performance mandated by service-level agreements (SLAs) and increase infrastructure productivity.

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Nespresso revolutionises its Business Solutions after-sales services with Machine-to-Machine solution from Orange. Nespresso Business Solutions is enhancing its B2B coffee machine after-sales service maintenance with a customised machine-to-machine (M2M) solution from Orange Business Services. Nespresso has launched two revolutionary B2B machine models – Aguila and Zenius, the industry’s first connected tabletop coffee machines. These models use embedded SIM cards from Orange that enable the machines to communicate with the Nespresso Customer Relationship Centres. This two-way communication enables remote machine diagnostic and preventative maintenance visits can be scheduled as required.

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International Recruitment Company HARVEY NASH launches new career opportunities and outsourcing services in Sydney Australia. The company has already gained several years experience in the Australian market working for international clients from its existing world-wide network of 40 offices, including Hong Kong and Vietnam. The new office marks a significant investment in the Australian market, and reflects confidence in the strength of its economy as well as the increasing demand for highly skilled talent both locally and offshore.

We have a new guest columnist – Eric Hochstein, Managing Director of Highstone Associates, Inc., a business and economic development consultancy based in Chicago, Illinois, has been involved in the outsourcing industry for more than 10 years, and previously worked in the telecommucations, contact center, and Internet software industries. He was also a Legislative Assistant to members of the United States Congress.

By Eric Hochstein

Outsourcing bothers many Americans. You hear it when politicians talk about the loss of “American jobs” to places like India, China, and the Philippines. A lot of Americans, particularly working-class Americans who are suffering through a devastating recession, feel that outsourcing is evil and call it one of the causes of the economy’s problems.

President Barack Obama has begun to capitalize on the public’s anger by pointing towards companies that have “outsourced American jobs”. He’s promoting “insourcing”, which combines “reshoring” of jobs that had been sent offshore and “homesourcing” jobs that could have gone to another country. And he’s promoting insourcing as a trend, which is helping to put Americans back to work.

The President pits “insourcing” against the “outsourcing” evil, while the issue is not really “outsourcing” but “offshoring. The President isn’t against outsourcing – he probably doesn’t care who is doing the work as long as it is being done in the United States. And he also combines supply chain/ manufacturing offshoring and technology services/business process offshoring. It’s all about U.S. jobs moving offshore.

In January, he hosted a White House Forum on Insourcing and he talked about insourcing in his State of the Union address. Just this week, he went to America’s heartland to laud Master Lock, a world’s largest maker of padlocks, for bringing 100 manufacturing jobs back to the company’s headquarters in Milwaukee, Wisconsin. It’s a theme he’s bound to return to this year as he simultaneously tries to reboot the economy and runs for a second term in office.

It’s one of the few no-lose political issues for the President in this election year. He can applaud companies that bring back jobs that they shipped out a few years ago because they could not compete profitably. He can vilify companies that continue to send jobs overseas, promise new tax incentives for businesses that keep jobs in the U.S. instead of sending them offshore, and threaten to eliminate tax breaks for companies that send work and jobs offshore.

And political opponents can’t oppose insourcing. Jobs are returning.

It’s just that homeshoring and reshoring may be (re)creating jobs in the U.S., but are not going to be the only answer to America’s economic ills.

The once-vibrant manufacturing sector in the U.S. struggled around the millennium. Employment in manufacturing decreased by almost 6 million jobs from 1999 to 2009. Companies shifted work overseas to meet competition and take advantage of lower costs, while also meeting demands in emerging markets.

Now, it appears that manufacturing in the U.S. is bouncing back. 237,000 new jobs were added in 2011, the most in the sector since 1997. In January 2012, 50,000 jobs were added. A very small portion of these jobs appears to be from work being brought “home”, but some are.

In fact, at Master Lock, the 100 jobs that returned from China, were only a small portion of the jobs that were lost to factories in Mexico and China. In the 1990’s, the Milwaukee plant ran at capacity with about 1,300 employees. Today, the company only needs about one-third that number. The President highlighted the 100, and ignored the larger number.

Yet despite that math, President Obama’s economic fortunes may be brightening at the right time in his first term. With about 9 months left before the election, and with four Republican candidates battling desperately for their party’s nomination, the U.S. economy is slowly gaining momentum and Obama’s approval ratings have just nudged above 50% for the first time in more than eight months.

