In Australia 45% of major companies see the cloud as a significant influencer to outsource
Aust. BPO report 2012 – Editor

The inaugural Cloud Summit East Africa, proudly supported by the Kenya ICT Board, will be held in Nairobi from 5 to 6 June 2012. The strategic 2-day invitation-only event is hosted by international business-to-business conferencing company, Kinetic Events.

The event is aimed at IT professionals, senior decision makers and cloud computing experts from top companies in East Africa with a focus on how cloud computing is reforming the African IT market place. As a cost effective solution for businesses to acquire and use, the event will explore debatable issues currently associated with the global cloud initiative.

International investors have played a major role in boosting the African IT industry. By tagging along on Africa’s major broadband initiatives, investors can establish clouds that are strategically located in major cities across Africa.

In recent research; South Africa is considered fairly mature in cloud development, with total IT spending expected to reach an estimated $12bn (US) by the end of 2012.

Cloud computing trends will have a major impact on IT industries globally as an effective means to collaborate with peers internationally and offers longevity to information stored in the cloud.

Shannon Mackrill, Joint Managing Director of Kinetic Events says, “Cloud computing is rapidly changing the African IT industry and the way companies do business. The move from capital spending to operational spending, will offer an affordable way to access services globally.”

Undersea fibre optic cables have been implemented in recent years, resulting in the cost of broadband decreasing. African entrepreneurs are taking full advantage of this development by providing superior applications and services that were seemingly impossible to consider only 5 years ago.

With a global focus on computing, security and continuously evolving technologies, Africa has been placed in the middle of a global IT revolution. The summit will place the spotlight on cloud computing in Africa as one of the key global emerging markets for cloud services.

For more information, comment or photographs, visit www.cloud-eastafrica.com or contact Shaunei Meintjes on +27 21 555 0866 or shaunei@kineticevents.net. Follow @ITLeadersAfrica and @KineticEventsSA on Twitter for daily updates and news feeds.

By Goutam Das and Sunny
India’s BPO industry losing voice, finds life elsewhere

Two years ago, Barclaycard decided to outsource the customer service of its credit card and consumer lending businesses. The deal was worth a mouthwatering 100 million pounds over five years. Naturally, Indian business process outsourcing (BPO) companies queued up. But Marge Connelly, Barclaycard’s Chief Operating Officer, said the function – all of it voice – had to be done out of the Philippines.

The Philippines was a colony of the United States from just after the Spanish-American war of 1898 to the Second World War – enough time for the US to imbue the South-East Asian country with its culture and language.

Barclaycard, part of the Barclays Group with headquarters in the United Kingdom, and Connelly, an American, were more comfortable with Filipinos, rather than Indians, speaking to their clients.

Eventually, Firstsource, an Indian BPO outfit, took over Barclaycard’s customer service centre in Teesside in Northeast England, and moved a majority of the work to the Philippines. Connelly, who left Barclaycard last December, is not the only one of her kind. Nor was the Barclaycard voice contract the first to go to the Philippines. But, given its size and profile, it provided a curious twist to the BPO story in India.

The story began with a whisper more than two decades ago when Raman Roy took on some work for American Express. It soon grew into a rumble and then into a thunder as the industry rode on Indians’ comfort with the English language to appropriate the bulk of the work being outsourced by companies in the US and Europe. Sanjay grew an alter ego as Sam, Nikhil turned into Nick and Sulekha pretended to be Sally. Hours in training turned a Tamil accent into the Boston twang and the Punjabi gruffness into the Texan drawl.

Images of young men and women, fresh out of college, sitting at a computer with headphones planted on their heads as if rooted there, became the symbol of the new India. Costing a fraction of what a similar professional in the West would have, they spoke and spoke into the microphone. And then the voices got muffled.

A RIVAL RISES

In the last six years, voice contracts coming to India are estimated to have fallen by half. This has pegged back the industry overall. In 2008, a report by industry lobby NASSCOM and research firm Everest said the Indian BPO industry would earn $30 billion from exports by 2012.

Given the “significant future market opportunity”, said the report, the industry could also set itself a “stretch target” of $50 billion. We are in the third month of the year and that market opportunity looks less than significant.

