Remote infrastructure management RIM could be the next big offshore opportunity for India and is poised to become a $13 to 15 billion opportunity for the Indian IT industry by 2013, according to Nasscom McKinsey report. The RIM industry would also create 3.25 lakhs to 3.75 lakhs jobs, the report says. RIM is a mission critical service requiring sophisticated tools and reflects high customer confidence and relationships. By increasing RIM services the Indian IT industry is moving towards becoming a fully integrated service provider.

The study highlights that the $524 billion infrastructure management services IMS industry,  that manages an enterprises core IT systems, including hardware, software, connectivity and people  could become as important as the Application Development and Maintenance ADM and BPO industries that have dominated the rise of offshoring in the last decade. The IMS industry is moving towards a remote delivery model where services are increasing delivered by vendors and captives from low cost locations.

After discounting for infrastructure management spend in low-cost countries, defence and government budgets, spend in small enterprises, services that cannot be offshore and value captured by customers, the study estimates the addressable market for RIM to be $96104 billion, while vendors and captives in low cost locations have captured a $67 billion of this opportunity so far.

According to the study, RIM, as an independent industry, could realize $2628 billion in revenues by 2013.The majority of growth in the RIM is likely to come from offshoring midrange services, and network towers, likely to account for approximately 70 per cent of the overall opportunity during this time. In terms of industries, the banking, financial services and insurance industries will lead this growth followed by the telecommunications industry.

Finally, it’s the convergence of three independent forces, the rapid evolution in technologies and IT architectures, changes in customer behaviors and demand patterns, and finally, developments in the vendor and offshore supply environment that have propelled the industry at a pace faster than earlier conceived and will continue to accelerate RIM adoption.

The study concludes that augmenting talent supply will require effort by all stakeholders to brand RIM as an attractive career option while enhancing quality will involve efforts in improving relevance of curricula, creating technical institutes that offer core technology and process skills training and investing in training programmes to improve communication skills.

What is Remote Infrastructure Management?

• Day-to-day management of IT infrastructure from a remote location
• Any IT function that can be successfully executed off-site is a candidate for remote infrastructure management
• Per International Data Corporation (IDC) estimates, 85% of data center support functions can be performed remotely
• Offerings differ from one service provider to another, based on expertise, skill sets and client requirements

           Services include the following:

– Monitoring services – Help-desk services

– Server management – Data-center management

– Storage management – E-mail management

– Network management – Asset management

– Selected IT-security services

Service delivery from distant locations with the goal of reducing costs, improving processes and enhancing service levels.

Market Overview

Remote infrastructure management has become possible through the convergence of enabling capabilities.

   Low-cost countries and robust services infrastructure

• High-speed telecommunications interconnectivity
• Security technologies
• Applications / Systems Management
• Business Continuity services

   Drivers accelerating the market:

• Increased competitive pressure on service providers to further reduce cost of service
• Increasing awareness of the remote infrastructure management market
• Need to support global footprints of multinational clients
• Increased infrastructure and labor resiliency – reduction of risk

Greater automation and use of offshore resources provides significant cost benefits for managing infrastructure systems and assets. Service provider

business drivers differ between multinationals (MNCs) and India pure-plays:

         MNCs require offshore delivery of services to remain     competitive for a large influx of re-competes and fully outsourced solutions. They also:

• Develop internal remote infrastructure management capabilities to drive down internal costs; now deliver those capabilities to clients
• Interest in increasing net margins – Bundle remote infrastructure management into overall infrastructure deals with often little Transparency
• Prefer to remain mostly “under the radar”

         India-based pure-plays are naturally extending their original software customer base and adding new markets to fuel continued growth. They also:

• Make a strong play with existing customers as a service extension
• Target “carve-out” (out-tasking) opportunities rather than total outsourcing
• Take advantage of clients re-competing/renewing infrastructure deals and trend towards multi-sourcing
• Market aggressively to develop the market and their competitive positioning

Who Is Using Remote Infrastructure Management?

   Hitachi

–       Network mgmt., server admin., storage mgmt., DB admin.

   Microsoft

–       Help desk, server admin, DB admin., DR, backup admin.

   Shell

–       Help desk, server admin., security admin., messaging, problem coordination

   Financial services major

–       Server admin., network mgmt., desktop, DB admin.

Unum Provident and a major energy corporation also signed contracts with significant global service delivery components for remote infrastructure management.

Global leaders in a variety of industries set the pace for service acquisition.

Remote Infrastructure Management

Many enterprises today face the challenge of implementing standard ITIL service management processes across geographically dispersed locations with decentralized IT management. At the same time, they must decrease costs, maximize efficiencies and enhance service quality. 

Remote Infrastructure Management is a service offering that delivers integrated, remote monitoring and management service support across multiple IT infrastructure towers and service providers for an end-to-end view for converged service support.

With Remote Infrastructure Management, you can benefit from unified monitoring, preemptive management and restoration of events in your IT infrastructure that require support, such as component failures and application problems. The result is proactive service, fewer handoffs, full environmental view and control, elimination of rework, better problem management and reduced queue time.

Remote Infrastructure Management provides an exceptional, holistic way to manage service events, restore services and resolve recurring incidents while simplifying operations and reducing costs 

Easy to Implement, Flexibility to Meet Your Needs

Remote Infrastructure Management provides an integrated way to benefit from all proven service delivery channels, from automated service to “feet on the street,“ giving you maximum flexibility in service delivery that helps you realize accelerated business results at lower costs.

The service offering provides easy-to-implement snap-on technology interfaces across infrastructure towers and service providers, giving enterprises not only an “end to end” view, but also the ability to correlate the impact of events across the entities and orchestrate pre-emptive engineering and proactive operations.

These capabilities are critical and help head off and resolve IT failures. Also, through the correlation of events, the solution can trigger defensive actions to prevent repeated incidents. It uses advanced analytics, ITIL problem and knowledge management, and advanced automation techniques for incident identification, diagnosis and service restoration across the IT infrastructure. 

Remote Infrastructure Management consists of three services. Enterprises can implement the service that best meets their needs, whether they are immediate or long-term support requirements.

Monitoring and Event Notification Services monitor infrastructure performance against defined criteria, such as CPU utilization and network bandwidth. They identify a service event – for example, a router outage or storage-system failure – and assess the priority level relative to the potential business impact. This makes identification of critical service events easier and diagnosis faster, and also reduces mean time to restore.

Infrastructure Availability Services help to ensure successful service restoration and closure of service incidents. They establish a ticket for incident management, factoring in the response time required to satisfy the governing service-level agreement (SLA), and can execute a script for auto-correction without a service representative ever having to get involved.

Infrastructure Management establishes and standardizes the overall framework for delivery of service across an IT infrastructure where service was historically delivered for each discrete segment.  It identifies and defines the roles of services groups and other third-party providers involved in delivering services for the infrastructure. This standard management framework shortens queue time for service events, reduces the number of handoffs required for resolution and eliminates rework.

Current Trends in Remote Infrastructure Management

1. Numerous global outsourcing proposals now contain some form of offshore infrastructure delivery of services.

Many of the large global sourcing providers believe that infrastructure management will be the next main revenue source.  IT vendors are increasing their delivery capabilities to attract more business from outsourcing companies. 

The utilization of global sourcing providers for services involving infrastructure management has become more main stream.  The market for remote infrastructure management is estimated to be somewhere between $80 billion to $120 billion. Experts feel that global sourcing providers will gain additional market share and will continue to grow by 20 percent each year.

The percentages of infrastructure support functions that could be sent to a global sourcing provider.  These functions included:

• Network Services 80%
  • Internal Help Desk 75%
  • Servers 70%
  • Maintenance 60%
  • Administration 35%
  • Mainframe 30%
  • End-user Devices 15%

A report published by India’s National Association of Software and Services Companies (Nasscom) asserts that up to 75 percent of all infrastructure management roles could be outsourced globally, which would create a $26 billion to $28 billion revenue potential by 2013. The report stated that Indian companies could capture approximately 50 percent of this revenue. 

There currently is a lot of competition among infrastructure providers.  Global sourcing vendors have been purchasing infrastructure service providers to grow that segment of their businesses.  The recent changes will give outsourcing companies additional options, but can also create more confusion on making the right decision for remote infrastructure management.

There are benefits to sending infrastructure management to a global sourcing provider, but it may not be a good fit for every organization. A&E Consulting can help you weigh the benefits of working with a global sourcing partner and will oversee your first outsourced project.

Advantages

Infrastructure management services can make your IT infrastructure reliable and available with maximum uptime.

Aligning business objectives with your infrastructure with scalable solutions.

With increased focus of the in-house IT resources, the company can concentrate more on strategic initiatives.

Company can save thousands of dollars with a stable IT infrastructure.

You get 24x7x365 support for infrastructure management, which might not be possible with your in-house resources.

With severity-based faster turnaround on issues your company can minimize downtime significantly.

Our consultants and experts in all fields of IT leverage their experience and an extensive knowledge repository to minimize troubleshooting time and proactively prevent recurrence of the same issues.

Remote Infrastructure Management Services – The New Trend of Offshoring

One typically relates offshoring, especially to India, with either ADM (Application Development and Maintenance) or BPO (Business Process Outsourcing) based services. These two have been around for a long time and were the initial drivers that encouraged companies to outsource their operations, while ensuring a higher quality of service at reduced costs. Of late, a new trend which is gaining tremendous potential and is effectively considered the third wave of outsourcing is Remote infrastructure Management Services (RIMS).

Remote infrastructure Management Services is a B2B service that covers all aspects of maintenance and monitoring of clients IT infrastructure; inclusive of networks, mailboxes, servers, VOIP, data centers, etc. All this can be done either on-site or remotely from a NOC. RIMS are gaining a fair amount of popularity among CTO’s as they are ensured of end-to-end reliable services encompassing all aspects of their IT infrastructure. The growing interest is going to be fueled by changing customer and vendor perspectives towards the RIMS space and the advancement of technology over the last few years.

A Nasscom-McKinsey report, titled ‘The Rising Remote Infrastructure Management Opportunity: Establishing India’s Leadership’ on RIMS estimates that the market for Remote infrastructure Management services lies between $96 bn – $104 bn. As things stand, less than 1 % of this market is being taken care of by offshore vendors. The large potential that lies ahead is a clear indication of the way the tide may turn with regard to offshoring in this domain. Many vendors have realized the potential that Remote Infrastructure Management services offers and are already developing tools, processes and global delivery models that can be tailor made to meet client requirements.

All said and done, a major aspect of identifying the right vendors is a major concern. A couple of basic points that can help identify a right vendor would be:

1) Skills and experience -
Once a company can identify the skills for which it requires outsourcing, it becomes important to compare the same with the labor being provided by the vendor. Potential vendors would have skill sets which not only manage your requirement, but also related skill sets that may come in handy in the future, hence, being able to provide end-to-end support. Needless to say, it makes clear sense to invest with an established vendor who has experience in remote operations as a core competency.

2) The rules of engagement -
A suitable vendor would be able to take care of all client requirements while ensuring that all rules of operations laid down by governing bodies and the local government are followed. It is preferred to go with a vendor who is certified by international organizations for process and quality. Regulations like data security, reporting, use of licensed software are important when outsourcing operations to a vendor. Many smaller vendors would tend to use unaccepted practices in order to cut costs. A thorough audit of the operations

With technology advancing at the pace with which it has over the last decade, remote monitoring and remote controlling of infrastructure has become more efficient and more reliable. With the advent of higher speeds across the internet, more and more CTO’s are comfortable with offshoring infrastructure operations to an experienced vendor, who does not necessarily have to be located in the same city. With most vendors themselves creating redundant links to a customer’s network, CTO’s can sleep better knowing that their infrastructure is in safer hands.

Quite clearly, Remote infrastructure management services is gearing up to be not only an effective means for CTO’s to ensure reliability and availability of their IT infrastructure while keeping operational costs in mind; RIMS is set to become a major revenue sector too.

Growth of Remote Infrastructure Management Outsourcing

Remote Infrastructure Management Outsourcing, (RIMO) is a growing trend among the outsource providers to deliver IT infrastructure management services remotely either from onshore, nearshore or from offshore locations. In the past customers were reluctant to outsource infrastructure management services to offshore locations but now that trend are changing. Recently India based HCL won a major infrastructure outsource deal from Reader’s Digest Association, Inc. and from Xerox.

Several trends like globalization, innovation in remote management technology, customer behavior, offshore vendor RIMO maturity, etc has created huge opportunities for offshore RIMO vendors. In this article we will explore changing dynamics of RIMO and discuss offshore vendors capabilities in RIMO market.

What is Remote Infrastructure Management, RIM?
Remote infrastructure management deals with managing IT infrastructure and applications remotely (outside the physical location of hardware assets) taking proactive steps and remedial actions so that all the computer assets will be available 24×7×365 to the customers. Following are the RIM services companies currently outsourcing to offshore locations:

• Helpdesk Services
• Network Management
• Server Management
• Storage Services
• Desktop Services
• Application Services

In the past Helpdesk and network management services are most prominently outsourced to low cost destinations. But now all aspects of IT infrastructure services except services (like disaster recovery, hardware repair, etc.) that requires physical presence, are outsourced to offshore locations.

Market Dynamics for Remote Infrastructure Management Services
In early 90’s Companies like IBM, Unisys, EDS, etc started infrastructure outsourcing trend by taking full ownership of both IT assets and the employees of client companies. Most of these engagements are long-term that spans ten to fifteen years. The long-term contract created risks for both customers and infrastructure management vendors. For customers it is loss of control of all the assets and also difficult to commit on long-term contracts due to changes in their business conditions like mergers and acquisitions. For the infrastructure vendors long-term contract and full ownership needed up-front capital expenses and it took several years before they see profit in their engagements.

Asset Light RIMO
Innovation in new remote management tools and technologies helped companies to use their engineers to manage their IT infrastructure remotely and they became comfortable in infrastructure planning, monitoring, and trouble shooting all their IT assets remotely, a new model Remote Infrastructure Management emerged. During this time infrastructure outsource vendors were improving their service offering and started marketing their remote management capabilities to customers. In this new model both the companies and outsource vendors started entering into short-term contract popularly known as asset light RIMO. In this selective outsourcing model, outsource vendor assumes responsibility of managing specific IT assets for a shorter duration say two years. Unlike Asset heavy model, Asset light model does not entail to transfer asset ownership and IT personnel to the vendor.

The asset light model benefited both the customers and vendors. For customers they can choose different vendors based on their specific skills like storage services, network and server management etc. Since the IT assets are managed by different vendors, companies risk exposure is reduced compared with one vendor in asset heavy model. For providers they can specialize in specific verticals and offer cost arbitrage due to economy of scale. It also reduced their large capital investment, creating opportunities for low-cost offshore providers entering into the RIMO market.

Though cost saving is the primary reason for the growth of offshore RIM services, following are some of the other reasons.

• Growing maturity of offshore RIM service providers
• Service Process standards maturity like Microsoft Operations Framework, MOF, ISO 20000.
• Growth of telecommunication industry in low cost destinations like India, China, etc.
• Processes and guidelines like ITIL and COBIT helping both the suppliers and customers to speak common language in IT asset management and governance.
• Growth in remote management tools and technologies like Cisco Remote Management Services, Java Management Extension, Intel VPro, etc.

