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Mobile Operators Think Small to Get Bigger Profits

Debbie Fisher, Business Writer, Outsourcing Center

A small cell solution, that is. Whether you’re a mobile virtual network operator (MVNO) deploying services in urban or rural areas, a city official modernizing your infrastructure to attract and retain citizens, or a high tech start-up looking to join the ecosystem of suppliers emerging to address the ever growing data traffic demands, a small cell solution should be part of your plan. Or maybe you’re a mobile operator with one of the 184 LTE networks already in service as of the end of July or leading the planning or deployment of another 159 networks during 2013 . No matter what stage of deployment you’re in, a new hosted model, Small Cells as a Service (SCaaS) is worth exploring. Smart Cities + Small Cells=New Opportunities Small cell solutions can lead to big benefits. Over the past couple of years, I took a closer look at “smart cities” that were deploying high speed fixed broadband to deliver innovative services to citizens and businesses as a way of reinventing their city and improving the way of life. What I found was amazing! Cities like Chattanooga, TN transformed light poles into multipurpose, high technology devices housing sensors for lighting, rain gauges, sniffers for chemical spills or terror attacks, and cameras for crime. This simple transformation of existing infrastructure had a significant impact on the city. Citizens felt safer walking to downtown offices or attending riverside festivals. City officials monitored rainfall to avoid flooding in flood-prone zones. And police now had a new weapon to help reduce crime. As more cities become wired to handle citizens need to stay connected 24×7, existing networks are pushed to the limit. 3G and 4G networks are important steps in addressing data demands but small cells are an important part of the mix. Small cells allow an additional layer in the mobile access network to handle growth in mobile capacity where it’s needed most – close to the citizens needing the coverage. Innovative Business Models Emerging But like any investment, the key question to answer with LTE/4G is; how can the costs be made affordable for all ecosystem players to justify the investment? One business model emerging that helps justify LTE investments including small cells is a hosted model, Small Cells as a Service (SCaaS). Several European operators are actively trialing and testing this option. COLT telecom, a European network operator with fiber in many European urban areas, has been offering to install and connect small cells for mobile networks. They’ve discussed several commercial arrangements, which include a fully managed service where they own the equipment and lease it at a monthly fee. Mobile operators would simply request installation of a new small cell at a specific location, and it would be connected on demand. All traffic would be consolidated and sent through dedicated broadband connections to the operator’s small cell gateway. Virgin, a UK cable broadband network, already supplies high capacity Ethernet backhaul for mobile operator’s macrocells. They offer a hosting option where they install metrocells or small cells for the last few hundred meters. Site acquisition, power, fiber backhaul from a nearby hub and on-site field staff for installation and maintenance are all included. They have completed successful trials in two UK cities. And trials are starting in the US. Clearsky/NEC and Public Wireless offer similar services. In March of this year, they offered a Femtco as a Service (FaaS) to fill coverage service gaps. Trials are also proving that the addition of small cells works, serving to “supercharge” access points where they need it most. A study from Real Wireless showed if the small cells were deployed at the cell edges of the existing macro cells, they would have the potential to double the throughput that was possible in those locations. What’s Next With the growing interest by the US government to ignite another internet revolution to help the fuel economic growth, Small Cells as a Service may just be poised to take off. Driven by the thriving ecosystem, one researcher is projecting small cells and carrier WiFi deployments to account for nearly $352 Billion in mobile data service revenues by the end of 2020. So why not explore how your business can benefit from a smalls cell solution? Ecosystem players will be key in serving up solutions to cities, businesses and citizens. Collaboration between mobile operators, MVNOs, city leaders, utilities, cable operators and specialized providers can make all the difference in building smarter cities and delivering on citizen’s insatiable need to stay connected.  

Outsourcing Talent Gives a Singapore Company a Competitive Advantage in a Market with One Percent Unemployment

