Monthly Archives: October 2010

Software Outsourcing China

 

by Xinhua News Agency

Profile of China’s software industry in Jan.-Sept.

China’s software industry’s revenue increased 30.3 percent year on year to 968.2 billion yuan in the first nine months of 2010, up 10 percentage points than that of last year.

The industry’s revenue was 257.3 billion yuan, 347.5 billion yuan and 363.4 billion yuan in the first quarter, second quarter and third quarter of this year, respectively, an increase of 25.7 percent, 31.8 percent and 32.3 percent year on year.

The industry accomplished the highest business revenue of this year in September to 139.6 billion yuan, an increase of 33.7 percent year on year, or 6.4 percentage points than that of August.

Chart 1 shows revenue growth of China’s software industry in the first nine months of 2010:

– Development of sub-sectors

Revenue from value-added information technology (IT) services posted outstanding progress in the first nine months of 2010, and revenue from software design and development showed a robust rebound.

Table 1: Business revenue of different IT services in Jan-Sept 2010 Service category Revenue (billion yuan) Growth year on year (percent) Software products 324.6 25.1 System integrated & supporting service 211.9 27 Embedded system software 164.2 24.1 Value-added IT services 125.6 40.6 IT consulting & management services 89.8 39.6 Software design & development 52.1 69.4

The following Chart 2 shows the revenue constitution of China’s software industry in January-September.

– Development in different regions

In the first nine months of this year, software business revenue growth in eastern China rebounded rapidly, while that in western China climbed slowly.

Table 2: Software business revenues in different regions in Jan.-Sept. Region Revenue (billion yuan) Share in the industry’s total (%) Year on year growth in (%) 2010 2009 Eastern China 841.8 87 % 31.1 19.2 Western China 73.9 – 26.1 30.7 Central china 52.5 – 24.1 21.7

Chart 3 shows software revenue growth in different regions in the first nine months of 2010.

– Exports of software and outsourcing of services

China’s software export value grew at a slow pace in the first nine months of this year, and the outsourcing service export value showed steady development.

Table 3: China’s exports of software and software outsourcing services in Jan.-Sept. Category Export value (Billion USD) Growth year on year (%) in 2010 Growth year on year (%) in 2009 Software 16.5 23.8 39.4 Outsourcing service 2.05 32.7 –

Chart 4 shows the export growth of the software industry in the first nine months of 2010.

Moreover, 15 sub-provincial central cities accomplished software business revenues of nearly 525.1 billion yuan in the first nine months of 2010, rising 32.8 percent year on year, accounting for 54 percent of the national total. Revenues from the software industry in five cities, including Ningbo, Qingdao, Nanjing, Guangzhou, and Harbin posted year-on-year growth of over 35 percent.

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Using Ruby on Rails for Web Development on Mac OS X

 

by Developer.apple.com

The Ruby on Rails web application framework has built up a tremendous head of steam over the last year. Fueled by some significant benefits and an impressive portfolio of real-world applications already in production, Rails is destined to continue making significant inroads in 2006. Simply put, Ruby on Rails is an open source tool that gives you the advantage of rapidly creating great web applications backed by SQL databases to keep up with the speed of the web. And with the release of Rails 1.0 kicking off the new year, there’s never been a better time to climb aboard.

It should come as no surprise that Mac OS X is a favored platform for Rails development. Rails and its supporting cast of web servers and databases thrive on the rich Mac OS X environment. A popular text editor used by many Rails programmers is TextMate, a Cocoa application. And all members of the Rails core development team work with Macs.

This article introduces you to Ruby on Rails by building a trivial web application step by step. Consider it a ride on the express train—an overview of what Rails can do, including a look at features new to Rails 1.0. In the end you’ll be better equipped to consider the advantages of powering your web application with Rails.

Why Ruby on Rails?

First, you might be wondering: Web application frameworks are a dime a dozen, so what’s different about Rails? Here are a few things that make Ruby on Rails stand above the crowd:

    * Full-Stack Web Framework. Rails is an MVC web framework where models, views, and controllers are fully integrated in a seamless fashion. That means you automatically get all the benefits of an MVC design without the hassle of explicitly configuring each component to play well with the others.

