UK insurance jobs head to India
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The UK's biggest insurer, Aviva, announces plans to cut 4,000 jobs at its Norwich Union business by 2008.
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It plans to begin manufacturing in India in the first half of next year, with an initial focus on the production of desktop computers.
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Aviva PLC, Britain&#39;s biggest insurance company, said Wednesday it will create about 950 offshore jobs in India and Sri Lanka next year to service its UK operations.
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Insurance giant Norwich Union has announced plans to move its business to India in a move which will lead to compulsory redundancies in Britain.
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Microsoft on Tuesday announced its decision to localise Windows and Office software in 14 Indian languages over the next 12 months and that the company would hire &#39;hundreds&#39; in India this year.
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Don't put all your eggs in one basket India will likely remain the offshore king when it comes to firms farming out IT skills abroad, but businesses are increasingly looking to spread the risk by adopting several locations, according to Gartner.â¦
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Microsoft is to form multi-million pound partnerships with two Indian software firms, and is expected to double the 1,500 people it already employs in India.
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Norwich Union is to offshore 950 jobs to India and Sri Lanka next year, with the loss of work in Norwich and York. The insurance giant said it will do all it can to minimise compulsory redundancies by redeploying staff to alternative jobs.
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As British unions cry foul over an exodus of jobs to Asia, one Indian information technology firm is bucking the trend, hiring 250 more staff at a call centre in Northern Ireland.
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French IT services company CapgeminiÂ will have more staff in India than any other country by the end of this year, as it expands its offshore services delivery from that nation.
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Royal &amp; SunAlliance, second-biggest general insurance company in Britain, announced on Monday it will transfer as much as 1,100 jobs to India to raise the number of employees in the country to 1,200 within a couple of years.
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British insurance company Aviva plans to reduce its U.K. staff by 4,000 by 2008, and move 1,500 IT and BPO (business process outsourcing) jobs to India in a bid to save Â£250 million ($468.6 million) annually.
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UK insurance giant Royal &amp; Sun Alliance is to offshore some 1,200 back office and call center jobs to India over the next two years.
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The foiled terrorist attacks in Britain have prompted anxiety and soul searching in India, whose economy is bolstered by its citizensâ ability to work overseas.
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Indian outsourcers already have a large share of outsourced application development and maintenance and are dominant in business process outsourcing. The country is now targeting a larger share of the market for remote infrastructure management services (IMS), and is planning to more than double revenue from these services to $15 billion by 2013.IMS involves managing an enterprise&#8217;s core IT systems, including hardware, software, connectivity and people. The IMS industry is moving towards a remote delivery model where services are increasing delivered from low-cost locations by service providers and wholly-owned services subsidiaries of user companies, according to a report released Thursday by India&#8217;s National Association of Software and Service Companies (Nasscom).Customers in the US and Europe are increasingly willing to outsource IMS to offshore locations, because the data does not move out of the home countries, and is only managed remotely, said Siddharth Pai, a partner at sourcing consultancy firm,Technology Partners International (TPI) in Houston, Texas.In India, IMS business is going both to Indian outsourcers, and the Indian operations of large IT services companies, Pai said. Because of the large staff component involved in IMS, there are cost benefits in outsourcing IMS to low-cost, offshore locations like India, he added.Research done by management consultancy firm McKinsey for Nasscom, suggests that the IMS business could generate between 325,000 to 375,000 jobs in India by 2013, as 70 to 75 percent of the roles in IMS can be moved offshore.Low-cost locations, including India, have so far captured a mere $6 to 7 billion&#160;of the IMS opportunity.Indian outsourcers have so far learned to price their services on the basis of staff time utilized. They now have to learn more sophisticated pricing that takes into account other parameters like amount of computing power being managed, if they are not to risk losing money in the business, Pai said.
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Microsoft has named India as the next market for its stripped-down version of XP, with shipping expected to begin early next year.