Outsourcing Center, Beth Ellyn Rosenthal, Senior Writer

The key to any successful business is its talent. But what would you do if you couldn’t find the people you needed in the entire country, even though you were paying above market wages? And you can’t offshore the jobs because of government regulations. That’s where outsourcing talent management comes in. Consider the current situation in Singapore. Finding and affording the talent needed has become a huge challenge, since unemployment tops one percent. “There is a work force supply crunch in Singapore,” reports Alan Lim, head of sales and marketing for emarketing.com.sg, a division of 1st Page Pte Ltd., a Web developer and graphics firm there. The firm has one full-time Web developer on staff. When Lim wanted to add to his staff, he says “it is not easy to recruit the right person.” Most talented Web designers and graphic artists “shun working for a small company like mine.” And he laments the lack of employee loyalty. Even though he paid above average wages, the new employees left after six months. The hours he spent recruiting were lost and then he had to repeat the process again. Hiring a foreign worker is not a possibility for Lim due to restrictions by the Singapore government. To get the work done, 1st Page hired local freelancers. He said freelancers would go for weeks without answering any of his correspondence. “Unfortunately, this led to major problems in quality of work, failure to meet deadlines, communications breakdowns and even failure to complete the work,” Lim explains. Naturally, these problems affected the company’s ability to deliver work to clients. They had “a huge impact on my company, damaging our credibility and negatively impacting our bottom line.” In addition, Lim says he was forced to spend “an inordinate amount of time locating and managing freelance workers, which took me away from the important work of operating and expanding the company.” The solution: Outsourcing talent management. How outsourcing talent management solved the problem 1st Page hired Businetic Pte Ltd, a Singapore-based service provider that offers hybrid offshore employment services to its clients. “Our goal is to provide small-to-medium-sized (SME) enterprises the benefits Fortune 500 companies enjoy, but without the initial cost and continual commitment,” says Jude Lee, sales and marketing director at Businetic. Lim had never outsourced before. “Outsourcing was worth a shot. At that point, I was willing to try anything,” Lim says. Lim says the results were almost immediate. 1st Page experienced an increase in business, because now the company had committed and responsible employees. “The Businetic employees are highly qualified professionals with proven track records of expertise and top notch performance,” he says. He adds they require minimal supervision and “consistently deliver excellent work on time.” Outsourcing allows him to devote more time to sales instead of the technical aspects of the work, a fact he relishes. “Businetic has removed all my stress factors by expertly handling all aspects of my remote hiring,” the outsourcing buyer continues. And he saved “substantial costs.” He says Businetic salaries are about 50 percent of what he had been paying and his contribution to Singapore’s Central Provident Fund (like Social Security in the US) was 16 percent. “All in all, outsourcing has enabled me to run lean at a higher productivity rate,” Lim reports. Outsourcing challenges Of course, there were some rough patches the provider and client had to work through. Lim says it took some time getting used to working with Businetic’s remote communication tools. And there were cultural differences, too, since Businetic’s remote office is located in Trivandrum, Kerala, India. Lee says for most of Businetic’s clients, “the key is understanding and patience. All parties need to make an effort to learn about one another’s countries and cultures.” Overall, however, Lim says “the benefits far outweigh the disadvantages.” He says the “partnership with Businetic is one of the most beneficial moves I have made as a company owner. Offloading my staffing needs to Businetic has led to smoother management of my company and increased profits, which have greatly improved my overall work and lifestyle.” The bottom line: “Outsourcing has become my competitive advantage,” Lim reports. Businetic’s own outsourcing journey Lee and Aghosh Babu started Businetic in 2010. The start-up outsourcing service provider originally offered IT and Internet marketing services to mainly the Singapore market. The founders noticed that many businesses were struggling to find the right talent for their companies due to the employment restrictions of foreigners and the small talent pool in Singapore. “We believed we could offer a viable HR solution using technology and the Internet,” says Lee. Their solution: dedicated offshore employment. Today Businetic’s employees work on any time zone instructed by its clients. “This eliminates the hassle of communicating with a major time difference,” says Lee. The India office is open 24 hours, except for weekends and public holidays. The service provider helps its clients find IT, creative, administrative and sales employees. In addition to finding the talent (the really hard part), the provider also handles most aspects of HR management, including payroll and benefits. The company also facilitates communication between employers and employees, an important bridge to culture understanding, especially at the outset. Businetic allows its clients to directly interview the candidates through video conferencing. Its client management system allows its clients to monitor their employees’ work. While the service provider has a few large clients, its sweet spot is SMBs. It is here Lee feels outsourcing can make a difference and level the playing field, especially in Singapore. Lim would agree. Question to readers: Are you having trouble finding and keeping the right talent? How are you solving this business challenge? Are there government regulations in your country that make offshoring difficult? If so, what are they and how are you dealing with this challenge? Are you an SMB? Are you outsourcing talent management?  

Top Five Reasons for IT Directors to Outsource IT Services

Mark Walker, Business Development Director, Ubertas

Fear of surrendering control is probably the main factor holding many IT directors back from realizing the benefits you’ll reap when you outsource IT services. But if you can find an IT services supplier who will work with you in a genuine partnership, understanding the specific needs of your business, it soon becomes clear that this fear is misplaced. It is perfectly possible to retain your strategic power while outsourcing the fundamental and mundane elements of your IT service and support. By opening the door to outsourcing some niche services or even your entire application or database management infrastructure, you can generate a host of business benefits. The top 10 benefits of outsourcing IT services Reduced service and support costs within a managed and predictable budget Better quality of service, fewer IT failures and less downtime thanks to well-defined service level agreements (SLAs) Access to the latest applications without high up-front license costs Access to accredited engineers, skills and technical expertise without having to train your own staff Reduced risk of employees leaving and taking their knowledge with them Round-the-clock access to a help desk primed to resolve problems remotely and rapidly Compliance with the latest regulations Guaranteed data security at remote, hosted data centers Real accountability via contracted commitments from a third party supplier partner that wants to keep your business rather than reliance on an in-house group that is hard to pin down Remove high IT staff costs from your balance sheet and shift to an opex budget For some time, there have been signs that IT directors in smaller enterprises are increasingly receptive to these benefits and are even embracing them with greater agility than their global counterparts. A survey from Computer Economics suggested that 27% of businesses now outsource applications management, while 21% outsource database management. According to Information Week, as this level of outsourcing gains credibility and trust among SMEs, the benefits quickly accumulate in terms of greater flexibility (particularly for companies that are growing rapidly); access to cost-effective expertise, techniques and programs; access to third-party resources such as the help desk, which liberates IT staff to focus on more productive business-focused activities; and the wider savings achieved by not having to invest in infrastructure and licenses. Take email services as one example: Gartner estimates that outsourcing just this one application could save businesses with fewer than 300 employees a significant amount because an outsourcing partner has the dedicated infrastructure to manage it at a much lower cost. Five reasons to outsource IT services Here are five good reasons why you should outsource IT services: 1. You could save significant staff costs. Not just on the recruitment and hiring front.  Skilled people with strong application-based credentials don’t come cheap and have long-term costs. Why spend time and money training somebody to support a core business application, only to see them poached by another employer and taking their expensively-acquired skills with them? Or send them to costly training to keep their skills current? And why not liberate your in-house IT staff to focus on projects that add value to the business rather than spending their precious time on firefighting duty? 2. An outsourced call center/help desk frees your resources. Providing round-the-clock support for your users in-house is expensive. Depending on the size of your business, you might need a dedicated facility that is operated by key IT support staff and is a significant cost center in terms of facilities management overheads. Even in a smaller IT operation, somebody—it might even be you—has to be on call outside office hours to provide IT support for an increasingly mobile workforce. Thanks to greater economies of scale, a dynamic IT services partner should provide a superior help desk at a greatly reduced cost. 3. You can save money all around – with the right outsourcing strategy and partner. A good IT services partner will work with you to identify the pressure points that make sense for you to outsource. These can vary tremendously from one business to another.  Toolbox.com points out that cost savings vary with the number of employees who need support and to what degree, the number of devices involved, the types of applications that you use, the ratio of employees using office space to remote workers, and even your geographic location when it comes to the price of on-site support. These are complex calculations that deserve patient analysis. 4. Your business will be more flexible in its use and consumption of IT services. Infrastructure is expensive. Why invest in servers, complex networks and other hardware just to deliver vital but everyday applications to your users when you can have those applications managed and distributed as a service direct to the desktop without the expense of hardware maintenance? Because your applications are being managed and hosted by a third party, they can be scaled up or down to meet fluctuating demand, and your costs will be more tightly controlled as a result. 5. Peace of mind. Why let worries about more complex issues such as data security or disaster recovery keep you awake at night when they can be managed and supported by a third party who has all the necessary expertise and infrastructure to meet your security and business continuity requirements? Yes, they are important, but by choosing the right partner to provide relevant support services, you are prioritizing them rather than allowing them to become distractions that need constant attention from your in-house IT team. Getting Started Negotiation is the key to getting your relationship with your IT services supplier off to the best start and making sure you realize the business benefits that you expect. And it starts long before the contract is signed. As Forrester analyst Wolfgang Benkel says in his useful report, Negotiate a Successful  IT Service Outsourcing Contract, ‘Renegotiating during an existing outsourcing relationship requires time and effort, decreases agility, and is always based on less competition, which influences the provider’s motivation and the price.’ In other words, you’ll get …

