THE HOME OF THE GLOBAL SOURCING STANDARD

  • 31 Jan 2008 12:00 AM | Anonymous
    With risk avoidance, assessment and management rising high on the corporate agenda for 2008, offshoring is certain to be one area that is closely examined, along with HR (see separate article). This predicates a need for 'risk intelligence'. Historically, the UK has been risk averse, while the US has adopted more of a 'portfolio' approach, whereby any failures are more than counterbalanced by the greatest successes. Signs are, however, that the US again sees the West as wild, and has begun circling the wagons.

    Nevertheless, the global information technology and business process outsourcing market is approaching $500 billion and investments in outsourcing and offshoring have never been higher, or more critical to organisational success. To help companies address the associated risks and maximise the value of their outsourcing and offshoring strategy, Deloitte has published a whitepaper, The Risk Intelligent Approach to Outsourcing and Offshoring.

    Deloitte identifies several trends that have increased outsourcing and offshoring risks:

    • Companies rely on other parties and/or offshore entities not just for specific projects and back-office functions but more often for core business processes.

    • Increased competition for global talent has contributed to shortages of qualified talent.

    • Regulatory developments have increased exposure to liability for malfeasance or misfeasance; in some cases, senior management and the board can be held accountable for non-compliance associated with operations of organizations hired to serve the interests of the company.

    • Piracy, security breaches, and theft of information can erode brand value, intellectual property, and other intangible assets, in which companies have heavily invested in recent years.

    • A volatile political environment or infrastructure limitations in some popular offshore locations can preclude effective and efficient operations.

    • Outsourcing relationships often morph into de facto partnerships, albeit without the analysis, reporting, visibility and control that typically characterise true partnerships.

    "To deal with such complex and dynamic risks, companies must employ a risk-intelligent approach to guide decision making throughout the outsourcing/offshoring life cycle," said Mark Layton, global leader for Deloitte's Enterprise Risk Services practice. "Aligning objectives, risks and controls throughout the outsourcing/offshoring lifecycle enables organisations to identify, assess, prioritize and mitigate outsourcing/offshoring risks at the right stage."

    Deloitte identifies the following critical stages within the lifecycle of an offshoring/outsourcing relationship and addresses in detail the most important risks around each:

    • Strategic assessment: Deciding whether, why and how outsourcing/offshoring may support your business strategy.

    • Business case development: Analysing expected cost savings and other financial and operational benefits of the initiative.

    • Vendor selection: Choosing a vendor according to criteria related to the strategic assessment and the business case.

    • Contracting: Negotiating a contract that captures the needs and expectations of both parties, and addresses compliance and risk factors identified in the previous three stages.

    • Service transition: Managing the migration, or initiation, of the service in the vendor or offshore location. Monitoring the ongoing performance and risk of the relationship according to the contract and service level agreements as well as for the attainment of strategic objectives.

    "Many outsourcing and offshoring initiatives fail to live up to their potential or the expectations of the parties. Even worse, a fair number of them fail outright, leading the company to either pull the operations back in house or to start anew in the search for a reliable, mutually beneficial partner. A Risk Intelligent approach can help organizations realize the expected benefits and improve relationships among constituents impacted by outsourcing/offshoring," said Peter Lowes, Outsourcing Advisory Services leader, Deloitte.

  • 31 Jan 2008 12:00 AM | Anonymous
    You won't be seeing President Bill Gates any time soon. The Microsoft chairman was in London this week as part of what seemed to be a farewell tour from his current role as he steps down from the company he founded to focus on his eminently respectable philanthropic interests.

    Asked if he would ever be tempted to stand for President, he laughed: "I'm certainly not going to do it. I do work with politicians... I enjoy doing that... but my role is being full-time with the Foundation. There's a lot of reform and improvement that, by being off on the side and working with governments and development agencies and filling our unique role, I think that's the highest impact. But running for an election, worrying about the next election? I don't think I'll get into that."

    That said, he did run a humorous video about his last day at the office which featured him pestering Hillary Clinton about being her running mate for vice president, and phoning Barrack Obama – who pretended not to know who Gates was (“Bill who? Bill Shatner from Star Trek?”). There were no similar pleas to Mitt Romney or John McCain – but then again it was a Republican administration that set the Justice Department hounds on Microsoft in the first place.

    Leadership 'takeaways' were surprisingly thin on the ground at the £200-a-head CRM event. However, on the subject of ongoing investigations into Microsoft, his best advice to business leaders was: “Don't get sued – especially by your own government. And especially if it's unjust!”