However, still server issues slows the adoption of offshore outsourcing for IT infrastructure services. Following are some those issues:

• Security risks in offshore locations
• Legal and privacy rules like HIPAA creates more risk exposure for businesses allowing offshore personnel managing sensitive data.
• Managing other offshore outsourcing risks and anti offshore outsourcing sentiments that comes with it.
• Lake of confident on technical skills of offshore infrastructure vendors
• Offshore vendor corporate scandals like Satyam

Offshore RIM vendor landscape
Big Indian outsource vendors like TCS, Infosys, Wipro, are started competing with US infrastructure vendors like IBM, EDS, etc., directly. Recently Wipro acquired US based Infocrossing to strengthen its remote infrastructure service offerings. Tire two Indian outsource vendor HCL has been aggressively improving their capabilities in RIM services and recently it was ranked as No.1 in infrastructure outsourcing by Independent Global User Survey. Traditional infrastructure outsource vendors like IBM, HP-EDS has their data centers in US but aggressively hiring professionals in India to mange their datacenters and competing with low-cost Indian outsource vendors. Other Indian IT vendors like Cognizant, Patni, Tech Mahindra, etc., are also started offering RIM services. Indian based boutique IT vendor Microland started IT infrastructure outsourcing services as early as 1999 and has been making steady progress in the infrastructure outsource market.

After seeing Indian IT companies success in RIM outsourcing, providers from China, Philippines, Brazil, Eastern Europe, etc., are trying to enter into RIM outsourcing market. But so far they could not match the Indian based outsource vendors in their service offerings.

Challenges facing Offshore Remote Infrastructure Outsourcing Growth
Although Remote infrastructure management outsourcing is poised for a stronger growth, it faces several key challenges:

• Unlike BPO or ITO, disruptions caused by RIMO are huge for companies, issues caused in BPO and IPO will affect few business processes and applications. But any failure in server, storage, network, etc. will cause the entire company to a grinding halt. So the RIMO vendors must respond to any infrastructure failure in real-time basis. From the customer’s point of view this is still a huge risk for their business continuity and still they are not comfortable to send these type of mission critical services to offshore locations.
• For companies planning, designing, and implementing infrastructure outsourcing is a huge task and it may take months and some times years. Companies need to change their entire IT infrastructure architecture, trouble shooting, security, support policies, etc., that takes significant capital investment. Unlike BPO and ITO projects companies are hesitant to take the initiative to outsource their infrastructure services.
• Managing IT infrastructure remotely is a daunting task for the offfshore vendors. They need skilled professionals with deep technical expertise and business acumen to solve the problems 24×7. Finding qualified people even in low-cost countries is getting difficult for the offshore vendors and this slows the growth of RIMO significantly.
• Customers expect stringent SLA for infrastructure outsourcing and require 24×7 real-time technical support from the vendors. This requires significant upfront capital investment from the vendors due to this, cost of entry is very high and posses challenges for new vendors entering into this market.

Though there are significant obstacles in remote infrastructure outsourcing, offshore vendors have been making steady progress in winning customers and competing aggressively with big companies like IBM, HP, Accenture, etc. Offshore vendors also improving their service offering by investing in training, skills, and hiring qualified personnel to increase their market share. Indian based vendors are also looking for inorganic growth through mergers and acquisitions to compete for high-value remote infrastructure management contracts.

Similarly to compete with low cost providers US based infrastructure vendors continuing their investments in low-cost countries. They are using their existing relationships with C-level executives in big corporations to dominate in higher-value infrastructure outsourcing deals. By judiciously blending their onshore and offshore teams passing down the cost savings to their customers.

New technologies like cloud computing, SaaS, server virtualization, etc will make the remote infrastructure outsourcing a hot market for all the vendors for a foreseeable future.

Remote Infrastructure Management: The third wave of outsourcing!

The third wave of outsourcing is here and it goes by the name of Remote Infrastructure Management.According to the NASSCOM-McKinsey Study, the total addressable market for IT infrastructure offshoring, inclusive of support, network administration and help desk is around US$ 70-85 billion. Other market watchers say it will grow into a bigger business opportunity (of the order of US$80-$150 billion by 2010). Not surprisingly, RIM, is being touted as the third wave of outsourcing!

In a global environment where IT budget escalations are happening slowly and organizations are having to make the most of what they have, Remote Infrastructure Management is growing in importance. Keen to “focus on their core strengths” and “outsource the rest,” companies are looking at Remote Infrastructure Management to stretch their IT budgets.

“Pressures on IT budgets are leading global organizations to search at avenues beyond ADM services. Clients’ expectation of end-to-end services from vendors along with maturity of offshore vendors is also allowing this trend to build momentum.” Infosys, India’s leading IT services vendor has leveraged its existing capabilities and loyal customer base in the software development segment to build up steam within the Remote Infrastructure Management space.

A recent study by business intelligence firm, Gartner Inc. had indicated that typically, around 32 percent of a CIO’s IT budget was going into internal resources to service infrastructure operations and management. Since this segment represented a significant chunk, it was also the area that required immediate reduction.

“Today, as businesses get more and more competitive, IT infrastructure is facing an increasing pressure to align itself closely to business requirements. A CIO’s challenge, therefore, is to formulate an IT strategy which achieves the following objectives: increases service levels for end customers; improves end-user response time through proactive management and reduces costs and increases flexibility.

Organizations worldwide have been able to effectively achieve these objectives through Remote Infrastructure Management,” said Anant Gupta, COO, HCL ISD of HCL Technologies, one of the leading providers of Remote Infrastructure Management services out of India.

HCL, one of the earliest entrants and pioneers in the Remote Infrastructure Management area, and a leading light in this segment, ensures that its customers enjoy an effective, efficient and productive IT infrastructure operation. The company is optimizing its investments in technology, people and processes and guaranteeing greater quality and increased end-user delight through requisite expertise and domain strengths. HCL has also built up robust and mature processes and enhanced visibility tools to establish its pre-eminence within the RIM arena.

RIM, driven by a paucity of in-house capabilities

Remote Infrastructure Management was also appearing on the radar screens of global organizations on account of the fact that companies were not really geared up internally—in terms of well-defined escalation processes, a knowledge base of errors and standard operating procedures—to handle their infrastructure. A number of offshore outsourcing companies on the other hand were using global standard processes like the ITIL (IT Infrastructure Library) and BS7799 (for security), for better management and problem resolution.

Pressures on IT budgets are leading global organizations to search at avenues beyond ADM services. Clients’ expectation of end-to-end services from vendors along with maturity of offshore vendors is also allowing this trend to build momentum.

Our global foray with the Offshore RIM proposition was a natural progression for us and did not require investment on building capability as much as building infrastructure related to global telecom and DR support and most importantly, on building customer confidence in the offshore delivery model for IT Infrastructure management. India’s leading IT services companies had therefore built up strengths and capabilities to provide both offshore and on-site infrastructure management encompassing a host of operations.

Offering wide ranging benefits

RIM offers global and India-based customers the following benefits:

Flexibility: By using models such as Co-Sourcing, companies are providing customers with an option to outsource a single specific function at a time, several functions or to enter the engagement in phases. This enables the customer greater scalability and cost predictability.

A quality and Process Edge: By providing high quality technology, processes and people, as defined by ITIL, BS15000 and BS7799 (earlier ISO 7799), service providers are helping customers resolve their problems faster. Also, a known knowledge base of errors and standard operating processes provide continuous learning and ensure that the problems get the attention of the right expert.

Expertize and dedicated skill-sets: Outsourcing gives the customer access to experts on a 24×7 basis. Moreover, these specialists constantly keep themselves updated with the latest technology trends and customer benefits from expertize-on-tap whenever needed.

Visibility and Control: Concepts such as Co-Sourcing or Selective Outsourcing allow enterprises to retain control of their strategic components such as physical IT assets, technology refresh, policy and architecture which provides visibility into the availability, performance and utilization of each component. This visibility further, enables them to take control of the situation, make informed decisions on future investments in IT and improve current service levels.

Improved SLAs and Best Practices: Remote Infrastructure Management works under tough, black and white and precise service level agreements, with penalties on downtimes. Backed by Best Practices, the Outsourcing also improves end-user SLAs which help in strengthening of the in-house IT function.

10x Cost Reduction: When it comes to cost arbitrage, Remote Infrastructure Management has a spiral effect. It reduces not only the manpower cost of managing the infrastructure, but also brings down the costs related to future infrastructure investments. Moreover, the cost benefits gained in outsourcing IT infrastructure management are much more than the cost benefits of offshoring application development.

According to Infosys, since it addresses both the cost and technology/process transformation aspects through a unique methodology, it helps customers reduce their overall TCO. It also enables the client company’s IT to become more lean and efficient. Infosys uses a four-step engagement approach called the “Transition–Optimize–Transform–Innovate,” when providing RIM solutions to customers.

India on the global RIM map

The emergence of Indian IT services vendors on the RIM has been a result of key trends that have helped define this market. These include the following:

For an improving telecom landscape in India. Extreme stability and drastic reduction in telecom costs have made remote management and monitoring of IT Infrastructure a possibility. This has enabled vendors to provide global-class connectivity and highly reliable, always-on network infrastructure to manage the IM needs of customers on a 24×7 basis.

For the establishment of credentials of Indian offshore services providers within the global markets. A number of leading IT services companies including HCL, Infosys, Patni, Satyam and Wipro, that have been engaging with large global customers for software development outsourcing are now leveraging these relationships to bag IM projects.

For the availability of manpower. The Indian IT software and services industry has built up a strong pool of manpower equipped with hardware, software and networking skills. These professionals are available to the growing RIM industry.

For the investments by vendors. Indian vendors too have enhanced their remote infrastructure delivery capabilities and even embraced the Global Delivery Model to better service customers.

Typically, Indian organizations such as HCL, Infosys, among others, are offering a range of Infrastructure Management options, including the full spectrum of ITIL-compliant Service Support and Service Delivery Processes. These include:

• End User Computing Services
• Datacenter Services
• Network Services
• Information Security Services
• Business Ready Infrastructure
• Process and Tool Consultancy
• Infrastructure consulting

These services are being delivered to a range of Industry Verticals such as Banking and Financial Services, Manufacturing, Pharma and Healthcare etc.—to Global/Fortune 500 Corporations.

Making RIM a strategic initiative

The first wave of offshoring was with Application Development and Maintenance and the next wave with Business Process Outsourcing. With Managed Services, the attempt is to ride the crest of the third wave around remote Infrastructure and Application Management. “It is estimated that less than five percent of the addressable Managed Services market has been addressed till date, indicating significant head room for growth.”

“The first wave of offshoring was with Application Development and Maintenance and the next wave with Business Process Outsourcing. With Managed Services, our attempt is to ride the crest of the third wave around remote Infrastructure and Application Management.”

HCL ahead in infrastructure outsourcing race

HCL has won two major infrastructure outsourcing contracts straight in a row, first $350 Million with Reader’s Digest and now $100 Million with Xerox.

HCL has been increasing their core competency on remote infrastructure outsourcing for some time and it is paying them now. HCL’s Infrastructure Services Division adopted the asset light model (Co sourcing) of infrastructure outsourcing in which clients own the IT infrastructure architecture, security, policy issues, etc., and HCL takes the responsibility of managing day-to-day operations of the entire IT infrastructure. The co sourcing strategy combined with multi-country delivery center strategy paying them in winding big multi-year outsourcing deals.

Remote IT infrastructure management outsourcing, RIMO is not like regular ITO or BPO. ITO and BPO companies can be started with minimal up-front capital investments. However, RIMO needs high capital investment and it will take years for companies to see the profit. Due to this cost of entry for infrastructure outsourcing business is high, this created a huge opportunity for HCL, and their management team used it wisely to capture the growing RIMO market. In the future HCL will win more contracts in the RIMO market space.

Green Cloud Outsourcing

IT industry is putting as much carbon as the airline industry until reading the Harvard Business Blog on cloud computing. Cloud computing is the hottest topic in IT and with its promise of reducing IT infrastructure and their by reducing energy usage will definitively appeal to all the businesses. Also President Obama administration with green initiative will further enforce the growth of green and cloud computing in US.

Like other businesses the green initiative will affect the outsourcing industry as well, already outsource vendors are rated based on their green compliance and environmental friendliness. Among the Indian based outsource vendors Wipro and HCL are in a good position to win customers with their green initiatives. Recently GreenPeace organization named Wipro and HCL are the top green companies in India.

Cloud computing affects the offshore outsource industry to publish an article. Cloud computing will change how we design, build, deploy and maintain software applications. All the companies are getting into cloud computing niche based on their industry and market strengths by offering XaaS (X as a Service, substitute X for any of the following: Software, Hardware, Infrastructure, Storage, Platform, etc.). The top Indian outsource vendors, TCS, InfoSys, Wipro, Cognizant, HCL, and Tech Mahindra.

Among the top companies HCL is in a good position to use their green rating and their Remote infrastructure offering to gain market share in cloud computing. Not knowing HCL’s strength in software architecture, design, etc, for the future cloud computing, but for IT infrastructure management side of cloud computing, HCL will get a bigger market share in the near future.

The Rising Remote Infrastructure Management Opportunity: Establishing India’s Leadership

Over the past few years, the infrastructure outsourcing industry has witnessed substantive shifts – average deal values have reduced by nearly 70 per cent, deal durations shortened by approximately 20 percent, and offshore vendors are entering the “top 100 deals ” league tables – all this while the overall market continues to grow. Key drivers behind these shifts include enterprise customers that seek to enhance service and performance levels while exploring innovative delivery models to reduce costs, technology that has improved infrastructure efficiency and management and maturing offshore capabilities. The global Remote Infrastructure Management (RIM) industry has grown at more than 80 per cent CAGR from US$2 billion in 2006 to US$6 billion to US$7 billion in 2008. India has been a significant beneficiary of this shift. 

As a result, questions about the potential of the RIM industry, the forces that propel it, and implications for various stakeholders, are now pertinent. In this context, NASSCOM and McKinsey & Company conducted a comprehensive study to develop a perspective on these questions. The Rising Remote Infrastructure Management Opportunity: Establishing India’s Leadership, details the potential of the remote infrastructure industry by 2013 and articulates the impact a maturing RIM industry is likely to have on the infrastructure outsourcing business and its customers.  

RIM, as an independent industry, could unleash the next largest wave of opportunity in offshoring, similar to that provided by the Application Development and Maintenance (ADM) and Business Process Outsourcing (BPO) industries. Convergence of three independent forces has resulted in the rise of the RIM industry —rapid evolution in technologies and IT architectures, changes in customer behaviors and demands, and developments in the vendor and offshore supply environment. These changes and their individual impact, which when viewed collectively suggests an accelerating trend towards RIM.

India is well positioned to capture a proportionate share of the RIM opportunity. In particular, the experiences gained from the rise of the application development and maintenance (ADM) and business process offshoring (BPO) industries, increasing capabilities of India-based providers, management of low-cost talent, and the country’s reputation as the IT offshoring centre of the world.

Finally, the implications that the rise of the RIM industry will have for various stakeholders. Some implications will call for concerted action at an industry level, while others will require companies and customers to revisit individual strategies. On the one hand, industry will need to work with NASSCOM and the central and state governments to augment talent supply, and strengthen talent quality. On the other, players may need to fundamentally alter their business models. With distinct reliability, security, technical, pricing and process requirements, the rules of the emerging RIM industry will challenge both infrastructure outsourcing incumbents and traditional ADM and BPO offshore vendors.

Undoubtedly, this opportunity holds significant promise for India and realizing it will accelerate the nation’s economic growth and maintain its dominance as the world’s leading offshore destination.

Is infrastructure management the next big opportunity for India?

Recent trends in the BPO space have given India the epithet of ‘back-office of the world’. Now a new thrust by Indian software service players in the IT infrastructure management space could see India becoming the nerve centre of the world’s networks, at least on the maintenance side.

Even as Indian software services players fight hard to stay in the game and win, there’s an opportunity almost equal in size to the entire global software services industry that’s hardly been discussed yet. The opportunity is ‘infrastructure management outsourcing’ and represents a massive $126 billion market—virtually untapped by Indian players. While this market is still a tough one to crack and remains dominated by global giants—the likes of IBM, EDS and CSC—pure-play Indian software services firms like Wipro, TCS and Infosys are trying to get a foot into the door by leveraging their offshore expertise.