    * Real-World Usage. The Rails framework was extracted from real-world web applications. That is, Rails comes from real need, not anticipating what might be needed. The result is an easy to use and cohesive framework that’s rich in functionality, and at the same time it does its best to stay out of your way.

    * One Language: Ruby. Everything from business logic to configuration files (there aren’t many) are written in the Ruby programming language. With just one language, you hope it’s a good one, and Ruby doesn’t disappoint. Ruby is a full object-oriented language with clean syntax and it has a way of making programming truly fun. Using one language means you don’t have to juggle between multiple languages and dialects as you’re building your application.

    * Convention over Configuration. Rails works hard to take care of all the repetitive and error-prone chores associated with starting to build a web application, and maintaining it over time. Rails uses simple naming conventions and clever use of reflection to make your work easier with near-zero configuration.

    * It’s Productive! At the end of the day, Rails is all about helping you stay productive. And in a world where being the first to market and keeping customers happy adds up to increased revenues for you, it pays to pick a tool aligned with those goals. Many real-world applications are already reaping the benefits.

All that being said, the best way to judge Rails is to experience it while building an application. So let’s get right to it.

Installing Rails

The version of Ruby that shipped on Mac OS X Tiger prior to v10.4.6 did not work well with Rails.   If you’re running an earlier version of Tiger, you’ll need to either upgrade to 10.4.6 or upgrade your copy of Ruby to version 1.8.4 or later using the open source distribution.

And to do any serious Rails development you’ll want to install a production-quality web server, database server, and a few other goodies. Thankfully, a golden-path installation guide is already available.

…

Read More

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Software Outsourcing – the New Trend That is Proving Highly Profitable

 

by Articlesbase.com

Software outsourcing is the new business that is witnessing a big boom and every software company worth its salt wants to make the most of this wonderful opportunity. India has over time proved to be the most sought after destination for software outsourcing, the main reason for this software outsourcing trend being the quality of output provided by the highly experienced and skilled team of Indian officials. Outsourcing has also been beneficial for the software companies as it has opened up a whole new world of opportunities and has resulted in a high rate of profit for the company involved.

Software outsourcing is beneficial to the foreign companies as well. Outsourcing helps to cut down costs drastically. The foreign companies make a saving of 40-50 % by outsourcing to India. Outsourcing to Indian companies ensures a high quality output with timely submissions and at a fraction of the cost that they would actually incur. Thus, software outsourcing definitely helps to make a huge saving for the company that is outsourcing the work. Outsourcing can be carried out either personally by hiring professionals in the field or through agencies who undertake such work. India with its huge pool of experienced, talented and skilled personnel proves to the best available option for foreign companies as Indian companies are in a position to undertake highly complex projects and understand the significance of meeting deadlines – all at very attractive rates.

India offers varied services that are not restricted to the field of software outsourcing alone. US companies are the main clients that the Indian IT firms cater to followed by the UK, Germany, France and several other developed nations that find India to be a very attractive destination when it comes to custom software development outsourcing. Statistics go to show that as high as 40% of all IT work is from India. Cost factor is a major attraction when foreign companies take into account Indian companies for the purpose of outsourcing. By making a huge saving in terms of cost, the foreign companies stand to gain by having additional funds available for investing elsewhere which would be helpful in furthering their business prospects.

Before actually making the decision to make the outsourcing deal and signing on the dotted line there are several factors that must be considered and evaluated. The company outsourcing work should first take into account the expertise and experience of the software company to which the work is being outsourced. The history and performance of the company in the field and the skill that they have for taking up the assignment must be properly studied. The credibility of the company in the particular field must be considered before handing over the work. Most IT consulting companies in the field are working towards getting certifications like ISO that are accepted internationally and itself speak for their quality and competence. All aspects of the company taking the work must be considered and proper evaluation of their services, the infrastructure available, the experience and the capability of the company to actually undertake the project must be carried out before outsourcing the work.

