Monday, May 25, 2009

IT firms find payroll outsourcing a good bet

Amid the ongoing slump in the financial service industry, payroll outsourcing has emerged as a better bet for Indian IT firms looking to provide the entire gamut of HR solutions to the US and European clients.

Companies like Infosys, TCS and Caliber Point are relying on pay roll outsourcing to achieve faster growth. No wonder, payroll outsourcing has tipped its subset human resource outsourcing in terms of growth.

A recent study shows that while payroll outsourcing registered a growth of 50 per cent, HR outsourcing grew only at 12 per cent.

“We have started to see payroll services getting more interest from larger and organized suppliers,” Gaurav Gupta, principal and country head of Everest Group.

Payroll outsourcing market pegged at $250 million is much smaller compared to HR outsourcing market at $1.3 billion.

But a large part of HR outsourcing requires onshore or near shore presence for understanding tax and regulatory issues, negating the cost advantage.

In contrast, payroll outsourcing provides immediate and quick cost reduction. It also provides simplification and standardization of the payroll process with quicker access to information.

Out of 104 multi-country, HRO deals signed as of December 2008 only 30 deals included Asia Pacific, but out of 78 multi country payroll deals, 58 were signed in the Asia-Pacific region. Realizing the opportunity Indian players are now getting aggressive to acquire more deals.

“Infosys has partnered with a niche player for providing these payroll solutions in many different geographies and that is the trend going forward,” Gupta said.

The US recession has proved that dependence on just one vertical, BFSI, which accounts for 50 per cent of the outsourcing market can be risky.

So, payroll outsourcing is now emerging as the new opportunity for Indian BPO/ITO companies to leverage on.

Source: http://profit.ndtv.com/2009/05/24212809/IT-firms-find-payroll-outsourc.html

Friday, May 22, 2009

Airline Rule Threatens Pact With EU

The US House of Representatives passed a measure aimed at boosting air safety that threatens to disrupt cooperation with Europe.

The provision, passed as part of a bill to fund the Federal Aviation Administration, requires for the first time that FAA experts inspect at least twice annually any overseas maintenance facility handling American airliners. Currently, the FAA relies heavily on inspections by its foreign counterparts.

The bill's sponsor, House Committee on Transportation and Infrastructure Chairman James Oberstar, said he added the provision because US carriers are increasingly outsourcing maintenance work overseas. Inspections of these facilities would "ensure that foreign entities conducting repair work on US aircraft adhere to US safety standards and regulations," he recently told a gathering in Washington.

Opponents say the current system works fine, and the provision is an effort to protect US jobs. They say it will duplicate inspections.

Final passage of the FAA act could take months, as it must next go to the Senate, which could remove the inspection provision.

But the new provision has already prompted the European Union to freeze enactment of a safety accord signed last June with the US And EU officials say that if the US demands FAA inspection of European repair stations, they will respond by requiring European inspections of repair facilities in the US The overlapping inspections could cost millions of dollars for each side.

The new provision "goes against the spirit and the wording of the US-EU Aviation Safety Agreement," said Daniel Hoeltgen, spokesman for the European Aviation Safety Agency, or EASA, the EU's counterpart to the FAA. The accord would boost cooperation, in part by establishing a joint US-EU board to oversee maintenance and certification. EU officials say such mutual assistance can't work if the US is acting unilaterally.

An FAA spokeswoman declined to comment.

Air safety is a delicate topic now, as accidents in the US and Europe -- two of the world's safest aviation markets -- killed 220 people and destroyed seven airliners between August and February, significantly more than in recent years.

Backers of the provision say that maintenance outsourcing poses big safety risks. Robert Roach Jr., general vice president of the International Association of Machinists & Aerospace Workers, which represents US maintenance workers, recently told a congressional hearing that his members had repaired planes returning from overseas flights that had "departed with obvious mechanical problems."

Under current rules, the FAA works with foreign air-safety regulators to ensure their inspections of local repair shops are on par with what the FAA would do. FAA experts then use the foreign reviews -- plus FAA spot checks -- to certify repair stations for US airliners.

