Outsourcing to India

Obama Speaks Out Against Offshore Outsourcing

2009-04-20T23:39:00.000-07:00

Source: CIO

Obama said that as president, he "will stop giving tax breaks to companies that ship jobs overseas, and I will start giving them to companies that create good jobs right here in America."
Economists and legal advisors contacted about those comments said they are unaware of any specific tax breaks aimed at offshoring tech jobs. Instead, they said, Obama may be targeting broader tax deferment strategies, such as the ability of multinational firms to avoid taxes on profits by moving money overseas.
Joe Greco, director of California State University-Fullerton's Center for the Study of Emerging Markets, discounted the impact of tax code changes on the broader offshore trend. "Any plans for a tax code change are like trying to plug a hole in a leaky dam with your finger—to believe the U.S. government tax code promotes outsourcing is a major misconception of the fiery debate around outsourcing offshore," he said.
But Obama could have more success fighting the shift of jobs overseas through the second half of his point—by creating incentives for companies to add jobs in the U.S, said Greco. "If you want to be a magnet, you can be a magnet," he said.
Indeed, Jim Harvey, the partner and co-chair of the global technology and outsourcing practice group at Hunton & Williams LLP in New York, said state and local governments can be very active in creating incentives to retain jobs, including tying a particular number of jobs to the size of a tax break. Such incentives, he said, can make a difference for some clients. "Incentives to keep jobs on shore, targeted at the IT industry, would make a lot of sense," Harvey said.
But tax breaks to keep jobs in the U.S. don't always work. The Nielsen Co., recently gave up local tax breaks it received in Florida after it hired an India-based firm.
If Obama plans to keep giving attention to offshore outsourcing, he is hitting an issue that is having a major effect on tech workers. In what may be the largest study of its kind, involving 10,000 workers and human resources professionals across a range of occupations, researchers at the New York University Stern School of Business and Wharton School of the University of Pennsylvania found that 8 percent of IT workers in the U.S. have been displaced. The study was released last week.

Offshore Outsourcing India and Ecommerce Development in India

2009-04-20T23:12:00.000-07:00

From: Technoinfonet

Written by wbedesignindia
Techno Infonet provides offshore Outsourcing and Ecommerce Development Solutions in a professional way with the right combination of quality, service & support. You get the highest quality; Designing work. It also offers services such as Email marketing, SEO in India.
Techno Infonet is a unique Web Design firm offering a variety of services from basic HTML Website Designs to complete E-commerce Website development. We have created and launched many of successful Websites since our origin; our designers and developers can work on your ideas and implement them on your Websites to strengthen your presence on Internet.
Ecommerce is said to be the transaction done through the electronic means with most of Internet base and some of CD-Rom catalogue also.
We have been providing offshore Outsourcing highly Complex white label service to other Web Design Services Provider in the UK, GERMANY, USA and Australia and Canada.
Techno Infonet develops innovative E-Commerce Development Techno provides the complete E-Commerce solution to get your business up and running online. Our affordable E-Commerce Website Design solutions are quick and easy to exercise. Nevertheless our highly creative web designs and Ecommerce solutions offer you a podium to present your self globally.
Techno Infonet with the base at India is a professional Web Designing Company. Our Web Designers focus on quality features of Web Design, Email Marketing and Multimedia Presentation. Company confers services such as Logo Designing and Search Engine Optimisation (SEO) in order to enhance the overall look of the Brand.
By providing an effective and efficient customized E-commerce solution as per our customer’s requirements we try to enhance the degree of easiness in our customers, which eventually augment the level of satisfaction.
This has been provided courtesy of TECHNO – http://www.technoinfonet.com in best-in-class Website Design, E-commerce development solution, Flash multimedia designing, logo designing and thus in ultimate Corporate Identity.

Offshore Software Development and IT Outsourcing

2009-04-01T02:17:00.000-07:00

Source: Amazines

The growing business needs and market place have increased the importance of offshore services. Outsourcing has become an integral part of businesses related with investments, foreign trade, financial and broker operations, transfer operations, currency dealing and foreign property management, web application and software development to benefit the companies from all industries and of all sizes.

It is true that software development is considered as the most technical and complex area of specialization. Many companies face difficulty while exploring possibilities for developing the right kind of software for many reasons. Offshore software development is the smartest option to get the right services at the right time. Getting affordable software solutions is the best way to minimize the risk involved in the process and to increase the profits for the businesses.

Offshore software also saves a great deal of time, which is something that most businesses lack. Also, you can save your money spend on developing and maintaining various kinds of resources and equipments. In addition, you need not to hire experts to provide the right service at the right time. In other words, in-house software development equals serious investment before benefits can be reaped, if any.

Offshore Software Development Company Contacting to the right software development company is the most economical and advantageous thing you can do to fulfill your software related needs. Besides getting the most desired services, you can easily match the prices as per your requirements. Offshore development allows you to get the useful software to be delivered rapidly and continuously, to the customers' satisfaction. Accessing to the time-effectiveness is another close benefit of agile scrums in offshore software development. It will further allow a close collaboration between developers and companies, adaptation to changing and developing circumstances. Search over the internet thoroughly to get the best results within your budgets.

The author of this article is a professional writer for Software Development services, an emerging IT company offering customized solutions including Offshore Software Development and Web Site Graphic Design, search engine optimization and flash development India for clients around the world.

Software Development India

2009-04-01T01:57:00.000-07:00

Source: Articlesbase

Written by : Vaibhav Aggarwalit

h the development of the internet, many new areas in software development have been opened in India to offer the best for clients. Software development in India has coma a long way to satisfy the growing demands of software needs of the growing businesses. Large English speaking population, lower cost manpower and technically skilled knowledge are considered to be the base of the growth of the software development India. The destination India is becoming a hot market for getting all kinds of web solutions including creating database, making user-friendly software by using ongoing technologies like PHP and Dot net.

The offshore software development India market has been growing at the continuous rate of 30% to give its clients total satisfaction and attractive results. In addition, offshore software development India has lead to gain considerable business margins and profitability for businesses across the world. As a result, many major corporations are transferring their work to India to get the better quality in a restricted time frame. As an attractive web solution destination, Indian IT companies have proved their skills and expertise in catering the business needs of foreign companies with their creative unique solutions.
Factors Contributing Success of Offshore Software Development India
Offshore software development India is going through its golden period. It has become one of the greatest contributors in the national development of the country. Let us look into the reasons for the success of offshore software development in India.
Skilled Workforce
India is having the world’s largest English speaking population. The country has equal number of technically skilled workforce to provide the best web solution to provide the best solution for the emerging businesses.
Timing
Indian standard time is about 12 hours behind the timing of the U.S. and UK, where major big companies seeking applicable web solutions are situated. The difference in timing gives the advantage to finish the work on time and increase efficiency.
Government Support
Seeing the current market trend, the government has taken many initiatives that support the smooth functioning of the growing IT companies, which provide web solutions for foreign clients.

Pressure on outsourcing

2009-03-19T22:15:00.000-07:00

Source: Rediffnews
By James Fontanella-Khan
India's celebrated IT outsourcing industry, which contributes about 25 per cent of the country's total exports, is feeling the pinch as it struggles to deal with the avalanche effects of the global financial crisis.

The National Association of Software Services Companies (Nasscom), India's software services lobby, this week added to the gloom by downgrading the sector's export revenue growth to 17 per cent from 21 per cent for the year ending March 2009, as demand from developed markets fell.

IT executives are trying to talk down the revised growth outlook, as they argue that their companies are still outperforming other industries in India. However, this did not stop Ganesh Natarajan, the chairman of the Nasscom, from asking the government for help to stimulate growth "by extending fiscal incentives to this industry".

Mr Natarajan's demand for state aid suggests there could be more bad news in the pipeline for an industry whose corporate integrity has been questioned after revelations of an alleged $1bn fraud at Satyam Computer Services [Get Quote].

Several IT services analysts believe that a 10 per cent growth rate for the sector is a more realistic figure, as demand from the US, which accounts for more than 60 per cent of the industry's export revenue, is not going to pick up until late 2009. Industry leaders, such as Infosys [Get Quote] and Tata Consultancy Services [Get Quote], will have to be creative to outperform their expectation.

Worries grow about Obama's outsourcing policies

2009-03-19T21:57:00.000-07:00

Source:Rediff News

By Mehul Srivastava

After a decade of outsourcing helped transform India into much of the world's back office, Indians are worried that President Obama's new Administration - and the slowdown in the global economy - will cast a shadow over one of the fastest-growing sectors of their economy.

Obama's $787 billion stimulus plan will make it increasingly difficult for US companies receiving bailout money to hire foreigners on temporary work permits known as H-1B visas. The budget the President recently presented may also make it harder for US companies that send jobs overseas to receive tax benefits.

In India, where the $63 billion IT sector makes up almost 7 per cent of the national GDP, the moves are worrying government officials. Acting Finance Minister Pranab Mukherjee groused about it over the weekend in an interview with CNN-IBN, a content partnership with Time Warner's CNN owned by India's TV18. "We will have to address this issue," said Mukherjee, whose ministry has spent the last five months trying to restart India's slowing economy with tax cuts and spending plans. "We are opposing protectionism, not only here but at every forum."

India needs a lot more love from Obama

2009-03-16T02:48:00.000-07:00

Source: Shadow Foreign Policy

By Dan Twining

In 1998, President Clinton flew over Japan without stopping to spend nine days in China. This led to acute concern in Tokyo over "Japan passing" -- the belief that Washington was neglecting a key Asian ally in favor of the region's rising star, China. Is the same thing happening today -- not with Japan, destination of Secretary of State Hillary Clinton's first overseas trip, but with India?

The construction of a strategic partnership with India was arguably President Bush's signal foreign policy accomplishment. Decades of estrangement between the world's largest democracies gave way to a strategic breakthrough akin to President Nixon's visit to China in 1972. Senior Bush administration officials believed that India could emerge as America's most important international partner over coming decades, given India's growing capabilities and a congruence of interests in defeating global terrorism, managing China's rise, sustaining an open global economy, and securing our common values.

For its part, the government of Manmohan Singh literally put its survival on the line for the United States, subjecting itself to a confidence vote in parliament in order to move forward with the civil nuclear cooperation agreement. Few other countries -- including America's closest allies -- have passed such a test.

But signs of trouble in U.S.-India relations emerged early on Barack Obama's road to the White House. As a Senator, he offered a killer amendment to restrict nuclear fuel supply to India during consideration of the civilian-nuclear agreement, which the Bush administration and India's supporters in Congress had to work hard to defeat.

During the presidential campaign, he revealed that he had asked Bill Clinton to consider serving as a special envoy for Kashmir in an Obama administration, alarming Indians in the way that Americans might be alarmed if the European Union offered to send a senior envoy to mediate between Mexico and the United States over the status of Texas.

Candidate Obama also pledged, if elected, to push for U.S. ratification and global entry into force of the Comprehensive Test Ban Treaty. This issue, more than any other, divided the United States and India in the 1990s, especially when the United States and China -- which had helped sponsor Pakistan's nuclear and missile programs targeting India -- ganged up on India at the United Nations to press it to accept the test ban.

India frets over Obama's Chinamania

2009-03-16T01:44:00.000-07:00

Source:Asia Times
By M K Bhadrakumar

Chinese Foreign Minister Yang Jiechen's visit to Washington this week is notable for three reasons. One, Yang is paying a return visit in a little over a fortnight of US Secretary of State Hillary Clinton's visit to Beijing. The intensity of the US-China traffic is indeed extraordinary by diplomatic norms. China seems to have blithely overtaken the traditional allies of the US, such as Germany and Japan.

Two, Yang's visit coincides with the 50th anniversary of the uprising in Tibet. Washington doesn't seem to be bothered at the coincidence. It is actually underscoring its current priorities in the US's relations with China. Tibet is an issue that arouses some animated passion in certain American circles. The US Congress and State Department have paid heed to these public sentiments

while Beijing on its part has duly regretted the US statements, but both sides are confident that life must move on.

Clinton made it clear during her Asian tour last month that neither Tibet nor Taiwan can be allowed to impede the serious business of Sino-US relations in the current world scenario characterized by the economic crisis.

Three, Yang's visit has been envisaged as a significant input in the run-up to the Group of 20 (G-20) summit meeting on April 2 in London. True, the US is widely consulting other countries for opinions on solving the economic crisis. But, again, the criticality of Chinese input for the US is self-evident from the fact that Yang has a scheduled meeting with US President Barack Obama.

But viewed from New Delhi
, Yang's visit assumes an entirely different color. The intensity of US-China traffic is in sharp contrast with the virtual absence of high-level political exchanges between the Indian leadership and Obama. So much so that the former director for South Asia in the National Security Council in the George W Bush administration, Xenia Dormandy, penned an article on Wednesday in The Christian Science Monitor precisely focusing attention on the subject.

Dormandy played a key role in coordinating the July 2005 landmark visit of Indian Prime Minister Manmohan Singh to the US that led to the new US-India strategic relationship. Titled somewhat exaggeratedly - "India: America's indispensable ally" - her article made an impassioned plea that "Obama's team would be wise not to forget it [India]". Dormandy pointed out that in foreign policy, "[The] Obama administration has started with a full sprint. Between the financial crisis and events in Afghanistan, Iran and Russia, and elsewhere, it's had to. But in rushing ahead to confront one crisis after another, it risks forgetting a crucial friend: India."

India's first contact with the Obama administration has been in the nature of Foreign Office consultations, when the Indian foreign secretary visited Washington this week. Reading between the lines, the picture that emerges from the reports of the consultations in Washington is that the US-India relationship is entering a phase of lull..........

Ambassador M K Bhadrakumar was a career diplomat in the Indian Foreign Service. His assignments included the Soviet Union, South Korea, Sri Lanka, Germany, Afghanistan, Pakistan, Uzbekistan, Kuwait and Turkey.

(Copyright 2009 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)

Outsource Software Development Using Rentacoder

2009-03-10T04:24:00.000-07:00

Source: Articlesbase
The existence of the Internet and the facilities that this industry offers us has forever changed the way the world handles its affairs and ultimately has forever modified the way most companies conduct their businesses. Due to the Internet, companies can now have the choice of hiring people from all over the world to do some specific work that they cannot handle. This reduces costs for the company and assures it at the same time that the job will be done properly.

Due to drastic change that human resources has thereby suffered, becoming more fluid, a place where outsource software development was accessible to all people was necessary. To our delight, most people and companies nowadays solve problems that we did not even know we had. Outsource software development using rentacoder is the fastest solution companies today have. It reduces costs significantly; it assures the company that the best people on the job will satisfy their software development needs and, most importantly, the services are easy to locate due to a specialized site, rentacoder, which has a big network of businesses.

Outsource software development using rentacoder is the easiest and most convenient way that companies have these days. The times when companies had to invest a lot of time and money into training people to resolve software development problems is long gone. Nowadays, outsource software development using rentacoder is the golden solution that companies just have at the tip of their fingers. Freelance professionals from all over the world are more than ready to bid on your projects, saving you a lot of time and more importantly a lot of money, for prices can always be kept down as long as it is in both parties’ interest. Outsource software development using rentacoder is probably the most cheap and efficient method that a company can choose and when the results are more than pleasing, I believe it is the best choice that a company can make.

Because outsource software development using rentacoder involves people of different nationalities, who speak different languages, there is the possibility of problems arising because of the lack of proper and accurate communication. Rentacoder arbitration is the solution for these problems. Arbitration is the determination of a dispute by a referee, an impartial one that both parties agreed on. Whenever problems appear due to different factors, rentacoder arbitration is the solution that is offered to you. It is very important to know this aspect and to agree with it, because it is one of the terms you have to say yes to when deciding that the best solution for your company is outsource software development using rentacoder.

All in all, in a world where problems are often without solutions and you can find everything you desire only one click away, the best solution that a company can opt for in order to achieve its goals is to choose outsource software development using rentacoder. Not only time and money will be saved, but you will realize that you have made the right choice once the results start showing. Moreover, if ever a dispute shall arise, rentacoder arbitration is the solution offered by the party involved, a solution that can only be in the best interest of all people involved.

For more resources about Outsource software development using rentacoder or even about rentacoder arbitration please review http://outsource.supergloo.com

Why China for Outsourcing?

2009-03-10T04:14:00.000-07:00

Source: Offshore-development.co.uk
By Betty Zhang
Why China for Outsourcing?

– Large Scale (presenting splendid opportunities for the potential, large domestic markets)
– New emphasis on Education System
– Aggressive plans to broaden English-speaking capabilities
– Up-to-date and growing Infrastructure
– Liberalization of laws, policies and the Government Incentives
– Burgeoning middle class
– Opportunity to be a fast follower by learning from the Indian and other leading countries` experiences, avoiding their mistakes and accelerating progress
– WTO Entry and Oversight
– Large multi-nationals already manufacture in China

Why Chinese Outsourcing Companies?– Diversifying away from existing regions in the world

– Lack of resources and/or high turn over in other countries
– CMM certifications now in process within certain Chinese companies
– Improved corporate governance, risk management and compliance
– Talent pool needed for large projects
– Favorable business environment

Finally, the reality is that the Chinese outsourcing services industry has its challenges, but is also has the devoted interest of a very goal-oriented government that has made one of the fastest growing economies in the world. Blend in China’s many other assets and reality looks quite promising.--from neoIT research of “The China Reality Check” in June 2005.

Author: Betty Zhang from www.shanghai-digital.com
E-mail: nzhang@shanghai-digital.com

Indian’s biggest body shopper stops hiring

2009-03-04T02:31:00.000-08:00

Source: India Daily
By Satish Rai
They are in India. They are abroad. They make millions of Rupees in salary and benefits. They live luxurious life. They abused their Engineering degrees in becoming cyber slaves of the West. They fix the legacy software that no European or American like to do. Yes, these are 100 million Indian cyber slaves that are paid for their hourly work, occasionally through middlemen called Indian or western body shoppers.

India’s biggest (mother of all) body shopper is shaking top to bottom as revenue vanish and the trader owner is little interested in supporting the bad trades. Tata Consultancy Services (TCS) has plans to freeze its lateral hiring. According to sources, unless US and the rest of the world economies get out of depression in the later part of this year, TCS will stop all hiring and lay off 25% of its work force.

For body shoppers, it is a downward snowball. They have extensive contracts with western companies that they must honor. At the same time, they have to cut cost because of rapidly diminishing revenue and mounting bad debts. Their services will deteriorate, making revenue further fall. They will lay off more people. The cycle will go on till their owners understand in then next five years, it is a worthless business models and wrap up the company.

Outsourcing

2009-03-04T01:53:00.000-08:00

Source: Economist.com
By Tim Hindle
Outsourcing is a term used to describe almost any corporate activity that is managed by an outside vendor, from the running of the company’s cafeteria to the provision of courier services. It is most commonly used, however, to apply to the transfer of the management of an organisation’s computer facilities to an outside agent. This transfer of management responsibility is frequently accompanied by a transfer (from the buyer of the outsourcing service to the vendor) of the specialist internal staff who are already carrying out that activity.

