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ISSUE #15, 2009

Cloud
Computing 101
Why external
providers are
often better
Achieving
business success
through process
excellence
How to
manage
offshore Is Cloud
Sourcing
relationships

a Fair Day
Event?
Matrade-outAD.indd 20 5/27/09 11:01:05 PM
 38

10

22

18

36
 CONTENTS
6 PIKOM fetes industry leaders and
organisations

Workers take Green issues

7
14 seriously

8 Bad times a boon for Dubai

Outsource Zone

Achieving Business Excellence

10
through Process Excellence

14 Is Cloud Sourcing a fair day event?

18 Cloud Computing 101

Why external providers are often

22
better

28
Offshoring relationship
management

Survey: RPO market on the

34
upswing

34 Employer branding vital to attract

35
talent

36
Financial basics of Outsourcing
transaction

38 Holiday choices for workplace

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UST RY
ES IND
SERVIC
HN OLOGY
D TEC
SIN ESS AN
ON BU
ZINE
R MAGA
PREMIE

06
5-10
198
ISSN

09
#15, 20
ISSUE

Cloudputing 101
Com
extern al
Whyid ers are
provn be tter
ofte
Achie ving ccess
busine ss suocess
h pr
d
Is Clrocuing
throug e
excellenc
to

Souair Day
Howag
man oree
offsh nships

a F nt?
relatio

Eve

Cloud Computing – yes, yet another catchphrase in

theteam
the Techy language. The mushrooming of countless providers
is causing companies to contemplate how and when to do
Cloud Computing.
For some, things are a little “cloudy” when it comes to
Managing Editor/Publisher: this new IT phenomenon. With all the hype, it’s easy to lose
Sritharan Vellasamy track of the real innovation that’s taking place every day
using this technology.
Consultant: For me, Cloud is, in essence, computing power served up
Sundra Surian as a utility. Perhaps you could imagine of how electricity
or cable TV usage and billing works. You can simply pay
a fee and use the computing power offered by the “utility”
providers.
It seems it has massive potential for the business world.
editorial editorial@wordlabs.com.my Users are attracted to its solutions primarily for strategic
reasons such as flexibility and responsiveness, in addition
Sub Editor: Simon Vella to potential cost savings.
Art Director:Steven Choo Now Cloud is giving birth to a new kind of outsourcing
Graphic artist:Shafie Osman – Cloud Sourcing.
Contributors: Tamyne Menon, In our Cover Story, columnist Jerry Durant tracks this
Dorothy Llew, Mohd Arshad phenomenon. He argues that while it is highly possible
Coordinator:James Wee that Cloud Sourcing has the potential to become a sourcing
approach, it is unlikely that it will have immediate
acceptance.
Durant says, “This is largely due to relationship maturity
issues, flexible scalability, and the need to conduct advanced
sales sales@wordlabs.com.my capacity planning.”
Agree or disagree, why not write to us on your opinions in
Vikraman Visno this matter? Selected letters will be published in the coming
Resh Nathen issue of this magazine and its online site.
In the Conversation segment, we have featured Gopi
Ganesalingam, the Head of Lava Protocols Malaysia. His
company is the go-to-market partners for Salesforce.com
and Astadia Inc. in Malaysia.
contact admin@wordlabs.com.my Here, he gives us a brief introduction to prevalent
Cloud solutions such as Infrastructure-as-a-Service (IaaS),
Platform-as-a-Service (PaaS) and Software-as-a-Service
(SaaS).
Also, please be sure to check out our feature titled
“Offshoring Relationship Management”, where Danny Ertel
and Joseph Bubman of Vantage Partners study the impact
of culture in cross-border strategic tie-ups.
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3(CIMA-Ad).indd 1 10/20/08 12:43:11 PM
Outsourcing | news bits

three
hree more locations develop
into MsCC Malaysia cybercentres
THrEE NEW locations in the There are four cybercentres
Datacom Klang Valley will be developed
into MSC Malaysia cybercen-
in the Klang Valley currently,
which are Kuala Lumpur City
opens second tres to provide more accessibil-
ity to tech companies wanting
Centre, Cyberjaya, KL Sentral
and Mid Valley City. There
Malaysian to be part of the MSC Malaysia
initiative.
are six cybercities in the states
of Kedah, Penang, Malacca,
office The three new cybercentres
are the Persoft Tower in Petal-
Perak, Johor and Pahang.
Datuk Badlisham Ghazali,
poration (MDeC), announced
this at the 21st MSC Malaysia
Kiwi iT company Datacom ing Jaya, GTower and Bangsar chief executive officer of the Implementation Council
has officially launched its South City in Kuala Lumpur. Multimedia Development Cor- Meeting (ICM) on Nov 9.
second Malaysian office
servicing the local contact
centre market.
New Zealand Prime
Minister John Key was on

fetes
hand for the opening of
the new facility in Bandar
Utama, Kuala Lumpur.
“Our growth in Malaysia
is fuelled by the confidence

industry leaders
our clients have in us to
deploy quality solutions,
enabled by talented people
across the region that are
passionate about innovation

and creating value,” said
Kirsty Hunter, managing
director for Datacom
Connect, specialist in
contact centre services
across Asia Pacific.
Datacom was founded
in Christchurch in the mid
1960’s and now spans
locations in Australia, New
Zealand, Malaysia and the
Philippines. “Our recent
growth, increasingly fuelled
by an expansion into the
Malaysia domestic ICT
market, has lead to the
investment in our new
facility. This investment
speaks to our confidence
in Malaysia as Datacom’s
core regional hub location,”
said Datacom CEO Michael
Browne.
and organisations
PIKOM, The National ICT Association of
Malaysia, honoured organisations and ICT
leaders at the PIKOM ICT Leaderships Awards
(PILA) 2009.
MOL Access Portal President and CEO
Ganesh Kumar Bangah and Sime Darby
Group CIO Tan Kah Chai were awarded with
the Technoprenuer and CIO Excellence award
respectively.
Hewlett-Packard (M) and MOL Access Portal
were both announced as joint-recipients of the
PIKOM Member Excellence Award.
Lembaga Hasil Dalam Negeri (LHDN)
Malaysia received the PIKOM ICT Organisation
Excellence Award while Yasmin Mahmood,
Managing Director of Microsoft Malaysia Sdn
Bhd received the PIKOM ICT Personality of the
Year Award.
The awards were presented by the Minister of
Science, Technology and Innovation (MOSTI),
YB. Datuk Seri Dr Maximus Johnity Ongkili
and Deputy Minister, YB. Tuan Haji Fadhillah
at the PIKOM Annual Dinner 2009 in Petaling
Jaya on Oct 30.
PIKOM ICT Leadership Awards event
honours and gives due recognition to out-
standing leaders in the ICT industry and
user community. Introduced in 2008, the
awards are presented to individuals and
firms that demonstrate ICT best practices in
their industry, commending the commitment
and innovative business strategies required
to advance in the local and global market-
place.

Cisco collaborates with MDeC

CISCO AND MuLTIMEDIA
LTIMEDIA De-
velopment Corporation (MDeC),
the Malaysian government’s
agency tasked with developing
the Multimedia Super Corridor
(MSC) in Malaysia, announced
a collaboration to establish
Malaysia as a regional hub for
training, certification and the
development of networking
technology operation skills.
This initiative is in line with
the Malaysian government’s
agenda to provide a strong
platform to create and build a
highly skilled knowledge-based
workforce, through which Ma-
laysia can enhance its position
as a global information and
communication technology
(ICT) and multime-
dia hub.
“The network has
become the platform
for ICT services in
collaboration and
virtualisation. How-
ever there is a global shortage
of professionals with knowledge
of designing and operating this
Internet Protocol (IP) based
Platform. Cisco is committed to
driving innovation and building
talent in the area of IP-based
networking and technologies,
creating a sustainable,
highly-skilled and in-
demand workforce to
drive growth.
“Our collabora-
tion with MDeC will
provide training and
development skills that will
contribute to the local knowl-
edge infrastructures critical for
accelerating and sustaining
economic growth in Malaysia,”
said Sameer Padhye, senior vice
president, Worldwide Service
Provider Line of Business, Cisco
Services.
Integral to this collaboration,
Cisco will provide training and
development for local partner
companies to enable them to
offer potentially the complete
range of Cisco training pro-
grammes and certifications
to students throughout the
region.

6 | Outsourcing | November-December 2009

 Outsourcing | news bits

Workers take
Green issues
seriously
Singapore employees are more likely to opt to
work for a company that is ethical and takes social
and environmental responsibilities seriously than a
rival that ignores them, according to a new study.
Nine out of 10 (91%) workers said they would
think about a company’s reputation on ethical and
green issue when considering a job offer, with two
out of three workers (66%) saying this was “very
important”.
Eight out of 10 (80%) said they would only work
for companies that upheld their environmental
obligations.
In deciding where to work, 39% said policies to ad-
dress global warming were “very important” – more
than workers in the US or Europe.
The survey by a recruitment firm Kelly Services
polled 3,125 employees across IT, gov-
ernment, manufacturing and retail
sectors.
More than half (53%) of Singapore work-
ers polled also said that they would prefer to
take a pay cut or lesser role in a company that
had a reputation of looking after staff, the
environment and general community.
Workers asked the same question in other
countries returned similar results:
50% in Malaysia; 48% in Indonesia; 48% in
Hong Kong; and 44% in Thailand.
The findings are part of the Kelly Global
Workforce Index, which obtained the views of
approximately 100,000 people in 34 countries cov-
ering North America, Europe, and Asia Pacific.

TCS bags deal with Singapore Convergys

opens its largest
People’s Association contact centre
Tata Consultancy Services (TCS) said it
has received a two-year multi-million dollar
istration. This is expected to enable higher
process efficiency and staff productivity across
in Manila
deal with Singapore’s People’s Association, the organisation. Global outsourcer
a statutory board under the Ministry of Girija Pande, EVP and head of TCS Asia Convergys has officially opened
Community Development, Youth and Sports, Pacific, said: “Our expertise in AMS, com- its biggest contact centre as a
to provide annual Application Management bined with our ability to deliver certainty of further sign of its confidence in
Services (AMS). results will provide sustained value to People’s the Philippines as an outsourcing
Under the agreement, TCS will develop Association. destination.
and maintain the association’s business and We have instilled strict quality control The new Manila centre, which
citizen centric applications including mission procedures and continue to drive more value will house 3,500 agents at full
critical applications. for our Singaporean clients through increased capacity, is the company’s 12th
This involves consolidating its multiple service quality provided by our team of highly contact centre in the country.
vendor environments allowing reduced main- qualified people with local knowledge of Convergys country manager
tenance costs and simplified system admin- culture and processes.” Marife Zamora said 2009 was a
banner year for Convergys. She
said the company hired close to
4,000 employees in 2009 and
Satyam, Saab in US$300m outsourcing contract the new Manila facility is its fourth
site opened this year. Zamora
Mahindra Satyam, earlier strategic step towards syn- this relationship with Mahi- said the company would launch
known as Satyam Computer ergising Satyam’s unique ndra Satyam as a strategic another site soon.
Services Ltd., recently said it is strengths in mission critical meeting of two highly skilled US Ambassador to the
planning to tie up with Saab, systems, ERP, engineering ser- teams believing in techincal Philippines Kristie Kenney said
a military defence and civil vices, avionics and integra- and engineering excellence,” at the launch that the Philippine
security solutions provider, to tion and Mahindra’s Systech’s said Ake Svensson, President BPO industry is expanding,
develop its India operations. manufacturing capabilities & CEO, Saab. including in the provinces, as
Saab’s outsourcing contract and engineering excellence,” According to the initia- shown in her visit to a BPO
to Satyam is estimated to be said Anand Mahindra, Vice tive, Satyam and Saab will company in Leyte recently.
between US$300-$400 mil- CMD, Mahindra Group. jointly address the Battle- Kenney said Convergys’
lion and is one of the largest The contract would also field Management System newest facility is a sign of
customer wins in the recent cover areas such as home- (BMS) – which is field proven confidence to the high-quality
past, India’s Express Buzz land security where focus and deployed across many Filipino workforce and the
reported. is planned for end-to-end countries – for the Indian government’s ability to support
“This collaboration is a security solutions. “We view Army. the business.