Big Data Trends: New Uses, New Challenges, New Solutions

Outsourcing Center, Patti Putnicki, Business Writer

It’s hard to find a business enabler that’s evolving as quickly as big data analytics. Big data trends are on the minds of business owners everywhere. This undisputed darling of the loyalty program and retail world has now infiltrated nearly every industry, from transportation and healthcare to insurance and supply chain management. It’s the catalyst for a new marketing mindset, where targeted offers are not only mapped to what the individual customer likes but how many “likes” that person is worth in social media. While Big Data trends are morphing as fast as Lady Gaga’s wardrobe, so are the accompanying challenges. How do you know if the data is ‘good?’ How can you validate information without delaying real-time analysis to the point where the opportunity has passed? And how do you use Big Data responsibly, increasing customer intimacy without crossing the line to customer voyeur? We set out to find the answers and look at the emerging big data trends. Big Data is Watching You—with Your Permission, Of Course While knowing who you are and your position in life is still important, it’s the ability to look at what you do that is driving the analytics surge. “There is a wealth of new behavioral data out there today,” explained Carl Madaffari, senior vice president, database solutions at Epsilon. “Take telematics (systems used in automobiles that combine wireless tracking with GPS tracking), as an example. Insurance companies are using this technology to monitor customer driving behaviors and adjusting rates accordingly. The value proposition is this: if you give us permission to monitor your driving behavior, you will be rewarded with lower rates if you prove that you’re a good, defensive driver.” Once an individual checks that all-important, “yes, I give you permission” box, it opens the door for other types of interactions—like text coupons for discounts at nearby restaurants or special offers from other retailers en route. “If there’s one emerging trend around telemetric data, that is collaboration and data sharing with business partners. Insurance companies work with restaurants, retailers, car dealerships and other types of vendors who could benefit from the data they’re gathering,” Madaffari said. But, it’s not just the automotive and personal lines insurance sectors that are getting in on the act. “Think about the growing use of Fitbits® and similar products that track an individual’s movements, sleep patterns and physical activities—all behavioral data that could help healthcare providers monitor patient care and insurance companies reward customers who adapt healthy lifestyle choices,” Madaffari said. “They can share this data with the local juice bar, and at the end of a run or workout, the Fitbit®-wearing consumer is rewarded with a coupon for a free kale smoothie to finish off his or her day.” Loyalty Programs Transform from “Earn and Redeem” to “Surprise and Delight” According to Madaffari, the loyalty program space is in the midst of transformation. While those old, familiar points programs still exist, that market is saturated. So, many consumer-facing companies are trying something new: the sneak attack. “Instead of purchasing nine coffees and getting the tenth one free, companies are testing the concept of ‘unexpected rewards.’ The idea is to surprise and delight loyal customers with an unexpected discount or bonus,” Madaffari said. It’s important to note that, while buying a lot of stuff from a company makes you a valuable customer, so does your perceived influence over other prospective buyers.  Are your blog posts highly likeable?  Does your Twitter following rival that of George Stephanopoulos? Your “net” worth just increased. “Through the cloud store, we can quickly pull up an individual’s connectivity score and identify not only who is influential in social media but what kind of followers that person has, ” Madaffari said. “So, for example, if a person is heavy into home electronics, is typically a positive speaker when she posts, and has numerous followers and ‘likes’ among technology lovers,  these factors might prompt  the salesperson at a boutique electronics store to give her a 40 percent discount on her purchase that day.” Using face recognition technology, an in-store retail system might identify a frequent shopper at checkout, ‘see’ that he bought two red sweaters on line and has looked at a jacket twice but never finalized that purchase. Because he has a large social following among the fashion-forward, the salesperson might offer him the jacket he’s been eyeing at a 30 percent off, just-for-him price. Cool, right?  To some. Other people might find the whole concept a little bit creepy. “We have to walk a very fine line with how we use the data we collect. It’s the balance between learning what your girlfriend likes so you can be a better boyfriend to becoming the creepy, stalker guy staring into her window so she’s never out of his sight,” Madaffari said. Insurance Underwriting Of course, all of the Big Data trends aren’t focused on generating consumer response. We’re seeing Big Data make its move to more traditional industries, the most notable of which is commercial insurance. In the past, underwriting wasn’t necessarily a moneymaker; companies relied on investment income for revenue. Today, it’s a brand new world. “In this era of low interest rates, insurance companies need strong real-time analytics capabilities to achieve the elusive underwriting profit and sustained growth,” explained Amit Unde, chief architect and director of insurance solutions for L&T Infotech. “Going forward, the competitive battles will be played on the data turf. It’s the companies that leverage both external and internal Big Data, predictive analytics and adoptive underwriting models that will come out on top.” In the past, commercial underwriting was a back-office function, with decisions based on agent submissions coupled with the underwriter’s intuition.  Because agents have a vested financial interest in gaining approval at a competitive price (it’s called commission), their submissions sometimes painted a rosier picture than what actually existed. “With Google Maps and location intelligence services, the underwriter can view a property from all angles and assess distance from a coastline, flood plain …