Some 700 facilities outside the US now maintain American planes, about 400 of them in Europe. In the US, more than 1,200 repair shops have certification by foreign aviation authorities on top of that from the FAA.

Source: http://online.wsj.com/article/SB124291388570643335.html?mod=googlenews_wsj

Thursday, May 21, 2009

Upset with outsourcing, union won't give up raise

One major state workers union is saying "no thanks" to Gov. Jim Doyle’s call for them to give up a promised raise to help fill a gaping state budget hole.

The workers won’t give up the 2 percent raise scheduled for June as long as the state continues to outsource additional work to contractors, said Bryan Kennedy, president of AFT-Wisconsin. The union has roughly 10,000 white-collar state workers including computer staff, public defenders and university teaching assistants.

"As long as the state continues to contract out, we will not discuss giving back the pay increase," said Kennedy, arguing that state workers are cheaper for taxpayers than contractors. "It’s a non starter."

Earlier this month, Doyle said he would rescind a pay raise for 9,500 non-union state workers to help fill a $1.6 billion hole in the state budget opened by falling tax collections and the struggling economy.

If the state’s 38,600 union workers don’t agree to give back their pay raises as well, Doyle has said that he could seek the savings by laying off up to 400 of them. Those layoffs would come on top of up to 700 layoffs and 16 days of unpaid leave for state workers also being sought by Doyle to solve the budget gap.

Department of Administration spokeswoman Linda Barth on Wednesday repeated the possibility of added layoffs if unions don’t go along with the pay cuts. She said state agencies are also looking at cutting spending on contracting.

As recently as April and early May, state agencies without enough staffing have taken steps toward possible contracting for computer work in spite of cost figures that show state workers would could do the projects for hundreds of thousands of dollars less, according to documents provided by AFT-Wisconsin.

If all union workers give back the 2 percent raise, that would save some $30 million in state and federal money spent on salaries. Marty Beil, executive director of the 20,000-member Wisconsin State Employees Union, didn’t respond to requests for comment.

Source: http://www.madison.com/wsj/home/local/451976

Wednesday, May 20, 2009

Toshiba says to end cellphone output in Japan

Japanese electronics group Toshiba Corp said on Wednesday it would end production of mobile phones in Japan in October and outsource some output to overseas manufacturers to cut costs as demand slumps.

Cellphone sales in Japan tumbled about 30 percent last financial year as a new business model came into effect that led to handset price hikes, prompting consumers to hold onto their phones longer, while the economic downturn also weakened demand.

Toshiba's mobile phone unit sales halved last financial year, causing it to log its first annual operating loss on these operations in five years.

The company, Japan's No. 6 cellphone maker with a 7 percent market share, said it would continue to make smartphones in China on its own as it shifts focus to the growing segment of phones with computer capabilities.

The planned outsourcing would help it cut 4.5 billion yen ($47 million) in annual fixed costs, a Toshiba spokesman said.

Toshiba has forecast it will return to an operating profit this financial year as it pushes ahead with a $3 billion cost-cutting plan. It logged massive losses last year after sharp price falls and sluggish demand battered its main chip business.

Toshiba shares closed down 1.9 percent at 355 yen, against a 0.6 percent rise in the benchmark Nikkei average .N225.

Source: http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUST19832520090520

Monday, May 18, 2009

Hynix raises US$300 million in IC packaging outsourcing deal

Hynix Semiconductor is to establish a back-end IC packaging joint venture in China with Wuxi Industrial Development Group Company Ltd. Certain equipment currently owned by Hynix in both Korea and China will be purchased Wuxi Industrial Development Group, for approximately US$300 million.

The IC packaging JV will support production at Hynix-Numonyx Semiconductor facility in Wuxi. The new JV reduces the Korean based memory manufacturers back-end operations by 20%, resulting in Hynix now outsourcing 50% of back-end operations

Source: http://www.fabtech.org/news/_a/hynix_raises_us300_million_in_ic_packaging_outsourcing_deal/

Outsourcing American dreams and Hollywood endings

America was always wearing a big smile when it strode into our living room in damp and ghostly England: Lucille Ball, the Beach Boys, a shining young president with two small kids, all stepped down from the screen in the days just before the convulsions of Vietnam, and summoned my Indian-born parents and me to the Land of Promise and Unending Sunshine.