    Gates was adamant that Microsoft's longstanding dominance of its markets did not stifle competition. "People do have lots of choice in these things. [You can] choose to user older versions, choose to use alternative things. There are tons of things out there. [In the business space there's] IBM, Oracle, lots and lots of companies. [Competition] is there, it just doesn't get covered as much."

    There were some pearls of wisdom on the ethics of doing business with certain regimes, notably China, and those central African states where human rights abuses are currently rife. His stance: it's better to be alive than to be free.

    He argued that while technology could help to drive innovation – for example, the internet allowing individuals to view a wider world than their own – it was not his job, nor Microsoft's, to try to use it to force through democracy. Although people have short memories in politics, arch-rival Google had come to the same conclusion only recently. In business, perhaps, it too is better to be trading than to be free.

    Nevertheless, Gates insisted that change would come in its own time and that refusing to get involved with dubious regimes was not necessarily going to assist them. Telling a poor African that he cannot have malaria medication, but he will soon have a vote would not have any positive impact, he rationalised. “It's always better to be alive,” he said.

    That said, Gates is prepared to talk politics to promote the work of his Foundation. After hooking up with David Cameron at the World Economic Forum in Davos, this week he was nipping round to Number 10 for tea and photos with Gordon Brown.

    It's well known that Gates had enormous influence over Tony Blair. In fact, it's suggested by some Whitehall insiders that Gates was indirectly responsible for the advent of the monstrous NHS National Programme for IT, having reportedly encouraged Blair to think big in terms of NHS IT modernisation. The paymaster for that ongoing nightmare was one Gordon Brown.

    Smile, please!

  • 31 Jan 2008 12:00 AM | Anonymous
    Outsourcing giant-in-waiting China has not escaped the economic downturn gripping parts of the West. Premier Wen Jiabao has warned of "a most difficult year" in 2008, and of “uncertainties in international circumstances and the economic environment... [and] difficulties and contradictions in the domestic economy". Such a candid assessment of the year ahead is a departure from the regime's typically robust predictions.

    The situation has been worsened by the most savage winter storms in fifty years, which have brought central, southern and eastern provinces to a standstill, leaving hundreds of thousands of people camped outside railway stations in the run-up to the lunar new year celebrations. At least 64 people have been killed by the weather so far, and rolling power outages have swept the nation, affecting tens of millions of people.

    With the Chinese government – which faces mounting criticism for mismanagement of the travel chaos – asking migrant workers to set aside their annual holiday, the risk for business now is that it may take weeks for electricity supplies and transport links to return to normal.

    In the meantime, economic uncertainty is taking hold elsewhere in the world, and the yuan is appreciating against the US dollar, making China's exports more expensive.

    China's previously double-digit growth has benefited many countries, including Australia, whose iron ore and coal industries have been much in demand. Any downturn in China's fortunes have wide-reaching consequence for the region, and its trading partners.

    It's clear that China has caught a cold, but who sneezes as a result could surprise many in the West, especially in our industry.

    Acts of God aside, the fragility of offshore business and optical communications in all parts of the world was thrown into unexpectedly sharp relief on Wednesday, as man-made chaos struck parts of the Middle East and Asia. A single ship attempting to anchor off the coast of the Egyptian port of Alexandria struck and severed two major undersea communications cables, leaving a reported 75 million people in Egypt and points east to India temporarily cut off from the Web.

    Governments in the region asked private surfers to stay offline, so that business communications could take priority while networks were rerouted, presumably via distant Atlantic and Pacific connections.

    In most cases communications were swiftly restored, but the accident remains a lesson for all of us who rely on such links, wherever we are based in the world. All desk-bound enterprises are aware how swiftly local work grinds to a halt when internet links go down, but the problem is far more acute when the failed connection is an international hub.

    Navigating the stormy seas of economic strife is one thing, but we often forget the more predictable and manageable crises that can be planned for with relative ease. Indeed, we have become so accustomed to seamless wireless communications and multinational, 24/7 business, that we quickly forget that a majority of the network is land-borne, or sub-marine. That network is vulnerable at manifold points.

    If one ship in trouble in rough seas can wipe out communications with a continent, then how easy a target have we become to a deliberate attack?

  • 31 Jan 2008 12:00 AM | Anonymous
    Today's global economy means businesses, more often than not, will find themselves working over geographical boundaries with colleagues, partners, suppliers or customers. Globalisation is far from a new phenomenon, but it's only now that companies are truly getting to grips with how to best exploit these long-distance relationships and deliver the best possible return.

