This page provides links to offshore outsourcing news articles published in December 2003. Please note that over time some links may become broken as the various web sites are updated. We endevour to keep the links up-to-date, but inevitably some broken links will occur.

For the latest news, visit our News Digest. For information on offshore outsourcing events, exhibitions and conferences, visit our Event List. For information on our offshore outsourcing consultancy services, visit our Home page.

You can also read December's News Review.

News Archive

31 December 2003 Offshore Outsourcing: Business Boon or Bust?

eCommerce Times

...The conflict is a throwback to 1970s protests over buying Japanese cars, says Glenn O'Donnell, a program director for Meta Group. "A similar thing is now happening in the white-collar world.... The economy is forcing dramatic changes within IT that are going to be unpleasant for a lot of people...

...Jobs are being lost, but the numbers are overblown, he [Harris Miller] says. People also fail to consider the impending shortage of high-skill workers in the U.S. as baby boomers reach retirement age...

31 December 2003 Predictions for 2004: IT moves up and out

Search CIO

...Offshore outsourcing was by far the most talked-about IT topic in 2003. And this won't change much in 2004...

...2004 will be the year that companies separate the hype from reality and put offshore outsourcing to the test...

...In addition to the many obstacles companies will have to overcome by sending work to foreign countries, they will have to deal with the backlash from U.S.- based IT workers...

30 December 2003 Outsourcing will bite in 2004

ZDNet

...For solving short-term issues or dealing with a specific development project or customer service application, the outsourcing route is a no-brainer...

...the hidden and more serious problem comes from outsourcing functions that are better managed internally. The business and technical knowledge that exists within a company is a huge, vital and often proprietary asset...

30 December 2003 Consuming passions

The Economist

New wealth is challenging the established order in the world's two most populous countries...

...The Indian economy, following an unusually lavish monsoon, is growing at a rate of 7% a year or more. Economic recovery in the United States, the biggest market for India's IT industry, has not dented American companies' zeal for cost-cutting...

29 December 2003 Dell setting up second subsidiary in India

The Economic Times

...is planning to set up a second subsidiary in India. ..

...Significantly, Dell plans to shift all the domestic sales and marketing activities of its existing subsidiary to the new venture. It is, however, not clear what the MNC's existing subsidiary will do once these functions are transferred to the second venture...

24 December 2003 Language hinders offshore outsourcing

IT World.com

...IT project proposals tend to be written in a company's native language because they begin life as internal communications...

...German companies will find outsourcers willing to speak German in the Czech Republic and Poland, and Romanians are ready to communicate with French and Italian customers in their own language...

...So even if a German company considers its international working language to be English, it's important for outsourcing suppliers to be able to communicate in German...

17 December 2003 Barclays nears £450m offshore outsourcing deal with Accenture

Silicon.com

...Barclays is set to sign a £450m IT outsourcing deal with Accenture that could see hundreds of software development jobs moved to India...

...There will also be a "significant" reduction in the number of jobs, which will be mainly contractor positions, after the transfer. Financial services union Unifi is in discussions with Barclays and Accenture to ensure there are no compulsory redundancies...

17 December 2003 Barclays to shift software development offshore in Accenture outsourcing

Fin Extra

Barclays Bank is in the final stages of negotiations to outsource its software development division to Accenture, in a £450-£600 million deal that could see hundreds of jobs transferred offshore to India...

17 December 2003 Offshore Backlash Grows as Lehman Pulls Out

Computer Business Review

...New York-based financial services firm Lehman Brothers, which has confirmed that it has stopped outsourcing its IT helpdesk to Indian services giant Wipro, due to poor quality of service...

...Lehman Brothers continues to outsource other IT functions, including software application development, applications support, and some IT infrastructure support...

...It is certainly not enough to turn the tide against the rush to offshore in India, but it may make clients more cautious about swallowing the promises of offshore vendors...

17 December 2003 All offshore who's going offshore?

CNN

...Investors should also monitor public and political opinion of moving offshore. With job growth not yet apparent in the country's nascent recovery, offshore outsourcing is an easy target for public outcry. Finally, there may be investment opportunities in offshore outsourcing...

...Right now, public opposition is in the embryonic stage, and with the affected workers -- IT staff -- not unionized, it's unclear whether the outcry will be truly threatening...

15 December 2003 Global tech revival in 2004: IDC

Rediff

...the revived IT industry emerging from the market downturn of the past three years will not resemble the industry of the past 30 decades, according to IDC...

...predicts that instead of relying on vertically integrated proprietary systems and system software, the IT industry's business model is rapidly shifting toward standards-based commodity computing to meet the budget limitations and operational efficiency demands of its customers...