November-December 2009 | Outsourcing | 7

Outsourcing | news bits
Worldwide SaaS
revenue set to grow,
says Gartner
Worldwide software as a service
(SaaS) revenue is forecast to reach US$7.5
billion in 2009, a 17.7% increase from
2008 revenue of US$6.4 billion, according
to Gartner, a research firm. The market
will show consistent growth through 2013
when worldwide SaaS revenue will total over
US$14 billion for the enterprise application
markets.
“The adoption of SaaS continues to grow
and evolve within the enterprise application
markets,” says Sharon Mertz, Research
Director at Gartner. “The composition of
the worldwide SaaS landscape is evolving
as vendors continue to extend regionally,
increase penetration within existing accounts
and ‘greenfield’ opportunities, and offer
more-vertical-specific solutions as part of
their service portfolio or through partners.”
“Adoption of the on-demand deployment
model has continued to grow as on-demand
vendors have extended their services
through alliances, partner offerings, and
more recently, by offering and promoting
user application development through
platform as a service (PaaS) capabilities,”
Mertz says. “Although usage and adoption is
still evolving, deployment of SaaS still varies
between the enterprise application markets
and within specific market segments
because of buyer demand and applicability
of the solution.”
The content, communications and
collaboration (CCC) market and the
customer relationship management (CRM)
market continue to have the largest amount
of SaaS revenue across market segments,
with the CCC market generating US$2.6
billion in 2009, up from US$2.14 billion in
2008 and the CRM segment generating
US$2.3 billion in 2009, up from US$1.9
billion in 2008.
Wipro eyes BPO buys
India’s third-largest IT services com-
pany Wipro Technologies is eyeing acquisi-
tions in the BPO space as it expects the sector
to drive the growth for the IT industry, says
Suresh Vaswani, joint chief executive of the
company’s IT business.
“Acquisitions are part of our strategy. We
keep looking at it. The BPO space is likely
to be the next engine of growth for the IT
industry. Also, the economy has improved
and the IT demand situation is improving.
The deal pipeline is good and the demand
environment is building up,” Suresh said on
the sidelines of Indian Economic Summit
2009.
Talking about growth outlook he said,
“Indian economy has started looking up
and demand for outsourced IT services has
certainly improved.” He said that sectors
such as banking, financial services and
insurance are once again seeing growth.
8 | Outsourcing | November-December 2009
Bad times
a boon for Dubai
Outsource Zone
Dubai Outsource Zone (DOZ)
, a member of Tecom Investments,
is experiencing “overwhelming”
growth in the outsourcing indus-
try.
“The growth took us by surprise,”
Esmail Al Naqi, executive director
of Dubai Outsource Zone, told UAE
newspaper Gulf News.
“This year, the zone saw a
23% increase in the number of
companies and is expecting many
more by the end of the year. The
total number is up to 105 compa-
nies. Today, we are running at 100%
occupancy within the zone and we
are expecting new buildings to be
delivered within a month.
“We have a solid pipeline for
these buildings. Overall, it has
been a very positive year and
this is where the role of the out-
Indian cities still the hotbeds
Six Indian cities are among the eight
top global destinations for outsourcing
according to a new survey.
The findings released by CyberMe-
dia’s Global Services and advisory firm,
Tholons, placed India’s IT-BPO export
services revenue at US$40 billion in
2008, and revealed the six Indian cities
as Bangalore, Delhi NCR, Mumbai,
Chennai, Hyderabad and Pune. The
other two cities are the Philippines’ Ma-
sourcing phenomena comes from,”
he said.
During the global downturn, compa-
nies have been more inclined to outsource
their peripheral business needs, with cost
cutting and making efficiencies the main
drivers.
“Companies find the best solution
can be found in DOZ, either through
reengineering their back office operations
and consolidating it back in DOZ or
outsourcing it to a third party, operational
in the zone or elsewhere in the UAE,” Al
Naqi said.
During the
global downturn,
companies
have been
more inclined
to outsource
their peripheral
business
needs.
nila NCR and Ireland’s Dublin City.
In the list of top outsourcing na-
tions, India came out tops, followed
by the Philippines, Ireland, China and
Brazil.
“For CIOs today, finding a centre of
excellence is more than just lower cost. It
must consider location, risk mitigation
for business, cultural affinity and scal-
ability of the skilled workforce,” Avinash
Vashistha, CEO of Tholons says.

IAOP inducts two leaders
into Hall of Fame
The International Association of Out-
sourcing Professionals (IAOP) has inducted
Oliver T. Bussmann, CIO of SAP AG in
Germany, and Michael S. Mensik, a partner
in the Chicago, Illinois law office Baker &
McKenzie International, into its Outsourc-
ing Hall of Fame.
Bussmann and Mensik were honoured
at a gala dinner attended by outsourc-
ing professionals from around the world
recently at the association’s 2009 European
Outsourcing Summit at the Copenhagen
Business School.
Over the past two decades, Bussmann
has excelled at driving and managing
transformational change initiatives across
Chengdu
learns from
Bangalore
China is wooing the best of
Indian IT companies to enter the
Chinese market whilst learning
from Bangalore’s example as the
Silicon Valley of India.
A high level team from China’s
Chengdu city is in Bangalore seek-
ing Indian IT companies to invest
in the city’s 60 million square meter
Hitech Industrial Development
Zone’s Tianfu Software Park reports
The Deccan Herald. Another team
from Kunming city in China is also
in Bangalore to market the city to
Indian IT players and learn from
Bangalore’s successful example.
The IT outsourcing market is
one of the most promising indus-
tries in China; forecast to grow
to US$29.43 billion by the end of
this year. The team from Chengdu
will meet with more than 80 IT
firms in Bangalore. They will also
participate in the Nasscom Product
Conclave to visit top Indian IT
companies.
Chengdu is one of the top
outsourcing destinations in the
world along with the Chinese
cities  Shanghai, Beijing, Shen-
zhen, Dalian, Guangzhou and
Tianjin because of its R&D centers,
strong government support and
investment incentives for IT firms.
Chengdu is seeking to boost its IT
outsourcing industry to US$100-
US$200 million annually by
2010.
complex multinational enterprises. In
leadership roles with IBM, Deutsche Bank,
and Allianz (Insurance and Asset Man-
agement businesses), he has delivered
millions of dollars in cost savings through
leading-edge information strategies includ-
ing outsourcing, shared services and service
centralisation.
Bussmann was appointed CIO of SAP AG
in September 2009. Based at the company’s
headquarters in Walldorf, Germany, he is
responsible for SAP’s cross-functional IT
department and supports the company’s
strategic direction. Until recently, Bussmann
was an invited member of the BITS Advisory
Council, a CEO-driven financial services
Xerox to snap up ACS
Xerox revealed that it will buy business
process outsourcing solution provider Affili-
ated Computer Services to create a US$22
billion global enterprise for document
technology
and business
process man-
agement. The
deal is initially
value at US$6.4
billion, and it
is the largest
acquisition Xerox has ever made.
In a Webcast, Xerox CEO Ursula Burns
stressed the synergies between Xerox and
ACS, calling the solution provider a “leader”
in the document management space. In
UBS sells Indian BPO arm to Cognizant
Swiss financial services
giant UBS has agreed to sell
its Indian business process
outsourcing (BPO) unit to
outsourcer Cognizant in a
deal that includes a multi-
year services contract.
According to reports,
the sale of Hyderabad-
based UBS India Service
Centre, which employs
2,000 employees, is part
of a new outsourcing
strategy of buying rather
than building.
The deal will also see Cognizant provid-
ing IT, BPO, knowledge process outsourcing
and remote infrastructure management
Outsourcing | news bits
industry consortium that comprises the
largest financial institutions in the US.
IAOP Chairman Michael Corbett said,
“These individuals represent the highest
quality of professionals in the outsourcing
industry globally. Not only are they leaders
in business, they are also leaders in society.
These Hall of Fame inductees are at the
forefront of advancing practices that are a
model for all companies.”
Recent inductees honoured at the 2009
Asia-Pacific Outsourcing Summit were: Tan
Sri Amirsham A Aziz, former president and
CEO of Maybank and previously a Malaysia
Minister; and Dr. Liu Jiren, chairman and
CEO, Neusoft Corporation.
forming the US$22 billion potential pow-
erhouse, US$17 billion will be in recurring
revenue or services, “a significant boost to
our profitable annuity stream”, she said.
The revenue Xerox
generates from
services will triple
from US$3.5 bil-
lion in 2008 to an
estimated US$10
billion in 2010.
ACS will oper-
ate as an independent organisation and
initially will be branded ACS, a Xerox
Company. Lynn Blodgett, current president
and CEO of ACS, will head the organisation;
he will report to Ursula Burns.
services to UBS worldwide.
“Cognizant’s broad bank-
ing and financial services ex-
pertise as well as its cultural
fit with UBS complement
the competencies provided
by the India Service Centre
today, while providing
technology capabilities that
expand the services we can
buy from India to support
our cost savings, efficiency
and flexibility objectives,”
said UBS group chief operat-
ing officer Ulrich Korner.
The sale is expected to complete by
year-end, subject to regulatory clearance.
Financial details were not disclosed.
November-December 2009 | Outsourcing | 9
Outsourcing | Insights

Products and
services offered
by a business
are linked to
the critical
parameters of
value to the
customer.

Achieving Business Excellence

through Process Excellence
10 | Outsourcing | November-December 2009
 Insights | Outsourcing

By Aditya Bhalla & Sandeep
Banerjee
Process improvement cannot be di-
vorced from the context of the business. The
journey from Process Excellence (primary
focus on achieving process throughput) to
Business Excellence (primary focus on excel-
ling in business metrics such as profitability)
will require mapping the evolution stage
of the business to the appropriate process
improvement strategy.
context of business growth
Products and services offered by a business
are linked to the critical parameters of
value to the customer. Critical parameters
of values are those parameters or charac-
teristics of a product or service for which the
customer is willing to pay. The parameters
that are viewed as critical by the customer
keep on changing as the market gains
maturity.
Given the dynamics of competition and
the evolution of the needs of the customer,
organisations are continuously adapting
their internal priorities (refer image above).
One of the core skills that management
must focus on is the ability to understand
the current stage of the evolution of the

At the Onset of the Process During the Implementation of the At the end of Process Improvement
Improvement Imperative Process Improvement Imperative Imperative

a) Perform Gap Analysis
• Base it on a process improvement
framework to benchmark company
performance with industry practices
• Decide what can be implemented within
the year
b) Define strategy and milestones
• Assess business context and critical
parameters to achieve
• Perform risk assessment
• Estimate effort based on stated
assumptions
• Derive the schedule based on availability
of resources, calculate the cost,
compare against budget, resolve
conflicts if any
• Define measurable milestones. Example:
Process pilot, process definition etc.
c) Provide Resources
• Assign a Project Manager, site
coordinators and resources for
implementation of each focus area/
process area
• Obtain commitments on Infrastructure,
and acquire other hardware/software
tools as needed
• Create a Responsibility and authority
matrix linked to deliverables
• Obtain signoff from internal and external
stakeholders
d) Project Management Office
• Form a Project Management Office to
review implementation
a) Regular reviews a) Perform After Action Review (AAR)
• Regularly monitor implementation of • Check against the set benchmark
processes and other process assets • Identify areas of strength and
• Escalate issues as per Escalation Matrix. weaknesses
Maintain an issue register and an action • Identify next set of process areas
register that can further help the organisation
• Keep relevant stakeholders involved capitalise on the gains
to identify opportunities for optimising, b) Reward and Recognition
remove redundancies • Appreciate contribution of all
b) Capture lessons learnt stakeholders
• Analyse audit results and look for practices c) Next Steps
that are not implemented. • Create the plan for the next year’s
• Identify inefficiencies in deployment process improvement imperative.
• Identify new risks discovered
c) IFDL: Implement-First- Define-Later (Try
the bottom-up approach – it works !)
• Prepare a draft process
• Do process pilots and evaluate results. Fine
tune definitions based on pilot results
• Roll-out full scale across the organisation
• Review process implementation
• Get into formal definition of processes
d) Be open to change, it’s a learning process
• A process defined now may change later
based on several factors such as business
conditions, service level agreements,
customer satisfaction parameters et
e) Training and mentoring
• Plan and track training activities and the
impact on developing skills/competencies
• Create mechanisms for mentoring linked to
staff competency development
f) Re-prioritise focus areas
• Re-prioritise focus areas as appropriate
based on periodic reviews.

November-December 2009 | Outsourcing | 11

Outsourcing | InsIghts

Get sharper now… Process

improvement activities gain
prominence as the business starts
gaining maturity and the focus
shifts towards efficiency gains and
cost reduction.

Prioritising the process

improvement initiatives and
translating into a process
improvement imperative for the
year is only part of the story.

different characteristics. the

he investigation will yield different answers for
different products and services of the business.
Process improvement
mprovement cannot be divorced from this context of the
business. As shown in figure above, at the initial stage of the evolu-
evolu
tion the priority of the business is more on making the product
or service work which maps more to prioritising product and
process design activities. Process improvement activities gain
prominence as the business starts gaining maturity and the
focus shifts towards efficiency gains and cost reduction.
“Find out … One of
journey of process improvement
Prioritising the process improvement initiatives and
the core skills that
translating into a process improvement imperative for management must
the year is only part of the story.
the table
t (on the previous page) shows a structured
focus on is the ability to
approach to process improvement to ensure that the understand the stages of
objectives of the business are met. business evolution. The
many
any organisations tend to overlook the two
areas of “strategy” in “onset phase” and “implement-
mplement- investigation will yield
First-Define-Later (iFDL)” in “implementation
mplementation phase” different answers for
(highlighted in red colour font in table).
different products and
conclusion
For effective and sustainable business results, process
services.”
improvement imperatives have to adapt to the different
stages of evolution of different parts of the organisation. A
one-size-fits-all approach to process improvement will lead to
sub-optimal results.

Aditya Bhalla is Practice Manager with QAI Innovation Practice consulting clients
on product and process design. Sandeep Banerjee is Senior Consultant with QAI SPI
and Human Capital Management Practice consulting clients on implementation
of best practices based on CMMi, and PCMM frameworks. They can be contacted
at adityabhalla@yahoo.com and sandeepcrpark@hotmail.com respectively.