RPO Providers Debunk 14 Outsourcing Myths

Outsourcing Center, Beth Ellyn Rosenthal, Senior Writer

Almost 40 years after Ross Perot launched outsourcing by offering to take over a company’s IT, outsourcing has become an accepted business practice. Yet it’s surprising how much resistance there still is in the market. The Outsourcing Center asked recruitment technology service providers and RPO providers why they believe companies still refuse to outsource in 2013. Many of the myths, however, can apply to any kind of outsourcing. Here are the key reasons and the real truth behind each of them. 1. My company isn’t large enough for RPO. Amy Bush, head of the Americas for Alexander Mann Solutions, contests that myth. “There are outsourcing solutions that can fit any need,” she observes. These days she says clients “have different needs in different regions at different times of the year.” A good outsourcing service provider “can weave together solutions.” What is the right number for outsourcing to make sense? It depends! Chad Veen, client success manager at HireVue, believes in general if a company needs to hire at least 50 positions, it makes economic sense to outsource.  However, “you don’t need a sledge hammer to kill an ant,” he says. It depends largely on the positions. He says if the buyer needs software engineers, the number may be just 15 positions. The rule of thumb is, “the harder to find, the less openings you need,” says Veen. 2. Do I have to go offshore? Or, outsourcing=offshoring. Veen says outsourcing buyers tell him, “I don’t want to outsource to the Philippines,” today’s du jour location. He says the quality of the candidate needed determines if offshoring even works for the buyer. Today, more and more service providers are opening American operations. Jim McCoy, head of US and Canada operations for ManpowerGroup Solutions, points out most service providers use a mix of onshore and offshore resources. “Your outsourcing provider should understand this mix, especially the roles that make sense to keep onshore,” he says. For example, Alexander Mann Solutions has shared services centers all over the globe, including Cleveland. “Certain clients want us to deliver all our services from the US,” Bush reports. Others want their clients to interact with Alexander Mann’s staff in Cleveland but prefer to have their 24/7 back office support from Manila. Specific to recruiting, McCoy adds that “the reality is there is no substitute for rapport building. That really only comes from a local understanding of a country, market or company.” 3. I can hand everything off to the provider and all my recruiting problems will magically go away. Sue Marks, CEO of Pinstripe, says many first-time buyers believe “outsourcing transfers all their problems to the service provider that magically resolves them without intervention. “In reality,” she adds, “both partners have to work together to design and nurture the solution to move beyond their challenges and transform their talent practices.” Travis Furlow, head of client services for Alexander Mann, believes “a bilateral partnership” is the best way to guarantee outsourcing success. “Working together is enormously powerful,” he observes. Chase Wilson, vice president, solution design for Randstad Sourceright, observes clients often view an RPO solution initially as “simply transferring their existing recruiting structure and processes to an external provider.” But he says RPO “can be so much more.” RPO providers share with their clients “their years of experience, their proven recruitment processes, sourcing innovation, compliance understanding and a constant view into the latest technologies and tools.” Wilson believes it’s a mistake to restrict an RPO partner to doing things the same way they’ve always been done. “This will ensure the same results,” he says. 4.   Choosing RPO providers means admitting your current recruitment strategies are failing. Talent acquisition leadership often fails to internally promote RPO solutions for fear senior leadership may construe that recommendation “as a surrender, admitting that the present recruiting strategy has failed,” says Wilson of Randstad Sourceright. Today, however, challenges are tougher for the in-house staff. “Economic volatility, globalization and the changing demographics of the workforce are just of few of the challenges in developing a consistently effective, yet evolving talent acquisition strategy,” he says. Outsourcing, on the other hand, “brings a strategic partnership opportunity to talent acquisition leadership that mutually overcomes these challenges with collaborative solutions that provide a client with greater control and insight into measurable performance indicators,” he says. For example, senior management can’t dock an in-house recruiter’s pay because they didn’t do their job. “But you can do that to an RPO provider,” points out Wilson. 5. I don’t have to nurture my relationship with my RPO providers Marks of Pinstripe says all good outsourcing relationships “need care and feeding.” When things are moving forward, she says people tend to ignore the relationship. But the best outsourcing relationships “are based on continuous improvement and a firm commitment to partnership evolution. Organizations need to choose  a partner who will push you to be constantly better. That’s when RPO is at its best.” Elaine Orler, president of Talent Function Group, believes outsourcing partnerships need day-to-day interaction. “The buyer has to work,” she posits. Orler adds buyers need to place a skilled vendor management team in place to help this relationship thrive. “These skills are more senior than most organizations put into play,” she reports. 6. Outsourcing is only effective if I outsource everything. Orler says, “Outsourcing doesn’t have to be all. It can be some.” She suggests starting small, with a few types of positions. Solutions can also involve only a part of the recruiting process, such as sourcing, screening or even just scheduling interviews, points out Wilson. Wherever a client is challenged with meeting the organization’s requirements for speed, scale or quality, an RPO provider can often help. 7. My departments know the jobs and the industry better, so we can do it better in-house. David Spector, global head of mobile for TMP Worldwide, posits outsourcers specialize, allowing them “to have knowledge of an entire industry.” He points out the service provider “also knows the companies you are trying to surpass.” …