Outsourcing has three main advantages:

• The greater economies of scale that can be gained by a third party that is able to pool the activity of a large number of firms. It is thus frequently cheaper for a firm to outsource specialist activities (where it cannot hope to gain economies of scale on its own) than it is to carry them out itself. Some firms gain the economies of scale by taking on the activity of others, becoming an outsourcer themselves.

• The ability of a specialist outsourcing firm to keep abreast of the latest developments in its field. This has been a particularly significant factor in the area of information technology, where technological change has been so rapid that companies’ in-house capabilities are hard pressed to keep up with it.

• The way that it enables small firms to do things for which they could not justify hiring full-time employees.

The most commonly cited disadvantage of outsourcing is the loss of control involved in derogating responsibility for particular processes to others.

Outsourcing is not a new phenomenon. Companies have outsourced their advertising, for instance, for almost as long as advertising has been in existence (and J. Walter Thompson has been in business since the 1880s). Financial services such as factoring and leasing, the outsourcing respectively of the accounts receivable function and of capital funding, have also been available from outside providers for many years.

But it has grown exceptionally fast in recent years. According to one estimate, in 1946 only 20% of a typical American manufacturing company’s value-added in production and operations came from outside sources; 50 years later the proportion had tripled to 60%.
Much of the increase came from the outsourcing of IT functions. This was bolstered later by the outsourcing of other functions (such as logistics) that were in areas that themselves had a high degree of it content. Banks, for instance, began to outsource the IT-intensive processing of financial instruments such as loans or mortgage-backed securities. The savings from such moves could be dramatic. By deciding to outsource the origination, packaging and servicing of all its personal loans, both old and new, one British bank cut the average cost of processing by over 75%. In the car industry in the 1990s, firms with the biggest profit per car, such as Toyota, Honda and Chrysler, were also the biggest outsourcers (sourcing around 70% to various suppliers). Those that outsourced the least (General Motors, for example, which outsourced only 30% of its value-added) were the least profitable.

The nature of outsourcing contracts has changed over time. What started off as a straightforward arm’s-length agreement between a buyer and a supplier moved on to become structured more like a partnership agreement. In this, not only is any increase in the clients’ volume of business reflected in the outsourcer’s scale of charges, but both parties in some way share the risks and rewards of the outsourced activity.

Relationships like this vary over time and require firms to learn how to work together in entirely new ways. In the early 1990s, in a groundbreaking five-year outsourcing agreement with BP, Accenture (then called Andersen Consulting) took over responsibility for running the day-to-day operation of BP’s accounting systems. BP retained control of accounting policy and the interpretation of data for business decision-making. In return, Accenture guaranteed BP that it would reduce the cost of running the service by 20%.

Some firms have been so taken with the idea of outsourcing that they have left themselves with little to do. An American company called Monorail Computers outsourced the manufacture of its computers as well as the ordering, delivery and the accounts receivable. Only the design was left to be handled in-house.

The New US President and the reaction of the World

2009-02-26T02:19:00.000-08:00

Source: Guardian.co. UK

Written by Peter Walker

In a night of near-unanimous praise and congratulation for Barack Obama on his US election victory it was, unexpectedly, the current occupant of the White House who expressed himself in the simplest, most memorable terms.

"What an awesome night for you, your family and your supporters," George Bush said. "You are about to go on one of the great journeys of life. Congratulations and go enjoy yourself."

Elsewhere, the vast majority of world leaders welcomed Obama's win as a landmark moment for both the US and the wider world, while warning of the challenges the new president will face once in office.

A couple were less enthusiastic – Iraq's foreign minister, Hoshyar Zebari, noted that the new president "will not have the same enthusiasm and momentum for this situation (in Iraq)" as did Bush – while Sudan was distinctly underwhelmed.

"When it comes to foreign policy there is no difference between the Republicans and the Democrats," said Ali Al-Sadig, a spokesman for the country's foreign ministry.

Otherwise, world leaders were queuing up to offer their support. Gordon Brown praised Obama's "inspirational campaign".

José Manuel Barroso, the president of the European commission, congratulated Obama, saying it was "time for a renewed commitment between Europe and the United States of America".

Angela Merkel, Germany's chancellor, echoed this idea, saying she was "convinced that Europe and the United States will work closely and in a spirit of mutual trust together to confront new dangers and risks and will seize the opportunities presented by our global world".

Nicolas Sarkozy, France's president, was more effusive still, despite his ostensible ideological differences as a conservative.

"With the world in turmoil and doubt, the American people, faithful to the values that have always defined America's identity, have expressed with force their faith in progress and the future," he said.

Asia's two emerging world powers offered their congratulations, although China was typically muted. The country's president, Hu Jintao, said he hoped to "continuously strengthen dialogue and exchanges between our two countries". India's prime minister, Manmohan Singh, was more effusive, saying Obama's "extraordinary journey to the White House will inspire people not only in your country but also around the world".

In the Middle East, both sides appeared more focused on arguing for continued support. Israel "expects close strategic cooperation with the new administration", said Tzipi Livni, leader of the country's governing Kadima party. An aide to the Palestinian president, Mahmoud Abbas, meanwhile said he hoped the "two-state vision will be transferred from a vision to a realistic track immediately".

Elsewhere in the region, Iranian politicians were as much celebrating the end of Bush's presidency as welcoming his successor.

"Obama's victory is ... evidence that Bush's policies have failed," one prominent MP, Gholam Ali Haddad-Adel, said. "Americans have no option but to change their policies to save themselves from the quagmire Bush has created for them."

Afghanistan and Pakistan, who will remain key strategic allies for Obama, were more fulsome. The election "marks a new chapter in the remarkable history of the United States", Pakistan's prime minister, Yousaf Raza Gilani said. The Afghan president, Hamid Karzai, said meanwhile that he wanted to "applaud the American people for their great decision".

Away from the presidential palaces, there was some more personal jubilation. Obama's relatives in Kenya erupted in cheers and singing in the western village of Kogelo, where the president-elect's late father was born, as victory was confirmed.

There was similar celebration in Obama, a small coastal town in southern Japan which has spent the past few weeks cheering on its namesake and acquiring a small measure of global fame in the process.

"I really think this is going to change the world," said Akihiko Mukohama, the signer of a band performing at a party held the mark the election, wearing an "I Love Obama" T-shirt.

New Foreign Policy of Obama and Kashmir

2009-02-26T01:08:00.000-08:00

Source: Time World
Written by Bobby Ghosh / Washington
Indian officials may be celebrating what they believe to be their thwarting of Richard Holbrooke, the new U.S. Special Envoy to Afghanistan and Pakistan, but they may want to hold off on the champagne. Despite the fact that India's behind-the-scenes lobbying may have helped ensure that the country was left out of Holbrooke's official mandate, the Obama Administration is unlikely to ease up efforts to pressure India to come to terms with Pakistan over their long, bitter dispute over Kashmir.

New Delhi views its success in avoiding becoming part of Holbrooke's diplomatic portfolio as proof of India's growing clout in Washington. Appearing on Al Jazeera, India's foreign minister, Pranab Mukherjee, evaded questions about the lobbying effort, saying only that relations between New Delhi and Washington had "increased substantially." But an official in his ministry told TIME that New Delhi is "feeling vindicated, because finally the U.S. has given us the respect we deserve."

The official, who asked not to be named because of the sensitivity of the subject, said the campaign to keep Holbrooke out was "not personal...we just objected to being lumped into a category with two of the world's most dangerous countries." Besides, he added, "there was no way we were going to allow Holbrooke, or anybody else, become a broker on Kashmir."

The Indians were alarmed when, during the Presidential campaign, Obama repeatedly said that ending Indo-Pakistani differences over Kashmir was one of the keys to calming tensions in South Asia and winning the war on terror. New Delhi views Kashmir as a bilateral issue, and has long resisted what it regards as third-party interference. In recent years, India has sought to isolate the Kashmir issue even further, by seeking to keep it out of other negotiations (over trade and travel, for instance) with Pakistan. "The Indians are allergic to any indication of outside mediation," says Bruce Riedel, a South Asia expert at the Brookings Institution who served as an Obama campaign foreign policy adviser.

Pakistan, on the other hand, is keen to get Holbrooke involved in the Kashmir dispute, which it has traditionally held is central to its differences with India . President Asif Zardari, in an Op-Ed for the Washington Post, wrote that he hoped the Special Envoy would "work with India and Pakistan...to bring a just and reasonable resolution to [the Kashmir issue]."

Islamabad has long argued that the disputed territory inflames Pakistani sentiment and feeds terrorist groups. More recently, Pakistan has played the terrorism card in other disputes with India. Zardari's Op-Ed noted that the two countries are currently arguing about water from rivers that flow through both countries; Pakistan says it is denied a rightful share of the water by Indian dams. Failure to resolve the water dispute, Zardari warned, "could fuel the fires of discontent that lead to extremism and terrorism." (See pictures of Pakistan's vulnerable northwest passage.)

For the moment, the Obama Administration is being careful to publicly distance the Special Envoy from the region's most intractable problem. State Department spokesman Robert Wood told reporters on Tuesday that "it's not in [Holbrooke's] mandate...to deal with the subject of Kashmir." And the White House has also been careful to deny that India's lobbying played any role in the formation of Holbrooke's diplomatic charge; not only has it insisted that it held no meetings with foreign governments or their representatives with respect to the assignment, but it has also claimed that Obama never actually intended the South-Asian portfolio to include India in the first place.

None of that is to say, however, that the Administration is going to buy India's line that the U.S. should butt out of Kashmir. The President himself plainly believes there's a role for the U.S. to play. In an interview with TIME's Joe Klein in October, Obama said that "working with Pakistan and India to try to resolve the Kashmir crisis in a serious way" would be a critical task. The key, he said, was to "make the argument to the Indians, 'You guys are on the brink of being an economic superpower, why do you want to keep on messing with this?'" Obama added that he would have to "make the argument to the Pakistanis, 'Look at India and what they are doing, why do you want to keep on being bogged down with this, particularly at a time where the biggest threat now is coming from the Afghan border?'"

So it's probably safe to say that after the euphoria of their lobbying victory has died down, Indian officials will probably feel Holbrooke's breath on their neck. Some Indian analysts are already predicting this. C. Raja Mohan writes in the Indian Express that "reworking the India-Pakistan relationship will be an inevitable and important component" of Holbrooke's plans. "Whether India likes it or not, Washington will devote substantive diplomatic energies towards the subcontinent, and New Delhi will be drawn into this dynamic."

Staffing for Offshoring

2009-02-24T02:05:00.000-08:00

Source: Zimbio
Globals provides scratch-to-end application development and support services under its success-proven Offshore IT Staffing methodology. Globals is geared-up to take complete ownership of its business partners IT needs through the complete lifecycle - including the requirements analysis activities.

With our state-of-the art infrastructure and competent team of professional developers in PHP, .NET, Ruby, C++, etc, we ensure the delivery of solutions that work for our clients. Our globally acclaimed process allows you to quickly and effortlessly transition and monitor your IT staff from a offshore location thus allowing you to save around 70% on the IT man power costs.

In case if you already have a plan ready with you and wish to outsource only certain phases of the project then we have a right solution for you. Hire dedicated programmers, analysts and quality assurance professionals on a full time appointment basis. This arrangement is best when you are looking to either augment your existing team, have a large project that requires dedicated staff, or if you have a steady stream of maintenance and enhancements requirements for your software product. This approach to contract developers would drastically save your operation, maintenance and recruitment costs and this making it hassle free. Globals offers extremely low monthly charges for contracting our developers and with auxiliary developers at any time so that your project never gets interrupted.

All our PHP / .Net / C++ / Ruby / Java / Perl programmers have extensive industry experience and are well-versed in many aspects of software development in their expertise. They are good communicators that have showed consistency in understanding client requirements and applying their technical, analytical and creative skills to come up with business-oriented solutions not just technological solutions.

When it comes to objective planning, Globals programmers have always displayed excellent entrepreneurial skills and along with their real hands-on programming experience they’ve impacted many clients’ business bottom-line.

Benefits:

High quality IT staff with highly competitive costs
Utilize your in-house staff on more productive and profitable jobs
Ensuring your contracted developers meet your set deadlines and enhancing the resources if needed with our round the clock Arbitrary Programmers
Reduce your time on new product launches or speed up your pilot projects
Focus on your core competencies and increase your market share
Save on your operation and high labour costs, approx. savings up to 70%
Save recruitment costs and time, and not to worry about Attrition
Hassle free and easy solution to overcome complicated labour laws
Highly proficient and professional Project Managers who will report to your team on your assignments and submit daily reports
Contract a Developer within 24 hours notice

How will working with Globals be cheaper?

While it’s true that a talented programmer in the US will be in the higher range, the actual cost to company for every employee is substantially more. In addition to the salary, every company needs to make other statutory payments for each employee. In addition, for each role, there will be other infrastructure costs such as hardware, software, utility and space costs that get added as overheads.

In the case of our team of programmers, you will not require all services on a continuous basis. In a typical project, the analysis, architecture and design takes up approximately 15% of the time in terms of effort and costs approximately 20% of the total cost, project management takes up approximately 20% of effort and 28% of cost, and development and testing takes the remaining 65% effort and 52% of the cost.

On the whole, a 12 man month project that would take approximately a year for your programmer in the Europe or US (costing you about US$100,000) can be completed in about 6 months by a team in India, and at an approximate total cost less than US$25,000. Contact us now on sales@globalsinc.com This email address is being protected from spam bots, you need Javascript enabled to view it

Outsourcing of Human Resource

2009-02-24T01:29:00.000-08:00

Source: The Hindu

Written by S. VARADHARAJAN

Outsourcing of human resource (HR) processes is happening in a big way in India and many medium and large sized organisations use the services of external consultants to take care of their HR functions.

The recruitment process outsourcing (RPO) in the organised sector is growing at 40 per cent and many organisations are outsourcing their recruitment process right from the entry level jobs.

According to Asim Handa, Country Head of Futurestep, an outsourced recruiting subsidiary of Korn/Ferry International (a premier global provider of talent management solutions), the present value of the RPO industry in India was estimated at $2.5 billion and companies such as Futurestep provide customised solutions to suit clients’ requirements across all sectors.

‘Strategic RPO’

Recently Futurestep had introduced its new comprehensive talent acquisition solution ‘Strategic RPO’ aimed specifically at the business performance needs of enterprise organisations. He said it focussed on identifying and delivering strategic impact at the business level.

According to Mr. Handa, there was a huge opportunity for Futurestep and the organisation was growing at 100 per cent year-on-year in the last three years. RPO was a major component of the worldwide BPO market.

One of the major advantages to organisations, which outsource their recruitment process, is that it helped to save as much as 40 per cent of their recruitment costs. Also, outsourcing enables the human resource professionals of organisations to focus on the core and other HR and strategic issues.

In India Futurestep has a lot of clients including earthmoving equipment manufacturer Caterpillar.

A policy agenda on Outsourcing

2009-02-19T21:28:00.000-08:00

Source: The Free Library
Key Points

* Although the number of U.S. service jobs lost to outsourcing is currently small relative to the total work force, the fear of a seemingly limitless loss of jobs to lower-wage countries has caused widespread anxiety.

* U.S. companies dominate global services outsourcing, and India is the top developing-country destination.

* National and state legislators have introduced a flurry of anti-outsourcing bills, but corporations are mounting a strong counter-attack.

"Don't worry; they'll get better jobs in the service sector." During the last three decades of the 20th century, this was the mantra of most government and business leaders when corporations transferred auto or apparel jobs to Mexico or China. That line doesn't work anymore, since U.S. companies have started shifting a wide range of service jobs as well--from high-skill computer programming to entry-level call center jobs--to India and other lower-wage nations. This breaching of the final frontier of American jobs has caused understandable anxiety and has become a hot-button issue Noun 1. hot-button issue - an issue that elicits strong emotional reactions
gut issue

issue - an important question that is in dispute and must be settled; "the issue could be settled by requiring public education for everyone"; "politicians never discuss in the presidential election campaign.

Outsourcing and its Economics

2009-02-19T20:38:00.000-08:00

Source: Foreign Policy in Focus

Written by Thomas Palley

Abstract

Outsourcing is a central element of economic globalization, representing a new form of competition. Responding to outsourcing calls for policies that enhance national competitiveness and establish rules ensuring acceptable forms of competition. Viewing outsourcing through the lens of competition connects with early 20 th century American institutional economics. The policy challenge is to construct institutions that ensure stable, robust flows of demand and income, thereby addressing the Keynesian problem while preserving incentives for economic action. This was the approach embedded in the New Deal, which successfully addressed the problems of the Depression era. Global outsourcing poses the challenge anew and calls for creative institutional arrangements to shape the nature of competition.

“A wild horse can do a lot of damage, but a bridled horse can be an invaluable asset.” Posted by Proud UAW Member in response to “Politics of Globalization” at www.thomaspalley.com, December 27, 2005.

I. Understanding outsourcing

Outsourcing is a central element of globalization, and policymakers need to understand its economic basis if they are to develop effective policy responses. The practice of outsourcing should be understood as a new form of competition, and responding to it calls for the development of policies that enhance national competitiveness and establish new rules governing the nature of global competition.

Viewing outsourcing through the lens of competition connects with early 20 th century American institutional economics. The policy challenge is to construct institutions that ensure stable flows of demand and income, thereby addressing the Keynesian problem while preserving incentives for economic action. This was the approach that was embedded in the New Deal, which successfully addressed the problems of the Depression era. Global outsourcing poses our current economic challenge and its solution requires a new set of institutions. The task is compounded by problems associated with a lack of global regulatory institutions and changes in the balance of political power that make it difficult to enact needed reforms.

Global outsourcing is enormously facilitated by technological innovations associated with computing, electronic communication, and the Internet. However, it is important to recognize that the debate surrounding outsourcing is not about the benefits of technology. It is a debate about the nature of competition and what constitute appropriate rules for governing competition within and between countries. Failure to recognize this can distract and confuse the issue.

II. The economics of outsourcing

Globalization has dramatically changed the structure of international competition. In many regards the process of change can be identified as beginning in the 1950s and 1960s with the emergence of multinational corporation (MNC) production. Initially, this output was primarily for local markets, as evidenced by the activities of such companies as Ford Europe and General Motors Europe, which manufactured for the European rather than the U.S. market. However, in the 1980s and 1990s the pattern changed significantly, when MNC production became increasingly targeted for export back to the United States . This change is exemplified in Mexico and China , which have become MNC production platforms.

There are two important economic features about the MNC revolution. First, MNC manufacturing has provided an important arena for business to learn how to render state-of-the-art technology and production methods globally mobile. Second, MNC activities offered a first margin within which capital was able to put American labor in international competition, and this competition has had significant adverse impacts on manufacturing wages, employment, and union membership (Bronfenbrenner, 2000; Bronfenbrenner and Luce, 2004).