The BPO industry’s growth has lagged that of IT even from a smaller base

The industry may clock less than $16 billion this year – a meagre growth rate of 12 per cent, according to NASSCOM’s latest estimates. In fact, the compound annual growth rate since 2006 has been an underwhelming 13.41 per cent.

“I will take a bet,” says an industry veteran who does not want to be identified. “No BPO company in India can show double digit organic growth in 2012/13. They will show growth only by making small acquisitions or by passing off information technology work as BPO.”

As voice in Indian BPO gets muted, the buzz around the Philippines gets louder. Last year, it became the biggest provider of voice-supported services as its BPO industry jumped 21 per cent to $10.9 billion.

The Business Processing Association of the Philippines expects growth to touch 19 per cent in 2012, very similar to how India had been growing before 2006/07. If you look at pure voice operations, the Philippines, with $5.2 billion in revenues, has already become No. 1 in the world, pushing India, at $4.8 billion, into the second spot.

What’s more, a chunk of the voice contracts going to the Philippines has moved out of India. According to estimates, in the last two years, about 75,000 seats that could have been added to call centres in India went to the Philippines.

In this period, US Retailer Target, Australian telecom firm Telstra, Manila-based food and beverages company San Miguel, US-based Aetna Insurance and Canadian carrier Air Canada – none of whom gave details – are understood to have preferred the Philippines to India. “We make decisions about engaging vendors based on the global needs of our business,” said a spokesperson for Target.

SLEEPING WITH THE RIVAL

“In the next decade, India as a destination can lose $25-30 billion in foreign exchange earnings to the Philippines. Indian service providers will earn a large chunk of this but India will lose out,” says Sandeep Aggarwal, who is part of a strategic transformation group at Intelenet.

The company, for its part, has made sure it is one of those gaining even if India loses. About a year ago, hospitality giant Hilton decided to give out nearly half a billion dollars worth of call centre work spread over five years.

It wanted the centre to be in the Philippines and Intelenet won half of that contract by setting up a centre there with 2,000 employees. The other half went to Aegis, part of the Essar Group, which followed suit.

Neither company was willing to discuss the contract, but when IBM’s Global Locations Report of 2011 says the Philippines has become a top destination for Indian investors, you can be sure the bulk of that money is going out of BPO coffers.

BPO rivals to India

“Calls requiring empathy towards the customer are best handled from countries like the Philippines, as they understand the American culture better than Indians,” says Rohit Kapoor, who heads EXL, India’s ninth largest BPO company. EXL has not added many new voice processes in India since 2008, choosing to add most of them in the Philippines.

Jerry Durant, who sits in Manila as Chairman Emeritus of The International Institute for Outsource Management, says of the Indian approach: “We hear complaints on voice-based services, linguistics as well as the tenor. It is not uncommon to be told ‘no problem’ and this has become a sure sign that there is a big problem.”

Beyond empathy, there are other areas in which the Philippines has the edge. It gets trained manpower, thanks to a government programme, and its employees travel on their own.

In comparison, the fresh-out-of-college look in the Indian call centres may look cool, but does not make a great business case, especially when the employer has to spend on training its people, arranging transport for everyone working nights and providing escorts for the women.

And then there is the matter of skill in certain areas. Some time ago a large health care company wanted EXL to handle processes like medical summarisation and disease management. It wanted US-registered nurses. India did not have any. The Philippines, on the other hand, had 100,000 nurses who had returned from the US after the financial crisis and were unemployed. EXL hired 400 of them and put them in front of computers.

According to industry estimates, 30 per cent of the graduates in the Philippines are employable, compared to 10 per cent in India. And they last longer. The attrition in the Philippines is about half that in India.

As the Philippines has emerged as India’s biggest rival in voice, several others are vying for the same pie. So if empathy tilts the scales in the Philippines’ favour, culture swings it for Egypt, which, with costs comparable to India’s, has been getting more and more contracts from companies based in West Asia.

Dalian in China has become an important outsourcing centre because a large population of the former Japanese colony is conversant in Japanese.

It does not help that the manpower in India is becoming costlier, with a 10 to 15 per cent rise in BPO salaries and training expenses in the last five years, leaving the Philippines just about 10 per cent higher in manpower cost. Brazil, West Asia, Poland and Romania – with costs comparable to or slightly higher than India’s – have also started giving Indian BPOs a run for their contracts.