12 | Outsourcing | November-December 2009

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Outsourcing | cover story

Is Cloud Sourcing
a fair day event?
By Jerry E. Durant
What is cloud computing? The
concept originated from the cloud
metaphor as used to describe the
internet. Rather than driven by a
rigid design, the navigation and
deployment of need is satisfied by
a community of service resources.
In this context it was conceived
that the same could hold true for
outsourcing.
Up to this point buying compa-
nies have bought fixed commodities
whether it be a number of seats in
a call centre or a fixed price for the
delivery of an application system.
Unfortunately business condi-
tions often demanded change
and these arrangements
required augmentation
in order to deliver a
suitable outcome.
On the other
hand, present
economic con-
ditions have
placed
added
stress
o n
Plug and
play … It
is highly
possible that
cloud sourcing has
the potential to become
a sourcing approach.
buyers to lower costs further. Their
sights are clearly set on flexible
resourcing whereby they only pay
for what they use and not what
they don’t as often set by contracts.
Thus the concept of cloud sourcing
was born.
buyers vantage point
Buyers want to pay as little as possi-
ble for the services that they receive.
Even though there are other factors
that influence a sourcing decision,
such as increasing bandwidth and
service delivery, cost remains as one
of the leading factors. Therefore
having flexible resourcing can
make cloud sourcing a desirable
approach.
However there are
several sig-
nificant
Scalability is much
like a power strip,
there may be no
physical limits on
the number of
plugs that you can
attach but there
are limits in terms
of its effectiveness
to deliver power.
buying risks to be considered. These
include:
• Adaptive Abilities
•  Quality Consistency
•  Scalability and
•  Availability
Unlike the inter net where
resources and routes are driven
from the interest of the user, in an
outsource arrangement the deploy-
ment or redeployment of resources
is driven from within the sourcing
community. This means that bonded
relationships must exist in order to
offer cohesive adaptability.
One cannot simply connect a new
resource, especially from outside
of that organisation, and expect
the service delivery to be fluid in
nature. Often that presents different
attitudes about quality in terms
of the measure and the means of
delivery. There are limitations that
the cloud can be expanded by.
Scalability is much like a power
strip, there may be no physical limits
on the number of plugs that you
can attach but there are limits in
terms of its effectiveness to deliver
power. It would be hard to imagine
that a group of providers, say 25,
could deliver the services without a
significant amount of coordination
risk being introduced.
In a similar sense a reduction
in service has a profound effect on
cost of service. A provider who offers

14 | Outsourcing | November-December 2009


service at a fix rate is basing this on
a given level of service. A reduction
in the service needs increases the
costs because fixed operating costs
become disproportionate to the
amount of resource being utilised.
The cloud also assumes that target
resources are available. This is called
the bench and many source provid-
ers maintain a very limited resource
pool. There also comes into question
the quality of the bench. If available,
the question remains as to whether
sufficient core cloud investment has
been made to insure ease of transi-
tion and that knowledge quality for
the resource pool.
Although it might appear that
some sourcing disciplines may offer
increased opportunities for cloud
sourcing (BPO, CCO etc) this often
overlooks the need for core skill
training and synchronisation to put
the cloud resources into the service
delivery mix.
cloud sourcers
Often companies echo their
flexible abilities through
internal staffing control.
As we consider cloud
sourcing as a solution,
these same firms must
look outside of their organi-
sations. This requires purposeful
connection, trust and cooperation.
Unfortunately the competitive
“Present economic conditions have
placed added stress on buyers to lower
costs further. Their sights are clearly
set on flexible resourcing whereby
they only pay for what they use.”
November-December 2009 | Outsourcing |
cover story | Outsourcing
nature of the outsourcing disci-
pline does not easily foster this
collaborative form of relationship.
A lack of control phobia gives rise
to concerns over contract/customer
ownership, distribution of revenues,
and relationship management. Just
like the need for Vendor Relation-
ship Management and Customer
Relationship Management (VRM‐
CRM) in a sourcing engagement, a
VRM‐VRM relationship must also
be forged.
Prior to Pre‐economic down-
town I strongly advocated for
a reduction in the number
of tier 3 players (capac-
ity exceeded demand)
through mergers
and consolida-
tions. This results
in the creation
of additional
tier 2 players,
which are in
short supply.
We have
not seen this
happening –  this
may be due in large part to the
phobia of losing control. Companies
15
Outsourcing | cover story
would much rather go out of business
than to share control. For this reason
concern is raised as to whether cloud
sourcing can become a choice in the
arsenal of source approaches.
The graphic box (on the previous
page) illustrates how cloud sourc-
ing might occur should there be a
willingness of the outsource service
providers to be cooperative and
fearless. So what are some of the
considerations that suppliers have
to take into account? First and fore-
most is the relationship, the trust
bond and the quality of the service
being provided collaboratively. As
the lead supplier it’s your reputation
that is in the balance.
Excuses are no excuse in the eyes
of the buyer. The measures of viability
and capability as exercised over you
by the buyer now become a duty that
you must exercise over your cloud
relationship. Of additional attention
in the VRM‐VRM cloud relationship
is the expand bench deployment.
Benchwarmer organisations are
apt to demand some compensation
for the relationship. Preparatory
and training measures will prompt
16 | Outsourcing | November-December 2009
the need for base compensation in
order to retain the bench rather than
operate from a position of ‘possible’
utilisation (as the cloud suggests in
terms of flexible informal inclusion).
Suppliers must also pay close atten-
tion to resource reductions, which
may also be referred to as ‘cloud
thinning’. The principal of the law
of diminishing returns exists.
A service offered at a fixed
price is based on a certain level
of delivery. If reduced fixed costs
remain, despite further a reduction
in service, the result would reflect to
lowered profit margins.
the final analysis
While it is highly possible that
cloud sourcing has the potential
to become a sourcing approach,
it is unlikely that we will see this
as having immediate plausibility.
This is largely due to relationship
maturity issues, flexible scalability,
and the need to conduct advanced
capacity planning.
Of particular concern is the
ability for the outsource service
environment to be flexible and for
The good and the appropriate levels of consistent qual-
bad … Having ity management to be sustained.
flexible resourcing Equally the buyer community, when
can make contemplating cost savings and
cloud sourcing resource scalability, must recognise
a desirable the potential for reaction latency
approach. and inconsistencies in delivery and
However there are quality. Furthermore both buyers
several significant and outsource suppliers need to be
buying risks to be prepared to critically evaluate the
considered. cloud in terms of secondary buyer vi-
ability and delivery abilities. Global
outsourcing offers many challenges
and tradeoffs.
The question is not whether “we
can” but whether it makes practical
business and cultural sense to do so.
Every problem has solutions and
these might very well be problems
that are worth taking the risk.
Jerry Durant serves as Chairman
Emeritus (founder) for The International
Institute for Outsource Management,
a trade organisation dedicated to the
assessment, development, and guidance
of outsource service providers in the
ITO, BPO, Call Centre and KPO domain
areas.
 8[=\Xkli\

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Outsourcing | Conversation
Cloud Computing 101
Digging into the subject of Cloud Computing, Outsourcing Magazine’s Sritharan
Vellasamy holds a conversation in Kuala Lumpur with Gopi Ganesalingam, the
Head of Lava Protocols Malaysia. His company is the go-to-market partners for
Salesforce.com and Astadia Inc in Malaysia.
Q: What is Cloud Computing?
A: Cloud computing is a general
term for anything that involves
delivering hosted services over
the Internet. These services are
broadly divided into three categories
such as Infrastructure-as-a-Service
(IaaS), Platform-as-a-Service (PaaS)
and Software-as-a-Service (SaaS).
A cloud service has three distinct
characteristics that differentiate it
from traditional hosting.
It is sold on demand, typically
by the minute or the hour; it is scal-
able – a user can have as much or
as little of a service as they want at
any given time and the user can
have a minimum of one user to an
unlimited number; and the service
is fully managed by the provider. All
the user needs is a web browser.
Can you elaborate more on SaaS,
IaaS and PaaS?
SaaS is a software distribution model
in which applications are hosted by
a vendor or service provider and
made available to customers over
the Internet. There are distinctive
business models – one that is set
on advertising revenues (like your
typical Google, Yahoo, Facebook
and others) and the other that is
based on subscription revenues.
Business solutions that are on SaaS
are typically based on subscription
revenue.
In the meantime, IaaS allows a
user to utilise virtual server instances
with unique IP addresses and at most
times allows storage-on-demand. Us-
ers utilise the provider’s application
program interface (API) to configure
their virtual servers and storage.
18 | Outsourcing | November-December 2009
One of the main advantages is that
cloud computing allows a user to
pay for only as much capacity as is
needed, and bring more online as
soon as required – paying for what
you use.
On the other hand, PaaS in the
cloud is defined as a set of software
or applications or even product
development tools hosted on the
provider’s infrastructure. Developers
create applications on the provider’s
platform over the Internet.
PaaS providers may use APIs,
website portals or gateway software
installed on the customer’s com-
puter. Force.com, (from Salesforce.
com) and GoogleApps are examples
of PaaS.
So what is the difference between
Cloud Computing and an ASP
model?
ASP models were popular in the
late 90’s and even early 2000’s.
Cloud computing, in my opinion,
is an evolution of the ASP model.
ASP models typically hosts legacy
applications with perpetual licenses,
making it difficult to upgrade and
customise.
Cloud Computing or SaaS mod-
els typically are new applications
that have numerous upgrades in a
year and these upgrades are done
virtually with no customers configu-
ration required hence, with a lot of
ease. The other main distinction is
that SaaS has a subscription model
that allows the users to pay for only
what you use and very quick to
implement – plug and play.
Why is cloud computing gaining
market share? What ticks to be a
successful Cloud player?
In my opinion, enterprises are being
drawn to cloud computing by reli-
able and scalable IT infrastructure,
proven security and performance
concerns, and due to economies-of-
scale, it can be offered with a much-
reduced cost. This new phenomena
frees up cash-flow as what used to a
typical balance sheet item, has now
moved to an operating expenses
line item with almost a predictable
monthly cost.
Due to the above prerequisites
of hosting a successful (software)
service, only a few global Cloud play-
ers have managed to capture the
market share. Hence, it is important
to select vendors that have a proven
track record, and are hugely success-
ful in this business – and sadly there
Cloud are possibly only a dozen or slightly
Computing or more in this space.
SaaS models
typically
are new What the future holds?
applications I truly feel that more and more
that have enterprises will switch to cloud based
numerous solutions simply because it will be
upgrades in a
year and these more reliable, and more cost compe-
upgrades tent as we go on. I would say almost
are done all of the Fortune 500 companies
virtually with are already subscribing to cloud
no customers solutions, and slowly but surely, this
configuration will have a natural extension to the
required hence,
with a lot of rest of the organisations.
ease. Due to the current take up on
cloud services, and its potential in
the next few years, almost all the big
global traditional vendors are mov-
ing to the cloud computing arena
to ensure that they do not miss out
on what I could call a ‘technology
revolution’.
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subcription.indd 42 4/16/08 5:33:39 PM

Outsourcing | Insights
Open Source
Competition for commercial e-learning companies
By Reetika Joshi
e-learning is a segment that
has registered exponential growth,
and over the years, open source
revolution is clearly making a mark.
There have been many community
efforts to bring Learning Manage-
ment Systems (LMS), the industry’s
prevalent learning technology, to
the open source format.
While Moodle may be the most
popular of the lot, there are several
such projects with unique USPs,
including Olat, Ilias, Sakai Project,
eFront, Dokeos and Claroline. LMSs
are either developed in-house by
buyers, or more often, licensed from
e-learning companies.
Commercial software is now pri-
marily distributed in a product form
by most providers, bundled with
implementation and maintenance
services. Open source applications
on the other hand, being non-
restrictive, can be customised for
corporate users, universities, and
other organisations.
Open source e-learning
applications surely
provide massive cost
savings as customised
e-learning solutions tend
to be very expensive.
20 | Outsourcing | November-December 2009
Strengths • Cost savings – customised e-learning
What is open source?
Open source software source
code and other rights (usually
bestowed on copyright holders)
are handed out under a software
licence in the public domain.
Individual users can then modify
and redistribute the software,
enabling application co-creation.
filling the gap optimally
Companies incorporate e-learning
Weaknesses • User dependant implementation –
into their ongoing training and
development activities, while uni-
versities and schools offer e-learning
opportunities to their full time and
distance learning students. Over
the last 3-4 years, there has been a
steady rise in the number of users
who have boldly experimented
with open source technologies to
aid their learning functions, from
large corporate houses to Ivy League
universities.
The academic field has universi-
ties such as the Oxford Institute of
Threats • Aggressive commercial market – The
solutions are expensive. The market
comprising small organisations or start-ups
(corporate/academic), in all geographies,
with low (to nil!) purchasing power, but
strong need.
• Crowd wisdom – Collaborative
coding and re-coding allows countless
improvements to be made by the world-
pool of programmers. Also, technical issues
are resolvable by consulting the collective
learning experience of the community.
• customisation – Being open source,
users are able to include modifications and
custom features available/capable of being
developed, specific to their needs.
• Control – Users are in control of their open
source projects during development and
implementation, as opposed to external
providers, who may only offer some level of
control during implementation.
• Protection – Single vendor lock-ins are
avoided.
Universities and corporate training divisions
may lack the knowledge, resources or
infrastructure to launch open source
enabled e-learning programs straight out of
the box.
• Long term maintenance – Over time,
users have to maintain in-house resources
for maintenance and upgrades, as opposed
to commercial arrangement.
Opportunities • Integration – These applications can be
integrated with other open source based
software, or custom applications. This will
allow the technology to be kept up to date
with market trends.
• Commercial friendliness – The technology
can be endorsed by e-learning service
providers, enabling buyers to access
external expertise, while still saving costs.
• Specialization – As newer open source
applications come into the market, there is
a wide scope for specialization in different
products (course authoring tools, LMS/
LCMS, platforms and browsers, media
creation tools) as well as user segments
(IT, Healthcare LMS within corporate
segment?).
global e-learning outsourcing industry is
fiercely competitive, with several types of
players from the IT field, HR outsourcing,
BPOs, etc. While the industry hasn’t
positioned open source software as
competition, traditional LMSs are ultimately
an alternative for open source environs.
• Community dependant model – The
core principle of open source is social
constructivism, which will limit its growth
and development (feature availability,
interoperability, etc.). User queries/
requirements may be left unanswered,
depending on community contributions.
Legal Practice, which has been using
Moodle to introduce a range of e-
learning elements such as webcasts,
podcasts, chatting, MCQs, interac-
tive materials, and portfolios to its
students. Also, within the corporate
segment, publishing companies
such as CNET have used Moodle to
deliver e-learning content online.
While these efforts initially did
stem from the relatively mature

