Industry news

Outsourcing (the American for offshoring) has become a frequent tool of attack in the recent US election debates. However, the debate does seem to have helped in clarifying the difference between the relocation of services (offshoring) and the more general contracting of services to an external company (outsourcing).

In recent debates Obama has criticised Romney’s record in offshoring services and jobs to China, including the offshoring of holdings and investments in companies involved in such practices. The Republican party have also been quick to point to Obama’s hand in transferring jobs and investment programs overseas.

In the October 16th debate at Hofstra University Romney rounded on Obama, saying: “You also have investments in Chinese companies … You also have investments through a Caymans trust”. Romney said that enterprises looked to China as an attractive offshoring destination compared to the US, and as such jobs will continue to be created in the more attractive location.

Both Obama and Romney have clarified on the differences of outsourcing and offshoring. Romney senior adviser Eric Fehrnstrom, said: “Outsourcing is what the Obama campaign does when they hire an outside telemarketing vendor to provide telemarketing services," adding, “Offshoring is the shipment of American jobs overseas”. Obama touched on the common misunderstanding in passing, saying: “If you're a worker whose job went overseas, you don't need somebody trying to explain to you the difference between outsourcing and offshoring".

Outsourcing has been used as a negative point in the US election campaign by both candidates. With jobs and the economy ranking as top election issues by voters, both candidates have focused negatively upon outsourcing as a practice. Both candidates focused upon China, with Romney labelling China as a tax manipulator while Obama spoke on closing tax advantages to offshoring destinations, mentioning China.

As mentioned the blanket use of terminology has been focused upon and the differences between offshoring and outsourcing have been touched upon within mainstream media, however these instances have been rare. Outsourcing is a word that is generally thought to hold negative connotations. The common business occurrence of offshore services, and the value investments that come to the shores of the US has been avoided, as has been the link between outsourcing and the billions of dollars of investment that it generates for the US economy.

UK based Credit-ratings checker Experian has acquired the remaining 29.6 percent of Brazilian credit company Serasa that it does not already hold.

The deal has been valued at $1.5 billion and comes five years after the original deal to acquire 70 percent of the business, which had succeeded in generating large operating profits.

Completion of the purchase is expected to be finalised by the end of the year. Don Hunter spokesman for Experian said: “Since 2007, business in Brazil has exceeded Experian's expectations”.

Premier Foods owned Hovis could be sold after the owners ended a £75 million contract with a unnamed supermarket due to untenable margins.

Premier has also announced yesterday that it has increased cost cutting targets from £20 million to £60 million in light of poor margins.

Michael Clarke, chief executive at Premier Foods, called the supermarket contract “costly to service”.

The company is carrying out a review of its bread division including the Hovis brand which is facing pressure from rising competition and ingredient costs including a 30 percent rise in wheat prices.

In a move to a predominantly online based service Argos is set to close or relocate 75 stores over the next five years.

The move comes as like-for-like sales growth increased by 0.6 percent over April to September.

Parent company the Home Retail Group said: “Stores and catalogues will remain important, but their roles will be adapted in order to support a digital offer."

Chief executive of Home Retail Terry Duddy, said: "Market conditions remain fragile and hence we will continue to plan cautiously, however we are in good operational shape as we approach our peak trading period".

Chinese based Huawei has offered to provide unrestricted access and software source code details to Australia in a bid to avoid being labelled as a security risk.

John Lord, chairman of Huawei's Australian arm, in a speech to Australia's National Press Club, said: “Huawei has done a very poor job of communicating about ourselves and we must take full responsibility for that".

The announcement comes after concerns were voiced over the employment of Huawei within the USA, including a House intelligence Committee report recommending that Huawei should be barred from any US mergers and acquisitions.

Birmingham City Council has revealed that the council needs to save £600 million by 2017 rather than the originally held figure of £400 million.

The proposed cuts will job losses and a reduction in services, with further reductions based upon the provision of government grants.

Council leader Sir Albert Bore said: “"I am not looking forward to this but it has to be done" and” "This is as serious as I've known it in local government."

Rolls-Royce has been chosen to provide engines for the development of a new generation of landing craft.

The multi-million dollar contract for the new craft will see Rolls partner will Textron to provide prototype craft, with the US navy looking to buy 72 units with the potential for further orders from the navy and other departments.

The success of the contract is expected to see the creation of further business from other nations as well as future contracts from the US as the company further establishes itself within the US defence market.

Tata Consultancy Services Ltd (TCS), which ranks as India’s largest software services exporter specialising in providing BPO and ITO services, have reported profit growth of 44 percent.

The announcement comes as customers increase their uptake of outsourcing, with the global economic downfall forcing businesses to cut costs.

Despite rising costs within India and reduced margins for similar Indian companies such as Infosys, TCS have said that they expect to see increased profits throughout the next year.

Websites including Reddit and Imgur experienced disrupted service including downtime from Amazons’s Web Services Elastic Block Storage (EBS).

Services dropped within the US, focused particularly within Northern Virginia, in which Amazon stated that its service saw, "degraded performance for a small number of EBS volumes."

The service is designed for large data loads and is frequently coupled with Elastic Compute Cloud (EC2).

Past disruptions to AWS have also included downtime from powerful storms and a poorly implemented upgrades which resulted in four days of downtime.

Plans to outsource back office and management services by the London Metropolitan University (LMU) have been abandoned, following the withdrawal of the universities Highly Trusted Sponsor status by the UK Border Agency relating to illegal students.

Instead of carrying out BPO and carrying forward with a major shared services procurement process, LMU will instead look at increasing support-services within the institution.

BT, Wipro, Capita and Global Services had all submitted proposals for the delivery of the contract.