To keep pace, Indian BPO companies have spread out. “Some voice work we cannot take offshore because of regulatory reasons and customer demand. A larger geographic spread also helps in reducing transfer of operations from one centre to another, and helps us grow in other markets,” says a Genpact executive.

The company, the largest in India’s BPO industry, is present not only in Dalian but also in several other countries, including five locations in the US and one in Mexico.

“It is only if a client asks specifically that its calls be handled out of India that we do so,” says N.V. “Tiger” Tyagarajan, President and CEO of Genpact. It operates in 25 languages, of which only English can be handled in India with a high degree of proficiency.

“Few clients, if any, are served from one location. We are also increasing our onshore activity in the US, some of it due to regulatory and licensing issues,” says Tyagarajan.

There is one more issue. As Mitt Romney, Rick Santorum and Newt Gingrich battle for the right to challenge US President Barack Obama in elections later this year, there is pressure on US companies to keep jobs within the country.

The pressure is more telling on BPO than on IT, mainly because there is a shortage of coders in the US but BPO jobs, particularly on the voice side, do not need much skill. With an unemployment rate of more than eight per cent, the US has enough people who would want to work in a call centre. And they may show more empathy than even the Filipinos.

“The perception that we are taking away jobs is the biggest challenge. The CEOs of client organisations are trying to weigh the benefits of offshoring against the pain they would suffer,” says Swami Swaminathan, who heads Infosys BPO.

Back home in India, the Manmohan Singh government has not done BPO any favour by withdrawing tax incentives under the Software Technology Parks of India scheme and imposing the Minimum Alternate Tax on Special Economic Zones. The inadequate infrastructure takes its own toll.

“I think part of the problem was the early success that Indian companies enjoyed. You really didn’t need to do much in order to get business as demand exceeded supply. But now Indian companies have to compete head-to-head with others in every aspect,” says Durant.

MUFFLING MURTHY

Phaneesh Murthy, dressed in his usual attire of jeans and T-shirt, reaches into a small, crystal bowl of fruit. Nibbling on something he picked, he says: “Companies like WNS are dead.” And you wonder if it is a case of sour grapes.

Murthy, whose iGATE acquired Patni Computers in 2011, tried to acquire WNS Global Services four years ago, but dropped the bid because he found that it was not a “strategic fit”. Maybe he is just bitter. WNS, after all, is a leading provider of BPO services, with 22,500 employees in 25 locations across the world.

It is then that Murthy brings you out of your conspiracy reverie. “There was a downturn in the market in 2008. All our prices were down. The tech industry got hammered. Our share price was $4. WNS’s was $11. Today our share price is $22, WNS’s is still at $10.” At the time this article was written, WNS’S share price on the New York Stock Exchange was $13 while iGATE was trading on NASDAQ at $16.62.

On second thought, WNS is not all that hot right now. Its revenues declined 23.2 per cent in the quarter ended December last year and its operating margin was a wafer-thin two per cent for the year ended March last year. Experts say staying focused on pure BPO services and not getting into IT has hurt the company.

However, where there is WNS, there is also Genpact, which reported a 27 per cent rise in revenue last year and boasts a 16.5 per cent margin. Genpact has done it not just by spreading out geographically, but also by moving up the value chain.

Several others companies, notably EXL, have done the same. They hire doctors to handle medical claims, chartered accountants to look at large loan maintenance and portfolio tracking, and lawyers to handle legal processes. Genpact also offers technology services, which acquired a big boost with the acquisition last year of Arjun Malhotra’s financial analytics services provider company Headstrong.

Gopinathan Padmanabhan, head of global delivery at MphasiS, owned by Hewlett Packard, says: “I can manage the customer’s infrastructure, the applications, and also the business processes that run on top of the application.”

Milind Godbole, who runs the Asia Pacific operations for Aditya Birla Minacs, the BPO arm of the group run by Kumar Mangalam Birla, says the industry is moving from an assembly-line model to more intellectual capital oriented work.

“Call centres were always like a line assembly. Now, the BPO industry is looking more at creating platforms and introducing automation to add value,” he says.

Platforms use cloud computing and bundle business process with technology.

The BPO firm hosts an application at its own or a third party data centre and customers pay only for using the platform. The BPO revenues through this stream are not linked to the number of people the company employs. Like a product, a platform is built once and sold to many customers.