...IT spending will grow by between 6 and 8 per cent in 2004, creating a 'tech resurrection' in a year that will also see a continuation of trends such as offshore outsourcing of IT services, wireless technology adoption and brisk consumer spending on new-media technologies...

15 December 2003 Report: Offshore Outsourcing Often Still More The Exception Than The Rule

Information Week

...While every day seems to bring news of more IT jobs moving offshore--such as Monday's report in The Wall Street Journal that IBM plans to move as many as 4,730 programming jobs to China, India, and elsewhere-- such stories may represent the exception rather than the rule, at least in the near term...

...With offshore moves realistically taking anywhere from 24 to 60 months or more, McCarthy suggests that successful management of offshore resources requires governance capable of adapting to the changing needs of the business relationship...

15 December 2003 Outsourcing's offshore myth

news.com

...innovation today is being strangled through insufficient R&D budgets on the company side and an overspending hangover on the customer side. Offshore development can help on both fronts...

...In most cases, a well-executed offshore development program can help release an additional 20 percent of the R&D budget for new innovation while continuing to meet the maintenance obligations of mature companies...

...Salaries in India are growing at 15 percent to 30 percent per year, and the gap with U.S. salaries will be negligible by about 2020.

14 December 2003 Carolinas companies increase exports of white-collar jobs

The State.com

...Nearly two-thirds of the largest companies headquartered in the Carolinas - 17 of 27 - say they have sent computer tasks abroad...

...the maker of Wrangler jeans, has an Indian help desk for workers with computer problems. South Carolina utility SCANA has done software work in India since 1996. Charlotte's Presbyterian Healthcare hired an Indian firm in Bangalore last year to help redesign its intranet...

...Now it is expanding with a subsidiary in India, set to open in Hyderabad in April, that will handle a wider range of work as software projects continue going to outsourcers. The bank won't give specifics about work intended for the center...

13 December 2003 Only 40% Fortune 1000 firms outsourcing

Rediff

..."Forrester data shows that 46 per cent of companies who are participating in offshore say that a lack of internal project management skills is one of the major reasons that these companies aren't doing more,"...

11 December 2003 The Bright Side of Outsourcing

E-Commerce Times

...From a global perspective, offshore outsourcing does have a bright side -- in India and other outsourcing destinations. It reinforces the benefit of higher education, allows individuals to purchase cars and gives workers confidence and hope for the future...

11 December 2003 Offshore outsourcing: Little effect on US jobs?

Info World

...The trend toward U.S. IT and manufacturing companies outsourcing jobs to other countries has so far had little effect on the overall U.S. job market, supporters of offshore outsourcing and some economists argued Thursday, but others predicted the national debate over the issue will get hotter as more jobs move...

...While Groshen and representatives of the U.S. IT industry defended offshore outsourcing as potentially good for the U.S., others raised warning flags. The argument that offshore outsourcing "frees up labor that can be redeployed" may not make sense to a U.S. worker who's just been laid off...

11 December 2003 India alarmed by Indiana's cancellation of software deal

EE Times

...Many here [India] think the U.S. media has overplayed stories about offshore outsourcing and U.S. job losses, and they fear politicians' penchant for considering personal political mileage when making decisions...

..."However, many companies, and the ITAA [the Information Technology Association of America] are working hard to educate Congress on the economic benefits of offshore outsourcing...

...A spokesman for IT service provider Wipro Technologies said India's industry "cannot underestimate the problems arising from protectionism [during an election year]"...

11 December 2003 Lawmakers eye ways to slow offshore outsourcing

Computer World

...Increasingly, federal and state lawmakers are seeking to put the brakes on offshore outsourcing, mostly by setting restrictions on the use of foreign labor in government contracting...

...There are at least nine bills pending in the U.S. House and Senate, and four states -- North Carolina, New Jersey, Michigan and Indiana -- are considering similar legislation...

...Among the pending federal bills is one from Democratic presidential candidate Sen. John Kerry (D-Mass.) that would require employees at a help desk or support call center, when they either initiate or receive calls, to disclose their locations...

11 December 2003 Offshore outsourcing: Little effect on US jobs?

Info World

...IT and manufacturing companies outsourcing jobs to other countries has so far had little effect on the overall U.S. job market, supporters of offshore outsourcing and some economists argued Thursday, but others predicted the national debate over the issue will get hotter as more jobs move...

...With pressure from stockholders to keep costs low, efforts to stall offshore outsourcing could harm U.S. businesses, said Rolf Lundberg, senior vice president of congressional affairs for the United States Chamber of Commerce. Efforts in eight states and among some members of the U.S. Congress to prohibit government contracts from being fulfilled by foreign workers will, in the long run, hurt the U.S...