Users are in control of
their open source projects
during development
and implementation,
as opposed to external
providers, who may only
offer some level of control
during implementation.
e-learning markets (the US and
UK), word has definitely spread
through online communities. Users
in developing countries are now
finding open source applications
a viable solution to their many
learning challenges.
The recent economic turmoil
made open source an important and
viable option for many, as learning
budgets were among the first to be
slashed. As an example, the Moodle
website shows increased activity in
2009 amongst users in countries
such as Brazil, Mexico and Portugal.
The reasons behind this rise can
be better understood through a
SWOT assessment of open source
e-learning applications.
implications for
e-learning outsourcing
companies
Open source e-learning has carved a
niche for itself within the e-learning
outsourcing industry. Service pro-
viders have varied views about its
implications on their businesses.
These are somewhat dependant on
the position of the company in the
industry value chain:
• Large international players are
generally supportive of open source
technologies. For example, Blackboard
in 2007, declared that it will not pursue
patent infringement cases against
open source projects and schools. As a
complementary strategy, for targeting
the Small and Medium Enterprises
segment (which forms a significant
part of the open source community),
large e-learning providers are turning
to hosted LMS solutions, which are
more cost effective and competitive.
• Medium and small international
players (and even some large com-
panies) are in fact expanding their
services portfolios to include open
source related services. These include
Users in companies like Kineo, Infinity Learning
Solutions, Activica and many others.
developing Services include integrating features for
countries open source learning platforms, course
content, consulting, implementation
are now and ongoing maintenance for the
finding technology.
open • e-learning outsourcing companies
source in popular offshoring destinations,
applications however, have a different take on open
source. It imposes a potential challenge
a viable to their value proposition against
solution to onshore companies – cost savings.
Players in offshore locations are able
their many to offer solutions at competitive prices
learning for international buyer communities.
But with open source applications
challenges.” available for free, the long term may
November-December 2009 | Outsourcing |
Insights | Outsourcing
see this niche segment as a strong
competitor for offshore providers. The
majority of such companies ValueNotes
interviewed remained hopeful, and
mentioned that the open source sec-
tor may result in further business for
them after all. Corporates/universi-
ties looking at cost-effective learning
solutions may turn to outsourcing the
implementation/feature development/
maintenance for their open source
systems to offshore providers.
The future looks bright for open
source software in the e-learning
domain, with evangelist-like sup-
porters, both among the service
providers and buyer communities.
With the range of technologies that
are currently being employed, there
is no one particular method that
will address industry challenges.
The integration and collabora-
tive frameworks which are currently
evolving among providers, users
and ultimately, technologies sug-
gest that it will always be a host of
solutions that each unique user will
be able to choose from to address his
e-learning needs.
Reetika Joshi, analyst, ValueNotes, a
leading research provider focused on
the outsourcing industry.
21
Outsourcing | basics
Why external providers
are often better
By Dr Wendell O. Jones
Critics of outsourcing usually rest
their arguments on the assumption
that internal units should be able to
perform as well as the outsourcing
service provider, if only the internal
unit applied good management
practices and worked smarter.
Sometimes this may be true, but in
most instances it is not.
Outsourcing providers usually
hold an advantage in a number
of ways.
scale advantage
Multiple clients allow an out-
sourcing provider to operate at a
scale unattainable by any single
22 | Outsourcing | November-December 2009
organisation. A large outsourcing
provider can buy and fully utilise
large, powerful, and more efficient
equipment than clients who operate
at smaller scale. A large-scale out-
sourcing provider has considerable
advantage in negotiating price and
service with providers of equipment
and software.
Large-scale outsourcing pro-
viders can maintain a bench of
technical experts with greater range
and depth than any of their clients
because the outsourcing provider
can utilise the expertise efficiently
and effectively when spread over
multiple clients on a flexible, as
needed basis.
Large-scale outsourcers can
Best in class … specialise, focus, and gain repeated
Because of the experience with management of
variety of clients tasks that may only come around
and circumstances once in the careers of many manag-
outsourcing ers in customer companies.
providers Consequently, outsourcing man-
encounter, service agers in supplier companies are
providers have a often more skilled and have more
depth and range rounded experiences, which leads
of experience that to the second advantage.
individual clients
can’t match. experience advantage
Because of the variety of clients and
circumstances outsourcing providers
encounter, service providers have
a depth and range of experience
that individual clients can’t match.
Outsourcing providers can go
through multiple restructuring and
 basics | Outsourcing

conversions that could only happen

once in the experience of in-house
personnel.
Just as the best surgeons tend to
be those who do many operations of
the same type, day-in and day-out,
so too outsourcing providers who do
the same difficult tasks repeatedly
gain an advantage over those who
do them infrequently or only once.

specialisation advantage
The ability to specialise in skills
also extends to experience with
new technologies. Internal people
may participate in a conversion to
a new operating system or a or ar-
chitecture occasionally, but through
engagements with multiple clients,
outsourcing provider personnel can
have this experience numerous
times and gain a real advantage in
knowledge, speed, and efficiency.

opportunities for Much needed

technology professionals
A big attraction to hiring and
retaining the most talented people
– outsourcing providers can often
offer these experiences on a more
consistent basis to its staff than
can the typical IT department. For
this reason, outsourcing providers
often have very good people with
the latest experience, something
difficult to reproduce in other or-
ganisations.
better management
controls
Outsourcing providers may also
rely on less costly temporary labour
when advantageous, locate major
facilities in lower wage areas of the
country or the world, implement
tough standards on employees, ex-
ercise tight control over inventories,
use leaner management, and hustle
more. These tactics are available to
internal organisations as well, but
experienced outsourcing providers
are normally better positioned to
carry them out.
resolving conflict
Experienced service providers have
learned how to better deal with
conflict. Even the best business rela-
tionships rarely go forward without
disputes of some kind. The best
conflict resolution methods stress the
importance of avoiding emotions
and posturing and getting down to
the real issues, looking for win-win
ways to resolve differences, and
using objective criteria that both
parties respect.
It is important to attempt to
resolve disputes at the lower levels
flexibility ... Large-
scale outsourcing
providers can
maintain a bench
of technical experts
with greater
range and depth
than any of their
clients because
the outsourcing
provider can utilise Seamless
the expertise
efficiently and … It also a good
effectively when investment to
spread over
multiple clients train outsourcing
on a flexible, as managers from
needed basis.
both companies
in dispute
resolution
methods.
and try to avoid dispute escalation of dispute resolution over time and
procedures. It is smart to watch for encourage the positive approaches
patterns of dispute resolution over as permanent ways to resolve future
time and encourage the positive disputes, while avoiding the nega-
approaches as permanent ways tive patterns.
to resolve future disputes, while
avoiding the negative patterns.
It’s also a good investment to Dr Wendell O. Jones is a Professor
train outsourcing managers from of Management and a former senior
both companies in dispute resolu- executive at Compaq, NASDAQ, and
tion methods. Relationship manag- McDonnell Douglas. He is recognised
ers should think twice about using as a leading outsourcing practitioner,
a power advantage over the other advisor and thought leader. He is the
party to resolve disputes. Habitual co-author of “Outsourcing Information
use of power erodes cooperation Technology Systems & Services” – rec-
and eventually destroys trust in ognised as one of the best outsourcing
outsourcing relationships. references. The book was recently
It is smart to watch for patterns released in a Chinese edition.

November-December 2009 | Outsourcing | 23

Outsourcing | feature

Embracing
Globalisation
This is the first in a series of
excerpts from the newly published
book by regular columnist Atul
Vashistha, “Globalisation Wisdom:
The Seven Secrets of Successful
Globalisers”. Here he shares
with us his Secret #1: Embrace
Globalisation
One underlying fact success-
ful globalisers understand is that
services globalisation has come a
long way from offshore outsourcing
and continues to evolve every day.
As services globalisation evolves,
new opportunities arise. The reality,
as Applied Materials GVP and CIO
Ron Kifer sees it, is that a company
can embrace, leverage and be a
part of that globalisation or it can
become its victim.
“It’s greatly important that
global organisations understand
that we’re moving to a globalised
economy and understand that
they have to have the flexibility
to be able to do the work wherever
the work is more cost-effectively
done and wherever the work is
high-touch to the customer. That’s
why we’re pushing globalisation
as a key strategic initiative in our
organisation because we want to be
on the leading edge of that,” Kifer
explains.
That concept of flexibility – of
being open to new opportunities
– leads into the first secret of success-
ful globalisers: Embrace globalisa-
tion. Successful globalisers welcome
services globalisation into their
organisations with open arms; they
allow themselves to be constantly
learning, constantly open to the
new opportunities – and challenges come, organisations must be always • Mandate the globalisation of pro-
–  that the evolution of services mindful that they are embracing
“Mandating cesses that can be performed better
globalisation presents. Embracing globalisation for all that it may
the elsewhere.
globalisation means looking at the offer. globalisation • Keep an eye on the future.
big picture; considering every corner of processes
of the world as a potential sourcing model for embracing that cannot When the offshore outsourcing
destination and thinking about the globalisation be done trend first caught hold of US busi-
unique advantages and opportuni- The basic model for embracing glo- elsewhere is nesses, most firms saw it as an oppor-
ties that each location offers. balisation has four components: an important tunity to reduce costs through labour
Embracing globalisation is also • Embrace globalisation across the part of arbitrage. But as the movement has
an important stepping-stone in business. stripping an evolved – as offshore outsourcing
the development of a services glo- • Ask whether your processes should organisation has become services globalisation
balisation strategy. Whatever may be performed better elsewhere. bare.” – companies have looked past cost

24 | Outsourcing | November-December 2009

 feature | Outsourcing

considerations.
In fact, flexibility is even more Companies must
important than cost in services glo- be constantly vigilant
balisation. “If cost was your primary
consideration, I think that you’re and always prepared to
going to fall short of meeting the real scrap the old way of doing By Atul
objectives,” Kifer says.
“The real objective of a sound
business to take advantage Vashistha
globalisation strategy is to have a of new opportunities.
flexible workforce and global model
and to realise that the markets,
customers and competitive environ-
ment is going to change, which will
require a company to maintain
competitiveness to be able to do work
in a different model in a different
place over time,” he adds. And that’s
why successful globalisers embrace
it across the business.
Bill Gates, Co-Founder of Micro-
soft, once said, “If we are not realistic
about what we’re good at, then there
is a chance of going backwards in the
face of further competition.”
In asking why each process can-
not be done elsewhere, an organisa-
tion must be realistic about which
processes are:
a) core competencies
b) performed most efficiently in-
house.

There’s no room for egoism in this

process: to survive, a business must
be willing to strip itself bare, down
to only those processes that are true
core competencies. Every business
function should be on the table for
globalisation until it’s taken off, and
only because it can be performed
most efficiently in-house domesti-
cally.
Mandating the globalisation
of processes that cannot be done
elsewhere is an important part of
stripping an organisation bare.
Within a company, some people
will resist globalisation. Success-
ful globalisers neither back down
from that resistance nor tolerate
it. Effective change management
that secures top-level commitment
and buy-in and addresses points
of resistance is a critical part of a
successful globalisation initiative.
Companies must be constantly
vigilant and always prepared to scrap
the old way of doing business to take
advantage of new opportunities. It
used to be that to engage in this sort
of flexibility made companies lead-
ers. Today it is a business imperative.
As Thomas Friedman wrote in The
World is Flat, “If you want to grow
and flourish in a flat world, you Gates … ‘If we are not realistic
better learn how to change and align about what we’re good at,
yourself with it.” then there is a chance of going
Companies that have embraced backwards in the face of further
globalisation, including leading competition.’
companies such as GE, Aviva, Texas
Instruments, Google and Proctor &
Gamble, have found large pools
of productive labour in offshore
destinations. But they have found