Infosys is an aggressive platform builder. One of its BPO platforms, Source to Pay, manages a customer’s indirect spending. After a purchase request from the client, Infosys BPO executes the range of processes from managing requests, generating purchase order, following the goods shipment, invoice processing and vendor payments.

The customer pays for the usage or outcome and incurs no capital expenditure. WNS, the target of Murthy’s ire, is dismissive of his prognosis. It sees itself on the growth path again after “a period of uncertainty”. It is investing in its technology-enabled practice.

“We have aggregated dozens of platforms, automation and new tool kits,” says Keshav Murugesh, its CEO. WNS has created a platform for the travel industry, which can check irregularities in the way travel agents function. It helps fare experts tell airlines how much more they should charge from an agent in case of irregularity.

The evidence of the transition is more than visible in the industry’s revenue split. In 2005/06, voice constituted 75 per cent of the industry’s revenues, which stood at $5 billion. As the revenue has grown more than three times, non-voice is more than half of it. The larger Indian firms do not have more than 20 per cent of their revenues coming from voice. It helps that the margins in non-voice are higher – 10 to 15 per cent higher than in voice.

Some companies have started distancing themselves from the term BPO. Bangalore-based [24]7 in which Microsoft invested recently, wants to be seen as a technology company. Essar-owned Aegis calls itself an “experience” company, managing different experiences for its customers.

The CEO of a rival firm sniggers that these companies may be facing an “identity crisis”. With time, we will know if the crisis had an opportunity lurking inside.

Source: In Today

By Jameson Berkow

Businesses stand to save more than US$1-trillion per year by outsourcing their IT to remote “cloud” computing providers by 2015, says a Microsoft Corp. study released Monday, allowing them to spend more on new hires.

“Efficiencies gained from cloud are applied to innovation broadly (not just IT), such as hiring more sales, finance, production, marketing people and more,” reads an excerpt from the study, conducted by International Data Corp. on behalf of the world’s largest software firm.

“In this way, cloud computing differs from traditional outsourcing.”

Nearly 14 million new jobs will be created around the world by 2015 as a result of growing cloud computing adoption, the study found. Canada in particular can look forward to cutting itself a very large slice of that economic pie.

Canadian businesses have been adopting cloud computing services at a rapidly accelerating rate in recent years and the IDC data found North America at large was leading the world in cloud adoption rates. Nearly 36,000 new jobs will be created in Canada as a result of could computing by the end of this year, the study said.

By the end of 2015, Microsoft expects that figure to double beyond 70,000.

Projected levels of IT spending, relative degrees of automation and workforce size were among the factors IDC used to determine its results. The researchers created a sophisticated economic impact model to determine “a little money spent up front to reach for the cloud leads to impressive returns down the line.”

So as the debate over widespread cloud adoption rages on, it appears the pro-cloud cost-savings argument may soon have millions of new supporters.

Source: Edmonton Journal

Australia’s Victorian government’s tech outsourcing arrangement with CenITex has come under fire after an investigation revealed that the company is paying exorbitant freelancing fees with little scrutiny. Fairfax’s investigation into the Victorian Government’s IT outsourcing operation has revealed up to $175 million of government funding was spent on un-scrutinised freelance operations. The investigation elaborated that some of these lucrative contracts – that at times were paying contractors up to $1000 per day – were taken by executives already working for the company.

—

In just 12 months, Australasian-owned professional IT services company Datacom has gained a top three place in the Longhaus list of most trusted Infrastructure as a Service (IaaS) Cloud Providers, signifying a quantum leap for the company which last year rated in the top 25. Datacom also won the 2012 award for best local provider of IaaS Cloud Services.

By Mark Atterby – Senior Staff Writer

The use of computer-based collaboration tools is helping to expand the scope of BPO and the range of processes that can be outsourced. With the exponential growth in the use of these tools, there are predictions that over the next few years remote working and web conferencing systems will change the landscape of traditional working environments.

According to Anne Rouse in her book, Managing E-Collaboration Risks in Business Process Outsourcing (2009, Deakin University), a major development in recent years has been the growth of “virtual organisations” (or “extended enterprises”), where a network of service supplier and vendor firms cooperates to create customer value. The value these networks created by vendors and purchasers hold the promise of substantial business benefits associated with specialisation and scale. These include reduced costs, greater business flexibility, and higher service quality.

