Calendar

May 2018
M T W T F S S
« Feb    
 123456
78910111213
14151617181920
21222324252627
28293031  

Follow me on Twitter

Automation, not cheap labor, is reshaping outsourcing

automationThe offshore outsourcing of IT grew because of the cost of offshore labor. A software engineer in India is paid but a fraction of what a U.S. worker earns. Payscale puts the median salary for a senior software engineer in India at $10,000.

When IT services firms bring in H-1B visa workers, these workers earn substantially more than their overseas counterparts, but often significantly less than American IT employees.

This labor cost advantage has been a powerful lure for U.S. customers, but analysts see labor costs diminishing in importance. Customers want more automation, whether it’s infrastructure management or business process outsourcing. IT services firms can no longer complete exclusively on lower cost labor.

“The search for just cheaper people is a thing of the past,” said Frances Karamouzis, an analyst at Gartner. What customers now want is to buy more “thinking” and automation for the “doing,” she said.

One process that has taken off is called “Robotic Process Automation (RPA),” a term given to a virtual machine that takes over some of the applications and workflows managed by workers. These systems don’t directly replace humans, but take structured tasks and automate them, with users saving as much as much as 15%, said Karamouzis.

But Karamouzis sees RPA as a gateway to more sophisticated tools. Once IT services customers realize savings using this tool, their next question often is: What else can we automate?

Automation tools are coming, and quickly. IBM, which is a major employer in India and has shifted much of its work overseas, is focusing a large part of its future on its cognitive engine, Watson.

Gartner believes that by 2020 Microsoft will center its strategy around Cortana, its intelligent personal assistant, instead of Windows.

The overseas firms — Infosys, Tata Consultancy Services and Wipro, in particular — are also focusing on artificial intelligence tools to take over tasks. Infosys, in a recent annual report, said it was able to move nearly 4,000 full-time employees from projects to other tasks as a result of the automation of underlying services.

“Is offshore dead? No, but it’s no longer going to be used for competitive advantage,” said Karamouzis.

Offshore outsourcing may be one of the more controversial issues in the political landscape, but the industry has grown despite it.

Among the large offshore providers, Everest Group said that HCL, for instance, had 450 clients in 2014 providing $1 million plus in revenue; last year, it had 495. Infosys had 950 active clients in March 2015. This past March, that number had grown to 1,092, with repeat business accounting for 97%, said Salil Dani a vice president at Everest. Other firms showed gains as well.

IT services firms are shifting to automation, cloud, the Internet of Things and to “next generation services contracts that have pushed the traditional outsourcing services to the backseat,” said Dani.

More broadly, the arrival of intelligent automation is spreading through all industries, not just IT services.

“Intelligent Automation is one of the most disruptive trends the industry has seen,” said Tom Reuner, an analyst at HFS Research. The approaches are “about decoupling routine service delivery from labor arbitrage. However, the direction of travel is toward human augmentation, and not substitution.”

In some ways, it is hard to imagine the labor advantage disappearing anytime soon.

The cost advantage of using offshore workers in the U.S. remain substantial. Outsourcers must pay visa workers the prevailing wage, but about half of these workers are paid Level 1, or entry level, salaries in a four-tier system, according to a report by the U.S. Government Accountability Office. (The prevailing wage Level 3 represents the median.)

Presumptive Republican presidential nominee Donald Trump has offered up an immigration reform plan to raise H-1B wages that strongly implies using Level 3 as the new wage floor.

Ron Hira, a public policy professor at Howard University, looked at the wages paid at one firm, Southern California Edison, which cut some 500 jobs last year after signing outsourcing deals, and compared it to data paid to H-1B workers. What he found was that the offshore contractors were saving as much as 41% on labor cost by using visa workers. His research, which was published by the Economic Policy Institute.

The idea of raising the wages of H-1B workers is championed by reformers in Congress. But what analysts are saying is that wage advantages won’t be as important as automation capabilities in the years ahead.

Article source: http://www.computerworld.com/article/3083264/it-careers/automation-not-cheap-labor-is-reshaping-outsourcing.html

Article source: http://roymogg.com/automation-not-cheap-labor-is-reshaping-outsourcing/

Government behaving badly on outsourcing contracts

Many of the problems in government outsourcing result from bad behaviour

The boss of outsourcing giant Serco has accused the Government of “behaving badly” by passing off unreasonable contracts to suppliers, ignoring its own guidelines and shrouding its decisions in secrecy. In a Commons hearing on lessons learned from the collapse of Carillion, chief executive Rupert Soames told MPs that a raft of “well run and well respected” outsourcers have lost vast amounts of money in recent years working on government contracts with “unmanageable amounts of risks”.

