Wednesday, October 29, 2008

IT outsourcing giant to set up new center
By Wang Xing (China Daily)
Updated: 2008-10-29 10:34

US software outsourcing company CSC, one of the world's largest IT outsourcing firms, said yesterday it will launch a new delivery center in China as the global financial crisis may force more Western companies to outsource their business to the country.

Michael Laphen, chairman and chief executive officer of CSC, said the financial turbulence would force more companies to outsource their business in pursuit of lower operating costs, thus creating more opportunities for outsourcing companies.

"Outsourcing will increase in difficult times as the financial crisis pushes companies to become more cost effective," said Laphen. "We expect further robust growth from China."

CSC's new delivery center, located in Tianjin, will open next spring.

It will serve both CSC's domestic and multinational clients in China and will have 500 employees within the next three years.

But Laphen declined to say how big its investment is in the new China facility.

Although the financial crisis has had a major impact on most of the world's economy, CSC remains optimistic about economic prospects in China.

It said the country's manufacturing and financial companies, which are two major customers for CSC in China, will continue to grow at a rapid speed.

During the past decades, multinational have been transferring non-core business to countries like India and China to reduce costs.

But as labor costs continue to rise in China, outsourcing companies in the country have been striving to go up the supply chain and earn money with more value-added services.

Lin Zheying, deputy director of foreign investment administration department under the Ministry of Commerce, said at an industry forum on Monday that the economic turmoil provided a good opportunity for China to develop outsourcing in service sectors, as many US financial institutions may have to outsource their business.

According to the ministry, the value of foreign contracts of Chinese outsourcing companies reached $1.9 billion in the first eight months, up 17 percent from the same period last year.

CSC entered the Chinese market in 1991 and now has around 300 employees in the country.

It has offices in Beijing, Tianjin, Shanghai and Guangzhou.

Globally, CSC has approximately 90,000 employees and reported revenue of $17.1 billion for the 12 months ended July 4, 2008.

Monday, October 27, 2008


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Pfleiderer AG, IBM reach 7-Yr outsourcing contract - Quick Facts

10/27/2008 10:17 AM ET
International Business Machines Corp. (IBM) said the company and German Pfleiderer reached a seven-year outsourcing contract. The agreement was signed in September of 2008. The company said the IBM SAP Application Delivery Center Model would enable Pfleiderer to use and pay for services according to its needs.

As part of the agreement, IBM would provide application hosting and management services out of Germany and Canada for all SAP Systems in Pfleiderer's worldwide locations.

Copyright © 2008 RealTimeTraders.com, Inc. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without prior written consent of RTTNews.

Hangzhou Opens 1,200-seat Software Outsourcing Base

Xinhuanet, 10/25/08

Stage one of construction on the Hangzhou Symbio international outsourcing base was completed recently. The base is a joint project of Hangzhou Data Technologies, the Symbio Group, and eOn Communications, and measures 10,000 square meters with 1,200 seats following the first phase of construction. It will focus primarily on software and call center outsourcing, with software outsourcing (overseas) to account for 70% of business.

Among the jobs already landed by the outsourcing base are the Symbio Group's US-targeted game software outsourcing and financial software outsourcing services, Market 168's bank card services, eOn Communications Corporation's Korean international call center services, and Zhejiang Netcom's customer center call services, as well as Alibaba's Taobao call center. Revenues from the base are projected to total RMB 100 mln for 2008.
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In India, Global Crisis Is Not All Bad News
One Industry Sees Opportunities, Lessons

By Rama Lakshmi
Washington Post Foreign Service
Sunday, October 26, 2008; A22

GURGAON, India -- In the mortgage crisis that has enveloped much of the Western world in recent weeks, Manoj Malhotra's outsourcing company sees an enhanced business opportunity.

As lenders in the United States and Europe move to firm up loans, sharpening quality control and fraud verification, the Gurgaon-based company that Malhotra heads has designed a Web program to help them do just that.

"The loan processing industry needs less of manual intervention and subjectivity and more of technology-based solutions, especially in the current climate," said Malhotra, who launched the program at a mortgage industry conference in San Francisco last week.

His company, Salient Business Solutions, is not the only one in this country to see opportunities and lessons in the global financial meltdown.

Indians working in information technology and outsourcing have long shared a joke: "When America sneezes, our industry will catch a cold here in India."