The MNC revolution has received considerable attention. However, while this was taking place, a parallel and equally important revolution was occurring in the retail sector. This retail shake-up was linked to a new sourcing model based on big-box discount stores. 1

Stage one of the retail revolution started 40 years ago with the emergence of large-volume discount stores like Wal-Mart, which was created in 1962. Initially, the business model was based on national sourcing, with the big-box stores buying from the cheapest national manufacturer. Such stores pitted producers against each other nationally, so that companies in New York were forced to compete with those in California . This new national rivalry provided lower prices, and it was largely beneficial because all suppliers were located in the United States and operated under broadly similar laws. However, even then there were negative effects, as the new competition encouraged manufacturing to move South to nonunion “right-to-work” states where organizing workers was more difficult and labor costs were lower.

Stage two of the retail revolution began in the 1980s, when the big-box discount stores started going global with their sourcing model. As a result, U.S. suppliers were not just in national rivalry, they were now in an international bidding contest. No longer was New York just competing with California ; U.S. producers were now measured against companies in Mexico , Indonesia , and China . The economic logic of this global sourcing model is simple. Scour the world for the cheapest supplier and lowest cost—the so-called “ China price”—and then require U.S. manufacturers and workers to match it if they wish to keep your business.

This new global sourcing retail model has had profound effects. The commercial success of the model means that once one retailer adopts it, others are compelled to also adopt it in order to remain competitive. Consequently, big-box discounting has spread to every corner of retailing, putting the entire consumer goods manufacturing sector in international competition. Additionally, the model pressures domestic companies to pursue offshore production (i.e., become multinational) in order to compete with foreign suppliers. These dynamics, though originating in the retail sector, have also eroded manufacturing jobs and wages. The model does indeed deliver low prices, but it does so at a high cost.

Outsourcing can be viewed as an application of the retail sector's global sourcing model to manufacturing. In effect, manufacturers are now also looking to source globally, and they too are asking their suppliers to meet the “ China price.” The spread of global sourcing is exemplified by auto component giants Visteon and Delphi . Initially spun off from their respective parent companies, Ford and General Motors, Visteon and Delphi engaged in national competition. In 2005, Ford and General Motors both announced that they were shifting to a global sourcing model and that their spin-offs would in future have to meet the China price if they wished to keep business. Given their higher union wages and benefits, both Visteon and Delphi have been shedding jobs and shifting production offshore, including to China . However, both have found it increasingly difficult to compete, and Delphi filed for Chapter 11 bankruptcy in October 2005.

It is now becoming clear that the global sourcing business model can also be applied to the services sector. Owing to improvements in electronic communication and the Internet, many services that were previously nontradable have become tradable. These include basic computer systems maintenance and software programming, tax preparation and accounting, architectural planning, and telephone call centers. Even retail sales is potentially tradable, as indicated by the success of the Amazon.com business model. This means that services will be the next area where the global sourcing model will be applied, with corresponding effects on compensation and employment security.

III. Outsourcing and the maturation of globalization

The maturation of globalization can be viewed as combining the developments of the last several decades into a highly synergistic system. There are three facets to this mature system. The first element is the global sourcing model discussed above, which was initially developed in the retail sector and is now being applied everywhere. The second element is the mobility of capital, technology, and methods of production. This mobility combines MNC experience in foreign production platforms with policies that have dismantled trade barriers and promoted international economic integration. Whereas the initial globalization era was one of classical free trade involving the movement of goods across international boundaries, the new era also includes mobile capital and technology. Consequently, all countries have access to similar methods of production, so cost arbitrage (especially wage arbitrage) becomes a critical driver of the system. The third element of mature globalization is the addition of two billion workers to the global labor market, given the end of economic isolationism in India , China , and the former Soviet bloc countries. 2

Putting the pieces together, changed competition (the Wal-Mart business model) plus changed technological conditions and policy (globalization of production) plus two billion new workers (the end of economic isolationism) add up to downward wage and benefit pressures in U.S. labor markets and rising income inequality. The economic logic is simple. When two swimming pools are joined together, the contrasting water levels will equalize.

Free trade theorists (Stolper and Samuelson, 1941) have long acknowledged that when a rich capital-abundant country engages in free trade with a poor labor-abundant country, wages in the rich country fall. By combining global sourcing with globalization of production, the new system puts the Stolper—Samuelson effect into hyperdrive.

IV. How should policy respond? Rediscovering the economics of American institutionalists

If we view global outsourcing as an evolution in the structure of competition, we link with the thinking of early 20 th century American institutionalist economists. 3 The leading lights of institutionalism were John Commons , Thorsten Veblen, and Wesley Mitchell. The leading living proponent is John Kenneth Galbraith.

Institutionalists emphasized the importance of the nature of competition and the problem of destructive rivalry—what Commons (1909, 68-69) termed the “competitive menace.” This idea resonates with today's notion of the “race to the bottom.” What appears to maximize well-being from an individual perspective can be suboptimal once the competitive interplay of actions is taken into account.

Institutionalist thinking constructs the policy problem in terms of “regimes of competition,” with some regimes promoting societal welfare better than others. In the 1930s the New Deal embodied institutionalist thinking. In combination with the adoption of a Keynesian macroeconomic stabilization policy, the New Deal solved the crisis of the Depression era and made way for the prosperity that followed World War II. The innovations of the period included new labor laws establishing the right to organize, the minimum wage, the 40-hour work week, and the right to overtime pay. In the financial realm, creative reforms included the establishment of the Securities and Exchange Commission to oversee financial markets. Today's challenge is to come up with a similarly innovative set of arrangements that addresses globalization and outsourcing.

The New Deal incorporated a collection of bold policies that fashioned an acceptable regime of competition. Responding to global sourcing will also require an insightful array of policies. As with the New Deal, there is no silver bullet. With regard to rules governing worldwide competition, international labor standards are key to establishing a floor under the global labor market and ruling out retrograde competition. At the same time, they are good for economic efficiency and development (Palley, 2004, 2005). Concerning domestic issues, unions are key to ensuring that productivity gains are shared equitably and result in a distribution of income that generates full employment. This calls for labor law reform that gives real meaning to the legal right to organize.

There is also a need for new arrangements—both within the United States and between countries—that prevents tax competition. Such competition is generated by corporations shopping for tax abatements and lower rates as conditions of making investments. The result is either an unfair shift of the tax burden onto labor incomes or an underfunding of needed public investment and spending when corporate tax avoidance strips the public purse of revenue.

Another area requiring new institutional arrangements is exchange rates. Here, the need is to prevent countries from using undervalued exchange rates as a means of competing. Engaging in competitive devaluation is a form of beggar-thy-neighbor economics wherein countries rely on demand in foreign markets rather than building domestic markets. Undervalued exchange rates are an unfair subsidy that distorts the pattern of trade. They also risk causing global deflation because they promote increased supply of exports without increasing global demand.

With regard to national competitiveness, countries need to invest in education that raises worker productivity. There is also a need for job loss assistance and active labor market policies that help displaced workers cope with income losses and obtain training that prepares them for productive future employment. In the United States there is a special need to attend to the problem of health insurance, which is currently a job cost, since premiums are tied to employment. This crisis is exemplified by General Motors, where the cost of each car includes $1,500 of worker health insurance. Health insurance coverage needs to be detached from jobs, and this suggests a national health plan financed out of general tax revenues.

V. Conclusion: the politics of policy response

The emergence of global outsourcing enormously complicates policy issues, both intellectually and politically. The ability to outsource worldwide calls for new forms of international regulation because it undermines the effectiveness of many existing national arrangements. Yet, construction of an acceptable regime of international competition must be accomplished in a political environment lacking effective institutions of international economic governance and in which national governments are weakened and corporations strengthened by the enhanced mobility of capital.

Creating a political climate that can secure the needed policy responses calls for the development of popularly shared understandings of globalization. That is why economics is so politically important. Economists tell stories about what is going on in the economy. Today there is need for a different story than that spun by neoliberal economists.

Industry and Offshore Software Development

2009-02-18T03:07:00.000-08:00

Source: Articlesbase
Written by Editor-123
Offshore software development services are considered as the market leader to get the best of offshore services available in the world. This growing technical market gives you all the latest technical benefits to expand your business to a height and increase your net profit. Offshore software development services give you ample opportunity to grow in the customized market of software and website development areas. Due to its benefits, software development India market is gaining a distinct position in the global arena. The Indian market has considered as an expert in providing software solutions and professional services company undertaking offshore programming, offshore software development and technical support help desk services for foreign companies with enhancing solution.

With effective and efficient solutions in the areas like content management, web application development for wireless and smart cards, outsource help desk support, consulting and global staffing, Indian offshoring software development companies have proved their real worth. These companies are equipped with the best team of professionals to give specialized experience in website development, web development, software development, application development, web programming, database site programming, and website programming to satisfy its clients placed all round the world.

If you have decided to hire the services of an offshore software development company, you can have sure of many advantages that will come in your way. First of all, you can get the best quality that will lure your heart away really effectively. Secondly, the cost effectiveness, offshoring the work can save thousands of dollars straight away giving you more room on concentrating on other aspects of software development activity. Third is the sharing of responsibility, the system of offshoring services can give you a chance to divide your work responsibility with another company may be located at the different corner of the world. It also brings more efficiency and competence in the work by generating positive results very soon. Also, offshoring services companies showcase great technical skills and capability to get the best deal out there.

Want to know more about Indian offshore software companies? Search online and get all the relevant services to get the real knowledge. You can see their work experience and see the testimonials to get the satisfaction. Further you can order your work and actually plan for its execution and wait for the result. Experience and just indulge into the Indian software development industry to have the best of technical service within a short period of time and increase your profit net.

Offshore Software Development and India

2009-02-18T02:01:00.000-08:00

Source: Articlesbase
Written by Kelly
Indian Internet IT service companies (software and web developers) are considered a viable outsourcing option today. What they offer is a strategic initiative to cut costs as well as provision of access to intellectual capital, which may not be available in-house. Virtual web companies are a natural outgrowth of the omnipresence of the Internet. But is the company in concern just a web page or does it comprise all the qualities to become the perfect offshore software development company that follow established processes and possess a solid infrastructure?

Surveys and studies have proven that more than 90% of Fortune 500 companies outsource a certain part of their operations. In the face of such clear indicators, why would some organizations hesitate to outsource to these offshore software development companies? The answer could lie in the bad experiences with previous outsourcing attempts. There are many issues that need to be addressed before choosing an outsourcing partner. Moreover, once the developer or service provider is selected, it is not enough to just sit on one's heels and assume that the outsourced projects would just work fine. Understanding outsourcing relationships is primary to the success of a project.

According to studies conducted by major research groups, more than 50% of software projects fail today. Why is this so? What does it take to turn the tide and be successful? Why is this so? Are there any safety measures that can be taken to prevent this from happening? How can one make sure that a software project succeeds no matter what? Is there a method of controlling and handling risk effectively?

With all the research studies that show the advantages of outsourcing software development to Indian offshore software development companies, the only question that really needs to be asked is this - which company should I outsource to? You know that choosing the right partner can put you onto an expressway to growth and financial success. Based on this understanding, you could spend the next few months wading through reams of data, speaking to hundreds of well wishers to find that right partner or vendor etc..., or you could outsource your operations to RapidSoft Technologies, an offshore software development company with a track record of successful project implementations to clients in US, Canada, EU and Asia. Choose the latter and save time, energy and your reputation as well!

Offshore software development companies in India understand that technical competency is an absolute necessity but in today's business scenario - understanding the needs and desires of the customers is of even greater importance. Technical competence is pretty much available but understanding business and marketing concepts is not .

They are a mid sized but growing company and becoming the choice of starting from startups. And the main reason for it is not only Cost Effectiveness that every outsourcing company claims to be! Rather it's the quality of service and client satisfaction that sets them apart from the other offshore software development companies in India.

Offshore Software Development Company and the Tips to Choose

2009-02-18T01:04:00.000-08:00

Source: Articlesbase
Written by Dane Phillip
Technology is a wide arena, like our outer space in the galaxy. IT outsourcing isn’t much different than any other kind of outsourcing. However, if there is danger that you will bite off more than you can chew, it’s about time to take into consideration. Anyone who has experience in outsourcing knows that there are advantages as well as disadvantages in offshore software development. some tips to cut down risks.

It’s not only about saving the bucks:

The most obvious benefit that tends to strengthen the demand of custom software development to an extensive extent is the cost cutting factor. Selecting the least expensive Offshore Software Development Company often backfires and ends up costing the client much more than initially thought. Offshore vendors are all facing cost pressures from wage inflation. Choosing the least expensive vendor just means you have chosen a company with very little leeway in its profit margins. This will affect everything adversely: hiring the right people, retaining the people who are working on your projects and providing the right resources for people to do the work on your development effort. Successful vendors may be better bets even if they're bit more expensive, given the realities in outsourcing and offshoring.

Hear their Story:

The Story of the provider speaks volumes about their professionalism, their business goals, their achievements, and their credibility. This will help you analyze how much you need to rely on them. How active and involved will they be and how much ownership they will take it helping you achieve your goals. If possible try hearing their story from other businesses who have worked with them. It will help you decide and understand how they practically function. Try to choose a provider you can have a long term relationship with. You will save time starting from scratch again.

Put Communication on high priority:

The basic reason is very simple: you know your business requirements best. Software services companies working in another part of the world can only develop a solution based on the input provided by you. But there will be loopholes unless the Communication is crystal clear. Fairly large projects demands for a dedicated project manager who is a single point of contact of the offshore team and acts as a virtual bridge between the business and the software developers. Agile methodologies are more realistic when it comes to making sure communication is facilitated properly and often with real code sent back for verification, reflection and fine-tuning.

Adhere to high standards:

Lookout for standards the provider adheres to, You need to understand that successful custom software development depends upon standards the provider follows in the process, documentation, coding in short the entire development cycle For example, The most dependable companies use the highest industry standards in testing each aspect of the products they create so that you receive a product that is ready to implement.

Check out their past experience:

The work done in past speaks a lot about the experience and expertise the provider has. It also talks about the domain they have been exposed to and the learnings they have picked up along the way which may help your goal. In theory, offshore software development companies should be able to perform custom software development for any type of business. There will be less of a learning curve, though, and greater chances for success, if the company has knowledge of your industry or a related industry.

Technology Expertise:

The most agile software development companies have an extensive network of specialists but they may be not adequate in terms of the technology expertise your project demands. So you will need to compare not only the domain expertise but also the technology expertise of a provider. Essentially, the provider needs to be competent and flexible, and see their role as an information technology partner who solves your software problems, supports your team, and manages your projects from beginning to end.

Study the Methodology the provider adapts:

We should remember that software development methodologies are all milestones in the continuing evolution of software engineering. This evolution is still continuing and there will be more variants in the future. And, depending upon the nature of the software development project, the choice needs to be different. A compatible Process Methodology accelerates the delivery of high quality custom software. An Agile Process Methodology follows a controlled, iterative development and prototyping process.

Offshore Software Outsourcing

2009-02-17T22:47:00.000-08:00

Source: Webraydian
Written by Sohali
Offshore software development company is what Yantrambpo does, and has been doing for the past 4 years. We know for a fact, that offshore and outsourcing (Outsource) partnerships convert into tangible savings for our customers. As an outsourcing services provider, Yantrambpo can deliver important advantages to its customers. Not only do we offer some of the best IT specialists in the outsourcing industry; we are also committed to starting smooth, risk-free and well-managed engagements with our clients.

"No matter what your project entails - whether it's a custom application, a complex IT solution or a redesign of an existing network structure - Yantrambpo can create a development structure that will provide you with the value, timeline and the budget you need"

Yantrambpo Offshore software development India market has been providing an expertise solutions in areas including content management, web application development for wireless and smart cards, outsource help desk support with consulting and global staffing with it consultants. Indian website development company are also equipped with best team of professionals to give specialized experience in website development, web development, software development, application development, web programming, database site programming, and website programming. Talking about the possible advantages of increasing craze of offshore software development in India, one cannot ignore the role of the power on the hold of English language, labor effectiveness, cost effectiveness and assurance of best quality control. With an army of trained population of information technology professionals, it becomes really easier to provide better results with better efficiency and effectiveness. As a result, global corporations are queuing up for getting the best by paying less.

Outsourcing software development has emerged as a recent trend in business. There are various factors which needs to be considered while deciding the kinds of software to be hired. There are myriad advantages of offshore software development. Access to global expertise can be achieved through offshoring in a very cost effective manner. It can also provide with ways of achieving business goals in a very speedy and efficient way.

Major Decline in Indian Software Tech Sector??

2009-02-17T03:55:00.000-08:00

Source: India Daily

Written by Nathan Gulash

Indian outsourcing sectors face a down ward spiral of deflation as IT purchases in the US is expected to drop sharply. “On a full year 2009 basis, a sustained recession could lead to annual US IT spending growth of 2-3 per cent and global IT spending growth of 3-4 per cent. This is just a scenario as an acute financial crisis has hit not only the US but also countries in Europe and Asia,” said Andrew Bartels, VP & Principal Analyst, Forrester Research.

The report titled-- What The Financial Crisis Means To The Tech Market--notes that the Software and IT services vendors will anyways – with or without the said scenario – start to feel the pain. They will be hit hard in the next three quarters. Vendors in these categories will have on average 3 to 5 per cent growth instead of the 9 to 12 per cent growth they have seen earlier in 2008.

Can Indian outsourcing survive in absence of American inflow of cash in exchange of cheap labor? One good thing for the outsourcing industry is that Indian Rupees has crashed. That means $1 fetches much more Rupees. But the American Administration in 2009 will not tolerate currency-manipulated schemes of draining American well paying jobs into India and China.

Indian IT companies continue to take advantage of H1B visa loophole

2009-02-17T03:43:00.000-08:00

Source: India Daily

Written by Juhi Singhal

H1B visa allows Indian body shoppers (so called IT companies!) to transfer human beings as cyber slaves. The debate is furious in Washington. Miscrosoft wants cheap Indian talent. Other American companies want the virtual slaves from India so that can circumvent labor laws in United States. Indian companies like to make the differentials on hourly trade per human bei9ng – nothing different from African slave dealers sending slaves to American cotton plantations three hundred years ago.

American politicians should stop this morally incomprehensible business of human trafficking. The Indian and American companies transport cyber slaves through two kinds of visa mechanisms. First, they use H1B. This is a temporary work visa The high tech worker is normally paid 40% less than his or her American counterpart. Unlike labor certification requirement for green card, no one really checks if there is a willing and able American available for the job.

The second way is to use L1 visa. The Indian companies send these cyber slaves as managers of internat6ional companies. In reality these are software technicians – never perform any managerial work. L1 visa is designed for temporary extended stay of foreign nationals for international corporations.

American lawmakers that support H1B are bought by lobbyists working for American companies and Indian body shoppers. The money floating in Washington to bribe the American lawmakers are in billions. Corporations will do anything to have slave labors from India, China, Philippines and other countries.

Obama promises jobs for America but....