November-December 2009 | Outsourcing | 25

Outsourcing | feature
something more in offshore employ-
ees as well: top engineering talent,
attention to detail and quality,
sophisticated mid-level and senior-
level management, and even a level
of brand identity and loyalty that
rivals that of their domestic staff.
The most successful globalisers
are companies who have visionary
leaders at their helms. Steve Band-
rowczak, former Lenovo CIO, says
that trying to succeed in globalisa-
tion without visionary leaders is like
trying to bake a delicious cake with
stale ingredients. “I don’t care how
you mix it,” he explains, “you’re go-
ing to come out with a bad cake.”
Visionary leaders – the ones at
the helm of globalisation since the
beginning of globalisation –  saw
the big picture as it emerged: how
the playing field expanded from the
26 | Outsourcing | November-December 2009
US and Western Europe to encom-
pass India, the Philippines, China,
Ireland, Poland, Chile, Brazil, Rus-
sia, South Africa, and more. These
visionary leaders understood, even
in the early days of globalisation,
that global sourcing would become
a key competitive advantage. They
saw that global sourcing could not
only allow them to reduce their costs,
but it could also allow them to grow
more quickly, to cut time to market,
and even to improve efficiency and
raise quality levels.
Embracing globalisation is the
first secret of successful globalisers
not because it is necessarily the most
important, but because it lays the
foundation for the six secrets that fol-
low. Indeed, we’ll see the principles
that underlie this first secret pop up
throughout the next chapters.
Think about it Embracing globalisation is about
… Embracing seeing the big picture. It’s about
globalisation is looking beyond a single destination
about seeing the or a particular set of processes. It’s
big picture. It’s about an attitude change; about
about looking bringing the principles of services
beyond a single globalisation into the business and
destination or a embracing them in every decision
particular set of that’s made.
processes.
Atul Vashistha is Chairman of Neo
Advisory (formerly neoIT), a leading
management consultancy since 1999,
focused on independent, objective and
actionable advice to enterprises that
seek to transform their organisations
by capitalising on services globalisation.
His latest venture is BestOutsourcing-
Jobs.com, an online job portal focused
on outsourcing careers. He can be
reached at atul@vashistha.com.
Join
outsourcing
Malaysia
O
utsourcing Malaysia (OM) is an initiative
of the outsourcing industry and a chapter
of PIKOM – the National ICT Association.
The prime objective of this organisation is to
enhance global visibility of Malaysian service
provider capabilities to the global buyers. OM
focuses on enabling both buyers and providers of
services to work together on addressing service
needs, within the aegis of global best-practices
and competencies.
Officiated by the Prime Minister in 2006,
OM aims to represent 80% of all Malaysian
outsourcing providers by 2012. Highlights of the
benefits our members are enjoying are:
Industry Representation
OM represents the local outsourcing industry
to the Govt and private sector both locally and
overseas. OM is backed by the support of its two
institutional partners, i.e. MDeC and MDV, and
consulted by a large number of organisations
such as MDeC, MATRADE, PSDC, Malaysian
Central Bank, etc.
Trade Promotions
• Marketing the capabilities of Malaysian
industry to local and global buyers through
various trade events, while generating business
leads for members.
• Providing business-networking opportunities
for members through networking sessions,
inbound and outbound trade missions and
industry meets.
Industry Information
• Providing forum for members to debate
important industry issues and promoting
conducive business environment
through appropriate government
policies for the industry.
• Regular Thought Leadership
brainstorming sessions.
For more information, please visit our website at: www.outsourcingmalaysia.org.my
ADFEATURE
• Access to OM’s Thought Leadership content
via Member’s Login on its website.
Business Exposure
• Providing members with tremendous business
exposure and visibility through the complimentary
listing via OM website and overseas campaigns;
• OM as the direct contact point for global
buyers.
• Affiliations with global outsourcing focus
publication such as the Black Book of Outsourcing
Global Vendor Directory, Forbes etc.
Priority, Subsidies & Discounts
OM Members are given priority in OM-organised
events in terms of reservations, subsidies and
discounts. Members are provided subsidies
on Overseas Campaigns and other Capacity
Development Programmes. Discounts and
complimentary priorities are allocated for
participations of seminars, conferences, cocktails,
industry talks, surveys, and media promotions.
Capacity Development
Programmes
OM is responsible in introducing the International
Association of Outsourcing Professionals (IAOP)
Certified Outsourcing Professionals (COP) and
Master Class programmes; and working alongside
with MDeC on their K-Workers Development Institute
(KDI) programmes designed to develop the human
resources of the industry.
Global Membership and
Affiliation
Global Membership
• Sourcing Interest Group (SIG)
• IAOP through partnership with MDeC.
Global Affiliations
Through PIKOM’s partnership and membership:
• ASOCIO • NASSCOM • WITSA
Contact: OM Secretariat
1106 Block B, Phileo Damansara 2
No 15 Jalan 16/11,
46350 Petaling Jaya
Selangor, Malaysia.
Tel: +603 7955 2922 F: +603 7955 2933
e-mail: info@outsourcingmalaysia.org.my
Outsourcing | study

Offshoring relationship
management
By Danny Ertel and
Joseph Bubman
Complex outsourcing relationships
are always difficult to manage,
but the unique characteristics
of offshore deals complicate the
challenge. Some early concerns
about offshoring, such as political
uncertainty and tax issues, appear
to have become more manageable
with experience.
Others remain, however, with
one rising above the rest, accord-
ing to hundreds of participants in
the Vantage Partners Offshoring
Relationship Management Study:
culture (see Figure 1, right).
And the way customers and pro-
viders manage culture has a direct
impact on the value they achieve
in their deal.
what do we mean by culture?
Question: To what extent to do these issues pose challenges Companies nearly always encounter
in your offshoring relationship? different organisational cultures
when entering into strategic rela-
Culture tionships with external partners.
After all, companies have different
Geographic distance strategies, structures, risk positions,
capabilities, and norms, and when
Language barriers the deal is more than a simple buy-
sell transaction, those differences
Recruiting and retention
(at service provider) impact how they work together.
Offshore relationships, though,
Infrastructure present unique challenges because
of perceived cultural differences
Time differences attributed mainly to the country
or region where each company is
Political uncertainty located. And this means that the very
approach partners take to discussing
Tax issues different structures, making strategic
decisions, or reconciling different risk
1 2 3 4 5
positions can be quite different. In
n=184 Average rating
1 = No challenges 5 = Significant challenges this study, we examine the impact of
perceived cultural differences across

The way customers and service

providers manage culture has a
direct impact on the value they
achieve in their deal.

28 | Outsourcing | November-December 2009

 study | Outsourcing

13 key dimensions:
• Individuals vs. groups (emphasis
on individuals vs. groups)
• Status and hierarchy (egalitarian
vs. hierarchical)
• Risk (risk-averse vs. risk-taking)
• Directness of communication
(indirect vs. direct)
• Relationships vs. tasks (emphasis
on relationships vs. tasks)
• Time frame (short-term vs. long-
term orientation)
• Multi-tasking (doing one thing at
a time vs. multiple things)
• Decision-making (consensual vs.
authoritative)
• Formality (informal vs. formal)
• Agreements (reliance on implicit
agreements vs. emphasis on con- Nearly everything you do
tractual deals) in an outsourcing deal is
• Ambiguity (tolerance for ambiguity geared towards achieving
vs. need for certainty) maximum value from the
• Dealing with conflict (avoid conflict contract. That’s why you
vs. engage directly) attend to the relationship,
• Making commitments (agree even and that’s why you should
when not sure vs. reluctance to agree pay attention to culture.
unless certain can deliver)

what cultural differences

exist?
For most of these dimensions, at
least two-thirds of customers see
some cultural differences between
their organisation and their key
offshore provider. Generally, they
say they are much more likely than
their partner to confront conflict
rather than avoid it, communicate
directly rather than indirectly, and
multi-task rather than focus on one
thing at a time. Interestingly, for
every dimension, providers are less
likely to perceive significant differ-
ences with their offshore customer
(see Figure 2, bottom right).
This may be because providers
see themselves differently from how
customers see them. For instance:
• Making commitments: 51% of
providers see themselves as reluc-
tant to make commitments unless Average difference along 5-point scale in customers’ perception Average difference along 5-point scale in providers’ perception
absolutely sure they can deliver; only of their organization vs. their offshore provider for each of their organization vs. their offshore customer for each
cultural dimension cultural dimension
26% of customers say that about
Directness of communication
their provider.
• Time frame: 59% of providers Status and hierarchy
see themselves as strongly oriented Making commitments
toward the long term, while only
Ambiguity
33% of customers say that about
their provider. Multi-tasking

Decision-making
Another explanation is that cus- Individuals vs. groups
tomers see themselves differently
Formality
from how providers see them. For
instance: Relationships vs. tasks
• Multi-tasking: 71% of customers Risk
say they emphasize multi-tasking, Dealing with conflict
while only 45% of providers describe
Time frame
their customers that way.
• Dealing with conflict: 47% of cus- Agreements
tomers say they possess a tendency 100% 75% 50% 25% 0% 0% 25% 50% 75% 100%
to confront and engage conflict; only Percentage of respondents Percentage of respondents
32% of providers say that about their
customer. n=154 � No difference � 1– point difference � 2+ point difference n=210

November-December 2009 | Outsourcing | 29

 Outsourcing | study

why do cultural the contract. That’s why you attend

differences matter?
% of annual contract value impacted by culture-related challenges
to the relationship, and that’s why
Cultural differences contribute to you should pay attention to culture. 1%
3% 3%
the difficulty of engaging in critical The study shows clearly that cultural 9%
outsourcing activities such as man- differences can prevent both parties
aging scope, generating innovation, from achieving the full value of their
18% 34%
and managing performance. Scope deal: 64% of respondents say that
management, for instance, is an the impact of cultural differences is
ongoing challenge in complex greater than 10% of annual contract 31%

outsourcing relationships because value, and 33% say the impact is

the necessary conditions for suc- more than 20% (see Figure 4, right). n=374

cessfully engaging in that activity Our study also shows that the � 0% � 11-20% � 31-40% � More than 50%

(e.g., efficient communication, ef- impact of cultural differences can � 1-10% � 21-30% � 41-50%

fective commitment management, be minimised with effective gover-

collaborative issue resolution) are nance. Implementation of various Measures of added value Sources of lost value

frequently absent. mechanisms, including joint skills � High savings � Lost savings
High staff morale Low staff morale
And in offshore deals, cultural training and health checks, can
� �

�
Quick response time to requests �
Missed deadlines
differences around communica- help the parties overcome cultural �
Innovation and thought leadership �
Missed innovation

tion, commitment management, challenges, leading to increased � Delivery of value-added projects on � Poor quality
time and on budget
and issue resolution shake those satisfaction with the relationship. �
Customer satisfaction
�
Scope overruns
Complaints from end users
• Among those respondents with
�

foundations of effective scope man- �

Resources freed internally to do �
Time wasted on conflict, revisiting
agement. joint skills training and health other work decisions

% respondents indicating that cultural differences have an impact on the following activities (rating a 3, 4, or 5 on 5-point scale)
80%

60%
Percentage of respondents

40%

20%

0%
Communicating Identifying, Managing Managing Creating Managing Establishing Generating Making
effectively raising, and scope performance buy-in with commitments an effective innovation joint decisions
resolving issues stakeholders governance
n=371 structure

It should be no surprise, then, checks in place, 89% are satisfied Companies

that 69% of survey respondents say with how their organisation has nearly always
that cultural differences have an managed their principal offshor- encounter different
impact on scope management (see ing relationship and only 3% are organisational
Figure 3, above). And of those 69%, dissatisfied. cultures when
half identify significant cultural • Among those with neither joint entering into
challenges around directness of com- skills training nor health checks, strategic
munication, half cite significant only 65% are satisfied with how their relationships with
cultural challenges around making organisation has managed the deal external partners.
commitments, and 45% note signifi- and 18% are dissatisfied (see Figure
cant challenges around dealing with 5, below).
conflict (respondents could identify
more than one challenge).
The consequences of ineffective Of respondents with joint skills Of respondents with neither joint
training and health checks in place skills training nor health checks in
execution of scope management
in their deal, level of satisfaction place in their deal, level of
and other critical outsourcing activi- with how their organization has satisfaction with how their
ties are anything but trivial. They managed the relationship organization has managed the
negatively impact customers and relationship
providers in the following ways:
• Lost savings 3%
• Low staff morale 8%
• Missed deadlines 18%
• Missed innovation
• Poor quality
• Scope overruns 17%
• Service complaints from end us- 89% 65%
ers
• Time wasted on conflict, revisiting
decisions

the bottom line n=62 n=170

Nearly everything you do in an
outsourcing deal is geared towards � Satisfied � Neither satisfied nor dissatisfied � Dissatisfied
achieving maximum value from

30 | Outsourcing | November-December 2009


About the study
In the OffshOrIng relationship
Management study, Vantage asked
customers and providers to answer
questions about their organisation’s most
significant offshoring relationship in which
they are significantly involved. Respondents
evaluated their own company and their
partner across 13 cultural dimensions,
identified the key challenges in their
relationship, described their impact, and
detailed how they have sought to address
those challenges. Our analysis was aided
considerably by follow-up interviews with
respondents from a cross-section of
companies, industries, and geographies.
there are many dimensions that can be
used to compare cultures. In developing
our questions on cultural dimensions,
we leveraged the scholarly work of Geert
Hofstede, who has conducted extensive
research on culture, and Stephen E. Weiss,
who analysed cultural characteristics of
negotiations in “negotiating with ‘romans’
– Part I” (MIt sloan Management review,
1994).
As with any survey, participant
responses are subjective; comparisons
between customer and provider responses
are taken from the response pool as a
whole and not from specific pairings or
relationships.
A snapshot of demographic information
study | Outsourcing
is provided below:
• 387 people took the survey: 227
providers and 160 customers.
• Illustrative customer titles: President,
Manager, SVP, Chief Quality Officer,
Managing Partner, Offshore Delivery
Director, Executive Director, Offshore
Relationship Manager.
• Illustrative provider titles: President,
Director, CEO, Delivery Manager, General
Manager, VP, Business Line Manager.
• 53% of respondents were involved in
application development outsourcing. Other
key services outsourced: IT infrastructure
(28%), customer relationship management
(21%), desktop or other IT (21%), finance
& accounting (21%), and human resources
(14%).
• 61% of the deals had an annual
contract value of US$5 million or less;
28% of deals were between $6 million and
US$50 million; 11% of deals were more
than US$50 million.
About Vantage Partners, LLC
Danny Ertel is a founding partner of
Vantage Partners, while Joseph Bubman
is a consultant at the global management
consulting firm. A spin-off of the Harvard
negotiation Project, Vantage Partners
helps customers and providers enter
into, manage, and remediate working
relationships.
“51% of providers see
to make commitments
unless absolutely sure
they can deliver; only
that about their provider.”
November-December 2009 | Outsourcing | 31
Outsourcing | Special Feature
iDc peeks into Malaysian
outsourcing industry
Malaysia’s services market
amounts to an encouraging Us$3
billion against the global market of
a staggering Us$770 billion, reveals
a recent study by research firm
iDc commissioned by Outsourcing
Malaysia (OM) and MDec.
The key growth areas for Ma-
laysian entities remain Business
Process Outsourcing (BPO), systems
integration (si) and iT consulting.
The Government, Financial service
industry (Fsi) and Manufacturing
verticals remain the largest services
opportunity verticals for the country,
it said.
The latest report – entitled “stra-
tegic Planning & Tactical road Maps
For Malaysian Organisations to
Become leading Global Outsourc-
ing Providers” – discusses in detail
the strengths and some key gaps
and shortcomings in Malaysia’s
32 | Outsourcing | November-December 2009
capabilities currently, and manners
in which they could be addressed.
iDc said key fundamentals of the
business like scale, capability/skill
sets and reliability remain basic
requirements for local outsourcing
players to look for further growth.
OM chairman David Wong
said: “Malaysia is certainly among
the most attractive locations for
outsourcing as attested by many
high rankings it has obtained in
numerous surveys, including of
course, the a
aT Kearney’s 3rd ranking
recently.
“However, we still need to work
harder to achieve greater success
as other countries, especially the
emerging ones, are fast catching
up.”
Wong added that the country
needs to continue to put in more
efforts towards making the industry
although Malaysia a thorough success.
is already well- He said: “in my opinion, the lo-
known as an cal industry must be strengthened
attractive location through better market access pro-
due to its living grammes and also by creating bigger
cost, infrastructure companies within the industry such
and general as giants Wipro and infosys. Besides,
overall stability, the quality of talent pool must be
in many cases improved through short-term plans
it has been let such as Train and Place Programmes.
down by the lack in the long run, certain iHls’ (insti-
of higher value- tute of Higher learning) curriculum
skills required could also be revised to cater for the
for technical BPO and iTO sectors.”
itO and BpO in recent time, an array of cities
engagements. across the asia Pacific have emerged
and positioned themselves as attrac-
tive offshoring locations synonymous
with global sourcing strategies and
delivery centres. Front-runners to the
cause have traditionally been cities
such as Bangalore, Dalian and Ma-
nila, who have equipped themselves