Until recently, most pundits had hypothesized that American manufacturing was doomed due to lower cost offshore production and were resigned to the “fact” that most American technology jobs could be done by people in lower cost emerging economies at one-third the hourly cost.

Now, realities have hit home –companies are finding that there are things that are better done closer to the customer in both the supply chain and information technology. Distance apart and time zones away hinder innovation, flexibility, responsiveness and time to market. Investments in productivity technology have reduced costs (and perhaps eliminated the need for assembly-line workers), making domestic production more efficient and competitive. Costs are increasing rapidly in both India and China, and the once abundant supply of qualified labor is being stretched thin. As a result, it appears that the velocity of offshoring from America is slowing.

But only a few of the jobs that were lost in the past two decades will ever be reshored. There are still many types of work that can be done cost-effectively and satisfactorily anywhere in the work. Few of these will return to the U.S. And American-based global firms are finding that their customer bases are spreading rapidly around the world and some things are better or more cost competitive when they are produced closer to the customer, who may turn out to halfway around the world from Milwaukee.

Global Increase in Outsourcing Forces Organizations to Improve their Information Security Posture to Prevent Devastating Breaches

“If an organization is looking to do a large infrastructure outsourcing engagement, the best way to ensure that security is a priority is to build a comprehensive list of security requirements into outsourcing contracts, develop appropriate service level agreements and reporting mechanisms to evaluate security and budget for a review by an independent assessment organization. This will ensure that security always stays top of mind,” said panel speaker Chris Oglesby. “If, however, the decision is to outsource infrastructure and security separately, then the security operations should drive the direction and outcomes and create independence between the organizations to meet the client needs.”

In the future, companies need to employ executive IS leaders who will develop methods to adequately protect the IT infrastructure when outsourcing in-house responsibilities. Platforms, such as EC-Council’s CISO Executive Summit Series, provide a means for top-level IS executives to gather and discuss the latest industry challenges. Continuous education and knowledge sharing will provide solutions to the quandaries top-executives face on a daily basis. For more information on upcoming EC-Council CISO Executive Summits, please visit: www.eccouncil.org/cisosummit.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/02/13/prweb9183078.DTL&ao=2#ixzz1mxxEQyZU

By Marlen D. Limpag

Joel Mari S. Yu Cebu Investment Promotions Center (CIPC) managing director, explained that this thrust is also in line with the recommendation of international research firm Tholons for Cebu to improve its knowledge process outsourcing (KPO) capabilities and make inroads in information technology outsourcing (ITO).

IT-BPO is one of two fast-growing sectors in Cebu, with export sales increasing from barely $200 million in 2005 to $1.5 billion in 2011 based on CIPC estimate, Mr. Yu said during the 2012 Cebu Annual Economic Forum and Investment Briefing initiated by the Cebu Business Club and the University of San Carlos (USC) Economics Department.

Records from the Philippine Export Zone Authority (PEZA) said Cebu currently has 126 foreign direct locators, which employ around 65,000 workers according to CIPC.

The IT-BPO firms are distributed over the following locations: 72 in Asiatown IT Park and eight in Cebu Business Park in Cebu City, one in HVG IT Park in Mandaue City, and 45 in various other buildings.

The bulk of service providers and employees, however, are concentrated on the BPO sub-group, which is the lowest level in the sector and deals with routinary call center work, at 72%, according to Mr. Yu.

KPO has a 13.5% share while ITO has 14.5%.

He said Cebu is working hard to sustain its ranking in a Tholons global study as ninth of top 10 emerging outsourcing cities by putting in investments in infrastructure as well as developing organizations and creating policies that would support the sector’s growth.

It is also taking seriously the recommendations of Tholons to develop a constant supply of skilled workers, maximize its customer support and call center services, and improve its knowledge process and information technology outsourcing capabilities.

“Cebu is growing phenomenally but with it comes an accompanying challenge. We must cope with that growth but we are not doing very well in that direction. We have a product that sells. We are world-class service providers for English-speaking call centers and IT-enabled services,” he said.

Mr. Yu said a comparison study that they asked Tholons to conduct showed Cebu was way above India in basic and analytical abilities but miles behind in software development skills.