10 December 2003 The response to offshore backlash

Rediff

The media in the US, sensing the public mood, has latched on to the offshore backlash story...

...leading Indian companies are taking the right approach. We have a message -- Offshore outsourcing makes US companies globally competitive...

10 December 2003 Unions form global opposition to offshoring

Infoconomy

...More than 300 finance sector unions from 48 countries have united to form an unprecedented global movement against offshore outsourcing...

..."We also must challenge the myth that protectionism offers any sort of solution," the minister said. "We cannot argue liberalisation abroad and practise protectionism at home. However strong the short-term case for protectionism appears to be, the long-term costs are far greater for consumers and for jobs."...

...recent announcements by insurance giant Aviva and banking organisation HSBC to send IT, administration and back-office functions overseas has intensified the debate in the UK...

10 December 2003 Outsourcing Hype vs. Reality

CIO

...A very small percentage of Fortune 1,000 companies are actually fully engaged in offshore outsourcing, according to a recent survey, because the move is not as simple as perceived...

10 December 2003 CIOs caught in middle of offshore storm

Search CIO

...Last month, Indiana Governor Joseph Kernan canceled a $15.4 million deal wherein the U.S. subsidiary of India's Tata Consultancy Services would handle the state's unemployment benefits...

...In addition to Indiana, Michigan, New Jersey and North Carolina also have legislation pending that would curb the amount of state jobs sent overseas...

...But what makes for good politics may not make for good business, according to some. And CIOs are caught in an unfortunate place –- right smack in the middle...

09 December 2003 More firms to offload IT

Computing

...Merrill Lynch questioned 100 European and US chief information officers (CIOs), and found 55 percent expected to increase their outsourcing during 2004. Only 15 percent planned to reduce the number of functions they outsource...

...The potential cost savings could encourage more organisations to look at offshore outsourcing. According to the survey, the main priority for IT departments in 2004 will be to cut costs...

09 December 2003 Why offshore outsourcing is good for the US

Rediff

...In the recession the workers that were the hardest hit were IT workers. After the IT bubble burst, most companies reduced their IT spends drastically...

...While offshore outsourcing does not directly lower the cost of consumer goods, it lowers the cost of operations for companies...

...The capital invested creates jobs. Sometimes, the increased profits (or decreased losses) could help a company survive. That saves all the jobs in that company...

08 December 2003 Don't pop those corks just yet

CNN

...Look at what the respondents claimed were two top priorities for 2004: "Cost reduction" and "Doing more with the same dollars." Hardly a positive indicator for the business-focused sector of the IT industry...

...Outsourcing is one of the few growth areas in the Merrill report, with offshore outsourcing poised to make some gains in 2004. This shouldn't come as a surprise, given that offshore outsourcing offers companies the ability to farm out application-development or help-desk functions at a significant cost savings...

08 December 2003 Outsourcing Threatens To Become a Tsunami. What’s a Country To Do?

Local Tech Wire

...As the outsourcing of IT jobs continues to increase, it’s up to entrepreneurs to develop the new ideas, products and technology to create a new wave of job growth...

...The job outsourcing trend also is going to worsen, according to a new report from research firm IDC, which forecasts more than 20 percent of IT services will be shipped to foreign countries by 2007. This also isn’t a fad...

..."In the future there are two roads," Roach said. "One is to look backward and hang on to what we think we’re entitled to. The other is to recognize what made America. Our virtues lie in a flexible and open, technology friendly, risk-taking, entrepreneurial, market-driven system."...

04 December 2003 Steps to Success: Know what you're getting into with offshore outsourcing

Search CIO

...the concept of saving money by sending IT jobs overseas has taken strong hold in corporate America. And the ensuing ruckus has percolated onto the front pages of national newspapers, and all the way up to Capitol Hill. But despite the hullabaloo, the trend is only growing hotter...

...Vendors would like CIOs to believe that they can toss project specs over the wall and then forget about things until the finished project appears magically at the door. It doesn't work that way...

03 December 2003 Fast forward: backlash, what backlash?

Business Standard

The San Jose Mercury News in the heart of America’s Silicon Valley ran a ten-part series last month (November) on jobs moving to India. The message that came through was bad news for India. The stuff was almost inflammatory...

...How serious or widespread is this backlash against offshoring? How much of it is directed at India? How deep rooted is the feeling and will it last beyond the US elections next year? How much of it is media hype?...

02 December 2003 UK firms size up Indian benefits

BBC News

Unions are fighting the proposed Norwich Union move...