In IDC’s
view, what
separates
the
‘successful’
countries
from the
‘up-and-
coming’
ones lies
within
what is
dubbed
the ‘deal
clinching
criteria’.
with adequate infrastructure and
local skill sets that have created an
aura of complete capabilities and
competencies suited in meeting
global offshoring demands.
in iDc’s view, what separates
the “successful” countries from the
“up-and-coming” ones lies within
what is dubbed the “deal clinch-
ing criteria”. in essence, the “deal
clinching criteria” are factors that
are recognised as having a high
degree of influence in the decision
making process that could “make-
or-break” the deal. These factors
take into account current skill sets
and capabilities, outsourcing do-
mestic market demand, outsourcing
export market demand, labour cost,
language proficiency and several
other crucial factors.
OM Head of Marketing & Brand-
ing, Bobby v varanasi, agrees on this
count. He said: “among a host of
deal clinching criteria, there are
two key ones. First is an ability to
address client industry knowledge,
and the second is the ability to
offer flexible business and financial
models built around client value
and not around service costs. in
these two key areas Malaysia lags
quite behind other mature provider
nations and companies.”
varanasi added: “The way to
v
improve this aspect would be to first
stop thinking iTO or BPO. rather
providers need to think “business
services” and “business impact-
ing needs”, and articulate their
understanding on these areas for
clients to gain comfort that provid-
ers are knowledgeable about their
business.
“Too often providers get stuck
within their zone of comfort –
technology or processes. These
are enablers to some value clients
are looking for. in absence of such
competence with client businesses,
providers are considered fringe
suppliers, and not real partners.
consequently deals are difficult to
be created or won.”
also, the report revealed that skill
sets and capabilities play a major
role in this “deal clinching” aspect.
although Malaysia is already well-
known as an attractive location
due to its living cost, infrastructure
and general overall stability, in
many cases it has been let down
by the lack of higher value-skills
required for technical iTO and BPO
engagements.
as highlighted in the study, the
niche opportunities that exist for
local players are in the areas of
hosting, remote management and
project management for regional si
and caD deployments. Key verticals
of opportunity that have emerged
in the near-term are Oil and Gas,
Media and communications, and
Fsi (islamic Banking).
varanasi
varanasi said: “We must leverage
Malaysia’s strengths with specific
verticals. it will need senior leaders
from such verticals to clearly accept
that what they think is core to the
industry that ‘can’ be outsourced
to providers, but deploying such
partnership models requires open-
ness with business and financial
models. costs are not the point of
discussion here. rather “value” and
“business impact” are the key deal
clinchers.
“We don’t seem to currently en-
gage in such conversations. Unless
this happens, i am afraid we shall
continue to offer commoditised
services and continue competing
with emerging cheaper nations,
losing out to them continually and
not growing the industry.”
according to Danny leong, OM
November-December 2009 | Outsourcing |
Special Feature | Outsourcing
Head of research, most Malaysian
companies are still focusing on the
country’s cost advantage. leong
said: “We cannot rely on the cost
advantage alone anymore as there
are cheaper options regionally and
globally. Moving forward, they need
to be very creative with their value
proposition and engagement model
with their clients.”
varanasi added that as long as
v
the local industry continues to offer
low-end cost-chasing commoditised
services, business will continue to
be lost to cheaper nations. He said:
“This is not the fault of the na-
tion. rather it is economics at play.
low-end services chase costs, and
surrounding nations are cheaper
than Malaysia. There will be a point
where Malaysia can potentially
become irrelevant if we continue
to offer very low-end services. iDc’s
research points to this fact very
clearly.”
current gaps according to
IDC Report
While Malaysia made a great start
towards attracting global leading
MNcs and vendors to Malaysia
in the early 2000s, she has slowly
taken her ‘foot off the gas’ and has
stagnated somewhat. lack of talent
pool remains a huge inhibitor for
many global vendors. Furthermore,
the emergence of lower-cost delivery
centres surrounding Malaysia (in-
donesia, Thailand, Philippines and
vietnam) has become a huge chal-
lenge for the nation to compete.
While the government has
placed frameworks in place to ad-
dress this issue, the “push” towards
implementation and adoption has
been minimal and the sentiment
remains that the Government
has not adequately utilised the
rM60
M60 billion stimulus packages’
investment into icT T to re-ignite the
industry. in the said report, iDc has
also summarised some key issues
that are currently inhibiting the
outsourcing industry locally.
“Strategic Planning & Tactical
Road Maps For Malaysian
Organisations to Become Leading
Global Outsourcing Providers”
• Outsourcing Malaysia & IDC
Publication, 2009
PRICE: USD$800
• Special Price of RM800 for OM
Members
TO BOOK YOUR COPY CONTACT:
Outsourcing Malaysia
Corporate address:
1106, Block B, Phileo Damansara II,
15, Jln 16/11, 46350 Petaling Jaya,
Selangor Darul Ehsan, Malaysia.
T: +60 3 7955 2922
F: +60 3 7955 2933
info@outsourcingmalaysia.com.my
33
Outsourcing | survey

everest:rPO
market on the
upswing
NotwithstaNdiNg the tough
economic environment, the RPo
market continues to grow at a
healthy rate in terms of deal sign-
ings in the last few years. however,
the nature of deals and the hiring
volume has changed in 2009, ac-
cording to Everest group, a global
consulting and research firm. while
the offshoring leverage within RPo
is currently lower than overall hRo,
increasing cost pressures in the
current economic environment has
led North american and UK buyers
to start receiving the back-office RPo
services from offshore location such
as india.
the study, “Recruitment Process
outsourcing (RPo) – Moving Beyond
the Pioneer stage” reveals that while
india-headquartered suppliers such
as infosys, wwipro, and Caliber Point
have already entered this space in
the past two years, wwestern suppliers
such as Momentum and People-
scout are also leveraging india for
delivering RPo services.
the study also projects a marginal
t proves.”
increase in deal signings this year
compared to 2008, but decreased
hiring volume is resulting in more
selective, smaller-sized deals.
More than half of the deals are
inked by North american firms;
however, adoption is on the rise by Procurement
outsourcing
buyers in the United Kingdom and
Continental Europe, particularly
germany and France.
“RPo is witnessing a fair amount
of interest among buyers given
the focus and specialisation that
“RPO is
witnessing a
on the rise
RPo suppliers bring to the table,” Spend on procurement
said gaurav gupta, Principal and
fair amount outsourcing (po) is expected
Country head, Everest group.
of interest to increase by 25% next year,
“while the hiring volumes are among the everest Research Institute
down in the current economic buyers has found. The organisation
environment, the value proposi- given the forecasts that uptake of po
tion of RPo is still resonating with focus and will be led by the “mature”
buyers that are looking for a cost- specialisation US market, while european
effective and flexible option to that RPO businesses will also continue
withstand the current turmoil and suppliers to increase spend on
at the same time create an efficient bring to the outsourced purchasing.
and effective talent acquisition pro- table,” Global market growth will
cess that can be scaled up quickly – Gaurav Gupta be helped by an increase
when business environment im- in the number of suppliers
offering po services.
Renewing and extending the
scope of existing contracts is

Opportunities in medical device

also expected to “contribute
significantly” to overall spend.
everest couldn’t say

market worth us$26.77b by 2014 what the total value of

aCCoRdiNg to a new mar-
ket research report, “service
outsourcing opportunities
in Medical device Market
(2009-2014)”, published by
MarketsandMarkets, the
global services outsourcing
market in medical devices is
expected to be worth $26.77
billion by 2014, growing at
a CagR of 13.9% from 2009
to 2014.
Medical devices form one
of the largest industries in
healthcare sector with an es-
timated size of Us$250 billion
in 2009 and a growth rate of
6-8%. the industry has been
outsourcing medical device
manufacturing services for al-
most a decade now. this trend
has brought about huge profit
margins, which has attracted
many new players. outsourc-
ing has helped medical device
manufacturers reduce product
development cost by 10% to
30%. the services outsourc-
ing industry has also gained
from the entry of new medical
device manufacturing com-
panies, as these players lack
experience in the field.
orthopedic devices hold
the largest market share and
cardiology devices have the
highest growth rate in the
medical device manufactur-
ing industry. the increasing
regulations for class 2 and
class 3 devices have increased
the demand for regulatory
consulting services. growing
complexities in supply chain
and the need for efficient man-
agement of client accounts
have increased the scope of
product lifecycle management
solution providers in the medi-
cal devices industry. Firms of
of-
fering chip designing services
have also benefitted from the
increasing incidence of chronic
diseases and the growing use
of electronic and embedded
systems in cardiovascular and
neurology devices.
the report analyses the
outsourcing opportunities in
cardiovascular, ophthalmic,
oncology, dental, and neu-
rology devices, along with a
study of various tools used
for developing, testing and
simulation tools used for
medical devices. the report
categorizes the service out-
sourcing in medical device
market as follows:
the market would be.
Cost-cutting, increasing
operational efficiency and
procurement compliance
will be the primary drivers
for organisations signing po
deals.
earlier this year Katrina
Menzigian, vice-president
of everest, told UK’s Supply
Management magazine that
there would be a rise in po in
the financial services sector
as companies restructured
and emerged from the
economic crisis.
everest also predicted an
increase in offshoring next
year, after growth fell flat in
2009. Although any rise is
likely to be lower than historic
levels, everest said India and
the philippines would be the
popular low-cost locations.

34 | Outsourcing | November-December 2009

 survey | Outsourcing

Employer branding
vital to attract talent
In a competitive and borderless world,
organisations need every possible means
to attract and retain their talent. Even in
a turbulent economic climate, employees,
especially those who possess the right
technical and behavioural competencies,
continue to be a scarce resource.
To address the growing concern about
talent attraction and retention, Kelly Ser-
vices, a workforce management services
and human resources solutions provider,
recently launched a white paper titled,
’Building a Strong Employer Brand – at all
times for a sustainable organisation’.
“Organisations need to understand their
employees and what attracts people to work
for them. Several important trends have
emerged in the workforce. Its composition
is changing significantly.
“The workforce of today is more inter-
nationally mobile, Generation Y (born
between 1978 and 1995) make up an
increasingly larger portion of the workforce,
and there is a greater emphasis on highly
skilled and knowledge workers. This brings
to light the need for effective employer
branding to attract and retain top tal-
ent,” explained Melissa Norman, VP and
Country General Manager of Kelly Services
(Malaysia) Sdn Bhd.
The Kelly Services whitepaper explains
that employer branding is a viral-based
perception management programme that
is intended to raise an organisation’s image
in the marketplace as a well-managed
business, thereby attracting a steady flow
of top quality applicants over a period of
time.
It further outlines ways to communi-
cate the Employer Brand such as award
programmes, editorial content in targeted
publications, presentations at conferences
and viral programmes.
“Employer branding is an integrated
approach involving several cross-function
areas of expertise including human
resource, marketing, finance, customer
service, and senior management.
To be most effective, employer branding
must be believable and interactive,” added
Norman.
“It’s about making your organisation a
destination company and being the coolest
employer brand,” Norman said.

