>> ISSUE #11, 2009 www.the-outsourcing.

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Living in a world
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Surviving the
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Offshoring: Integral Penang a future
part of market  BPO star: KPMG
research value chain Asian CIOs
Global Market are more
business-savvy

Research Services market

to survive
economic storm

plement
See Inside: Special Sup
Outso u r c in g S u m m it
2009 Asia-Pacific Held for the first time
in Asia
Outsourcing | Insights

20 | Outsourcing | February – March 2008

 Insights | Outsourcing

February – March 2008 | Outsourcing | 21

 C O N T
14

20
Sur
do
24

36
 E N T S
6 Rhythm & Hues taps into MSC Malaysia
Hollywood’s leading visual effects studio
to set up high-tech studio in Cyberjaya

10 TCS cutting jobs

Penang a future BPO star

14
Malaysian city listed in KPMG’s Exploring
Global Frontiers report

Outsourcing: The early days

20
Tracing history over the past two decades

24 Living in a world of constraints

Surviving the downturn

26
A peek into Global Services Confidence
Index Report

28 The case for public sector outsourcing

33 Asian CIOs are more business-savvy

Malaysian services market to endure

34
economic storm

Leadership Extraordinaire
g
36

rv ivin Maxis rings up IBM for IT deal

the
38
Telco giant seals contract with Big Blue
to further enhance services

w n turn
o 26
40 Brisbane CC staff reveal strange calls

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>> ISSUE #11, 2009 www.the-outsourcing.com

RM12, S$8, US$8

KDN NO: PP14967/02/2010 (023611) MICA (P) 288/07/2008

PREMIER MAGAZINE ON BUSINESS AND TECHNOLOGY SERVICES INDUSTRY

ISSN 1985-1 0 0 6

Living in a world
of constraints
Surviving the
downturn
Offshoring: Integral Penang a future
part of market  BPO star: KPMG
research value chain Asian CIOs
Global Market are more
business-savvy

Research Services market

to survive
economic storm

ement
See Inside: Special Suppl
urcing Summit
2009 Asia-Pacific OutsoHeld for the first time in Asia
Clearly, the economic gloom has blanketed much of the content
in this issue of Outsourcing, dominating the minds of our columnists,
theteam feature writers as well as our interviewees as the unprecedented global
situation trudges on with no foreseeable cure in sight.

Managing Editor/Publisher: As much as we could like to put on a positive outlook for the year,
Sritharan Vellasamy the threat and sense of danger is unmistakable.
Consultant: Regarding the American economy, a recent interview saw investor
Sundra Surian
extraordinaire Warren Buffett chillingly declare: “It’s fallen off a cliff”.
It seems no one is sure when it will hit the ground but the American
situation has undoubtedly hauled the rest of the world down with it.
editorial: sri@wordlabs.com.my
The Oracle from Omaha, however, remained optimistic that
Sub Editor: Simon Vella
Art Director: Steven Choo America’s best days are ahead, but he says the country will likely face
Graphic artist: Shafie Osman higher unemployment and eventually inflation because of the current
Contributors: Tamyne Menon,
Dorothy Llew, Mohd Arshad economic crisis.
Coordinator: James Wee
But it’s not all gloom in the outsourcing industry as experts are betting
their money on the surge of outsourcing activities in Asia for the coming
times as corporations look to reduce their costs and risks.
sales: sales@wordlabs.com.my
Michael Corbett – the chairman of The International Association of
Vikraman Visno Outsourcing Professionals (IAOP) – is one.
Resh Nathen
He stresses that Asia’s role in the global outsourcing marketplace will
be important in moving forward. “Challenges create opportunities,”
he says.
contact: admin@wordlabs.com.my
As such, the upcoming IAOP Asia Pacific Summit in Kuala Lumpur
from May 12-13 is surely a timely event.
An exciting occasion is on the cards as the world’s top outsourcing
practitioners and business leaders get together for a one-of-a-kind annual
gathering to explore and set the future of outsourcing in Asia.
WORDlabs MEDIA (001645509-W)
Be sure to check out our Special Focus editorial supplement for more
27-1, Metro Centre, Jalan 3/146,
Bandar Tasik Selatan, information on this grand event to be held for the first time in Asia
57000 Kuala Lumpur;
Phone: +603 90564770, 90580971; Pacific. – Sritharan Vellasamy
Fax: +603 90564771, 90580972
Outsourcing | News bits

MDeC hopes for Telekom Malaysia

wins govt
call centre deal
govt’s BPO support Telekom Malaysia (TM tre for the
deal to manage a con
country’s Department of
er
tac

a
t cen

five
) has won a

Irrigation and
-year deal.
Multimedia Development Corporation its MSC Malaysia Job Camp programme Drainage (JPS) und known as
(MDeC) hopes the government will con- this year from 7,000 graduates last year to The JPS Contact Centre, hotline,
ne” wil l hav e a sin gle
“JPS Careli
tinue to relocate certain functions through meet the demand from industry. eral public
business process outsourcing (BPO). He said the programme was open 1-300-80-1010, for the gen enquiries,
ke
MDeC CEO Datuk Badlisham Ghazali to those underemployed who decide to to get information and ma ns on all
give sug ges tio
said that through BPO, the government upgrade their skills, the unemployed, complaint and
could concentrate on its core responsibility fresh graduates and those who have been JPS related matters. agreement,
Under the 5-year service
and competency. retrenched. rce d ser vice provider
TM is the outsou
“It will also provide more confidence “The programme will be promoted
t will pro vide the com munication
tha
in the Malaysian public sector,” he said to other states like Terenganu, Penang, tact centre
at MSC Malaysia Job Camp BPO and Pahang and Johor in near future,” he infrastructure for the con iary of
, a sub sid
while VADS Berhad
Contact Centre Management (BTEC) added.
wil l ma nag e the con tac t centre
Certification Graduation Ceremony in To date, the total number of knowledge TM, ipping
operations tha t inc lud e equ
Cyberjaya. workers contributed by MSC Malaysia is contact
Earlier, Badlisham said MSC Malaysia 79,000 and this is expected to increase to the centre with the right with
er
100,000 by 2010. centre technology togeth
aimed to produce 10,000 graduates under ple and
the recruitment of the peo vice
inin g of the cus tom er ser
tra
representatives.

Rhythm & Hues

taps into
MSC Malaysia
Los Angeles-based award winning vi-
sual effects studio, Rhythm and Hues Studio,
will be setting up a high-tech studio on par
with its Los Angeles studio in Malaysia.
With more than 100 feature films to its
credit such as Babe, The Hulk, The Golden
Compass, The Chronicles of Narnia and Night
In The Museum, Rhythm is recognised as
one of Hollywood’s top visual effects and
animation facilities.
“Rhythm is not outsourcing or doing
back office work in Malaysia. The work done
here will be the same sort of thing being
done in LA. The Malaysian studio will be a
wholly-owned subsidiary of Rhythm in the
US,” said Rhythm senior advisor Shahril
Ibrahim.
“For instance, while shooting a film, the
lighting is done in Mumbai, the animation
in Kuala Lumpur and the visual effects in
LA. So it’s a very collaborated effort which
is broken up into task groups.”
The studio in Malaysia will be Rhythm’s
third outside of the US. It also has studios in
Mumbai and Hyderabad. Presently, there
are 300 people in the India outfit.
Shahril said Rhythm was in need of The Golden
a third studio and had looked at a few Compass ...
countries. Rhythm &
Malaysia was chosen because of Multi- Hues had
media Development Corp’s (MDec) support a hand in
for this sort of work, he said. Cost was creating
another huge factor, apart from the big this 2007
pool of students studying multimedia in Hollywood
Malaysia. blockbuster.

 | Outsourcing | March – April 2009

Outsourcing | News bits
Malaysia hot
spot for BPO:
Frost & Sullivan
The efforts of the Malaysian govern-
ment and the Multimedia Development
Corp have been instrumental in position-
ing the country as a shared services and
offshoring hub.
In a report on “Contact Centre Outsourc-
ing Trends in the Asia-Pacific Market (2008-
2011)”, Frost & Sullivan said Malaysia was
seeing good response from US and Europe
clients seeking business process outsourcing
(BPO) services.
“Outsourcers such as Symphony House,
Scicom and VADS were offering one-stop
solutions at competitive prices,” said the
research and consulting firm in a state-
ment.
It said companies like TeleTech, a leading
global BPO company providing a full range
of front- to back-office outsourced solutions,
Mobile phone operator
considers more outsourcing
Mobile phone operator Vodafone is
considering outsourcing more of its 465
contact centre jobs.
Vodafone spokeswoman Alison Sykora
told reporters that Vodafone already uses
Salmat SalesForce to provide customer
support services from Auckland, and was
looking at extending the contract. Where
possible, Vodafone contact centre agents
 | Outsourcing | March – April 2009
was expected to expand its operations in
Malaysia.
However, it said, Malaysia also needed to
develop its labour pool to make itself more
competitive in the offshoring landscape.
Frost & Sullivan said Asia-Pacific would
continue to dominate in the sector for both
voice as well as non-voice business process
outsourcing sectors.
“By 2011, the opportunity in Asia-Pacific
for contact centre outsourcing services is
expected to cross US$20 billion,” it said.
The report said with established markets
such as India and the Philippines, and
emerging destinations such as Malaysia,
China, and in the foreseeable future Viet-
nam, the APAC contact centre outsourcing
market was set to grow at a compound an-
nual growth rate of 14% from 2008-2011.
affected by the move would become em-
ployees of Salmat SalesForce.
Vodafone has three contact centres in
Auckland and one in Cairo. They employ
465 contact centre staff, including contrac-
tors. Telecom New Zealand has already
announced plans to outsource 250 seats jobs
to Manila over the next 18 months, bringing
the total number of staff there to 700.
Singapore
joins
IAOP
The Singapore
infocomm Technology
Federation (SiTF) has joined
an international organisation,
which is seeking to transform
the world of business through
outsourcing.
Last week the SiTF became
an affiliate member and the
official local chapter for the
International Association of
Outsourcing Professionals
(IAOP), which has 40,000
corporate, professional,
and associate members
worldwide.
The IAOP is the global,
standard-setting organisation
and advocate for the
outsourcing profession.
Its Asia members include
Malaysia, Hong Kong, and the
Philippines.
The membership was
confirmed recently with a
signing ceremony between
the SiTF, represented by the
Best Sourcing Chapter (BSC)
Chairman, Charles Fan and
IAOP Chairman Michael F
Corbett.
The IAOP’s client-side
members are, on average,
responsible for US$60 million
per year of outsourcing
spending with some
overseeing outsourcing
programmes worth billions of
dollars.
The SiTF has some 400
members from multinational
corporations and local
companies.The main charter
of the federation is to assist
its members in business
development, market
intelligence, overseas trade
missions, networking and
alliances.
Corbett said that each
association can leverage on
the new partnership and
bring greater benefit to
their respective outsourcing
members.
The IAOP’s 2009 Asia-
Pacific Outsourcing Summit,
“Outsourcing 2009”, to be
held in Kuala Lumpur, Malaysia
from May 12-13, will explore
Asia’s role in the new global
economy.
Outsourcing | News bits