2009-02-17T03:36:00.000-08:00

Source: India Daily

Written by Harish Baliga

George Bush is like by the ignorance of the ‘quick rich’ schemes of Indian oligarchs. He allowed export of American jobs to India. Bush’s oligarch friends, the rich owners of American corporations made handsome profits by hiring cheap educated work force in India and firing qualified, efficient and hard working American workers in America. Obama promises to change that. The Bush oligarchy is coming to an end unless McCain oligarchy takes it over!

Interestingly the self centered money mongering Indians especially the oligarchs and their political agents and employees cannot take it.

According to media reports from India, So when India woke up on Friday and caught on to the Democratic Presidential candidate's power speech, there were nervous exchanges of what Obama's anti-sourcing pitch could have meant or not meant.

Infosys quarters started ringing with the reaction on how in a globalised world outsourcing is realty. HR Director of Infosys, Mohandas Pai said his company would wait and watch.

According to the nation's premier IT lobbying association NASSCOM, "Obama probably meant manufacturing and not software. US companies themselves will back outsourcing. NASSCOM President Som Mittal said US companies would find the right balance, but having worked with us in the past, most companies increase their competitiveness when they work with India.

Earlier on August 26, Hillary Clinton's Speech at the Democratic National Convention had similar overtones. "We need to elect Barack Obama because we need a President who understands that America can''t compete in a global economy by padding the pockets of energy speculators, while ignoring the workers whose jobs have been shipped overseas."

"India, rejoice!!! The waves of the reverse outsourcing starts"

2009-02-17T02:49:00.000-08:00

Source: India Daily

Written by Harish Baliga

You must be thinking what is reverse outsourcing? Well the concept is simple. India now starts outsourcing nuclear reactors, expertise, and fuel from the United States.

The actual fun starts now. America is thinking India will buy reactors from Westinghouse, GE, and other American companies. Close $100 billion will come back to US that Americans sent to get software work done with cheap Indian labor.

Indian politicians have other plans. They already have in place plans to buy these reactors slowly from Russia and France. America will get some orders, perhaps to the tune of $10 billion.

That will make the US Administration very unhappy!

The NSG waiver is noteworthy. What India needed was a waiver from the NSG to engage in nuclear commerce without signing the Nuclear non-Proliferation treaty (NPT). However, against the background of illegal sale of nuclear technology to countries like DPR Korea, at least three countries said they needed many more assurances from India that it would never conduct a nuclear test again. These countries also wanted assurances that India would not pass on uranium enrichment technologies to other non-signatories of NPT.

Ireland and Austria demanded India amend the draft. Yesterday, Foreign Minister Pranab Mukherjee issued a covering statement (full text on Page 12), which spelt out and emphasized India’s voluntary moratorium on testing. However, he said nowhere that India would not test again. Chairman of the Atomic Energy Board, Anil Kakodkar, repeated this. Mukherjee also stressed India’s commitment to non-proliferation but added that as NPT was discriminatory, India would not sign it.

This testament of India’s nuclear doctrine appears to have been accepted as India’s commitment to non-proliferation. Achieving this cannot have been easy because, as India is not a member of NSG, it was the United States that was doing the heavy lifting for New Delhi.

End of Outsourcing?????

2009-02-17T01:57:00.000-08:00

Source: India Daily

Written by Harish Baliga

The worldwide depression has finally restructured the world. The so-called slavish outsourcing servicing American and European companies is coming to an end. Just like in Second World War Europe went bankrupt and gave way for America to rise, in this current financial world war, America and Europe both are broke giving rise to India and China to rise up.

Indian outsourcing industry is dying because Americans and Europeans cannot pay their bills. The western world is in deep depression that may get worse and linger for much of this century.

But that is not the end of Indian adventure to manifest superiority in science and technology. The fundamental research in India has started again. India is moving fast in the area of bioengineering, genetics, and implementing the concepts of life in building the technology of the future.

India’s second-largest information technology services provider, Infosys Technologies, has issued letters to its employees stating they could opt for a one-year sabbatical to engage themselves in philanthropic activities. They would continue to draw 50 per cent of their salary during the period. Infosys crossed the 100,000-employee mark in India in the quarter ended September 30, 2008.

The company said that while the move may have coincided with the global financial turmoil and slowing growth rates of IT firms, it should be perceived as a pure voluntary act by employees who are prompted by altruistic motives and inspired by the example of its chairman and chief mentor, NR Narayana Murthy.

Well that is how AT&T Bell Labs started getting dismantled.

Although Indian outsourcing, call centers and so called low end software body shops are doomed, bright days are ahead of India starting from space exploration to creating artificial life.

Obama Plans ' to Buy America '

2009-02-17T01:15:00.000-08:00

Source: India Daily

Written by Harish Baliga

The outsourcing schemes of India Inc. have collapsed. It is now time for its complete uproot. America under Obama administration is ready to bring the nail to coffin for Indian Inc.’s outsourcing schemes. America has to start thinking about America. Fairness must dominate the global trade – not currency manipulated unfair trade as conducted by India and China.

President-elect Barack Obama’s advisers are looking at including a “buy American” provision in the economic-stimulus legislation that the incoming administration has made its first priority.

That may spell the death for unfair trade practices by the IT and call center outsourcing schemes of India Inc. The honeymoon for Indian and Chinese unfair trade is over. The trade will be dominated with fair trade practices, fair currency valuation, human rights concerns, child and prison labor issues, principles against cyber slave trading, environmental issues, and above all fully reciprocal nature of global trade.

India and China must buy as much from America as they sell to America. The Indian and Chinese currencies must be brought to some parity so that slave traders in both countries find it difficult to trade human bodies.

With the U.S. amid its worst economic slump since World War II, Obama is working on a package combining tax cuts and spending on infrastructure, such as roads, bridges and transit systems, to boost growth.

The stimulus package must pass Congress. Obama transition team and US Congress are focused on investments in areas where American industry will benefit.

Indian IT employees and Recession

2009-02-16T23:18:00.000-08:00

Source: India Daily

Written by Harish Baliga

KPMG is bearish on India Inc. According to a survey by the global consultancy firm, on the leading corporate houses of India to assess the level of preparedness to deal with threats of terrorism, 53.4 per cent of the respondents said they did not conduct such threat analysis. "The preparedness to threats was found to be drastically low as only about 24 per cent of the respondents had a comprehensive response plan and rest of the respondents either had no or very generic security response plan for their organization," the survey said.

The Indian corporate and outsourcing body shops have no clue and do not have any disaster recovery plan on terrorism as it plagues India’s future.

In the mean time the employees of Indian body shoppers have started committing suicide. The job loss is not common in Indian culture. Hiring and firing cycles are new to India.

A 23-year-old employee of scam-ravaged Satyam Computers allegedly committed suicide here, police said. Vishwa Venkatesan, hailing from Salem, yesterday consumed poison. The suicide rate among the employees of Indian body shoppers are going up exponentially.

Recession and Massive Reduction of Job

2009-02-16T22:19:00.000-08:00

Source: India Daily

Written by Nitish Bharadwaj

International software and hardware companies operating in India will lay off more than 1,500,000 jobs in 2009. Sun Microsystems employs close to 1400 people in India. They are forced to reduce staff size by 40% due to lack of revenue from US and India.

"Our focus is now more on public sector units as there is hardly any cost cutting in the government sector. Earlier, PSUs contributed some 20-25% of our revenues and the rest came from the private sector. But, in 2009, we expect some 40-45% of our revenues to come from PSUs," said Mr Valluri.

According to sources, PSUs are actually slashing costs through reduction in expenditure in software and hardware.

India faces more than 1.5 million job losses in the first half of 2009.

ASPs Bite at the Banks

2009-02-16T21:53:00.000-08:00

Resource: Zyen

Written by Jeremy Smith and Ian Harris

Introduction

In Ancient Egypt, it became fashionable to outsource ritual killing to another species. Cleopatra, "working in partnership" with her asp, is possibly the best known example. The benefits were equivalent to those boasted for classical IT outsourcing: · an undesirable job (in Cleo's case, killing) was transferred to a third party (the asp); · minimal human intervention was required to get the desired results (death of Anthony and Cleopatra).

Similarly, some 2030 years later, the use of outsourcing services and shared utilities in the financial services industry is nothing new. New York banks were outsourcing their security guards to Pinkertons Detective Agency in the 1910's. In the payments and securities arena, shared services such as SWIFT, Euroclear and CHAPS have been around for a number of years. In fact, huge businesses have been grown in the bank-to-bank market with the emergence of global custodians and cash clearers.

But investment banks (with some notable exceptions such as JP Morgan's deal with the Pinnacle Alliance) have largely ignored the outsourcing trend for their systems development and operations functions. This, despite the fact that in other sectors, outsourcing has spread in waves. For example, in 1987 in the UK, each health authority had its own systems development group. Within 10 years, all of these had either been outsourced or commercialised through management buy-outs. Throughout these sectors, the key question that management has been asked has changed from "How will you best run your department?" to "Have you thought about outsourcing?" to "Why haven't you outsourced yet?"

Our suggestion is that 2030 years later, the ASPs are starting to bite again in the outsourcing market. With the advent of web-enabled e-commerce, investment banks are looking hard at new-style outsourcing through the e-business utility or application service provision (ASP) model. And if there is a better way through e-business ASP utilities for investment banks, what are the implications for other sectors, steeped in conventional outsourcing?

The argument for outsourcing

Many people believe that the wave of outsourcing will hit the financial services sector in the next few years. There are a number of pointers that back this assumption:

high staff costs;
commonality of processes between different organisations;
scope for automation to make a large reduction in unit costs (and thus differentiate between competitors effectiveness);
the requirement for huge spends on technology;
commoditisation of products leading to reduced margins and higher volumes;
historical management focus on business growth rather than efficiency on product delivery.

But there still need to be a number of credible outsourcing suppliers to make outsourcing in financial services take off. Then we realise that outsourcing financial services has its own "Catch 22".

1. You'd almost certainly have to be a bank to have the systems, people and processes capable of supporting another bank;

2. banks are most reluctant to outsource from other banks because of reasons of confidentiality and competitiveness.

This Catch 22 has stunted the growth of outsourcing in financial services. The big outsourcers such as EDS and Andersen Consulting cannot get in at the high value end, because they do not have the systems etc. The banks who have the resources have other priorities and do not wish to help their competitors. Only a handful of large scale providers have made inroads into this area, e.g. Bankers Trust (now Deutsche Bank), Bear Sterns and JP Morgan (Arcordia).

The advent of e-business Utilities

In the past two years or so, a number of e-business utilities have been initiated in the investment banking arena, particularly in the OTC Derivatives market. Three of these are:

SwapsWire.com - a collaborative venture within the interest rate derivatives community. It intends to deliver e-solutions for the negotiation and trading of Swaps products to the whole interest rate derivative dealing community at a utility price.
Londex - Londex is a highly automated trade matching service currently focused on the matching of over-the-counter (OTC) Derivatives trade confirmations.
SwapClear - London Clearing House's SwapClear was launched in September 1999 to provide settlement and clearing for plain vanilla interest rate swaps of up to 10 years maturity in US Dollars, Euros, Japanese Yen and UK Sterling.

These e-business utilities are in effect large-scale application service provision (ASP) suppliers. Whereas most people still seem to consider ASPs to be solutions for small and medium-sized enterprises, we suggest that these e-business utilities for banks are leading the way towards larger-scale ASP provision for organisations of various sizes across all sectors.

An investment banking example

Lets take it step by step with a simple example, a "plain vanilla" interest rate swap. Although this is considered an OTC derivative product, it has become a commodity with the largest banks having over 100,000 such deals on their books with 10's of thousands of new trades each year.

The processing of a swap has three main stages:

trading - where two parties agree on financial terms either between each other or via a broker
confirmation - where the legal agreement is drawn up and matched
settlement - where regular "coupon" payments are calculated and made by both sides to each other

Effectively, these are three sets of bilateral functions that go on in parallel on both sides of the deal. All can sometimes involve a series of manual processes and all require dedicated teams of people and systems at each bank.

So how will using the e-business utilities change these processes?

A review on outsourcing

2009-02-16T20:54:00.000-08:00

Source: ZYen
Written by Michael Mainelli
Turning Lead into Gold: The Demystification of Outsourcing by Peter Bendor-Samuel 2000. Executive Excellence Publishing reviewed by Michael Mainelli, Director, Z/Yen Limited.
A tired metaphor, but hardly a tiring book. Peter Bendor-Samuel’s review of outsourcing is an easy read and, in many ways, a refreshing reminder that there is so much to be gained through innovative outsourcing. Although the metaphor of getting rid of dead weight might be more appropriate (the author does not examine the value creation potential of some outsourcing spin-outs such as IBM/Procord or DERA/Comax), the author does provide a quick overview for busy executives who haven’t really looked at outsourcing before.

As a former executive with EDS, Bendor-Samuel shows outsourcing from both sides, the side of the buyer and the side of the provider. Bendor-Samuel had a strong commercial motivation to write this book as CEO of the Outsourcing Center which publishes the Outsourcing Journal. At times, the commercial interests slip out, e.g. “it’s certainly worth getting expert advice from a knowledgeable outsider like the Everest Group” (the Outsourcing Center’s consulting group no less). At other times, the breathless nature of the book seems to have rushed into the editing, e.g. diagram descriptions in the text do not always match the labels on the diagrams. More thorough editing might also have eliminated apparent contradictions such as in one section pointing out that outsourcing partners are NOT “bound like a marriage” but later stating that the “relationship works much like a good marriage”.

“Turning Lead into Gold” is a short book, despite the page count. Its North American origins show in the enthusiasm and the positive attitude, but also in the jargon and the terminology. The author does try to take an international perspective including examples of the Rolls-Royce/EDS contract as well as the Kellwood/EDS contract, but on the whole the examples are from the USA. One key lesson which Bendor-Samuel makes is the importance of establishing a long-term relationship while using short-term contracts. He stresses this lesson, explaining away some of the typical objections, e.g. need for a long-term contract in order to make it profitable for the outsourcer. Bendor-Samuel also emphasises the key role of pricing in establishing a mutually beneficial relationship. He is scathing about “open-book” pricing and cost bundling and many of his reasons are valid.

Another lesson which the author stresses is the importance of metrics. Unfortunately, this topic did not get the time it deserved. Bendor-Samuel does cover some of the dichotomies, e.g. “forensic” versus “proactive”, or “diagnostic” versus “business-oriented”. While touching on service levels and the challenges of measuring, few concrete examples are given. Moreover, there is no overall metric framework or detailed example which gives a reader a feel for the complexity inherent in measurement. Some of the interesting European contracts where up to 50% of reward is based on measuring IT or facilities through “customer at the desk” satisfaction appear to be absent from North American thinking.

The author also misses a few lessons which some of his examples hint at, e.g. the importance of recognising the difference between an established, well-defined outsourcing service widely available in the markets (say cleaning) and more tailored strategic relationships (say specialist laboratory services). These are two distinct types of outsourcing, typically requiring different styles and even contracts. He also skims the deep discussions surrounding core and non-core, the complexity of fixed and variable cost calculations, as well as the importance of competition in determining outsourcing purchases and sales.

The author is clearly a fervent believer in the power of outsourcing, to the point of strongly reminding this reviewer of Koestler’s closed belief systems. ‘Closed systems’ have three main peculiarities. First, they claim to represent a truth of universal validity which explains everything. Secondly, the system “cannot be refuted by the evidence, because all potentially damaging data are automatically processed and reinterpreted to make them fit the expected pattern”. Thirdly, criticism is invalidated by shifting the argument to the motivation of the critic. Koestler provides an example of a closed system from the orthodox Freudian school of pyschoanalysis. “…if you argued that for such and such reasons you doubted the existence of the so-called castration complex, the Freudian’s prompt answer was that your argument betrayed an unconscious resistance indicating that you yourself have a castration complex; you were caught in a vicious circle” [Arthur Koestler, “The Ghost in the Machine”, Penguin Books Ltd, 1967, pages 263-264]. The closed belief system comes across most strongly when discussing outsourcing failures, i.e. they were not really proper outsourcing contracts anyway, or core activities, e.g. “the buyer may outsource important, even strategic, functions; but it comes as a result of the buyer’s management team having decided that it will focus on functions that are more core to the company’s essential reason to exist.”

“Turning Lead into Gold” is not a book which will educate an outsourcing provider, nor will an already savvy purchaser learn much. This book is likely to be of most use as a corporate gift from an outsourcing provider to a novice buyer. If the novice buyer reads “Turning Lead into Gold”, their first joint conversation is likely to be inspired by the upbeat tone of the book. The novice buyer may not have learned much, but the provider might just push a sale.

Michael Mainelli is a Director of Z/Yen Limited, the UK’s leading risk/reward management firm, and a non-Executive Director of CityAxis, a Design-Manage-Construct firm. Michael was a partner in one of the large accountancy firms dealing with outsourcing and a former director of one of the UK’s largest commercial outsourcing companies. Z/Yen is heavily involved in facilities management and outsourcing, and has advised organisations in many of the Europe’s largest outsourcing deals, at times for buyers and other times for suppliers. Z/Yen provides strategy, systems, organisational, benchmarking and commercialisation solutions to improve performance. Michael’s humorous risk/reward management novel, “Clean Business Cuisine: Now and Z/Yen”, written with Ian Harris, was published by Milet in 2000.

Outsourcing, a Quick Fix

2009-02-16T03:02:00.000-08:00

Source: Economist

AS CAR dealers know only too well, the global downturn has made people think twice before splashing out on pricey new machines. Instead they are trying to make their existing sets of wheels last longer. Like car owners, managers faced with a cash crunch are also keen to get as much extra mileage as possible out of their existing equipment rather than buying costly new gear. To do so, some have been turning to “asset maintenance” companies, which specialise in taking over all or part of a firm’s servicing activities and then running them more efficiently.

“Downturns have always been good for the maintenance-service business,” says Jari Kaija, the head of the global service arm of ABB, a Swiss-Swedish firm that is one of the biggest in the asset-maintenance field. This slump is unlikely to break that rule. A recent study by Frost & Sullivan, a research firm, predicts that the $125 billion market for outsourced-maintenance services in North America will continue to grow as firms push ageing machines to their limits on the one hand, and try to reduce head count on the other.

More deals are likely in Europe, too. In January ABB kicked off what it claims is the biggest-ever outsourced-maintenance agreement in the pulp-and-paper industry. Together with Stora Enso, a Finnish paper-products firm, it has set up a joint venture to take over servicing and repairs at six of Stora’s Finnish mills. Some 1,450 of Stora’s staff have been transferred to the new company, which is expected to have up to $270m a year in revenues. Stora has been badly battered by the downturn and urgently needs to cut costs. On February 5th the company announced that it made a net loss of €675m ($988m) in 2008, following a net loss of €212m in 2007.

Outsourcing firms such as ABB and Advanced Technology Services (ATS), an American company, promise to help clients save money not only by offloading repair workers, but also by getting remaining ones to work better. They can reduce costs by consolidating spare-parts suppliers, introducing more sophisticated machine-monitoring systems and encouraging better forward-planning and co-operation between engineering and production staff. Rod Bayliss, a manager who oversees outsourced maintenance for Eaton, an American industrial company with $15 billion in annual sales, says ATS has helped it anticipate problems with machinery.