    The most successful collaborative business relationships are based on a strong foundation, with each company involved working to a well-defined role, playing to its particular strengths and sharing its knowledge with all others in the partnership. Achieving this can give a valuable source of competitive advantage, maximise the productivity of everyone involved in the partnership and reduce costs. Learning to work effectively from afar can also take steps to cut down business travel and therefore lower carbon footprints and the environmental impact of business.

    But successful collaboration isn’t an easy task. Technology can now provide the means for remote parties to work together like never before, but there are many barriers to consider and overcome if a relationship is to succeed.

    Cultural considerations

    Any business relationship operating over a significant geographical distance must begin with due consideration of the many differences in how other countries operate. On a basic level, this begins with seemingly obvious but often underestimated factors such as different languages, different timezones and different national cultures. It’s not enough to just translate your normal business practices into another language; it’s about understanding how variations in culture affect how people work.

    Even something as simple as an email can be interpreted in an entirely different manner to which it was intended if adequate care is not taken and differences aren’t understood. For example, short, brusque and to-the-point emails that are commonplace in the western world can be seen to lack tact and formality elsewhere.

    Politics and history also play a major role. Take for example, India and China, two of the fastest-growing countries in the world where many UK businesses will already have experienced working with outsourcing partners. In India, during the days of the British Raj the education system was set up in English alongside other public services such as the judicial system. This historical adoption of the English language is one of the reasons for the country’s business success in recent times. In contrast, the Chinese government has retained a relatively stronger hold on its language, and since the state owns the 160 largest companies it is not uncommon for political representatives to get involved in business dealings. These factors will affect how long it takes to set-up the relationship so need to be considered in advance.

    Away from national differences, successful collaboration also rests on every partner’s will to genuinely share knowledge and change how they work to further the relationship. There is no room for rivalry or suspicion in a collaborative relationship, and if companies refuse to give some leeway in their working procedures, or insist on trying to outperform the other partners, both time and money will be wasted.

    To succeed stakeholders in the relationship must understand exactly what unique function or role they are intended to play, and trust the others to perform theirs. Lack of clear definition and accountability can cost a relationship dearly.

    Global success

    To overcome the challenges of working across large geographical distances, a number of techniques can be employed. First and foremost, companies need to remember that success will only come with time and effort – they need to be prepared to invest to make the relationship work, and to commit sufficient resources to establish the correct processes.

    Technology arguably provides the best means with which to make collaboration work, by overcoming the physical distance between all parties involved in a project. It’s no longer enough when working with remote colleagues to review progress periodically – a policy that risks inefficiencies, misunderstandings or duplication of work being noticed only after it is too late. Instead, communication needs to be made in real-time, with the ultimate aim being one single view of a project’s current status and all relevant data for everyone involved.

    Real-time collaboration can be enabled by video and web conferencing systems, which have evolved greatly over the last 10 years to allow instantaneous contact with almost anywhere in the world, crystal clear high-definition video and the ability to share resources on computers in either location.

    Unified communications and presence awareness systems can also inform employees in one location exactly who in remote offices is online at any particular time, speeding communications and reducing the amount of time wasted chasing others. In addition, many companies are now adopting web 2.0 techniques such as blogs and wikis. Blogs can allow senior management to communicate with staff, partners and customers in other countries, while project-based wikis provide an interactive forum for all staff involved, no matter what level, to express their views.

    However, technology alone cannot overcome the cultural barriers to working with companies in other countries. One way to achieve this is through training. Whenever we start working with clients or partners in a new country we run extensive cross-cultural workshops to fully educate all our staff about how the other country and how they like to work.

    Another technique is to run regular employee exchange programmes, which exposes both workforces to the others’ working culture and also gives valuable face-to-face contact to encourage teamwork and ease the collaborative process.

    The outsourcing example

    The outsourcing industry is a good example of how collaborative relationships can prosper. For example, our own customers are spread throughout the world, and we ourselves operate throughout Europe, the US, India, China, South America, and across Asia. As a result effective collaboration between our delivery centres, local offices and clients is absolutely essential.

    Our collaborative policy continues with what we call ‘two in a box’ – where we assign each client both a local and offshore manager to work alongside. This helps to minimise any difficulties that can arise when working with another country, and ensures the offshore work is completely aligned with the client’s objectives. Many earlier outsourcing projects, where work has simply been ‘thrown over the wall’ and left to the offshore team to complete with no real ongoing communication, have unsurprisingly failed.