Almost the entire Indian IT services industry depends on three categories of services. The first segment is system integrations, which includes packaged application implementation, custom application development and integration. The market size for this is approximately $98 billion. The second segment is application outsourcing, which includes support and maintenance services. This market is estimated to be close to $15 billion. The third segment is IT consulting, which includes strategic consulting, business process consulting and change management. This space is estimated to be worth close to $25 billion. But as traditional markets have started entering the commodity phase, Indian players have no other choice but to expand the scope of the markets they are addressing.

“The total IT services space that Indian players have addressed is said to be close to $138 billion. But Indian companies do not get much business from IT consulting, as even large companies don’t do more than 10 percent of their business via this route. So in reality, Indian IT services providers have flourished inside a market size of approximately $120 billion. Now take a look at IT infrastructure outsourcing. Mainframe-related outsourcing is a $29 billion market. Network-related outsourcing is a $7 billion market, while the desktop outsourcing market is a $18 billion market. Add to this the distributed environment related outsourcing market, estimated to be close to $57 billion. If you sum up the numbers, you would see that it comes to $111 billion, close to the same market size Indian players have been addressing over the years with falling margins.”

While very few Indian companies are playing in the infrastructure management outsourcing space, the trend is a positive one as some North American and European firms have started looking at Indian offshore vendors to help them cut costs and improve productivity on the infrastructure side.

How Indian players can win

While infrastructure outsourcing has typically been a game for large vendors, recent trends have shown that demand is also coming from small and medium-sized firms. Additionally, one more important trend that could be key for Indian firms is the price advantage. Unlike the past, price is amongst the most important criteria today and clients are even overlooking past relationships.

While Indian vendors have always aimed at moving up the value chain to command higher margins, the reality is that few Indian vendors have made even a dent in the IT consulting space. This is where the move into infrastructure management outsourcing can be beneficial to Indian players as this is not only a huge untapped market, but more importantly, a market which is a bigger spend area for customers than application development is.

 “IT infrastructure management services demand the right mix of onsite and offsite models. The nature of the services involved decides this. For instance, helpdesk management and network management works well with remote management mainly because of the customer’s confidence in the same. However, most large companies may not be comfortable outsourcing their network security management needs. There is a mindset change needed here.”

Conclusion

While Indian offshore service providers do not currently have the expertise to assume a prime contractor role for large organisations, they still have considerable opportunities as offshore service provider’s start hitting giants in the space with their low-cost quality solutions. “Over the long term, current Tier-1 infrastructure outsourcers will be forced to address skill and service rate disparities compared to offshore alternatives. If they fail to do so, fledgling offshore providers will rapidly capture enough talent and experience to join the ranks of Tier-1 providers.” Knowing Indian software service players, who have almost never lost an opportunity to gain revenues, the infrastructure management space could be one area where Indian players repeat their software magic again.

Application Outsourcing is known as the deployment, management and up-gradation of packaged or customized software that is contracted out to a third party or a vendor.

The process of Outsourcing Application lends high sustenance to cost effective software consulting, developmental and maintenance related practices.

With the adoption of Application Outsourcing, organization attain an added option of nurturing the internal skills, make cost effective budgets for the purpose of proper application and implementation, focusing on the core business department and ultimately reduce the cost of technological ownerships.

Generally aspects ranging from application development, application maintenance, application migration, software product engineering, quality assurance, testing and technology optimization, e-learning are covered through the process of application outsourcing.

An Application Outsourcing vendor manages and delivers application and their corresponding capabilities to multiple sources from the data centre across the network.

Delivering packaged software product and grouping the related services in IT department are the major aspects an Application Outsourcing third party vendor aims at.

An Application Outsourced vendor provides an alternative to procure and implement complex systems. It helps an organization to concentrate on ownerships and schedule the payment schemes and helps users to avoid risks of making high budget technology planning and implementation errors.

According to a survey, 46% companies outsource the majority of their application related development work processes to India.

Application Outsourcing had raised its level to an unbelievable height after the technology boom of the 1990s, coupled with the redefining work that companies worldwide engaged after the Y2K computer problem which sparked India’s rise as an IT powerhouse, especially. Recent developments suggests that other countries are muscling in on the action, notably in China, Eastern Europe, Brazil, Canada, and Mexico, offering outsourcing organizations more options.
Application Outsourcing maintenance to a trust worthy vendor allows organizations to focus on core development and better and new found technologies where else on the other hand mission-critical business systems continue to operate without any kind of interruption.

Maintenance work has been seen to prevent the development team from focusing on high value-added activities such as analysis, design, and implementation of new systems.

Herein an Application Outsource vendor becomes an integral part of an outsourcing organization by providing the maintenance and management of new or existing applications.

Moreover in addition to providing helpdesk and functional support, the Business Analysts and Subject Matter Experts of the vendors work with end users to find the vital improvements necessary for an organization, thus profiting them in the best possible way.

The aim of application integration as integrated by an Application Outsource vendor stands to provide support to complex corporate business processes basically by integrating the existing applications instead of replacing them.

Integration tasks are performed essentially in an independent system the integration middleware, instead being scattered in the individual applications (interface modules).

This approach of the vendors simplifies relationship types between applications from many-to-many to one-to-many relationships. This may also provide a solution for administration and monitoring options essential to the real-time integration.

Applications Management Services
Offshore Outsourcing Applications Management Services aims at total cost deduction as well as composite benefit of quality management. The circumference of Applications Management Services in its Offshore Outsourced status include project management, consecutive business analysis, architectural functions, related designs, applicable development, enhanced coding, testing functions, maintenance, structuring procedures and quality support. Offshore outsourcing in Applications Management Services helps to increase the work force or rather the resources without any additional infrastructural costings and thus benefits an outsourcing organization. India being the leader in providing Offshore Outsourcing Services to the world- leads market in Offshore Outsourcing Applications Management Services.

IT Management
Outsourcing as a concept was preferred due to curtail in the costings and available better resources. Offshore Outsourcing was thus the benchmark of functioning in the industry. IT management offshore outsourcing services include a varied range of offerings. From better project delivery to increased product delivery; everything’s is known to work out absolutely fine with the procedure. Offshore Outsourced IT Management aims at deducting the infrastructural cost and adds to experienced resources from all over the world, thereby increasing the quality of servicing with cheaper budgets. Software’s, equipments, premises and labor being very easily available at the considered offshore destinations, IT Management and its related outsourcing works out in an exactly appropriate manner.

Software
Offshore Outsourcing has never just aimed at cutting costs, but at added functionality of better resources and effective productivity. Offshore Software Outsourcing ensures the fact that the industry standard are raised and thus the technology always keeps moving at a rate faster than time. With Offshore Software Outsourcing: an outsourcing organization aims at application development, better system integration, appropriate business automation tools and thereby draws and lends the perfect account of support to the financial, telecom and the media segments in the market.
Helping you to seize business value: Step by step application roadmap.
Application outsourcing service roadmap offers clients access to a portfolio of services which target cost reduction opportunities (blue curve) and address their business value creation priorities (green curve). This enables the IT organization to create an IT estate that looks like, evolves like and is costed like the business it supports.

Benefit from expanded Business Aware Application Outsourcing services offering• Bringing innovation to Application Outsourcing clients, working closely with its strategic alliance partners on solutions that exploit new technology areas, such as SaaS and Web2.0, to help clients deliver the IT responsiveness and flexibility that business is increasingly demanding.
• Industrializing key high demand services, to help its clients to better address cost and performance inefficiencies and to improve the business value of their IT estate.
• To offer the clients a business-driven approach to identifying their IT cost reduction and investment priorities and the ability to jointly create tailored application roadmaps to deliver these priorities.
Transformational lifecycle approach to applications management not only reduces costs, but also drives innovation and change to deliver business value.

Application Portfolio Strategy

Realigning resources with strategic goals: A step on application roadmap.

Application Portfolio Strategy provides a business-driven framework for all IT decisions. It audits the current IT estate and “heatmaps” the business to understand the business value of IT. On this basis, it constructs tailored application roadmaps for each line of business to drive the estate towards its goals. This gives business visibility into how to manage the IT estate to deliver business advantage and the right measures and contractual models to ensure success.

Based on various estimates, an average of 40% of total IT spending brings no return to their organizations. Why? There are numerous underlying strategic and structural problems, magnified also during project execution. Just to mention a few: there is a duplication of initiatives across lines of business; the installed applications and the architecture do not fit the business model; and hardware is decentralized and underutilized. As a consequence, projects have to be re-worked because of requirement misalignment and resource skill sets do not meet changing needs. Applications Portfolio Strategy comprises a comprehensive solution to all the above problems.

APS delivers:
• The Business Service Architecture and Heatmap of the area(s) under investigation.
• Tailored Application roadmaps for each area and application.
• Recommendations on contractual models and evolution paths to achieve the
business end-goal.

Application Mashups

Delivering true business innovation: A step on application roadmap.

Application Mashups is a pioneering solution that enables companies to successfully adopt Web 2.0 technologies and to deliver the next generation of business-focused applications today. By offering a factory-based approach to creating online gadgets and composing mashup applications to help companies leverage the power of online services such as Google Applications to drive business advantage.

Solution provides both the security and functionality needed to better integrate a company’s shadow IT activities with the rest of its IT estate. Industrialized approach supports the rapid creation of compliant online applications, pre-configured corporate social networks, and other services enabling organizations to adopt Web 2.0 technologies to drive competitive advantage. These online gadgets and mashup applications are delivered via delivery network, providing the right combination of local intimacy and globalized industrialization for optimal price and effectiveness in both business and IT Delivery.

Transformational Application Outsource

Driving a managed, business-centric evolution application roadmap.

Transformational Application Outsource is a long-term service partnership that takes full accountability for the complete applications lifecycle to ensure business continuity, boost adaptability and drive down your total cost of ownership. With focus on business functionality and technical considerations from the start, efficiency and flexibility are attained in the most arduous and cost-intensive areas. Ongoing enhancement projects, continuous development and comprehensive support integrate IT for accountability, effectiveness and continuity.

Transformational Application Outsource presents a holistic view of the applications lifecycle that covers both tactical and strategic Business-IT alignment, on a day-to-day basis as well as over the long term. Based on your evolving business needs, the partnership allows you to tune your level of risk, degree of flexibility and incremental business value for the IT applications supporting your business, as well as optimize effectiveness, efficiency and costs thanks to a global delivery network. Following “run-build-run” approach, the offering delivers integration and accountability while Specialists from the entire applications lifecycle ensure continuous development and seamless transitions.

Why Transformational Application Outsource?

To accelerate the delivery of business benefits

A world-leading electricity and automation management firm needed to harmonize its processes across its heterogeneous legacy organizations and optimize the global IT costs. Subsequently helping the client transform its IT infrastructure, consolidate a portfolio of data centers serving 31 countries, and standardize operating systems through a group-wide implementation of SAP. In result, delivering a new functionality that helped grow the client’s business.

To secure a new technology platform to support future objectives
The largest borough of London came for assistance in making its services more customer centric and in meeting e-government objectives. Under the ten-year deal, assisted in the implementation of new infrastructure (voice and data) throughout the council; the transformation of the borough’s website and e-forms solutions; the implementation of complex CRM applications and the consolidation of their existing document management solutions. The borough has been provided with higher quality IT support services, more effective and efficient customer interface channels and a platform for progressively re-engineering their processes, integrating them better with their partners and changing their operational culture.

To collaborate in an open and flexible costing structure

Offering flexible contract arrangements including capacity-type deals as well as contracts offering cost reductions year on year, where the savings are then spent on a capacity basis to undertake transformational activities.

Application Outsourcing Services

Providing a broad set of application outsourcing services that enables to provide comprehensive support for clients’ software applications and platforms. To endeavor continually improving the applications under the management and to evolve the clients’ IT applications into leverageable platforms.

Application outsourcing services are differentiated because they are based on the principle of migrating installed applications to flexible platforms that can sustain further growth and business change. This can be done by:
 Developing a roadmap for the evolution of applications into platforms
 Establishing an ongoing planning and governance process for managing change
 Analyzing applications for common patterns and
 Identifying application components that can be extended or enhanced as core components
 Integrating new functions, features and technologies into the target architecture
Application outsourcing services include the following application and platform management, infrastructure management and quality assurance management services

Application and Platform Management Services• Production support
• Maintenance and enhancement of custom-built and package-based applications
• Ongoing software engineering services for software companies
Infrastructure Management Services
 Systems administration
 Database administration
 Monitoring
Quality Assurance Management Services• Outsourcing of quality assurance planning
• Preparation of test cases, scripts and data
• Execution of test cases, scripts and data
Outsourcing Application Development and Maintenance

Full breadth of Application Outsourcing Services for all size Industries
Outsourcing has become the next new business-critical process. Providing solutions that help reduce your IT costs, improve speed to market and lets you focus on your core business needs.
Integrated delivery model is based on a well-orchestrated combination of off-shore, on-shore, and near-shore resources, and significantly reduces the complexity and risk of doing business in remote locations. Believed that the success to any business is its cost effectiveness, enhanced quality and decrease in time to market.
Application Outsourcing- The advantage: Ensuring high quality service with minimal risk and maximum flexibility through offshore delivery model
 To reduce business interruptions resulting from application downtime and underperformance
 Improve time-to-market on application upgrades and enhancements
 Control and lower baseline costs while keeping up with market innovations
 Create a Value Proposition
 Consistent, quality deliverables
 Global operations spanning
 Reduce total cost of technology ownership

Outsourcing Application Development and Maintenance
Today, most companies outsource at least some of their IT work — to India, the United States, and elsewhere — as companies in other nations try to follow India’s lead in providing highly skilled professionals at relatively low price points.
The top two pressures that drive the outsourcing of application development and maintenance should come as no surprise to executives: reducing IT operating costs and the desire to have internal IT focus more heavily on strategic tasks. But many organizations, especially mid-size enterprises, see value in human asset management in IT: tapping the superior expertise among some providers with the goal of having that knowledge transfused into the skill sets of their internal IT professionals. Also, more than one third cites a need for quicker turnaround in application development projects, a key performance measurement in a faster-paced business world in which delay and hesitation can impact competitiveness.
While the drivers behind application development and maintenance outsourcing are clear, organizations — taken altogether — are receiving four key benefits from their third-party relationships: more time for their IT staff to focus on strategic work, lower costs, and improvements in version control, lifecycle management, and in documentation of procedures and best practices.
How Do You Win?

The criteria for winning at outsourcing application development or maintenance vary depending on the company. However, leading companies, excel in three key measurements — higher cost savings, greater user satisfaction, and improved project delivery performance — over Industry Average and Laggard firms within Competitive Framework.
To determine the Best in Class behind application development and maintenance outsourcing, then examined respondents’ answers to a series of key performance questions, starting with cost savings. The companies that emerged at the top 20% of the survey field saved, on average, 56% by outsourcing application development and/or maintenance functions, compared with 26% for Industry Average firms, and very little for Laggards .Those same firms also performed better than the other two groups in improving user satisfaction and project delivery, as well as improvement in defect rates.

Competitive Framework Key
The Competitive Framework defines enterprises as falling into one of the three following levels of practices and performance:
Best in Class (20%). Practices that are the best currently being employed and significantly superior to the industry norm
Industry Average (50%). Practices that represent the average or norm
Laggards (30%). Practices that are significantly behind the average of the industry

Key performance indicators by competitive framework.