Recent assessment tests showed as well that the gap between the needs of the industry and the skills provided by the academe has narrowed, except in verbal ability and American LCT, he added.

Cebu’s lower minimum wage, cheaper food, and less expensive real estate are its cost advantages over Manila, which was fourth in the Tholons ranking, he added.

The five biggest call centers in Cebu ranked according to size are Convergys, Qualfon, Aegis PeopleSupport, Stream Global Services, and Sykes Asia and they employ a total of 17,700 employees.

Cebu could do better, though, Mr. Yu said, citing that Accenture in Manila has a total of 23,000 workers in eight locations.

Since Cebu’s voice locators are from the US, it would suffer if Congress passes a bill restricting offshoring by American firms. Mr. Yu pointed out, however, that there is already an increasing number of KPO and ITO companies here from other countries like Japan, Australia, India and Canada.

Source: BWorld Online

By Mark Atterby – Senior Staff Writer

In the last few years smartphone applications have emerged as another channel for organisations to interact with their customers. Smartphones and Tablets have evolved into a major computing platform. As such BPOs who manage the customer experience for their clients, need to have a strategy when it comes to developing mobility applications.

More and more consumers are using their smartphones to help them shop and many are walking into retail stores armed with their mobile device. While in store trying a product out, they can receive product and pricing information from other online or physical retailers. They can quickly share and obtain information with their friends, receiving feedback and reviews about the products they are planning to purchase.

Once they’ve bought the product or service their smartphone is increasingly the main vehicle for them to interact with the organisation for support or advice whether that’s via SMS, email, Skype, web chat or a traditional mobile phone call.

Retailers have tried to tap into this with mixed results. Research from Retrevo (http://www.retrevo.com/content/blog/2011/10/retailers-not-providing-smartphone-equipped-shoppers-what-they-need), highlighted how most consumers who use their smartphone for shopping are happy to download a retailers app, but most say that it had no impact in helping their purchase.

However, the development of apps for mobile banking has seen phenomenal growth, where concerns developed about growth outstripping capacity. Mobile banking is used in many parts of the world with little or no infrastructure, especially remote and rural areas. It is estimated that there is 1.7 billion people with a mobile phone but not a bank account, where as many as 364 million unbanked people could be reached by agent-networked banking through mobile phones.

BPO largely evolved from the outsourcing of inbound customer service calls as well as outbound telemarketing in an age when people wanted to talk to someone. In an age where people increasingly prefer the speed, comfort and anonymity of self-service, BPO providers need to incorporate mobility applications as part of their service delivery and technology investment.

Not just customers. SmartPhones and tablets are popular with employees and management.

Executives and managers hate being chained to their desks, and they love the power of tablets and smart phones. According to Datamark BPO providers are planning to provide clients with mobile apps for monitoring and auditing outsourced processes. Features will incorporate business intelligence, dashboards, analytics and instant messaging with the provider.

BYOD (Bring Your Own Device) is expected to take off during 2012 [1]. Essentially companies will be encouraging workers to use their own mobile devices to perform work related functions. BYOD, while reducing hardware costs for the organisation, also increases employee satisfaction. People prefer to work on the devices they own and like using, rather than the slow or antiquated devices handed to them from the IT department.

These days people want everything at their fingertips, regardless of their location. Most leading providers have taken significant steps to adopt smartphones and mobility into their service delivery. BPO providers who do not take on the development of smartphone technology and mobility apps, will lose business and struggle in a market where the phone call is no longer as important as it once was.

1. http://www.globalservicesmedia.com/IT-Outsourcing/Enterprise-Applications/BYOD:-The-New-Me-of-IT-Consumerization/22/3/11825/GS1201239010447

Firm releases market activity reports for Q4 2011 and 2011 in Review

The global sourcing market saw a marginal decrease in outsourcing transaction volumes in 2011 compared to 2010 due to decreased transactions in the second half of the year, according to Everest Group, an advisory and research firm on global services. After a strong start, transaction volumes dropped in the second half of the year including fourth quarter activity numbers that were the lowest since Q1 2009.

Although captive activity also dropped in the second half of last year, 2011 saw captive set-ups almost double in number compared to 2010. These findings and other market insights are detailed in Everest Group’s Market Vista: 2011 in Review and Market Vista: Q4 2011 reports, which capture key developments in the outsourcing and offshoring industry.