It would never seem quite so rosy after we knew it off screen, but Ronald Reagan or Julia Roberts -- even Bruce Springsteen, at times -- ensured in later years that America still meant to the outside world possibility, freedom, the perpetual future tense. It was, everyone knew, the home of the Hollywood ending: the final clinch, justice restored by the lone hero, the dawning of a bright new day.

Or so, at least, ran the self-fulfilling myth of the last 100 years, rightly called the American century.

In 1890, as the global columnist Fareed Zakaria points out, the United States had only the 14th-largest army in the world, and its navy was an eighth the size of Italy's. By the late 1940s, it controlled 50% of the world economy.

The growth of technology meant that the American dream got turned into a global cottage industry that everyone longed to feed on. It was the vision that drew millions of dreamers up from south of the border, over from East Asia and my parents' Bombay, and as these migrating dreamers raised the country to even greater heights, they made it their business to spread rags-to-riches stories to the world (on screen) and to tell their friends back home that you really could find new beginnings in America.

As soon as the new century began, though, we were not so quietly reminded that dreams at some point bump into realities. America's very youthfulness, its remoteness from the tragic lessons of history, seemed to render it more vulnerable to terrorists than even the victims of later (and much smaller) attacks in London or Madrid or Mumbai (the former Bombay) would be. It was as if endless summer had no way of dealing with darkness and cold. Hell, to adapt Shakespeare to America, hath no fury like a dreamer scorned.

Yet as the seasons have continued turning, and as we have adjusted to a new vision of reality, that initial shock has matured into something much more promising. Returning to America this spring, after many months in Japan and India and Europe, I am struck by how much the country, in the wake of its latest attack (from the treacherous cycles of the market), seems in tune with the rest of the world, at last.

Our new president smiles less than did his predecessor, and many of us feel better for it. On a recent episode of the Japanese version of "Who Wants to Be a Millionaire," one question noted that the ringing word Barack Obama kept out of his inauguration address was not "freedom" -- or "peace" -- but "dream."

It has long seemed to some of us that America could best play a part in the new global order once it had older hands, from more seasoned cultures, to help direct its evergreen energy and hopefulness. Youth, as wise men have it, is wasted on the young. As soon as the New World was ruled by people from Iran and Vietnam, bringing us their own, more weathered sense of history, the land of happy endings would have both the experience to see what was realistically possible and the freshness to make it happen. The American dream would have less to do with conquering the world than -- as seems to be happening already -- with living in something like harmony with it.

To the planet as a whole, our new president speaks for the hope and opportunity, the youthfulness of America, which is what most of the planet craves. But to anyone who's met him on the page, he comes from some much older and more qualified place. His memoir is not about finding his roots and bringing "closure" to his search for identity but, rather, about being unsettled and even shocked by what he found out about his father and his legacy in Kenya, and being haunted by Indonesia even in the born-again sunshine of Hawaii. His tone in recent months has been prudently sober, refusing to talk too easily of happy endings or quick victories.

At times this looks like the best, and most unexpected, new development of the century: What's being outsourced now are American dreams and Hollywood endings. After all, this year a British film from my parents' Bombay about the victory of hope and rags-to-riches dreams got the top Oscar, eclipsing our home-grown movies about doubt, a murdered San Francisco revolutionary, a "dark knight" and a prematurely old little boy.

I'd never have guessed it in rainy old England: The Old World is becoming new, even as we -- at last -- are getting a little older.

Pico Iyer is the author, most recently, of "The Open Road: The Global Journey of the Fourteenth Dalai Lama."

Source: http://www.latimes.com/news/opinion/commentary/la-oe-iyer17-2009may17,0,2715857.story

Wednesday, May 13, 2009

TCS bags outsourcing deal from Volkswagen

Tata Consultancy Services has bagged a five-year IT outsourcing deal with Volkswagen (VW) Group UK which for the first time will use a mixture of onshore and offshore services for managing its software infrastructure.

