SwarmPoint

Despite articles to the contrary IT outsourcing  is not disappearing. There is some apprehension regarding regulatory winds causing a different view on tax or immigration and putting outsource relationships under uncontrollable change but that will settle down within the first couple of months of the year. The economic drivers for outsourcing still exist and they often drive policy in practice and are likely to continue to do so. The cost savings from outsourcing of simple business processes or calling centers are overwhelming because the activity can occur almost completely offshore.

The cost saving when outsourcing more expensive tasks such as software development to India or China are only 15 to 20% due to the larger onsite and integration management component. A saving of 15 to 20% is considerable for a major IT department and this lower percentage doesn’t mean that the savings are wiped out by potential currency or cost swings in India or China. The offshore proportion of overall development outsourcing cost is relatively small. The onsite teams and employee relationship management and interaction are all onsite costs in the buyer’s own currency. The offshore component of the cost has overwhelming economic advantages far in excess of the 15 to 20% of the overall cost of the operation. If offshore costs rise by even 20% then the overall benefit of offshoring only diminishes by a couple of percent. Significant to the vendor’s margins but not to the overall rational for the process.

The other advantages of the scale of the skilled staff pools offshore and ability to ramp up and down team sizes in a very dynamic market remain completely in favor of outsourcing. As a result most large corporations are likely to want to continue to want to have the majority of their IT development staff in outsource arrangements. The BPO and KPO areas are going to account for higher growth rates and will also result over time in the complete outsourcing of the related IT support.

The significant barriers remain political but politics inevitably eventually follow the economic drivers. We will just need to see if there will be any barriers put in place.

   Send article as PDF to

Effectiveness outsourcing

By presence we mean knowing that somebody is available is if they were present. Colleagues in the office seem more engageable because we can see their availability, or the lack of it, and determine how interruptible they are. For those away from the office either on travel, in the field, or in a home office a common complaint is that people don’t contact them. Around a building when people are away from their desks we could contact people with a mobile phone but don’t because we don’t know if they are in a meeting. We could use corporate instant message tools if they are at a desk or SMS as a slightly more polite form of interruption, and the under 30s often do, but for good reasons, many don’t use SMS or mobile phones in general because the recipient may be in a meeting.

To some extent people can be encouraged to use SMS more often but there is still a strong need for presence to indicate if people are available. We can have people’s calendars but that misses the point. It is their availability that presence information tells us. The setting and delivery of the information preferably should be a mobile device.

In a corporate environment we don’t want to be mixing with many of the existing social networks and firewalls prevent use of commonly available tools so until more professional tools, possibly LinkedIn or Skype are offering the kind of presence / status information that face book provides we need to encourage the use of SMS without presence information and look out for tools like Skype and LinkedIn or others providing it on portable devices. Some major corporations are using internal messaging applications but a are generally lacking mobile integration due to cost. The business need is strong and the functionality will break out from the current implementations on mobile phones of Facebook integration or the Microsoft Live tools currently in the consumer market out into tools more acceptable in the corporate market.

What tools are you seeing people using in an office environment?

   Send article as PDF to

Effectiveness im, integration, mobile, web20