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Chart Your Business Success With Software Outsourcing Services

 

by Articlesbase.com

Most established businesses need software services and there is no dearth of software outsourcing firms today. An intelligent team of software experts are involved in testing, development solutions and validation of tests. For various reasons, companies are seeking the help of software outsourcing services for plan and execution of vital projects. What are the advantages or disadvantages of hiring a outsource software consultancy firm? Read on and resolve your doubts on the effectiveness of outsourced software services.

The software industry is developing at a rapid pace and companies are increasingly feeling the need to hire qualified professionals who can offer them the requisite support. The option of software outsourcing firms is gaining huge popularity to help satiate large establishments and their rising software related requirements. Not just big businesses, even small businesses can benefit from the assistance of outsourced software services to cut costs. In fact outsourcing software requirements to establishments effectively monetizes spending of business players.

Consider this, 40% of the Fortune 500 companies including Motorola, Microsoft, GE, Oracle, Lucent are taking advantage of outsourcing today and the list of companies is steadily growing, with software outsourcing being the lead area. The objective for this move is to ensure maximum ROI while reducing costs and an effort to ensure that the company remains a leading player in the industry. Companies stand to save anywhere between 40%-70% by adopting offshore software outsourcing.

However, software outsourcing requires proper synchronization between teams to help the company attain its goals. Every year an increasing number of software engineers emerge from Indian universities. Knowledge of English and a tendency to update their knowledge according to requirements makes Indians a popular option for foreign companies to hire them for software projects, as and when required.

Employees of software outsourcing firms benefit from special tax benefits and even the ability to switch jobs according to the pay offered and convenience. However, employees shifting to jobs which offer greater remuneration might not work well for the employers of software outsourcing services. For the software engineer, the fear of a project closure would result in serious health problems and even monetary woes. Time difference between countries could also spell problems for companies opting to outsource software services.

In today’s scenario most businesses have technology in their hands, require delivery in possible least time, less skilled personnel available, discrete communication and inefficient management of various modules within a large enterprise – it appears that outsourcing software services is surely a safe bet in these circumstances.

Offshore software outsourcing can be difficult to implement, controversial and confusing. There is no dearth of information resources available online to help you choose the ideal outsourced software consultancy for your needs. For enthusiastic individuals who want to set up a software outsourcing consultancy at home, remember, you need to have the ability and time to manage the product requirements of a large or small establishment. You need to understand the premise of the project before you undertake it and cater to the changing demands and requirements of the market.

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Is Software Outsourcing the Answer to your Software Problems?

 

by Articlesbase.com

Figuring out whether or not software outsourcing is the answer to your software problems is not necessarily a tough question to answer but it is a question which involves careful consideration. There are a series of questions which ought to be be asked to help judge whether or not outsourcing is a smart choice in a individual circumstance. Examples of some of the questions which ought to be asked are:

* Are there in-house staff members experienced enough to solve the software problem?
* Do present workloads allow in-house staff members to toil on this problem?
* How costly will it be to outsource the work?
* What are the advantages of outsourcing the problem?
* What are the major disadvantage to outsourcing the work?

This article will examine each of these questions and supply understanding into how these questions can be used to help make this extremely important choice.

The Capabilities of In-house Staff Members

"Outsourcing and globalization of manufacturing allows companies to reduce costs, benefits consumers with lower cost goods and services, causes economic expansion that reduces unemployment, and increases productivity and job creation."
~~ Larry Elder — "The Larry Elder Show"

Many software problems demand immensely specialized experience to fix the issues. It is frequently the case that a company’s in-house staff members do not possess the capabilities of fixing these software issues. When this occurs software outsourcing to a professional is the undeniable choice. Even so, in situations where the in-house staff members are experienced enough to fix the problem, the issue of whether or not to outsource becomes more complex.