JP Morgan to
up outsourcing,
says report
The second-biggest bank of the US, JP
Morgan Chase, which acquired Washington
Mutual and Bear Stearns recently, will
increase its outsourcing to India by 25%
this year to nearly US$400 million, it was
reported.
The firm will also manage the integra-
tion of the acquired companies from India to
bring down the cost of integrating different
information technology (IT) systems, ac-
cording to a news report out of Bangalore.
The strategy is being driven by JP Morgan
CIO Guy Chiarello as part of his wide-rang-
ing efforts to cut costs, it was claimed.
According an article in India’s Economic
Times, JP Morgan is one of the first banks in
the US to have fleshed out its outsourcing
strategy ever since the banking meltdown
happened.
The article did not say which Indian
companies had won the bidding for the
additional US$100 million of work, but it
did state that JP Morgan currently spends
between US$250 million and US$300 mil-
lion with Cognizant, Tata Consulting, and
Accenture. In addition, JP Morgan also
operates its own captive IT operation in
Mumbai.
India still
a top location
Global financial firm Moody’s
has said India will remain a top
outsourcing destination.
“India will remain a top out-
sourcing destination because of its
tech-savvy and English-proficient
urban workforce whose wages are
much lower than their western
counterparts,” Moody’s economist
Sherman Chan said.
Chan further said India’s out-
sourcing industry will certainly be
hurt by this global downturn, as
demand for IT support or telemar-
keting has weakened significantly
in recent months.
However, it will recover well af-
ter the global economy rebounds,
though the recovery is expected to
be gradual as businesses will remain
cautious with investment plans, she
added.
In his first address to the joint ses-
sion of the US Congress last month,
Obama had stated his adminis-
tration would end tax breaks for
corporations that ship the US jobs
overseas.
On asked whether increase
in protectionism of the domestic
industry in the US and the devel-
oped countries is hitting the Indian
outsourcing badly, Sherman said, “I
don’t think businesses leave India
mainly because of protectionist
sentiment.”
“A more likely reason is that
activity is being scaled back in the
light of a slowing global economy,”
she added.
The US$40 billion Indian software
and BPO export industry, mainly
driven by outsourcing, draws 60%
of its revenues from the US.

TCS cutting Staffing issues for

jobs Malaysian datacentres
Datacentres in Malaysia are understaffed, according to
Tata Consultancy Services (TCS) has Symantec Corp’s annual “State of the Data Centre” report.
decided to fire around 1,300 employees or Raymond Goh, Director of Systems Engineering for Symantec
1% of its global workforce this year, it was Asia-South, said Malaysian datacentres have staffing
reported. issues because the country has a very
About 100 employees have already been young IT workforce.
sacked in Chennai alone in late February, “Operational experience in the
sources in TCS told Times of India. datacentres is very hard to come by,”
This comes in the wake of recent an- he said.“IT managers in eight of the 10
nouncements by the company’s MD S
“IT manage rs companies we surveyed in Malaysia
Ramadorai recently that variable pay of
employees is being reviewed this year, to in eight ofnth e said there are difficulties getting
counter the tough economic situations
10 compa d ies qualified employees.”
Symantec declined to reveal
in
we surveye there
across the globe. the Malaysian companies it
The IT major has also increased working surveyed but said they included
hours to 45 hours per week from 40 hours id
Malaysia scau telecommunications and
s
are diffi ltliie
effective April 1. government organisations.
ed
When asked about job cuts, he had told
The Economic Times that the company wasn’t
getting quaesfi.”
employe
planning to cut jobs immediately but might
have to if the situation worsened.
Going by its analyst presentation for the
third quarter ended December 2008, TCS
had a total employee count of 130,343.

10 | Outsourcing | March – April 2009

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Outsourcing | News bits

‘More American CFOs

say no to offshoring’
Nearly two-thirds of chief financial
officers at technology businesses say they’ll
oursource services or manufacturing this
year, but more plan to outsource in the US
rather than abroad.
An annual survey by accounting and
consulting firm BDO Seidman LLP showed
that 22% say the US is the outsourcing
destination they are most likely to consider
in 2009, compared to 16% for China and
13% for India. Another 19% report no
interest in additional outsourcing.
“While last year may have produced
an outsourcing bubble, 2009 will see com-
panies retrench to survive in the face of
reduced demand. The US has become a far
more viable option for them,” said Douglas
Sirotta, a partner in BDO Seidman’s technol-
ogy practice. “This year we are seeing three
global factors that are causing US technol-
ogy companies to pull back from traditional
outsourcing locations, led by the recent
boom and bust of the worldwide economy.
Satyam’s fraud case and the terrorist attacks
in Mumbai are causing a lot of companies
to reconsider operating in India.
“And supply chain and shipping cost
issues in China are negatively impacting
the attractiveness of outsourcing technology
operations.”

PMI seeks for eTelecare occupies

presenters Talk House
next year’s eTelecare Global Solutions, a eTelecare to further expand its

Congress leading provider of complex busi-

ness process outsourcing (BPO)
solutions, has completed the
global delivery network, by adding
approximately 400 employees in
Cape Town, South Africa.
the
esentations for acquisition of The Phone House “A key component of our corpo-
The call for pr ent Institue (PMI)
rate strategy is to address the large
Project Managem 2010 – Asia Pacific (Proprietary), a BPO Services
s UK contact centre market,” said
Global Congres subsidiary of Talk Talk Group, the
op en . telecommunications division of John Harris, president and CEO of
is now must be
All submissions il 2009. For The Carphone Warehouse Group eTelecare.
A pr “We are pleased to have this
completed by 19 w to submit a PLC.
ho In conjunction with the opportunity to acquire The Phone
information on submit, please
to House centre because it provides an
topic and a link sses.pmi.org/ purchase of The Phone House,
http://co ng re eTelecare entered into a three-year offshore delivery platform to serve
visit: .
introduction.cfm rmation, e-mail: agreement to provide BPO services the UK market and establish an
For more info pmi.org to Talk Talk Group customers in important new business relation-
rs@
congress.speake the UK. The acquisition will enable ship with the Talk Talk Group.”

Aviva inks deal with EDS

EDS, an HP company, and Aviva announced
a 10-year, US$1 billion data centre services
contract to reduce Aviva’s operational costs,
improve information access and increase
flexibility.
Under the terms of the agreement, EDS will
transform and manage two data centres for
Aviva, the world’s fifth largest insurer. The
data centres, located in Norwich, England,
serve Aviva’s businesses in the UK, India,
France and Ireland.
“Partnering with EDS for data centre
services, in our view, supports Aviva’s goals
to improve flexibility, increase operational
efficiency and lower costs,” said Igal Mayer,
UK general insurance CEO at Aviva. “After a
thorough evaluation, we chose EDS over other
global service providers because of its col-
laborative approach as well as its unmatched
reliability, security and value.”

12 | Outsourcing | March – April 2009

FlkjfliZ`e^s8[=\Xkli\

THE Premier Magazine on Business and Technology Services Industry

OUTSOURCING
“PROVIDING
THE RIGHT STAGE
FOR OUTSOURCING
SERVICES PROVIDERS
AND SEEKERS”

A quality production of Word Labs Media

CONTACT US:

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Outsourcing | feature
Penang a future
BPO star: KPMG
Penang could become a centre favoured
by business process outsourcing (BPO)
players, a study by KPMG said.
Large labour pools, proximity to the
major client bases and multiple language
skills could help the Malaysian city or any
other of 31 spots nominated by KPMG
become potential alternatives to established
Indian cities.
The auditors said the credit crisis has
14 | Outsourcing | March – April 2009
prompted a new rush for outsourcing
services across IT and that a number of
new locations are emerging as viable BPO
hubs.  “Though established locations may still
According to KPMG’s Exploring Global
Frontiers report, places like Bangalore,
Chennai and Shanghai could soon be
approaching saturation point.
“Traditional sourcing locations, which
have been at the forefront of the outsourcing
boom, were always going to reach satura-
tion point,” said Edge Zarrella, Global Head
of IT Advisory at KPMG.
be considered as epicenters of outsourcing,
entities are beginning to look at alternative
locations due to favorable business environ-
ment, access to a good supply of talent, good
quality of life and lower costs.”
Zarrella added: “Corporates now need