A business process involves a number of interrelated activities performed with the aim of generating value. As outsourcing and BPO is shifting towards building relationships aimed at adding strategic value to those relationships, client and BPO vendor organisation need to work closer together to identify mutual benefits and opportunities, share knowledge and resources, and coordinate activities more effectively and efficiently.

Collaboration will play a key role in the near future as BPO providers and client organisations work together to fulfil their objectives of globalisation by working together across time zones, distances, and organisational and business boundaries to improve utilisation of resources. MarketsandMarkets believes that increasing enterprise productivity along with cost control measures is playing a key role in shaping the future of collaboration applications within enterprises across the globe.

These tools and appliances already play an important role in businesses around the world but it is a market with an exponential growth capability. According to Gartner the team collaboration and web conferencing software market was worth $US 774M in 2007. It predicts tis market to be worth $US 19.7 billion by the year 2015. The main forces driving the market are conferencing and collaboration to enhance productivity of businesses as well as employees.

Computer-based collaboration has been on the boards for quite some time. The challenge in developing such systems is, as Cameron Ackbury, director of Sales APAC and Japan, Mindjet points out, “human activity is highly flexible, nuanced, and contextualised and this needs to be reflected in the collaborative platform deployed within the organisation.” In other words these system need to be able to cater for social as well as cultural structures.

Computer based collaboration tools aim to facilitate, internally within an organisation as well as part of a network of supplier and client organisations:

• Accessing and combining of distributed assets and resources.
• • Sharing of knowledge, skills and best practice
• Reduction in travel, project management and administrative costs
• Speeding up product-development cycle time
• Improving agility, flexibility and speed of strategic relevant action across locations and organisational boundaries
• Synchronising activities across teams leading to efficient coordination within an entire supply chain or market channel

However, to be able to make collaboration happen and succeed requires a different management style to a strict traditional top-down approach. Ackbury comments, “People need to be educated and encouraged to work with their colleagues and co-workers, as well as management to share ideas and knowledge.”

Though collaboration offers numerous benefits, greater attention needs to be paid to the governance mechanisms put in place to manage a BPO relationship and corresponding contract. There are a number of potential issues and risks, which include:

• Losing control over strategic information
• Sharing of competitive data
• Who owns the IP of processes and methodologies jointly designed?

For a business process outsourcing (BPO) model to deliver sustainable value, it is essential that all parties involved work together closely to ensure that processes and technology are designed jointly, goals are aligned, activities are strongly coordinated and the benefits gleaned from innovation are jointly shared.

By Mark Atterby – Senior Staff Writer

2011 was the year of the cloud. Many organisations adopted a range of cloud solutions and we continued to see the emergence of new providers (new entrants as well as cloud services from established IT vendors). 2012 is the year where Cloud computing matures and grows up. According to Terry Walby from IPsoft, “Critical for 2012 is that cloud services can operate within a hybrid architectural environment, and deliver truly enterprise-class services. To realise this, the outsourcing industry will need to adopt a cloud orchestration approach”.

Cloud orchestration is the ability to manage cloud infrastructure in order to manage services consistently across multiple cloud and physical environments. According to Walby cloud orchestration involves three things:

1. The development of architecture, tools and processes to deliver a specific or defined range of services.
2. Knitting together different software and hardware environments to deliver those services.
3. Connecting and automating of work flows when necessary to deliver a defined service.

The cloud is all about scalability and flexibility, the ability to automate work flows across various technical and business domains is vital to the delivery of robust, scalable and on-demand services and computing resources. Orchestration is about aligning the business needs with the applications, data and infrastructure. It defines the policies and service levels through automated workflows and change management, creating an application-aligned infrastructure that can be scaled up or down based on the needs of each application. Orchestration also provides centralised management of the resource pool, including billing, metering, and chargeback for consumption.

Orchestration reduces the time and effort for deploying multiple instances of a single application. And as the requirement for more resources or a new application is triggered, automated tools perform tasks that before could only be done by multiple administrators operating on their individual pieces of the physical stack. Russell Ives Director of Business Process Outsourcing (BPO), Global Process Services (GPS), IBM, comments,” From a BPO perspective, orchestration is about coordinating all the processes, tasks and underlying IT components that are embedded within the outsourced processes to serve internal or external customers. This includes sub-processes, people, departmental approvals, interactions between companies and BPO providers, and the IT that supports those processes whether it is cloud-based or not”.

