This page provides links to offshore outsourcing news articles published in May 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 May's News Reviews and Press Releases.

News Archive

24 May 2004 An offshore conversation: Real estate CIO says communication is key

Search CIO

...In this exclusive interview with SearchCIO.com, Asija tells us about the obstacles of working with an offshore provider, how the experience made his organization more competitive and why offshore outsourcing is more than just the latest IT fad...

24 May 2004 There's No Stopping The Offshore-Outsourcing Train

Information Week

Although the upcoming presidential election has aroused a wave of sentiment against offshore outsourcing, new research indicates the promise of low-cost labor will result in 40% more U.S. white-collar jobs moving offshore by 2005 than previously expected. And while the types of jobs moving offshore vary, it's anticipated that IT work will continue to be a prime candidate...

...A downside is looming, however. As the demand for qualified IT workers in India increases among companies worldwide, prices of outsourcing services are going up by an estimated 15% per year, according to a recent study...

20 May 2004 Choosing an outsourcer

NetworkWorldFusion

studied the outsourcing practices of more than 50 companies from a variety of industries for its report, "Outsourcing from Strength." The research offers insight into the key outsourcing strategies and tactics employed in leading organizations. Available at www.cuttingedgeinfo.com, a free executive summary to the report includes advice for identifying key outsourcing requirements and evaluating vendors against them...

(Registration required)

20 May 2004 Netas play as anti-BPO fire burns

The Economic Times

... India has expressed no objections to the two bills, owing to lack of political leadership at the Centre . ET has been reporting on various bills introduced in state legislatures for more than two years now. There are approximately 35 states in the US, which have a bill pending in their legislatures trying to prevent offshore outsourcing...

20 May 2004 Offshore outsourcing rockets in 2004

VNU Net

...the research note from Gartner warns that the industry will not sustain such high revenue increases in the future, even though offshore BPO has enjoyed high growth rates recently, and is predicted to accelerate through 2004...

..."The recommended plan for a successful outsourcing relationship is careful planning, integration, and management of outsourced channels, functions or processes...

20 May 2004 Offshore outsourcing: Don't circle the wagons

Globe and Mail

...Despite the apparent economic recovery, American businesses are increasingly transferring operations to low-cost countries. New jobs have been slow in coming this election year, and politicians are rightly concerned about theirs. Offshore outsourcing has become one of the fiercest battlegrounds of the U.S. election.

While the desire to circle the wagons and shoot anyone who approaches is almost understandable, opponents of offshore outsourcing risk shooting themselves in the foot...

19 May 2004 Offshore outsourcing

Globa and Mail

Three developments are sharpening the U.S. debate over the offshore outsourcing of information technology and other knowledge-based services jobs. We've got updated projections and insights from Forrester Research, some policy moves by the Bush administration and a refreshing viewpoint from Senator Joseph Lieberman...

18 May 2004 The jobless recovery and offshore outsourcing

Cnet News

The simple truth is that offshoring is not the result of a few Benedict Arnolds. It's a result of the relentless pressure on businesses to take advantage of every opportunity available to them to reduce costs, increase quality and add to profits...

...what should we do? Simply tell people to hang on, that macroeconomics will eventually come around to save them? I'd instead suggest a more aggressive, two-pronged effort...

18 May 2004 Heard on the Street: Offshore Outsourcing Stays on American Soil

Accounting Software

...It seems that you can't have a conversation with an accounting professional or call center-oriented business without the discussion turning to outsourcing work to foreign countries...

... What's the word on the street?...

...Although customer satisfaction data for the pilot program was positive, Grass says the effort was not progressing fast enough to ensure "excellent support for the '03 tax preparation season."...

18 May 2004 Bad Press Apparently Can't Dent Offshore Outsourcing

Information Week

...According to a survey conducted by moderators during a seminar here at the Gartner Outsourcing Summit Tuesday, 86% of respondents said negative publicity wouldn't slow their offshoring plans. Only 5% said bad press would cause them to delay an offshoring strategy by more than six months...

18 May 2004 Attendees get down to business at Outsourcing Summit

Search CIO

...More than 1,000 C-level executives, IT managers and business managers are cramming into the three days' worth of keynote presentations and track sessions that cover topics ranging from steps to mastering outsourcing to what's new in outsourcing contracts and the challenges of outsourcing over the next five years...

...The firm has decided to stop using the term "offshore outsourcing" and instead is calling the practice "global sourcing." Gartner feels the term better describes the broad mix of on-site, onshore, offshore and nearshore strategies.

18 May 2004 No Outsourcing Backlash Here

Forbes

...he maintains that the trend is being driven not by greedy executives or impatient shareholders, but by customers. American consumers, he says, will not pay a premium for American-made products.

Need proof? Zenith Electronics and Huffy (nyse: HUF - news - people ) resisted the push to use offshore manufacturing for their televisions and bicycles, respectively, and paid the price...