Evaluating logistics Insurers more receptive to ITO

outsourcing: Look According to IDC Financial
Insights’ latest report, while
and support; value proposition
and competitive differentiation;

before you leap! insurers typically still have

the tendency to look inwards
rather than outsource, the
Aberdeen Group, a Harte-Hanks Company, an- marketplace is growing
nounced the release of its latest supply chain execution increasingly challenging and
study, “Evaluating Logistics Outsourcing: Look Before insurance carriers in Asia/Pacific
You Leap!” are becoming more cognizant
This report examines how companies have enabled of the benefits of outsourcing
more automated and collaborative transportation technology in order to
and warehouse processes through strategic decisions compete in today’s challenging
to use logistics service providers. marketplace.
“The shift in the global economy over the past year Insurers here have hitherto
has forced Logistics Executives to re-evaluate their been laggards in IT spending,
supply chain strategies in order to create more efficient but the economic malaise
and cost-effective operations,” said Bob Heaney, has driven home the need
senior research analyst, Aberdeen Group. “The role to create a more dynamic
of logistics service providers (LSPs) has continued to business framework through the
evolve as companies look to utilise their services as assistance of technology. More
part of a more integrated supply chain.” insights are revealed in the study
In this study, top performers were distinguished “Insurance Vendors: Spotlighting
from their peers based on three performance mea- the Major Players in Asia/
sures: on-time and complete shipments, on-time Pacific”, which assesses the
delivery, and year-over-year reduction of inventory prominent insurance technology
carrying costs. These performance criteria were chosen vendors in Asia/Pacific and the
because they provide insight into the impact of overall products and services they
supply chain strategies (including outsourcing), how provide.
those decisions affect customer value, and track a The report casts the spotlight
cost associated with making better supply chain on three enterprise wide
decisions. technology firms: CSC, IBM
Across all respondents, overall supply chain cost and SAP, and six insurance
(40%) and increasing complexity (39%) are the technology (InsTech) firms:
two most-frequently cited pressures of supply chain 3i Infotech, Cognizant, EAB
organisations. How do organisations combat these Systems, eBao Technologies,
pressures without compromising performance? “The Mastek and Perot Systems.
role of technology to support in-house and outsourcing It provides a comprehensive
strategies in supply chain management is a critical coverage of each company
factor in determining success,” said Heaney. “It’s including their strategic
important to evaluate and understand the value of objectives; approach to product
internal solutions in any outsourcing strategy.” development, deployment
market footprint and client
profile; and, overview of major
products. It also provides IDC
Financial Insights’ assessment of
the strengths and limitations of
these respective vendors.
Li-May Chew, CFA, Senior
Research Manager for IDC
Financial Insights Asia/Pacific
says, “Each company has
a unique value proposition,
offering nuances in products,
services and solutions.
For instance, CSC has a
large installed base with
commendable end-to-end
reach, while we applaud IBM’s
high commitment level to the
industry and vast ISV ecosystem
of business partners. Amongst
the InsTech organizations, 3i
Infotech has a laudable front-
end solution that addresses
the full spectrum of insurance
functions, and eBaoTech is
viewed as being an aggressive
company that has excelled at
building brand awareness.”
IDC Financial Insights Asia/
Pacific recommends that
insurers exploring ITO ascertain
that the vendor’s offerings
correlate with their requirements;
make decisions around the
extent of customisation preferred
and the choice of multiple vs.
one-system solutions; and,
examine the vendor’s footprint of
reference clients.

November-December 2009 | Outsourcing | 35

Outsourcing | basics
Financial basics of
outsourcing transaction
Outsourcing is probably one of
the most complex IT decisions most
CIO, CFO or Vendor Management
makes. In most cases, any outsourc-
ing deal would involve a long term
commitment to be financially viable.
It requires significant adjustment to
ensure cultural alignment between
both parties, detailed analysis of the
services expected by the customer
and service levels to be provided
by the outsourcing vendor. On top
of that, the terms used are often
lengthy and difficult to concep-
tualise, adding to the complexity
of the process. In this article, we will
explore some of the key financial
terms and positions often used in the
structuring of complex outsourcing
deal contracts.
Financial terms are vital in any
outsourcing arrangement. The pri-
mary intent of most organisations to
outsource is cost savings. Similarly,
the objective of an outsourcing ven-
dor is to ensure a profitable business
agreement that is sustainable for
their operations and quality of
service. Some of the key financial
terms to be aware are:-
payment stream
The most prevalent in this part
of the world is monthly payment
stream. This is probably due to
the commercial exposure we are
accustomed to in our daily trading
36 | Outsourcing | November-December 2009
The most
important point
to keep note is
the pertinent
need to create a
win-win situation
for any financial
parameters.
lives. However, this may not be
the most economical arrangement
for all involved parties. In recent
times, there have been outsourcing
arrangements signed with quarterly
and bi-annual payment streams.
Annual payment streams are also
practiced although these would
not be the norm. It is used mainly
by cash rich organisations that
wish to bargain for lower prices or
additional services in return.
From an outsourcing vendor’s
perspective, such payment stream
will lead to further reduction in
administrative cost and other sup-
port related cost. The main benefit
is that it lifts the financial burden
by ensuring a positive cash flow
movement. Naturally, the customer
would expect some financial benefit
in return such as lower price.
late payment fees
Most of us would be reasonably
familiar with this concept from late
payment of credit card bills. It’s a
generally acceptable concept but
area of discussion would be the late
fees incurred and notice period. It’s
common for customer to request for
a decent rate normally pegged to
any official published rate by the
local bank association or central
banks, this differ from countries to
countries.
Furthermore, it is becoming more
common for some organisations
to request for one or two weeks of
notice period from the outsourcing
vendor for any such late payment,
giving them a second chance to
ensure prompt payment as most
late payments are due to internal
procedural delay rather than inten-
tional action.
taxes
For most outsourcing services, soft-
ware or hardware arrangements will
incur some form of local taxes de-
pending on laws of the host country.
There are some countries that allow
for reduced tax rates depending on
nature of services rendered, thus it
would be wise to consult the appro-
priate financial authorities for such
incentives. There are customers that
demand that outsourcing vendor
absorb such applicable taxes. This is
probably not a fair arrangement and
may lead to discontentment among
the parties involved over a longer
term. Such long term arrangements
are beneficial only if a win-win situ-
ation is adopted for all the parties
involved.
disputed fees
While this is not a situation that any
parties would like to experience, it
does happen especially when there
are changes to the fees structure or
mismatch of service expectation.
One of the most effective ways to
resolve such situations while main-
taining a positive relationship and
an expected service provision would
be to establish a joint governance
forum with different level of escala-
tion such as:
• Level 1 – Team/Deal Manage-
ment
• Level 2 – Country Management
• Level 3 – Regional Management
This allows the issues to be ad-
dressed by the right decision makers
and enables the project teams of both
parties to continue their existing
working relationship. Some more
complex arrangement would specify
the specific maximum amount of
withholding dispute fees (such as
 basics | Outsourcing

“In recent times,

there have been
by cK Mah outsourcing
arrangements
a percentage of the service fees or signed with
factors of the monthly service fees).
these can also be arranged to be
quarterly and
deposited into an escrow account,
but it may incur some administrative
bi-annual payment
fees and would be more appropriate streams. Annual
payment streams are also
for complex and large outsourcing
deals.

exchange rates practiced although these

some of the simpler outsourcing deal
would be arranged and provided
entirely within a singular country
would not be the norm.”
without any exchange rate concerns.
However, most it is outsourced for
organisations to enjoy world-class
service levels not normally available nature of service based on the type of viable to the outsourcing vendor
locally or it may be too expensive. outsourcing arrangement. this will and provides high service level to
in such typical scenarios, there will ensure that the parties involved are the customer.
be services provided from overseas not exposed to a higher rate due to
resources that may be subjected to other adjustments that is irrelevant
exchange rates. to the outsourcing arrangement. CK Mah specialises in the area of
there are organisations that the most important point to infrastructure outsourcing, applica-
reject such provision and expect keep note is the pertinent need to tion outsourcing and business process
the outsourcing vendor to absorb create a win-win situation for any outsourcing and has written numerous
such risk as part of their global financial parameters. this is to articles on these subjects.
service model. these often lead to an drive sustainable and mutually
unattractive pricing to the customer beneficial long-term outsourcing
as most vendors would simply factor arrangement that is both financially
such exchange rate risks into their
cost.
the most cost effective solution
would be to agree on an exchange
rate based on the rates published by
the banking association or central
banks of the appropriate country.
this would be a fair and balanced
approach to ensure long lasting
outsourcing arrangements.

cost of living adjustment

this is a sensitive term and may Vital … Financial
cause confusion during any outsourc- terms are
ing negotiation if it is not understood important in
correctly. the inherent nature of any outsourcing
outsourcing requires services to be arrangement.
performed by it professionals and
the salary (salary is just one example
of other variable cost elements sub-
ject to adjustment) is not fixed due
largely to increasing or decreasing
inflation adjustment.
From a customer’s perspective,
the price should be fixed without
any such cost of living fluctuation
since this is the business risk of the
outsourcing vendor. in my opinion,
the most commercially beneficial
arrangement would be for such
adjustment to be based on a pub-
lished rate by the local authorities
or reputable human resource com-
panies. the trick is to reference to a
published rate pertinent to a specific

November-December 2009 | Outsourcing | 37

Outsourcing | management

Can any employer

afford to let employees
take off for all of these
holidays, or must they
have some way of
keeping track of which
holidays are important
to any individual
employee?

Holiday choices
for workplace

38 | Outsourcing | November-December 2009


Happy Holidays. This is the season Isn’t it more fun,
for holidays and holy days through more positive,
out the world. people have a variety of more respectful
different celebrations some for a single to allow people
day, others for multiple days with to honour their
multiple obligations and activities. holidays and holy-
For employers and managers there days in their own
are many additional decisions to be way, sharing what
made. in this article, i’d like to discuss they wish with
just two of them – and hopefully leave the rest of us in
you thinking about new solutions. their more public
They are: The symbols and Celebra- displays?
tions at Work and Holiday Vacation
Time.
symbols and celebrations at
work
What symbols and celebrations can
you allow at work? What will be ac-
cepted by people of differing religions,
and what will be offensive to some?
should you allow any symbols or cel-
ebrations at all? should you pretend
it’s not holiday season?
We’ve had difficulty with this
decision here in the Usa. Up until
What symbols and celebrations
can you allow at work? What will
be accepted by people of differing
religions, and what will be offensive to
some? Should you allow any symbols
or celebrations at all? Should you
pretend it’s not holiday season?
we started attempting to honour
diversity, we, a mostly Christian na-
tion, celebrated Christmas with lights,
trees, and religious symbols. Through
the years the religious symbols were
removed in respect for those not
Christian, but lights and trees and
“Christmas parties” continued to
be part of the season. Then, it all
changed to no symbols, and only the
word “Holiday party” was allowed.
We sanitised all celebrations.
i,, a Jewess, have always loved
to celebrate Christmas with my
friends. They have enjoyed sharing
my holidays with me as well. We’ve
honoured our differences by sharing
our traditions. My mother had a
retail store and it had two windows
on either side of the door. Each year
she would decorate one window with
Christmas decorations and the other
with Chanukah symbols.
personally, i love seeing the variety
of symbols and celebrations. Recently,
in my townhouse complex the lights
November-December 2009 | Outsourcing |
management | Outsourcing
By Dr arLyne
rLyne
Diamond
were up now celebrating diwali.
soon Christmas lights will join them.
isn’t it more fun, more positive, more
respectful to allow people to honour
their holidays and holy-days in their
own way, sharing what they wish
with the rest of us in their more public
displays? i think so. i like choices.
holiday vacation time
it’s a happy season for celebrants,
but probably quite difficult for those
in the workplace required to juggle
stations, people, and tasks in order
to have the necessary coverage for
all the days people will be away
from work. How do you manage?
How do you know who to give what
days off?
do you care?
New y year, Halloween, day of the
dead, diwali, Thanksgiving, Chanu-
kah, Christmas, New y year’s – all these
holidays come in the fall and winter
and are celebrated in one form or
another throughout the world. Each
country and each religion has its own
version of planting, reaping, and
praying. For those who practice their
religion, these holidays are holy-days
and there are rituals to be performed,
requiring days off from work.
How do employers handle the
needs of such a diverse workforce?
Can any employer afford to let
employees take off for all of these
holidays, or must they have some
way of keeping track of which holi-
days are important to any individual
employee? if keeping track, do your
employees need to prove to you what
religion they are and how observant
they are? i know in the Jewish religion
those more orthodox honour many
more holidays than those called
“reformed” or less observant of old
traditions. similar differences exist
in other religions as well.
No matter how carefully you try
to control it, there will be times when
all or almost all your employees
want the same days off. How do you
handle this need? Here in the Usa sa for
example, there are holidays that the
vast majority of workers celebrate.
Thanksgiving, Christmas and New
year’s are holidays most take off and
y
because of that typically most firms
are closed completely for those days.
39
Outsourcing | management
That of course puts Muslims, Jews and
other non-Christians in an awkward
and unfair position since they get
these days off whether they need
them or not – and do not have the
same rights for their holidays.
I know that in New York City many
years ago there was a mandated
law requiring businesses to close on
Sunday in observant of the Christian
day of rest. The Jewish community,
honouring Saturday as the day of
rest, were then forced to be closed both
days. Eventually, after much lobbying
the laws were changed so that stores
could be closed either day, or open
both days. This gave people choice.
I like choice. I think that we fail
to realise how much we control the
activities of others for reasons less
than rational or necessary. Let’s go
40 | Outsourcing | November-December 2009
back and look at holidays and how
they could be handled.
I advise my clients to allow a
certain amount of personal days off
that employees can use whenever
they wish for whatever purpose they
wish. The only stipulation I would
make is to request advance notice for
planning purposes – especially if the
employer needs to fill the gap during
the time that employee is missing.
I think that offering employees a
set amount of days that they can use
for sickness, holiday, and vacation is
so much easier and more effective
than dictating how many days they
can use for each of these needs. By
letting them choose you are allowing
them to act as adults, making their
own decisions as to how they wish to
spend their “free time”.
By choosing for them, you are
putting them in a position of having
you make the decision for them – and
often inviting individuals to lie and
say they are ill when in fact they need
the day off for other reasons.
Let me tell you a story about
teaching people to make their own
decisions. It doesn’t have anything
directly to do with business, but it
sure is the best starting place I know
for those of you raising children, and
it lends itself to tactics for managing
others.
Many years ago, my sister and her
two young daughters came to visit me
in California from New York City. The
girls were approximately six years old
(Gabrielle) and nine (Amelia.) While
they were visiting we decided to take
them to Disneyland and I asked my
sister how much money she wished
to give each of the girls as spending
money. Initially my sister said that
she wasn’t planning to give them
any money, but when they wanted
something she’d decide whether to
buy it for them or not.
After much discussion, including
my offering to equal the amount
she gave each child, we decided that
we would each give each of the girls
US$10 in spending money. They were
each thrilled to learn that they could
decide for themselves how to spend
their US$20 that day.
When we arrived at Disneyland
we wandered into the retail stores and
Gabrielle fell in love with a stuffed
animal she saw. She wanted to buy
it right then. I suggested we put it
on hold and if, at the end of the day,
she still had her money, she could
purchase it. She agreed.
During the day, Amelia spent her
money freely on soft drinks, cotton
candy, and arcade games. Gabrielle
didn’t spend a dime. As the day came
to an end, we re-visited the retail store
and Gabrielle happily purchased
her stuffed animal. Both girls were
delighted. Both girls made their own
No matter how decisions and were happy with the
carefully you try results of them. Both girls learned a
to control it, there valuable lesson about choices.
will be times when How much control do we as par-
all or almost all ents, managers, or employers really
your employees need to have over our employees? Do
want the same you really care if I take the day off to
days off. How do go to the doctors, or visit friends? The
you handle this issue is I’m gone for that day and it
need? becomes one day deducted from my
allowable time off. I like choices. I
like freedom. I like sharing in the
traditions of others, it makes me feel
good. How about you?
Dr ArLyne Diamond is an Organi-
sational Development and Human
Resource Consultant with over 30 years
experience. She can be contacted at
arlyne@diamondassociates.net
 happenings | Outsourcing

2nd APCCAL and

CCAM Expo 2009
Co-hosted by Asia Pacific Contact Centre
Association Leaders (APCCAL) and Contact
Centre Association Malaysia (CCAM) – the
2nd APCCAL and CCAM Expo 2009 at the
Sunway Convention Centre, Kuala Lumpur
– was an instant success among contact
centre leaders, vendors and professionals
across the Asia Pacific region.
With special emphasis on strategies to
overcome the impact of current global eco-
nomic downturn, the occasion provided over
500 industry delegates a good opportunity to share knowledge and devise best practices with a myriad of CRM and contact centre
for networking and to listen to an all-star for their own respective operations. offerings. The event ended with the CCAM
cast of the speakers in the industry. Over 50 exhibition booths, showcasing Awards and Gala Dinner.
The event also hosted a series of work- Customer Relationship Management (CRM) The Outsourcing magazine served as
shops, forums, case studies and open round- and Contact Centre solutions, graced the the Media Partner for this high-profile
table discussions enabling the participants exhibition hall and presented attendees conference.

