This page provides links to offshore outsourcing news articles published in March 2004. 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.

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You can also read March's News Reviews and Press Releases.

News Archive

30 March 2004 Study: Offshore outsourcing boosts domestic employment, wages

Washington Technology

...According to ITAA, 10 percent of U.S. IT software and services jobs have been lost since 2000, but only 2.8 percent of those jobs have been lost because of offshore outsourcing. Most jobs were lost because of the dot-com and telecom busts, the economic recession and productivity gains, the study said...

...The executive summary (10 page PDF) of the study is available at www.itaa.org...

29 March 2004 SPRING CONFERENCE: Offshoring's Pros And Cons

Information Week

...Roy Dunbar, Eli Lilly & Co.'s president of international operations, addressed three key aspects of offshore outsourcing and the backlash that it has created on Monday during his keynote at InformationWeek's Spring Conference...

While cost-cutting originally was viewed as the chief benefit of hiring offshore talent, he said, many question just how long wages in developing countries will lag far behind those in the United States...

Another critical issue for U.S.-based companies to consider is whether investments in the economies of developing countries will open up new markets for those companies--or whether this money is ultimately training America's future economic competitors. A third key aspect Dunbar addressed is whether the loss of low-level IT and call-center jobs will evaporate the next generation of IT leaders in this country...

25 March 2004 Local Firms Set for Bigger Role

AllAfrica.com

..."SA [South Africa] is well positioned to become the place of choice for offshore outsourcing. We are English-speaking, which is important when it comes to solving customer problems,"...

...For example, the total cost of a skilled call-centre agent in the UK is about £2500 a month, compared with about £500 in SA, due to the exchange rate...

..."We did benchmarking at the end of last year that shows that SA is marginally cheaper than India," says Smith...

24 March 2004 Outsourcing: It's the 'In' Thing

Washington Post

Worried that your job in the technology industry is going overseas and you're not invited? Don't fret. One of the nation's largest high-tech associations says that reports of the outsourcing phenomenon are greatly exaggerated...

24 March 2004 The two sides of offshore outsourcing

Minnesota Public Radio

"If we hadn't developed a capability in India, and been able to move very quickly we'd have been out of business--just flat-out, out of business. And now we're the strongest company in our field in the world because we had that capability and we were able to survive, keeping our core capabilities there,"...

..."This is not good for our nation, and our people and especially the middle class is going to start to disappear, there will be a rich and poor and the people in the middle, too bad," said Barnes...

18 March 2004 Offshore Outsourcing Soundoff

Fool.com

...I wrote about how many American companies have moved their headquarters overseas, and also about many firms relocating jobs abroad. A main explanation or defense has been that it saves money and is therefore good for the company and shareholders. Meanwhile, critics worry about laid-off workers in America, fearing that their ranks will swell.

I wasn't surprised to receive a lot of email in response to my article. Many readers made many good points, some of which I'd like to share with you now...

17 March 2004 Epam merges to expand offshore services

Network World Fusion

Looking to compete with the top-ranking offshore outsourcers, U.S.-based software services provider Epam Systems Inc. Wednesday announced it has merged with Hungarian firm Fathom Technology...

17 March 2004 New P&G deal gives HP its first BPO contract

Network World Fusion

...This deal strengthens the relationship between HP and P&G, which last year signed a 10-year $3 billion outsourcing contract for HP to manage P&G's [Proctor and Gamble's] IT infrastructure worldwide, including data center operations, desktops, networks, help desk, product lifecycle and procurement, and some applications development and maintenance...

16 March 2004 No pain, no gain: BPOs must rethink on pricing

Economic Times

...to escalate profitability, India third party BPO vendors need to embrace alternate pricing models...

...Unless a hybrid pricing model is followed, Indian BPO vendors cannot gain competitive advantage in the long run...

16 March 2004 Indian call centers well manned

Manorama Online

Indian call centres, particularly those in Bangalore, are comparable to the best in the world, an author of a new book on outsourcing has claimed...