Outsourcing firms sometimes discover that their clients are spending too much to keep machines up and running. “It’s often engineers at play,” quips Andrew Jardine, the director of the Centre for Maintenance Optimisation and Reliability Engineering at the University of Toronto. Bill Wasilewski of Fluor, another American asset-maintenance firm, says it sometimes has to persuade clients that occasional breakdowns are acceptable because the cost of preventive maintenance turns out to be far greater than the cost of lost production when a machine temporarily fails.

The downturn means that many factories are lying idle. Some bosses may be tempted to axe maintenance work—and workers—altogether, because they have plenty of spare capacity. But that could be risky. For one thing, mothballed plants may suddenly need to be brought back to life if demand shifts. Getting them running again will be much more difficult if equipment has been neglected. For another, firms could all too easily lose vital knowledge that is locked up in the heads of their in-house repair folk. That really would throw a spanner in the works.

Perception

2009-02-16T02:04:00.000-08:00

Source: ZYen

Written by Professor Michael Mainelli

A man once ran the finest hot dog stand in the city. The man was so successful that he sent his son to Harvard to do an MBA. After graduation the son said: “Dad, based on current economic statistics, we’re heading for a recession. You’ve got to stop using all that sauce, and you dish out onions as if they were free.” Reluctantly, dad cut back on the sauce and the onions and moved to a cheaper brand of hot dog with a more traditional sawdust ratio. Just in time, because it turned out his son was right – business took a real dive.

Fat tails – the observation that events at the extreme ends of the statistical bell curve happen more often than expected - are all the rage. Witness the unlikely sales of The Black Swan, Nassim Nicholas Taleb’s fascinating book about rare events.

Systems Analysis has long explained fat tails through simple concepts of feed-forward and feed-back. Systems exhibit seven components – take an automobile:

inputs, processes and outputs: the "doing" components, the engine, wheels, chassis, brakes, steering and fuel systems of a car;
feedback: news about performance - the speedometer;
monitoring: reacting - slowing down because of the speedometer;
feed-forward: anticipating - signalling a manoeuvre;
governance: adjusting the system to meet our goal - deciding where to drive.

Bob Giffords, the technology analyst, groups together feed-back, monitoring, feed-forward and governance components as “feed-through”, highlighting the effect of people’s perceptions on the probability of future events. If people change their perception of a risk, e.g. terrorism, that perception feeds through to alter future behaviour, such as passenger levels on public transport.

Perceptions matter. Thousands of Fat-Tailed Maniacs decide the fates of financial markets. Share buying and selling is gambling against perceptions. When you buy a share, you bet against past investors prepared to sell to you today; when you sell a share you bet against future investors prepared to buy today. Indirectly, you realise that future investors may not value the share so highly because the future investors to whom they will need to sell may not value it so highly, and so on: feed-through. The secret to stock market success is to guess what average opinion thinks average opinion will be, as in Keynes’s famous beauty contest example.

Systems with feed-through – and human systems are marked by this - typically have non-normal event distributions. In other words: the root cause of fat tails is people. Non-normal distributions trouble financial analysts. Human-originated fat tails are hard to distinguish from more normal distributions and complex to analyse.

Herbert Simon, the psychologist, said: "What information consumes is rather obvious: it consumes the attention of its recipients." Looking at financial failures, what failed often was not the firm, but people’s perceptions of other people’s perceptions. Bank runs are caused by people believing that other people will withdraw their money before they do. Clearly the media have a big role in accelerating feed-through.

James Surowiecki, in The Wisdom of Crowds [2004], shows that large numbers of people can arrive at good answers to complex problems if four conditions apply:

diversity of opinion – private, even eccentric views;
independence –opinions uninfluenced by other opinions;
decentralisation –local knowledge;
aggregation – a mechanism for collective decision, e.g. a price.

The greater the independent diversity of opinion, the more likely the herd will reach the right answer. Markets clearly meet three conditions – diversity of opinion, decentralization and aggregation, but not Surowiecki’s second condition, independence. When you give a bad weather forecast predicting rain tomorrow, it does not make rain tomorrow more likely. But when you give a bad forecast predicting a share will fall tomorrow, you do make it more likely. "Talking a market" up or down frequently moves a market up or down. "The trend is your friend – the trend is your enemy."

In a world of inter-connected media global information creates global perceptions that feed-through to global bubbles. The challenge for financial reformers is to slow feed-through’s many mechanisms, such as market prices, valuations or regulatory standards, yet satisfy the clamour for increased transparency. Markets will behave better when we can solve the paradox of providing global information without overwhelming diversity in local opinions.

Now I went to Harvard, so I’ve always wished my father had used "Yale" in the story, but that’s feed-through for you.

Michael Mainelli is Chairman of the think-tank, Z/Yen, and Mercers’ School Memorial Professor of Commerce at Gresham College.

Why Outsource?

2009-02-16T01:38:00.000-08:00

Source: The outsourcer Zone
The benefits of outsourcing of course are variable, depoendent upon the nature and situation of the organization. However, the following is a list of common reasons why outsourcing is undertaken:

Lower costs due to economies of scale

Ability to concentrate on core functions

Greater flexility and ability to define the requisite service more readily

Specific supplier benefits. For example, better security, continuity, etc.

Higher quality service due to focus of the supplier

Improved internal management disciplines resulting from the exercise itself

Less dependency upon internal resources

Control of budget

Faster setup of the function or service

Lower ongoing investment required in internal infrastructure

Greater ability to control delivery dates (eg: via penalty clauses)

Lack of internal expertise

Increase flexibility to meet changing business conditions

Purchase of industry best practise

Improve risk management

Acquire innovative ideas

Increase commitment and energy in non core areas

Improve credibility and image by associating with superior providers

Generate cash by transferring assets to the provider

Gain market access and business opportunities through the supplier’s network

Turn fixed costs into variable costs

OUTSOURCING ASSESSMENT

Despite the size of this list, every scenario is different. There may well be equally compelling arguments against any sort of outsourcing arrangement.

It is therefore important that ALL the issues are considered before embarking upon the outsourcing course. This assessment should take into account all factors, both local and generic.

Stronger ties under Obama by Japanese ministers

2009-02-16T00:33:00.000-08:00

Source: TMC net
Japanese Cabinet ministers expressed high hopes for strengthening the Japan-U.S. alliance under the incoming administration of U.S. President-elect Barack Obama ahead of his inauguration Tuesday.
"What is most important is that we continue to make the Japan-U.S. alliance a firm one even when there is a change in administration," Foreign Minister Hirofumi Nakasone said. "It is necessary to further our close contact over international issues, especially the current economic problem."

"It will be a start under extremely tough circumstances in foreign policy, domestic economy and finance," Finance Minister Shoichi Nakagawa said separately. "But I believe the public has very high expectations and I hope he will weather the storm."

Kaoru Yosano, minister of state for economic and fiscal policy, said he hopes the Obama administration will enable smooth global trade relations and capital transactions.

Citing the U.S. Smoot-Hawley Tariff Act of 1930, which raised U.S. tariffs to historically high levels, and the spread of protectionism worldwide afterwards, Yosano added, "It is in this kind of difficult times that one must uphold the free trade regime and that is my biggest expectation for the new U.S. administration."

Foreign Minister Nakasone also said Japan believes it important to work with the United States to resolve issues related to North Korea, including its denuclearization as well as the unresolved cases of its abductions of Japanese nationals.

Nakasone expressed hope for Prime Minister Taro Aso to meet Obama, and for himself to meet incoming Secretary of State Hillary Clinton, "as soon as possible," but gave no details.

Japan's relations with the United States, its closest ally, peaked in recent years under former Prime Minister Junichiro Koizumi. He established a close relationship with U.S. President George W. Bush and was instrumental in deploying Japanese forces to Iraq in 2003 in support of U.S. operations there.

But the alliance suffered several dents during Bush's eight years in office, most recently over Washington's removal of North Korea from its blacklist of state sponsors of terrorism despite a strong call from Tokyo to first see progress on the abduction issue.

Obama and US policy on China

2009-02-13T00:46:00.000-08:00

Source: Rediff News

Written by Brajesh Mishra

Despite the historic victory of Barack Obama [Images] in the Presidential elections and 'the change' he has promised, Unites State's foreign policy would continue to be guided by its national interest as it has been since World War II, feels former National Security Adviser Brajesh Mishra.

Chairing a discussion on 'Indo-US Nuclear Deal: Impact on Asian Security Framework' at Observer Research Foundation, Mishra said the Bush administration had been working on two key US strategies -- expanding eastward in Europe and balancing China.

"Obama will also do that," remarked Mishra, adding that while the new President-elect talks of international cooperation, he also says, "we have to lead it".

Mishra opined that the Indo-US nuclear agreement and better bilateral relations would lead to increased investments from the US. "This is a plus point in the Indo-US relations," he said.

Pointing out that the international situation has changed in the last few months following the financial crisis, Mishra said that he believed that Obama would seek China's cooperation to survive the economic crisis and perform well in the first four years, so that he can seek re-election.

General V P Malik, president of the Institute of Security Studies, which had organised the discussion, said that it is too early to assess the material gains from the nuclear agreement, especially in the hi-technology transfer area.

Giving the US and India perspective, former foreign secretary and former ambassador to US Lalit Mansingh also said that the US would continue its hegemony in the world, irrespective of whoever is the President.

"There would be continuity (in its foreign policy) though there may be some differences," he said.

"Obama is not going to be hostile (to India), but at the same time, he is not going to be as friendly as President Bush," he added.

Mansingh said that though President George W Bush [Images] articulated the Indo-US agreement, it had really taken off when the Pentagon and the Central Intelligence Agency's studies stated that India was a 'swing state which would make the difference between war and peace.'

He described 1998 as a point of departure as far as the India-US relations were concerned, with the Clinton administration making a U-turn, months after it imposed sanctions on India after the Pokhran II nuclear tests.

Noting that the US military was under stress now, Mansingh said that the US only considers China as a potential threat, as it has the capability to challenge the US.

A strategic partnership with India will help US balance the China factor, he explained.

Mansingh was clear that there are no alternatives to the relationship between India and the US. However, he was not so certain about the possibility of friendly behaviour from China. In such a scenario, there wouldn't be anything as effective as the Indo-US relation, felt the former Indian envoy.

Former diplomat and strategic thinker M K Bhadrakumar, however, expressed a different point of view. He pointed out that the central issue was not Barack Obama's political personality, but certain new realities in the international system. Evidently, the crisis in the US economy cannot be viewed as a cyclical recession amenable to traditional remedies such as monetary and fiscal policies or 'spending the way' out of the depression.

He pointed out that the US needs huge infusion of funds from outside, and China was the only real source available for that. He reminded the audience that China was finally becoming -- what World Bank President Zoellick once termed a 'stakeholder' -- in the international system.

This leaves the US with no option but to revisit the thinking behind the containment strategy towards China, which has been noted in today's discussion as a major impetus behind the US-India strategic partnership and the nuclear deal.

"The Americans may survive their closer relations with China," said Bhadrakumar.
He also opined that the nuclear deal has led to losses for the United States in the war in Afghanistan, as it had led to mistrust in Pakistan.

Bhadrakumar also believes that the war in Afghanistan will be the top priority for the Obama administration, as the outcome can well determine Obama's re-election bid. At any rate, Obama would want to avoid Lyndon Johnson's tragedy of inheriting a war that ended up consuming his presidency and destroying his political career, he added.

Given Pakistan's crucial role, Obama will be compelled to define its 'legitimate' interests. "At the every least, we should expect an even-handed US policy towards Pakistan and India. That is to say, another postulate behind the nuclear deal, namely, that the US is committed to make a great power out of India, may prove a chimera." He said.

Giving the Chinese perspective, Dr Surjit Dutta, senior fellow at IDSA, said that though China was not happy about the nuclear agreement, it decided to go along with it because the "Chinese diplomacy was not willing to stand alone."

"So, it decided to adjust to the new reality of a new world nuclear order. And attempt to engage strongly with the US and India to create a conducive situation," Dr Dutta said.

Giving the Russia [Images]n perspective, former foreign secretary and former ambassador to Russia Kanwal Sibal said that Russia was not concerned about the Indo-US deal. It was ready to give US due credit for its efforts to get India into the Nuclear Suppliers Group, which Russia was reluctant to do earlier, said Sibal.

Sibal said that Russia would have a problem only if Indo-US relations start to trouble the country strategically and economically.

Giving the South-East Asian perspective, Professor GVC Naidu of Jawaharlal Nehru University explained how the new Indo-US relations have fetched India a critical role in the new security architecture. It has also resulted in stronger relations between India and Japan [Images], with many countries remaining suspicious of China.

He also spoke of the possibility of increased civil nuclear energy cooperation with Japan, which has stakes in both US and French nuclear energy firms.

Obama to forge stronger U.S.-India ties

2009-02-12T21:59:00.000-08:00

Source: Reuters

Editing by Philip Barbara

WASHINGTON (Reuters) - The incoming Obama administration should forge a strong partnership with India to tackle common problems such as terrorism and the global financial crisis, an Asia Society task force said on Friday.

"India matters to virtually every major foreign policy issue that will confront the United States in the years ahead," said the New York-based society, which promotes scholarship and exchanges with Asia.

"A broad-based, close relationship with India will thus be necessary to solve complex global challenges, achieve security in the critical South Asian region, re-establish stability in the global economy, and overcome the threat of violent Islamic radicalism," it said.

The report noted that in 1998 the United States had sanctioned India over its nuclear tests, but last year they consummated a civilian nuclear deal that will give India access to U.S. nuclear technology.

More recent events -- the bloody November militant attacks in the Indian commercial center of Mumbai and the global financial meltdown -- underscored the need and the opportunity for the two large democracies to work together, the report said.

"The new relationship rests on a convergence of U.S. and Indian national interests, and never in our history have they been so closely aligned," it said.

The task force, headed by former top diplomats and business leaders from the two countries, said the two countries could work together in areas such as expanding trade, environmental issues and climate change, nonproliferation and public health.

President-elect Barack Obama, who takes office on January 20, should boost governmental relations by helping secure Indian membership in multilateral institutions where global decisions are made, expanding counterterrorism cooperation and forging a bilateral investment treaty, the report said.

U.S.-Indian public-private projects should be formed to help meet India's vast secondary and higher education needs, to spread HIV/AIDS awareness and to help boost agricultural output through technology, the task force recommended.

(Editing by Philip Barbara)

Foreign Investors Rush for the Exit from US Dollar Holdings due to US Recession

2009-02-12T02:49:00.000-08:00

Source: The Market Oracle

Written By: Mike_Whitney

To some extent, the losses have been concealed by the up-tick in Treasuries sales to US investors who've been fleeing the money markets in droves. Investors have been trying to avoid the fallout from money funds that have been contaminated by mortgage-backed assets. Naturally, they bought US government bonds which are considered a safe bet. But that doesn't change the fact that the dollar's foundation is steadily eroding and that foreign support for the dollar is vanishing. US bonds are no longer regarded as a “safe haven”.

The dollar slumped to a 15 year low against 6 of its most actively traded peers and set the stage for an early morning market rout on Wall Street.

Foreign investment and currency deregulation has been a real boon for the stock market which thrives of a steady flow of cheap capital. It's also been good for ravenous consumers who like to borrow boatloads of low interest cash for their toys, SUVs and McMansions.

Of course, when things seem too good to last---they usually don't. The economy is contracting; credit is getting tighter, and the stock market is flailing about aimlessly. Worse still, the world is quickly losing confidence in American leadership on everything from human rights to global warming. In many ways the US appears to be tragically out-of-step with its epoch. The world is looking for innovative solutions to species-threatening problems while the Bush Administration insists on following an agenda that seems more suitable to medieval warlords in the Dark Ages. The social and economic consequences of their shortsightedness are obvious. Its been a disaster.

As Capital flight accelerates; interest rates in the US will rise, unemployment will mushroom, and the dollar will fall. It can't be avoided. American markets and consumers will be compelled to curb their gluttonous appetite for cheap foreign credit. The free lunch is over.

Overseas investors own more than $4.4 trillion in US debt in the form of bonds and securities. Even if they sell only 25% of that sum, the US would feel the pinch of hyper-inflation. For the last decade foreigners have been eager to by our Treasuries and equities---gobbling up America's enormous $800 billion current account deficit and keeping demand for the dollar artificially high. But just like the subprime mortgage holder whose “teaser rate” has suddenly expired; the US now faces the painful adjustment of higher payments and less discretionary income for indulgences.

Maybe the charade could have carried on a bit longer if not for the belligerent Bush foreign policy that has alienated friends and foes alike. But, then, maybe not. After all, the Fed's loose monetary policies added to Bush's extravagant spending---$3 trillion added to the National Debt in just 6 years--- doomed the country from the beginning. Deficit spending has been the central organizing principle from day 1. Now comes the hangover.

Bernanke is expected to drop the Fed funds rate on September 18. The move will provide more “easy credit-crack” for the addicts on Wall Street but it could also trigger a run on the dollar. That's what keeps the Fed-chief up at night.

The Bush Team was warned repeatedly---by the BIS, the World Bank, the IMF and the European Central Bank ECB---that their policies were “unsustainable” and would end in an economic meltdown. But they brushed aside the warnings with the same casual indifference as they did the critics of the war in Iraq.

Why would they care if the country suffered? Their friends would still get their massive, unfunded tax cuts. Their private armies and “no bid” contractors would still get their payola. The Democrats would still cave in on the enormous “off budget” war spending. And, they'd still be able to print as much counterfeit money as they chose until every last copper-farthing was drained from the public till.

No worries. Besides the media would mop up the mess they'd made with their usual “happy talk”. As the economic calamity unfolds, we can expect to see the usual parade of lacquer-haired phonies on the Business Channel singing the praises of “free markets” and the poisonous culture of overspending and consumerism.

The problems we're now facing should have been easy to spot for anyone willing to look beyond the empty rhetoric of the TV Pollyannas or their cheerleading co-conspirators at the White House. Instead, we were anesthetized by Greenspan's low-interest snake oil and Bush's “tax-slashing” mumbo-jumbo thinking that they‘d found a new path to prosperity.

It was a hoax. And the seven years of sleepwalking has cost us dearly. Unemployment is up, consumer spending is down, the housing market has slipped into recession, and the stock market is lurching back and forth like an overloaded washing machine. All of this could have been foreseen by anyone with minimal critical thinking skills and a healthy dose of skepticism of government.

Consider this: US GDP is 70% consumer spending. That means that wages have to increase beyond the rate of inflation OR THE ECONOMY CAN'T GROW. It's just that simple. So how is it that 50% of the American people still believe Bush's supply side baloney that cutting taxes for the uber-rich strengthens the economy? How does that increase wages or build a healthy middle class. If we want a strong economy wages have to keep pace with productivity so that workers can buy the goods they produce.