But as the credit crisis drags down the U.S. economy, India's booming technology and outsourcing industry is taking steps to boost its resistance to infection. Taking the crisis as a warning, it is hastening efforts to reduce dependence on U.S. and European companies, scale up high-end products and services, find new ways of billing and move beyond merely leveraging the low-cost, English-speaker advantage.

About 60 percent of India's outsourcing business comes from the United States, and 40 percent of the work is in the banking, insurance and financial services sectors.

"We now have to look at other regions of the world, like Japan, the Middle East and the Nordic countries," said Som Mittal, president of the National Association of Software and Services Companies, or Nasscom. "The current crisis has sharpened our realization that we cannot put all our eggs in the U.S. basket."

The industry revised an estimate of 30 percent annual growth to 24 percent this year. But it has undergone a transformation in the past five years, and many observers say that will help provide a cushion in the U.S. crisis. Besides trying to diversify into other parts of the world, India's outsourcing industry has tried to wean itself from the banking and finance industries, attracting work from American health-care, aviation and utilities companies.

Perhaps the biggest and most sustaining change has been its climb up the value chain of services in recent years -- from back-office support functions to what the industry calls "knowledge process outsourcing," which includes legal services, hardware network management and engineering design.

The ubiquitous tech-support and customer-service call centers and software coding services are, in fact, considered the low-end level of the industry, although they still constitute about 60 percent of India's offshoring business.

One of the country's biggest technology companies, Bangalore-based Infosys, has been making a deliberate effort to scale back assembly-line software development and ramp up more technically complex services such as engineering design.

"It is a strategic shift we began making some years ago," said S. Gopalakrishnan, the company's chief executive officer. "Our efforts to expand our services to include high-end consulting, systems management and product engineering and design work may help weather the storm."

Infosys's fastest-growing business is in product and machine design for American aerospace, automobile and construction firms, but the company has also set up consulting businesses in China, the Middle East and Mexico.

Meanwhile, the legal services branch of India's outsourcing industry is experiencing a boost as a direct result of the global crisis, as bankruptcies, mergers and acquisitions proliferate and demand grows for help with litigation.

"It is difficult to find lawyers now -- there is a shortage," said Anand Maheshwari, director of Intrust Global eServices. "This wasn't the case three months ago. The litigation work is booming in this chaos and crisis."

Still, the industry has not escaped ill effects of the crisis. Gopalakrishnan cut back Infosys's revenue estimate for the year by about 4 percent. He said his clients have slowed launching new projects and investments. Infosys is offering a pay-as-you-use business model to clients faced with a cash crunch. Under this model, the client will pay only for the software service and not for hardware and maintenance of the program.

To cut costs for their clients, many in the industry are thinking of shifting away from the seven big, booming and expensive Indian cities where 90 percent of offices are located. The industry forum, Nasscom, has urged its member businesses to go deeper into the hinterlands and identified 43 second-tier cities they might consider.

Fresh hiring by the industry has slowed in the past three months, although there have been no layoffs yet.

"There is already a drop of 20 percent in hiring from engineering campuses. Nobody is making big hiring commitments," said Pratik Kumar, executive vice president for human resources at Wipro, a large information technology and outsourcing company. "Companies will no longer maintain large benches," he said, referring to the practice of keeping engineers on standby for anticipated offshoring work.

Many new graduates are being told to wait longer before they can step into their first jobs.

For engineering graduate Pooja Shetty, 22, the wait will be almost a year. She was offered a job, but now the software company wants her to report for work in April.

"The company said there is no immediate requirement," Shetty said. "There are very few jobs now. I have no choice but to wait. This is the only thing we talk about in our Yahoo friends group these days."

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Thursday, October 23, 2008

October 23rd, 2008

After the layoffs: Increased workloads stress out those left behind

Posted by Sam Diaz @ 12:13 pm

Jobcuts are never easy - and finding your name on the layoff list can be traumatic, especially this time of year. There's no disputing that.

But what about the folks whose names are not on the list, the ones who get left behind to pick up the workload slack? They certainly don't want to be complainers when the boss comes walking over to hand off the work that Mary or Joe was doing, before they were laid off. But, they were barely keeping up with their own workload before - and now there's more?

An increased workload - followed by the pace of new technology and office politics - are the leading causes of stress for IT workers today, according to a survey released by Robert Half Technologies. OK, I know what you're thinking: Too much work can be a good thing in today's economic climate. But it can also take a toll on productivity. Overstressed workers don't usually perform at their best and stressed-out workplaces can quickly erode morale, as well.