Those tasked with determining the choice frequently weight the options by taking into account the expense of software outsourcing versus the speed at which the problem would be fixed in both cases. If there is an authority freely obtainable to tackle the problem it will most likely be solved comparatively swiftly. That said, if in-house staff members are currently overburdened, they may not be able to make this problem a high priority.

The Workload of In-house Staff Members

The workload of in-house staff members usually comes into question when looking at whether or not to outsource a certain software associated job or tasks. In the former segment we discussed the value of software outsourcing when the in-house staff members are not experienced enough for certain tasks. Even so, this is not many times the circumstance. Frequently in-house staff members are perfectly capable of accomplishing a job but they are not able to do so because of their present workload. In a circumstance when all of the in-house staff members are unavailable to take on additional tasks, software outsourcing again becomes a sensible choice.

"The other part of outsourcing is this: it simply says where the work can be done outside better than it can be done inside, we should do it."
~~ Alphonso Jackson — Secretary of the United States Department of Housing and Urban Development

Will Software Outsourcing Save Money?

One of the primary factors companies think about when they contemplate software outsourcing is whether or not they will save money by software outsourcing. Hiring an authority on a contract basis can definitely be costly but it is frequently a profitable investment especially for highly specialized jobs. The cost of software outsourcing is normally higher in terms of the hourly pay of the staff member but overall the total exspense may be lowered. When contemplating jobs performed by in-house staff members it is extremely important to understand the price of the work includes the staff member’s hourly wage, the cost of benefits such as social security, Medicare and workers’ comp and resources such as office space, hardware, office supplies and additional incidentals. After factoring in all of these expenses it becomes crystal clear that software outsourcing isn’t always the more costly selection.

An additional aspect to think about when calculating the costs of software outsourcing is how rapidly the problem can be solved by outsourcing as opposed to handling the problem in-house. This will hang on on the capabilities and availability of the in-house employees. If there is not a capable employee readily available it may take considerably longer to handle the problem in-house.

The Advantages of Software Outsourcing

At last, the advantages of software outsourcing have to be considered in choosing whether or not to outsource certain tasks. We have previously touched on a few of the advantages of software outsourcing but for the benefit of completeness we will incorporate a list of a few of the most significant advantages below:

* Decreased labor expenses
* Access to industry experts
* Flexibility in scheduling
* Increased manpower

With so many advantages it is totally clear that software outsourcing can be a sensible solution to many software problems. The bottom line in choosing whether or not to outsource a certain software problem frequently involves comparing the advantages of outsourcing to the costs of software outsourcing.

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Joomla Development

 

By Karolos Tsiligkirian, Ezinearticles.com

There are many advantages of using Joomla in comparison with other web design platforms. Let’s look at some of these advantages:

(1.) Joomla is in reality a complete CMS – that is a content management system. A CMS ensures that the pages of a website can be easily updated, as well as maintained. For example, it includes the addition or removal of some of the pages, and the dividing of content to separate categories. This is a very big benefit compared to making a website in straight forward HTML or Dreamweaver (or any other HTML editor).

(2.) But, what is the main reason behind using Joomla? Why don’t we use anything else, for example, a product based on Microsoft or IBM or any other kind of commercial product. Joomla is a free and open source product. It means that you have no need to pay any kind of fee for licensing that you would usually pay for commercial products of bif companies. As Joomla is open source there is a big pool of community sources available for providing assistance and support. The community of Joomla is available worldwide in all countries and there are a number of groups of local users who support it extensively with Forums and extra add-ons. There is a forum on the website Joomla.org that has around 200,000 members in total and they all provide input, as well as support into the process of making Joomla the best CMS platfom you can find.

(3.) A good reason for using Joomla is that it is very easy to extend its functionality. You can easily make anything with the help of its infrastructure. It can be a simple brochure website, an interactive membership site or even a fully featured shopping cart. The reason behind this is that there more than 5700 extensions for Joomla, for every possible use. Just name it! Image galleries, forums, shopping carts, video plug-ins, blogs, tools for project management and many more.