to know which locations to consider
next for their outsourcing activities.
There are many locations around
the world which are able to supply a
credible outsourcing capability.”
“However, there are subtle nu-
ances in terms of labour skills, niche
specialisations and government
incentives which have led us to
highlight these 31 locations as stars
Penang skyline …
The Northern state
has been listed as one
of the 31 outsourcing
hubs of the future by
KPMG.
of the future.”
The 31 locations are an eclectic
mix, ranging from well-known
cities in developed countries to
lesser-known places in the emerging
markets, well off the tourist track.
Winnipeg, Belfast and Brisbane
all feature for example, alongside
Queretaro, Davao City and Cluj-
Napoca.
feature | Outsourcing
Lim says
the recent
listing
proves
Penang’s
future
potential.
On the KPMG list, Buenos Aires,
with its population of nearly 13
million, thus features alongside tiny
Port Louis (population 130,000) in
Mauritius. Despite the difference
in size, both are emerging as im-
portant future outsourcing centres,
with the latter rapidly developing
an international reputation as a
disaster recovery centre.
“Companies are focused on
reducing their cost base, both for
short-term and long-term gain,”
Shamus Rae, Advisory Partner at
KPMG in the UK said.
“As a result, more organisations
are considering savings obtained
through outsourcing parts of their
operations. Most importantly,
they should be convinced that by
doing so, they are not sacrificing
performance for the sake of cutting
costs.”
However, Rae cautioned that
these emerging destinations still rep-
resent a degree of risk and should be
assessed on a case-by-case basis.
“Penang’s record RM10.2 billion
in investments in 2008 and contin-
ued faith in the future potential is
proven by its recent listing as one
of the 31 outsourcing hubs of the
future,” Penang Chief Minister Lim
Eng Guan wrote in his blog.
Lim added that the KPMG nod
proves “our superior human re-
sources and talents”.
The full list of highlighted
destinations includes 10 locations
in the Americas (Buenos Aires,
Campinas, Curitiba, Calgary,
Winnipeg, Santiago, Guadalajara,
Queretaro, Boise, Indianapolis); 10
in Asia-Pacific (Brisbane, Changsha,
Hangzhou, Ahmedabad, Jaipur,
Nagpur, Penang, Davao City, Iloilo
City, Ho Chi Minh City); and 11
in Europe, the Middle East and
Africa (Sofia, Zagreb, Cairo, Port
Louis, Belfast, Gdansk, Cluj-Napoca,
Rostov-on-Don, Belgrade, Tunis and
Lviv).
March – April 2009 | Outsourcing | 15
Outsourcing | COVER

16 | Outsourcing | March – April 2009

 COVER | Outsourcing

Offshoring: Integral part of

market research value chain
By Pranav Dixit
The need to conduct market re-
search has changed over the years
primarily driven by globalisation,
and rise in competition, among
other factors. The marketing func-
tion, which was earlier restricted to
creating awareness and building
differentiators among products, has
expanded and become central to the
creation of these new products.
Large corporates are now spend- The market
ing anywhere from US$5 million to research industry,
US$100 million on market research. which is fairly
Research agencies too have tried to new to offshore
complement the changing needs of outsourcing is still
clients with professional manage- to evolve from
ment, consolidation and creation the ‘traditionally
of value through both delivery outsourced
mechanisms and interpretation. services’ like data
The increasing use of technology has collection and
led to standardisation and consolida- processing to high
tion in the research industry, thus end analytics.
preparing the ground for greater
outsourcing. While shortening research than US$10 million are also started
cycles and greater cost pressures adopting offshoring. The results
Global Market Research: Break-up by are compelling drivers
Global for offshor-
Market Research: derived
Break-up fromby the survey of market
Geography (FY 2006-07) ing, the propagationGeography
of technology research agencies reveals that with
(FY 2006-07)
in research functions is facilitat- greater competition, research agen-
ing offshoring. Additionally, the cies, especially the smaller ones, are
changing role of research agencies Middle East increasingly using offshoring to gain
Middle East where they provide greater “insight and Africa competitive advantage.
and Africa and foresight” to their clients 2%
Latin America has Most of the research agencies
Latin America 2% 5% of these
increased the inclination surveyed offshore activities such
5% companies to offshore larger por- as data collection, data processing
Asia Pacific
tions of the research
14% “execution” to and panel services. This is due to the
Asia Pacific service providers across the globe. high level of USA
offshoreability of these
14% 36%
USA services. However, many companies
36% Services offshored have also explored offshoring in
Today, close to two-thirds of the relatively “difficult to offshore” areas
market research agencies offshore like project management, report
work to service providers located writing and research design.
across Asia, Eastern Europe and A large chunk of data collec-
Latin America, according Europe
to a recent tion and processing that has been
43%
survey conducted by ValueNotes. migrated to offshore locations has
While the large multi-national been transaction based. The market
Europe Source: ESOMAR
research agencies have been Global out-
Market Research Survey 2006-07
research industry which is fairly
43%
sourcing certain services, the smaller new to offshore outsourcing is still
agencies with revenues typically less to evolve from the ‘traditionally
Source: ESOMAR Global Market Research Survey 2006-07
Offshoring - Covers two thirds of the ground
Global Market Research
Industry North America 69%
Globally, market research is a
Offshoring - Covers
US$24.6 billion two(FY07).
industry thirds of the ground Europe 69%
Europe leads with a 43% market
Markets

share, followed by North America at Asia 75%

rth America 69%
36%. Although the market research
industry has been one of the earliest Others 50%
Europe users of outsourcing as a tool to 69%
enhance focus on their core activi- Offshoring at least one service
ties, offshoring is relatively new to
Asia the industry. 75%
Source: ValueNotes Research

Others 50%
March – April 2009 | Outsourcing | 17
Offshoring at least one service Outsourcing and Offshoring of Services
 40%
Offshoring at least one service Source: ESOMAR,ValueNotes Research
Outsourcing | COVER
Source: ValueNotes Research

Outsourcing and Offshoring of Services

Problem Formulation
In-house

Solutions Presentation Opportunities

Survey Programming
Project Management Project Management
Panel Services Data Collection Panel
Data Processing Services
Data Analysis Untapped
Outsource

Field Data Collection Opportunities Analytics

Analytics Charting and Presentations
Panel Services Project
Management
Near Shore Offshore Data Data Mining
Standardisation
Source: ValueNotes’ Report on Market Research Outsourcing Rapid Growth
Opportunities Project
Management
outsourced services’ like data col-
lection and processing to high end Survey
analytics. Programming
Like in other areas where offshor- Data Data Validation
ing has matured, cost arbitrage is Processing
the primary driver for offshoring but
other factors like faster turnaround CATI
Data Entry
time, better quality of work etc. and Tabbing
have emerged as equally important Traditional
Opportunities
factors.

Opportunity in market 2000 2005 2012

research
While various studies have projected
different numbers, the total potential Source:ValueNotes’ Report on Market Research Outsourcing
for offshoring research and analytics
services can be broadly estimated
to be in the range of US$8 billion to at US$10 billion. The focus of research agencies has
US$10 billion by 2010. The offshoreable market for been on outsourcing tasks that are
The ESOMAR report on global market research is estimated at transaction based and which can
marketing research industry esti- US$4 billion in 2006 (40% of the be executed from an outsourced
mates total industry revenues at outsourceable market). location. In market research; study
US$24.65 billion in 2006. Technically A typical market research project design, interpretation and analysis
35% to 40% of these activities can has many components that are are considered as key differentiators
be outsourced, which is estimated (or can be potentially) outsourced. and hence are often retained in-
house. However, all other activities
Global Market Research: Outsourceable, Offshoreable Estimates have huge potential for outsourc-
ing.
The research agencies are ex-
Global Marketing Research Industry pected to scale up outsourcing in
other non-core activities in the next
three to five years. The MRO service
Outsourcable providers have to build competencies
35 to 40% to address these requirements and
In-house move up the value chain.
55 to 60% The exhibit below shows tradi-
tional, rapid growth and untapped
opportunities.
This growth will be primarily
driven by ‘rapidly growing’ and other
‘untapped’ opportunities. The down-
ward pressure on costs, shortening
Offshoreable research cycle, and the increasing
40% use of technology in market research
Source: ESOMAR,ValueNotes Research drove early adopters to outsource
some of their market research ac-
tivities with the prime motive of
maintaining profitability. Over a
period of time, offshoring of market
Although the market research industry has research has matured into a full-
fledged knowledge industry.
been one of the earliest users of outsourcing as
a tool to enhance focus on their core activities, Pranav Dixit is the Principal Analyst
offshoring is relatively new to the industry. – Research & Analytics at ValueNotes,
a leading research provider focused on
Opportunities the outsourcing industry.