The Flexi-pricing Route to Cloud Innovation

Outsourcing Center, Karthik Nagendra, Business Writer

I’ve got a little story about cloud solutions. A wealthy looking woman entered an optician’s shop, pointed to a very stylish frame and declared to the shopkeeper, “I’d like to buy that. How much?” Gauging at a glance her capacity to pay, he replied: “$500.” When she didn’t bat an eyelid, he added quickly, “for the frame.” “And the glass?” she asked haughtily. “$1000,” said the shopkeeper, tremulous at his own boldness but looking for any sign of outrage. When he saw none, he quickly added, “for each.” There’s often a thin line between flexi-pricing and fleecing, as the joke above illustrates. But the truth is that sellers often try to gauge how much a buyer is willing to pay, and fix rates accordingly. The sensible buyer is happy to pay a price that reflects the value received from the product. Reaching that balance is an age-old dance, with new moves still being added. One such move borrowed from other industries is flexible pricing. Airlines have for long sold seats for a higher price on dates closer to the date of travel. We also have witnessed airlines offloading unsold tickets at throwaway prices some three hours before take-off because an unoccupied seat on a flight is nothing but a complete waste of opportunity. Flexi-pricing sends shoppers into frenzy during ‘Sale’ periods—it tempts people to spend more by asking for less. The origins in tech sector In the technology industry, flexi-pricing was embraced by the outsourcing industry pretty early in the day, with service providers billing their customers on a cost-plus basis—and the bill amount could differ from month to month, depending upon the number of people the service provider hired to carry out the work. Flexi-pricing evolved a notch when service providers started to add value and were rewarded for it accordingly. When product development was outsourced, service providers asked for and began to receive a percentage of the royalty on product sales. BPOs (business process outsourcing firms) too got into the act, charging clients per transaction rather than per employee. The higher the number of transactions handled, the higher the payment received by the service provider, while the cost per transaction fell for the buyer of the service. This acted as an incentive to automate processes, leading to better performance and enhanced income for the BPO, but also shorter resolution-time for clients. Evolution leads to innovation With Cloud computing taking off, flexi-pricing has become the new norm, in turn setting off a chain of innovations. Those opting for cloud solutions are paying only for the amount (of server space, virtual desktops or package software) used without having to actually buy anything. Some decades ago you could only order an entire pizza even if you could consume only a slice. With evolved pricing, you can now ask for just a slice at many pizzerias. But can you pay for a bite at a time? If it was a digital pizza, you could—and that is what Cloud computing has made possible. Of course, this has made the payment collector’s life incredibly complicated. Keeping track of who’s using what and how much and for how long is the challenge. Fortunately, tools automatically keep count, measure out billable events and so on. Improved process automation will lead to further evolution of transaction-based pricing—and a lot of new products and services in the following areas: Management tools: Cloud solutions already deliver intelligent governance that allows customers to consolidate and virtualize resources, allocate and manage applications, improve service levels, and reduce operational costs. This will reduce manual monitoring drastically and allow for the monitoring to happen from remote locations at lower costs. Predictability tools: How much of that particular software are you going to need in the future? How much server space? Will your needs change from month to month, day to day? New tools will be able to estimate future demand based on historical usage and your own business plans. Analytical tools: While large companies are making their business intelligence and predictive analytics solutions available on the cloud, we could foresee startups offering a newer and more nimble way to analyse data. Innovation takes over It’s a virtuous cycle that will lead to further innovation on the Cloud platform, fuelling early-stage funds inflow into this sector. IDC has predicted earlier this year that over $25 billion will flow into acquisitions of companies with cloud service offerings until perhaps the end of 2014—a big jump from the $17 billion in acquisitions during the previous 20 months. A whole set of innovations are also likely to be industry specific. Take, for instance, the healthcare industry. With doctors using mobile phones to receive photos of ailing patients, then remotely diagnosing the condition, or using collaborative platforms to share patient notes, x-rays and MRI images with the patient himself or with another expert, it’s almost certain that HIPAA-compliant cloud-based collaborative platforms are on the horizon. Similar stories will be written in other fields, such as education, manufacturing, hospitality, automobile, aviation, and nearly any field really. Could the sky be the limit for cloud solutions?  