    Another factor in the outsourcing industry that lends itself to strong collaboration is the tendency for clients to hire several IT suppliers to handle different areas of the business. In this multi-sourcing situation clarifying exactly what each partner is responsible for is of the utmost importance, with a clear structure for governance and escalation to take account of any unforeseen developments.

    It's clear that any company with global ambitions will need to learn sophisticated collaborative skills if it is to compete. As global partnerships increase, and with the continued growth of multi-sourcing arrangements, chances are we will all soon be working with more companies in more countries than ever before – and those without the ability to collaborate efficiently will pay the price. In many ways technology can make the world smaller, but it is still a diverse place. Cultural differences need to be observed if collaborative relationships are to succeed.

  • 30 Jan 2008 12:00 AM | Anonymous
    As economies of either side of the Atlantic attempt to strip risk out of the economy by wrestling with interest rates and simplifying financial structures, the need to manage risk in all aspects of outsourcing is fast becoming the theme for 2008. For example, a wide-ranging study carried out by HR services multinational Hewitt Associates reveals that the development of a risk management policy is the number one priority for HR departments this year.

    The study of 53 organisations employing a total of more than two million people also reveal fears over cultural and organisational changes, together with labour shortages and tough productivity targets. In four out of 10 organisations, HR departments said they must improve services to match business expectations, notably on issues such as demographic change, work-life balance programmes, and HR due diligence.

    The survey also found that HR departments expect to embrace new competencies and responsibilities over the period 2008-2010, while some traditional HR activities will be transferred to business operations.

    The findings are interesting, as they suggest that HR – all too often seen as a simple two-stroke hiring and firing engine under the bonnet of the enterprise – is reappraising its role, and sees the need to be more business like and proactive, but also to be less protective of tasks that may be best placed elsewhere. In a global economy, in tough economic times, and with greater pull and influx from the East, these are certainly the least risky options.

    There was some good news for HR at a time when tough decisions and bad news may be on the immediate horizon. The research reveals HR directors’ satisfaction with their jobs, loyalty to their employers and trust in their CEOs. Eighty-five percent of participants said they like their company and their role, while only seven percent would give up their HR role and move to another function. Some 40% said they would be happy to work in locations elsewhere in the world.

    As in previous surveys, talent management is where HR has the greatest impact on business performance. Organisational effectiveness, performance evaluation and leadership development are also ranked highly. However, it's fair to say that the results perhaps reflect a more positive economic environment than we find ourselves in at present, and in any catastrophic downturn HR departments are often asked to manage the loss of entire layers of management, lock down on strategic marketing, and to lose expensive employees.

    Leonardo Sforza, head of EU affairs and research at Hewitt Associates and chairman of the committee leading the study, said: “The current business context of global interdependence, of economic uncertainty, and, in some cases, of mistrust in the financial markets, is one that is likely to emphasise the need to embed sound corporate values into the daily operations of the entire organisation.

    Similarly, the strategic relevance of cross-border people issues is being emphasised by the increasing internationalisation of European business. But by confirming their own CEOs and their companies’ employees at the top of their personal trust ranking for the second consecutive year, HR executives are well positioned to 'join the dots' within their organisations, linking leadership and execution across borders.

    “However HR is also conscious that it continues to struggle to delivery consistently on – and above – business expectations. There is a shared responsibility among the different corporate functions to overcome the current gap. Better and more timely involvement of HR professionals each time that new business direction and strategies are defined – together with improved business acumen by HR – are key pre-conditions of success.”

  • 30 Jan 2008 12:00 AM | Anonymous
    Here is a statistic for you: 15 out of every 100 dollars spent in the world are spent by Americans, but they do not save at a similar rate. US workers famously have a powerful work ethic, with long hours and short holidays, but economies such as India and China now offer both a skills base and manufacturing might at a fraction of the cost. Indeed, one economist recently argued that China is exporting 'disinflation' to the world.

    Fuel bills and food prices are soaring higher than wages worldwide, but China and India are building domestic generating capacity for both at a staggering rate. Eastern Europe, meanwhile, is buying ever deeper into gas production. Gold prices hold steady above volatile and nervous markets (and will rise further as power outages in South Africa close down local production), and one thing India knows how to buy is gold.

    All of this goes some way to explaining why Americans from the dustbowl to the Superbowl will turn on the offshoring industry at the drop of a dime: as we examined last week, they think it's solely about American jobs and dollars heading East.