As part of this engagement, TCS will manage the corporate IT systems, data centres and applications of VW, Mr A. S. Lakshminarayanan, Vice-President and Head of Europe, TCS, told Business Line from London.

“Due to the economic downturn, facilities of auto companies in the UK are not running at full capacity. Hence they are keen to reduce variable operational costs as much as possible. Partnering with companies such as TCS helps them in doing that in addition to improving work efficiency,” he said. TCS will help in virtualization of VW`s servers and consolidate them on a single platform, added Mr Lakshminarayanan. However, neither company disclosed the overall deal size or the number of people to be deployed for the engagement.

TCS’s services will cut across the VW group’s operations including brands such as Audi, SEAT, Škoda, Volkswagen Passenger Cars and Volkswagen Commercial Vehicles. Volkswagen Group UK Ltd is a wholly owned subsidiary of German carmaker, Volkswagen AG, which produces one in every six new cars sold in the UK, according to a press release from TCS.

The global auto industry is facing a huge crisis because of a drastic fall in sales volume due to the ongoing recession. In spite of the downturn, companies still need IT services to manage their day-to-day operations, said Mr Lakshminarayanan.

“Moreover, the positive thing is that the UK Government is giving incentives for consumers to buy cars,” he added.

TCS has several high profile automobile customers such as Ducati and Ferrari in Europe. The company’s scrip was down 2.36 per cent and closed at Rs 622.5 on the BSE.

Source: http://www.thehindubusinessline.com/2009/05/14/stories/2009051452490100.htm

Tuesday, May 12, 2009

Unisys Wins IT Outsourcing Contract Extension From LANDIS+GYR

Unisys Corporation today announced that its Unisys Switzerland subsidiary has secured a five-year, multi-million dollar extension to its IT outsourcing contract  with Landis+Gyr, one of the world’s leading providers of advanced metering and integrated energy management solutions.

Building on the existing relationship, Unisys will continue to provide end-user support and data centre services, SAP solution management and a range of additional IT services to more than 5,000 Landis+Gyr employees. Unisys will provide the services from its global services centres, as well as on-site.

“The difficult global economic situation has reinforced how important it is to have long-term partners who add value to the business,” said Dieter Hecht, Executive Vice President & Chief Procurement Officer at Landis+Gyr. ”Our decision to renew our contract with Unisys is based on the quality of the company’s services and the return on our investment they provide. With Unisys driving forward the implementation of our global IT strategy, Landis+Gyr can respond effectively to the business challenges we face now and in the future.”

The services provided by Unisys under the contract extension include:

Round-the-clock system management and SAP operations
Unisys will provide the entire Landis+Gyr server environment with a 24-hour service, covering both physical and virtual servers, including monitoring and automatic reporting of problems and failures. The support service extends to all servers, from backup and web servers to print servers. Unisys will continue to run and provide support for the Landis+Gyr SAP system in Switzerland, Italy, Spain and Greece. The entire Landis+Gyr infrastructure runs on Unisys servers, with a virtualized environment based on a VMware ESX system.

Virtualization and consolidation with best-of-breed IT technologies 
Unisys will continue to support Landis+Gyr with virtualization and consolidation programmes to meet the needs of the business and reduce costs where possible. The Unisys range of virtualization and consolidation services includes IT consulting, concept development, implementation and provisioning of hardware for the entire infrastructure.

International service desk outsourcing 
Unisys provides the service desk for all Landis+Gyr employees in Switzerland, as well as some members of staff working in other countries across Europe. Through this service, Unisys provides assistance on specific applications such as the mail system, wireless infrastructure and CRM system. Unisys supports Landis+Gyr’s local-area networks (LANs) in Switzerland with the latest, round-the-clock management tools. Landis+Gyr’s wide-area network (WAN) is run by a global provider, while the Unisys team is the first point of local contact, co-ordination and service.

Extensive desktop services
Landis+Gyr staff benefit from the entire range of desktop services from Unisys, both remotely and locally. These include desktop software services, equipment installs/moves/adds/changes (IMACs) and de-install services (IMACD), hardware maintenance and break/fix services.