Robert Half Technologies, which asked the question as part of a larger survey that helps shape hiring forecasts, said some companies are bringing in IT folks on a contract basis to help with the workload. Many are also looking at training and professional development programs to help employees keep pace with technology. Most importantly, though, good managers open the lines of communication to keep employees motivated and ensure that priority projects stay on track.

The survey asked the question: Which of the following do you think is the greatest source of workplace stress for IT professionals? The responses were:

Sam Diaz is a senior editor at ZDNet. See his full profile and disclosure of

India's Tech Firms Unlikely to Elude Global Crisis

Lackluster Profits From Flagship Companies Suggest Sector Won't Dodge Global Crisis

India's leading technology companies -- the flagships of the country's economy -- doused hopes that they could escape from a spreading global financial crisis anytime soon.

"Our outlook is cautious in the near term given the extent of strain on the global economy," said Azim Premji, chairman of Wipro Ltd.. That pessimism comes despite a sharp weakening of the Indian rupee, which helps tech companies that earn most of their revenue overseas.

Under Indian accounting standards, Bangalore-based Wipro said net profit for the July-September period rose to 9.78 billion rupees ($200.2 million) from 8.24 billion rupees in the year-earlier quarter. ...


Monday, October 20, 2008

ob recruiting racketeers make a kill on no-go ban to Iraq

By Leon Berenger and Chandani Kirinde

Hundreds of Sri Lankans are risking their lives and making their way into war-torn Iraq to secure lucrative employment inside US military facilities while a helpless officialdom say there is little they can do as unscrupulous recruiting agents make millions of rupees out of this illegal operation.

Although almost daily groups of Sri Lankans are leaving these shores and heading for Iraq there is very little the authorities can do to stop it since their departure is done through legitimate channels.

While there are many who have found safe passage to Iraq, The Sunday Times spoke to several youth who were stranded at the Dubai International Airport in late September for more than two weeks since arriving there from Colombo. An agent of the local travel agency had promised they would be met on arrival by one of their agents in Dubai who would ensure their passage to Iraq. But for one week they were left all alone at the airport with no idea as to what would happen to them. When the agent finally met them, they were told it would take a few more days to travel to Iraq.

U.S. soldiers stand near the Swords of Qadisiyah monument in Baghdad. Many Lankans are employed in various US military facilities as janitors,
cleaners, mess boys, storekeepers, laundry hands and construction workers

As the men had run out of money they had to rely on the hospitality extended by the many Sri Lankan who work at the airport and those who pass through it to get their daily meals. There were 13 men in this group.

They had each paid Rs. 250,000 to a job agent in Armour Street, Colombo and were told they would be employed at US bases in Iraq and paid a monthly remuneration of US $550 but their dreams of finding lucrative employment had become a nightmare just two weeks after leaving the country. One of the men had been sent to Afghanistan, also to a US military base but after two months due to the poor working conditions, he had managed to find his passage back to Dubai and was awaiting a ticket to return home
The Government has banned sending Sri Lankans to Iraq for employment due to the security situation there and two agencies were raided earlier this year for doing so. But many registered travel agencies in the country continue to recruit persons but give no security guarantees.

"We have had many cases of Sri Lankans stranded in Iraq who have sought assistance from our missions in Jordan and Lebanon. But as we have almost no diplomatic representation in Baghdad now and no consular representation at all, it is difficult to assist them," an official of the Foreign Ministry who served till recently in the Sri Lanka Mission in Lebanon said.

The International Organization for Migration (IOM) had also reportedly helped more than 30 Sri Lankan workers flee Iraq since February 2007 after finding that they were being exploited and were living in deplorable conditions.

The lack of any records on how many Sri Lankans are employed in Iraq also makes it more difficult to trace their whereabouts when the need arises. Sri Lankans who had been stranded there and who had managed to contact Sri Lankan missions in neighboring countries had been repatriated with the assistance of the US military and the Iraqi government, the official said.

The bulk of Sri Lankans destined for Iraq first land in the United Arab Emirates (UAE) on so-called transit visas that are easily obtained and which are issued mainly to intended shoppers and tourists entering the desert nation. On arrival in the UAE the Sri Lankan workers are picked up by handlers, taken to a transit house where they are fed, given shelter and later taken to Iraq by road over the Kuwaiti border.