What to Outsource in the 24×7 Marketing Age

Outsourcing Center, Karthik Nagendra, Business Writer

The digital age has changed customer DNA forever. They have no patience with 9 to 5 and they’re shredding the concept of after-hours and weekends. They have a voice, and that voice demands to be heard whenever, wherever. Enter outsourcing social media marketing. Working hours, what’s that? Banks—previously such strict observers of “working hours” all over the globe—have risen to the challenge by embracing technology. Net banking and ATMs have virtually done away with the need to visit those hallowed brick-and-mortar portals. Mobile payments are being made directly from person to person, minimizing the need for even small amounts of cash. While this is great news for all of us as individuals, the risk for the bank is that it becomes a marginal player in the life of the valued customer. This is the case with several consumer-facing industries, such as apparel, books, groceries, appliances, furniture and such—all of which can be ordered online and delivered while you are away at work. No interface or face-to-face conversation with the company required.  Especially when you’re working from home, you meet the shipping company rep rather than someone from the company you ordered the goods from.  This is perfectly okay for the average buyer, except when something goes wrong! Say you ordered blue curtains, but what you saw is not what you got. Colors on the digital screen often look different than when seen off-screen. Simply returning what’s arrived is not the solution. Speaking to someone and explaining what you had in mind so you get the right product is. This means that online dealers need to have someone customers can have a live discussion with.  Beyond a live agent, online dealers more than ever are finding customers who expect to engage in live conversations any time of the day. Research by Social Bakers, an agency that measures how well brands perform in terms of social customer care, found that the number of questions asked on brand pages on Facebook has increased by 85 percent over the last year, and that airlines had the best response rate of answering 79 percent of these promptly. “Working hours” is not a phrase that works anymore. Engage, not enrage Companies selling anything at all cannot afford to be out of touch with their customers. So while digitization may keep the consumer from physically visiting you, it has also forged a path for newer ways in which to meet up through social media. Businesses are following their clients where they go, meeting them where they hang out, not in their offices but online. Have you noticed that the online store you bought something from recently keeps popping up not only when you google something but also on all kinds of websites that you visit? That’s because The Web knows and tracks your online preferences. Personally, I find pop-ups asking to indulge in a live chat very intrusive—it’s like a store attendant following you everywhere and asking, “Can I help you?”  While it’s good to know there’s someone who can answer your queries, nobody likes to be stalked. Smart businesses know how to keep track of the customer without being obviously there. Keeping them engaged is in fact a bigger challenge than ever before since your customer can close that communication window with just a click. Fly with the experts Let us take an example of an airline that’s effectively engaging with customers. Lufthansa has its fingers on the pulse of the customer, and potential ones, through an enviable Facebook presence. Contests, events, quizzes all have earned the airline something every self-respecting Facebooker looks for—likes! Over 300,000 likes (on the India page alone), and if even a small percentage decides to fly with it because of the online excitement generated, that’s a big win. Understandably, retailers and consumer-facing companies have a big Facebook presence. Coca-cola, Starbucks, McDonald’s, Walmart, Levi’s, Target, Nike, Kohl’s are among those that have the highest number of likes. Twitter accounts of many of these companies also have a very, very large number of followers. Clearly, they have managed to reach out effectively to their potential customers using social media. What to outsource These are still early days for outsourcing social media marketing and engagement, but it makes sense to outsource at least some of your efforts to begin with. Look holistically at your social media marketing plans and start by assessing what skills you have in-house and skills you are lacking. You may decide to start with getting the design and development built by an outsourcer to get your framework up front. Other areas to consider include: Savvy social media writers may be a skill your current writing team lacks, so content writing could be a place with clear payback. If you’re content doesn’t attract and maintain customers, you could be doing more harm than good to your brand. Analytics can easily be done by a third-party and is probably the least vulnerable to subjectivity. That will save precious resources that you can deploy towards strategizing and hiring in-house of local experts to manage the customer community. Customer experience management or customer care is another area to consider, especially if your customers are global and resident in different time zones. Be cautious to consider outsourcers who understand your business and your customer engagement model.  Since the outsourcer will be “you” during customer interactions, you need to feel confident they can successfully represent your brand. Needless to say, do monitor what’s going on closely enough so you can step in when necessary. The important thing now is to be open for business all the time. Not just 24/7 but 24/7/365 and even up to 366 in a leap year!  Business process outsourcing companies are gearing up to meet the demand when it arises. That will finally help harried executives to get their well-earned weekend off to do their own personal networking, online or otherwise. Has your organization begun outsourcing social media marketing and customer engagement yet?  