16 March 2004 India reacts with dismay to recent US legislation on outsourcing

World Socialist Web Site

...Several states, such as Colorado, Wisconsin, Indiana and Minnesota, have introduced legislation to ban the offshoring of such contracts. The latest was the recently passed US Senate bill banning private firms from outsourcing federal government contracts overseas...

...Despite the public rhetoric by both Republicans and Democrats, important sections of both parties are big supporters of offshoring, as it increases the profits of major corporations. The US Chamber of Commerce and many corporate backers of both major parties such as IBM, Dell, HP and Sun oppose such legislation...

16 March 2004 Outsourcing means job creation is a must, Powell says

Network World Fusion

..."It is the reality of 21st century international economics that these kinds of dislocations will take place," said [Colin] Powell, according to a transcript of the press conference. "And what we have to do is work to minimize these dislocations and provide new opportunities for workers. This is a major issue that we will be focusing on in the months ahead."...

16 March 2004Outsourcing Fears Debunked in Teleconference

E-Commerce Times

...Transmitting sensitive company data to a foreign country is enough to make any CIO hesitate, at least for a moment...

...However, Harding noted that because Indian companies are so keen on winning U.S. contracts, they have implemented many security measures that would seem quite severe if used in the United States...

15 March 2004 The Peculiar Nature of Software

Computer World

Imagine that a programmer in India writes a program so useful that it creates thousands of jobs for developers in the U.S. to adopt, support and enhance its functionality...

...offshore outsourcing may indeed lead to a partial loss of such jobs in the U.S. At the other end of the spectrum is innovative software development. The potential for such software to create jobs suggests that even if some of this work is done overseas, there would still be benefits for U.S. programmers...

15 March 2004 'Not in my backyard' -- state lawmakers fight offshoring

Search CIO

..."I think the federal government needs to do more to provide incentives to stay onshore because with our tax code, we can modify [the] behavior of corporations,"...

...the American public demands the best for the least. "The business sector needs to respond with lowest cost and highest qualities," he said. "We can't ignore that India and China are there."…

15 March 2004 IEEE [USA] Advocates Limits On Offshore

Information Week

...The paper falls short of advocating a ban, but it details actions to monitor and limit the trend of sending tech jobs overseas...

...The position paper calls on the government to begin collecting data about offshore outsourcing, restrict government use of offshoring unless it clearly poses no threat to U.S. competitiveness and security, and expand training programs for displaced workers...

13 March 2004 Infosys dismisses criticism of offshore outsourcing

The Business Times

Infosys, the leading Indian IT services group, on Thursday rejected recent criticism of offshore outsourcing and defended the economic benefits of globalisation, the Financial Times reported yesterday...

...outsourcing not only enables companies to cut their costs and improve their margins, but also mitigate the effects of economic cycles and the need to expand or contract their workforces…

13 March 2004 Offshore outsourcing: A consumer decision?

The National Business Review

Citing what he called "legitimate" issues involving both patriotism and privacy, Chris Larsen, chief executive of online financial broker E-Loan has opened to his home equity loan customers the decision of whether to have their loans processed overseas or in the United States...

12 March 2004 IBM denies report it will hire 2,200 in Calcutta

Network World Fusion

..."The estimates for the current population (of employees) and hiring plans are both grossly exaggerated," McNeese said. "While we plan growth in India, it's both modest and nowhere close to what is being reported by The Wall Street Journal."...

12 March 2004 Greenspan: Be careful of knee-jerk reactions to outsourcing

Network World Fusion

...Last week, I promised to share two other views on outsourcing of high-tech jobs -- one by a reader, who asked not to be named, from India, and another from a U.S. IT worker...

...as one of those 'Evil Indian programmers' stealing jobs from the West. First, please ...understand that this is an intense discussion both within the Indian IT community as well the Americans we work with...

....I am already feeling the trend for companies to outsource their IT department staff to foreign countries. I've personally been unemployed for nearly two years now. At every job interview I've gone on, there have been 40 to 50 applicants almost all as qualified as I am, if not more so...