So, while cost savings is a top driver, it is not the driver in all organizations. Here’s what an IT manager from a mid-size company in the food and beverage industry has to say about his employer’s reasons for outsourcing: “We do not outsource to save (on costs),” he says emphatically. “We do it to gain access to superior expertise for short periods (of time) and then to free up our internal IT professionals to focus on their strategic work.

“Several exercises had been done to relate the reduced cost through outsourcing and none has come out at a lower cost but rather higher cost at a promise of more benefits. Over time these promises actually fade … and the initial cost goes up or the service goes down.”
The table highlights the other differences among the Best in Class, Industry Average, and Laggard firms in their processes, knowledge, and organizational strategies in application development and maintenance outsourcing.
Competitive framework for application outsourcing.
Best in Class Industry Average Laggards
Process Call on relationship management skills that extend across all enterprise functions. Tend to take more of an incremental approach to outsourcing (e.g., outsource pieces of work, opt for long term contracts) when launching a strategy. Heavy focus on systems analysis and quality assurance. Tend to outsource pieces of work to determine which providers can best meet their needs. Heavy focus on end-user testing and systems analysis. May outsource pieces of work to determine which providers can best meet needs; also look at pilot projects to help set expectations.
Organization CIO and CTO play major roles in outsourcing decisions. Most have cross-functional relationship management team to oversee relationship. CIO and CTO likely to play major roles in outsourcing decisions. Most manage outsourced work from within the company. Most CIOs play major roles, but not CTOs. Most manage outsourced work from within the company.
Knowledge Retain the most strategic functions, such as project management, acceptance, and business process optimization, and leave the rest to third-party providers. Most retain the most strategic functions, along with systems architecture and QA. Retain the most strategic functions, along with systems architecture, QA, integration testing, and installation.
Results Development process excellence with the metrics to prove it. Moderate development control and metrics performance. Most likely to cite suboptimal work by providers. Limited development controls; retaining of more functions limits ability to allow IT staff to work on more strategic initiatives.

Challenges and Responses
Outsourcing application – related work – especially for companies doing it for the first time — generally doesn’t come without hiccups. The top three challenges respondents cited below demonstrate that being less than thorough in exercising due diligence in the provider selection process can strain a relationship with a chosen vendor. Achieving the goals of IT outsourcing sometimes requires stronger management of providers.

Challenges and responses in application outsourcing.
Challenges % Selected Responses to Challenges % Selected
Securing a provider with the right skill set. 43% Dedicated more management resources. 58%
Integration, testing and/or quality assurance work took more effort than expected. 43% Escalated problems to outsourcing provider’s executive team. 49%
Communication or cultural “gaps” with the provider. 38% Implemented new/revised vendor management processes. 34%
Missed project milestones. 29% Moved from single vendor to multiple vendors. 26%
Less than quality work. 26% Renegotiated contract or statement of work. 25%
Inadequate or insufficient skills to manage outsourced environment. 25% Dedicated more IT technician resources. 22%

An IT manager for an industrial equipment manufacturer believes anyone in a “relationship management” position for an organization that outsources application development and maintenance work must understand more than just management skills. The key skills are those of any relationship manager — customer focus, experienced at delivery, relationship skills — but on top of that was the experience at large scale development and of outsourcing projects.”

The Business Value of IT Outsourcing Benchmark Report says that, more than two-thirds indicated that they dedicate more management time and talent in answering outsourcing challenges while half escalate issues to provider executives, compared with only about half of Industry Average and Laggard firms. This survey reaffirms leading companies’ affinity for those two responses, along with renegotiating an outsourcing contract.

Responses to challenges by competitive framework.

A Truly Global Marketplace
India’s rise as an IT powerhouse, especially as a popular site for application development outsourcing work. Simply, Indian providers were offering established companies quality work at a fraction of the labor cost they had been paying. This is reflected in the following survey findings

46% of respondents’ companies outsource the majority of their application development work to India; the United States picks up 30%.
More than half of the companies — 55% — outsource most of their application maintenance work to India, followed by the United States, but at less than half (27%).

Companies that outsource most of their application development and maintenance work to Indian providers are slightly more satisfied with the quality of that work than are companies that outsource primarily to U.S. providers.

The right side of the below table shows the proportion of application development work going to providers in India and the United States, as well as to other countries. Contrast that with the left side, which shows the primary application development outsourcing destinations for companies within North America.

Top destinations for application development outsourcing.
Key Takeaways
• Best in Class organizations excel at cost savings, higher user satisfaction, and better project delivery performance over Industry Average and Laggard organizations.
• Companies generally respond to outsourcing challenges by dedicating more management resources or taking up issues with a provider’s executives. This is especially true of Best in Class organizations.
• While India-based vendors have emerged as key market players, buyers are looking to vendors in other countries that can provide quality work at lower costs.
Summary
Application Outsourcing
It can realign your applications, their performance and total cost of ownership by transforming your support organization and services. As a result, it can maximize business value and reduce maintenance costs by 15 to 40 percent.

It can be achieved through:

• A flexible, scalable and transparent services-based operating model with measurable service performance linked to key business performance indicators.
• Visibility into each application’s performance, complexity, priority and business impact Predictive pricing and adjustable contracting.
• High quality, low cost delivery systems that utilize globally consistent industry frameworks; highly-trained and experienced professionals; and automation tools.
• A real-world, stepped approach to transformation.
Reduce costs, improve quality, and decrease time to market
Companies need to reduce costs to stay competitive, and the market is finally accepting the tremendous value that nearshore/offshore application outsourcing provides in terms of cost reduction, improved quality, and decreased time-to-market. Leveraging helps CIOs application outsourcing to:
• Augment internal skills
• Make IT budgets more predictable
• Enable internal staff to focus on business-critical applications
• Reduce total cost of technology ownership
Delivering world-class distributed solutions span key industry verticals and include the following:
• Application development
• Application maintenance
• Application transformation
• Enterprise package implementation and migration
• Software product engineering
• Quality assurance and testing
• Technology optimization
• eLearning design and development
• Business process outsourcing

Benefits can be gained through:
• A combination of strong onshore domain expertise and consulting prowess, with deep technical acumen across multiple offshore facilities (India and Philippines) that also mitigate geopolitical risks
• Scalability to support large project requirements.
• Extensive Financial Services specialization, with the only center in India focused exclusively on the Securities industry.
• A global footprint that allows clients to choose from a broad range of lifecycle services delivered by a team of experts focused on solving real business challenges across North America, Europe, and Asia-Pacific
• Proven methods and processes for complex project management and membership.

Rapid transformation is taking place in the global BPO market. It is accompanied by increased spending in BPO services. Most of the leading business companies of the world are adopting BPO as a strategic business solution. The BPO industry is very diverse, with several sub-segments, each displaying its own unique characteristics.
A market research firm, the size of the global BPO market by 2007 would be $173bn, of which $24.23bn would be outsourced to offshore contractors. Of this, India has the potential to generate $13.8bn in revenue. “The projection includes revenues of pure play Indian BPO service providers, captives operations of MNCs operating in India, third party service providers and BPO subsidiaries of IT services firms.
For today’s youngsters, the call centers are a welcome addiction. The industry has woven such magic around the entire nation that these days a city without a call centre would be hard to find. Call centers contribute a fair share to the revenue of the Indian BPO industry. About 70% of the BPO industry’s revenue comes from call-centers, 20% from high-volume, low-value data work and the remaining 10% from higher-value information work.
The average Indian’s attitude towards life has undergone a drastic change in the last few years. The motto of today’s young Indian generation is “Live life king size”. The changing lifestyles, demand for luxury and emergence of high-income spending groups coupled with a thoroughly cosmopolitan outlook of life are changing the modern Indian. Call centers are a major turn on for young graduates.

Futuristic State of Indian BPO Industry
BPO sector in India is smarting under the pain of global financial meltdown—it is obvious for the plethora of suspicions, expectations, doubts, and forecasting to emerge and make waves among the industry. The most obvious thing that we can expect is that the Indian BPO industry will remain on tenterhooks for some time.
Presently, even the experts can expect and can’t calculate exactly. For the last 10-12 days, the global financial meltdown has sent shocks across the world—the prices of oil, value of money, and export have suffered a lot and have seen a lot of changes. Outsourcing is one of the major part of export in India and it plays a significant role in the economy also.
Over the last couple of years, India has metamorphosed as a global hub of Outsourcing and this is due to the fact that India scores in the areas of technological dexterity, quality, flexibility, cost control, competitive advantage and also the quality English speaking work force. All these have made the country as the global leader of Outsourcing particularly in the area of BPO. Perhaps, no other field has made such rapid inroads in such a short span of time.
Despite the sincere attempts made by the BPO companies to provide a definite career in the industry, there have been no cheering results until now and as a result it is observed that there is an alarming level of churning happening in the ITes field. There is a general myth that the employment in this sector is a short term or rather a stop gap arrangement rather than a long term one.
Outsource Data Entry and Data Processing Services to BPO Company India
While the economic downturn has definitely hurt the country’s IT sector, several industry players are optimistic that opportunities still abound and that recovery will happen by 2010.Financial pressures are now “affecting both buyers and sellers of IT services.
Noting that this has led, in turn to a decreased demand for “people’s talents,” particularly workers in the information and communications technology field. However, Chief Researcher said the economic downturn has triggered the “restructuring of the IT and IT services market” and given the ICT.
The most important basic need of any organization is data entry and an exceptionally imperative area of capability that helps the performance standard proficiency. It may appear that managing and handling data entry of a business is easy task but the truth is, it’s very complicated and involves many processes that need to be dealt systematically. Handling work has become much easier due to the massive changes that have taken place in this field.
The option today is to find a data entry company which provides data entry services with lowest possible rates, so that you can make use of the data entry services to maintain the data and other information of your company. It is a growing trend now days to outsource Data Entry Work to trustworthy service provider who provides exceptional output out of their work. Outsourcing is a very wise option and also profitable, for those who want to concentrate on other important matters of business by leaving these works to a reliable service provider who is specialized in this field.
Government’s Support To The Bpo Sector In India

Recognizing the growing importance of the business process outsourcing, the Government of India has introduced various policy concessions and initiatives to accelerate the growth of the IT-enabled outsourcing market. Spearheaded by associations such as National Association of Software and Service Companies (NASSCOM), the Indian software and services industry has also taken various steps to ensure that India becomes the global hub for IT-enabled outsourcing in the future. Some of the steps taken by the Government and industry for the ITES/BPO sectors are as follows
Companies rush into BPO market without understanding the kind of operational and marketing issues they would have to cope with, and the kind of gestation periods to be expected before profits can start flowing in consistently. As a result, many facilities that were set up are lying vacant, and the failed enterprises have to either close down or get acquired, as they have neither funds nor clients.
Software companies are required to produce lots of software products for their clients. These software products being used for giant organizations such as airlines, banks, financial institutions, big corporate houses and various government bodies, where lots of data being stored and updated every day. IT (Information Technology) software companies in US, Canada and Europe who are taking up these projects require massive investment in infrastructure as well as huge manpower to work on them.
India has taken the lead in IT outsourcing jobs. Its Bangalore city is now said to be Mecca of IT industry. With favorable government policies and substantial investment in infrastructure are making India as the great attraction for IT software outsourcing jobs. By outsourcing their IT jobs to India, U.S., Canadian and European companies will not only save labor costs but this will also help them to be more competitive.

BPO market – The Present and the Future

The BPO market has grown by huge proportions in the recent years but there has been an increased backlash against BPO in the US and UK. With the elections nearing the Bush administration which had for a long time supported BPO and other kinds of outsourcing, has had to take some (if not major) measures to keep the situation under control.
Nearshoring as opposed to offshoring involves shifting of jobs to near shore destinations. Outsourcing offshore consulting companies are of the opinion that near-shoring will pick up pace in the near future as more and more companies begin to realize the importance of security.
Ever since the day the software and the BPO markets came into being, the entire lifestyle of many people have changed and most importantly, it is the youngsters who are barely in their mid twenties who were earning more than their age and were leading some really extravagant lives.
The girls also realize that momentary pleasures will have a lasting impact on their lives in the future.
Health insurance to get BPO benefits

Guardian Lifecare, the countrys second largest retail pharmacy chain, plans to go into an expansion mode. Marlabs India, a wholly owned subsidiary of Marlabs Inc, announced the launch of a new exclusively focused division providing KPO services to the health insurance sector.
The new unit, which currently operates from the company’s Bangalore and Mysore offices, will soon expand to other cities as well. Marlabs intends to hire over 2,000 medical professionals over the next 18 months to staff the KPO division and is investing close to US USD 7 to 8 million in the venture. The KPO unit which is already functional in Bangalore and Mysore currently has 400 professionals on its rolls.
Announcing the new business unit, Krishnan Ramachandran, CFO, Marlabs Inc, said, With our extensive experience in providing value added services to the US corporations, the KPO division will be a significant component of long term business plans. Expecting the business unit to grow rapidly in the months ahead.
Providing details on the new unit and the career opportunity, Ramesh Natarajan, Head of the KPO business unit for Marlabs India, said, Medical KPO offers a career alternative to medical school graduates who may find the typically long period for establishing a successful medical practice to be unattractive. KPO enables medical professionals to leverage their learning and expertise in a new and growing area

Animation BPO set for growth
Animation and gaming are seen as the next wave in India’s successful outsourcing story. However, there is a major change, this is a sector which has moved up from outsourcing to co production, a move up the value chain from low end, less creative work to higher creativity and advanced technologies. For India to catch the animation bus, it needed to quickly provide the required manpower since Nasscom had projected that both animation and gaming were multi billion dollar opportunities for India. The usual block, however, is the lack of trained manpower.
And those who do go to training schools offering such courses are not studio ready, industry veteran’s claim Industry is now trying to bridge the gap through an industry training institute co operation. MCCIAs Mahratta Chamber of Commerce, Industries and Agriculture, animation and gaming committee, comprising a three member group of industry professionals, has devised a curriculum for a six month foundation course, which will provide the industry with studio ready professionals.
Additionally, the committee has proposed the formation of a loose alliance of all training institutes so that some facilities might be shared. This association will ensure that basic standards are maintained in the quality of training imparted at these institutes.
The sector was more than just software. Being a multi disciplinary area, its manpower must be skilled at acting and the other performing arts. Lalit Kala Kendra of the University of Pune has, therefore, devised a course for applied theatre, where theatre can be used as a therapy by the industry.