Unisys also provides asset and programme management. A strict governance structure helps to ensure that all processes are controlled and all activities meet the service levels agreed to in the contract.

Source: http://www.1888pressrelease.com/unisys-wins-it-outsourcing-contract-extension-from-landis+gy-pr-118555.html

ATM Outsourcing for State Bank of India

State Bank of India has agreed to outsource the management of some automated teller machines.

The Mumbai banking company, India's largest, operates 1,200 ATMs throughout the country. It said last week that it would hand off network management duties for 500 of its ATMs to the telecommunications firm and broadband operator Tata Communications Ltd. and the payments technology vendor C-Edge Technologies, both of India.

Weeks ago the Reserve Bank of India, the country's central bank, mandated that Indian financial companies offer free ATM withdrawals to their own customers who use debit cards.

Banks can still earn surcharge revenue from noncustomers who use their ATMs, which will likely prompt banks to expand their ATM networks, said Prathima Rajan, an analyst based in India with the Boston market research company Celent.

"Many banks have adopted the pay-per-transaction model, as that works out to be more feasible for banks," Rajan said. Surcharge fees have "generated a new revenue stream for the banks who have installed a large number of ATMs across the country."

Tata and C-Edge confirmed the contract but would not discuss their ATM management operations.

Source: http://www.americanbanker.com/article.html?id=20090511XL4UU2HO

Monday, May 11, 2009

QLD Performing Arts strikes outsourcing deal

The Queensland Performing Arts Centre (QPAC) has inked a three year hosted virtualization deal with Macquarie Hosting to monitor network traffic and link its ticket bookings with flights and accommodation.

The outsourcing deal, the first for the QPAC, follows a $34.7 million upgrade of the Brisbane Concert Hall and Lyric Theatre last year and is set to make the centre more competitive with rival ticketing outlets such as Ticketek.

QPAC information services manager Chris Holder said it decided to outsource services after a large growth in network traffic.

“Services have been rolling over into the environment over the last eight months as we naturally outgrew internal management,” Holder said, adding the old environment was in place for about five years.

“We have plans to tie our ticket sales in with our restaurant to offer deals to our customers and we have partnerships with some of the local hotels... tieing qtix [ticketing system] with flights is still a possibility.

Holder said most systems have migrated to the virtualized environment, along with test servers running micro-sites for theatre campaigns including the Paris Opera Ballet La Bayadère.

Most services will operate on Citrix virtual VMWare hosts, alongside a single dedicated server, and use reporting systems and SSL load balancing to monitor and control network traffic. Its mission critical applications like the qtix ticketing system will be housed in the $35 million Macquarie Hosting Intellicentre in Sydney.

Holder said the hosted service, introduced in October last year, has reduced time to market for new offers and applications. Network traffic spiked at some of the highest levels during the launch of Miss Saigon and the Phantom of the Opera.

The centres' eight IT staff are also developing a new Web site, Holder says, adding that the QPAC has no plans to outsource further services.

The QPAC would not disclose the value of the deal.

Source: http://www.computerworld.com.au/article/302662/qld_performing_arts_strikes_outsourcing_deal

Thursday, May 7, 2009

IBM Named Innovation Leader for Outsourcing

IBM today announced that The Bathwick Group has declared IBM the leader for building innovation into large-scale outsourcing contracts. The standing is a result of recent research as part of the Bathwick Services Index, conducted by The Bathwick Group on prominent outsourcing vendors in Europe.

"Innovation in outsourcing is particularly crucial in this very tough economic climate as it can help the IT function to run more cost-effectively and more efficiently," said Kate Hanaghan, Senior Analyst, The Bathwick Group Ltd. "Equally, we know that clients who work with IBM value being able to tap into IBM's deep R&D resources and broad industry expertise in order to experiment beyond the confines of traditional outsourcing agreements. Overall, IBM heads the services pack with an innovation strategy that is mature, well funded and very well received by its customers."

According to the Bathwick Group report, IBM can build innovation projects into existing outsourcing contracts by allowing clients to work with leading IBM researchers and become part of the think tank, dispatch innovation experts to meet with clients a few times a year or dedicate scientists on a full-time basis. IBM also has the systematic capability of creating and tracking innovation progress in outsourcing contracts.