10 March 2004 California Legislator Wants To Bar Offshore Outsourcing Of Medical And Financial Records

Information Week

The chair of the California Senate's trade commission said Wednesday that she's considering introducing legislation that would bar the offshore outsourcing of administrative and IT work that involves the medical or financial records of California residents...

...she's concerned that a growing number of large U.S. medical and financial-services firms are shifting information-processing work to countries that lack strong privacy laws, leaving consumers vulnerable to identity theft and other crimes...

10 March 2004 Employees Play Key Role in Outsourcing Success, Says AMR Research

Tekrati

The recent media and political uproar about offshore outsourcing and political posturing is making the offshore outsourcing situation a sensitive one...

...Successful outsourcing strategies entail far more than simply selecting the right service and transferring the work. By emphasizing the positives of outsourcing, retraining IT workers, and minimizing layoffs, companies can achieve an effective outsourcing strategy with internal employee support...

09 March 2004 Surveys Say No Rush To Outsource

Information Week

According to a quarterly survey of nearly 1,100 midmarket CEOs by TEC International, a CEO consulting firm, just 5% say they intend to outsource IT jobs overseas. By comparison, 12% plan to offshore manufacturing jobs, while 73% say they have no intention of doing any offshore outsourcing...

08 March 2004 Indian outsourcers tackle high-end IT

Network World Fusion

...Indian outsourcers say they are moving up the value curve, from primarily software coding and maintenance to new areas such as IT consulting, systems integration, infrastructure management, package implementation, and product development...

...Outsourcing to India is now being driven from the top - by CEOs and CIOs - and includes strategic development work, unlike a year ago, when new clients typically came to India for staff augmentation or software maintenance work...

08 March 2004 Weigh risks of offshore outsourcing

Network World Fusion

Offshore outsourcing might be a good economic decision for some organizations based on lower labor costs. But make sure you carefully consider the security risks of the decision...

...the Health Insurance Portability and Accountability Act, Gramm-Leach-Bliley Act and California's SB 1386 require companies to protect privacy and impose stiff financial or disclosure penalties if they do not...

08 March 2004 Meta: Outsourcing laws still a long way off

Search CIO

So far, 21 states have introduced 39 bills to limit offshore outsourcing, but not one has been passed into law, said John Goggin, vice president and director at Stamford, Conn.-based Meta...

...Security, particularly when it comes to intellectual property protection, is a serious consideration, especially in China, which is quickly catching up to India as an offshore destination, Davison said. Organizations also need to consider geopolitical factors such as war, terrorism and politics and protectionism abroad and make contingency plans...

08 March 2004 Weighing the benefits of outsourcing

IT World

Stories illustrating how offshore developers from India to Romania are providing a range of application services for U.S. companies of all sizes and stripes have become commonplace...

..."Using remote resources successfully is not intuitive," says Stephanie Moore, an analyst at Giga Information Group Inc. who has authored a number of reports on the offshore outsourcing phenomenon. "Seventy-five percent of the outsourcing deals that fail are due to lack of program management skills on the part of the user."...

05 March 2004 Lawmakers push offshore outsourcing legislation

Network World Fusion

...The Senate, by a vote of 70 to 26, voted to approve Sen. Chris Dodd's amendment, which would prohibit taxpayer dollars from being used to outsource or take offshore work formerly done in the U.S...

05 March 2004 Are we the enablers of outsourcing?

Network World Fusion

...technology itself has contributed greatly to the movement of tech jobs to cheaper production sites overseas. The Internet, IP, VPNs, VoIP, distributed processing/networking/storage and other technologies mostly invented and developed in the U.S...

...it's hard to think of a market where protection does anything other than weaken the protected producers - ultimately the cost is borne by consumers in the protected market in terms of higher prices for second-rate products...

