Top Story
Parents become part of the hiring picture in India
Amol Sharma, Jackie Range And Vibhuti Agarwal, Mint
When outsourcing company Keane Inc. hired Jyoti Taneja 10 months ago to work in its Gurgaon, India, offices, her parents were worried. The 22-year-old Ms. Taneja would be taking calls from American customers of U.S. health-insurance companies, finishing her shift at 2:30 a.m.
Hoping to reassure their young hire’s parents about her safety, her supervisors at Keane paid several visits to Taneja’s family home in nearby New Delhi.
They outlined the security measures Keane takes to protect employees, such as providing a shuttle service to and from work, and having security escorts accompany young women who are riding home alone. “All of that adds to my mom and dad’s confidence,” Taneja says.
Facing a shortage of workers, India’s outsourcing specialists are pulling out the stops. In a culture where twenty-somethings often live with their parents and seek their blessing on major life decisions, family outreach has become a critical recruiting and retention tool, along with offering more-flexible work hours, higher salaries and continuing education.
Such efforts “create a bond, not just between the employees and the organization, but also with the families, and is key to our retention strategy,” said Ritu Anand, a human-resources executive at Tata Consultancy Services Ltd., one of India’s largest technology and outsourcing companies, in an email.
India’s technology-services and outsourcing industry generated $33 billion in revenue last year and is expected to continue growing at a fast clip, as U.S. and European companies increasingly farm out customer service and software development, as well as such functions as billing, payroll, benefits administration and insurance-claims review.
That growth has led to stiff competition for labor. Outsourcing firms are constantly trying to recruit new college graduates and lure young talent away from one another. Employee turnover rates have jumped, with half of the employees at Indian customer-service operations changing jobs annually.
Like many other young call-center workers, Taneja has fielded several calls from headhunters offering her a salary increase. But having settled in at Keane and won over her parents, she isn’t moving. “I do get plenty of calls, but I’m not interested,” she says. “I don’t want to start all over.”
Keane, which is based in San Ramon, California, and operates in 10 countries, goes to great lengths to win parents’ confidence. The company, which employs 14,000 people world-wide and has $1 billion in annual revenue, invites parents to attend orientation sessions for the 200 to 300 new hires in India that start every few weeks.
Because Keane isn’t a household name, some parents worry that working there might not enhance their child’s marriage prospects, a key consideration in India, or are concerned about money. “They’ll ask, ‘How much will my son get?’” says Sudip Mandal, Keane’s head of recruitment in India.
Other parents want to make sure transportation to and from work is safe, especially for young women. Those anxieties were reinforced last fall by the rape and murder of a 22-year-old outsourcing employee of Wipro Technologies Ltd. on her way to the office for a night shift.
Keane’s Mandal assures parents that Keane conducts rigorous background checks on local drivers before hiring them, and checks them daily to make sure they are alert and aren’t under the influence of alcohol.
Industry
Indian IT lags in consulting
Bengaluru,Deccan Chronicle
The road ahead will be tough for Indian IT service providers: while bagging new long-term contracts is becoming difficult, currency and economic volatility may continue to be veritable bottlenecks in realizing sustainable bottom line growth. The headwinds, though, can be offset by higher margins services such as business consulting, which can build “non-linearity” in how contracts are currently shaped, experts say.
The problem is Indian vendors have marginal presence in this service, which sits right on top the IT value-chain pyramid. This explains why many Indian firms are respected technology partners but hardly ‘strategic’ associates. Business consulting implies access to a customer’s boardroom and typically commands the highest premium on the services offered.
However, this is an extremely difficult business to build and only few companies such as Infosys and MindTree have attempted to transition from just an execution role to a mix of advice and implementation.
“Indian IT firms are yet to make any significant breakthroughs into business process consulting and strategic consulting – services that address the basic structure of a client’s business. These remain the exclusive domain of the big boys like IBM, Accenture and HP along with pure-play consulting outfits,” says Anirvanjyoti Chaudhuri, managing director of technology consulting firm Kognos. IBM, for example, had executed consulting work on process improvement and change management for Canara Bank in India.
The difficulty in building a consulting practice stems from its very nature — it requires deep understanding of not only technology but of business and domain as well. For instance, a consultant should have managed businesses themselves. How else will he advise on deriving ‘business value’, or growth, profits, and customer satisfaction?
Industry veteran Sridhar Mitta, managing director of e4e, feels it is difficult to get people with all the three skills. “In advanced countries, business managers become a business consultant after a successful career in a given domain. In India, we don’t have enough people with adequate combination of the skills. In addition, there should be organizational processes to make consultants deliver value to customers. This is also not evident in Indian companies,” he says.