IBM innovation partnerships leverage the company's extended resources including research laboratories, technology development, information technology (IT) and business consulting practices to help clients innovate. Innovation partnerships can be formed to address broader business challenges and visions and to increase the value derived from their outsourcing relationships.

"Innovation partnerships are a natural extension of outsourcing relationships, giving clients direct access to IBM's extended capabilities including research and development as well as our own transformation experience, best practices and lessons learned," said Dave Liederbach, IBM general manager, strategic outsourcing.  "Providing experts from IBM's vaunted Research arm to address strategic client challenges and deliver innovative breakthroughs extends the core value IBM delivers through IT outsourcing. IBM is uniquely positioned to deliver this kind of higher-value engagement."

Source: http://www.tradingmarkets.com/.site/news/Stock%20News/2315734/

Wednesday, May 6, 2009

Hewitt Associates To Provide Benefits Outsourcing Services To FSBA

Resources consulting and outsourcing company Hewitt Associates, Inc. Wednesday said it signed a contract with Florida State Board of Administration or FSBA, an agency of the Florida, state government, to provide benefits outsourcing services. The agency provides various investment services to governmental entities.

According to the five-year agreement, effective January 1, 2010, Lincolnshire, Illinois-based Hewitt will act as record keeper for the FSBA's $3.8 billion Florida Retirement System or FRS Investment Plan. The FRS Investment Plan is a member-directed 401- a- defined contribution program.

Jay Rising, Hewitt's president of HR outsourcing said "We look forward to serving this new set of participants and retirees with our enhanced set of retirement tools that consider the diverse needs of the plan population. Our relationship with the Florida SBA marks a new foray into serving state governments, and it's one we will continue to pursue."

http://www.rttnews.com/ArticleView.aspx?Id=938462&SMap=1

Tuesday, May 5, 2009

Obama unveils anti-outsourcing policy, Indian BPOs to be hit

In a move that will hit some 10 lakh Indian IT professionals and a sizable chunk of the country's BPO industry, President Barack Obama has unveiled new proposals to end tax breaks for American companies that shipped jobs overseas to countries like India.

Meeting one of his major election promises, Obama said he will end the tax incentives to those US companies which created jobs overseas in places like Bangalore. Instead, the incentives would now go to those creating jobs inside the US.

"For years, we've talked about ending tax breaks for companies that ship jobs overseas and giving tax breaks to companies that create jobs here in America. That's what our budget will finally do," Obama said yesterday at the White House announcing the international tax policy reform.

"We will stop letting American companies that create jobs overseas take deductions on their expenses when they do not pay any American taxes on their profits," he said.

Obama said his administration will use the savings to give tax cuts to companies that are investing in research and development in the country to jump start job creation, foster innovation, and enhance America's competitiveness.

Source: http://www.ptinews.com/

Monday, May 4, 2009

Mexican outsourcing delivery could be impacted by swine flu

Courtesy: http://www.pharmaceutical-business-review.com/

Concerns over swine flu outbreaks in Mexico have led to many governments issuing warnings against non-essential travel to the country. Considering the existing worries over ongoing border violence, as well as potential agent absence, this virus could have a negative impact on the Mexican contact center outsourcing sector.

The recent outbreak of the virus commonly known as swine flu should be cause for concern among contact center outsourcers based in Mexico looking to grow their business from the US and abroad, should the spread of the disease not slow in the immediate future. With Mexico seen as the global epicenter of this illness and its capital city currently in the midst of a five-day shutdown, the potential damage in the near-to-medium term could be very serious.

To date, medical research has shown that swine flu is most commonly transmitted in areas of limited air circulation and close human proximity. For a location like Mexico, in which contact center agents frequently use public transportation to travel to and from work, it is very possible that many could choose to stay at home rather than risk contracting the virus during regular commutes. This is also the case in regard to the contact center facilities themselves, in which large numbers of individuals share common space.