18 | Outsourcing | March – April 2009

Untapped
Panel
Services

Malaysians
take
pride in
their work
A study by Kelly Services revealed
that Malaysian workers were pre-
pared to accept a lower wage or a
lesser role if their work contributed
to something more important or
meaningful.
The latest Kelly Global Workforce
Index, which sought the views of
nearly 100,000 people in 34 countries
including almost 2,000 in Malaysia,
found that 48% of people would
forego income or status to do some-
thing more meaningful, with baby
boomers (aged 48-65) the most likely
to make such a sacrifice.
Kelly Services (Malaysia) Sdn
Bhd’s VP and Country General Man-
ager, Melissa Norman said that a
significant number of people were
actually prepared to give up some
of their salary and their position
if they could do something that
was important to them and their
organisation.
“They place value on work which
is personally satisfying, which builds
competence and self-belief, and
which helps to advance long term
career goals,” Norman said.
The survey demonstrates the
value of work in building pride
and self-confidence, and highlights
the differing views across the gen-
erational divide. Amongst the key
findings of the survey: By global
standards, Malaysians derive a high
degree of pride and self-confidence
ABOVE ... from their jobs. Some 94% said their
Across all the work gave them a sense of pride
generations, and 87% said that it raised their self
female workers confidence.
were more likely • 57% of baby boomers were
to be concerned prepared to forego salary and
about career position for more meaningful
prospects and work.
career direction. • 71% of Gen X (aged 30-47) plan
to look for a new job within the
next year.
• 28% of Gen Y (aged 18-29)
said they would not choose the
same field of work if starting out
again.
The findings reveal Gen X
and the baby boomers as those
most concerned about their career
directions with Gen X likely to
switch jobs in larger numbers in the
feature | Outsourcing
immediate future.
Across all the generations,
females were more likely to be
concerned about career prospects
and career direction.
Norman said that the findings
highlighted the importance of em-
ployers in helping to bring out the
best in their workforce by tailoring
work that is engaging, stimulating
and which encouraged people to
learn new skills.
“Employees’ aspirations will
change markedly over the course
of a career, so it is important to
recognise the things that are impor-
tant at each stage in order to build
and maintain a motivated, stable
and high-performing workforce,”
Norman added.
“By global
standards,
Malaysians
derive a high
degree of
pride and self-
confidence from
their jobs.”
March – April 2009 | Outsourcing | 19
Outsourcing | analysis
Outsourcing:The Early Days
This is the first part of a series by Dr Wendell Jones tracing
the history of outsourcing over the past two decades.
Outsourcing, as we know it
today, owes its origins to new ways
of thinking about services and to
new concepts of organisational
models and business practices. These
management and organisational
changes coincided with an extended
period of continuous and rapid tech-
nological changes and the rise of a
highly competitive global market.
These convergent forces fueled the
worldwide growth of outsourcing.
Now, as the first decade of this
century nears completion, it is inter-
esting to observe how far we have,
or as some might argue, have not
come. Much has been written about
outsourcing since the early 1990s,
when we signed a US$3 billion
outsourcing contract at McDon-
nell Douglas with IBM, which is
still one of the largest information
20 | Outsourcing | March – April 2009
technology outsourcing agreements
in history.
Soon thereafter, Robert Klepper
and I began work on a book in 1993
at a time when few outsourcing
books had been published, and the
academic research was limited to
a handful of faculty, notably Rudy
Hirscheim and Mary Lacity.
Since those early days, scores
of books and thousands of articles
have appeared in print. A basic
search in December 2008 of multiple
databases for the term, Outsourcing,
produced a list of over 33,000 ar-
ticles, including over 1, 200 articles
in scholarly journals, 1,700 articles
in magazines, 21,000 articles in
trade and industry publications, and
6,700 newspaper articles. A similar
search for Offshoring produced a
list of over 450 articles, including
Manufacturing era …
Some pundits were
forecasting the demise of
manufacturing in the US
and the rise to dominance
of service industries.
But this did not happen.
Instead, major changes
in management thinking
resulted in completely new
ways of doing business from
one end of the value chain
to the other.
two articles in scholarly journals,
25 articles in magazines, about
170 articles in trade and industry
publications, and 180 newspaper
articles.
“The 1980s Arguably the most influential
and 1990s academic researchers of the last two
were periods decades are Lacity, Joseph Rottman
and Leslie Willcocks, who began their
of pivotal research in 1988 with a focus on IT
change in outsourcing. During those twenty
the way US years, they interviewed over 1,000
management client and supplier stakeholders in
nearly 300 companies. Their primary
thought and co-researchers and co-authors over
acted, due to the two decades included David
the intense Feeny, Rudy Hirschheim, Thomas
pressure Kern, Sara Cullen, Peter Seddon, Eric
Van Heck, John Hindle, and Guy
of global Fitzgerald.
competition.” In 2000, Lacity, Feeny, and Will-
cocks began to study business process
CONTINUE PG 21
PREMIER MAGAZINE ON BUSINESS AND TECHNOLOGY SERVICES INDUSTRY
S p e c i a l F o c u s

Asian
region…
destination
of choice.

During these tough times,

outsourcing has almost become the
order of the day, further providing Asia
a perfect platform to revel at the heart
of the new global economy.
Come May 12-13, business leaders
from around the world will come
together in Malaysia to discuss the
future role of outsourcing at the 2009
Asia-Pacific Outsourcing Summit
(APOS 2009).
Themed:“Outsourcing 2009: Asia’s
Role in the New Global Economy”, the
event will be held at the Kuala Lumpur
Convention Centre.
This showcase is produced by
the International Association of
Outsourcing Professionals (IAOP) in
association with Outsourcing Malaysia
(OM) – a special interest group of The
National ICT Association of Malaysia
(PIKOM) and Multimedia Development
By Sritharan Vellasamy Corporation (MDeC), the country’s
leading IT development organisation.
Chairman of PIKOM and OM, David
Wong said: “The Summit will explore

Bringing the
and showcase the vital role Asia
now plays in the global outsourcing
landscape.
“And while today’s economic
slowdown certainly impacts all aspects

outsourcing
of business, we feel that the Asian
region will provide some answers
in moving forward in terms of
outsourcing and offshoring.”
Staged for the first time in the

world to Asia
continent, the event is part of the
world-renowned Outsourcing World
Summit Conference Series.
IAOP Chairman Michael Corbett
said: “Asia’s role in the global
outsourcing marketplace will be
pivotal moving forward, despite the
Get ready for landmark APOS 2009 economic downturn, which is why it is
in Kuala Lumpur this May so important for any global company
to understand how outsourcing is
changing and evolving in the region.”
 S p e c i a l F o c u s

Wong … ‘The
Summit will
explore and
showcase the
vital role Asia
now plays in
the global
outsourcing
landscape.’

“Challenges create opportunities,”

said Corbett, who has served as an
expert on the topic of outsourcing at
hearings called by the President of the
United States.“Service providers are
aggressively examining their products
and services to create greater value
and increase market share in these
times. Companies are recognising they
need to use this as an opportunity to
strengthen relationships with their
partners because each one of those
partners will make them a better
company.”
The IAOP, with 40,000 corporate,
professional, and associate members
worldwide, is leading the effort to Varanasi … ‘IAOP Malaysia Corbett … the IAOP Chairman.
transform the world of business has been quite an active
through outsourcing. Its client-side chapter in the region.’
members are, on average, responsible
for US$60 million per year of
outsourcing spending with some
overseeing outsourcing programmes in
the billions of dollars. sourcing decisions. and brand new opportunities are
“Particular Wong said more than 500 high emerging. At the same time, the value
Malaysia as the hosts
It is indeed great news that Malaysia
emphasis level global industry players are
expected to attend the Summit.
proposition for every country and
even many of the regions within a
was selected to hold this event, said is being He said:“We are targeting buyers, country are in constant flux.”
OM Head (Marketing & Branding)
Bobby Varanasi.
placed on vendors, advisors and government
officials, including industry associations. Front line experience
Varanasi, who is also the IAOP buyers as Particular emphasis is being placed on At the event, some of the main topics
(Malaysia Chapter) Chairman said:
“IAOP Malaysia chapter has been quite
we believe buyers as we believe their experiences
and perspectives are the most crucial
will focus on the latest experiences
from today’s front lines as well as the
an active chapter in the region, and their to understand and learn from. Hence current research and thinking into
we had proposed to IAOP Board that experiences our programme’s pricing is aimed at how outsourcing to Asia is likely to
Kuala Lumpur be the host to the first
event in Asia-Pacific. and good discounts for buyer delegates.”
Varanasi stressed that the focus of
evolve over the next couple of years.
Varanasi says: “Both these themes
“Furthermore, OM had invited perspectives the event is well timed to the tough will explore the success measures
IAOP Chairman Corbett to speak
at the World Congress in IT in 2008, are the economic times the world is in.
He adds:“For many Western
adopted by organisations in their quest
to leverage globalisation of services,
which helped Malaysia showcase its most companies, Asia is the first destination while also showcase the challenges
event management capabilities.”
He said the Summit would also crucial to of choice for outsourcing and
offshoring. But the market is changing
that are necessary to overcome in
changing times.”
emphasize outsourcing’s emergence understand rapidly. Activities and locations that “Particular emphasis of most
as a global business practice and
profession, and the critical connection and learn only a few months ago were the
centre of many companies’ global
speakers shall be placed on how to
leverage opportunities the current
between cultural ties and global from.” strategies are today’s commodities, economic crisis presents, while not
S p e c i a l F o c u s

“An IAOP survey found that 75% of organisations

will do the same or more outsourcing in response
to the financial crisis. They also said that greater
contract flexibility is their top need.”

