Daily Archives: February 28, 2012

IT Outsourcing will Create New Revenue Streams for Service Providers

Outsourcing is recognised as an effective way to curb costs. Rather than expend time, energy and money on getting your own IT infrastructure set up, why not get someone else to do it? This is already being experienced in the ICT industry, through the use of hosting, cloud and managed services. Egypt, South Africa, Kenya, Nigeria, Morocco, Senegal, and Mauritius, are considered to be primary outsourcing destinations in Africa, and have attracted foreign direct investments from countries like India, UK and the Netherlands. South Africa is leading the outsourcing market across areas such as customer support, financial services, legal administration and other back-office services.

If tying your own shoe laces disrupts your life, there is someone out there that will do it on your behalf – at a price. In the enterprise IT outsourcing market, technology vendors, network operators and system integrators are major service providers in South Africa. Business and knowledge process outsourcing services provide a new means of IT outsourcing, by leveraging emerging technologies such as cloud computing, data centres, and Software as a Service (SaaS). Outsourcing, will not only facilitate the improvement of customer services, through deploying cost-effective IT platforms, such as Infrastructure as a Service (IaaS) and SaaS, but also reduce Capital Expenditure (CAPEX) and Operational Expenditure (OPEX), particularly for service providers with international footprints.

IT and customer support services are fast becoming the most outsourced services by enterprises. These two service categories require outsourcers to procure necessary hardware and software to support the provision of IT systems and contact centres. IT and customer support outsourcing services provide an opportunity for leading telecommunication equipment vendors, such as Ericsson, Nokia-Siemens Networks, Alcatel-lucent, Huawei Technologies, ZTE Corporation, and network operators such as Vodacom, MTN, Airtel and Orange, to provide network infrastructure, hardware, software and devices required in the outsourced enterprise IT systems. These companies have one thing in common – they specialise in infrastructure development and enterprise communication networking services, such as cloud computing and managed services.

Tying shoe laces may seem like an easy task, but what if you needed the knot to look like a butterfly, with one wing slightly larger than the other? Firms that require specialised services have a higher propensity to outsource. IT outsourcing is becoming popular as new emerging trends such as unified communications, managed services, cloud computing (i.e. hosted data centres) and enterprise mobile applications arise as new solutions to assist enterprises in reducing OPEX. Nevertheless, the deployment of such solutions requires significant investments in network infrastructure in order to build new systems and/or integrate them into existing IT architecture of enterprises. IT outsourcing (i.e. managed/hosted IT services) is, therefore, a unique and innovative area to generate new revenue streams for channel partners, including internet service providers (ISPs), system integrators and network operators.

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Offshore Outsourcing Can Boost Agility

Most corporate leaders decide to offshore IT services to cut costs — that’s as true today as it was at the dawn of the offshoring era. But labor arbitrage fades, according to an ongoing offshore outsourcing study researchers are conducting at Duke University. In fact, it disappears after three years.

And when it comes to other oft-cited drivers for shipping IT functions overseas, the benefits may be diminishing as well, researchers at the Center for International Business Education (CIBER) and the International Offshoring Research Network’s (ORN) Project at Duke’s Fuqua School of Business have found.

While 53 percent of corporate leaders surveyed by ORN in 2010 reported that offshoring provided them with better access to qualified personnel, just 40 percent said the same in 2011. And the 46 percent of executives who said offshoring resulted in improved service quality in 2010 decreased to 41 percent last year.

Read More:

http://www.cio.com/article/700906/Offshore_Outsourcing_Can_

Boost_Agility

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Has IT outsourcing created the UK skills shortfall?

A colleague interviewed John Harris, chairman of IT user group The Corporate IT Forum and chief architect and vice president of global IT strategy at GlaxoSmithKline, recently and got his views of the UK skills shortage.

He, like many others, is of the opinion that years of outsourcing commodity IT skills is contributing to a lack of grass-roots IT talent today, because the talent pipeline is not being fed at the bottom end.
"While outsourcing did bring value, people moved jobs that should not have been moved. We outsourced our skills pipeline," he said. Young people were not being given a chance to come into the industry.

"Yes, it may be more economical to outsource to India, but such a job may be the type of work that gives an apprentice a real grounding [in IT]," he said.

There has been loads in the press lately about the IT skills gap and genuine attempts to address the shortage of IT students that are capable of breaking into the corporate IT sector.

Outsourcing service providers themselves are getting involved in a Ministry of Justice and Business in the Community backed the project which aims to help students further their careers in IT. Nine of the biggest UK IT service providers have agreed to a charter for employing IT apprentices. These are Accenture, Atos, Capgemini, CSC, Fujitsu, HP, Logica, Siemens and Steria have all signed up to the charter.

Azim Premji, chairman at Indian IT outsourcing firm, has even offered to take UK students to India for 12 months to be trained up in software, IT and engineering.

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Apple: Why Won’t They Pay Dividends?

Apple Inc. (NASDAQ: AAPL), the iconic technological behemoth and wildly successful iPad and iPhone maker, again refrained from announcing that the company will start paying dividends, despite a huge amount of cash on its balance sheet and clamor from some stockholders.

International Business Times spoke with three experts about Apple’s recalcitrance to pay out dividends.

Michael Yoshikami is chief executive and chairman of Destination Wealth Management in Walnut Creek, Calif.

Michael McGervey is president of McGervey Wealth Management in North Canton, Ohio.

Anna N. Danielova, Ph. D., is assistant professor of finance at the DeGroote School of Business in Hamilton, Ont.

IB TIMES: Is it unusual that Apple pays no dividends?

DANIELOVA: No, about 70 percent of firms or more do not pay dividends.
Among those are high-growth companies which choose not to pay dividends for the following reasons: they need to finance their growth and internally-generated earnings are cheaper, so all generated earnings are reinvested back; and their shares are presumably mostly held by investors who prefer capital gains over dividends.

Source: http://www.ibtimes.com/articles/305157/20120227/apple-dividends-tim-cook-china-google-microsoft.htm

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