(4.) But again, some people state that they they prefer WordPress instead of Joomla. WordPress is also very popular and makes it easy to add some new pages or categories. WordPress also has many templates available, and this makes it a very attractive alternative for making websites quickly, as well as easily. WordPress is a fantastic blogging platform with CMS features. But of you need a real extendible CMS, Joomla is the best tool, especially for medium to big size websites. This complexity doesn’t mean that the design aspect is lagging. Joomla sites can be extremely pleasing to the eye! Just check out portfolio.

(5.) ACL. Joomla provides an access restriction system. There are different user levels with varying degrees of access control. Access restrictions can be defined for every content or module item. In the new Joomla version (1.6) this system is ever more powerful than before. The power of this ACL system is light-years ahead of that of WordPress.

(6.) SEO Friendly. Joomla is very friendly to the search engines. In case of very complex websites, it is sometimes necessary though to invest in SEO plugins like SH404.

There are a number of web applications that are used for the development of a website. Out of all these applications, Joomla is one of the top-3 most demanded CMS platforms. Joomla is used for simple sites, marketing portals, presentations, newspapers, ecommerce sites and many others.

You will be able to find a lot of information about Joomla on a number of search engines. You should remove the thought from your mind that the web development companies are going to cost you an arm and a leg, when you tell them about your plan for making the perfect website. This is not true. Creating the desired website by means of Joomla can become the best way by which you can save your money.

Why? Because it facilitates Rapid Website Development, it provides open source and it reduces the "code maintance" costs. Contact us for more information.

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Increased Cloud Computing Not Far Off for Mac and Apple Product Fans

By J.A. McLynne

Techno geeks have been chatting up cloud computing all over the Internet over the past few years. It has reached deep into the lives of Internet surfers in more ways that were only dreamed of just a few years ago. The development of cheap storage devices has allowed establishment of huge data centers that reach across the globe and into your home. These servers stand ready to accept any data that you want to feed them. In some cases they may even take data without you even being aware of the theft.

These data centers contain thousands of servers and disk drives whose primary task is to collect and save data from the Internet. All that these computers do all day and night is slurp up as much data as they can from the Internet. For example, a recent CNN article reported that a cloud computing center run by IBM outside of San Jose stored more than a petabyte of data. This is enough storage to hold billions of photographs and books.

It will not take long for this data storage facility to fill to capacity and more storage devices will need to be added to the facility. One company that is looking forward into the cloud computing era is Apple. Yes, Apple is jumping into the cloud computing market. The Chief Financial Officer for Apple, Peter Oppenheimer stated in the 2010 Third Quarter Earnings Call that Apple was building a billion dollar data storage center in Malden, NC. Oppenheimer said that the facility construction was on schedule.

Apple has stated in a recent press release that the data server center will support the iTunes and iPhone Apps store. However there is some speculation among Apple bloggers, like Paul Acciavatti at modmyi.com, that this center contains a huge amount of data storage capacity, much greater than being stated by Apple. The new center may be used to allow anyone with iTunes to store their music and videos on line ie, "in the cloud," so that the files and information can be accessed anywhere they may travel. Apple may also include a MobileMe capacity as well. A well connected applications database may virtually eliminate the need for an operating system on your computer.

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Cloud computing: 5 tips as GSA goes on-demand

by Bernard Golden (CIO (US))

The most interesting cloud computing I saw this week was the announcement that the General Services Administration (GSA) has awarded 11 companies the opportunity to participate in the apps.gov portal, offering IaaS services.

The list of companies is an interesting mix, including cloud pioneer Amazon, large companies like Verizon, defense contractors like General Dynamics, and relatively small players. Almost all of the awarded contracts are offered via a joint venture arrangement between two or more players, typically one with technology and one with government knowledge and experience.

This award has been a long time coming. Apps.gov has been up for over a year, offering SaaS services. If you’re not familiar with apps.gov, it’s a portal, sponsored by the GSA, that allows government agencies (including state and local entities) to obtain cloud computing services on-demand with the contracts and due diligence already performed and in place. The IaaS portion of the award process was put out for bid and then withdrawn, to be released for bid once more. So the IaaS portion of the portal is finally, at long last, underway (the awardees still have to complete a FISMA (Federal security regulation) Certification and Accreditation process before finally being ready to do business via the portal).