    While we know this isn't true, a survey in Fortune magazine proves that people believe that it is, and these are the people whose spending power has been the financial engine of the world. Signs are that the US is becoming increasingly protective of the venerable old economy held between its jagged shores.

    It's a familiar joke about the US that people in the 'square states' never travel, while people on the east and west coasts are much more connected with world affairs. However, economic anxiety has affected the US to the extent that Americans of all shapes and sizes feel as though they are now the victims of global competition – a claim other parts of the world might scoff at, perhaps, but belief can be a dangerous thing. Fortune reported that 68 percent of those surveyed felt America’s trading partners are benefiting most from free trade – that's free trade – rather than the US.

    The magazine surveyed 1,000 people this month and found that the US was on the “verge of becoming a country of economic nationalists”, with nearly 55 percent believing that growth in international trade has harmed American business, and 78 percent that it has worsened the lot of American workers as jobs fly, so they believe, overseas.

    “That sense of victimhood is changing America’s attitude about doing business with the world,” said the Fortune editorial. “We are a nation crawling into a fetal [sic] position, cramped by fear that America has lost control of its destiny in a fiercely competitive global economy. The fear is mostly about jobs lost overseas and wages capped by foreign competition.”

    It's a fear that is beginning to play a role in the forthcoming US election, and one that demonstrates how inexactly US politics map onto those of Western Europe, as Democratic candidates talk up the issue more than the Republicans. (In the UK in particular, economic isolationism is more usually the preserve of the conservative Right.)

    Presidential hopeful Barack Obama accepted his recent win in Iowa by pledging to end the outsourcing of jobs, while Princeton economist Alan S Blinder is on record as saying that communications technology risks 40 million jobs being shipped out of America in the next twenty years. The Democratic mantra is now “fair trade, not free trade”, said Fortune.

    This is all very well, and the US is lucky to have candidates with the power, intellect, passion and charisma of Obama and Clinton battling to wrest power away from the Republican old guard, but any such grandstanding to the local electorate by candidates – of any party – simply plays an easy card. In economically turbulent times we are surely more connected than ever in a global market.

    If proof of turbulent times was needed, one website reported this week that 75% of all the trading sessions on Wall Street this year have seen triple-digit moves in either direction. That's volatility of an almost unprecedented nature, and the US should be wary of rocking the boat catastrophically in its efforts to steady it, at a time when they are no longer the only boat out there worth getting on board.

  • 30 Jan 2008 12:00 AM | Anonymous
    I have devoted a number of blogs to commenting on the chilly economic winter many parts of the world are experiencing, and to an extent this has only added to the chattering of industry teeth. That said, outsourcing will increasingly be called into question over the coming months and our industry needs to know how to respond.

    Announcements today suggest that the UK – whose economic options seem limited by inflationary fears – now feels the need to be as interventionist as the United States, given that Chancellor of the Exchequer Alistair Darling has set out plans for a more US-style banking industry, to prevent another run on a high street bank.

    To an extent, this was inevitable, but the government's proposals were announced on the same day as Mervyn Peake – apologies, I mean Mervyn King (Mervyn Peake was the author of the none-more-doom-laden 'Ghormenghast' novels) – was appointed as Governor of the Bank of England for a second five-year turn.

    One of the first actions of the previous Chancellor, Gordon Brown, was to make the Bank of England more independent, whereas this announcement effectively strips Threadneedle Street of some of its powers – a policy that is arguably more in keeping with traditional Labour values. Indeed, it is rather like congratulating Mr. King with one hand, and slapping him in the face with the other (an iron handshake, no less).

    The Financial Services Authority, meanwhile – much criticised for its handling of the Northern Rock affair – will be given the right to investigate and intervene in banks' affairs at short notice. More controversially still for fans of a free, transparent market (there may still be some in the City), the new rules will allow the Bank of England to offer financial support to troubled institutions in secret.

    So it seems that the solution to the financial sector's cold snap on this side of the Atlantic is a muffler: a more secretive, more clandestine industry. To put it another way, it's a free market in camera, and one controlled more directly by a Whitehall that also seems keen to bail out private investors with public money.

    (Indeed, if you felt your tongue inching towards your cheek, you could argue that a strategy of centralised public control for the benefit of careful private investors (rather than a careless public) may be a 'push-me, pull-you' beast, but it seems to work for the Chinese, not to mention President Putin.)