The Seven Deadly Sins of BPO and How to Avoid Them

Outsourcing Center, Patti Putnicki, Business Writer

Business Process Outsourcing (BPO). The concept is relatively simple: instead of hiring employees to handle the necessary but non-core, transaction-based business functions in your company, pass these on to someone else. Where’s the room for BPO mistakes? Here’s the thing: BPO is not like dropping off your dirty clothes at the dry cleaner and having them magically transform into fresh-pressed garments the next day. The client has to play an active role to make the engagement successful. However, that doesn’t always happen. So, what are the most common BPO mistakes that cause potentially great BPO relationships to start a downward spiral? We asked our experts to weigh in on the biggest pitfalls – the seven deadly sins of BPO – as well as the best ways to get on the road to redemption. 1. Basing Your Buying Decision on Price Alone One of the biggest BPO mistakes is gauging buying decisions on price alone. Yes, it’s a competitive market, with a lot of players making a lot of promises – many of which are legitimate. But, according to Bill Randag, president of DATAMARK, Inc., if the price is far below market, buyer beware. “There are a lot of educated people with computers out there who claim capabilities at a low-ball price. Without due diligence, the result can be a horror story,” he said. His advice? Don’t rely on hearsay, marketing pitches or RFP alone to choose vendors. Instead, go see for yourself. “If your prospective BPO provider is doing what they say they’re doing, then you should be able to see it,” Randag said. “Take the time to talk to references, make a site visit and talk to the people on location.” It’s also important to evaluate potential providers’ capabilities beyond the initial project scope. “In this market, staying competitive revolves around having the agility to change. So, it’s important not only to chose a BPO partner who can provide what you need today, but has the capabilities to support your long-term strategic roadmap,” explained Heinz-Werner Glueck, director of BPO Transition and Transformation for HP. “You don’t want to be in a situation where your needs outgrow your provider’s ability to deliver.” 2. Ignoring the Necessity of a Cultural Fit You prefer face-to-face meeting; your provider only meets virtually. You’re in an industry that can change on a dime, but your provider likes to take things slow. These cultural conflicts could escalate into big trouble down the line. “With BPO, you can’t ignore the necessity of a cultural fit,” Glueck said. “In a competitive RFP process, you spend three days in a room with your prospective partners, with a lot of written documents passed back and forth. That’s not going to tell you if your company styles, ethics or values are in sync.” So, a formal evaluation of cultural fit has to be part of the due diligence process. “We see companies sign contracts and six months later, they have to make a change – only to discover that that provider isn’t flexible enough to respond,” Randag of DATAMARK, Inc. said. Before the contract is signed, Randag recommends talking to your internal operations people and identifying three or four situations in the past that have thrown you off guard. “When you’re interviewing references, ask about how those vendors would react in a similar situation,” Randag  said. “If you need flexibility, find a company that works that way. If you want to take the ‘penny for a change’ route, then go with that type of provider. The real key is planning for all of that up front.” 3. Entering an Agreement Without Stakeholder Buy-in BPO is a procurement decision, right? We send out an RFP and we award the contract. No need to make a big production out of it. Au contraire. One of the easiest BPO mistakes is entering an agreement without stakeholder buy-in. According to Tom Blodgett, Xerox’s COO for financial services, if the client’s entire organization isn’t committed to the transformation, things could head south fast. “Many projects have failed because key stakeholders in the organization weren’t involved in the decision and didn’t believe in the objective,” he said. “It is imperative that executive management, operations, procurement, IT, and any other impacted area, are committed to making the engagement work — especially when unforeseen challenges come up.” Skillful change management and communication upfront eliminates some of the stumbling blocks down the road. “There will be roadblocks to overcome in every engagement.  If you don’t have upfront buy-in from the key stakeholders, you may have a difficult time navigating the roadblocks in an efficient manner,” Randag of DATAMARK, Inc. said. “Everyone has to have one common goal.” 4. Believing “Executive Sponsor” is a Part-time, Short-term Job Executive oversight is equally critical – and that means choosing an executive sponsor who is far more than a figurehead. It’s a full-time job. “BPO requires a lot of change. The rules of the game have to be clear and there has to be a referee. If the top sponsor doesn’t play an active role, if he or she isn’t at meetings to make decisions, things can come to a grinding halt,” Glueck of HP said. Glueck is quick to point out that, nearly 100 percent of the time, when a sponsor checks out, it is because of bandwidth constraints, or a belief that his or her involvement is only needed during the initial transition. The reality is that involvement and executive governance spans the life of the engagement. So, it’s imperative to assign a sponsor with the resources to have that kind of availability and focus. 5. Refusing to Adjust “The Way We’ve Always Done Things” When you hire someone to clean your house, that person typically does the job faster and better than you can yourself – and get rid of that spot or stain that, try as you might, you never really could. That’s not a surprise. Cleaning professionals have their own techniques, tools and probably tried something you …

Signing a Foreign Trade Agreement Made Colombia Outsourcers More Welcome in the US Market

Outsourcing Center, Beth Ellyn Rosenthal, Senior Writer

The Foreign Trade Agreement (FTA) is no longer an unfamiliar concept. By 2013 most American companies understand and appreciate the value of offshoring. Since the Indians were among the first suppliers to pioneer the concept of sending work across geographical boundaries, American companies feel comfortable offshoring major functions to Indian service providers. Outsourcers in other countries would like to be considered on the short list at selection time too. American companies, however, have been reticent since they have had a decade of good experiences with India. “Our service providers want to work for US companies, but the buyers have been wary,” reports Juan Carlos Gonzalez, vice president of investment for ProExport Colombia, the Colombia government entity in charge of promoting foreign investment, international tourism and non-traditional exports. Colombia’s service providers decided to tackle the challenge head on. The Colombian government (which includes the US Embassy), ProExport and other agencies worked with the Office of the United States Trade Representative (which is part of the Office of the President) to sign a Foreign Trade Agreement. The Trade Representative’s office monitors the trading partners’ implementation, “enforcing America’s rights under those agreements,” according to the Trade Office. Colombia and the US signed their Foreign Trade Agreement in May. According to the Trade Representative’s office, Colombia is now the 18th country to meet the qualifications to earn an FTA since 1958 when they came into existence. Gonzalez says the “FTA sets out clear, long-term rules on how to do business between the US and Colombia. It gives us a label of authenticity and accountability.” He says qualifying for the FTA “gives American businesses the right idea about Colombia. It shows our companies can comply with all US laws.” The Proexport executive adds the Foreign Trade Agreement was important to the South American country because its outsourcing industry continues to grow despite the world economy’s tough times. “Outsourcing is a priority business sector for Colombia because it creates good jobs for our citizens,” Gonzalez explains. The value for Heinsohn Heinsohn is one of the largest IT service providers in Colombia; it has 700 employees. It develops products and services for pension funds. The company, founded in 1977, did well until 2002 when domestic and regional competition increased markedly. “Big projects became difficult to get. We needed to find a new source of business,” says Santiago Gil, vice president for consulting services. Before the FTA, almost all Heinsohn’s buyers were either domestic or in another Latin American country, according to Gil. “We want to offer our services to America because the market is so much bigger there,” he continues. The FTA “helps us overcome the challenges Americans may have with doing business with Colombian companies,” he adds. He believes it will help US buyers “think of Colombia as an outsourcing possibility.” Gil adds the Colombia government is working with different American agencies “to remove the barriers we found before the FTA.” The FTA is critical, according to Gil, because “it isn’t obvious why companies should do business with Colombian companies.” He says there are four main reasons: Talent. Colombia has a deep pool of IT talent with a wide range of skills. Location. Colombia is a near shore partner in the same time zone as New York City. Logistics. It’s easier to fly to Bogotá from the US than Bangalore. Stable economy. The economy has been stable and growing for the last 25 years. Heinsohn’s first step in entering the US market is to offer its consulting services. Then it plans to market products that have matured in Colombia. “We are very optimistic about this,” Gil adds. “We are putting a lot of effort into our US launch. We welcome the challenge…and the opportunity,” he says. Gil views the Foreign Trade Agreement as a watershed moment. “It’s good for Heinsohn. It’s good for our IT sector. And It’s good for the country,” he believes. Would you hire a Colombian service provider? Why or why not?  