“In 2011, the first two quarters showed a continuation of the upward, positive market traction we began to see in 2010, but activity dropped during the last two quarters, leveling out the year and thereby resulting in almost a repeat of the previous year,” said Eric Simonson, managing partner of Research. “We also saw strong captive activity in the first two quarters of 2011, which further validated our firm’s long-held opinion and research findings that the captive model can be a viable core component of sourcing strategies for many organizations. Our outlook for 2012 is cautious given several factors including financial volatility in Europe, anti-offshoring sentiments in the United States and United Kingdom, and the adoption of new technologies, particularly in ITO deals.”

Last year saw 1,929 outsourcing transactions compared to 1,979 in 2010, and annual contract value (ACV) of transactions decreased compared to the previous two years. Contract renewal and restructuring activity was higher in 2011 compared to previous years, accounting for one-fifth of transaction volumes and almost one-third of the market’s total annual contract value (ACV). IT Outsourcing (ITO) contracts accounted for two-thirds of total transaction activity; 32 percent were Business Process Outsourcing (BPO) contracts.

Other findings in the Market Vista: 2011 in Review and Market Vista: Q4 2011 reports include:

• Financial services and manufacturing sectors continued to dominate outsourcing activity while healthcare activity increased significantly and public sector adoption dropped.
• While North American transactions decreased marginally last year, activity in the United Kingdom increased by 32 percent compared to the previous year.
• Although Q4 saw the signing of four mega deals, each valued at over US$1 billion in total contract value (TCV), the trend for mega deals shows a continued and steady decrease over the past three years with 11 signed in 2011 compared to 19 in 2010.
• Asia continued to see the most new captive developments but notable activity also occurred in Eastern Europe, Middle East and Africa.
• Last year saw the emergence of Brazil and Poland as mature global sourcing locations, underscoring their relevance in the global delivery footprint of leading players.
• Political unrest in North Africa, examined in the Market Vista Q2 2011 report, reinforced the importance of risk management in sourcing portfolios.
• Currency depreciation eroded arbitrage potential in Brazil, Chile and Malaysia while the rapidly depreciating Indian rupee created near-term opportunities for service providers and new entrants.
• Revenues of leading service providers increased in 2011 compared to 2010, but operating margins fell.
• Service providers continued to consolidate with Market Vista Index providers reporting about 50 merger and acquisition activities in 2011.

“The last year witnessed the continued trend towards service provider consolidation with many high-profile mergers and acquisitions,” said Salil Dani, research director. “Within leading providers, the offshore-centric providers witnessed higher growth in both revenue and operating margins compared to traditional global majors.”

Market Vista reports comprise key developments among 20 leading global service providers.

By Chris Zappone

Westpac employees are bracing for the loss of as many as triple the number of job losses already announced this week as the bank adjusts to a weak economy and higher funding costs.

As many as 1500 more positions could be at risk, adding to the cuts of 560 already announced.

“We’re conducting consultations to a number of our employees around changes to our staff,” said a spokeswoman for the bank.

The bank has been cutting jobs since the end of last year, when it shifted about 200 back-office jobs offshore.

On January 19, a spokeswoman for the bank said the bank planned to cull more positions this year.

“We can expect that staff numbers will decrease as we reduce higher cost contract-based staff and reduce duplication in roles at head offices,” she said.

Analysts from UBS tip that as many as 7000 banking jobs may be shed in Australia in the next two years, as demand for loans slows and households reduce debt levels.

Read more: http://www.smh.com.au/business/westpac-set-to-announce-job-cuts-20120202-1qulx.html#ixzz1lBm7oHKx

So what’s the future for outsourcing?
Are businesses turning to outsourcing to help them through the economic crisis?

By Paul Morrison

The boom in outsourcing predicted at the start of the economic downturn in 2008 never materialised. So are businesses now turning to outsourcing to help them through the crisis, asks Paul Morrison.

When it comes to the world economy, we live in interesting times. And as businesses grapple with uncertainty, volatility, austerity, the Eurozone crisis and markets in recession, what role if any does outsourcing play?

In particular, has it become a more or less important feature of the business landscape, and is it helping or hindering organisations to succeed?

Outsourcing offers two primary benefits for an organisation weathering the economic storm.