In addition to concern among agents going to and from work, Datamonitor believes that the current swine flu outbreak in Mexico could also slow investment due to the health-related fears of business people from North America and beyond making them unwilling to travel into the country. With the US and Canadian governments issuing warnings against non-essential travel to Mexico, and some operators temporarily halting flights into Mexican cities, prospective investors may decide to examine other delivery locations that are perceived to be safer from a health standpoint.

The current outbreak of swine flu, furthermore, is only one of a number of challenges facing the Mexican contact center outsourcing space, the most notable of these being that of ongoing border violence. Earlier this year, Datamonitor commented on the negative impact that drug cartel wars with authorities could have on the investment climate in Mexico, in regard to attracting foreign clients. Concerns over swine flu will only exacerbate worries associated with this location, and make other offshore markets potentially more attractive to investors.

In conclusion, Datamonitor maintains that Mexico, given its cost effectiveness, remains an excellent option for US firms looking for a bilingual or Spanish-speaking, sizable labor pool from which to draw and a diverse choice of urban centers. Considering the existing challenges faced by vendors based in Mexico coupled with the current worries over swine flu, however, outsourcers based in that country are likely to find it more difficult to attract offshore investors than they have in recent years. Therefore, Datamonitor encourages outsourcers based in Mexico to consider the impact of swine flu on their operations and ongoing business development efforts, and to develop contingency plans to mitigate these risks.

Cities say outsourcing trims lawn costs

Courtesy: http://www.commercialappeal.com/

Despite having a city-operated Parks Department, Southaven pays Green King Spray Services $100,000 a year to keep the grounds at City Hall and some other city properties looking tidy.

In neighboring Horn Lake, the city pays Affinity Lawnscapes more than $140,000 a year to maintain City Hall and the Latimer Lakes Park Complex.

While some may see such fees as a duplication of services in tough economic times, city officials defend the practice of contracting such work because they say it actually saves money.

In fact, of DeSoto County's five incorporated municipalities, a check with officials revealed that a majority of them let private firms perform much of the seasonal work because, officials say, it's cheaper than hiring extra city crews for seasonal tasks.

Like Southaven and Horn Lake, Olive Branch follows the practice. Hernando used to contract with a lawn service for some work but no longer does so, and Walls, with fewer than 1,000 residents, performs all of its own maintenance.

In most of the larger cities, though, officials said outsourcing just makes more sense.

"We contract that work out because we would have to add a lot of people and equipment during the summer months to our regular Public Works crews if we did not," said Spencer "Penny" Shields, Public Works director in Horn Lake.

The city has a three-year contract with Affinity Lawnscapes, at $11,900 per month ($142,800 a year), for grass cutting, tree trimming, mulching, flower bed preparation, debris removal, weed control and fertilization of Latimer Lakes Park Complex and City Hall. The exception to the contract is the ball fields at Latimer, which are maintained by Parks Department crews.

Affinity is required to mow everything as often as is needed during the summer growing season. The contract with Affinity was signed this year.

Olive Branch Mayor Sam Rikard said his city spends about $45,000 annually to cut grass and perform landscaping functions.

He said the services are provided by four vendors.

"Since these are considered services, we do not bid, but we do take quotes for those services. We will be seeking quotes for those services again in September or October of this year," Rikard said.

He said the city outsources some of its grounds work despite having a Parks Department of 12 groundskeepers and two supervisors.

The city employees are responsible for cutting all the grass in City Park, the soccer complex and other smaller parks such as Magnolia, Southcrest and Ivy Trails.

They also prepare every ball field, and they cut grass at three US 78 intersections and the right-of-way along Goodman Road near Eastover subdivision.

Rikard said without getting outside help, the city would have to have more park employees on payroll all year long to perform the services that are only necessary seasonally.

In Southaven, the county's largest city, city officials hired Southaven-based Green King Spray Services for weed control, lawn and grounds maintenance at its City Hall complex on Northwest Drive, Jim Saucier Park, the Police Department and the library.

The city pays the company $100,000 per year for the work. Invoices show that from 2007 to this year, the city paid the company $307,114.73 for work.

The work done by Green King is considered a professional service and does not have to be bid on by vendors, Mayor Greg Davis said.