November-December 2009 | Outsourcing | 41

Outsourcing | happenings

Kre8tif! Digital
Content Conference
in December
Malaysia’s Multimedia Development Cor-
poration (MDeC) is organising the MSC
Malaysia Kre8tif! Digital Content Conference
to provide a platform for the exchange of
insights and expertise on digital content
and emerging media among the local and
international creative communities.
The conference, the first of its kind in
Malaysia, will be held in Kuala Lumpur
from Dec 7-9 with the theme “Infinite Minds,
Unlimited Passion”, which highlights the
vast opportunities that abound, resulting
from the meeting of over 20 international
and local experts in the field coupled with
raw talent.
“The idea of having the Kre8tif! Confer-
ence originated from the desire to further
promote and develop the digital creative
content industry, while profiling Malaysia
as a strategic location to identify potential
collaboration opportunities, recruit talent,
outsource and engage with co-production
partners,” said MDeC vice president of
the industry development division, Saifol saifol shamlan …
Shamlan. MDeC vice president
The three-day event is expected to attract of the industry
over 500 participants from Malaysia’s digital development
creative content industry and discussions will division.
focus on four key areas of digital arts, games,
visual effects and emerging media, he said.

Datacom’s Malaysian agilent

community centre
DaTa
DaT Ta CoM SEa (M) Sdn Bhd
together with its partner Yayasan
Kajian dan Pembangunan
Masyarakat (YKPM), led a Cor-
porate Social Responsibility (CSR)
initiative and jointly launched a
Community Technical Centre in
Selayang Prima, Malaysia.
This initiative was designed to
raise ICT awareness and specifi-
cally Internet awareness in the
community by providing an in-
troduction to training, computer
skills and an understanding of
how technology can transform
lives.
“We believe that by provid-
ing the training and skills, we
can partner with people in the
community, to create social and
economic opportunities that can
help change people’s lives,” com-
mented Kirsty Hunter, Managing
Director, Datacom.
Hunter added: “Datacom
believes that ICT should be
available to everyone. as part
of our CSR initiative to ‘Break
the poverty cycle through
technical knowledge’, we have
partnered with focus to take ICT
education and infrastructure
gilent and
MDeC join
straight to rural communities
hands
with the objective to provide ICT Agilent Technologies and Multimedia
training opportunities to the Development Corporation Sdn Bhd (MDeC)
underserved.” have joined hands to churn up more highly
“Utilising the Microsoft Digital skilled human capital in the country in line with
Literacy Curriculum and the current industry needs. Minister of Science,
e-learning module, we aspire to Technology and Innovation, Datuk Seri Dr.
train the community and equip Maximus Ongkili said through the joint efforts,
them with borderless knowledge both parties will make available experts in the
of ICT to aid and improve their technology field to 20 institutions of higher
quality of life.” learning in the country.
“With this cooperation, there can also be
certainty that the expertise being passed on
to the students is in synch with the current
industry needs. It will directly bring forth
human resources with world level technology
“We believe that skills,” he said following the signing of a
memorandum of understanding between
by providing the MDeC and Agilent Technologies in Cyberjaya.
training and skills, MDeC was represented by its Chief
Executive Officer Datuk Badlisham Ghazali
we can partner while Agilent Technologies’ President Gooi
with people in the Soon Chai signed on behalf of his company.
Ongkili said this collaborative effort was
community, to create also in line with the government’s objective
social and economic to make available a highly skilled work force
in line with the increasing demand in the
opportunities that information communication technology
can help change (ICT) field. By next year, demand for skilled
workers in the ICT field is expected to go up
people’s lives.” to 10,000, he added

42 | Outsourcing | November-December 2009

 happenings | Outsourcing

Frost & Sullivan

spurs ‘Green rush’
Frost & Sullivan recently held
an executive symposium titled the
Global Green Revolution 2009:
Driving Growth through Sustain-
able Technology & Innovation in
Kuala Lumpur.
Co-located with Growth, Inno-
vation and Leadership Congress
(GIL 2009: Asia Pacific), the in-
augural congress featured some
prominent thought-leaders like
Sudeep Mohandas, senior direc-
tor of supporter operations, World
Wildlife Fund Malaysia for Earth
Hour; Lars Ronning, president, Asia
Pacific, Tandberg, Singapore; Ir
Ahmad Hadri Haris, national
project leader, MBIPV Project, head
of Renewable Energy, Malaysia
Energy Centre (PTM), Malaysia; and
Matthias Gelber, board member,
Maleki GmbH, Malaysia, amongst
others.
“Integrating green strategy into
an organisation’s growth plan is not
about social responsibility. Green
has emerged as a major competitive
factor, both in terms of products and
processes.
Far from being a brand catalyst,
green initiative has become a quint-
essential element for both top-line
and bottom-line growth in busi-
nesses,” says Ravi Krishnaswamy,
Director of Energy Practice at Frost
& Sullivan.

MOL hooks up with Friendster

Friendster, Inc. recently announced a
global partnership with MOL AccessPortal
Berhad (MOL), a leading payments provider
leveraging a network of over 500,000 physi-
cal and virtual payment channels across
more than 75 countries worldwide, to power
a pre-paid payments platform to enable
micro-spending by Friendster’s 115 million
users globally.
MOL will power the Friendster Wallet, a
stored value system, for all members of the
Friendster social network. The partnership
was officially announced in a signing
ceremony held at the Berjaya Times Square
Hotel in Kuala Lumpur, Malaysia. The intro-
duction of a payments platform through the
Friendster Wallet is a critical step towards
facilitating greater monetisation of Friend-
ster’s massive, global user base.
It will further enable Friendster to launch
incremental revenue streams surrounding
virtual goods, gifts, and games, all of which
are proven business and revenue models in
Asia, where Friendster is a leading web site.
The service will initially launch in Malaysia,
Sealed … From
Left: Ganesh,
Kimber and Tan
Sri Dato’ Seri
Vincent Tan
Chee Yioun,
Chairman and
CEO of Berjaya
Corporation
Berhad
and will be rolled out within weeks through-
out Southeast Asia and globally.
“Through this exclusive strategic part-
nership, we’re enabling many users to pay
for goods and services online for the first
time, and in doing so, creating a valuable
transactional ecosystem on Friendster,” said
Ganesh Kumar Bangah, president and chief
executive officer at MOL.
“We’re excited to extend our payment
platform exponentially via this relation-
ship, as both companies will benefit from
the continuous loading and spending
within the Friendster Wallet.” “We’re excited
to work with MOL, as they’re a payments
platform leader throughout our major
markets in Asia,” said Richard Kimber, chief
executive officer at Friendster.
“Just like PayPal eliminated ‘payment
friction’ in the globally successful eBay
marketplace for buyers and sellers, MOL
will help Friendster deliver many new and
important revenue streams by seamlessly
powering a wealth of premium entertain-
ment and content features.”
IBM announces
software for
managing data
centres
IBM recently introduced a
new software for managing data
centres. The new technology has
the potential to dramatically cut the
cost of operations while speeding
the deployment of new applications
from weeks to minutes.
The introduction of IBM’s new
VMControl product for enterprises,
combined with IBM Tivoli software,
gives businesses for the first time
a single point of control across
multiple types of IT systems and
virtualisation technologies. It spans
UNIX/Linux, mainframe, x86 and
storage systems and networks.
VMControl helps companies that
have turned to virtualisation – the
creation of multiple virtual servers or
storage on a single physical system
– to reduce infrastructure costs, but
have encountered new struggles as
they try to manage enterprises made
up of disparate platforms, each with
their own virtualisation technology.
VMControl allows combinations
of physical and virtual IBM servers
to be managed as a single entity.
This approach – known as system
pooling – expands the benefits of
virtualisation by helping corporate
data centres simplify complex
management functions and better
share and prioritise use of critical
resources such as processing
power, memory and storage.

November-December 2009 | Outsourcing | 43

Outsourcing | Light takes
Lets get techy!
“Once a new technology rolls
over you, if you’re not part of the
steamroller, you’re part of the
road.”
– Stewart Brand (Writer, author)
“It is a medium of entertainment,
which permits millions of people
to listen to the same joke at
the same time, and yet remain
lonesome.”
– T.S. Eliot (American poet), about radio
“I like my new telephone, my
computer works just fine, my
calculator is perfect, but Lord, I
miss my mind!”
– Anonymous
“The production
of too many
useful things
results in too
many useless
people.”
– Karl Marx
“Many people see technology as
the problem behind the so-called
digital divide. Others see it as the
solution. Technology is neither. It
must operate in conjunction with
business, economic, political and
social system.”
– Carly Fiorina (President of Hewlett-Packard
Co, 1999)
“The greatest danger in modern
technology isn’t that machines
will begin to think like people, but
that people will begin to think like
machines.”
– Anonymous
“Technological
progress is like an
axe in the hands
of a pathological
criminal.”
– Albert Einstein
“One machine
can do the work of fifty ordinary
men. No machine can do the
work of one extraordinary man.”
– Elbert Hubbard (American philosopher)
“Never trust anything that can
think for itself if you can’t see
where it keeps its brain.”
– J.K. Rowling
“If GM had kept up with technology
like the computer industry has, we
would all be driving $25 cars that
got 1000 MPG.”
– Bill Gates
“Technology is so much fun but
we can drown in our technology.
The fog of information can drive
out knowledge.”
– Daniel J. Boorstin (American historian)
44 | Outsourcing | November-December 2009
Fine telcos
for poor service
The AusTrA r liA
rA An Competition and Consumer
A
Action network
etwork (ACCA
(ACCAn) wants Aussie telcos
to literally pay for poor service.
“We think it’s only fair that a A$50 compen
compen-
sation payment should apply to consumers
affected by poor customer service,” said C CeO
of the action network Allan Asher. Asher said
the payment would be an incentive for telcos
to “get it right in the first instance” and said
it would recognise “the real costs of giving
customers the run around”.
The Telecommunications industry Om-
budsman annual report recently indicated
complaints rose by 54%.
And for the first time, more people
complained about their mobile phone
service than their landlines.
“About half of the complaints
made were about telecommuni
telecommuni-
cations companies failing to do
Are you there? … More people complained about what they already promised to
their mobile phone service than their landlines. do,” Asher said.
kudos
udos for prison-based
call centre
The prison-based telemarketing business at saying by callcentres.net website.
new south Wales’s Dillwynia Correctional “On release, she rose to the post of
Centre is already helping to profoundly executive assistant in a sales firm.”
alter the lives of those involved. The prison agents are reportedly under-
speaking at the recent 2009 Corporate taking data collection for businesses, as
excellence Awards for Corrective services well as directly calling private consumers
industries, business development manager on behalf of charities. Prisoners are not
rob steer said fifteen or so women offenders allowed to ask for or handle any credit card
work successfully and happily in a brightly details or other financial records and every
lit room at the centre. “One of the girls had call is recorded and monitored by both a
never worked a day in her life until she put telemarketing professional and a corrective
on the headphones,” he was quoted as services officer.
agents
gents reportedly told
to time their loo breaks
sTAff AT MeDiCAre contact centre in spend 92% of their time on the phone with
sydney have reportedly been ordered to counselling and disciplinary action, the
monitor their toilet time to three minutes. newspaper reported.
The Daily Telegraph reports that manag- A spokeswoman for Medicare Australia
ers at the Parramatta centre were even fol- denied having a policy that “specifically
lowing staff into bathrooms to hurry them monitored toilet breaks”. she told reporters
along. staff at the centre say the draconian that staff would not be disciplined for
productivity push unfairly targets pregnant excessive toilet use and managers had not
women and older employees. been operating as “toilet monitors”. “A log
Managers ordered all staff to fill out the of time away from work was only ever a
length of toilet breaks in a “compliance local practice and never a national policy,”
diary”, threatening staff who failed to she said. “it is no longer in use.”
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