First, cost reduction. Whether it’s shaving 15 per cent off the costs of hosting a datacentre with a specialist, or 30 per cent for offshoring a back-office process, cost reduction is almost always the strongest motivation for outsourcing.

The dramatic fall in new outsourcing contracts between 2008 and 2010 had nothing to do with a perceived growth in insourcing

Properly planned and executed, the vast weight of outsourcing experience is that significant savings can be achieved, and in a time of economic downturn and uncertainty, you would expect these benefits to be highly valued.

Secondly, outsourcing offers flexibility. A well-constructed outsourcing contract can pass the risk of fluctuating business volumes onto a supplier.

So, for example, instead of paying for an HR organisation scaled up to support a rapidly-growing business, your organisation could pay an outsourcer on a transactional basis – for example, per recruit or per training session – thus flexing your demand for services according to the real requirements of the business.

In an age of cloud and on-demand provisioning, the right outsourcing relationship can encapsulate flexibility and responsiveness.

So outsourcing, its supporters claim, should enable organisations to save money and become more responsive to fluctuations in demand, surely ideal outcomes for businesses under duress.

Back in 2008 and the first onset of the economic downturn, many commentators forecast an outsourcing boom like no other.

The boom never materialised. In fact the immediate reaction of most businesses was to shun rather than adopt major new outsourcing activities. There was no great rush to cancel existing contracts – the benefits for almost all have proven too great.

But in the period between 2008 and 2010 the number of new outsourcing contracts was dramatically lower both for IT and business process outsourcing, down some 30 per cent to 40 per cent from peak levels.

Instead, companies focused on optimising their existing contracts, benchmarking prices and renegotiating commercial terms. But for the most part businesses were not turning to outsourcing to solve or salve their credit-crunch problems.

This trend was nothing to do with a perceived shift to insourcing, the taking work back in-house from outsourcers.

The few significant occurrences of insourcing in recent years, ardently seized on by outsourcing’s critics, are invariably the product of poor strategy, where the wrong processes have been outsourced, or poor execution where outsourcing has taken place without the right know-how – not because outsourcing no longer makes sense.

The reality was that in this time of great uncertainty two factors were impeding outsourcing. First, although it still offered a route to significant cost reduction, these savings were always contingent on up-front investment.

Most outsourcing deals require two or more years to pay back on the costs of disruption and transition. In other words, to save money, businesses first needed to spend money.

With cash in short supply or being hoarded by risk-averse boards and with the focus on the immediate future, outsourcing programmes were not the short-term fix that businesses were looking for.

Secondly, many business leaders simply had bigger problems to think about. Ultimately, outsourcing is a strategy for operational improvement. With markets and companies in crisis mode, at a time of existential challenge, long-term operational improvements were not top of the agenda in 2009, 2010 and 2011. More urgent or more radical strategies took up much C-Level attention during this period.

So, unexpectedly, the economic downturn held back, rather than boosted, outsourcing programmes in the first few years of the downturn.

By forcing businesses to preserve their short-term cash, and focus attention on crisis management, many decisions about whether to invest in a new outsourcing relationship were deferred or dropped.

But the story does not end there. Today the UK and many European economies flirt with recession or are already in recession. The Eurozone crisis is unresolved and threatens disaster in the near future.

But paradoxically, rather than once more postponing long-term plans, businesses are being driven towards further outsourcing by this continued economic uncertainty.

Surge in outsourcing activity

The evidence is clear. The past 12 months have seen a surge in outsourcing activity, with deals in many sectors back to pre-2008 levels. Something has changed in boardrooms across Europe.

The difference is one of broadening horizons. With a future outlook so uniformly bleak, many organisations are starting to see economic uncertainty as a permanent fixture, an ongoing feature of business life.

Rather than waiting for conditions to improve, businesses are making plans for a future of uncertainty and diminished expectations.

In this context, the factors that previously have held back outsourcing – a two- or three-year payback, or management focused on crisis management – are no longer persuasive. It no longer makes sense to wait to invest in outsourcing relationships.

Despite the economic gloom, businesses are turning once more to outsourcing to improve their businesses. Outsourcing is back on the agenda in 2012.

Paul Morrison leads Alsbridge’s BPO and shared services advisory practice and blogs regularly on sourcing.