compromising on value creation and
cost-savings options,” Wong said.
Despite the current global
economic bad weather, he is confident
that outsourcing business will thrive
on in the region and around the world.
He said:“I am confident that
companies will continue to outsource
more, definitely not less. Their
focus however will shift toward cost
savings with built-in needs demanding
variability with costs or pricing, and
also increased focus on performance.”
Varanasi chips in:“Gone are the
days when providers could grow on
input-based pricing models. Today’s
demand for performance-based
and or output-based pricing will
push providers to really focus on
core capabilities with verticalised
impacts, rather than just at the level of
services.”
Recently, IAOP surveyed 450
organisations from 20 countries
that attended its recent annual
conference. The survey found that
75% of organisations will do the same
or more outsourcing in response to
the financial crisis. They also said that
greater contract flexibility is their top
need.
Malaysian scene
The coming summit, acknowledged
Wong, will also help shift the local ICT
outsourcing industry into a higher gear.
“This landmark event in
Malaysia will act as a catalyst for the
outsourcing industry in the region,”
he says.“Events such as this are very
promising and draws strength from the
combined efforts and vast experiences
of respected organisations such
as IAOP.” He adds that there is
strong support for the outsourcing
industry from MDeC. “In addition,
the outsourcing industry in Malaysia
is still looking at positive growth of
15-20%, even during the downturn, in
comparison to overall ICT growth of
about 5%.”
Job creation and human capital
development is one of the key targets
of OM, says Wong. “The growth of
Volatile … Asia’s this industry will create thousands of
role in the global technical and managerial jobs within
outsourcing the country. This is important to grow
marketplace will the number of skilled ICT workforce
be pivotal moving for the industry.”
forward – despite He explained that outsourcing
the economic remained one of the most promising
gloom. sectors in Malaysia. “There is no talk
of retrenchments in this sector and
the Ministry of Human Resources
is allocating funds for retraining and
re-skilling of fresh graduates and
unemployed people for business
process outsourcers. By 2012, there
are expected to be 300,000 nationwide
outsourcing jobs in Malaysia.”
Some other important OM
efforts include providing substantive
information about the industry itself.
The group will undertake a focused
custom research, an ongoing exercise
that gathers, evaluates and analyses
both data and information related to
the industry. Wong said:“We firmly
believe that such information is vital to
sustain the attractiveness of Malaysia
within the outsourcing eco-sphere.”
S p e c i a l F o c u s
Asia’s Role in
New Global Economy
The 2009 Asia-Pacific Outsourcing
Summit, being held 12-13 May, 2009 in
Kuala Lumpur, Malaysia, in association
with Outsourcing Malaysia and
PIKOM, the association representing
the information and communications
technology (ICT) industry in Malaysia,
brings the worlds top outsourcing
practitioners and business leaders
together for a one-of-a-kind annual
gathering to explore and set the future
of outsourcing in Asia.
Introducing The 2009 Asia-
Pacific Outsourcing Summit
Presented by the International
Association of Outsourcing
Professionals (IAOP), this must-attend
event is part of the world-renowned
Outsourcing World Summit
Conference Series. Designed to meet
the business and educational needs of
outsourcing professionals with a real
understanding of the differences in
creating and implementing outsourcing
strategy in the Asia-Pacific region,
this event will ensure you are ahead
wherever the outsourcing market
goes.This is a unique opportunity to
learn the best outsourcing practices
from both global and regional points of
view, and for customers and providers
of outsourcing services to make
powerful connections.
Renowned for its keynote speakers:
• The Power of Outsourcing:
Leadership Lessons from One of
the Worlds Top IT Executives
Marty Chuck, COP, Founder,The
CXOs LLC
• Long Distance Innovation:
Overcoming the Hurdles to
Value Creation in Global
Relationships
Danny Ertel, COP, Partner,Vantage
Partners, LLC
• The Future of Outsourcing and
the Culture Surprise
Beverley Honig, CEO, Honeylight
Enterprises Pty. Ltd.
Additional speakers include:
• Mark Boyle, Managing Director
Outsourcing APAC,Accenture
• Rob Cayzer, Director, Marketing
and Business Development, MDeC
Malaysia
• Matthew A. Considine,
Director of Strategic Operations,
athenahealth Inc
• Snjezana Cvoro-Begovic,
Senior Development Director,
Electronic Arts, Canada
• Leila Chirayath Janah,
Founder and CEO, Samasource
• Jag Dalal, COP, Managing
Director,Thought Leadership, IAOP
• Philip Hadcroft, GM – Strategy
& International Development, Salmat
BusinessForce
• Aman Mustafa, Director IT,
Offshore,ACS India
• Eus Pontenagel, COP,
International Business Development,
Quint Wellington Redwood
• Asif Quadir, Senior Counsel,The
Bank of Nova Scotia
• Eric Rongley, CEO, Bleum
Incorporated
• Mritunjay Singh, AVP, Infosys
Technologies Limited
• Bobby Varanasi, COP, CEO,
Matryzel Consulting
SOCIAL &
NETWORKING
EVENTS
Sunday, 10 May
• Optional Networking Event:
Tour of Kuala Lumpur.
Monday, 11 May
• Networking Reception for IAOP
Corporate Members and Speakers:
Get a head start and make
the most of your time at the
event by introducing yourself to
colleagues and potential partners.
Tuesday, 12 May
• Customer-Only Networking
Breakfast:
Join fellow delegates for
networking and experience
sharing early in the conference
so you can make stronger
connections.
• Networking Luncheon and IAOP
Chapter Showcase:
Enjoy lunch with colleagues who
share similar interests.
• Cocktail Reception in the
Exhibition Forum:
Exchange ideas and experiences
over cocktails.
• Gala Dinner:
Join IAOP as the Outsourcing
Hall of Fame Award is presented
for the first time in Asia.
Wednesday, 13 May
• Networking Breakfast:
Start the final day with coffee and
conversation.
• Networking Lunch:
Meet your peers at a networking
lunch, where you will have
the opportunity to form new
relationships and potential
business opportunities.
The Exhibition Forum at The
2009 Asia-Pacific Outsourcing
Summit is an integrated
networking and social venue
within an event that is, by
design, educationally focused.
Delegates attend the Summit
to gain insight and guidance
and treat its exhibitors not
as vendors, but as a valued
part of their educational
experience at the Summit.

Join Outsourcing Malaysia
O
utsourcing Malaysia (OM) is an
initiative of the outsourcing
industry and a chapter of PIKOM
– the country’s Association of the
Computer and Multimedia Industry. The
prime objective of this organization
is to enhance global visibility of
Malaysian service provider capabilities
to the global buyers. OM focuses on
enabling both buyers and providers of
services to work together on addressing
service needs, within the aegis of global
best-practices and competencies.
Officiated by the Prime Minister in
2006, OM aims to represent 80% of
all Malaysian outsourcing providers by
2012. Highlights of the benefits our
members are enjoying are:
Industry representatIon
OM represents the local outsourcing
industry to the Govt and private sector
both locally and overseas. OM is backed
by the support of its two institutional
partners, i.e. MDeC and MDV, and
consulted by a large number of
organisations such as MDeC, MATRADE,
PSDC, Malaysian Central Bank, etc.
trade promotIons
• Marketing the capabilities of
Malaysian industry to local and global
buyers through various trade events,
while generating business leads for
members.
• Providing business-networking
s9 OM – Advertorial.indd 20
opportunities for members through
networking sessions, inbound and
outbound trade missions and industry
meets.
Industry InformatIon
• Providing forum for members
to debate important industry issues
and promoting conducive business
environment through appropriate
government policies for the industry.
• Regular Thought Leadership
brainstorming sessions.
• Access to OM’s Thought Leadership
content via Member’s Login on its
website.
BusIness exposure
• Providing members with tremendous
business exposure and visibility through
the complimentary listing via OM
website and overseas campaigns;
• OM as the direct contact point for
global buyers.
• Affiliations with global outsourcing
focus publication such as the Black Book
of Outsourcing Global Vendor Directory,
Forbes etc.
prIorIty, suBsIdIes & dIscounts
OM Members are given priority in
OM-organised events in terms of
reservations, subsidies and discounts.
Members are provided subsidies on
Overseas Campaigns and other Capacity
Development Programmes. Discounts
SPECIAL FOCUS
S p e c i a l F o c u s
and complimentary priorities are
allocated for participations of seminars,
conferences, cocktails, industry talks,
surveys, and media promotions.
capacIty development
programmes
OM is responsible in introducing the
International Association of Outsourcing
Professionals (IAOP) Certified Outsourcing
Professionals (COP) and Master Class
programmes; and working alongside with
MDeC on their K-Workers Development Institute
(KDI) programmes designed to develop the
human resources of the industry.
gloBal memBershIp and
affIlIatIon
Global Membership
• Sourcing Interest Group (SIG)
• IAOP through partnership with
MDeC.
gloBal affIlIatIons
Through PIKOM’s partnership and
membership:
• ASOCIO • NASSCOM • WITSA
For more information, please visit our
website at: www.outsourcingmalaysia.org.my
Contact: OM Secretariat
1106 Block B, Phileo Damansara 2
No 15 Jalan 16/11, 46350 Petaling Jaya
Selangor, Malaysia.
Tel: +603 7955 2922 F: +603 7955 2933
e-mail: info@outsourcingmalaysia.org.my
10/20/08 12:23:55

From page 20
outsourcing (Lacity et al., 2003;
Feeny et al., 2005), and offshore in
2003. Later, Rottman and Lacity
interviewed 238 people, including
53 supplier employees in India and
34 in China (Lacity and Rottman,
2008). Ilan Oshri, Julia Kotlarsky,
and Willcocks also began a large
research project on offshore out-
sourcing (Oshri et al., 2007).
The collective work of these eleven
researchers formed a research base
of over 500 companies on five con-
tinents, covering most industries
as well as central, state, and local
governments.
This multi-part article traces
the history of outsourcing over the
past twenty years. We begin with
the initial drivers of outsourcing,
including the early thinkers and
proponents of change, who set the
stage for the shifts in managing
thinking and the transformation of
American enterprises.
The pressures of a competitive
global economy stimulated the need
for cooperative relationships with
other companies, and these organi-
sational and economic changes set
the stage for the phenomenal growth
of outsourcing.
Global competitive pressures
The 1980s and 1990s were periods
of pivotal change in the way US
management thought and acted,
due to the intense pressure of global
competition. As the US rose to super-
power status during and after World
War II, its manufacturing prowess
was based on mass production of
standard goods. Low-cost production
was achieved with long production
runs of standardised products and
integration that went backward to
sources of inputs and raw materials
and forward into distribution and
marketing. The bulk of US manufac-
turing output in the industrial age
was consumed in internal markets.
Foreign markets did not influence
major design, manufacturing, or
marketing decisions.
Managerial mindsets shaped by
World War II and the aftermaths
were soon shaken by the steep rise in
global competition of the 1970s and
1980s. Companies from countries
that previously were no competition
for American goods entered the US
market with higher-quality products,
a greater variety of products closely
attuned to the tastes of discriminat-
ing consumers, and less expensive
products based on more efficient
foreign technology and cheaper
labour.
Shoe and apparel manufacturing
went abroad, Japanese autos almost
ran US vehicles off the road, and
the US steel industry was in tatters.
Some pundits were forecasting the
demise of manufacturing in the
US and the rise to dominance of
Corporate service industries. But this did not
juggernaut happen. Instead, major changes
… Whatever in management thinking resulted
advantages in completely new ways of doing
bigness by itself business from one end of the value
used to confer chain to the other. US management
on a business learned quality, product diversity,
have largely flexible manufacturing, just-in-
been canceled time supply, value chain analysis,
by the universal outsourcing and the necessity for
availability of constant change.
management and
information. Early influencers
One influential development was
the recognition that services are a
competitive differentiator for many
companies, a concept advanced
in a Harvard Business Review
article written in 1990 by James
Bryant Quinn, Thomas Doorley
and Penny Paquett. They described
the corporation as a collection of
services that provide value. Even in
manufacturing firms, most workers
are in service-type functions, such
as research, logistics, maintenance,
design, IS, accounting, and law, and
account for about 75% of all costs
in most US industries. To think in
terms of services, they argued, is to
concentrate on the activities that
create most of the value. Value is
added in style, image, durability,
after sales maintenance, as much
analysis | Outsourcing
as in the actual fabrication of a
product.
The three authors contended that
technological change in services
offers strategic opportunities. Service
companies that employ advanced
technologies are able to offer services
at lower cost and higher quality
than the same services generated
inside the firm. Instead of analysing
market share, they urged managers
to analyse the strength of the service
components of their business rela-
tive to competitors and outsource
non-core functions.
Outsourcing permits organi-
sations to devote more time and
attention to the core activities that
provide competitive advantage,
and outsourcing, they argue, can
reduce the size and layers of the
organisation, allowing executives
to focus on obtaining, developing,
and motivating the people who
create value. It also frees manage-
ment to focus attention on strategy,
coordination, and the capabilities
that increase competitiveness.
Proponents of organisational
change
Peter Drucker, Tom Peters, Walter
Powell and other prophets of change
decried hierarchically structured
organisations, and promoted less
centralised, more flexible, and re-
sponsive organisations structured
around teams of knowledge work-
ers. According to Drucker, the task
should be the focus of organisational
structure, not the division of the
organisation by function which
prevailed in earlier decades when
General Motors, DuPont, and other
classical companies were highly
integrated firms.
These huge organisations in-
cluded almost every stage in the
value chain from production and
delivery of raw materials through
the production process to sales,
delivery, and after-sales services.
Corporate strength was measured
by the extent of vertical integration
forward and backward along the
value chain.
Drucker argued in the “New
Society of Organisations”, that
knowledge is a factor of produc-
tion, along with land, labour and
capital. Drucker explained that
every organisation must build the
management of change into its very
structure. Neither is large nor small
size a necessary advantage to an
industrial firm.
Economies of scale no longer
conferred advantage for the produc-
tion of products. What counts for
more are quality, flexibility, agility,
and the ability to meet diverse con-
sumer demand. As Drucker stressed:
“Whatever advantages bigness by
itself used to confer on a business
have largely been canceled by the
CONTINUE PG 22
March – April 2009 | Outsourcing | 21
 Outsourcing | analysis