Nothing says “cost cutting” like a big outsourcing deal. Some firms will either panic or simply be forced to pull the trigger on outsourcing deals without laying the foundation for success with effective internal preparation. Some of these deals will work based on brute force and luck, but luck is not a good business strategy, and many deals will not meet expectations. For firms that must execute or renegotiate an outsourcing deal, there are some steps that improve the chances of success.
Today’s economic headlines have put IT outsourcing decision-makers under pressure to deliver near-term cost savings while simultaneously improving support for the business.
However, sourcing and vendor management professionals should see the current U.S. economic turbulence as an opportunity to ensure that sourcing strategy and tactics are value differentiators for the firm’s end clients.
The trick to coming through this recession is balancing the intense pressures to use outsourcing to cut costs quickly with the responsibility for building a solid foundation for the future.
Sourcing professionals can take steps to help balance the pressure for near-term cost savings with all the same risks and rewards associated with outsourcing that are still in play by doing the following:
Don’t shortcut internal preparation and strategy setting. Savvy sourcing decision makers should strongly resist the temptation to shortcut internal preparation. Although some deals certainly can be “fast-tracked” and still succeed, there is a lower probability of achieving strategic business objectives. The connection between internal preparation and sourcing outcomes has been claimed before, but Forrester data shows that outsourcing decision makers find it beneficial to devote even more effort to internal preparation and strategy setting.
Don’t put the move from IT to business technology (BT) on hold. Regardless of current weaknesses in the broader economic market, an upturn will come, and the smartest businesses will continue to aggressively leverage technology as a business accelerator rather than as a sunk cost. The evolution from IT to BT—including pervasive technology use that boosts business results and in which the business becomes deeply embedded in technology—should not be put on hold. Laggards will be under even more pressure. Exercising some caution is just smart business, but self-imposed paralysis could be as damaging as a thoughtless lurch toward outsourcing for a quick cost reduction. Working with CIOs and IT management, smart sourcing decision-makers can implement solid outsourcing relationships to help drive this change.
Ride the turbulence to your business’ advantage. Forrester often sees real-world examples where firms view IT service outsourcing primarily as a cost reduction mechanism around what they perceive to be commoditized work. That may be partly true, but outsourcing creates a remarkably effective opportunity for large-scale change in an organization. Visionary IT and sourcing leaders will position a slowdown, or even a recession, as a driver for cost reduction, productivity improvement, and the shedding of business processes that don’t add to brand equity.
Leverage your existing outsourcing ecosystem. Firms that have good existing outsourcing relationships are much better positioned to grow their deals and accrue near-term savings. Now is the time to consider aggressively expanding existing healthy relationships with service providers. Firms should also drive hard for additional pricing and service concessions from providers.
Five Trends That Challenge Technology Offshoring

IBM is an international company that happens to have its HQ in the United States. After this latest round of outsourcing, the WSJ reports that 70% of the company’s employees will be located outside the U.S. Having your job get shipped overseas sucks and having it shipped away in a cruddy economy is a double whammy, but calling for boycotts or trying to legislate job security is not going to work. That horse is already out of the barn. Tech vendors will put jobs where they can get an acceptable work done at the lowest rate.
There are five trends that suggest those big outsourcing waves will wane.
1. The delta between salary costs is narrowing. Salaries for tech proficient workers in India are moving up and salaries in the U.S. are stagnant or moving down. At some point it is simply not worth the hassle in time zones and culture differences to move the work offshore. Note, this is probably not true for the big financial institutions that are in such terrible shape they want to move as many salaried costs off their books as possible in exchange for contract work. But the financial companies are floundering around looking for any quick fix rather than a long term strategy.
2. Technology advances are the biggest challenge to contract offshoring. Much of that offshore work is for business applications. But when you can deploy, say an Oracle virtual business application, in the cloud at one mouse click, the whole offshore development equation gets changed. Once you start exchanging physical, hand coding for digital virtualized software distribution, you are in a new world.
3. Those outsourced workers can become the next competitors much more easily. If you are a skilled software developer, you can rent your servers via Amazon and make an end run around the costs that used to associated with tech startups.
4. Social networks are in place for new companies to connect and find work. This is just starting to form, but onshore contractors are going to find it much easier to find and bid for work.
5.The current domestic stimulus packages favors onshore industry.Education spending includes technology spending, but education is still very much an in-person business. Health care spending, same thing. Infrastructure spending will almost by definition take place in the U.S.
Look, there will still be plenty of work going offshore. In fact the big dollar contracts from the financial companies may skew the chart even more towards offshore. But underneath the covers are five trends that make me think offshoring may not be the automatic solution it was once seen.

Spice-Spanco BPO merger falls through

BK Modi-led Spice Group’s plan to set up India’s largest domestic BPO unit by merging its BPO unit with that of Spanco Telesystems and Solutions has fallen through. The merger, announced in October 2008, was called off just a month later in November. This, however, remained under wraps and has come to light now.
The three-way merger would have brought together Omnia BPO of Spice, Spanco’s BPO arm and Bharat BPO, the existing joint venture of Omnia and Spanco, which has got the call centre business of Indian Railways. It would have created India’s largest domestic BPO firm in terms of numbers, employing over 10,000 people.
The MoU between Spice and Spanco fell through due to differences among the partners over the way the new entity should be managed, according to Kapil Puri, chairman of Spanco. Puri told FE that the two sides could not reach an agreement on how to work together.
“Issues over operational management led to the failure. Differences such as appointments to the new board of directors could not be resolved.”
However, Dilip Modi, chairman of Omnia BPO Services, while speaking to FE, said that the merger had not fallen through. “We already have a partnership for Bharat BPO and discussions are on. We are taking it step by step. As opportunities present themselves, we will evaluate them,” said Modi. A source connected with the merger said, “Though the terms of the agreement provided for 50:50 management control of the new entity by the parent companies, the Spice group was not in favour of ceding management of the new company.”
The disagreement between the two companies–Spice and Spanco–could also spell trouble for their joint-venture firm Bharat BPO. Puri, however, said that currently, there are no plans to go solo and the JV is on track. The unit handles around 20 million calls a day.
“The project is too mission-critical and large to not operate at all, but it could move one way or the other,” said a source in Spanco.
Spice was recently in news for pursuing Satyam Computer Services, but later opted out of the race citing that the bidding process was not transparent.
Spice and Spanco had, in October 2008, announced that two companies would invest Rs 500 crore upwards in the new entity, which would be called Omnia till a new name was found for it. Clear expansion plans were announced, which involved increasing the number of seats from then 7,000 to 15,000 by March 2010. The number of employees would also be increased from 10,000 to 15,000 by March 2009, it was announced.
Omnia and Spanco continue to operate as separate units now, with Spanco currently employing 6,000 people and having a run rate of Rs 100 crore. Incidentally, the then CEO of Omnia, Pravin Kumar, left the company soon after to join Spanco as its CEO, along with a few more employees of Omnia.

India sees more outsourcing
Domination of India software industry doesn’t need introduction any more. India software development and support services are catering the industry in the best possible manner. And making these more complimentary is the outsourcing process of services and support to India. Big shots gun Like US and UK are outsourcing their work to India. And in the process of outsourcing each and every single work is outsourced and architectural and engineering outsourcing is vital part of this outsourcing process.
Engineering and architectural outsourcing implies producing drawings in India where as the designers are far there in other countries waiting for the drawings produced in India. This is called on-site design base where as the production site is called off-shore. As Indian brains are best in the industry countries like US, Europe and Australia are outsourcing engineering and architectural designs and work. They are open to Indian market and this is making our economy more booming and strong.
Successful engineering outsourcing has following points for success.
Great brains at minimum budget. Engineering outsourcing is not an easy job and these engineering designs and work needs lot of input. The on time delivery and throughput is must for the timely success of the project. Which is very much essential to make any project successful. And keeping in mind the budget and the duration of work involved, Indian market offers best man power with brilliant brains and less costing. Delivering the quality engineering drawings and work at the right time. The main reason for engineering outsourcing to India.
Motivational factors. Great Indian brains are more motivated showing more productivity for higher rewards and remuneration. As the cost difference between onsite and offshore has great difference. People on offshore production center are highly paid and show more productivity.
Quality and standard. As engineering outsourcing, engineering works, engineering designs needs great perfection and quality. World knows that India brains are hard to find. And work standards are very competitive and error free. Indians show great level of professionalism, in each and every department of services. Getting the best quality and timely works lure these countries to outsource engineering and architectural work to India.
Pricing. As the pricing of quality work, design and development is very much cheaper in countries like India. Countries like US and Europe get their work delivered at low price.
Brain drain. As due to bad infrastructure and economy, India suffers brain drain, but due to engineering outsourcing. Indian brains will not be going to leave their country as they will be lured by good salary and prospects by these companies. They will also have all options open to visit the one. Thus attracting the best talent to them these engineering outsourcing firm benefits to maximum.
These points make engineering outsourcing so successful in India. And there are many firms which are offering the best services for engineering outsourcing.
Woolworth to outsource

Top Indian tech firms TCS, Infosys and Wipro, along with multinational rivals IBM, Accenture and HPEDS , are currently chasing an outsourcing contract worth over USD100 million from Australia’s biggest retailer Woolworths, as the retailer plans to deploy a SAP based solution for transforming its merchandising and supply chain platforms.
At a time when new business is increasingly becoming tough to come by, Australia has emerged as a great opportunity for the outsourcing vendors. Other recent outsourcing contracts awarded by Australian companies include the USD100million deal from Telstra and the over USD50million contract from mining firm Rio Tinto. Both were won by India’s second biggest software company, Infosys.
Woolworths is currently working with SAP on a project where, over time, we will replace our core merchandising systems. These systems are a very important piece of IT for a retailer.
Woolworths will lead this project internally but we are currently going through the process of determining other technology vendors who will assist Woolworths with this project.
With over USD18 billion in revenues during the half year ended December 2008, Woolworths runs several supermarket chains, apart from consumer electronics and hotel businesses across Australia, New Zealand and the UK.
According to research firm Forrester, Australian companies will buy around USD39 billion worth of software products and services this year, accounting for almost 4.6 percent of the country’s gross domestic product GDP.
While Australian enterprises are not as severely impacted by the global economic recession when compared with their rivals in the US and Europe, the country’s leading corporates, including Rio Tinto and phone firm Telstra, have recently intensified their efforts to reduce their operational costs by working with Indian service providers.
In October last year, Wipro won a 10year outsourcing contract from Origin Energy, Australia’s second biggest energy retailer for a SAP based transformation.
A few months ago, Infosys was awarded an over USD50million outsourcing contract by Rio Tinto for managing the global mining giants IT applications and some back office procurement activities.
Experts such as Arno Franz of offshore advisory firm TPI say that Australian customers will continue to outsource because of obvious benefits. The business case for outsourcing, including offshoring, is compelling and, given current economic circumstances, even more so; organizations are increasing their focus on cost realignment, and outsourcing/offshoring offers the best and most risk mitigated and timely way of doing this.

‘We expect a 5-15% drop in prices…’
The overall IT outsourcing market is slowing down but some segments like infrastructure and Business Process Outsourcing (BPO) are still showing positive traction. India is well positioned to gain major market share in the infrastructure outsourcing space as corporates are pushing more work outside to cut costs. However, this time around the challenge may not be just to cut costs but to provide innovative service delivery.

How do you see the IT outsourcing market now?
There are some segments like consulting and systems integration where work is dropping, but at the same time customers are looking at reducing costs. There is a steady flow of outsourcing, especially in the area of infrastructure services. The remote infrastructure market is estimated at about $17 billion and around $5-6 billion could potentially come to India.

There are wide opportunities but there is some work which is going to Latin America region. Many of the Indian IT service providers are looking at scaling up these operations as they are currently providing support kind of services in this segment.

What about the pressures of price cuts?
We expect a 5-15% drop in prices of contracts right through 2010. The IT service providers are trying to maintain their profit margin as well as retaining customers. There are many things happening like reworking of service level agreements, extending the period of the contract. However, I would advice the service providers to take a wise look at it before making any decision. There is a lot more pressure in taking over the assets. I believe that the largest market in remote infrastructure management service is among the mid-size companies as most of the large ones have already done outsourcing.

What has been driving infrastructure outsourcing services?
Companies today are talking about doing something right now that is, reducing costs and I’m seeing a lot of that happen. The quicker ones are all for offshoring, though it is piecemeal approach with smaller deals to start with. This is also happening across verticals and not tied to any particular industry. There is strong flow of outsourcing in the application, maintenance and BPO segments as well.

What challenges do you see for the Indian service providers in infrastructure management space?
The big challenge is building a truly capable offering where they can offer the guarantee of providing the service for 4-5 years, and it is still an evolving business. In this segment, labour arbitrage is not going to play an important role and Indian service providers will have to look at innovative ways of delivering this service.

As the global insurance market hots up, actuaries have become hot property. And ever since actuarial process outsourcing (APO) has caught up, KPOs especially in India are wooing actuaries with lucrative packages.

Experts say the estimated revenue from Indian offshore insurance BPO services are expected to rise from $790 million in 2007 to about $2 billion by 2010. However, as the market matures , Indian IT companies, who till now provided only back office insurance services like claims processing and others, are now moving to doing the more complex actuarial valuations jobs as well.

While APO is fast emerging as a niche KPO segment, there are no official studies to forecast the market yet. ‘‘ The global insurance KPO market is estimated to be around $430 million in 2007 and India’s share is expected to be about 70 per cent at about $300 million by 2010.’’

‘‘Various sources of market research predict the KPO industry to be anywhere between $10 billion to $17 billion by the year 2010.

Going by the indication and the response we are seeing from the global market, India has the potential to become actuarial back office of the world.’’

Patni BPO has almost 120 actuarial workers in India. Kapur feels, considering, APO is not driven by volumes, growing to 125 FTEs in itself is considered significant.

So what is driving this market? Apart from significant cost savings and improved productivity, India provides global companies access to skilled resources.

Actuarial Process Outsourcing

Abstract
The scope for outsourcing actuarial work to India, and how an actuarial offshore delivery center can be set up and managed. The focus on the aspects of outsourcing actuarial services, much of the principles discussed here would equally apply to most of the other financial services outsourcing.
Keywords
Outsourcing; BPO; KPO; APO; ITES; BTO; BOT; Captive; Pilot; Operational risks; Delivery centre; FTE; centralization; standardization; functionalization; RFP.

Introduction
In section 1, an overview of the outsourcing industry and their volumes, trends and how the industry has evolved over time with particular reference to the Indian outsourcing industry.

In section 2, there are different approaches that can be adopted in setting up an actuarial delivery center in an offshore location and the pros and cons of each of them.

In section 3, considering the characteristics of typical actuarial processes, transition methodology and key challenges in the setup and management of an actuarial service delivery centre and why India is likely to be a preferred destination for APO.

In section 4, summarizing the key elements of the actuarial process outsourcing.

Outsourcing industry – an overview
Actuarial processes fall in the extreme complex end of the KPO. Due to a lot of business potential, different skill set requirements and other characteristics; it may be worth treating them as a separate category, the APO (Actuarial Process Outsourcing).

Insurance outsourcing
Insurance companies tend to follow cautious approach and have traditionally been among the slowest adopters of outsourcing/ off shoring. But in the past few years the market has changed as a result of shrinking margins, higher claims disbursement and increasing competitions. The size of the insurance industry, with over 1,500 property and casualty insurance companies and 1,300 health insurance companies in the U.S. alone, makes insurance outsourcing an attractive market.

The Indian off shoring industry is particularly strong in this sector. Total estimated revenues from offshore insurance business process outsourcing (BPO) services from India were expected to rise from US$790 million in 2007 to about US$2 billion by 2010. Employment in the Indian insurance off shoring sector is likely to increase from 41,600 to 100,500 in 2010.

India has several benefits as a leading insurance outsourcing destination:
• Low cost advantage
• Established destination for outsourcing
• Indian companies offer near-shore services
• Indian IT outsourcers can leverage their existing relationships with large insurers
• Indian service providers are expanding organically and inorganically to establish a multi-location presence and to de-risk their business.

By 2010, a large number of Indian service providers are expected to evolve into mature, end to-ends, competing with multi-national outsourcing companies.
As insurance services mature and more high-end processes like actuarial and underwriting services move to India, the BPO industry is expected to grow further.

Actuarial services delivery centre – business models
10 most important factors for successful outsourcing as:

• Understanding company goals and objectives.
• A strategic vision and plan.
• Selecting the right.
• Ongoing management of the relationships.
• A properly structured contract.
• Open communication with affected individual/groups.
• Senior executive support and involvement.
• Careful attention to personnel issues.
• Near term financial justification.
• Use of outside expertise.