Apps.gov reduces the burden for agencies that want to use cloud computing but don’t want to take the time (or don’t have the ability) to perform assessments and contract negotiations on their own. And, presumably, the GSA obtained very favorable pricing by combining all of those entities’ demand. This allows individual government agencies to save even more by taking advantage of cloud computing via the apps.gov portal.

So, the awards mean that, subject to the FISMA process, government agencies will have immediate, on-demand access to IaaS services. What will that mean? Here are five things that Federal (and state and local) agencies should expect:

1. More adoption than they foresee

I wrote about the way on-demand IaaS has been driven by developers. The government employs lots of developers and contracts to companies with tons of developers. Now that developers will have an approved method of using on-demand IaaS, look for a onslaught. A year ago I spoke with several members of the Federal Cloud Computing Steering Committee and shared that they should expect a ton of use once IaaS went up on apps.gov. Just as commercial software engineers have embraced AWS as a low-friction way to develop systems, once an approved government IaaS offering is available, the same phenomenon will occur.

2. An enormous acceleration to application development

People used to everything taking forever react to on-demand IaaS with a dumbfounded look, amazed that resources can be so easily obtained. Once you clear out all the endless, time-consuming back-and-forth necessary in most environments to obtain resources, it’s astonishing how much more productive people become.

3. Lots of confusion

To its credit, the Federal government is being extremely aggressive about cloud computing. The Department of Defense has its RACE cloud. The Department of Interior is building a cloud, with the vision of sharing it with other agencies. There are undoubtedly many more cloud construction initiatives underway as well. Inevitably, some of the "private vs. public" cloud controversy will adhere to the decision process regarding which cloud offering to use. Moreover, just the plethora of choices tends to induce paralysis by analysis.

4. An ongoing challenge to developers

Creating elastic, scalable apps doesn’t just happen. New design patterns need to be applied to allow applications to gracefully grow and shrink without operations personnel getting involved in software installation and configuration. There’s a learning curve to getting the hang of creating cloud apps, and that curve affects every group in application development. From this perspective, having an easy onramp to IaaS resources like apps.gov can make it easier to experiment with these new design patterns and provide an ideal learning environment.

5. An ongoing challenge to process

Applications developed on the apps.gov IaaS with the belief that "it’s just for the dev and test part of the project" will naturally end up becoming production applications–especially once the realization sinks in that the application that has been developed now has to go back through the tedious and lengthy ‘official’ release to production process. The temptation to just get started, perhaps with the rationalization that "we’re just testing it as a prototype" will be impossible to resist. I’ve written about this challenge several times, and if you haven’t seen our video on the "cloud boomerang," discussing the unforeseen return of applications to unprepared operations groups, you might find it helpful.

The Federal Government really deserves a hat tip for its aggressive pursuit of cloud computing (and not a moment too soon: it just announced that it has found another 1000 data centers that heretofore were unaccounted for!). The apps.gov offering is an outstanding initiative and should be acknowledged as a signal achievement. I’m looking forward to when the first offering gets through FISMA.

Bernard Golden is CEO of consulting firm HyperStratus, which specializes in virtualization, cloud computing and related issues. He is also the author of "Virtualization for Dummies," the best-selling book on virtualization to date.

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More outsourcing buyers opting to restructure contracts

from Consultant-News.com

3Q10 TPI Index shows delay in overall outsourcing market’s gradual recovery due to continued weakness, uncertainty in global economy.

More outsourcing buyers opting to restructure contracts

TPI, the sourcing data and advisory firm, released data showing a sharp increase in outsourcing contract restructurings but a delay in the overall outsourcing market’s gradual recovery due to continued weakness and uncertainty in the global economy.