“Orchestration can, and must be, executed at multiple levels from servers, software, networks to applications, processes and workflow. As cloud-based BPO becomes more prevalent, the IT orchestration can become more complex, coordinating traditional IT environments with private and public cloud across the company and BPO provider”, adds Ives.

If we need orchestration, who is the orchestrator?

Russell Ives believes that initially the client organisation needs to be the orchestrator, he says, “Different aspects of orchestration; workflow, process, application, network, SW and servers may be devolved to providers but end to end responsibility must rest with the company. Over time, as BPO and cloud maturity progresses, different levels of devolution of orchestration can be adopted depending on the scope of both cloud infrastructure and BPO services employed by the company’.

Providers of cloud orchestration platforms such as GT Nexus and Enstratus have emerged to help organisations manage enterprise-class applications in public, private and hybrid cloud environments. For BPO organisations looking to leverage the emerging power of the cloud, they may decide to collaborate and create partnerships with various cloud providers to acquire the necessary competencies. According to Ives, the key capabilities that BPO organisations will require, in addition to core BPO competencies, include process transformation, IT enablement (the ability to support processes with IT capabilities), and expertise in cloud infrastructure and its’ integration. The ability to deliver outsourced processes is paramount.

In September last year, Gap Gemini and GT nexus announced a global partnership to enable the delivery of BPO supply chain orchestration for Cap Gemini’s global supply chain customers. The partnerships aims to deliver an orchestrated environment where different and complex supply chains interconnect with other complex networks so that processes can be automated across numerous enterprises and promote much greater visibility end to end.

Cloud-enabled BPO will become a critical capability and offering for any BPO provider. Ives believes, “As cloud becomes increasingly prevalent and progresses from being server focused to business outcome focused, clients will increasingly demand BPO providers to deliver a richer set of capabilities leveraging cloud-based platforms.”

“Currently, BPOs are predominantly utilising clients’ applications and IT infrastructure. Cloud-based infrastructure provides an opportunity for these BPOs to deliver bundled process and IT capabilities.

This will deliver greater savings and operational flexibility for clients as well as reducing overall reliance on traditional IT delivery”.

By Chris Luxford
President – Australia / New Zealand | Aegis Services Australia

There is no shortage of reports and forecasts about the uptake of cloud computing. According to a recent IDC survey of the intentions of CIOs in Australia, 20.6% of respondents were using a cloud solution. The same survey says that by 2015 the use of cloud services by Australian companies – from SMBs to enterprise-size organisations – is set to quadruple.

If you needed any further convincing that cloud computing is no longer on a roll but becoming a bullet train, IDC forecasts that the revenue for cloud services in Australia will increase from its 2010 figure of $470 million to just over $2 billion in 2015 – a compound annual growth rate of 34%.

So what does this all mean for organisations such as Aegis and for our clients?

Before answering that, it is worth looking back at technology. Technology has been changing the way we have been doing business for some decades. And keeping on top of that change requires time (and usually a large IT department) to understand the technology and how it can impact a business.

Technology is going to continue to be an ever-increasing enabler of differentiating change. I think this is helped by the fact we no longer fear technology. We now understand what it can do for our business.

The real change that organisations are seeking to drive is differentiation. In today’s increasingly information rich and knowledge worker based environments that differentiation will largely come from an organisation’s ability to change business processes at a speed that is faster than the competition.

Technology as a process change enabler is critical.

I think in the past technology was seen as a necessary evil. We didn’t trust the many large promises that technology sales people made, in part as we can all share a story of a large, company-wide technology investment that turned out to be a dud. The problem was that the organisation became so fatigued by the “technology project” that they never turned their attention to the more important piece of process change (adoption) post the technology implementation, resulting in low, or in many cases, no ROI.

Technology projects used to be long (sometimes years), often blew out budgets and as a result ROI would frequently be at less than desired levels, but you had to do it to stay competitive.

Cloud offerings change all that. Technology can be turned on and off in an instant. The most exciting part is that resources can be invested and assigned in driving the required process change to deliver the ROI and the desired market differentiation.

Technology has long driven differentiation, revenue and cost competitiveness at Aegis. Cloud computing will enable us to continue to do this but in a more client centric customer outcome fashion. This will allow us to become far more proactive in driving genuine business process change.