    On the other hand, perhaps all this is simply an example of realpolitik, 21st century style – that brand of nineteenth century politics that was variously interpreted as a means to maintain the balance of power in Europe, as a form of polite diplomacy, or as an instrument of rampant nationalism, depending on which country you were in when you said it.

    Either way, it seems that the western economies risk becoming increasingly isolated from those of the East, while more closely modeling themselves on them – at least if a new survey published by Fortune magazine is to be believed. More of that separately...

  • 30 Jan 2008 12:00 AM | Anonymous

    Diligenta, a subsidiary of Tata Consultancy Services, has won a contract to deliver Business Process Outsourcing services to support Sun Life Financial of Canada UK's operations.

    The services, expected to commence in May 2008, are estimated to be worth £100 million (over US$200 million) over the life of the contract.

    Diligenta has been working with SLF UK as preferred supplier since October 2007, following a competitive tender which came towards the natural end of SLF UK's existing outsourcing agreement. Diligenta will continue to run the operation in Basingstoke where SLF UK's Head Office is based.

    "Diligenta and TCS will ensure that Sun Life Financial of Canada UK continues to receive market leading standards of customer service," said Phiroz Vandrevala, chairman of Diligenta. "This contract win adds significantly to Diligenta's reputation as a leading player in the UK Life and Pensions outsourcing market and is proof that the TCS promise of certainty can be translated in the UK Life and Pensions market."

    "The deal with SLF UK underlines the strength of TCS' Diligenta strategy, launched in 2006. Our vision was to establish a centre of excellence in the UK to capitalise on the growing BPO trend and to cultivate new opportunities in this sector," said A.S. Lakshminarayanan, vice-president and country head, TCS UK & Ireland. "With the Sun Life Financial deal, Diligenta is moving into the second phase of its history, expanding its client base and UK market share and we are confident it heralds further growth for Diligenta."

    Janet Fuller, Chief Executive of SLF UK explained, "We have successfully outsourced our customer services operations for over five years. In preparation for the natural end of our existing outsourcing agreement, we undertook a detailed and thorough review of the BPO market in the UK and selected Diligenta for its cost guarantees, risk transfer capability and its commitment to match or exceed our service requirements. We have confidence that Diligenta will work closely with us and our current provider to transition the services during the second quarter of 2008 - a process which we expect to be transparent to our customers. We are pleased that Diligenta will continue to run the services from Basingstoke as we are very happy with the quality of people and services provided from the current site."

  • 30 Jan 2008 12:00 AM | Anonymous
    French services bellwether Capgemini kicked off a promising 2008 by annoucing a six-year, £23 million IT outsourcing contract with UK psychometrics company SHL on 25th January. Since then, however, the deal has been placed in the familiar context of renewed rumours about a possible Indian takeover of strategic parts of the business by either Infosys or Wipro.

    The SHL win sees Capgemini signing on to upgrade and maintain its new client's IT infrastructure of about 1,000 desktops worldwide, and moving three datacentres in Europe and America to a single location in Bristol. Support will be provided by Capgemini's service centres in Poland and India, and back-up from the company's Rotherham facility.

    Andy Ross, CIO and CTO at SHL, said: "Working with Capgemini will help us meet the challenging targets we have for growth, service and cost effectiveness. Their solution gives the flexibility SHL needs at a time of significant change and will help us deliver the high service levels our customers expect from us. We look forward to an excellent long-term relationship with them.

    Capgemini Director Paul Soutter added: "We have worked closely with SHL over the six months of the bid process and, as a result, we understand the IT needs of their business and their staff, including their many qualified psychologists. We are therefore confident that we can provide the consistent and predictable growth in IT capability that they will need as their business develops over the next six years."

    Indeed, psychology may be the key to renewed speculation about a takeover, suggested Capgemini CEO Paul Hermelin: "The rumours are without foundation and have already been strongly denied," he said. "I ask myself if these practices are not above all designed to discourage our customers and potential partners at the moment when we are gaining market share and attracting new talent."

    It has been reported in the Indian IT and business press that neither Infosys nor Wipro are keen on a total buyout because European laws would prevent a restructuring that favours the Indian offshore model. No further evidence has been provided of the veracity of takeover claims.

  • 29 Jan 2008 12:00 AM | Anonymous
    India's business process outsourcing companies could attain revenues of up to £25bn by 2012, but the industry will need greater investments in education and infrastructure by the government, according to a report.

    At its current growth rate, India’s £5.5bn BPO industry will reach about £15bn by 2012, said the joint report, published by consultancy firm Everest Group and India’s National Association of Software and Services Companies (Nasscom).

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