Nevertheless, domestic outsourcers can hardly afford to not test the service. Besides higher margins, consulting can peg the vendor on a higher pedestal while Boardroom access can aid in cross-selling other offerings: “Consulting opens doors into other areas of IT services easily. This is what the big players leverage. Besides domain knowledge, a firm would require thought leadership record and a wide global experience of industry-wide best practices. No Indian IT services company is anywhere close as yet,” Chaudhuri holds.
Many Indian firms still vouch for technology and not business consulting. Dr A.L. Rao, COO of Wipro, says the major focus for the Indian IT industry will continue to be technology consultancy. Today, the firm is not advising customers on changes in trade processing mechanism but is advising on new IT models to optimize inventory, for instance.
Weaker rupee helps, no change to guidance: Infosys
Infosys Technologies, India’s No. 2 software-services exporter, was being helped by a weaker rupee, although its chief executive said on Tuesday that it would not be changing its earnings guidance because of the move.
The rupee hit a 13-month low of 43.21 per dollar last week. It has fallen 8 percent so far this year, making it one of Asia’s weakest currencies against the dollar, after it rose more than 12 percent in 2007.
“At this level it is helpful to IT,” S Gopalakrishnan told reporters at an industry event in New Delhi.
“But more important is stability. We don’t know which way it will go .. we have to wait and watch,” he said, adding that the company would give updated guidance in its June quarter results.
Satyam Computer Services Ltd, India’s fourth-largest software-services exporter, was maintaining its earnings forecast for the current quarter and the full year to March 2009 despite a weaker rupee, its chief financial officer said on Monday.
When asked whether the rupee’s weakening would lead to losses on derivative positions, Gopalakrishnan said Infosys had reduced hedging positions to $760 million at the beginning of the April-June quarter, from $1.1 billion six months ago. http://economictimes.indiatimes.com/Infotech/ITeS/Weaker_rupee_helps_no_change_to_guidance_Infosys/articleshow/3076236.cms
EDS, CSC, IBM, Fujitsu, and Thales Chosen for Supplying UK ID Cards
IPS has signed framework contracts with EDS, CSC, IBM, Fujitsu, and Thales for the £2 billion project under the National Identity Scheme.
The Identity and Passport Service (IPS) has signed framework contracts with five companies—EDS, CSC, IBM, Fujitsu, and Thales—to provide ID cards to UK citizens under the National Identity Scheme, according to which, it will be mandatory for all UK citizens to have an ID card and to have biometrics added to their passports.
These five companies were the only ones left after BAE and Steria pulled back their bids; Bill Crothers, Executive Director, IPS, said that all the five companies were retained for the contract as all of them were qualified to bid and the difference between their scores was considerably small.
Applabs named among 50 fastest growing Asian-American biz
AppLabs, one of the largest independent testing, quality management and certification solutions company, has been named by the US Pan Asian American Chamber of Commerce Education Foundation (USPAACC-EF) as one of its 50 Fastest-Growing Asian American Businesses.
“We are indeed honoured and delighted to be named among the 50 Fastest-Growing Asian American businesses. This recognition is a testament to our dynamic entrepreneurial spirit, thought leadership in the software testing space and hard work of all AppLabs employees,” said Makarand Teje, President and CEO, AppLabs in a release here.
“As world’s fastest growing independent software testing company, this award further strengthens our leadership position in the industry, and I am really looking forward to receiving this award on behalf of AppLabs,” said Doc Parghi, Senior Vice President of North America, AppLabs.
“We congratulate our 50 Fastest-Growing Asian American Businesses for generating robust growth over the years-yet another indicator that through innovation, hard work and ingenuity, Asian Americans are at the forefront as engines of growth in our national economy,” said USPAACC-EF National
President and CEO Susan Au allen.
To qualify for the ranking, companies must be owned by one or more Asian Americans (at least 51 percent ownership), among other eligibility criteria. Based on percentage revenue growth over three years, selection was determined through direct applications and nominations. All finalists and winners were independently verified by the accounting and consulting from of BDO Seidman, LLP, it added.
EDS renews deal with Kellwood
Electronic Data Systems Corp. has received a seven-year contract renewal to provide technology services to clothing maker Kellwood Co.
Financial details of the agreement weren’t released. The companies began their relationship in 1996.
The renewal agreement includes a process by which EDS and Kellwood technical and business personnel will collaborate to share, review and prioritize innovative ideas, with the objective of helping Kellwood reduce costs and improve overall operations, according to a release.
http://www.bizjournals.com/dallas/stories/2008/05/26/daily5.html
EDS Names Frank Chechile to Lead Saber Government Solutions
Frank Chechile, a longtime EDS executive who has led major applications delivery efforts for global clients, today was appointed chief executive officer of Saber Government Solutions, EDS’ non-health care U.S. state and local government subsidiary with operations in more than 40 states. Saber is based in Portland.