Greenspan knows that. So does Bush. But they chose to hide it behind an “easy credit” smokescreen so they could weaken the dollar, off-shore thousands of industries, out-source 3 million manufacturing jobs, fund an illegal war, and maintain the lethal flow of the $800 billion current account deficit into American equities and Treasuries. In truth, there hasn't been any growth in the economy since Bush took office in 2000. What we've seen is an ever-expanding bubble of personal and corporate debt amplified by a “structured finance” system that magically transforms liabilities (subprime loans) into securities and increases their value through leveraging.

That's it. No growth---just a galaxy of debt-instruments with odd-sounding names (CDOs, MBSs, CDSs, etc) stacked precariously on top of each other. That's what we call "wealth" in America.

It's all smoke and mirrors. The financial system has decoupled from the productive elements of the economy and is now beginning to show disturbing signs of instability. That's why the big blow-off in the bond market. The halcyon days of supplying our armies, funding our markets and building our subprime “ownership society” empire on the backs of foreign creditors is over. The stock market is headed for the landfill and housing is leading the way. Economic fundamentals can only be ignored for so long.

Arms Sales, no Recession !!!

2009-02-12T01:47:00.000-08:00

Source: New America Foundation

Written By Frida Berrigan

The CEO of a weapons manufacturer has plenty of chances to rub elbows with deputy secretaries of defense, officials from Homeland Security, retired military personnel, and the best and brightest of the defense establishment almost any week of the year.

One such opportunity occurred at the ComDef 2008 conference, which wrapped up at the National Press Club in Washington on September 3. Sponsored by weapons giants like Boeing, Raytheon, and BAE Systems, the day-long conference was organized around the theme of "Defense Priorities in an Age of Persistent Conflict." It featured presentations from a Navy undersecretary, a deputy director at the Pentagon, several weapons manufacturers, and defense representatives from France, the Netherlands, Canada, and elsewhere. With this high-powered lineup, the conference probably delivered on the promise of its catch line: "Where the international defense cooperation community gets down to business."

Next on the calendar in mid-October will be the Women in Defense National Conference at the Crystal Gateway Marriott near the Pentagon. Sponsored by consulting giant Booz Allen Hamilton, the conference includes a panel on the "National Security Priorities in the Next Administration," moderated by a Lockheed Martin vice-president. Foreign policy advisers from the McCain and Obama campaigns will be on hand and -- in a nod towards inclusiveness -- representatives from Bob Barr's and Ralph Nader's campaigns have been invited. The closing reception is sponsored by Lockheed Martin, and Booz Allen Hamilton is picking up the tab for the "Breaking a Glass Ceiling" dinner featuring retired Air Force Major General Jeanne Holm.

And then, who would want to miss flying south for the winter? The Defense Manufacturing Conference at Disney's Coronado Springs Resort in Florida in early December offers military industry executives the chance to soak up the rays and address the question: "Are we ready to provide affordable warfighting capabilities?"

One of the persistent themes of these and many other weapons industry conferences is the looming concern that the military budget -- which increased by two-thirds between 2001 and 2008 -- can't keep spiraling upwards forever. ComDef 2008 frames it like this: "persistent warfare is eroding the capability of our armed forces and hard choices will need to be made…It is increasingly unlikely that more money will be found for defense." Last year, the Women in Defense conference addressed this issue with a panel titled "Shaking the Money Tree: Funding National Defense," moderated by a vice-president for programs and budget at Lockheed Martin.

Job losses pile up on Recession

2009-02-12T01:14:00.000-08:00

Source: Reuters

Writeen by Emily Kaiser

WASHINGTON (Reuters) - Authorities increased the flow of public funds into their economies on Tuesday as a jump in Spanish unemployment and weak retail sales in the United States and Germany provided the latest proof of a severe, synchronized recession.

The Federal Reserve extended agreements with several other central banks to meet a global demand for U.S. dollars as policy-makers tried to keep credit flowing to the companies and consumers that power the economy.

Australia's central bank slashed short-term borrowing costs by a full percentage point and the government announced that it was more than doubling the size of an initial stimulus, bringing the total package to more than $49 billion, or nearly 8 percent of the economy's annual output.

"The Australian economy has probably slipped into its first recession since the early 1990s," said Jay Bryson, global economist with Wachovia.

Bryson said the latest government measures should help limit the severity of the downturn, but if the global recession worsens, it would hurt Australia's exports, "which could lead to another down-leg down-under."

U.S. lawmakers were debating a nearly $900 billion stimulus plan that was likely to receive Senate approval later this week after a contentious, largely partisan fight over how best to spend the money.

President Barack Obama has been trying to convince Americans that the spending is urgently needed, but with many people still seething over a $700 billion bank bailout, the stimulus package has met with some resistance.

A U.S. official said on Monday the Obama administration would likely lay out a framework early next week for dealing with banks overloaded with mortgages and other loans, which are defaulting at an alarming rate.

In Japan, the central bank said it would buy up to 1 trillion yen ($11 billion) worth of shares held by banks in a move analysts said was aimed at easing the burden on financial institutions' balance sheets.

Stocks on Wall Street opened up modestly as Congress' deliberations left investors cautious and anxious over any evidence that the stimulus package might be hitting a snag. Japan's Nikkei stock average closed down a touch, while Europe's FTSEurofirst 300 index was weaker.

SPANISH UNEMPLOYMENT SOARS

Spain, one of the hardest-hit economies in the 16-nation euro zone, received more bad news on Tuesday as figures showed the number of registered jobless surged by nearly 200,000 in January, the tenth straight rise and the biggest since records began in 1996.

The jump took the unemployment rate up to 13.9 percent, the highest level in the broader European Union. The total number of unemployed in Spain swelled to 3.33 million, just below the level in Germany, a country with nearly double the population.

"It's going to get much, much worse," said Jose Garcia Zarate from the 4cast consultancy, noting that unemployment was spreading from Spain's battered construction sector to other parts of the economy.

Further evidence of flagging European activity was evident in producer price data for the euro zone, which fell a steeper-than-expected 1.3 percent in December.

The collapse in inflation after a price scare last summer should give the European Central Bank more leeway to reduce interest rates, although economists expect the central bank to hold steady at its next meeting on Thursday.

News from Europe's biggest economy was also negative. Data from the Bundesbank showed a 0.7 percent drop in German retail sales in December, disappointing economists, who had expected a Christmas-sales boost. The country's HDE retail association forecast sales would fall in real terms in 2009.

"The economic crisis will hit our sector, but when, how hard, and for how long is uncertain," HDE Managing Director Stefan Genth told a news conference.

A measure of U.S. retail sales showed that January ended on a down note, with sales off 2.7 percent in the final week of the month. Redbook Research said for the month as a whole, sales were off 2.3 percent from a year earlier.

However, there was a glimmer of hope in the downtrodden U.S. housing market. The National Association of Realtors' Pending Home Sales Index rose for the first time since August.

"It's a real shot in the arm for sentiment," said Brian Dolan, chief currency strategist at Forex.com in Bedminster, New Jersey. "I'm sure it's foreclosure-driven, so it could be a hollow number. But right now, it's improving sentiment."

(Reporting by Wayne Cole in Sydney; Rob Taylor in Canberra, Michael Perry in Sydney, Hideyuki Sano in Tokyo, Kevin Yao in Singapore, and Noah Barkin in Berlin; Editing by Dan Grebler)

Recession makes you stronger???

2009-02-12T00:43:00.000-08:00

Source: The New Republic

Written by Walter Russell Mead

Even before the Panic of 2008 sent financial markets into turmoil and launched what looks like the worst global recession in decades, talk of American decline was omnipresent. In the long term, the United States faces the rise of Asia and the looming fiscal problems posed by Medicare and other entitlement programs. In the short term, there is a sense that, after eight years of George W. Bush, the world, full of disdain for our way of life, seems to be spinning out of our--and perhaps anybody's--control. The financial panic simply brought all that simmering anxiety to a boil, and the consensus now seems to be that the United States isn't just in danger of decline, but in the full throes of it--the beginning of a "post-American" world.

Perhaps--but the long history of capitalism suggests another possibility. After all, capitalism has seen a steady procession of economic crises and panics, from the seventeenth-century Tulip Bubble in the Netherlands and the Stop of the Exchequer under Charles II in England through the Mississippi and South Sea bubbles of the early eighteenth century, on through the crises associated with the Napoleonic wars and the spectacular economic crashes that repeatedly wrought havoc and devastation to millions throughout the nineteenth century. The panics of 1837, 1857, 1873, 1893, and 1907 were especially severe, culminating in the Great Crash of 1929, which set off a depression that would not end until World War II. The series of crises continued after the war, and the last generation has seen the Penn Central bankruptcy in 1970, the first Arab oil crisis of 1973, the Third World debt crisis of 1982, the S&L crisis, the Asian crisis of 1997, the bursting of the dot-com bubble in 2001, and today's global financial meltdown.

And yet, this relentless series of crises has not disrupted the rise of a global capitalist system, centered first on the power of the United Kingdom and then, since World War II, on the power of the United States. After more than 300 years, it seems reasonable to conclude that financial and economic crises do not, by themselves, threaten either the international capitalist system or the special role within it of leading capitalist powers like the United Kingdom and the United States. If anything, the opposite seems true--that financial crises in some way sustain Anglophone power and capitalist development.

Indeed, many critics of both capitalism and the "Anglo-Saxons" who practice it so aggressively have pointed to what seems to be a perverse relationship between such crises and the consolidation of the "core" capitalist economies against the impoverished periphery. Marx noted that financial crises remorselessly crushed weaker companies, allowing the most successful and ruthless capitalists to cement their domination of the system. For dependency theorists like Raul Prebisch, crises served a similar function in the international system, helping stronger countries marginalize and impoverish developing ones.

Setting aside the flaws in both these overarching theories of capitalism, this analysis of economic crises is fundamentally sound--and especially relevant to the current meltdown. Cataloguing the early losses from the financial crisis, it's hard not to conclude that the central capitalist nations will weather the storm far better than those not so central. Emerging markets have been hit harder by the financial crisis than developed ones as investors around the world seek the safe haven provided by U.S. Treasury bills, and commodity-producing economies have suffered extraordinary shocks as commodity prices crashed from their record, boom-time highs. Countries like Russia, Venezuela, and Iran, which hoped to use oil revenue to mount a serious political challenge to American power and the existing world order, face serious new constraints. Vladimir Putin, Hugo Chavez, and Mahmoud Ahmadinejad must now spend less time planning big international moves and think a little bit harder about domestic stability. Far from being the last nail in America's coffin, the financial crisis may actually resuscitate U.S. power relative to its rivals.

Foreign Policy and the Recession

2009-02-11T22:24:00.000-08:00

Source: The Wall Street Journal
WrittenBy RICHARD N. HAASS
It now is highly likely that the United States will face several quarters of negative growth to be followed by several years of low growth. Less and less are we hearing of V- or U-shaped economic recoveries. The immediate future looks like an L: sharp contraction followed by not much in the way of a quick rebound.

Most of the current conversation is about the economic consequences of such a future, and what can and should be done domestically and internationally to soften the blows and speed recovery. But the world is not a series of silos. What happens in the economic realm will spill over into the political and strategic ones. Some of what results will add to the challenges confronting President Barack Obama.

Pressures to rein in federal spending are sure to grow. There is little that is easy to cut given the need to meet entitlement obligations, pay interest on the $10 trillion debt, and bail out states and cities unable to balance their budgets. What's more, there is an emerging consensus on the need for yet another stimulus package. Down the road, ballooning deficits will bring inflation and cause problems for the dollar. It is highly likely then that Congress will want to cut the defense and foreign-aid budgets simply because there are so few other targets available to reduce federal spending. This will limit the availability of tools central to asserting U.S. power and influence abroad.

There will be other policy consequences of recession. It will be more difficult to negotiate an accord on climate change as countries such as China and India will resist anything that could be an impediment to growth. High unemployment will make it even tougher to build a majority here at home for immigration reform. We will likely see new outbreaks of resistance to the ability of foreigners to buy U.S. assets despite a clear need for their dollars.

The recession is sure to strengthen trade protectionism. This is a big setback, as trade offers the ideal noninflationary stimulus. It is also a boon to developing countries, and one way to link countries in a web of dependencies that restrains nationalist impulses.

The combination of recession and no global trade accord will reduce U.S. imports, which in turn will slow growth around the world, increasing poverty and straining political stability in many countries. Many countries are already suffering from slower growth, much lower stock values, scarce credit and reduced exports. Others are reeling from lower commodity prices. We should not be surprised when governments fail and societies suffer from violence.

One other adverse consequence merits mention. The appeal of free markets is much diminished. The ability of U.S. officials to preach persuasively on the virtues of market reform is all but gone. The backlash against markets will almost certainly go too far, with adverse results for economic recovery and democracy around the world.

We are already seeing increased anti-Americanism, the result of perceptions that the global economic slowdown had its roots in the U.S. mortgage market. Globalization itself is further tarnished. What we can expect is heightened state intervention, protectionism and mercantilism as governments look to enter into arrangements that guarantee preferential outcomes.

Still, most clouds have silver linings, and this one is no exception. Recession has caused a major decline in the world price of oil, to roughly $70 a barrel from over $140. This is bad news for Iran, Venezuela and Russia -- the so-called axis of diesel.

The most encouraging consequence of this change involves Iran. Iran has been closing in on the ability to enrich uranium on a large scale. The last thing the new administration wants is to choose between living with a nuclear Iran and attacking Iran so it does not reach that point. Either path promises to be extraordinarily costly.

Up to now, diplomacy has produced little. The question is whether this could change. The reason it might is economic pressure. Financial sanctions, relatively easy for the mullahs to shrug off when oil was $140 per barrel, are having real effect now that oil is only half that price. Adding to the pressure is an Iranian budget that is based on oil fetching some $90-$95 per barrel. Inflation, unemployment and deficits are rising as dollar reserves are falling.

All of this could well make the Iranians more open to diplomacy that would limit or better yet end their independent uranium enrichment effort in exchange for economic relief. It might even lead the Iranians to examine some of their expensive support for Hamas, Hezbollah and Shiite militias in Iraq.

The slowdown also may bring good news closer to home. Venezuela under Hugo Chávez has been carrying out an imperial foreign policy, supporting governments such as Cuba's, Bolivia's and Nicaragua's. Mr. Chávez has also been systematically subverting Venezuelan democracy. But like Iran, Venezuela will have to scale back. A $4 billion oil refinery for Nicaragua is on hold. Given an inflation rate of 35%, mounting debt and declining financial reserves, the question is whether Mr. Chávez will be able to keep his hold on power if the price of oil remains where it now is for several years.

Developments in Russia may constitute another silver lining. A Russia resentful over its loss of status and territory has become a resurgent power. Oil and gas have become a source of wealth and influence. But Russia is feeling the pain -- not just of falling energy prices but of a plummeting stock market that has come down two-thirds from its high and was closed by authorities more than a dozen times. Many Russians see what has happened as the result of the world's negative reaction to their actions in Georgia. This has the potential to make Russia's leaders think twice before intervening in Ukraine on behalf of ethnic Russians living in the Crimea.

Falling energy prices have one other benefit: They reduce the burden to importers everywhere, from the U.S. (by reducing some pressure on the dollar) to poor countries that did not have the good luck to find oil or gas in their territory. It would be unfortunate, though, if the reduction in energy prices took the wind out of the sails (so to speak) of the effort to reduce American energy consumption. Current levels of use leave the U.S. vulnerable to supply interruptions and price hikes, fuel the economies of some of the world's least savory regimes, and add to climate change. The temporary respite provided by lower energy prices should not be squandered so that we continue policies and behaviors that made us vulnerable in the first place.

This all raises a larger point. To say there will be a recession followed by years of depressed growth leaves vague the questions of how deep and how prolonged. Little is inevitable. The Treasury and the Federal Reserve have demonstrated that the U.S. is not Japan; policy innovation is part of our political culture. The new president and Congress will have the opportunity to shape the dimensions of the "L" and to both offset and exploit its strategic consequences. Let's hope they use it wisely.

Mr. Haass is president of the Council on Foreign Relations.

The Recession and the losers

2009-02-11T21:02:00.000-08:00

Source: Foreign Policy
Written By Nouriel Roubini
In an era of globalization, no country is immune when the United States falls onto hard times. Here’s a look at how economies elsewhere will fare.

The Losers:

Mexico and Canada: Living next door to world’s biggest economy has its advantages, but it has big drawbacks, too. Exports to the United States represent about a quarter of each country’s GDP, so direct trade links will bear the brunt of a slowdown. Expect the manufacturing sectors of both countries to feel the pinch.

China: The world’s fastest-growing economy can’t help but be affected when the world’s largest economy slows down, since China relies on exports to the United States as one of its main sources of growth. In recent years, China has boasted double-digit growth. Officially, Chinese economists expect growth to slow down to 9 percent in the wake of a U.S. recession, but only if such a recession is mild, lasting two quarters. If the U.S. recession is severe—four quarters or more—and is centered on a faltering U.S. consumer who buys fewer Chinese goods, then China’s growth is likely to slow to 6 or 7 percent, a hard landing, indeed.

Indonesia, Malaysia, Taiwan, and South Korea: China gets raw materials such as timber and rubber from Southeast Asian countries like Indonesia and Malaysia. Other East Asian countries, like Taiwan and South Korea, send component parts to the mainland, which are then assembled into finished products that are shipped to the United States. Both groups of exporters are likely to fall—and fall hard—if a drop in Chinese exports to the United States leads to less Chinese demand for these goods and raw materials throughout Asia. Keep an eye on metals, coal, and food products in particular.

Latin America: Chile’s got copper; Brazil’s got minerals; Argentina’s got livestock and feed. They’ll have to scrounge to sell these and other commodities elsewhere if the United States and China isn’t buying as much as before. Prices of commodities could fall by 20 to 30 percent in a U.S. recession followed by a sharp economic slowdown.

Estonia, Latvia, Lithuania, Hungary, Bulgaria, Romania: They all run large deficits, are experiencing excessive credit booms and housing bubbles, and have an overvalued currency. If capital dries up because of the global credit crunch, it could lead to deep financial woes for these smaller European economies: Households that borrowed Swiss francs or Euros to finance their mortgages could go bankrupt and, in turn, local banks could go belly up.

Britain, France, and Germany: As a recession in the United States takes hold, the fall in U.S. demand will mean lower exports by European companies, as well as lower sales and profits for European firms—such as BMW, Unilever, and others—that produce everything from cars to consumer products in the United States. A weaker dollar means that the value—in euros—of European investments in the United States will suffer a major capital loss. High oil prices won’t help, either. And the deflation of housing bubbles in Britain, France, Spain, and elsewhere will slow down growth across the continent.

Japan: The Japanese economy is perpetually anemic, always on the borderline between growth and recession, between inflation and deflation. A deep U.S. recession will likely tip Japan over the edge, and into a recession of its own. Most of Japan’s economic growth in the last few years has been driven by external demand for its goods (such as consumer electronics, cars, etc.), net exports with a weak yen. Domestic private consumption has been weak, as incomes and wage growth have remained flat. And, as one of the world’s largest energy importers, oil hovering at $100 a barrel will make it hard for Tokyo to shake off its economic malaise any time soon.

