Stephanie Overby

Author Archives: Stephanie Overby

4 ways Cognizant customers can protect themselves amid corruption probe

Following Cognizant’s announcement late last week that it had launched an internal investigation into possible anti-corruption violations, there have been more questions than answers about what may have occurred at the Teaneck, N.J.-headquartered provider of offshore IT services. Particularly perplexing to some was the attendant news that the company’s long-time president Gordon Coburn was stepping down.Cognizant gave no reason for the departure of Coburn, who has been replaced by head of IT services Rajeev Mehta. However, the company did say in a regulatory filing that it was looking into whether it had violated the U.S. Foreign Corrupt Practices Act (FCPA) within a small number of company-owned facilities. Cognizant owns 12 of the 45 delivery centers it operates in India, where 75 percent of its employees work.To read this article in full or to leave a comment, please click here

Why automation doubles IT outsourcing cost savings

Outsourcing consultancy and research firm Information Services Group (ISG) this week unveiled a new research report to quantify the cost savings and productivity gains from automating IT services.The inaugural Automation Index shows improvements in productivity fueled by automation can more than double the cost savings typically derived from outsourcing IT. Total cost reduction ranged from 26 percent to 66 percent, depending on the service tower, with 14 to 28 percentage points of these savings directly attributable to automation, according to ISG. (The typical cost savings from labor arbitrage and process improvements alone range from 20 percent to 30 percent).To read this article in full or to leave a comment, please click here

Customers have a love/hate relationship with IT outsourcing providers

HPE Outsourcing once again garnered the highest Net Promoter (NPS) score among IT service providers according to a 2016 analysis of NPS scores among corporate technology vendors recently published by the Temkin Group. However, its merger with CSC could shakes its customer experience standing.A company’s NPS is considered a measure of customer loyalty and has been proven by some to be a leading indicator of corporate growth. Customers are asked to rank the likelihood they would recommend a brand to a friend or colleague on a scale of 1-10. Those who answer 9 or 10 are considered promoters: loyal enthusiasts who will keep buying and refer others the company, thereby fueling growth. Respondents who answer 7 or 8 are considered passive customers: satisfied, but unenthusiastic and vulnerable to competitive offerings. Those who answer between 0 and 6 are detractors: unhappy customers who can damage a brand and impede growth with their negative word of mouth.To read this article in full or to leave a comment, please click here

Digital transformation boosts captive offshore center growth

Global in-house centers — wholly owned captive offshore operations that deliver offshore IT services to their parent companies — today provide a quarter of the offshore and nearshore digital services market, according to outsourcing research firm Everest Group. And that percentage is likely to grow as enterprise demand for digital transformation continues.[ Related: Digital transformation will shape 2016 ]“Global in-house centers (GICs) are typically more strongly integrated with the core business as they are perceived as an extended team of the parent or onshore organizations,” says Aditya Verma, co-director of Everest Group’s global sourcing practice. “They typically have specialized knowledge of the business as they cater to only one customer (the parent organization) as compared to a multi-tenant service provider.” Enterprises are typically more comfortable sharing core business knowledge or intellectual property with the company’s own employees than with a third-party service provider who works with other customers or even competitors.To read this article in full or to leave a comment, please click here

Autonomic offerings set to transform IT, but outsourcing customers beware

Wipro has Holmes, Tata Consultancy Services introduced Ignio, Syntel is selling Synbots. HCL Systems calls its Dry Ice. And Infosys is promoting Mana. With traditional IT outsourcing revenue streams at risk to automation, a number of IT service providers are responding by developing their own homegrown systems which are designed to perform routine tasks and operations otherwise performed by humans.The good news is that CIOs now have a number of automation options to choose from. The bad news? The array of choices can be confusing and the unproven systems can be risky. It may not be immediately clear how these new automation options from traditional IT service providers differ from the solutions of the more well-established robotic systems companies like IPSoft or BluePrism.To read this article in full or to leave a comment, please click here

Why Vietnam is an attractive IT offshoring destination

Vietnam’s technical talent, retention rates and modern tech infrastructure has attracted the likes of IBM, Microsoft and Intel to set up operations there. While it will never be able to offer the scale of IT services hubs in India and China, Vietnam is increasingly an attractive alternative for IT organizations that are frustrated with high turnover and rising costs in the usual offshore locations.[ Related: Is Vietnam a viable offshore outsourcing alternative? ]To read this article in full or to leave a comment, please click here