Chechile replaces Nitin Khanna, who resigned from the company along with his brother, Karan, to pursue other entrepreneurial opportunities. Nitin and Karan Khanna founded and developed Saber as a leading provider of software and services to state governments. The change is effective immediately.
Chechile and Saber Government Solutions report directly to Dennis Stolkey, vice president and general manager of EDS’ U.S. Government and Public Sector.
ITES/BPO
Sex scandal rocks Mphasis
A sex scandal has cost a senior Mphasis executive employed at the Ahmedabad office of the company, his job.
Operational manager Vijay Anando put in his papers early this month after a customer service representative accused him of demanding sexual favours
and threatening to ‘ruin her career’ if she did not comply.
At least four more employees, who were also found guilty of sexual misconduct in the company’s internal probe, have been served a warning.
The victim, who let her seniors in on her ordeal when she was called to office to explain her long absence from work, has quit Mphasis and is now
pursuing a flight attzendant’s course in Ahmedabad.
Anando on Monday spoke to the Mirror and confirmed that he quit after being grilled by his seniors over one of his juniors’ allegations of sexual exploitation.
He, however, claimed that he was framed and said he would soon produce evidence to prove his innocence.
Anando alleged that a few employees who did not like him because he was a strict disciplinarian set him up.
Mphasis offices both in Ahmedabad and Bangalore refused to comment.~
Outsourcing/Offshoring
Britain IT pay freeze blame on India
London,The Telegraph
The outsourcing of jobs to India is the main reason why the salaries of low-paid staff in the IT industry in Britain have remained static for the past five years, a report has claimed.
The industry report also predicted that only when salaries in India start matching those in Britain would conditions improve for the lowest paid in the UK.
The report from the Association of Technology Staffing Companies (ATSC) effectively blamed India for depressing the wages of staff at the bottom of the IT rung.
Not everyone will agree with this analysis, however.
While it is true that British unions have resisted the outflow of jobs to India, others, including senior politicians, have argued that many companies have been able to survive by cutting costs through outsourcing. Were it not for India, it was argued, many of the lowest paid workers might now be languishing in the dole queue.
But the report claimed the outsourcing of computer contracts to other countries, notably India, had cut the wages of workers in the UK.
It added that the wages of new information technology support staff have remained stuck at £18,000 over the past five years — this is slightly below the national average — while longer serving employees have only seen their pay increase by 0.8 per cent a year.
But salaries for managers have increased by 20 per cent over the last five years to an average of £45,000, the research found.
The report predicted that there could be an IT skills shortage in the UK in the future as young people were not studying the subject in sufficient numbers — in marked contrast to the situation in India.
According to the findings published yesterday, low-skilled jobs leaving the UK “acted as a disincentive” for people in the UK to study IT, which could worsen skill shortages in the industry.
Ann Swain, chief executive of the ATSC, underlined the seriousness of the problem: “The outsourcing of entry-level IT jobs has meant fewer graduate-level jobs are available in the UK. It’s like removing the bottom rung from the career ladder.”
She said: “The shortage now is of candidates with a few years’ experience looking for second and third jobs. But how do you get that experience if entry-level jobs are being sent offshore? Concerns over quality of service and data security in outsourced operations are constantly being voiced. However, these concerns haven’t yet prompted organisations to bring their IT support roles back onshore en masse.”
The report predicted that a turning point would arise when Indian salaries, increasing at over 14 per cent, came close to those of UK professionals.
http://www.telegraphindia.com/1080528/jsp/nation/story_9330485.jsp
Technology
Microsoft: Windows 7 to Include Multitouch Features
Microsoft is finally opening up about when Windows 7 will ship, but the company continues to share just a few, yet tantalizing details of what the eagerly anticipated OS update will be all about.
The latest tidbit to drop is multitouch interface support. At the Wall St. Journal’s D Conference Tuesday evening in Carlsbad, Calif., company founder and chief software architect Bill Gates and chief executive Steve Ballmer are scheduled to unveil a laptop with a touchscreen that accepts multiple, simultaneous touches. The effect is quite reminiscent of what’s possible with the world’s most popular, commercially available gesture-based interface device: the iPhone.
http://www.pcmag.com/article2/0,1895,2309800,00.asp
Government may decide to scrap Blackberry services
Inability on part of the Canada-based firm Research In Motion (RIM), the vendor of ‘BlackBerry’ smartphones, to allow Indian security agencies to read messages or e-mails of its users is likely to further complicate matters, and could even lead to scrapping of BlackBerry services in the country.
According to RIM: “The BlackBerry security architecture for enterprise customers is based on a symmetric key system whereby the customers create their own key and only the customer ever possesses a copy of his encryption key.
“RIM does not possess a ‘master key,’ nor does any ‘back door’ exist in the system that would allow RIM or any third party to gain unauthorised access to the key or corporate data.