"Vendor selections come through purchasing and department heads in accordance with state law," Davis said.

He said the city's parks employees maintain all the city parks, including the massive Snowden Grove complex, and cut grass at abandoned or condemned property in the city.

"To do the weed control with spraying the chemicals, a state license is required to do this work and our parks employees do not have certification," Davis said.

Davis said the city also outsources grass cutting of the medians and ramps along Interstate 55 to Reel Neet Lawn Service because the Mississippi Department of Transportation only cuts the grass twice a year. Reel Neet, a Southaven company, receives $100,000 per year.

"Again, it is cheaper to do it this way than in-house," Davis said. "In fact, we used to do the all the lawn maintenance work in-house, but the maintenance of the equipment and personnel costs skyrocketed."

Hernando Mayor Chip Johnson said his city, the county seat, used to subcontract with a lawn service for mowing on- and off-ramps along Interstate 55, the city parks and the cemetery. However, that work is now handled by the Hernando Parks Department.

In Walls, the smallest of the county's incorporated municipalities, Mayor Gene Alday and other town officials pitch in and do all the grass cutting, roadside trash pickup and landscaping at Town Hall and the town's one park.

Last year, the town of 870 residents bought a $23,000 tractor, and Alday can be found on it on any given day, cutting grass in the town.

Dr. John O'Looney, senior public service associate at the Carl Vinson Institute of Government at the University of Georgia, said outsourcing is not uncommon for local governments.

"We see it a lot when new elected officials come in and want to explore it, thinking that the private sector can do it better," O'Looney said.

O'Looney said in 2007 his office conducted a feasibility study on outsourcing for Dawson County, GA, and found that it is a complex issue that does not have a "one-size-fits-all" answer.

"Contracting for services is and will continue to be a major decision task facing public managers," the study stated. "According to the US Government Accountability Office, contracting is the most utilized alternative to direct service provision.

"However, there does not appear to be any single answer to the question of whether to contract out services."

He said individual governments have to decide what is best for their needs.

Friday, May 1, 2009

Outsourcing firm shut down for using pirated software

Courtesy: http://www.abs-cbnnews.com/

The Anti-Fraud and Commercial Crimes Division (AFCCD) of the Philippine National Police’s Criminal Investigation and Detection Group (CIDG) seized a total of 173 computers during a raid against Pinoy Data Capture Inc. in Makati City last week, putting the latter’s operations to a virtual standstill.

The search warrants were issued by Manila Regional Trial Court Vice-Executive Judge Cielito Mindaro-Grulla for the alleged violation of Republic Act 8293 or the Intellectual Property Code of the Philippines.

Pinoy Data Capture Inc. (PDC), with its office at the 30th floor of Burgundy Corporate Tower in Sen. Gil Puyat Ave., Makati City, was reportedly using computers with unlicensed and pirated software in its business operation.

PDC is a business process outsourcing (BPO) company that provides data conversion, medical coding, contact center and software development services for clients in the Philippines and the United States.

The police operation involved the software audit of each computer and server, and then check against software licenses that were presented by the company to determine the legality of the software. PDC had to stop its operation and send home their employees to avoid disruption to the inventory and seizure procedure of the raid.

Anti-piracy operatives found 173 of the company’s computers loaded with unlicensed and pirated copies of Adobe and Microsoft software, with an estimated value of almost P9 million.

“All computers found loaded with unlicensed and pirated software were seized and will be kept in police custody for use as evidence in court,” said Senior Superintendent Joel Orduña, chief of the PNP-CIDG-AFCCD.

He added: “This raid should serve as a warning to other businesses that continue to use unlicensed software. Software piracy may not only result in serious legal consequences, it can also completely paralyze business operations.  That unlicensed software was found in PDC’s business operation truly casts a shadow over the country’s aspiring BPO industry.”

The raid on PDC is part of the Pilipinas Anti-Piracy Team's ongoing nationwide campaign against businesses using unlicensed and pirated software. The PAPT had earlier given businesses 20 days to legalize their software, after which, members of the PAPT including the NBI, OMB and PNP conducted random and routine inspections and raids on businesses that were allegedly infringing on software copyright.