The 3Q10 Global TPI Index, which measures commercial outsourcing contracts valued at $25 million or more, recorded total contract value (TCV) of about $14 billion, down more than 20 percent from both the previous quarter and the same period last year. While market activity typically slows in the third quarter, this year saw the lowest third-quarter TCV in five years.

Restructuring activity, which includes renegotiations, renewals and extensions of existing outsourcing contracts, totaled $6.8 billion during the third quarter, or 48 percent of the global market. Year to date, restructurings have accounted for 34 percent of overall TCV, compared with typically about 20 percent over the past three years, and have increased 56 percent over 2009, influencing results throughout the outsourcing market.

The uptick in restructuring activity can be attributed to three factors in the market:

• Economic conditions have caused many companies to be tentative about new outsourcing adoption.
• Existing outsourcers are increasingly attracted to the quicker returns and lower risk promised by restructurings.
• Longer-term contracts – the 7- to 10-year agreements awarded in the early 2000s as well as the 3- to 5-year contracts typically awarded more recently – are now coming up for renewal at the same time.

“As we predicted earlier this year, 2010 is shaping up to be a year driven by restructuring of contracts as organizations look to identify opportunities for cost reduction and greater efficiency,” said John Keppel, Partner and Managing Director, TPI Research, Analytics and Intelligence. “We expect to see restructurings continue to be a significant organic force in the outsourcing market in the future.”

Third-quarter outsourcing market performance varied substantially by scope, region and industry sector, the TPI Index found.

By scope, contract awards in both IT outsourcing (ITO) and business process outsourcing (BPO) declined in the third quarter. ITO values have dropped off since a strong first quarter, resulting in flat TCV year-to-date. BPO contracts also fell from the previous quarter, and year-to-date TCV awarded in that scope is down 15 percent. About one-third of the BPO TCV awarded so far in 2010 has been restructuring-related, an indication that this younger segment of the market is now maturing.

By region, differing outsourcing market maturity and economic climates are playing a major role in whether companies decide to enter into new contracts or choose instead to restructure existing agreements. Contract values declined in both the Americas and Europe, the Middle East and Africa (EMEA) during the third quarter, though the data indicate some stabilization in EMEA.

Among the industry sectors that historically have driven overall outsourcing market performance, Financial Services saw substantial contract award activity in the third quarter, largely due to the restructuring of some EMEA-based contracts with TCV of more than $1 billion. However, Manufacturing and Telecom & Media continue to recover at a slower pace.

“After some growth in the early part of the year, global outsourcing market activity in the third quarter slowed considerably,” said Keppel. “However, we do anticipate a significant improvement in performance in the fourth quarter even with the sluggish economy.”

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IT outsourcing models need to evolve with technology

 

by Jason Morton

The IT sector has been undergoing significant changes in recent years, with many custom solutions now available, to businesses, from third parties. This shift makes it ever more crucial for companies to analyse their outsourcing business models and adapt to market conditions and the overall trading climate.

According to research firm IDC, both customers and third-party vendors alike will need to adjust their outlooks for new technologies. Most importantly, it said, while customers become more aware of emergent technologies, they will have raised expectations of what they might receive from a particular service.

The key, according to experts, is adaptability.

"Perhaps the greatest lesson of the Great Recession is the need for companies to be much more adaptable to changes in the market," according to David Tapper, vice president for outsourcing and offshore services market research at IDC.

The economic downturn of the past few years has been widely accredited with fuelling developments in these new technologies, though improvements continue to be made, even as western economies pull out of the slump.

"This fundamental need is a major force driving considerable shifts in the outsourcing industry – shifts that not only involve provisioning more targeted and innovative solutions – but also involve the transformation of the outsourcing industry from a labour-centric model of service delivery to more asset-based services involving cloud-based outsourcing," Tapper told IT Pro.

While competing analysis from Gartner suggests customers may continue to use the same companies for traditional IT and new technologies, though researcher Rene Millman suggested businesses should look around before settling for their current supplier.

"If you’re happy with the relationship with your current suppliers it is probably going to make more sense to stick with them. But if [their services] are not fit for purpose, you’ll have to look further afield," Millman said.

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