Outsourcing permits
organisations to devote
more time and attention
to the core activities
that provide competitive
advantage, and
outsourcing, they
argue, can reduce
the size and
layers of the
organisation,
allowing
executives
to focus on
obtaining,
developing,
and
motivating
the people
who create
value.

From page 21
universal availabil-
ity of management
and information. What-
ever advantages smallness
by itself conferred have largely
been offset by the need to think, if
not to act, globally”.
Constant change meant that companies
needed new and different organisational
models. Peters lectured widely and taught
US managers that change will always
be with them, and that companies must
constantly innovate to survive. Powell made
the case that outsourcing, alliances, and
reengineering are logical responses to the
shortcomings of large, integrated firms that
are unable to respond rapidly to competitive
changes.
He argued that hierarchy reduces worker
motivation, the desire for promotion makes
people avoid criticism of supervisors and
other managers in the hierarchy, and the
fear of making a mistake stifles worker
initiative. Although large organisations
may work well for repetitive, predictable
tasks, Powell contended that repetition leads
to formalisation of rules and creates barriers
to open information flow. Therefore, the
lack of agility motivated companies to look
to alliances, downsizing, re-engineering,
and outsourcing for solutions.
When the need is to reduce costs and
increase management control over alloca-
tion of resources, Powell sees outsourcing
as the rational response. But when world-
class skills and innovation are needed,
companies look for alliances and other col-
laborative relationships that complement
existing capabilities and compensate for
shortages of needed skills and capabilities.
When internal tasks are too slow and
unresponsive, firms turn to reengineering,
which entails rethinking and radically
reorganising business processes, reducing
management layers, and substituting
information technology for labour.
Powell emphasised that increased compe-
tition stimulates outsourcing of standardised
tasks, redesigning and re-engineering
internal processes
for more flexibility
and faster responses, and
creating alliances to access
new skills and innovation.
For the past two decades, the
global economy has presented companies
worldwide with unprecedented opportuni-
ties and challenges, and influenced by the
early writers and proponents of change,
many companies responded with outsourc-
ing relationships.
The second article in this series, to be published
in the next issue of Outsourcing, describes the
influence of continuous change in IT on the
growing demand for outsourcing in the 1990s
and traces the meteoric rise of offshore outsourc-
ing in the first decade of the new century.
Dr Jones is a Professor of Management and a
former senior executive at Compaq, NASDAQ,
and McDonnell Douglas. He is recognised as a
leading outsourcing practitioner, advisor and
thought leader. He has written many articles,
and he co-authored a book still recognised as
one of the best outsourcing references. His book
was recently released in a Chinese edition.

Technological change in services offers strategic opportunities.

Service companies that employ advanced technologies are able
to offer services at lower cost and higher quality than the same
services generated inside the firm.

22 | Outsourcing | March – April 2009

 trends | Outsourcing

Service buyers are

reducing IT budget
allocations but still
under tremendous
pressure to reduce
cost and survive.

Tholons:
Top 10 trends for 2009
The ripple of the global eco- kets as a means to hedge against “It’s an opportune time for the
nomic downturn continues to impact the volatility of existing offshore larger players to continue their
the foundation of the outsourcing contracts.” string of strategic, niche acquisi-
industry, both near and long-term, These shifts will significantly in- tions,” added Paul Santos, man-
advisory firm Tholons says. duce a high degree of consolidation aging director, Tholons Capital.
Service providers are experiencing ñsmaller and less efficient providers “In an increasingly competitive
impact of sluggish growth, decreased may face difficulties in tapping market, and improbable economic
margins and employee downsiz- “Buyers will new revenue streams and would state, the mantra of only the strong
ing. Service buyers are reducing IT need to be prone to acquisition or outright will survive has never been more
budget allocations but still under re-assess dissolution. relevant.”
tremendous pressure to reduce cost their
and survive. strategies
Despite this lingering cloud of and
uncertainty, Tholons maintains implement According to Tholons, the top 10 trends that will shape global
that the long-term demand for out- a better mix outsourcing in 2009:
sourcing remains intact. Decreasing of multi- 1. The market downturn will impact revenues during the first two to
margins will push providers to better sourcing, three quarters;
utilise existing resources, leverage near-shore 2. Focus on domestic market to increase;
operational levers, implement new and offshore 3. Global economic downturn will lead to increased outsourcing
technologies efficiently to differenti- models, in Healthcare, Education, Retail,Telecom and Legal Process
ate themselves and improve service
delivery processes.
while Outsourcing (LPO);
providers 4. Governments to take special initiatives in promoting destinations;
Clients, with reduced IT budgets 5. Clients will increase geographic diversity in their service delivery
would be more selective ñ demanding
will look to locations;
stringent SLAs, greater contractual
tap growing 6. Pricing pressures will result in reduced rates and new measures to
flexibility and output/result based domestic achieve cost savings and higher productivity;
payments. markets as 7. Consolidation imminent for small players – focus away from large
CEO Tholons Avinash Vashistha a means deals;
said: “Service buyers will need to to hedge 8. Outsourcing revival by 2009 end – driven by small to mid sized
re-assess their outsourcing strategies against the (SME) clients;
and implement a better mix of multi- volatility 9. Strong focus on innovation, R&D and technology adoption will be
sourcing, near-shore and offshore of existing key differentiators for providers;
models, while service providers will offshore 10. Sourcing deal sizes will increase for large clients.
look to tap growing domestic mar- contracts.”

March – April 2009 | Outsourcing | 23

Outsourcing | analysis
Living in a
world of constraints
By Aditya Bhalla &
Shree Phadnis
The economic downturn and
the fate of some fairly large organi-
sations have cast a shadow on the
world of outsourcing as well.
Management across the board
has become extremely cautious
when it comes to any new invest-
ments. The current mantra seems
24 | Outsourcing | March – April 2009
ABOVE ...
to be to maintain the cash flow and Managers • ITO and BPO service providers
to focus on cost cutting. clearly have are being asked by their clients
Two trends seem to be emerging to learn to to find ways to improve their
from this turmoil: perform in a productivity levels within the
•  Management at large MNCs world with same constraints.
(the outsourcers) is demand- higher level
ing evidence based on cred- of constraints Both the above scenarios are
ible benchmarks to help them than opportunities for service providers
decide whether to outsource or experienced to demonstrate their mettle.
to perform the same function earlier. Managers very clearly have to
in-house. learn to perform in a world with