Why is Outsourcing Innovation So Hard? Here’s How to Make the Impossible Possible!

Outsourcing Center, Beth Ellyn Rosenthal, Senior Writer

Talk to most outsourcing buyers at the outset of their engagements and innovation is always on their wish list. Talk to them two or three years later, and the one thing they wish they had gotten is innovation. The lack of innovation in outsourcing seems to be one the few things they are unhappy about. Why is innovation so difficult in outsourcing relationships? Differing perceptions are major part of the problem, according to KVL Somayaji, Global Transition & Transformation community leader for IBM. “While outsourcers provide ROI and can demonstrate tangible savings, buyers are interested in its impact on the ground. That is a matter of perception, making innovation difficult to prove,” he explains. Another problem may be the definition itself. “Disruptive innovation may not fit into a business process management context,” says Keshav Murugesh, Group CEO, WNS Global Services. That kind of innovation, which appears at regular intervals at Google and Apple, “while not impossible, will be few and far between” in a typically outsourcing engagement, he says. The importance of trust and collaboration for innovation Instead, innovation that is possible in a BPO or ITO relationship is “more of a two-way street,” Murugesh observes.  And he believes partnership is the requisite foundation. “If the engagement model is built around partnership, then innovation is more likely to happen,” the WNS executive believes. “Openness, trust and the will to collaborate,” are the key drivers to innovation, adds Rich Jaso, vice president, Global Operations, Unisys. These behaviors create an environment where both sides “have the freedom to display new ways of thinking.” Buyers and providers in adversarial mode, on the other hand, can count on no or minimal innovation, he has observed. “Both sides have to keep each other honest,” adds Subramanian Gopalaratnam, group head of innovation for Xchanging. And the will must be there on both sides for innovation to happen. The WNS executive believes innovation can happen if it’s “an aspiration for both sides.” He says it can’t be lead by service level agreements or by pressuring the service provider. “Innovation happens in a relationship of equals,” he says. In addition, the relationship’s maturity determines the level of innovation possible. “Some innovations may seem very risky at the start of a relationship, especially when dealing with non-linear models,” according to Murugesh of WNS. How do you define innovation? Murugesh equates outsourcing innovation like viewing the hour hand of a clock. “It does not move if you keep looking at it. It’s only after a point in time that you see it has moved,” he explains. Somayaji of IBM adds that the concept of innovation changes from industry to industry, even from process to process. “If there is a concept that is used in different contexts by different stakeholders with different meanings at different times, it probably is innovation,” he says. Yet he took a stab at an all-encompassing definition: “any project or process that can deliver significant tangible and intangible benefits by using emerging technologies that are ahead of industry standards.” Gopalaratnam says innovation requires “a different thought process.” In his experience, innovation “is not about shiny things. It’s about a sustained effort to think differently.” Murugesh of WNS adds innovation in outsourcing comes in many forms:  Completely new, disruptive business idea A  never-seen-before, high-impact business outcome that may create a new revenue stream A dramatic idea that changes the way the client engages with its end customer An idea that can change the direction of the client’s organization internally Jaso of Unisys adds an innovative idea doesn’t have to be completely new. It can be “an old idea used in a new way.” How buyers can aid innovation The experts say both parties are equally at fault for not producing the desired innovative outcome. Outsourcing buyers serious about innovating should do the following: Get everyone on board. Sandeep Malhotra, associate vice president, industry solutions, HCL, observes that the biggest hindrances to innovate are getting  buy in to the idea and dealing with the inertia to change. He says it is often easier to deal with both issues if the new idea has a measurable business impact, either revenue upstream or margin improvement or both. “You have to start a change management initiative early in the game,” he suggests. Look both upstream and downstream too. Jaso of Unisys says clients frequently ask his team to innovate a certain segment of an IT process. But things are also happening upstream and downstream. He says clients have to look at the entire process and be willing to work on all the pieces if they want to solve the problem. “Tangential things impact processes. You have to address those too,” he says. Invest. Somayaji of IBM says buyers need to invest both time and money if they desire IT innovation. Time is just as important as money, he adds. “Buyers can help by spending significant time in planning, so the long-term strategy is the culmination of several near-term strategies.” Ask insightful questions. Murugesh says clients can help by asking insightful questions, like: What more can I drive into my processes to make the outcome more dramatic? What kind of analytics can change the way I work? How can I generate a new revenue stream with my existing sales and marketing force? Stop focusing on the”how.” Jaso of Unisys believes the real focus should be on the “what.” He says focusing on the “how” is an inhibitor to change. He believes the ‘how’ “should be open to adopting best practices and better ways of doing things.” Adopt a long-term perspective. Somayaji of IBM believes any innovation road map must be long term, “while not losing sight of the low-hanging fruits: the near-term benefits.” Don’t fixate on cost reduction. “This inhibits innovation,” says Jaso of Unisys. Clients who live and die by their outsourcing contracts “don’t have the right mind set for innovation,” he says.  “You have to look broader than just this month’s SLA or KPI.” Stop thinking in silos. Real innovation …

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