...[Thomas Friedman]noted that while visiting an outsourcing company in Bangalore, all of the PCs were from Compaq, the phones from Lucent and the water from Coke. It would be interesting to see how American companies' sales to India have grown since the outsourcing boom started...

05 March 2004 Offshore outsourcing a pain for US

Business Day

Outsourcing has become a hot-button political issue as a new push for legislation to halt the offshore jobs exodus is countered by an aggressive business campaign arguing the effort will backfire...

04 March 2004 U.S. politicians to take a swipe at offshoring

Network World Fusion

Over 50 U.S. congressmen will shortly introduce a bill into Congress designed to bar U.S. companies from receiving government financial aid if they do not protect local jobs to the same extent as they protect jobs which they provide outside the U.S...

..."The American people also have a right not to give corporate welfare to those companies that are leaving the United States for India, China or Mexico ."

03 March 2004 Offshore benefits go beyond savings

Network World Fusion

When a spike in demand comes along, a business can capitalize on it more easily when it can turn to an offshore partner to help boost capacity or find workers with skills in a particular field...

..."There are cost savings, but there is also a notion of improved time to market for us. That means core product development as well as implementing customer systems,"...

...Some companies miscalculate the savings they will realize because they don't consider all the associated costs, such as extra travel and communications, and even hiring a manager to oversee the offshore work...

03 March 2004 Gartner: 2004 will see trend toward smaller, focused outsourcing projects

Network World Fusion

Small projects - and possibly small providers - will be a central theme in the outsourcing climate for the coming year...

...The number of enterprises that enter into new outsourcing relationships will increase by 30% in 2004...

...but these relationships will be for smaller, more focused projects...

03 March 2004 Tiger to market Yash offshore outsourcing services in Europe

Finextra

...Under the agreement, Tiger's software services division, Camaga Software, will act as the exclusive agents for Yash Technologies' services in Europe, with Tiger being responsible for marketing the services in the financial sector...

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Offshore Outsourcing Press Releases

23 March 2004 Book on Offshore Outsourcing Released

Market Wire

"Offshore Outsourcing: A Path to New Efficiencies in IT and Business Processes," the book is a guide to achieving new efficiencies through offshore outsourcing. It also deals with the offshore imperative and its benefits, current trends, legislative issues, the future of global trade and jobs...

24 March 2004 AeA Paper Finds That Offshoring Is Just One Element in a Rapidly Changing and Dramatically Competitive World; AeA Releases a New Paper on Offshore Outsourcing

AeA

Offshore Outsourcing in an Increasingly Competitive and Rapidly Changing World," finds that offshore outsourcing is just one part of today's dramatically changing and increasingly competitive world. Therefore, offshore outsourcing cannot be viewed in isolation. The report acknowledges that although offshore outsourcing is exaggerated as the primary cause of lost jobs, the report does acknowledge that some people will be hurt...

To obtain a copy of the report, visit AeA's Website

12 March 2004 CoreBriX Releases White Paper on Offshore Outsourcing in Commercial Real Estate

Business Wire

"Our intention with this paper is to give a high-level balanced overview of the opportunities, key success factors, benefits, risks, and overall considerations that should be made prior to engaging in offshore outsourcing in this industry"...

The white paper may be downloaded at www.corebrix.com.

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News Reviews

Offshore Outsourcing News Review - 16 March 2004

It is no surprise reporting on the various US offshore outsourcing legislative initiatives continues to dominate the news. Fortunately some reasoned discussion, rather than plain reporting on the subject can be found.

The recommendation that blended rates for BPO work are abandoned in favour of graded pricing, seems like sound commercial practise to me, provided it doesn't make it difficult for suppliers and customers to easily identify the costs. Failure to keep it simple could result in poor estimation, and a failure to meet customer expectations.

In an industry dominated by Indian suppliers, it's nice to see one of the 'rising stars' of outsourcing, Romania, mentioned even if only in passing.

This month we've increased the news and event information carried on our RSS feed to help users of news aggregators. With RSS we tell you when and how we've updated the site, saving you unnecessary visits to check for new information.

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