And a Few Winners:

The United States: Ironically, some parts of the U.S. economy will be the biggest winner. For example, a weaker dollar means that the export competitiveness of American trade partners will
be reduced while U.S. competitiveness will receive a boost. American firms will benefit from more exports to the rest of the world. Sharply lower home prices are bad news for current home owners but good news to those renters who will now find buying a house more affordable.

Importers in Europe, Japan, and China: A U.S. recession and global economic slowdown will eventually lead to a sharp fall in the price of oil, energy, and other commodities. So expect the heavy importers in these areas—particularly Europe, Japan, and China—to find a silver lining amidst the storm.

European Shoppers: American goods may have never been so cheap for people with euros in their pockets. If you have visited New York City recently, you may have noticed the swarm of European tourists hunting for bargains from a weak dollar. Expect these European crowds to grow even larger as the savings on luxury goods, clothes, and shoes climbs higher and higher. It may also put a smile on the face of a few American retailers, too.

Nouriel Roubini is chairman of RGE Monitor and professor of economics at New York University’s Stern School of Business.

A recession beater Outsourcing

2009-02-11T02:28:00.000-08:00

Source: Infomaticsonline

Written by Andy McCue

The economic downturn and a focus on core business operations will fuel massive growth in IT outsourcing, according to the Butler Group.

Worldwide spend on outsourcing will grow from $75bn this year to $175bn by 2005, the analyst group says in its Strategic Sourcing - Effective Alternatives for the Enterprise report.

And while the outsourcing market is dominated by big players like IBM Global Services and EDS, there will be a sharp rise in the number of medium-sized organisations of 500 to 5,000 employees turning to smaller and more specialist outsourcers.

Users should look at outsourcing as a way of cutting infrastructure costs and adding flexibility in uncertain economic times, said the analyst.

"IT is a utility: a service provided to the business in the same way as any other. How it works is no longer an issue, provided it does the job required, and where a third party can provide or manage a service more efficiently, it is prudent to follow that route," said Maxine Holt, senior research analyst at the Butler Group.

Butler defines outsourcing as the contracting out of business services to a third party, including extended service providers and off-shoring.

Extended service providers range from application service providers (ASPs) and web hosting to more specialised services covering security and wireless.

The entrance of Microsoft, IBM, Oracle and Hewlett Packard into web services with the adoption of software rental as a business model will boost global spend on these services from $7bn this year to $26bn by 2005, according to the report.

Locating services with an overseas supplier will also continue to increase, it says. But the report warns users not to choose ASPs that cannot customise services.

Companies such as Channel 4, British Airways, Friends Provident and Thomas Cook have already located application development or services in India, and spending will increase from $17bn this year to $50bn by 2005.

A recession-proof business tool, Outsourcing

2009-02-11T01:37:00.000-08:00

Source: Tekrati services

By EquaTerra

EquaTerra's 3Q07 Pulse Surveys revealed that demand for Information Technology (IT) and business process outsourcing is improving and is especially strong in the Europe, Middle East and Asia (EMEA) markets. The uptick in outsourcing demand is strong across all major industries, and is occurring even as growth in many vertical markets, such as financial services, is challenged by a range of economic and demographic challenges. Free report, teleconference.

Overall Outsourcing Demand Growth: 51 percent of EquaTerra advisors noted that demand for outsourcing services was up in 3Q07, and their outlook for 2008 was optimistic. Demand growth was strongest into the ITO market segment and in the EMEA market geography. Demand for Finance & Accounting Outsourcing (FAO) outpaced that for Human Resources Outsourcing (HRO), though there are signs of improved HRO demand in EMEA.
lobalization of Outsourcing: The use of remote, lower cost offshore resources to deliver ITO and BPO services continued to grow during 3Q07. However, wage inflation in leading offshore markets like India and the falling value of the U.S. dollar negatively impacted margins of service providers with extensive offshore operations. This, coupled with changing buyer demands and the need for service providers to access talent with more diverse skills, further drove the expansion of delivery capabilities beyond the Indian market into locations like China, Central/South America and Central/Eastern Europe. Similarly, as wage rates across markets converge, more outsourcing buyers in the U.S., along with non-U.S. based services providers, have increasingly begun looking closer to home for onshore delivery resources. Investments in the India market remained strong, however, for both captive and outsourced delivery capabilities, and Indian service providers continued to broaden their delivery capabilities into BPO and newer ITO areas like remote infrastructure management.

Outsourcing Becoming a Recession-Proof Business Tool for Financial Services and Other Industries: There was a consensus between EquaTerra advisors and service providers polled that recent turmoil in the financial services industry could slow some outsourcing efforts in the short-term, and continue to negatively impact some providers. Longer term, however, the expectation is that outsourcing in this industry will grow as buyers seek to reduce operating costs, avoid investments into new systems and capabilities, shift focus to more strategic activities, and leverage their growing supply of skilled global resources. This trend in financial services illustrates that outsourcing as an industry has become “recession-proof”, and that outsourcing is a tool buyers use in up markets to improve performance and in down markets to reduce costs and remain competitive. EquaTerra expects this trend to play out in other industries that are negatively impacted by economic and demographic factors such as aging workforces and weak local labor pools. These industries include consumer packaged goods, healthcare, public sector and retail.

"The findings from our 3Q07 Pulse Surveys are generally positive in terms of the growth, maturation and globalization of both the ITO and BPO markets," said Stan Lepeak, Managing Director of Research for EquaTerra. "While buyers still experience challenges with their outsourcing efforts, overall results have met or exceeded expectations, which has enabled outsourcing to become a commonplace tool that -- regardless of broader economic and market conditions -- buyers employ in an effort to improve their process delivery and reduce operating costs."

About this study

The EquaTerra BPO/ITO Pulse Surveys yield insightful market analysis including longitudinal comparisons derived from recurring topical themes. The Pulse Surveys do not capture quantitative market size information. Rather, these surveys capture changes in demand, scope, capacity and related key market indicators. They highlight changes, and the direction of change, in the outsourcing market compared to prior quarters and years.

Torture of Outsourcing

2009-02-10T02:56:00.000-08:00

Source: Newyorker

Written by Jane Mayer

On January 27th, President Bush, in an interview with the Times, assured the world that “torture is never acceptable, nor do we hand over people to countries that do torture.” Maher Arar, a Canadian engineer who was born in Syria, was surprised to learn of Bush’s statement. Two and a half years ago, American officials, suspecting Arar of being a terrorist, apprehended him in New York and sent him back to Syria, where he endured months of brutal interrogation, including torture. When Arar described his experience in a phone interview recently, he invoked an Arabic expression. The pain was so unbearable, he said, that “you forget the milk that you have been fed from the breast of your mother.”

Arar, a thirty-four-year-old graduate of McGill University whose family emigrated to Canada when he was a teen-ager, was arrested on September 26, 2002, at John F. Kennedy Airport. He was changing planes; he had been on vacation with his family in Tunisia, and was returning to Canada. Arar was detained because his name had been placed on the United States Watch List of terrorist suspects. He was held for the next thirteen days, as American officials questioned him about possible links to another suspected terrorist. Arar said that he barely knew the suspect, although he had worked with the man’s brother. Arar, who was not formally charged, was placed in handcuffs and leg irons by plainclothes officials and transferred to an executive jet. The plane flew to Washington, continued to Portland, Maine, stopped in Rome, Italy, then landed in Amman, Jordan.

During the flight, Arar said, he heard the pilots and crew identify themselves in radio communications as members of “the Special Removal Unit.” The Americans, he learned, planned to take him next to Syria. Having been told by his parents about the barbaric practices of the police in Syria, Arar begged crew members not to send him there, arguing that he would surely be tortured. His captors did not respond to his request; instead, they invited him to watch a spy thriller that was aired on board.

Ten hours after landing in Jordan, Arar said, he was driven to Syria, where interrogators, after a day of threats, “just began beating on me.” They whipped his hands repeatedly with two-inch-thick electrical cables, and kept him in a windowless underground cell that he likened to a grave. “Not even animals could withstand it,” he said. Although he initially tried to assert his innocence, he eventually confessed to anything his tormentors wanted him to say. “You just give up,” he said. “You become like an animal.”

A year later, in October, 2003, Arar was released without charges, after the Canadian government took up his cause. Imad Moustapha, the Syrian Ambassador in Washington, announced that his country had found no links between Arar and terrorism. Arar, it turned out, had been sent to Syria on orders from the U.S. government, under a secretive program known as “extraordinary rendition.” This program had been devised as a means of extraditing terrorism suspects from one foreign state to another for interrogation and prosecution. Critics contend that the unstated purpose of such renditions is to subject the suspects to aggressive methods of persuasion that are illegal in America—including torture.

Offshore Software Development and its Benefits

2009-02-10T01:51:00.000-08:00

Source: Amazines
Written by VIT COERS
From offshore software development is becoming increase with many companies looking to save money and help ensure that more international affairs. Often, sending a project offshore can save money by development costs cheaper, then the economy may be on other development projects, which will be revealed that more profitable. It is a possibility, because offshore workers an hour, there are more experts in developing software.

Company’s offshore development can use their lowest annual outflows due to the reduction of wages and lower bills overheads such as large office and computer equipment. They are also unable to pay as much tax as in many countries, business tax breaks for jobs. Software development offshore has become very popular for the reason above. More and more firms are overseas, which means that business is shrinking international space. As more and more people are teams in other countries, most projects are not completed. It can benefit everyone works for the company.

Until the company can be a benefit of offshore development, they continue to be a viable alternative programming at home. Based on the laws of countries, many companies save money by exploiting the loop holes, etc. and send work offshore. However, the language barrier can lead to major problems of communication, specifications and requirements, it is particularly important for businesses are a factor in advising clients. Who are not able to communicate with others may mean that businesses, customers to lose. Off-shore development is effective in some areas but not for others.

Recession Crisis and Outsourcing

2009-02-10T00:49:00.000-08:00

Source: Amazines

Written by RICKIE WILLIAMS

Some of my ITance friends expressed their fear regarding to the impact of the recent economical recessions over Indian economy and particularly outsourcing industry. They have view of negative impacts but I posses some converse view as I believe that a recession is actually a great time to start a new venture. Take advantage of the lack of froth now, when talent is available, resources are cheap, and you can hear yourself. In fact whenever there's a downturn people outsource more, not less. Organizations want to take costs out wherever they can.

What happens to the host countries where outsourced work is going? Such countries show the downing trends in growth of salary, cost of living, real estate prices etc. These all make cheaper the outsourcing services for offshore companies for instance from US, UK etc. Additionally Recent currency rate further elevate profit margin for offshore companies.

Fundamentally the outsource market is strong and it will not change due to this financial crisis. Western companies are started viewing India as a strategic place to not only outsource higher-value research work, product design etc, but also to sell their own products and services. In the long-term once the dust settles in the US financial market, Indian IT and BPO companies will be in good position to attract more outsource work from the US businesses.

Recent trends of Indian outsourcing industry suggests a strategic shift from low cost services to higher valued KPO like services. This kind of trend will continue and Indian outsourcing industry will add new dimensions to the outsourcing market.

Now a day Indian offshore software and web development companies shows their smartness in dealing the recent recessions. They kept their expenses as such and higher the working time of their staff, higher the quality of out put and reduce the out put time. Among such high quality services offering companies Perception System is one. The portfolio of Perception System depicts a reliable out put with reasonable prices.

Recession causes job cuts

2009-02-09T22:57:00.000-08:00

Source: Amazines
Written by SANDEEP PERIWAL
Almost 2.7 million people around the world have been rendered unemployed by the longest lasting economic crunch in the world. This economic meltdown which began in the middle of the last year and is very much on the high even now; has taken a massive toll on workers across industry verticals and has made people rethink about their expenses and their saving patterns. Call centers too have felt the jitters from these global economic weakness and have tightened up their sleeves to fight back the meltdown with increased productivity, cut backs in perks, skipping several training expenses and generally tightening up on their spending. Although, there has been no mass exodus of employees from Indian Call centers; but everyone can feel the heat of the economic pressures. But the good side of this pressure is that the employees have upped their productivity like never before and the sense of insecurity and the possibility of losing their job has made them put their best foot forward in order to avoid the pink slip! For some, it is a time of great vindication, especially those who have blamed the Indian call centers for the job losses in America. They seem to be getting great joy from the reduced hiring; delayed salaries and postponement of new investments at these call centers. The call center industry seems to be gripped by an unfamiliar sense of uncertainty about the future. As the end of this economic uncertainty does not seem to be in sight the whole industry is waiting with baited breath. The call centers have not been hit as badly as the banking and the financial institutional sector; but that is no consolation for the industry. The downturn in profits has also shown that although Indian call centers are the biggest and the best front and back office services provider; it too is not immune from the global economic downturns. Indian call centers and outsourcing services have provided cheap talent resources to the Western world and have helped them save millions of dollars yet they have not been able to make themselves indispensable because their work is more manual and regular in nature rather than technical and specialized. The only hope in this dim economic situation came from the front runner of the industry INFOSYS that showed profits in its quarterly results and has been able to successfully dodge the recessionary trend. Technology Partners International, a consulting firm which makes an index of global outsourcing deals has categorically said that outsourcing deals are almost down by 10% the world over. The Nasscom (National Association of Software and Service Companies) estimates that although there will 50,000 fewer jobs in 2009, yet it is hopeful that the recession will not crumble the edifice of the call center industry and it will continue to thrive as always. All those who thought that the outsourcing industry is ‘recession proof’ have to now think twice. To fight the threat of recession; the call center industry has pulled up its socks and is now giving greater productivity and making its business operations more efficient. More and more call centers are offering better deals to all its clients in order to cushion itself from the downturn. This is great for the outsourcers who can now draw up improved contracts and further save costs.

Outsourcing Industry and Impacts of Recession

2009-02-09T22:10:00.000-08:00

Source: Amazines
Written by SHOAIB MARFATIYA
Generally people believe that recessions have all the way negative impacts every where but it is not true. Outsourcing industry shows significantly mild impacts and some where positive too. Indian outsourcing industry shows greater degree of flexibility to combat the prevailing situation.

Some of my ITance friends expressed their fear regarding to the impact of the recent economical recessions over Indian economy and particularly outsourcing industry. They have view of negative impacts but I posses some contrary view as I believe that a recession is actually a great time to start a new venture. Take advantage of the lack of froth now, when talent is available, resources are cheap. Previous experience reveals that whenever there's a slump people outsource more, not less. Organizations want to take costs out wherever they can.

What happens to the host countries where outsourced work is done? Such countries show the downing trends in growth of salary, cost of living, real estate prices etc. These all make cheaper the outsourcing services for offshore companies for instance from US, UK etc. Additionally Recent currency rate further elevate profit margin for offshore companies.

Fundamentally the outsource market is strong and it will not change due to this financial crisis. Western companies are started viewing India as a strategic place to not only outsource higher-value research work, product design etc, but also to sell their own products and services. In the long-term once the dust settles in the US financial market, Indian e-commerce and BPO companies will be in good position to attract more outsource work from the US businesses.

Recession Period and Cost Effective Outsource Web Development

2009-02-09T20:37:00.000-08:00

Source: Amazines
Written by SMITHS CHARLES
Everybody needs business in that recession period, every company fear from recession because it’s completely difficult to manage the company in that recession time, if we talk about particular outsourcing industry. Now a day Indian web development and Indian offshore companies shows their smartness in dealing the recent recessions Companies focus on holding there existing clients and try to find new clients by using cost effective way.

Actually it is the greatest opportunity to do new venture, when talent is available and resources are cheap, we should not panic and give up our websites, or accept that we will get less business, but if you will try to fight not in recession but in any circumstances I am sure that you will get batter result.

only make a site for the business it’s not the solution, if you want to fight with your competitors you need to applying creativity and providing verity with cost effective to your customer in that recession period that will be your plus point for you business. In Web Development era everybody wants their website to be fast, and easy understand for the users. After complete the website bring user to your site that should be the aim of every online business, after all visitors will be your clients.

Here is some great news for the e-commerce sites just check it out.

In that recession period consumer wants quality things with great offers because in recession people are not ready to spend to much money on particular thing, for E-commerce sites we needs to survive our products with great offers,

For example:

• Special wedding offers • Seasonal offers (like winter or summers) • If you are purchasing above 1000 bucks you will get 10% discount, • Write guaranties on home page and in attractive banner. • Lots of sites are not writing address on their site that means it could be a fake site so please write your address on your contact us page and also write your cell no if it is possible so costumes can easily get in touch with you, • 20% off on some products or give a small gift on any purchase.

By using that kinds of offer customers will have to attract man, and you will get more business. Perception system will help you put these products on your site with effective manner.

So “Are you ready to jump?” just compare the quality of work and prices, and get business in that recession period we will help you to make your site and also for getting business. Among such high quality services offering companies perception System is one of them, just check out the portfolio of perception system you feel that reliable out put with reasonable prices, after all Customer satisfaction is our motto . You are just one click away to do this.

Advantage of the Intellectual Property Outsourcing

2009-02-09T02:25:00.000-08:00

Source: Outsourcing 2 India

Intellectual property (IP) refers to creations of the mind: inventions, literary and artistic works, symbols, names, images and designs used in commerce. IP plays an important role in an increasingly broad range of areas, ranging from the internet to healthcare to nearly all aspects of science and technology, law, literature and the arts. Understanding the role of intellectual property in these areas - many of them still emerging - often requires significant new research and study.

No person or for that matter no business organization is an island unto itself. No business enterprise is capable enough to perform all its activities by itself. It has to depend upon some other entities for some of its functions. Assigning some of its activities by a business to others is by general definition called outsourcing. Companies take a step back, look at what their competencies are and are not, and if they find some are deficient, they contract an outside business whose expertise covers those aspects.

With a realization that they can't be all things to all people, service organizations like Intellectual Property practitioners, lawyers, physicians, surgeons, dentists, clinical laboratories, hospitals are relying on service providers to manage critical but non-core processes for them. By doing so they are able to focus more on their core competencies. It is in fact essential for them to do so as these professionals are generally operating with skeleton staff strength and for the sake of profitability are not in a position to maintain large work force.

Outsourcing of support functions like search, analysis, proof reading, reminders to the customers, pay roll, drafting and editing of documents, maintaining personal records of customers, research and development (R&D) et al allows them to focus on their core competencies and remain profitable. It won't be wrong to say that in 10-15 years from now, service organizations may be outsourcing all work that is "support" rather than revenue producing to keep themselves afloat.

The management needs to look at the business from a strategy perspective. Without these aspects taking up personnel and time, they could focus their capital and energy on other areas. Outsourcing has many benefits, including the fact that the outsourcer's job is to devote its resources to this one aspect of a business, be it financial or legal, etc. In general, this would mean that the service level would be higher. These outsourcers are providing a better service at a much lower cost than the company's costs in performing the function in house. Outsourcing gives these businesses the opportunity to provide much improved quality of service to their customers.