Why Vietnam is an attractive IT offshoring destination

Vietnam’s technical talent, retention rates and modern tech infrastructure has attracted the likes of IBM, Microsoft and Intel to set up operations there. While it will never be able to offer the scale of IT services hubs in India and China, Vietnam is increasingly an attractive alternative for IT organizations that are frustrated with high turnover and rising costs in the usual offshore locations.[ Related: Is Vietnam a viable offshore outsourcing alternative? ]To read this article in full or to leave a comment, please click here

U.S. IT employment grows, with IT services jobs leading the way

The U.S. IT sector added a total of 32,100 new jobs in June, according to an analysis of Bureau of Labor Statistics data by technology industry association CompTIA, and continues to grow at a faster rate than overall national employment. Indeed, every category except technology manufacturing, experienced positive job growth.INSIDER: Network jobs are hot: Salaries expected to rise in 2016 CIO.com talked to Tim Herbert, CompTIA’s senior vice president of research and market intelligence, about what this labor data reveals about the state of the domestic IT services market, digital transformation as employment driver, why automation is likely to have a greater impact on American IT jobs than offshoring, and how IT outsourcing job growth will significantly outpace corporate IT roles.To read this article in full or to leave a comment, please click here

How to benchmark your IT outsourcing vendor management skills

In the attempt to keep up with the pace of technology and business change today, most IT organizations are relying on a variety of external vendors. But orchestrating a mix of IT traditional providers, offshore outsourcing firms, and new cloud computing suppliers while keeping up with business demands requires a robust vendor management and governance practice.Outsourcing consultancy Alsbridge recently introduced a vendor management and governance self-assessment tool to help IT organizations gauge their effectiveness in the areas of contract management, financial management, performance management, relationship management, risk management and general strategy. Multi-sourcing management is an emerging discipline, says Alsbridge managing director Jeff Augustin, and companies are looking for ways to assess their own strengths and weaknesses in order to improve their service delivery management.To read this article in full or to leave a comment, please click here

Digital transformation pushes big banks into application outsourcing

Large application outsourcing transactions in the banking sector hit a record five-year high last year, according to a recent report by outsourcing consultancy Everest Group. There were 54 new big application outsourcing projects in the sector with a total contract value of $5.9 billion in 2015—an increase in volume of 45 percent and in value of 25 percent over the previous year.[ Related: How to turbocharge digital transformation ]Financial institutions tend to outsource applications around three different dimensions, says Jimit Arora, partner at Everest Group There are systems to run the business which are outsourced for cost reduction and efficiency reasons. There are systems to manage the business, which may involve issues of regulatory compliance or cybersecurity and are driven by cost or penalty avoidance. And there are systems to change the business, which are efforts to drive revenue growth by introducing new products and services more quickly.To read this article in full or to leave a comment, please click here

Offshore and cloud service providers upset IT outsourcing’s top tier

The most recent top 25 list of IT service providers from outsourcing analyst firm HfS Research leads with a couple of the usual suspects, with IBM and Accenture in the No. 1 and 2 spots, with 7.8 percent and 5.1 percent market shares, respectively.[ Related: 10 outsourcing trends to watch in 2016 ]But not far behind are India’s Tata Consultancy Services (TCS), at No. 5, offshore-centric Cognizant in 8th, and as-a-service Amazon Web Services (AWS) already in the No. 12 spot. HfS is calling it a “full-scale assault” on the traditional providers.To read this article in full or to leave a comment, please click here

How IT outsourcing customers should prepare for HPE-CSC

How the recently announced “spin-merger” between HPE’s spun-off enterprise services unit and CSC to create a $26 billion global services giant (the third largest in the U.S) will actually shake out once its completed next spring is uncertain. What is clear is that the two service businesses had been struggling for some time.[ Related: HPE to spin out its huge services business, merge it with CSC ]To read this article in full or to leave a comment, please click here