...Despite a high-profile counter campaign being run by many British unions, research shows 28 firms have outsourced more than 50,000 jobs serving UK customers to India over the past two years...

...said Indian call centre workers also do a better job than those in Britain because they are more motivated and more accurate in their work...

02 December 2003 The risk of offshore outsourcing

The Edge Daily

Last week, leading computer maker Dell said it would stop using a technical support centre in India...

...There’s no question, offshore outsourcing for call centres is booming, especially in India. But as the Dell case illustrates, there are risks to outsourcing call centres offshore...

...That said, there are clear benefits to outsourcing contact centre operations...

01 December 2003 Outsourcing: Offshore Hiccups An Irreversible Trend?

CRN

The reining in of a pair of high-profile offshore relationships late last month shows how the movement of IT and customer-service operations to lower--cost overseas locales still carries sizable business and public-relations risks...

...Despite some backlash, McCarthy says he sees no slowdown in the rush by businesses to take advantage of low--cost labor in emerging economies, calling the moves by Dell and the state of Indiana "hiccups in an irreversible trend."...

01 December 2003 India hits back on outsourcing job fears

Infoworld

...The Indian government went on the offensive last week on the contentious issue of the loss of U.S. and European jobs to India due to outsourcing...

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Offshore Outsourcing Press Releases

18 December 2003 Keane Expands Offshore Outsourcing Operations

Biz Ink (Press release)

Third Advanced Development Center Opened in India to Meet Increasing Demand for Offshore Outsourcing...

18 December 2003 Offshore Outsourcing Continues Dramatic Growth

Yahoo (Press release)

...The event is co-sponsored by three leading industry experts: Law firm Mayer, Brown, Rowe & Maw, neoIT, the leading offshore advisory firm, and TPI, the leading sourcing advisory firm. These top companies will join a host of other industry leaders to present best practices for seamlessly implementing an offshore outsourcing program...

08 December 2003 New Research From Forrester States 60 Percent Of Fortune 1,000 Companies Not Outsourcing Offshore

Business Wire (Press release)

...Sixty percent of the Fortune 1,000 firms in the US have not jumped on the offshore outsourcing bandwagon, and another 25 percent are in the experimentation phase, according to new research from Forrester Research, Inc...

December 2003 VA Software Uses Own 'Offshoring' Experience to Tune Flagship Product for Hot Growth Market

Business Wire (Press release)

...SourceForge Enterprise Edition is evolved from the software used by more than 750,000 developers worldwide on www.SourceForge.net, the global nexus for open-source software development projects. SourceForge Enterprise Edition 3.5 adds enterprise-grade security and management features, resulting in a product that helps companies cut application development and maintenance costs while improving quality and reducing risk...

03 December 2003 The Impact of Offshore Outsourcing on the U.S. - Pros, Cons, Questions

Yahoo (Press release)

Does outsourcing work? If so, what are the benefits? If not, what are the short- and long-term effects on the local and national economy?.

02 December 2003 neoIT Teams Up with Other Leading Experts at 'Offshore Outsourcing Forum' to Help Companies Learn Offshoring Best Practices, Avoid Risks

Yahoo (Press release)

In response to the increased demand for information on best practices and strategies for offshore outsourcing, neoIT, the leading offshore advisory firm, has teamed with the law firm of Mayer, Brown, Rowe & Maw...

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News Digest Review

Offshore Outsourcing News Review - 5 December 2003

The decision by Dell to close its offshore call centre, and the Indiana State Government to retract a contract from TCS dominated the news earlier in the week, and keeps on reappearing in various guises.

It is reported that Dell based their decision on customer complaints about undecipherable accents. If this was the case then it would be interesting to know just what steps Dell and their supplier were taking to correct the problem before they decided to pull the plug, and how the situation arose in the first place. This type of problem is well known and there are many voice training and coaching schemes available, so just how did Dell and their Supplier get caught out?

In the UK, Norwich Union's announcement on moving jobs offshore had the press and unions up in arms. This reaction flew in the face of a recent article (28 November) indicating that the unions are preparing to accept offshore outsourcing as a fact of life, and get down to the difficult task of redefining the future for their affected members.

In the midst of this an old (July 2003) article re-surfaced in my inbox. In it the author discusses why some companies choose to go offshore, and prophetically (or is that inaccurately?) cites Dell as one that isn't.

On November 30 I flew out to India. I'll be staying here until just before Christmas, visiting Hyderabad, Bangalore and Chennai. In the new year I hope to be able to report back on our Indian vendors' views on the above and other topics of interest. In the mean time, instead of weekly updates, we'll be adding digest items as and when my schedule and stamina allows.

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