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(InfoWorld) - To cut costs in its growing business, the IT services subsidiary of Swedish transport equipment company AB Volvo moved some work offshore in 2002 to MindTree Consulting, a software services company in Bangalore, India. The subsidiary, Volvo Information Technology AB (Volvo IT), has an operation in Poland that is doing application maintenance, but it wasn't easy to increase the number of staff in that country quickly, said PÃ¤r Forsberg, Volvo IT's competitive sourcing manager. Working with an outsourcer gave Volvo IT flexibility in staffing. "We needed to be able to ramp up and down quickly depending on demand from clients and MindTree was able to meet that requirement," Forsberg said. MindTree also offered skills in the broad spectrum of technology areas that Volvo IT was working on, including Java, .Net, and technologies from SAP AG, he added. MindTree now has about 300 staff doing work for Volvo IT, mainly in applications development, up from less than 20 four years ago. Volvo is one of a large number of multinationals in the U.S., Europe, and Japan that have been flocking to India to outsource software development work, or to set up their own development operations in the country. Many of the U.S. and European companies are also moving call centers and back-office processing work to India. The influx has been a boon to India's economy. Its revenue from software exports and IT services grew by about 33 percent in the year to March 31, to US$23.6 billion, according to Kiran Karnik, president of the National Association of Software and Service Companies (NASSCOM). The numbers include the revenue from both Indian outsourcing companies and the Indian software and services subsidiaries of multinationals. India offers these companies a vast pool of talent at lower cost than they can find in the U.S. and Western Europe. "We've started to see the cost benefits of migrating roles from the U.K. to India, and we are now also seeing a lot of innovation around our IT and business processes coming from the Indian operation," said Meena Ganesh, chief executive officer (CEO) of Tesco's Hindustan Service Center, a subsidiary of U.K. retailer Tesco PLC. Tesco has 1,600 staff in Bangalore. About half develop software, and the rest run back-office processes such as internal support, payroll and accounts payable. Savings have been in the range of 30 to 40 percent, in line with the average for India, Ganesh said. Multinationals like Tesco are also looking beyond low-cost coding work to tap the ability of their Indian staff to innovate. Yahoo India Research and Development, in Bangalore, does product development in the areas of multimedia search and user behavior analysis, said Venkat Panchapakesan, CEO of Yahoo Inc.'s Indian subsidiary. With over 750 staff, the R&D operation is Yahoo's largest outside the U.S. India's key strength is that about 2.5 million students graduate every year. Education is still in English, a legacy of nearly two centuries of British colonial rule. English has also served as a link between India's numerous cultural and linguistic groups. To take advantage of the low-cost labor, companies are expanding their operations at a fast pace. Dell Inc. has said it will double its staff in India to about 20,000 in the next three years. It already runs call centers and does software development in the country. It also said recently it would design servers and storage gear in Bangalore and build a PC manufacturing plant in Chennai. Services companies are also moving in. LogicaCMG PLC of London has 2,300 staff at its offshore operation in Bangalore, and will expand its facility by November to accommodate up to 4,000, said Rahul Patwardhan, CEO of LogicaCMG's global delivery center. Capgemini SA plans to increase its staff in the country from 5,600 today to 10,000 by the end of next year. Customers of these firms want them to have an offshore component in order to benefit from the cost savings, said Siddharth Pai, a partner at sourcing consultancy firm Technology Partners International Inc., in Houston, Texas. Taking advantage of the low costs in India, some services companies are now bidding for contracts at prices even lower than those of Indian outsourcing companies, he said. To achieve a target of $60 billion in outsourcing exports by 2010, the country will have to overcome several issues, however, including a potential shortage of manpower. The industry will need 2.3 million IT, call center and back-office processing staff by 2010, and there's likely to be a shortfall of about 500,000, according to a December report from NASSCOM and the management consulting firm McKinsey & Co. Attracting and retaining staff has already become difficult. Tesco and IBM Corp. have started advertising on billboards to lure staff, promising the chance to work on leading-edge technologies. Some companies advertise jobs on buses used to transport staff to work. Google Inc. and Microsoft Corp. are hosting programming contests to help identify talented people. Most companies offer cash incentives to staff who refer potential employees. Meanwhile, salaries are going up on account of the competition for staff. "Talent is available, but