How to contract for outsourcing agile development

Agile software development methodologies are hardly new. But figuring out a way to adequately contract for them in IT outsourcing deal is.“Under traditional contracting approaches, there is an assumption that the development team can define, with some specificity, the ultimate ‘thing’ to be created supported by a detailed project plan and key milestones tied to client acceptance and financial payment triggers,” says Derek J. Schaffner, attorney in the Washington, D.C. office of law firm Mayer Brown. “These concepts are very easy to memorialize in a development agreement due to the linear nature of a traditional software development approach that commences with detailed planning, followed by design, coding, testing and deployment.”To read this article in full or to leave a comment, please click here

How to embrace the benefits of shadow IT

The terms shadow IT conjures up negative images in the minds of most IT organizations. Yet non-IT enterprise functions and lines of business are buying more of their own IT systems than ever before, particularly product, operations and external customer-facing groups and highly dynamic services areas. “As business functions seek to realize the benefits from these non-traditional channels of IT enablement, the shadow IT organizations are growing aggressively in order to help orchestrate and aggregate services into business consumable offerings,” says Craig Wright, managing director of outsourcing and technology consultancy Pace Harmon.[ Related: 4 ways to apply SLAs to shadow IT ]To read this article in full or to leave a comment, please click here

How to embrace the benefits of shadow IT

The terms shadow IT conjures up negative images in the minds of most IT organizations. Yet non-IT enterprise functions and lines of business are buying more of their own IT systems than ever before, particularly product, operations and external customer-facing groups and highly dynamic services areas. “As business functions seek to realize the benefits from these non-traditional channels of IT enablement, the shadow IT organizations are growing aggressively in order to help orchestrate and aggregate services into business consumable offerings,” says Craig Wright, managing director of outsourcing and technology consultancy Pace Harmon.[ Related: 4 ways to apply SLAs to shadow IT ]To read this article in full or to leave a comment, please click here

Public sector embraces bigger, longer outsourcing deals

Over the past five years, as outsourcing in the commercial sector has grown steadily but modestly, the annual contract value of outsourcing deals in the public sector has more than doubled, according to analysis by outsourcing consultancy ISG. Today, public sector outsourcing deals account for two-thirds of the annual contract value in the market overall.Much of the activity is happening in the U.S., which consists almost entirely of information technology work and driven in large part by Department of Defense spending, according to ISG. The Department of Homeland Security and the Department of Health and Human Services, contending with the changes mandated by the Affordable Care Act, are also significant users of third-party IT services.To read this article in full or to leave a comment, please click here

How to counter outsourcers’ cost of living adjustments

For years, most large outsourcing contracts have included standard provisions for annual pricing adjustments based on consumer price indices and other economic indicators. These cost of living adjustments are intended to normalize services fees with economic conditions over the life of long-term deals. The impact on pricing can be significant—in the millions of dollars for a large deal. A $50 million annual services contract with a 2.75 percent cost of living adjustment could mean a $1.375 million increase in annual fees.  In theory, cost of living adjustments help service providers reduce attrition by ensuring that employee salaries keep up with market trends. Staff retention benefits providers and allows clients to avoid the disruption of employee turnover.To read this article in full or to leave a comment, please click here

Why outsourcing customers are terminating their call center deals

The contact center outsourcing industry has always been subject to greater provider churn than other areas of IT and business process services. Historically around a quarter to a third of call center deals up for renewal are terminated every year compared to just fifteen percent of non-voice contracts.[ Related: 8 tips for choosing the right contact center for your business ]But that termination rate has risen dramatically in recent years. Over the last two years, more than half of customers with end-of-term call center contracts decided not to renew their vendor relationships, according to recent research by outsourcing consultancy Everest Group, funded in part by business process and IT outsourcing provider TELUS International.To read this article in full or to leave a comment, please click here

4 ways to apply SLAs to shadow IT

The risks and costs of shadow IT have been always been a concern for IT organizations. Yet the business clearly values the capability to procure certain IT services to rapidly meet its changing business needs — so much so that these informal IT capabilities are springing up even more often than IT leaders realize. One 2015 report by Cisco indicated that the number of unauthorized cloud applications being used in the enterprise, for example, was 15 to 10 times higher than CIOs estimated.[ Related: CIOs vastly underestimate extent of shadow IT ]To read this article in full or to leave a comment, please click here

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