At the moment we have about 50,000 people globally in call centres around the world, including 2,400 here in Australia.

Until now our own technology platform has required an almost continuous upgrade cycle of hardware to keep pace with changes in software – at significant cost. It can also be hard to move staff around because their login is dedicated to a particular hardware spec for the various client related activities.

At Aegis we are constantly striving to be at the cutting edge of technology. Thus we have recently undertaken a revolutionary technology upgrade with our Citrix Virtual Desktop Infrastructure Project.

Australia is among the first countries in the world to make the transition to the Citrix VDI (Virtual Desktop Infrastructure) along with Aegis offices in India, the Philippines and South Africa.
The investment will enable our employees to ‘hot desk’ meaning our staff can sit at any desk in any location and still have easy and instant access to all the information they need. This technological upgrade will further assist us in managing and enhancing the experience of our partners’ customers.

From our initial cost estimates we believe we will save 50% on our hardware costs. But while the cost improvements are impressive, it’s the speed with which we can drive the aforementioned process change that is really exciting. We believe we can undertake and execute process change in a third of the time we were able to previously, with greater flexibility from cloud-based technology.

Improved business agility, flexibility and efficiency, increased ability to exceed the business outcomes of clients and meet their ever changing needs, desktops being easier to manage, more secure and operated at a lower cost, increased productivity, choice and flexibility for any user, and a faster roll out of contracts are all expected outcomes of this significant technology upgrade.

Some companies have so far chosen to shy away from cloud because of the perceived security issues. My observation is that our technical people are very comfortable with the security of the cloud. They understand how security is managed, what risk mitigation strategies need to be implemented and how to ensure both our client’s data integrity and ours. Security remains one of the most important issues for our clients – we simply would not embark on cloud-based offerings without rock solid confidence.

For me I believe there is an invisible line. Those below the line are those that look at decisions and focus on the risk of change. Then there are those above the line – those who think, “What is the risk of not changing”.

For Aegis, we are above the line. We need innovative business processes and a workforce that can move around from office to office depending on demand. This is not only important for our growth globally, but also for the growth and differentiation of our clients and their businesses.

By Mark Atterby – Senior Staff Writer

Application Outsourcing existed before the birth and rapid growth of the IT outsourcing and BPO industries. For a while it was forgotten as software applications were viewed as something that was bought and implemented rather than rented. The advent of the cloud has redefined the concepts surrounding application outsourcing, and how organisations can source, develop and deploy IT applications.

Essentially, application outsourcing is when one company employs another company to develop IT applications to automate specific processes and functions within the business. This has been happening since the first adoption of computers into businesses. Many providers of these services realised that they were able to package the application software they were developing and sell it as a product. Hence we saw the rise of organisations such as Oracle and SAP.

As organisations grow, the applications required to support the business generally become more complex. And the management of the infrastructure supporting those applications becomes more complex. The aim of Application Outsourcing is to give the organisation access to a comprehensive set of skills and assets essential to the increase of both the technical and business value of their existing software and the supporting infrastructure.

Cloud computing allows the applications and infrastructure developed by the third party provider to be delivered in a way that is scalable, flexible and easily deployed across multiple locations.

According to recent research from Everest, the Banking, Financial Services and Insurance industry are one of the largest adopters of IT application outsourcing services. Catering to this large global market segment, numerous service providers have developed capabilities to deliver AO services to the banking and financial services industry.

Due to increased competitive intensity, the advent of cloud computing, and the rapid changes in regulatory environment, financial institutions face significant pressure to ensure their applications portfolio is aligned to industry best-practices. According to the Everest research, as financial institutions strive to maintain and modernise their applications portfolio, they are consolidating their IT service provider base and are looking to identify strategic partners that can sustain the pace of technological advancement in this rapidly evolving industry.

As a result of this consolidation exercise, financial institutions are signing larger and more strategic AO contracts with a fewer number of service providers, a phenomenon that is expected to meaningfully alter the application outsourcing market. Risk and complexity is impacting most lines of business, and managing trade volatility has become a key front-office priority; while mid- and back-office are more focused on modernisation of the clearing and settlement function.

Other key markets for Application Outsourcing include Telcos and Public utilities, Healthcare and Defence.