17 May 2004 Silicon Valley entrepreneurs' Indian Election shock

The Enquirer

the TiEcon convention - which is the premier gathering for Silicon Valley entrepreneurs with ties to India - was all abuzz with the news of Friday's shock election defeat...

...to gain power, Gandhi will have to do a deal with the Communists and seriously curtail any of the free market moves bought in by the previous government...

17 May 2004 Forrester adjusts outsourcing numbers upward

NetworkWorldFusion

Forrester Research says the number of jobs moving offshore is accelerating in the short term...

One of the reasons for this short-term surge is the political backlash over offshore work. In a twist of the public relations adage that any publicity is good publicity, the political furor has "increased the awareness of offshore outsourcing, and increased the awareness of the value of offshore outsourcing,"...

...In addition, IT departments are being asked to do more as the economy recovers, "yet the IT budget is still flat or declining...

16 May 2004 White-collar jobs may be next to move overseas

The Boston Globe

...Information technology has been the sector hit hardest by the export of skilled jobs by American companies to up-and-coming economies like India, Russia, and the Philippines, where the work can be done more cheaply. But the ripples from offshore outsourcing will also be felt in other industries...

...There are several factors that increase the possibility a job will be outsourced, according to Bardhan. Does it involve lots of expertise? Can the job be done over the Internet? Is there a large wage difference between an American worker and an Indian worker performing the same job?...

11 May 2004 Lieberman calls for new outsourcing ideas

Computerworld

The U.S. government needs to address recent growth in offshore outsourcing with new ideas, including wage-loss insurance paid for by companies that use offshore outsourcing, and a bipartisan commission focused on ways the U.S. can remain competitive despite lower wages offered by other nations...

...U.S. politicians should stop blaming others for jobs lost to offshore outsourcing and instead focus on how the U.S. can better compete. "The American economy is failing to adapt to fundamental changes and to growing competition in the global economy,"...

10 May 2004 Offshoring Arrives on Wall Street

internetnews.com

...U.S. IT workers reject it, U.S. IT companies embrace it. Now U.S. investors will weigh in on the topic as more tech companies prepare to test the markets for public offerings, including another on-demand software player...

...PeopleSupport won't be the first firm specializing in offshore outsourcing to go public. The best known is probably India's Infosys which boasts a market value of nearly $11 billion...

09 May 2004 Call it 'worker replacement program'

Denver Post

...Some of us think "American worker replacement program" is a better description for the use of cheaper foreign workers in countries such as India, China, the Philippines and Ireland to do service-related work such as...

...HireAmericanCitizens.org is working diligently to get legislation introduced at both the state and federal levels to fight American worker replacement programs...

07 May 2004 The next battlefields for advanced technology

News.com

..."Eastern Europe cultivates some of the most highly technical, skilled work forces in the world,"...

...Indian technology companies, particularly biotech and software businesses, are working on cutting-edge innovation as well. "Indian companies, especially the big ones, are waking up to the patents philosophy, as they find that patents are highly profitable,"...

...In addition, the United States faces some internal obstacles, including slower growth in the number of possible workers to recruit and train…

06 May 2004 How India is handling international backlash

News.com

...Despite the angry rhetoric and calls for protectionist legislation in the U.S. Congress and several state houses, Indian politicians and executives of companies that provide offshore services are surprisingly sanguine about the controversy. From the capital of New Delhi to the high-tech center of Bangalore, government officials and business leaders often seem genuinely puzzled about the intensity of negative reaction in the United States...

...The news media are often blamed for exaggerating American job losses and other consequences of offshore outsourcing while underreporting the benefits, such as cost savings to technology companies and the U.S. economy as a whole. Indian officials and corporate leaders have attributed much of the controversy to election year politicking and to denial by American labor organizations that outsourcing is here to stay...

05 May 2004 Outsourcing: Where to draw the line

ZD Net

...The chief information officer at San Jose-based software maker BEA Systems contracted with an Indian outsource company six months ago to handle maintenance and support of internal enterprise software from PeopleSoft, Siebel Systems and Clarify...

... "At a recent discussion we had, executives were unanimous in saying they are very, very careful about what they offshore and what they don't," said Rick White, a former Republican congressman and now head of industry lobbying group TechNet. "They tend to send things overseas that don't compromise their intellectual property, for obvious business reasons."...

... But as offshore outsourcing becomes more prevalent, and the skill level of foreign labor rises, economists and others say it is inevitable that higher-level work will move overseas...

04 May 2004 IDC: BPO spending and challenges increase

Network World Fusion

Spending on business process outsourcing services will continue to increase in coming years, but so will clients' expectations for the quality and breadth of vendors' offerings, according to an IDC study whose results were announced Wednesday...