Taking these factors into account, a four phased outsourcing model has been prescribed:
- A sourcing strategy, (Where/how to sources and Which Processes)
- Evaluation and selection (Whom to source)
- Contract development and,
- Sourcing management (Monitor the performance)

Establishing Sourcing strategy
At the beginning itself, we should be clear what we want out of outsourcing. Company should go beyond the obvious and should try to get value based and sincere answers for questions like “Why am I doing this?” “What are the risks?” and “What kind of relationship do I want with a provider?” We need to ask ourselves, are we outsourcing to:
 Accelerate reengineering benefits
 Access to world class capabilities
 Cash infusion / Make capital funds available
 Free resources for other purposes /core business activities
 Function difficult to manage or out of control
 Improve company focus
 Reduce and/or Control operating costs
 Reduce/ Share risks (for example Minimizing risk through multiple delivery locations)
 Resources not available internally
 Cater Technology risk

Do we have a strategy to take care of the following?
 Cultural differences
 Perception of loss of control
 Local data protection and regulation

Not all outsourcing relationships are the same; especially in case of actuarial processes it’s bound to be different. One of the biggest factors in a failed outsourcing project is when a company goes straight to the process of evaluation, without taking time to consider strategy.

Evaluation and selection of actuarial.
Start building the evaluation and selection phase on the foundation of Sourcing Strategy. Simply putting out an RFP (Request for Proposal) and taking the lowest bidder might work in other cases, but in actuarial services we need to adopt an exhaustive and comprehensive approach. We should be clear about the very specific type of expertise company is looking for. Finding exact skill set and qualitative association is more important than the bottom-line price of service for core activities like actuarial.
This is stage to identify country where such expertise is available, best suitable partnership model, appropriative as per the parameters fixed at sourcing strategy phase. We also need to identify the processes to be out sourced.

Before selecting an actuarial service provider investigate the following:
 Operating experience in Actuarial services
 Commitment to quality and Additional value-added capability
 Price/ Financial Benefits
 References/reputation / Existing relationship
 Flexible contract terms / Level of management bandwidth
 Others like ability to hire & retain talent, Execution Speed, Location, Cultural match etc.

Comparison of countries for actuarial outsourcing can be made on the following parameter:
 Availability of actuarial Talent in the country
 Financial benefit /Cost
 Flexibility and Degree of control offered by local law
 Commercialization Potential, Risk and Compliance
 Risk of partner compatibility and Upfront Investment
 Ease to exit/ Cost to Exit

Selecting business model for actuarial services
The following three business models are considered for an actuarial service delivery centre in an offshore location.
1. Outsourcing to a third party vendor
2. Captive set up
3. BOT (Built-Operate-Transfer)

Each of these models has a number of variations based on the type, duration and long term objectives of the relationship. Though Joint-venture with the intention of commercializing the delivery centre is another possible model, we are not exploring it further in the paper.

Outsourcing to a third-party vendor

It’s an arms length outsourcing agreement with a third party.

Pros Cons
Faster installation
Lower up-front capital cost
Viable even at small scale
Exposure to country-specific risks limited
Overall, reduced risk and hence preferable option for first time offshoring Savings reduced by the vendor margin
Mature vendor landscape not present in some offshore market (but this is not a problem in India)
Ongoing vendor management required
Limited day to day control over processes – more difficult to make changes

Captive set up

It’s a fully or majority owned subsidiary.

Pros Cons
Highest potential cost savings
Greater control over critical and sensitive processes (an actuarial process from a consulting environment could be an example – but a third-party vendor with demonstrated expertise in such services could be relied upon as well) Considerable build out time and investment involved
Not feasible for small scales eg 300-400FTES (full time employees)- a number of actuarial process will be of small scale
Full exposure to in-country risks and the risk of carrying headcounts on own books

BOT (Build-Operate-Transfer)

It’s mid-way route between outsourcing and Captive. You start with outsourcing with an understanding to build and eventually transfer the process to Captive. This is a bit tricky and comes with its own challenges. The transition to captive from a third party environment is a straight forward exercise. This needs very careful planning and requires high degree of the third-party vendor’s co-operation. There are likely to be a number of conflicts arising in the process. Employee expectation management is a key problem area in such an arrangement.

The following flow chart gives a high level view of how one can go about thinking on the different options.

It is important that the following aspects are factored into the decision making:

 The key objectives of outsourcing the actuarial process includes:

 Redesign the delivery model to move from consulting delivery mode to top down standardized delivery model
 Reduce cost to make the core service (re-occurring or compliance driven activity) offering more competitive
 Evolve the centralization strategy for core service delivery
 Technology up-gradation and centralization
 Establish an offshore pilot program for delivery of core services

 The gaps in the existing service model such as

 Build documentation
 Detailed Process flows
 Standard operating procedures
 Establish performance metrics
 Build Metrics & operational definition
 Baseline current performance
 Performance dashboards and reporting mechanism
 Drive continuous improvement using Six Sigma
 Help transition from client centric operations model to process centric delivery model
 Drive standardization & business process optimization
 Build a robust & scalable training engine
 Provide resource augmentation
 Create an option for providing core service delivery from the delivery centre

 The choice of the vendor and the business model needs to be looked at in conjunction with each other – though a particular model is preferred given the objectives and the process characteristics, the vendor chosen might not have expertise in executing the plan and vice versa.

Here is a brief description of the three major benefits that are often talked about in the context of outsourcing.
Centralization
 Actuarial Process migrated from various client locations to a Delivery Center
 Delivery Centre provides support to multiple offices
 Standard Operating procedures developed

Standardization
 Process rationalization through development of client exception metrics
 Establishment of production benchmarks
 Quality & reporting methods standardized

Functionalisation
 Delivery Centre team structure optimized to enable functional competency development
 Movement from client-centric to process-centric processing environment
 Slice the process into pieces and ensure appropriate skill-sets are employed in each of the pieces (eg. actuarial processes typically comprises of significant amount of data activity which can be treated more of an analytics function than strictly actuarial)

3. Actuarial services delivery centre – setup & management
The actuarial processes typically fall into the following categories:
 Recurring activities – project-type or transactional type (e.g. statutory actuarial valuation, experience analysis)
 Special one-off projects/studies (e.g. cash-flow projections relating to a proposed change in a pension scheme design)

The actuarial process outsourcing (APO) has its own distinctive characteristics as follows:

Person and judgment-driven
APO work requires insight and analysis based on skills, experience and judgment. The result and the recommendations are driven by judgment rather than by rule-driven processing.

Process can provide a guideline
Processes/services are performed based on skills, domain knowledge and intellectual capability. The process can provide a guideline but not a deterministic set of rules.

Process is complex
The process is complex and requires many steps. It calls for interpretation, analytical skills, reasoning and the exercise of judgment.

Skill set requirement
It requires higher order analytical, logical reasoning skills, ability to learn complex software, ability to understand and follow complex regulatory provisions and accounting principles.

Global team-work
APO usually entails outsourcing part of a larger process (e.g., experience Analysis, Data Preparation for Valuation). There will be several handoffs and peer review. By its very nature, it’s a team work and global in nature.

Actuarial skills travel well
Barring regulatory and terminological differences, the fundamental actuarial principles remain applicable across the boundaries. This enables a delivery centre to serve multiple geographies without necessarily going through the full knowledge transfer exercise once it is established for a particular geography.
As mentioned earlier, the actuarial services fall at the complex end of the KPO and they usually have a long & steep learning curve which makes resource retention & development a key aspect. The following diagram shows how an actuarial process compares with other typical BPO & KPO processes in terms of complexity and knowledge intensiveness.

A typical transition plan for an actuarial process would typically follow these steps:

Initiation and planning
• Assign Actuarial Program Manager
• Core Team set-up
• Set-up Communication Plan
• Re-validate Scope of Work
• Understand high level details
• High Level SIPOC
• Operations
• Technology
• Establish high level Project Plan
• Understand Productivity / Quality and SLA related parameters

Onsite knowledge transfer
 Core team trained onsite
 Understand the process flow
 Consolidate training material
 Understand the client’s standard procedures
 Understand documentation / audit trail aspects
 Decide on the duration, scope and success measures for the pilot
 Decide upon the support mechanism for case study

Pilot
 Execution of the pilot program
 Very close monitoring of the progress
 Validating & base-lining effort requirement for the process
 Identify any knowledge gaps or quality / productivity issues
 Test the technology solution
 Internal expertise built up from the queries resolved & feedback from onsite support team

Go Live
 Start to work live
 Validate the onsite support mechanism
 Identify knowledge gaps
 Continued internal expertise built up from the queries resolved & feedback from onsite support team
 Evolve the training content
 Develop Performance monitoring mechanism

Ongoing knowledge transfer
 Fill the knowledge gaps
 Short-term onsite training / conference calls / web meetings
 Mechanism for keeping the delivery team up-to-date on regulatory and process changes

Typical challenges during the transition are:

 Core-team hiring -apprehension over the survival of the project

 The third party vendor and/or the client’s brand image, expertise and market leadership should help overcome this to a large extent.
 If the vendor has got similar processes then this should help alleviate the apprehension in the minds of prospective employees since the vendor can absorb them in other processes even if the pilot does not succeed.

 Knowledge transfer

 Regulatory environment and terminology varies between countries though the fundamental actuarial principles remain the same – the on-site knowledge transfer should be designed to fill this gap
 Pilot approach would also help the knowledge transfer from a practical stand point and would also validate the effectiveness of the on-site training and fill the gap in the knowledge transfer

 Technology setup

 The complexity actuarial software and also the data security and information privacy issues warrant a careful planning and testing of the technology well in advance to avoid any delay in getting the process up and running.

 Delay in transition

 Executive sponsorship at both ends
 Build redundancy
 Significant involvement in training of offshore resources

 Cultural risks

 Cultural training as part of curriculum
 Invest in acclimatizing offshore resources with training and development, onshore visits

Examples of actuarial functions that can be off-shored are as follows:

 Life insurance

 Underwriting
 Pricing and profitability testing
 Statutory Valuation
 Experience analysis
 Statutory reporting

 General insurance

 Loss monitoring
 Reserving
 Statutory reporting
 Pricing

 Pensions and other retirement benefits

 Funding valuation
 Accounting valuation
 Benefit calculations/statements
 Discrimination testing
 Health and Care insurance
 Claim analysis
 Reserving
 Fraud detection analysis
 Trend and variation analysis (medical cost, practice etc.)

While monitoring the on going processes it’s imperative not to loose the attention from the following risks that can cripple the very purpose of outsourcing.

Strategic Risks
Inappropriate model selection

 Conduct through analysis for all the model
 Select the most appropriate model that meets majority of sourcing and execution considerations

Partner incompatibility issues

 Select the most appropriate vendor based on degree of flexibility, investment and executive level commitment

Failure to capture projected savings

 Build robust mechanism around financial reporting of the projects
 Conduct regular review session
 Focus on business process re-engineering/improvement

Financial risks associated with deal construct

 Select the most appropriate model and country that maximizes value

Risk of inheriting significantly high cost structures in BOT

 Conduct assessment on cost structure of the vendor from the year 1 of operations build
 Benchmark cost structure of the vendor vis-à-vis market prevalence

Operational Risks
Service quality degradation:

 Build a robust program management and governance model
 Robust QA audit by Off shore team before final work goes to the Client
 Client’s Actuaries peer review and sign-off on the final reports

Staffing levels not met:

 Build a solid staffing model with the requisite buffers to cater to attrition/absenteeism

Quality control risk:

 Develop an entry and exit criteria for all the projects
 Stringent quality audits by peer reviewer and Team/Process Manager

Intellectual Property risks:

 Fool-proof Data protection measures in place
 Develop a solid compliance/regulatory framework

Confidentiality risk:

 Strong Information Security policies in place
 Non-disclosure agreements in place with each and every employee

Regulatory Risks
Compliance Risk:

 Implementation of consistent, enterprise-wide compliance policies and procedures to ensure 100% compliance to regulatory parameters

Below are the key challenges in the operational management and how they can be overcome.

Attracting and retaining talent
 Functionalizing of the process so that some part of the process can be handled by non-actuarial skill set
 Put in place a decent actuarial study program
 Provide opportunity for key individuals participating in Actuarial seminars and conferences relevant to the domain
 Regular interaction –One-on-One, Skip Level Discussions, Business Updates etc.
 Career pathing
 Rewards & Recognition schemes
 Soft skills training (e.g. communication, leadership, client relationship etc.)
 Ensure a decent work life balance

Knowledge retention & sharing
 Create and maintain a knowledge repository (capturing of learning from previous projects, changes in business environment and marketing conditions)
 Detailed documentation of process steps to make it as people-independent as possible
 Succession planning
 Expose individuals to varieties within the process boundaries

Communication & culture sensitization
 Encourage more verbal interaction
 Put in place a clear communication & escalation protocol
 Exchange of resources across the boundaries
 Training on effective communication and active listening skills

India is emerging as a preferred outsourcing destination for the following reasons.

 Fast growing supply of actuarial talent in India
 Large supply of mathematics/statistics graduates who can be trained to do actuarial work
 Fast turnaround times and the ability to offer 24×7 services based on the country’s unique geographic location that allows for leveraging time zone differences.
 Strong quality orientation among players and their focus on measuring and monitoring quality targets.
 Proactive and positive policy environment which encourages investments and simplifies rules and procedures.
 A friendly tax structure

BPO firms eye actuarial services market

Business process outsourcing companies such as Infosys BPO, Patni’s BPO arm, EXL Services and Genpact are increasing their focus on providing high-end actuarial services to insurers in the US and UK.

The Indian IT companies, which have been hitherto providing back office services (claims processing and others), are now planning to provide actuarial valuations.

Genpact, one of the largest players in the property and casualty space has been in actuarial services since the last five years. Actuarial processes constitute the extreme complex end of the knowledge process outsourcing (KPO) space. Actuaries are professionals who design insurance policies.

They assess the financial consequences of unforeseen events and the premiums needed to cover the risks. The Indian off-shoring industry is particularly strong in this area.

The total estimated revenues from Indian offshore insurance business process outsourcing services were expected to rise from $790 million in 2007 to about $2 billion by 2010. Employment is also likely to increase from 41,600 to 1.5 lakh in 2010.

Cost Benefit: One of the key reasons for work coming to India, other than mature practices, is the shortage of skill-sets. An actuary in US with 5-6 years of experience gets a package of $150,000-250,000 and an actuarial student will draw about $70,000-125,000 a month. When the same work comes to India, the cost saving is almost half.

Patni Computers, which started an actuarial process outsourcing unit around two years back, has three US insurance companies as its clients and a 125 member team who do actuarial valuations.

Paternoster, UK’s insurance company set up in June, is making a conscious effort to get Indian actuarial talent. It wants to introduce new thinking as traditional methods of computing life expectancy are off the mark.
“In the last 4-5 years, the demand from these markets has doubled.”
Actuarial processes constitute the extreme complex end of the knowledge process outsourcing (KPO) space. They assess the financial consequences of unforeseen events and the premiums needed to cover the risks. The Indian off-shoring industry is particularly strong in this area.The gamut covered includes life, health, property and casualty insurance.”

Actuarial Services
Insurance Actuarial Services helps clients with optimized outsourcing solutions for their actuarial services requirements. Enables its clients, to enhance their in house actuarial expertise in the areas of actuarial modeling, critical for new product launches and bespoke arrangements for bulk deals.
The Knowledge Acquisition Phase utilizes skilled Insurance Actuarial resources to understand the processes in detail through our BRISK methodology and ensure swift transition. Actuarial Tables (Premium, Mortgage redemption, Commutation tables) and Analytics (Expense Analysis, Persistency Analysis, Cause of death analysis, Portfolio Loss Modeling) and Reporting are some examples of potential outsourcing processes ensuring process optimization and leveraging of customer’s existing technology investments to the maximum.