higher level of constraints than
experienced earlier.
Benefiting from a world
of constraints
Living in a world of constraints has
negative connotations as it conjures
up images of cost cutting, job cuts,
projects put on hold, slashed invest-
ments on workforce development
and so on.
However, not every organisation
is viewing it in the same manner. For
some organisations it is an oppor-
tunity to question the fundamental
assumptions on which the processes
have been designed.
Large organisations over time
develop cumbersome processes that
run very efficiently at the depart-
ment level but do not always do
a competitive job in delivering
customer service across the value
chain. The booming economy adds
to the sense of complacency and
a mindset supportive of “if it ain’t
broke, don’t fix it”.
However, now more than ever,
clients are willing to listen to ideas
to help them save costs and provide
greater value to their customers.
For some service providers the
current economic downturn is their
moment of truth when they can
demonstrate their superior creden-
tials to their clients.
Consider the example of an ITO
service provider (see box, zam letak
box tepi selepas para ini). As illus-
trated in the small example, winds
of change are blowing.
For service providers wanting
to leverage this change, they must
analyse to identify the Critical
Parameters of Value (CPV) of the
business users.
Critical parameters of value can-
not be identified through a random
brainstorming session or admin-
istering the conventional voice of
customer survey to clients.
Critical parameters of value can
be obtained from the analysis of the
outcomes or jobs that the custom-
ers or end-users are getting done
through the services.
It is important to note that:
• Not all requirements to a product
or process can be called a CPV.
• The Must Have parameter, by
which a product cannot be dif-
ferentiated, will not fall in the
CPV category
• CPV are different for different
stakeholders in the value chain
For example, a customer at a
retail front-desk of a bank has to get
certain jobs done to provide superior
customer service.
One critical parameter of value
to management would be the ability
of the front-desk representative to
channelise sales opportunities. The
complexity in doing this lies in the
ITO Service
Provider Example
The technical teams of
different vendors provide software
application enhancement services to the
business users of IT applications.
Stifling … contradiction that the representa-
Management tives are of a lower skill level than
across the board sales staff and the fact that their
has become primary role is to provide customer
extremely service and not sales.
cautious when it This is where the service provider
comes to any new can step in to fulfill a real business
investments. The need by providing a solution that
current mantra blends the process level changes
seems to be to with the IT platforms to guide the
maintain the cash representative on how to pitch the
flow and to focus appropriate product to the appropri-
on cost cutting. ate customer without compromising
the customer service experience.
Conclusion
Critical parameters of value are those
attributes for product or service that
analysis | Outsourcing
When the economy was booming,
the client (IT department) was satisfied
with all vendors providing timely
closure of application support and
enhancement requests of the business
users.
With the economy tanking, client’s
focus has now shifted to fixing the
root cause to bring down the volume
of change requests originating from
the business.
Let us momentarily shift our
perspective to consider the
view of the business user of the
application. For the business user,
software applications should
fulfill their core requirement to
perform transactions in an efficient
manner with minimum complexity.
Applications should also be
adaptable to the changing dynamics
of business processes.
These are the Critical
Parameters of Value (CPV) for
which the business user will pay
money.
With slashing IT budgets, the
opportunity has been seized by
one service provider to help
realise the benefits that the
business users seek and increase
its share of the outsourced
business.
IT applications are merely one
of the tools to provide a function.
If that function can be obtained
through a simple solution
(may be a blend of IT and
non-IT) then that should also be
explored. It may however, mean
exploring new business models
with the client.
will have the greatest significance
in the customers purchasing deci-
sion. The increased constraints on
account of the economic downturn
is also an opportunity for ITO and
BPO service providers to move up
the value chain by offering services
to the under-served parameters of
high value to their clients.
Shree Phadnis and Aditya Bhalla are
Senior Consultants with QAI Innovation
Practice. They are Six Sigma Master
Black Belt, and MA TRIZ Level 3 certi-
fied. They can be contacted at shree-
phadnis@usa.net and adityabhalla@
yahoo.com.
March – April 2009 | Outsourcing | 25
Outsourcing | perspective
By Atul
Vashistha
ivin g
Surv e
th n
w n tur
do
Atul Vashista takes a peek into Global Services
Confidence Index Report
This recession has been a
burden to thousands of companies
in the West who are struggling to
survive. With sales plunging and
revenues and profits dropping faster
than ever, this has meant closure for
a number of firms. 2008 in particu-
lar was a hard year for economies
around the world and the economic
downturn has forced major players
to reassess their growth, costs and
profit margins.
As before, during such times, a
number of companies have turned
their attention to outsourcing in
their search for bigger savings. The
question that’s now being asked is;
what will the impact of this economic
downturn have on outsourcing
budgets and how deep will it effect
the current outsourcing that most
players have in place?
Recently, neoIT and Goldman
Sachs partnered to develop the
Global Services Confidence Index
(GSCI), to provide an indication as to
26 | Outsourcing | March – April 2009
the demand, risks and opportunities
related to globalisation and spending
patterns. In a survey conducted with
57 C-level respondents, including
Vice Presidents, Directors and Global
Heads of Offshoring programmes;
some salient key points emerged
that shed light on the direction
and pattern that outsourcing will
be taking over the next couple of
months.
Both the big players and emerging
contenders are even keener on the
overused catch phrase – budget.
Most organisations have kept
their non-discretionary budgets
untouched, but are closely monitor-
ing their discretionary spending
as they experience an increasing
pressure on growth and reduction
on margins.
And with the big layoffs that 2008
saw, can one expect to see bigger
outsourcing deals in 2009? While a
lot of companies have been forced
to downsize, an equal number are
eager to unchain their key execu-
tives from routine tasks, in order to
capitalise on their innate potential
by outsourcing standard, yet much
needed requirements.
This is a newer trend that is emerg-
ing globally and one that makes
outsourcing seem even more impor-
tant and cost efficient. Better resource
management, more products at the
same cost, efficient customer service
at minimum dollar; all this makes
outsourcing continue to be a viable
“Organisations and profitable option.
New contenders are emerging as
have also companies struggle to balance shrink-
realised ing budgets with rising outsourcing
the need to fees. India for example, has witnessed
capitalise an increase in costs related to real
on the estate and infrastructure, coupled
multilingual with salary inflation to the tune of
options a staggering 12%-15% – making it
newer less attractive as a destination for
emerging cheaper outsourcing labour. This has
geographies been tempered by the downturn.
offer.” Yet, the outsourcing spend for
 perspective | Outsourcing

New contenders
are emerging as
companies struggle
to balance shrinking
budgets with rising
outsourcing fees.

the first six months of this year is
expected to remain the same with no
great leaps that 2008 saw continue
into the new year. As organisations
continue to be under pressure to cut
costs, a new and significant trend
will emerge as companies leverage
near shore destinations such as Latin
America and Eastern Europe.
Companies seeking to realign
their spending will do so more in
ADM and BPO and infrastructure
spending may likely remain the
same level of onsite-offshore spend
rate. Manufacturers and tech
companies will continue to learn to
capitalise on global talent pools, to
increase products at a rush rate and
lower costs.
Organisations have also realised
the need to capitalise on the mul-
tilingual options newer emerging
geographies offer. Latin America
can provide the Spanish and Portu-
guese support that is much needed
as the Hispanic population in the
Under pressure West continues to grow. Similarly,
… Most corporations are spending a sizeable
organisations amount of their budgets in Eastern
have kept their Europe as they continue to fulfill the
non-discretionary language requirements of European
budgets markets.
untouched, China is vying for position as a
but are closely dominant contender in the play-
monitoring their ing field and one can expect to
discretionary witness an increase in companies
spending as moving towards China, despite the
they experience current political and intellectual
an increasing concerns. Will stringent contracts
pressure on and implementation of stricter se-
growth and curity codes address these concerns?
reduction on That remains to be seen.
margins. In addition, many American in-
vestors are reaching out to nearshore
destinations such as Canada and
Mexico as a cheaper alternative,
and one that fulfils the growing
time-zone and language require-
ments.
As companies work out the
smaller details, they are now looking
to question actively their own need
for outsourcing; and seeking to
reap maximum additional benefits
such as a dual language deal that
workers in these countries can offer.
Investment in these new regions
could free up hundreds of millions
in cash flow annually. And smart
use of offshoring can step up the
performance of current players on
the market.
In the end however, the ones that
emerge winners will be eventually be
those companies that are adept at
maximising the benefits outsourcing
offers, while minimising the risks
and costs involved to the betterment
of themselves, their workers and the
industry.
Atul Vashistha is Founder & CEO of
NeoGroup, a firm focused on providing
outsourced programme management
and governance. He is also Chairman
of neoIT, a leading global services
management consultancy.

March – April 2009 | Outsourcing | 27

Outsourcing | perspective
The case for public
sector outsourcing
By Glenn Davidson
At this moment in time, govern-
ments around the world and out-
sourcing companies have a golden
opportunity to build new, profitable
relationships. Unfortunately, they
continue to keep each other at arm’s
length and this distance does not
seem likely to close soon.
With economies contracting,
tax revenues shrinking, the need
for government services rising, and
the access to capital evaporating,
the public sector needs immediate
solutions.
Working together, governments
and service providers could find
new ways to deliver a higher level
of service for lower costs.
Nearly every government by now
is familiar with outsourcing, and
uses it for some services. But while
the private sector has quickly ad-
opted, and has become comfortable
with outsourcing during the past
decade, the public sector continues
to adopt it in a piecemeal fashion.
For countries that experimented
early with government outsourc-
ing, the demand for outsourced
solutions continues to be strong
and is growing. UK Prime Minister
Gordon Brown’s government has
been an especially eager customer
28 | Outsourcing | March – April 2009
of outsourcing arrangements.
A recent study by EquaTerra in
the UK underscored that fact; it
found strong demand for IT Out-
sourcing (ITO), back-office process
improvements and support for
deploying shared services. In addi-
tion, it showed that service providers
were winning contracts for training,
operational support and supply
chain management.
While the same level of outsourc-
ing adoption by governments may
not be true elsewhere in the world,
these results do reflect, however, the
immediate needs of government in
this era. If the global public sector
were as comfortable entering into
outsourcing arrangements as they
are in the UK, these trends would
likely be more typical.
Still shy
Several factors are working at the
moment to limit the spread of
public sector outsourcing. The big-
gest obstacle is political resistance.
Unfortunately, the words “outsourc-
ing” and “off-shoring” are used
interchangeably. 
Second, most of the lowest-hang-
ing fruit has already been picked.
Governments often outsource their
IT — the infrastructure or applica-
tions themselves or the people who
run them — payroll systems, fleets
or retirement plans. But momentum
into to other back-office areas — such
as finance and budgeting, procure-
ment and other aspects of HR — has
been slow.
“Many No doubt, this momentum could
be accelerated if governments were
entities promised up-front, immediate sav-
freeze ings. Unfortunately, such outsourcing
their arrangements are becoming increas-
ingly difficult because outsourcing
technology providers, at this time, lack the
in place access to capital necessary to either
provide financing for transformative
the initiatives or to structure deals that
moment lose money in the first couple of
an years. Furthermore, governments
are increasingly asking providers
economic to renegotiate the back end of deals
downturn — where most of the provider profit
hits and exists — making these providers less
willing to give early year discounts
keep even if they have the cash to make
systems in it possible.
Absent big up-front savings, most
place until governments simply do not have the
revenues resources at the moment to make any
start to investments. This has the potential
to make outsourcing very attractive
improve. — but at the same time, it places
This is tremendous pressure on providers
a major to find the profit in a deal.
The bottom line is that there is
mistake.” opportunity for outsourcing arrange-