04 May 2004 Gartner picks best offshore destinations

Search CIO

...A range of countries are involved in offshore outsourcing. The big ones on our [Gartner] radar are India, China, Israel, South Africa, Northern Ireland, Southern Ireland, Czech Republic, Poland, Hungary and Russia. We evaluate each of these countries based on language compatibility, government support, infrastructure, educational system, cost, labor, political stability, cultural compatibility and security. I'll give you a quick break down of the main issues each of these countries face in the offshore market...

04 May 2004 Poll shows support for offshoring tax

News.com

More than 40 percent of U.S. technology executives surveyed would be willing to pay higher taxes to compensate for jobs they send offshore, according to a nationwide poll conducted jointly by CNET News.com and Harris Interactive...

...The results were part of a wide-ranging survey of nearly 500 information technology "decision makers," defined as having a role in acquiring or recommending IT products or services for their companies. The respondents, who were polled online in late April, work across industry segments, in various departments and levels at their companies, including the most senior ranks...

03 May 2004 NZ seeks outsourcing cash

Computerworld

New Zealand planted the flag as a destination for organisations seeking an offshore outsourcer at a key gathering in London last week...

...But New Zealand is comparatively late to the market...

...Rather than attempt to compete with Indian companies on price and scale, Outsource2NewZealand is promoting itself as a clearing house for organisations in the market for “highly innovative or leading edge” development projects...

02 May 2004 BPO bops up the future

ABS - CBN Interactive

...Call-center operators expanding into the Asian region say the Philippines is seen to benefit from a “lasting” growth in offshore outsourcing, which they say is only just starting...

...Kapoor thinks the market will be large enough for India and the Philippines combined -- two of the hottest sites competing for the offshore outsourcing business. Both countries are high on the priority list for BPO outfits because of their English proficiency...

02 May 2004 As a Center for Outsourcing, India Could Be Losing Its Edge

GoUpstate.com

...wages in the country's major outsourcing sectors have been rising by close to 15 percent per year. The reason is increasing competition for labor, thanks in large part to a rush by American companies to outsource work offshore. In fact, the competition has grown so fierce that the typical Indian operation in business processing - things like call centers and payroll, accounting and human resources functions - can expect to lose 15 to 20 percent of its work force each year...

...In certain sectors of the outsourcing market, attrition rates are 50 to 75 percent, according to Sunil Mehta, vice president of the National Association of Software and Service Companies...

...A recent Nasscom report projected that if India continued to produce college graduates at the current rate, demand would exceed supply by 20 percent in the main outsourcing markets by 2008. "Candidly, we see a labor problem in India right now," said Dan Zadorozny, the vice president for applications delivery at Electronic Data Systems, a global outsourcing firm that is based in the United States but has operations in India. Even with wages rising 15 percent per year, the cost of a computer programmer or a middle manager in India remains a small fraction of the cost for a similar employee in the United States...

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Offshore Outsourcing Press Releases

19 May 2004 CMP Media's TechWeb Network Launches Managing Offshore Yahoo Finance

...Managing Offshore provides in-depth reports on topics such as on how to find the best global locations for companies, explorations of local markets, as well as on cost-reduction and moving jobs overseas. Each issue contains two main reports as well as content authored by notable experts. Managing Offshore will be published twelve times per year...

16 May 2004 Cinq Technologies Brazil Partners with U.S. based Vision TRE, Inc. to provide Brazilian Offshore IT services to U.S. companies eMedia Wire

Vision TRE, Inc., an information technology (IT) consulting firm in Stone Mountain, Georgia today announced its partnership with Cinq Technologies of Curitiba, Brazil. Vision TRE, Inc. will provide U.S. marketing, sales, and onshore support for Cinq Technologies of Brazil, offshore IT projects in the U.S....

...Cinq Technologies was founded in 1992 and their client project portfolio includes Brazilian government agencies, Alltech, Diebold Corporation, HP, IBM, Siemens, Banco Do Brazil, Michelin and other well know companies. According to Carlos Jayme a Director at Cinq Technologies, "our goal is for each project to reflect customer service and technical excellence to assure your continued customer satisfaction". Cinq employs about 50 developers with a wide range of skill sets including C++, .Net, Oracle, MS SQL, Java and much more.

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News Reviews

Offshore Outsourcing News Review - May 2004

Offshore outsourcing is dead… Long live offshore outsourcing. Well at least according to Gartner. In a presumed step to avoid the bad press offshore outsourcing is receiving right now, Gartner are coining the phrase Global Sourcing - to reflect the broadening and maturing of the industry.

It seems the old adage, "there's no such thing as bad publicity" is coming into play. Just weeks after Forrester down-played the impact of offshore outsourcing, the figures have now been revised up again, in part due to an upsurge in interest in offshore outsourcing, driven by all the current publicity.

Finally, on the American election front, Senator Joe Lieberman has been receiving praise for a measured approach to this election issue. His 42 page Offshore Outsourcing and America's Competitive Edge report is available for download in pdf format.

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