it is becoming a little more difficult to find and get on board the people with the right skills, particularly in IT," Ganesh said. Companies are hiring from outside cities, but finding good English skills there is a problem. LogicaCMG rejects more than half of the applicants for IT jobs not on technical grounds, but because of inadequate English, Patwardhan said. As the back-office processing and call center business expands, less people with good English skills are likely to go in for higher technical education, which in the future could create a shortage of technical staff who speak good English, he said. The problem is that, although India's universities produce graduates, only a small proportion have the skills required -- a quarter of them in the case of engineering graduates, according to Karnik. Only 10 to 15 percent of the general graduates can be employed by the business process outsourcing industry, he said. Karnik suggests sending engineering graduates to a "finishing school" for a few months to hone their skills. Staff for call center and back-office operations could be trained in parallel with their university education. To contain costs and curb attrition, companies are hiring a mix of new graduates -- or "freshers" -- and experienced staff. Between 10 and 15 percent of Tesco's IT staff in India are freshers, a figure the company plans to double during this year. "Once you have a strong middle layer of staff, you can add more freshers without sacrificing quality," Ganesh said. Some companies are also moving to smaller towns, where competition is less. Dell has set up a call center in Mohali, in northern India, while Opera Software ASA has a development center in Chandigarh, also in northern India. As India's IT hubs, particularly Bangalore, expand at a fast pace, real estate and general living costs become expensive, even as the infrastructure, including roads and power supply, deteriorates. Other countries may emerge as greater threats to India, such as China and countries in Latin America and Eastern Europe. LogicaCMG is expanding in Brazil, Morocco, and Europe, to spread its risks and to address some of its non-English speaking customers. Staff costs outside of the Euro zone, in countries like Romania, Ukraine and Russia, are comparable to those in India, Patwardhan said. Outsourcing has also come under attack because of the threat of lost jobs at home. "Protectionism in the U.S. is very related to the employment situation in the country," NASSCOM's Karnik said, adding that it has receded in the past 18 months as employment there has picked up. Other obstacles could also hinder business. Concerns about data privacy could grow as more call center and back-office jobs move overseas. After a case in which Indian staff were alleged to have sold some customer data, NASSCOM initiated measures to strengthen data protection at Indian service companies. A National Skills Registry allows employers in India to check employee backgrounds, and a new watchdog organization later this year will monitor data protection standards. The Indian government is also amending its Information Technology Act of 2000 to give it more teeth in data protection and privacy. Outsourcing companies have also implemented processes such as the BS7799 standard for information security management of the London-based British Standards Institution. "We want to change the rules of outsourcing to India," said Sunil Mehta, vice president of NASSCOM, in a recent interview. "Customers should be interested in outsourcing to India not for lower cost alone, but because of the superior data protection and privacy we offer." Despite the problems, many companies plan to keep India as their main hub for offshore work, and the growth shows no signs of sputtering. Tesco's strategy is entirely based around India, Ganesh said. It has software and back-office operations in Eastern Europe and elsewhere, but these are primarily to service local needs. LogicaCMG also plans to continue expanding in India, and its importance will remain high even as the company expands in other locations, Patwardhan said. Meanwhile new opportunities are emerging, such as non-IT design and engineering services. India's second largest outsourcer, Infosys Technologies Ltd., set up an R&D center in Bangalore last year for French engineering company Alstom SA, to focus on high-end services such as product development, engineering simulation and product life cycle management. The big Indian outsourcing companies, Infosys, Wipro Ltd., and Tata Consultancy Services Ltd. (TCS), are also offering more value-add services such as IT consulting. The country's domestic IT and business process outsourcing market is also growing. Revenue from the domestic market was US$6 billion in the year to March 31, up 24 percent from a year ago, according to NASSCOM. India's software and services revenue will grow by as much as 30 percent next year, to between $29 billion and $31 billion, NASSCOM said. And India's revenue from exports of software development, call centers and back-office processing will grow by 25 percent a year to US$60 billion by 2010, according to the joint report from NASSCOM and McKinsey. "We are well on target," NASSCOM's Karnik said.