Mr Soames – a grandson of Sir Winston Churchill – claimed the Government has previously tried to pass off controversial and “unreasonable” contracts to outsourcing firms, while also routinely expecting suppliers to shoulder the risk of major law and policy change.

The recent woes in the outsourcing sector, which led to the collapse of Carillion and forced a number of its rivals to raise emergency capital to bolster their finances, was “astonishing”. “It’s been a massive, massive disruption in the supplier sector, the likes of which I’ve never seen – £8 billion written off of the supplier sector and billions of pounds being raised to recapitalise.” He added: “A lot of this is management’s fault, but … the Government as a monopoly buyer cannot stand idly by and say ‘nothing to do with me, Gov’.”

 

Mitie chief executive Phil Bentley, who was also giving evidence in the hearing, told MPs on the Public Administration and Constitutional Affairs Committee that he believed inaccurate data was also to blame for some failed outsourced contracts and called for greater data sharing and transparency. He gave the example of the asylum seeker contract handled by Serco, which he said saw the numbers of asylum seekers “massively underestimated” and led to hefty losses on the work.

Both bosses also said the bidding process was also flawed, with the Government under pressure to choose the cheapest supplier, rather than focusing on quality and expertise. Mr Soames added there are “no benefits for good behaviour, and no penalties for bad behaviour” in the process.

The company chiefs said the Government had tried to pass on the extra cost of the national living wage on some contracts, while also expecting suppliers to take the hit from any future policy changes from Brexit law changes.

 

Article source: https://www.eveningexpress.co.uk/news/business/government-behaving-badly-on-outsourcing-contracts-says-serco-boss/

Cielo is a Leader in recruitment process outsourcing

“As we continue to explore new frontiers in technology, extend our reach to new places around the world and break new ground in the candidate and client experience, we remain committed to maintaining the high quality of service our clients expect from us,” said Sue Marks, Cielo’s Founder and CEO. “Once again being recognized as a Leader by Everest Group and their peers in the analyst community shows sustained excellence even as we focus on growth and plan for future success in a fast-changing market.”

Everest Group’s 2018 Recruitment Process Outsourcing Service Provider Landscape with PEAK Matrix Assessment evaluated 21 established RPO service providers based on the absolute as well as relative year-on-year movement for specific criteria, including market success, scale, scope, technology capability, delivery footprint and buyer satisfaction. The providers were then categorized into three categories: Leaders, Major Contenders and Aspirants. Leaders, like Cielo, were placed in the top quadrant for both market success and delivery capability.

Cielo was highlighted specifically for the launch of Cielo TalentCloud, a suite of three technologies that includes: SkyRecruit, an exclusive CRM platform that provides the most advanced and recruiter-friendly tools for targeting, nurturing and engaging top talent; SkyAnalytics, a platform that provides prescriptive and actionable insights from market and internal data sources; and SkyLabs, an innovation engine whereby Cielo tests and pilots new and emerging technologies, tools and processes to understand how they could (or would not) help clients reach their goals.

“Cielo’s focus on enhancing its technology and developing new and innovative solutions for its customers has enabled it to stay ahead of the competition, which is reflected in Cielo being consistently featured in the Leader’s quadrant in Everest Group’s RPO PEAK Matrix,” said Arkadev Basak, Vice President, Everest Group.

About Cielo

Cielo is the world’s leading strategic Recruitment Process Outsourcing (RPO) partner. Under its WE BECOME YOU™ philosophy, Cielo’s dedicated recruitment teams primarily serve clients in the financial and business services, consumer brands, technology and media, engineering, life sciences and healthcare industries. Cielo’s global presence includes 2,000 employees, serving 154 clients across 92 countries in 36 languages. The industry has verified Cielo’s reputation for executing innovative solutions that provide business impact through numerous awards and recognitions, including its #1 position on the HRO Today RPO Baker’s Dozen listing, PEAK Matrix Leader placement by Everest Group and Industry Leader designation by NelsonHall. Cielo knows talent is rising – and with it, an organization’s opportunity to rise above. For more information, visit cielotalent.com.

Cielo Contact:
Matt Quandt
matt.quandt@cielotalent.com
+1
262-439-1673

 

SOURCE Cielo

 

Article source: http://www.prnewswire.co.uk/news-releases/cielo-recognized-as-a-leader-in-recruitment-process-outsourcing-for-sixth-consecutive-year-on-everest-682146311.html