“The BlackBerry security architecture for enterprise customers is purposefully designed to exclude the capability for RIM or any third party to read encrypted information under any circumstances. RIM would simply be unable to accommodate any request for a copy of a customer’s encryption key since at no time does RIM, or any wireless network operator, ever possess a copy of the key,” the company has said.
RIM’s reply comes after the Department of Telecommunications (DoT) asked the Canadian firm to allow it and Indian security agencies access to messages and e-mails transferred through its system. After objections from the security agencies, the Union Home Ministry had asked DoT to ask RIM to provide the ‘master key’ so that it could access the contents transferred over the handheld device.
Stating that the BlackBerry security architecture was also purposefully designed to perform as a global system independent of geography, RIM said the location of data centres and the customer’s choice of wireless network were irrelevant factors from a security perspective since end-to-end encryption was utilised and transmissions were no more decipherable or less secure based on the selection of a wireless network or the location of a data centre. “All data remains encrypted through all points of transfer between the customer’s BlackBerry Enterprise Server and the customer’s device [at no point in the transfer is data decrypted and re-encrypted].”
“RIM understands and respects the concerns of governments. RIM operates in over 135 countries today and provides a security architecture that has been widely scrutinised over the last nine years and has been accepted and embraced by security-conscious corporations and governments around the world. Governments have a wide range of resources and methodologies to satisfy national security and law enforcement needs without compromising commercial security requirements,” it said.
Though DoT and RIM have been holding talks to resolve the issue, the recent advisory by the latter to its BlackBerry subscribers might force the government to take some harsh steps. This could include scrapping of the service in India altogether, said sources in DoT.
DoT has been demanding RIM to set up its servers in India so that its traffic could be monitored by the security agencies, but RIM has so far ruled out any such possibility. According to telecom industry sources, there are over 4-lakh BlackBerry subscribers in India and their numbers are increasing fast. Leading operators like Bharti Airtel, Vodafone Essar and Reliance Communications are offering this service.
http://www.hindu.com/2008/05/28/stories/2008052855781300.htm
Clients
Merrill Lynch Plans to Virtualize Half Its Desktops
Merrill Lynch is placing a big bet on emerging virtualization technology that’s driven by IT management cost savings.
Desktop virtualization is an emerging technology for which the practical options for large-scale adoption are just starting to take shape, so most IT leadership teams aren’t sure how big a part it will play in their IT strategies. Merrill Lynch, however, is way past wait-and-see. According to Birnbaum, the firm plans to virtualize 10 percent of its 63,000 employees’ desktops by year’s end, and as many as half within five years, including those of many mobile workers. That’s a huge bet that desktop virtualization is ready for massive scale and Wall Street’s demanding performance standards.
CSX urges holders to support board in proxy fight
CSX Corp. urged its shareholders on Tuesday to support the railroad operator’s board and said two hedge funds seeking to elect their own minority slate have made misleading statements about the company.
The hedge funds _ TCI, which manages The Children’s Investment Master Fund, and 3G Capital _ jointly nominated a slate of five board candidates in December 2007.
http://money.cnn.com/news/newsfeeds/articles/apwire/c9c15bfd19b72f4b7cb3457950bb6927.htm
Eircom boosted by strong Meteor showing
Eircom has posted revenues of €515m for the third quarter to the end of March, up 5% on the same time last year. Group earnings before restructuring costs and other items rose by 11% to €175m.
The group’s mobile arm Meteor saw 13,000 new customers signing up in the three month period. This brings its total customer base to 975,000 by the end of March, up 17% from the same time last year.
Revenues from Meteor rose by 23% to €120m on the back of the subscriber growth and higher average revenues per user. Meteor’s EBITDA jumped by 88% to €30m in the third quarter, it added.
http://www.rte.ie/business/2008/0528/eircom.html
SABMiller shares leap 7% on InBev bid talk
Shares of SABMiller, the brewer of Grolsch and Peroni Nastro Azzurro beers, rose almost 7 per cent on speculation that InBev, its Belgian rival, may make a bid if its overtures to America’s Anheuser-Busch are rebuffed.
The 85p rise in the SABMiller price to £13.09 came as shares of Diageo, which owns Guinness and Harp Irish Lager, fell 11p to 973p on suggestions that it could make its own move on Anheuser, owner of Budweiser.
http://business.timesonline.co.uk/tol/business/industry_sectors/consumer_goods/article4016270.ece
Ruling allows State Farm to avoid homeowners’ rate cut
State Farm has won another ruling in its five-year battle to avoid the insurance commissioner’s order to cut homeowners rates by 12 percent.
The Austin-based 3rd Court of Appeals issued an opinion Thursday, finding a provision in the state’s 2003 insurance reform law was unconstitutional because it failed to protect the company’s due process rights.
The court sent the rate case back to the Texas Department of Insurance
http://www.chron.com/disp/story.mpl/headline/biz/5798296.html