Thereafter they are found employment in various US military facilities as janitors, cleaners, mess boys, storekeepers, laundry hands and construction workers.

An average worker earns around $600 to 700 a month inclusive of food, accommodation, medical and even liquor and tobacco rations, something they will never get in any other West Asian country.
However, the workers are not allowed to leave the military base owing to the security situation and insurgents show no mercy for foreigners caught working for American interests. On completion of their contracts which vary from one to two years they are brought back to the UAE crossing the same desert borders from where they board a flight back to Colombo.

The passports do not contain immigration endorsements of Iraq or any other country except that of the UAE, their first landing point which indicates that they have not left the country at any time. Hence the UAE authorities have no objection in allowing them to exit the country.

US Embassy spokesman in Colombo Jeff Anderson when asked to comment on the employment of Sri Lankans in US military bases in Iraq declined to do so.

A Sunday Times investigation found that the main culprits behind this racket are the registered recruiting agencies who cleverly conduct their operations using middlemen/brokers who are paid a commission for their services.

Persons seeking employment in Iraq are charged anything between Rs. 200,000 to 250,000. This includes the airline ticket and other local expenses such as medicals, bureau taxes etc, the investigation revealed.

The agencies do not advertise or in any way publicise vacancies in Iraq, since the recruitment of workers for that country is outlawed. However, they use other means of getting their message across.
For example a long-time established recruiting agency operating in Colombo has put up a long list of vacancies in the UAE, but in fact the jobs are actually available in Iraq.

The agency it is alleged discloses this to a prospective job hunter only once they are satisfied that the person is genuine and is seeking to work in Iraq. Thereafter the two parties discuss the other details such as payments, day of departure etc.

The Sri Lanka Bureau for Foreign Employment (SLFEB) is fully aware of the Iraqi operations, but for reasons perhaps known only to them have opted to maintain a lukewarm attitude if not ignoring the errant agents altogether.

SLFEB Deputy General Manager L.K. Ruhunuge said although they were aware of the recruitment for Iraq it was difficult to carry out a crackdown since the persons were leaving the country through legitimate channels and posessed valid visas-transit, visit or any other.

He said that two agencies that were found to be involved in the illegal recruitment have had their operations suspended, but apart from that there have been no complaints from people who have taken up employment in Iraq.

Another frightening aspect is that no one is prepared to take responsibility for those taking up work in Iraq and in the event of a tragedy, matters could become complicated, admits Mr. Ruhunuge.

So far there have been two deaths of Lankans in Iraq. In one a worker was killed when a missile hit an oil storage dump and the other was caused by an industrial accident, Mr. Ruhunuge said.

He added that investigations into an errant recruitment agency could commence only if there has been a complaint, but apart from that there was little the Bureau could do.

These words will no doubt be music to the ears of the recruitment agencies, their so-called brokers, handlers and every one involved in this racket.

Big promises but empty pockets

Driven by economic hardship, S.V.Gamini of Kalutara was among a group of 21 Sri Lankans who left for Iraq in December last year with the prospect of coming home with enough money to lead a more comfortable life than the present one.

He borrowed money to pay a job agency in Borella Rs. 230, 000 to secure a job and left on December 14 last year for Dubai along with several others. On their arrival, they were met by a contact of the Sri Lankan agent and put on a flight to Iraq. The group was split into two and put to work in two US military bases, mainly as labourers. There were 16 Sri Lankans working with Gamini.

"We were given the promised monthly salary of US $ 550 and had enough food and adequate accommodation," he said. Gamini worked there for ten months and decided to leave when he felt that the security situation was getting dangerous." A few days before we left, a mortar fell into an adjoining room where we were working It was frightening," he said.

Gamini was also in poor health by now and said he wanted to leave prior to the end of his one year contract. He and four others were allowed to go but their two months salary was deducted to pay for their air ticket which cost around Rs100, 000. When they arrived at the Sharjah airport, they had to pay an additional US $ 100 as visa fee and although they were promised free transport from Shajarh to Dubai, the men had to pay another US $ 80 to travel by taxi to the Dubai airport from where they boarded a flight to Colombo.

However, two of the men were detained in Shajarh as their passports had expired. "Although I went there with high hopes, I was not able to save any money. Job agencies charge us so much to send us to Iraq but they don't keep to their side of the bargain," he lamented.