In the last phase – Optimization & Outsourcing, which is long term, obtaining customer’s consensus on optimized process and its supporting technology for outsourcing to ensure reduction in over heads and operating costs. Thereafter through Customer Satisfaction Surveys and an active engagement model, drives continuous improvement in the outsourced opportunity for cost reduction throughout the long term engagement.
Outsourcing non-core Processes
Low risk, non core processes have the potential to deliver maximum benefit through outsourcing developing multiple offerings which cover all the processes within the Actuarial domain while maintaining the risk and offshorability analysis of each. All the processes within the Actuarial domain for Outsourcing Support based on our in-depth experience and skills in the domain. We support technology outsourcing in all three tiers through our extensive breadth of technology expertise in legacy applications and experience in insurance products.
Actuarial Services for faster Product modeling
Using a particular actuarial modeling system for a long time over a period of time, a lot of developments by way of new products or enhancements in response to market movements (regulatory and competitive) have required the company to constantly initiate changes in its actuarial system and the problems mounted.
Leveraging sound process engineering and actuarial skills to deliver focused solutions in a Business As Usual environment and:
• Standardized build and design methodology
• Augmented development capability
• Undertook core changes to product models
• Undertook design and build of new products within the actuarial system.
Benefits:
• Reduced development/enhancement time for new / existing products
• Greater confidence in the reported numbers
• Reduced complexity in existing product models
• Faster reporting cycle
• Reduced future cost of development
Summary
Actuarial processes have distinctive characteristics which needs to be clearly understood and factored into the outsourcing decision taking process. It is complex and requires a holistic approach in terms of knowledge transfer, building up training capabilities and resource management. Robust transition plan coupled with an Effective training engine should ensure the knowledge management and continuous flow of resources.

Most of the other operational governance aspects of BPO industry would equally apply to the actuarial processes outsourcing also. They must realize that these services are different from others and besides understanding the goals and objectives of the out sourcing company they need to have a pulse for actuarial services. Sharing strategic vision & plan, ongoing management of the relationships, involvement and support of senior executive creates bone structure.

Given that majority of the actuarial processes are of project type in nature, project management skills becomes very critical in meeting the timelines and quality standards. This involves planning, understanding the scope of the project (each project might be unique on its own), effective communication, close monitoring of the progress and dynamically adjusting the resources/timelines etc. Also, the inherent seasonality due to statutory reporting requirements would mean cross training and using the resources for internal or one-off type of studies becomes another important consideration in order to engage the resources productively throughout the year.

India has a fast growing actuarial talent pool and a matured outsourcing industry. A few in India have shown process excellence in the actuarial services domain and a number of others have demonstrated capability to manage complex analytical services. India is thus increasingly recognized as a force to reckon in the actuarial outsourcing arena.

What is a BPO Bank Department?

Many real estate agents want to start listing foreclosures for banks but they are unaware of all of the steps required to begin. For example, unless you have a personal contact at a bank, it’s virtually impossible to just call a bank and start listing their Real Estate Owned (REO) properties.

Before you begin listing foreclosures, you need to start to process BPOs for banks. Most banks and asset management companies offer their REO listings only to agents that they know and trust. Agents gain that trust by doing a great job on BPO assignments that the bank has previously given them.
These banks and asset managers assign their BPOs to agents through their BPO department. Almost every lending institution or management company has a segment of their organization responsible for requesting and analyzing preliminary values of homes going into foreclosure.

When the bank’s BPO department knows a home is going to be foreclosed on, they find an agent in that area to complete a Broker Price Opinion (BPO) on the home. This BPO gives them an estimated price that the home will sell for in the current market and allows the bank to make financial decisions regarding that home.

How to Evaluate a BPO Bank Department List?

So once an agent knows how banks assign REOs and BPOs, the next step is to get on the bank’s list of approved BPO agents. Here is where many agents give up. Getting approved as a BPO agent requires two very important things: 1.) a good BPO bank department list and 2.) Hard work. Hard work can help you evaluate the many BPO Bank Department lists that are available.

With the downturn in the real estate market, many agents have started looking into how to process BPOs for banks to supplement their income. This has spurred a number of providers to offer lists of different BPO bank departments. These lists general cost between $99 and $175 each. Some of these lists are great. Others are worthless. Here are the keys to evaluating the different lists without having to buy them first:

Do They Offer a Guarantee: The good lists offer a money back guarantee. If you’re not satisfied, they allow you to get your money back. If a list doesn’t offer a guarantee DO NOT BUY IT. Every quality list found, gives buyers at least a 60 day money back guarantee.

Number of Banks on the List: When you’re considering a BPO bank department list, make sure it has over 80 banks and asset managers. With a little work, you could find 20-30 banks for free using an online search engine, there is no need to pay for such a small list. The best lists found have over 1,000 contacts.

Price: While most lists cost around $100, some companies trying to charge over $500 for their list. Don’t pay it. You can get the same information for much less.

Quality of the BPO Bank Department List: While many lists have the website and main phone number for the bank or asset manager, the best lists contain direct phone numbers to the BPO department in each bank.
In addition, the larger lists have individuals’ names and personal emails. Those names can be invaluable as you start to build your BPO business.

Once you choose the right list, you’re on your way to constant stream of income being a BPO agent can provide. You can do it. You just need hard work and a great BPO Department list. Once you chose the right list, you’re on your way to the constant stream of income being a BPO agent can provide.

Study Shows Consolidation in the Insurance Outsourcing Vendor Landscape Set to Accelerate
Consolidation in the insurance BPO services provider landscape is expected in more than one direction. The larger BPO vendors are aggressively buying out smaller, niche providers to gain scale, clients and expertise in the insurance domain. Larger providers are also entering innovative arrangements with insurance carriers to buy out and manage their back-office transaction processing units.
Further, a new stream of consolidation is likely to be a growing reality, although it may appear far-fetched right now. Third party administrators or TPAs who will be increasingly threatened by competitive pressures may buy out smaller BPO vendors, especially offshore ones, to build a presence at a low-cost base like India. On the other hand, some of the large third party providers are likely to buy out TPAs, for on-shore presence, client access and domain knowledge.
A report by Pune-based ValueNotes suggests that insurance offshoring (BPO) to India is likely to grow at 30 percent CAGR over the next three years. India’s revenues are estimated to grow from $690 million currently, to around $2 billion by 2010. Driven by the need to reduce costs, differentiate products in an increasingly competitive environment, and ensure regulatory compliance, offshoring will be a growing imperative for the global insurance industry.

According to the report Insurance Outsourcing: India gains momentum as offshoring intensifies trends, insights and key vendor profiles, the large established offshore BPO vendors in India are expected to gain the most, as they will be able to demonstrate the ability to manage scale, and offer services across the value chain to global customers. By FY2010, a large number of Indian vendors will have evolved into mature, end-to-end service providers, competing with multinational outsourcing companies. Players like Genpact, WNS and EXL Services, as well as BPO offshoots of IT companies like IBM, TCS, Infosys (Progeon) and Wipro will emerge as formidable global players in the next few years.

Greater offshoring of high-end, higher-value services like analytics, actuaries and underwriting to push average billing rates in offshore insurance BPO upwards by more than 25 percent in the next two to three years.

EXL Renews Outsourcing Deal with Centrica

BPO firm ExlService Holdings, Inc. has renewed its outsourcing contract with Centrica, PLC (British Gas). As part of the renewed contract, EXL will continue to provide comprehensive services including complex back office processes, debt management and analytics for an additional three-year term through April 2012, and Centrica will have the option to extend the contract for two annual extension periods.

Speaking about the renewal, Rohit Kapoor, president and CEO, EXL, shared, “The renewal of our contract with Centrica clearly demonstrates that EXL’s relentless focus on operational excellence in the utilities domain remains valuable to our clients. Over the past year, we have continued to enhance and extend our leadership position in this domain and expect to continue to make investments in our service capabilities and operational infrastructure to benefit our key strategic clients like Centrica.”

“We look forward to continuing to grow and scale our business to meet Centrica’s requirements in the years to come,” added Kapoor.

Phil Bentley, managing director, British Gas, stated, “In 2005, we selected EXL to help us drive down costs in back office functions. EXL has delivered a high-quality service so extending the contract makes sense as we continue to manage our costs and maintain our competitive advantage in the market place.”

Genpact Eyes 30 Outsourcing Deals In India!

Genpact is eyeing around 30 outsourcing deals in India across sectors like manufacturing, telecom, utilities and financial services. The country’s largest BPO firm by sales has also zeroed in on China, Japan and West Asia as growth markets. Genpact is scouting for companies that can offer IT platforms, finance and accounting capabilities, or have expertise in catering to the healthcare and financial service verticals

New Procurement Outsourcing Contracts See Decline In 2008

Although the number of new contracts for Procurement Outsourcing (PO) services declined in 2008, strong interest and expansion of existing contracts sustained a 30 per cent annual growth rate, according to Everest Research Institute. Annual contract value of PO spend surpassed the $1 billion mark in 2008, with large companies signing 54 per cent of new contracts.

Companies signed fewer multi-process PO contracts in 2008 as were signed in 2007; however, market growth was evident as suppliers’ managed, non-core PO spend was up $16 billion over the previous year, crossing $110 billion, according to the study, ‘Procurement Outsourcing (PO) Annual Report 2009.

“Last year’s drop in new contract spending is the result of a changing buyer approach, not a lack of interest in PO.”The average size of multi-process contracts nearly halved last year as buyers began adopting a cautious, phased approach, but expansion of existing contracts and increased signings of single-process contracts were significant drivers of market growth. Looking forward, a significant value.

Creation opportunity is coming for buyers as nearly 45 per cent of contracts in the PO market are coming up for renewal over the next few years that are worth more than $1.3 billion in TCV.”

Offshore adoption has increased significantly across procure-to-pay (P2P) as well as sourcing-focused contracts. The study said nearly half of all PO buyers leveraged supplier-owned IT systems; about a third also leveraged supplier-provided add-on tools.

End-to-end PO suppliers Accenture, IBM and ICG Commerce hold nearly 80 per cent of market share. IBM accounted for 70 per cent of new TCV signed last year. Top P2P-focussed performers in 2008 were Wipro, Infosys BPO and EDS-HP.

“Suppliers need to focus on pursuing organic growth opportunities, leverage finance and accounting outsourcing (FAO) to expand into PO services and create differentiation through strategic use of global sourcing.” Delays in decision making will continue and challenges will temper the rate of source-to-pay adoption. Combined with emerging phased adoption, PO suppliers should expect the continuation of lengthy sales cycles and complex buyer decision-making processes.”

Wipro Wins Best New BPO Locator Award!

Wipro BPO, the business process outsourcing (BPO) division of Wipro Technologies, has been recognized as the Best New BPO Locator of the year at the International Information and Communications Technology (ICT) Awards, held recently in Manila.

Organized by the Canadian Chamber of Commerce of the Philippines in partnership with Business Processing Association of the Philippines (BPAP), the International ICT Awards – Philippines, recognizes outstanding performance and contributions by organizations and individuals who contribute extensively in placing Philippines and Filipinos in the minds of global business leaders.
BPO companies, whether captive or third-party providers, that set up in the Philippines in CY2008 were judged on the basis of size and growth in revenue and employees; size, quality and diversity of international clients and evidence of quality, competence and management capabilities.

Sanjeev Bhatia, vice president, international operations, Wipro BPO, said, “Wipro BPO Philippines is uniquely positioned to service customer requirements by leveraging its tenets of quality, innovation, the best people talent, self-sustaining process framework and domain expertise.”

Modernizing CRM Contact Centre to Create Higher Impact,
Lower Costs

Gartner predicts that by 2012, managing Web interactions will be a core competency of the contact centre.

Although critical to success for most enterprises, the customer service contact centre is undervalued by most business leaders, according to Gartner Inc. This lack of priority is reflected in underfunding of the customer service function and often results in an enterprise’s failure to remain competitive.

Gartner Executive Programs (EXP) conducted a worldwide survey of 1,527 CIOs in the fourth quarter of 2008 in which CIOs identified their top business priorities for 2009. The survey showed that attracting and retaining customers had dropped from second to fifth place. “Although still highly placed, customer service is receiving less emphasis than cost cutting.” Cost cutting is essential in the current economic climate, but knowing how to cut costs without damaging the customer experience is critical, and the role of the contact centre is crucial to this.”

Customer service, as delivered through the contact centre, currently suffers from an overall lack of commitment to the customer service representative (CSR) in the form of tools, training and compensation. Maoz said that companies need to redouble their efforts in this area and extend the customer website, add multiple communications channels, and plan carefully to improve agent performance through the introduction of new technologies.

Gartner predicts that by 2012, managing Web interactions will be a core competency of the contact centre, with customers expecting the contact centre CSR to know their customers’ Web posts in relevant online communities at the time of a telephone interaction. This will mean that by 2014, it will be an accepted practice in 30 per cent of contact centres to have two standard monitors on each agent’s desktop.
“Contact centres present the best chance to favourably impress customers and yet organizations continue to drive customers away from interactions with people.” “With better processes and tools to support the system, an organization can demonstrate its competency and its knowledge of the customer’s needs.”

Gartner has identified four key areas that contact centres need to focus on to create a higher impact at lower costs:

Personalized Customer Assistance — In a time of budget freezes, this investment is important because it offers higher revenue and reduced agent churn. Agent attrition is reduced because they have a better feeling of competency and success.

Better Contact Centre Application Design — Younger CSRs expect a more compelling, responsive and intuitive CRM interface to match the experience with the consumer applications that they take for granted. Gartner predicts that consumer applications will extend to the desktop as well as the website to the point that smaller less-formal customer service centres will be able to look at Web 2.0 technologies that enable common technologies (such as Face book) to be used as the agent desktop, with the necessary telephony components and business information integrated through such “gadgets”.

Integrating Web Interactions/Functionality Into the Contact Centre — In a few years, customers will expect an organization to lead them (as required) from self-service on the Web by detecting that they need help, then guide them into an assisted chat session and/or co-browsing session (if necessary), then transfer them into a telephone conversation. At the same time, the organization should be maintaining and transferring the context of each interaction as it evolves

Speedy, Accurate Service Interactions — With the rise of multichannel and multimodal interactions, Gartner expects most contact centre managers to consider either a second monitor for each desktop or a wide (landscape) monitor for better, faster navigation by the CSR

Daksh on Continuous Improvement Drive

The company is has developed tools and evolving processes to offer services that improve efficiencies of not just large enterprises but SMBs as well.

IBM Daksh, one of the leading BPO organizations, is ready to leap at this emerging opportunity. The company is strengthening its Business Process Services focus on the SMB market. Sam Palmisano, Chairman, President & CEO, IBM, during an investor address in Bangalore had said, “We’re continuing our aggressive advance into the high-growth marketplace for business performance services, or BPS. This is the business of applying technology expertise and global economies of scale to transform and run business processes for our clients — everything from supply chain, to human resources, to logistics and more. Last year, our BPS revenue increased 28 percent, to $4 billion.”

Since IBM Daksh forms an integral part of IBM’s BTO global delivery network, the company is delivering on the promise. “IBM Daksh follows the ‘Managing Business Process Service’ (MPBS) model, which encompasses Business Transformation Outsourcing (BTO), Business Process Outsourcing (BPO), and the currently being developed Business Process Services (BPS).”

According to him BPS offers set of more standard, highly automated, asset-based offerings that are focused at the mid-market and SMB. Along with BPS, other modules like BTO delivers improved business results through continuous strategic and operation transformation of the client’s business processes, applications and infrastructure, and BPO reduces client’s costs and investment in business processes in addition to improving efficiency and customer satisfaction.

In fact the company is reinventing its service strategy to shift from labour-based to asset-based approach. To do that it has adopted what IBM calls the global integration strategy. “IBM’s global integration strategy is not just about providing competitive pricing for commodity work, but also go beyond the commodity labour play, to provide much broader client value, spanning consulting, industry expertise, engagements with our research lab utilizing IBM’s advance technology – and more often than not, it combines more than one of these elements in a total solution play.”