Outsourcing of intellectual property functions is not a new phenomenon. For many years now, outsourcing of mainly support functions has become a major player in the business game of IP practitioner firms in the US. Despite the anti-outsourcing rhetoric, businesses must remain profitable in today's highly competitive global economic environment particularly when the IP practitioners and other professional service providers are operating on razor thin margins. Those firms that outsource some of their functions into other countries are reaping rewards and meeting the bottom-line goals.

In recent months Microsoft Corp. began using Indian professionals to search for prior art - written information about an invention - in preparation for filing patent applications. Other Fortune 500 companies, such as Oracle Corp., have considered it. And law firms, which often follow the lead of their customers on new initiatives, are finally catching on.

Outsourcing may be a dirty word for some people for political considerations. But in the real world - where costs and competitiveness matter - Intellectual Property Practitioners, medical practitioners as well as lawyers, like other professionals, have started to recognize the value of tapping into the highly educated, English-speaking Indian workforce to carry out tasks that would typically be performed by junior-level employees. Several outsourcing companies are courting the U.S. legal market, using Indian lawyers, scientists, and other trained professionals in cities like Hyderabad, Bangalore, and Noida. There are a few different emerging models. Vendors like Lexadigm Solutions and Lawwave.com rely exclusively on Indian lawyers to conduct low-level legal work and analysis. Others, like Office Tiger, use a mix of lawyers and trained professionals to handle legal and non-legal tasks such as managing conflicts databases and document management and review.

Cost Savings and Outsourcing BPO to India

2009-02-09T01:44:00.000-08:00

Source: Outsource 2 India

Bob Beauchamp, BMC Software President and CEO talked about the backlash in the US where an economic rebound had not created jobs. Addressing the Product and Embedded Software Summit in Bangalore he said that there may be a backlash, "But as studies have indicated that for every one dollar invested in India, the value derived by the US economy is between $12-14." He termed outsourcing to India as "irreversible" and said it was a "must have" to improve the Indian and global economy.

NASSCOM has tried to address some of the concerns voiced by anti-outsourcing parties especially about the benefits to the American economy.

The study shows that US businesses have witnessed significant cost savings by offshoring to India.

The US banking, financial services and insurance (BFSI) sector's costs are 7-10% lower than that of its European counterparts
American BFSI companies have saved $6 billion in the last four years by offshoring to India.

Outsourcing and Indian Advantage

2009-02-09T00:37:00.000-08:00

Source: Outsource 2 India

The Indian advantage lies primarily in the educational and technical qualifications of the personnel, who are often more qualified than the people working in the parent locations. A survey conducted in 2002 by NASSCOM (National Association of Software and Service Companies) showed that an India based ITES-BPO center in the banking and financial service sector, performs better than a UK or US based facility on significant factors such as the number of correct transactions/total umber of transactions, total satisfaction factor, number of transactions per hour and the average speed of answers.

The ITES-BPO industries are most sensitive to incorporating internationally accepted standards of quality assurance. The NASSCOM survey also found that 50 percent of Indian companies have implemented varied levels of ISO (The International Organization for Standardization, which conceives sets of quality management standards) such as ISO 9002, ISO 9001, ISO 9001:2000, ISO 9001:2001.

The survey also says that 45 percent of Indian service providers have certifications like Six Sigma (a disciplined, statistical quality control method that measures the number of defects compared to the opportunities to make defects) and CMMI (Capability Maturity Model Integration - which is a process improvement method that provides a set of best practices that address productivity, performance, costs, and customer satisfaction.). Moreover, a lot of organizations are upgrading their quality standards to from the ISE 9000 to the new ISO 9000:2000, and from the CMM framework to the new CMMI framework.

Outsource2india hires only the best. Our personnel are highly educated and well trained in using the latest software and technologies available in the market. We have international quality assurance processes. We are an organization who also follows six sigma processes.

The Reasons to Outsource to India

2009-02-08T23:01:00.000-08:00

Source: Outsource 2 India

Today, outsourcing has almost become the order of the day. So why are global organizations choosing outsourcing? More and more global companies are choosing to outsource today for a number of reasons, such as, cost-effective services, increased efficiency, increased productivity, shared risks, reduced operating costs, increased quality, better services and more time to focus on core competencies. These are just a few of the reasons why organizations are outsourcing today. But why outsource to India and why do companies outsource to India. India is the most ideal place to outsource to, because India offers several advantages.

India has been a pioneer in providing outsourcing solutions and has been providing a range of outsourcing services to countries across the globe. Today, India can be called as the world’s outsourcing hub. Outsourcing to India can help your organization benefit from cost-effective services, high-quality services, reduced operating costs, greater flexibility and faster-time-to-market amongst others. These are just a few reasons why companies outsource to India. Another reason why outsourcing to India makes good business sense is because India has high-end technology and best-of-breed infrastructure. India has now become the world’s most preferred outsourcing location. India is also the global hub for software enabled services and software development.

Outsourcing to India can give your organization a competitive edge. The following are a list of reasons why companies outsource to India.

1. Cost-effective services

The numero uno reason why global organizations outsource to India is because India offers cost-effective services. Outsourcing to India can help you save more than half of your operating costs! India has a large, educated, trained and technically skilled manpower and this number only keeps growing every year. Unlike the west, where technical talent is rare, India has a large pool of highly-skilled professionals. Having a large technically skilled manpower has enabled India to provide cost-effective services without compromising on quality. Outsourcing to India, can help you save on your operating costs, while increasing your productivity, quality and efficiency.

2. High-quality services

India uses the latest in software, technology and infrastructure to provide global customers with high-quality outsourcing solutions. India has proved that it is technically superior when compared to other countries that provide outsourcing solutions. So, when you outsource your work to India, you can be assured that the best technology and software would be used for your services. India has the largest English-speaking audience after the U.S. India also has a highly educated manpower that is talented, educated, experienced, technically-skilled and computer literate. Outsource to India and be assured of high-quality services.

3. Time Zone Advantages

The time zone advantages between India and countries in the U.S and U.K has proved to be another important factor why companies outsource to India. Organizations who wish to provide their customer with 24x7x365 days customer support or helpdesk services can outsource to India.

4. India’s stable government

India has celebrated more than 60 years of democracy and has one of the world’s most stable governments. Building up the IT sector has been a top priority for the Indian government. India has a ministry of information technology that quickly approves the implementation of IT projects and streamlines regulatory processes. The Indian government has even released a bill termed as the “IT act 2000” India has been rated to have the most excellent investment potential in the coming years. The Indian government has given complete support to the IT and ITES industry in India. With ample support from the government, Indians have been able to build high-tech IT parks which has the best in technology and infrastructure. The Indian government has even permitted 100% foreign equity. India’s fast growing economy has been yet another reason why companies are outsourcing to India.

5. The Indian Advantage

Cost-effective services are one of the primary advantages that India offers, but it is not the only advantage of outsourcing to India. Outsourcing to India can give you access to professional and skilled outsourcing solutions within a fast turnaround time. By outsourcing to India, your organization can concentrate on core business activities and save on time, effort, manpower and infrastructure. More than 20 Indian software companies have achieved the prestigious SEI-CMM level. India also has the highest number of ISO-9000 software organizations. Outsource to India and give your organization a competitive advantage.

6. Global organizations’ most preferred choice

India has been the most preferred choice among global organization when it comes to outsourcing. In the U.S alone, more than 80% have ranked India as their first choice, when outsourcing software and IT services. The U.S has also recognized India as an outsourcing superpower. The number of organizations outsourcing services to India has only been increasing over the years. This is reason enough to outsource to India.

The History of Outsourcing in India

2009-02-08T21:52:00.000-08:00

Source: Outsource 2 India

The idea of outsourcing has its roots in the 'competitive advantage' theory propagated by Adam Smith in his book 'The Wealth of Nations' which was published in the year 1776. Over the years, the meaning of the term 'outsourcing' has undergone a sea-change. What started off as the shifting of manufacturing goods to countries providing cheap labor during the Industrial Revolution, has taken on a new connotation in today's scenario. In a world where information technology has become the backbone of businesses worldwide, 'outsourcing' is the process through which one company hands over part of its work to another company, making it responsible for the design and implementation of certain business process under the requirements and specifications of the outsourcing company.

This outsourcing process is beneficial to both the outsourcing company and the outsourcing service provider. In an outsourcing relationship, the outsourcing service provider enables the outsourcer to reduce operating costs, increase quality in non core areas of business, save on effort and increase in productivity Outsource2india (O2I), a pioneer in outsourcing since the year 1999, provides ten distinct services which cater to a wide range of industries. Outsource to O2I and get access to proficient and cost-effective services.

Since the onset of globalization in India during the early 1990s, successive Indian governments have pursued programs of economic reform committed to liberalization and privatization. Until the year 1994, the Indian telecom sector was under the control of the governmental. The state owned units in India enjoyed a monopoly in the market. In the year 1994, the government announced a policy under which the sector was liberalized and private participation was encouraged. The ‘New Telecom Policy’ of 1999 brought in further changes with the introduction of IP telephony and ended the state monopoly on international calling facilities. This brought about a drastic reduction heralded the golden era for the ITES/BPO industry. This in turn ushered in a slew of inbound/outbound call centers and data processing centers.

Although the IT industry in India has existed since the early 1980s, it was the early and mid 1990s that saw the emergence of outsourcing. One of the first outsourced services was medical transcription, but outsourcing of business processes like data processing, medical billing, and customer support began towards the end of the 1990s when MNCs established wholly owned subsidiaries which catered to the offshoring requirements of their parent companies. Some of the earliest players in the Indian outsourcing market were American Express, GE Capital and British Airways.

At Outsource2india, we provide call center services, data entry services, engineering services, financial services, creative services, web analytics services, healthcare services, digital image editing services, software services, research and analysis services and a host of other additional services. Outsource to Outsource2india and get access to competitive services that can give your business a competitive edge!

The ITES or BPO industry is a sector in India that has been in existence for a little more than ten years. Despite its recent arrival on the Indian scene, the industry has grown phenomenally and has now become a very important part of the export-oriented IT software and services environment. It initially began as an activity confined to multinational companies, but today it has developed into a broad based business platform backed by leading Indian IT software and services organizations and other third party service providers.

The ITES/BPO market expanded its base with the entry of Indian IT companies. The ITES market of the present day is characterized by the existence of these IT giants who are able to leverage their broad skill-sets and global clientele to offer a wide spectrum of services. The spectrum of services offered by Indian companies has evolved substantially from its humble beginnings. Today, Indian companies are offering a variety of outsourced services ranging from customer care, medical transcription, medical billing services and database marketing, to Web sales/marketing, accounting, tax processing, transaction document management, telesales/telemarketing, HR hiring and biotech research.

Looking at the success of India's IT industry, the central government identified the ITES sector as a key contributor to the economic growth that prioritized the attraction of FDI in this segment by establishing 'Software Technology Parks' and 'Export Enterprise Zones'. Benefits like tax-holidays generally enjoyed by the software industry were also made available to the ITES/BPO sector. The National Telecom Policy (NTP) was introduced in the year 1999 and the deregulation of the telecom industry opened up national, long distance, and international connectivity to competition. The governments of various states also provided assistance to companies to overcome the recruitment, retention, and training challenges, in order to attract investments to their region.

The National Association of Software and Service Companies (NASSCOM) has created platforms for the dissemination of knowledge and research in the industry through its surveys and conferences. NASSCOM acts as an 'advisor, consultant and coordinating body' for the ITES/BPO industry and liaisons between the central and state government committees and the industry. The ardent advocacy of the ITES/BPO industry has led to the inclusion of call centers in the 'Business Auxiliary Services' segment, thereby ensuring exemption from service tax under the Finance Bill.

These measures have led to a steady inflow of investments by large foreign companies such as Reuters, for establishing large captive ITES/BPO facilities across India. Moreover, the existing ITES/BPO operations of major multi-nationals are also being ramped up to cater to the ever increasing demand for better and speedier services. Almost all of India's top ITES/BPO giants have announced some form of expansion and are in the process of hiring manpower to fill in the additional seats. India's competitive advantage lies in its ability to provide huge cost savings thereby enabling productivity gains and this has given India an edge in the global ITES/BPO marketplace. NASSCOM studies pinpoint the following factors as the major reasons behind India's success in this industry.

Abundant, skilled, English-speaking manpower, which is being harnessed even by ITES hubs such as Singapore and Ireland
High-end telecom and infrastructure which is at par with global standards
Strong quality orientation among players and their focus on measuring and monitoring quality targets
Fast turnaround times and the ability to offer 24x7 services based on the country's unique geographic location that allows for leveraging time zone differences
Proactive and positive policy environment which encourages ITES/BPO investments and simplifies rules and procedures
A friendly tax structure, which places the ITES/BPO industry on par with IT services companies.

Outsourcing to India offers significant improvements in quality and productivity for overseas companies on crucial parameters such as number of correct transactions, number of total transactions, total satisfaction factor, number of transactions/hours and the average speed of answers. Surveys by NASSCOM also revealed that Indian companies are better focused on maintaining quality and performance standards. Indian ITES/BPO companies are on an ascending curve as far as the quality standards are concerned. Organizations that have achieved ISO 9000 certification are migrating to the ISO 9000:2000 standards and companies on the CMM framework are realigning themselves to the CMMI model. Apart from investing in upgrading their CRM and ERP initiatives, many Indian ITES companies are beginning to acknowledge the COPC certifications for quality and are working towards achieving COPC licenses.

Despite being a fledgling in the global ITES/BPO industry, the Indian ITES industry recorded a growth rate in excess of 50% in the years 2002-03. Industry experts consider this a positive indication of the times to come and a look at the ranking and the revenue and headcount statistics show the potential of the industry. The global ITES/BPO industry was valued at around US$ 773 billion during the year 2002 and according to estimates by the International Data Corporation worldwide, it is expected to grow at a Compounded Annual Growth Rate (CAGR) of 9% in the future. NASSCOM lists the major indicators of the high growth potential of the ITES/BPO industry in India as the following.

During the years 2003-04, the ITES-BPO segment achieved a 54 percent growth in revenues as compared to the previous years
ITES exports accounted for US$ 3.6 billion in revenues, up from US$ 2.5 billion during the years 2002-03
The ITES-BPO segment also proved to be a major opportunity for job seekers, creating employment for around 74,400 additional personnel in India during the years 2003-04
The number of Indians working for the ITES sector jumped to 245,500 in the year 2004
In the future, the BPO segment is expected to employ over 1.1 million Indians, according to studies conducted by NASSCOM and leading business Intelligence company, McKinsey & Co. Market research shows that in terms of job creation, the ITES-BPO industry is growing at over 50 percent

US Recession and the Benefit of IT Offshore Outsource

2009-02-07T03:25:00.000-08:00

Source: Article Archives
The slowdown of US economy may actually be a blessing in disguise for the Indian IT services sector. Experts say, it's expected to get a boost as more and more American and European companies offshore to cut costs. Buyers of IT services may actually consider increasing the percentage of their labour in offshore, lower-cost locations. India, will remain the dominant location for IT offshore services both for American and European buyers, says Gartner in its latest report.

Buyers of IT services will shift from cost containment goals to a greater focus on cost reduction and productivity increases in their sourcing decisions. "This will lead to a steady increase in the adoption and expansion of offshore services - primarily from India. Factors that will give India the edge over other offshore locations are scale and quality of labour," says T J Singh, research director, Gartner.

North American and European buyers of IT services have been the force behind a growing offshore services market and India is central to almost any discussion of offshore services delivery for these buyers.

"Whether it is the indigenous India-centric service providers that have a wide-reaching impact on the IT services sector, or a vast and growing IT labour pool being trained to support a global client base, India will continue to be the most-sophisticated country option to source offshore IT services in the near term," Singh feels.

Gartner sees two possible scenarios that will have an impact on offshore services adoption in the coming months; temporary economic downturn (best case scenario) or a more sustained recession (worst case scenario).

While in the first scenario, buyers will aggressively seek cost-saving measures by accelerating offshore delivery. In the worst case scenario, there will be more-aggressive movement to cut IT budgets.

Offshore Outsourcing and the crisis of Recession

2009-02-07T02:31:00.000-08:00

Source : PC World

Written by Phil Fersht, CIO.com

I recall sitting on a panel at an outsourcing conference in New York City back in 2004 when the major spike in offshore outsourcing kicked into gear. There were protesters outside, demonstrating their frustration about U.S. jobs "moving offshore". In response, an attorney declared, "outsourcing provides a great opportunity for the U.S.-we can "offload low-value jobs and focus on higher-value, more innovative work". I recall thinking to myself, even then, that that argument didn't quite add up.

While it sounds like a nirvana, the reality is we're competing globally for labor, for making cheaper, better cars, for delivering good quality IT services, for delivering quality finance, HR and supply chain support. If the U.S. is to truly deliver "higher-value", the government needs to invest in education programs that develop this talent. The reality is that the rest of the world caught up. People in Chennai, Manila, Bucharest, Guatemala City, Guangzhou, etc. are being trained to compete with American, British, French and German workers, and the Internet and new technology have been a huge enabler to make this happen. A good friend who works for one of the leading India-based BPOs recently suggested, "We should bring over the training leaders from the top Indian outsourcers and have them work with U.S. businesses to get their act together."

What continues to irk me, is that industry has become so focused on making its quarterly numbers that it has taken its eye off the long-term picture. We saw this financial meltdown coming-and did nothing (wasn't the Asian crisis of the '90s warning enough?). We are seeing further deterioration of the environment-and still do little. We saw the U.S. automotive industry grind down to its current predicament-and have done nothing. And we are seeing the IT and business process outsourcing industry rapidly develop across the globe-and have blissfully ignored it to meet these cost-containment targets.

And how to we respond? Bailouts. We're now talking about bailing out the failing automotive industry. How did it come to this? Years of greed, a deterioration of our work-ethics, and developing nations eager to get a taste of what we have. It's as if we had a major cardiac arrest and are now hoping we can recover fully from open-heart surgery.

And this time when we do recover (and we will), we simply have to make sure this never happens again. Some will argue this is all about natural economics of globalization and a free market-and they are probably right. However, this time we have truly reached an inflection point.

How the Outsourcing Landscape Will Change in This New Economy

What is clear, is that shipping jobs offshore isn't necessary very healthy for the rising U.S. unemployment rate.

What's more, many offshore service providers are now focused on taking on more high-value work activities for their clients, in addition to routine transaction work. For example, once you have your general ledger run from a service provider in, say Chennai, what is now stopping that provider taking on higher-value accounting services, such as budgeting/forecasting and business intelligence? That provider basically owns and understands much of the revenue cycle of that client, hence the natural next step is to move up the process value chain.

And if your current provider won't move up the value-chain, there is a proliferation of KPO providers willing and ready to take on higher-value offshore work. Moreover, while a firm may have been enjoying good quality COBOL programming from Brazil, what's stopping that provider offering systems architecture work for their client, which is among the costliest onshore IT services?