For instance, IBM Daksh has effectively leveraged IBM’s research capabilities to develop and pilot tools called ProACT and Intelligent forms processing to help improve productivity and accuracy levels for clients. “By using ProAct, IBM Daksh has successfully reduced the time consumed in analyzing a customer issue from 10 minutes per complaint to just 30 seconds for the entire record. ProAct also has the ability to analyze drivers for future growth, based on customer feedback.”

IBM Daksh, along with IBM Research Labs, developed a unique tool – Sensei, a learning and evaluation tool. The company has been innovating on different tools to improve it performance and service levels. Sensei is a tool improves training cycle and shortens evaluation time.

“This successful integration with the complete spectrum of IBM competencies across research, development and consulting, distilled into high-value solutions and replicable tools, has enabled us to offer unmatched value-proposition to clients worldwide,”

Perot Systems to Add More Centres in India

Perot Systems, which recently launched a new facility in Chennai, is likely to add more centres across the country. The company is examining options of setting up centres in Hyderabad, Coimbatore and Pune apart from ramping up its existing centres like that of Noida. The company has about 8,000 people in its India operations, which is about 30 per cent of the company’s global headcount. The company reported revenue of $2.8 billion during 2008, reports The Economic Times.

Opportunities in the Indian Domestic BPO Market

While the offshore (International) BPO market faces pressures with economy-wide slowdown in developed markets, the domestic BPO market is getting ready to take off. “Unlike the overseas business, labor or cost arbitrage does not drive the domestic BPO market. It’s strategic factors such as the need to scale rapidly, focus on core competencies, enhanced productivity and reduced time to market that are driving domestic demand.”

Research indicates that the domestic BPO industry stands at an inflection point, with the growing scale of Indian buyers as well as the emergence of significant vendors with greater capabilities. The recently released report by ValueNotes estimates the share of third party revenues is 27% of the domestic BPO market, at Rs. 18 billion for FY08. This is expected to grow at a CAGR of 44% over the next four years reach Rs. 77 billion by FY12.

“The outsourcing opportunity in the domestic BPO market will gain impetus over the next couple of years with the increased buyer awareness and adoption of outsourcing across industry verticals. Reforms in banking, financial services and insurance will further drive the future growth.”

The vendor landscape has over 700 large and small service providers. Large BPOs like WNS and Genpact traditionally catering to the international market are focusing on building their domestic BPO divisions.

The service providers present in the domestic BPO market has been classified into four broad categories:

- International leaders (established BPO service providers with strong presence in international BPO market like MphasiS)
- India leaders (primarily focused on domestic market like Aegis, InfoVision and Omnia BPO)
- Emerging companies (companies building capabilities and currently offering specialized services on a small scale like Caretel, vCustomer)
- ‘Me-too’ players (offering undifferentiated low value services)

In the absence of cost arbitrage, creating sustained value from outsourcing will be a critical challenge for service providers in the long term. Currently, services outsourced by the Indian companies are largely limited to high volume, back office jobs and customer support activities. “Most of the Indian companies are outsourcing for the first time. Further growth in outsourcing volumes will be largely dependent on performance of initial engagements and will unleash opportunities higher up the value chain.”

This report provides an in-depth analysis of the domestic BPO market. This study is based on extensive interviews with over 300 companies in various industry verticals and all major service providers.

The report is designed to help:

- Indian companies looking to outsource their services.
- Existing service providers to assess the competitive environment in domestic BPO market.
- Other potential service providers to assess opportunities across various industries.
- Venture capital companies looking for investment opportunities in specialized domestic BPOs.
- Researchers looking for information on domestic BPO industry.

The study analyzes the sectoral opportunity and emerging trends in the large and emerging verticals – Banking, Financial Services, Insurance, Telecom, Government, Retail, Logistics, Airlines and Travel and Hospitality.

Five reasons to say why India is the BPO king

American businesses looking to place their technology operations offshore should give strongest consideration to India, Canada, or China.

India, which took the No. 1 spot in neoIT’s ranking of 14 possible IT outsourcing destinations, offers “cost competitiveness, a highly skilled labour pool and a high level of service maturity,” it said in its annual report ‘Mapping Offshore Markets Update 2005.

The country’s skilled labour pool and mature level of services helped it to provide $12 billion in outsourced IT services last year. It also leads the world in IT services exports, with sales topping $12 billion last year.

To help companies evaluate potential offshoring location, neoIT has ranked countries based on the neoIT ‘Offshore.

Attractiveness Index,’ which rates each country’s characteristics to generate a quantitative net cost benefit of outsourcing to that destination.

The five factors are:
• Financial benefit
• Service maturity
• People
• Infrastructure, and
• Catalyst

Components of the Offshore Attractiveness Index

Srno. Level 1 Factors Level 1 Weights Level 2 Sub-factors
1 Financial benefit 30% • Labour cost
• Cost advantage – operating and capital expenditures
2 Service maturity 25% • Process maturity and competency of suppliers
• Industry size and growth
• Security/IP protection
3 People 25% • Labour pool and skill level
• Language proficiency
• HR
• Educational system
4 Infrastructure 5% • ICT and physical infrastructure
5 Catalyst 15% • Governmental support
• Geopolitical environment
• Physical and time zone displacement
• Cultural compatibility

NeoIT ranked Canada second, noting its “geographic proximity to the US” and its “skilled labour force.”

Canada’s IT services exports last year totalled $8.2 billion. China, with its “low cost, large pool of skilled labour, and rapidly improving infrastructure,” ranked third.

In its report, however, neoIT cautions that China’s attractiveness is “negatively affected by the lack of English-language proficiency” in the country. China exported $700 million worth IT services last year.

Based on the index, India, Canada, China, Poland and Ireland ranked in the top five. Other countries ranked in the report include Ireland, the Czech Republic, Russia, Malaysia, Mexico, Hungary, the Philippines, Brazil and South Africa.

NeoIT also found that Eastern Europe has been rapidly gaining ground as the preferred outsourcing destination for Western Europe, while the Philippines, Malaysia and Mexico also make steady progress as preferred global destinations. Poland ranked fourth with its “low overall business operations cost” and “language and cultural connections with Western Europe.”

The sixth-ranked Czech Republic is “an emerging contender,” neoIT said. Russia ranked seventh, as the consulting firm raised flags over the country’s “unpredictable political and business climate.”

The insurance industry is facing myriad challenges arising from intense competition, rising regulatory compliance and growing payouts due to fraud and natural disasters. It’s expected that competitive pressures will make offshoring of information technology (IT) and business processes a growing imperative in the insurance industry.

Compared to mainstream banking and financial services, where the early adoption of automation and IT helped facilitate outsourcing, first in IT services and later in BPO, the insurance industry has lagged behind. This is one reason why insurance companies have been more conservative in their attitude to “business process outsourcing”, and especially to offshoring.

With expected cost savings of 30% to 40%, and other advantages such as focusing on core competencies and access to skilled labor, we believe that the insurance offshoring industry is poised for significant growth in the next three to four years.

The Opportunity For India

Indian revenues from offshore insurance BPO services are slated to rise from $690 million in 2006 to about $2 billion by 2010. During the period, employment in Indian insurance offshoring is likely to increase from 41,600 in 2006 to 100,500 by 2010.

Insurance Offshoring: The Growth Opportunity

• Insurance carriers currently dominate the buyer landscape. However, in the future, we may also see offshoring from intermediaries and re-insurance companies.
• Buyers in the UK and Europe will increase their share in the insurance offshoring market, while the share of business from US buyers is expected to fall by 2010.
• As the industry achieves greater offshoring maturity, the share of higher value services such as underwriting support and analytics will increase. Because billing rates are higher in these “knowledge”-based services compared to traditionally offshored tasks, the rise in employment in the industry will be lower than revenue growth.

Outsource-Ability And Offshorability

Support functions such as accounting and human resource were among the first processes offshored by insurance carriers. Vendors typically require less insurance domain expertise for these functions than for some of the other transaction processing functions. The table below shows processes that have been finding their way offshore.

In the last two to three years, a large number of activities in claims processing functions have found their way offshore. Relatively, processes in underwriting, adjudication, fund management and actuarial processes are not yet being offshored in significant volumes, though this is likely to change.

The Indian Service Provider Landscape

Historically, the industry owes its roots to the captives of large companies such as GE and Conseco, which first set up offshore centers in India to provide insurance processes. Subsequently, the captives of these companies became third party players — Genpact and EXL Service. Today they dominate the insurance service provider landscape by virtue of their size, domain expertise and offshoring capabilities.

The insurance BPO provider landscape comprises large, mid-size and small service providers. The larger BPO companies are diversified across many verticals; but as a result of their size, they have acquired deep domain expertise in multiple verticals, including insurance. They have significant global reach, with marketing and delivery centers spread across the world. We expect this group to continue to dominate the insurance provider landscape in the next two to three years.

Many of the mid-size players have grown considerably in the last two years. They have diversified into additional insurance segments (life, healthcare and property and casualty) and broadened their service offerings. Some of these players, especially the BPO offshoots of IT companies, have good potential to grow both in size, and specialization in the next two to three years.

Apart from the large, differentiated players, there are a number of tier 2 and 3 vendors of smaller sizes and capabilities. Some of these small BPO vendors — those that have been able to differentiate their offerings — are growing rapidly, at rates much higher than the industry average. However, this is on a typically tiny base, and their ability to manage scale isn’t yet evident.

Key Trends in the Insurance BPO Industry

The insurance offshoring industry is definitely poised for higher growth than it has witnessed so far. According to ValueNotes’ estimates, the industry will grow at a CAGR of 30% a year up to 2010, compared to a CAGR of 23% in the last two years, driven by the need to reduce costs, differentiate products in an increasingly competitive environment and ensure regulatory compliance.

Buyer Market to Shift Towards UK and Europe

As per our estimates, about 64% of the current offshore business is generated from insurance carriers based in the United States. Of the remainder, 28% of the business comes from the UK and Europe. We expect that by 2010, the US share will shrink to 54%, while that of the UK and Europe will increase to 36%.

Innovative Operating Models to Lead the Way in Contracts

We expect the number of contracts with “hybrid operating models” to show a large increase in the future. This will come at the expense of straightforward captive and third-party contracts from insurance companies. Hybrid models will also have a large share of the additional employment generated in the insurance BPO industry in India. Among these, innovative arrangements such as the buy-out of the UK-based Pearl Group’s insurance processing division by TCS will become more common.

Growth in Emerging Markets to Translate into More Business

The rising volume of insurance business due to globalization, in turn, promises greater opportunity for outsourcing vendors. In India itself, domestic insurance companies that have sprung up in the last decade have already begun to outsource. This trend is expected to accelerate with an increase in business volumes and intensifying competition.

Favorable Eco-system to Support Talent and Skill Availability in India

Following the privatization of the insurance sector in 2000, there’s also evidence of greater skill development in insurance in India. This is likely to create a sustainable eco-system, which will provide the necessary talent and experience to fuel further growth in insurance BPO in India.

Research and Analytics Services to Provide Value Growth to BPOs

So far, knowledge services, especially the core insurance services, such as underwriting and actuarial support is restricted to the captives of large insurance carriers. But now, high-end knowledge based services such as analytics, data mining and research have also started to get offshored to third-party vendors in India.

While, services such as claims processing, policy management, etc. will continue to provide volume growth to offshore BPO services providers, services such as analytics and decision support will be the higher-end, higher billing rate-based services that will drive value growth for the BPO organizations.

Non-Voice Transaction Based Processes To Go Up Significantly

So far, knowledge services and the core insurance services such as analytics and decision support have been retained in-house or restricted to captives. However, this work is starting to get offshored to the larger Indian BPO vendors or niche service providers, which are rapidly acquiring capabilities in these areas.

While services such as claims processing, policy administration, etc. will continue to provide volume growth to offshore BPO services providers, it will be the higher-end, higher billing rate-based services that will drive value growth for BPO organizations in future. Pressure on billing rates coupled with the need to offer broadbase service offerings is expected to drive most Indian BPOs down this route in the future.

Convergence in vendor landscape expected

Mergers and acquisitions have become integral to growth strategies of insurance BPOs. Acquiring domain expertise, inheriting trained and skilled manpower and accessing newer markets and clients are the drivers for acquisitions. The broader trend, however, is towards acquiring expertise in banking, financial services and insurance as an integrated offering.

Third-party administrator — BPO service provider convergence?

Industry dynamics are pointing to the possibility of a “third-party administrator-BPO service provider” convergence. This convergence can be in either direction. TPAs, threatened by competitive pressures, may acquire offshore vendors to build a low-cost base in countries like India. On the other hand, some of the large third-party service providers may buy out TPAs, both for more business and to gain onshore presence and domain knowledge.

In Short

In the future, you can expect to see a rising trend towards outsourcing of higher-end processes such as underwriting, actuaries and analytics to the larger third-party BPO vendors, which are fast gaining capabilities in these areas. ValueNotes forsees greater offshoring of high-end, higher-value services like analytics, actuaries and underwriting to push industry average billing rates upwards by more than 25% in the next two to three years. Finally, by 2010 a large number of Indian vendors will have evolved into mature, end-to-end service providers, competing with multinational outsourcing companies. Players such as Genpact, WNS and EXL Services, as well as BPO offshoots of IT companies such as IBM, TCS, Infosys (Progeon) and Wipro will emerge as formidable global players.

One scary thing about Conficker is that it spreads without human involvement, moving from PC to PC by exploiting a security hole in Microsoft Corp’s Windows operating system.

The hole was fixed in October, but if your computer doesn’t get automatic updates from Microsoft, you could be vulnerable.

Disables anti-virus sites

Lots of computer worms disable antivirus software outright, which can be a tip-off that something is wrong. But Conficker doesn’t do that.

Instead, Conficker blocks infected PCs from accessing the antivirus vendors’ and Microsoft’s websites, so victims won’t get automatic updates and can’t download the Conficker removal tools that those companies have developed

Tracing Conficker

So see what websites you can visit. If you can navigate the Internet freely except for sites owned by Microsoft or antivirus vendors such as Symantec Corp, McAfee Inc or F-Secure Corp, your PC might have Conficker or a similar bug.

Free removal tools

Fixing the problem gets a little trickier. The best remedy is to have a friend — whose computer is not infected — download a removal tool from Microsoft or one of the antivirus vendors. Then that person should email the tool to you.

A list of the free Conficker removal programs is available on the website of the Conficker Working Group, an alliance of companies fighting the worm. The removal programs will take care of themselves, for the most part, scanning your system and purging the worm.

A must do: Change file name

One thing to note: Conficker blocks infected machines from running removal tools with “Conficker” in the name. So users might have to change the name of the file (once you’ve saved the tool to your desktop, right-click on it and select “rename”) before running it.

The program’s instructions will let you know if you need to do this. Many antivirus vendors have already changed the names in their removal tools — in some cases calling the file a misspelled variant of “Conficker” — to trick the worm into letting the program run.

Beware, evades detection!

Businesses have a bigger challenge, because Conficker has yet another method for evading detection. Once the worm is inside a machine, it applies its own version of the Microsoft patch that fixes the vulnerability Conficker exploited in the first place.

So a business running a standard network scan, looking for unpatched machines, might come up empty-handed, even though some computers on the network are infected.

The scans need to take a deeper dive into the machines on the network, something an antivirus vendor’s service should enable.

Definition – Analytics is very clearly as helping businesses make better operating decisions by analyzing large amounts of data using sophisticated analysis tools. This includes building risk / marketing scorecards, validating existing score cards, building Basel II Compliance scorecards, providing support in reporting and dashboards, supporting campaign management, segmenting prospects / customers, and data management / data cleanup / data processing for prospects databases and collections of files. As can be seen from above, Analytics Outsourcing is here to stay. It is probably at a stage where BPO industry was 4-5 years ago, and is thus bound to see significant growth in the near future.