ments with governments today, but
both political concerns and contract
risks are rising. Now more than ever,
governments need to approach all
of their sourcing options strategi-
cally — with an eye not just on the
immediate economic benefits, but
also as a means to transform the
way they deliver services.
Strategic approach
As tax revenues continue to drop,
the demand for government and
public sector services are rising
sharply. This is putting government
agencies and departments in a
box — slashing services is not
an option, but new revenue
streams will not be created during
the downturn. Strategically,
governments need to rethink how
they can become more efficient
during a recession.
Here are some ways for the
private sector to reduce operating
costs without cutting the muscle
out of their services. First, every
government agency needs to find out
exactly where it stands. Managers
should conduct performance reviews
to determine if, how and by how
much current business processes and
methods of delivering services can
be improved.  services.
It’s not an easy review to make at
perspective | Outsourcing
ABOVE ...
Several factors
are working at
the moment to
limit the spread
of public sector
outsourcing.
The biggest
obstacle is political
resistance.
RIGHT ... Now
more than ever,
governments
need to approach
all of their a time when all government spend- enue streams. They can explore
sourcing options ing is at risk of being cut. However, innovative ways to capitalise on
strategically managers who get a handle on existing assets — from finding new
— with an eye their costs and know precisely which advertising and sponsorship oppor-
not just on the processes and services are most cost tunities to adding new user fees.
immediate effective will be in a better position Many governments are making
economic to defend the essential parts of their greater use of lease arrangements
benefits, but operations — and also in a position — selling public assets such as toll
also as a means to make a case for making greater roads, government buildings, and
to transform the use of services that are proving to be physical space on emergency network
way they deliver the most cost effective. poles for WiFi and cellular service pro-
Governments also need to be viders — to commercial providers.
more creative in finding new rev- CONTINUE PG 35
March – April 2009 | Outsourcing | 29
Outsourcing | Insights
Putting
flexibility
into the
mix
CK Mah provides the
Why, What and How on
the concept of Usage-
Based Outsourcing
Why?
Some of the key reasons for out-
sourcing initiatives are to improve
quality of technical service levels,
reduce operational risk and focus
on core business strengths through
enterprise restructuring. However,
there is no doubt that the underly-
ing benefits would be to manage the
escalating IT costs particularly due
to higher operating cost and lack of
qualified technical skills.
The economic slowdown reminds
us of the importance of maintain-
ing a cost-efficient and effective
IT operation. Most organisations
are downsizing their operations
globally, in particularly back-end
support functions such as IT are
under severe pressure to further
reduce operating cost and trim
30 | Outsourcing | March – April 2009
non-essential functions.
While “cost saving” is the buzz-
word for this quarter, most econo-
mists will also argue that as most
organisations restructure themselves
and improve their internal manage-
ment structure, the economic situa-
tion will improve eventually either
through a V-shaped or U-shaped
economic recovery.
Depending on the duration of
this recession, would such sim-
plistic IT cost reduction position
the organisation to be ready for a
recovery ahead of its competitor?
Thus the concept of a Usage-Based
Outsourcing Model, which is able to
provide a flexible cost structure that
maintains an acceptable level of IT
service levels, is very attractive in the
current economic situation.
The flexibility gives the manage-
ment ability to scale the IT services
as required, which is sensitive to the
surrounding economic situation.
This is only possible if coupled with a
strategic IT outsourcing partner with
a long term relationship based on
mutually beneficial arrangement.
What?
Usage-Based Outsourcing Model
is a flexible end-to-end IT services
that focuses on the performance of
critical business functions (such as
delivery, measurement and billing)
and processes. This generic definition
therefore requires:
1. The business volatility to be re-
flected throughout the measurement
period to ensure quality of service;
2. The price and service levels to

be reflected according to the higher
efforts in the various resource catego-
ries; and
3. It to be customer-centric and
not IT service-centric as the service
element needs to be aligned to the
business process and criticality.
A simple way to understand the
usage-based model is to compare this
against our electricity utility model
at our private household. It is based
on a simple usage-based model with
a metering system through an entry
point for account monitoring and
charging purposes. You may use
the electricity as you desire based on
pre-defined technical specifications
– in this case kW per hour.
This concept works because it is
based on a standard pre-specification
of utility services through a common
Better chances electricity network to deliver a lower
… A successful cost service based on economy of
Usage-Based scale. In the IT industry, although
Outsourcing the specific usage behaviour of a
Model is possible single department within an organi-
only if it is based sation is unpredictable, the overall
on a commercially enterprise consumption is known
mutually and can be anticipated due to the
beneficial large number of potential users.
arrangement Therefore the workload balance
between the within an enterprise among various
outsourcing business units should translate to
vendor and a lower risk usage-based model. If
customer. some of the non-core or support func-
tions can be shared among multiple
organisations it will further acceler-
ate the cost efficiency measure.
While this is not a novel idea, the
security and competitive barrier is
hard to overcome for most organisa-
tions unless the outsourcing vendor
Insights | Outsourcing
takes an active role to pursue a
selection of complementary organi-
sations to share such usage-based
services.
How?
The Usage-Based Outsourcing
Model is deployed through a flexible
pricing structure (refer to Figure 1)
with an agreed and specified service
definition. The outsourcing vendor
would need to ensure delivery of
the required service within the
boundaries of a certain usage ca-
pacity according to the anticipated
consumption for each of the services
provided.
In most cases, in order to ensure
long-term commercial viability,
CONTINUE PG 32
March – April 2009 | Outsourcing | 31
Outsourcing | Insights

Accurate
measurement
… the service
element
identified must
From page 31 be measurable,
consistent,
there will be a base or basic charge granular,
on a periodic basis (such as monthly) complete and for
for fixed cost incurred for a mini- periodic review
mum level of service. Additional or enforcement
services used will then be charged by technical or
accordingly based on consumption administrative
on a periodic basis (either monthly staff.
or quarterly in some cases to reduce
administration cost as agreed by
parties involved).

S er v ic e U s a g e U ppe r
B a nd w idt h
S er v ic e
B a s elin e
L o we r
B a nd w idt h

T im e
Figure 1 Usage-Based Service Model
Definitions:
Service Baseline = The quality of service element or level of services
provided
Service Usage = The quantity of service element used
Lower Bandwidth = The area of allowed consumption below the
service baseline
Upper bandwidth = The area of allowed consumption above the
service baseline
A successful Usage-Based Out-
sourcing Model is possible only
if it is based on a commercially
mutually beneficial arrangement
between the outsourcing vendor
and customer. Both parties need to
work in partnership to standardise
the service elements to enable better
forecasting of the required invest-
ment or disinvestment depending
on the needs to reduce stranded cost
while maintaining a degree of flex-
ibility to the customer’s benefit.
This also benefits the outsourcing
vendor by leveraging economy
of scale to reduce or divert spare
capacity for other commercial
consumption. The service element
identified must be measurable,
consistent, granular, complete and
clear (and not a complex math-
ematical formula which may lead
to dispute, misinterpretation or
become expensive to manage) for
periodic review or enforcement by
technical or administrative staff.
The pricing flexibility can be
built on different levels of pricing
for each identified service element
or for the amount used for each of
the service elements. There is no
best option as it is highly dependent
on the nature of relevant service
elements in accordance to the nature
of industries.
However the degree of flexibil-
ity depends on the service element
accepted by the customer, agreed
minimal level of services, types of
assets transferred, speed of transition
or standardisation process, required
complexity of governance structure,
expected growth pattern and alloca-
tion between fixed versus variable
costs (this will determine the level
of risk undertaken which leads to
pricing competitiveness).
In summary, the Usage-Based
Outsourcing Model definitely of-
fers greater degree of flexibility for
an organisation that is trying to
manage their IT operating cost
while inheriting ability to scale the
“The required level of services when there
flexibility is an increase or decrease of such
gives the service requirement.
management This notion of variable cost
management indeed is very attrac-
ability to tive from a commercial perspective.
scale the IT The key is to ensure a dependable
services as outsourcing vendor for such a long
required, term mutually beneficial partner-
ship.
which is
sensitive
to the CK Mah specialises in the area of
surrounding infrastructure outsourcing, applica-
tion outsourcing and business process
economic outsourcing and has written numerous
situation.” articles on these subjects.

32 | Outsourcing | March – April 2009

 survey | Outsourcing

“In Asia, it’s not

unlikely to find a
CIO who comes Manufacturers
to the job from
some other set to reduce
part of the
business.”
IT spending
IT spending by the manufacturing
industry in Asia/Pacific (excluding
Japan) will take a hit as companies
counter the economic recession by
reducing their workforce, cutting
costs and overheads, and stopping
production for significant durations,

Asian CIOs
it was predicted.
In its latest study, Manufacturing
Insights Asia/Pacific, an IDC com-
pany, forecasts that manufacturing

are more
IT spending will reach US$23.4 billion
in the Asia/Pacific excluding Japan
region (APEJ) in 2009. This represents
a Year-on-Year (YoY) growth of 2.9%

business-savvy
Analysts from research firm Gartner ex-
pect chief information officers (CIOs) in Asia
to play a more integral role in transforming
their companies’ business processes with
the use of IT this year, compared to their
counterparts in North America.
Mark McDonald, group vice president
and head of research, Gartner executive
programmes, said such a scenario would
likely occur due to the relatively compact
corporate hierarchies in Asia. Results from
a recent Gartner survey showed 54% of CIOs
in Asia report directly to the chief execu-
tive officer (CEO), compared to just 38%
worldwide. Seventy-five per cent of CIOs in
Asia also reported having responsibilities
outside of IT.
ìIn Asia, it’s not unlikely to find a CIO
who comes to the job from some other part
of the business,” said McDonald. “Executives
teams here have the tendency to know each
other very well, and we find that CIOs in
Asia Pacific are much more business-savvy
than in North America,” said McDonald.
Gartner surveyed 1,527 CIOs worldwide,
from September 2008 to December 2008.
Seventy-one respondents were from coun-
tries in Asia, such as Hong Kong, India,
Malaysia, Singapore, Taiwan, Thailand
and the Philippines.
Budget growth
The survey also showed that CIOs in Asia
expect their IT budgets to grow this year,
despite challenging operating conditions.
CIOs in Asia expect an IT budget increase
of 5.32%, compared to the global figure
of 0.16%.
CIOs will need to utilise their IT budgets
to restructure the organisation, McDonald
said. “Enterprises expect IT to contribute
results in an uncertain economy. This is
more true in Asia, where CIOs plan to
allocate 24% of their budget to growing
the business and 20% to transforming the
business. “
CIOs in Asia listed business process
improvement, cutting enterprise costs and
improving enterprise workforce effectiveness
as their top business goals for the year.
but a 7.3% drop compared to the
previous forecast published in May
2008.
Debashis Tarafdar, Associate
Research Director of Manufacturing
Insights Asia/Pacific says, “During
an economic downturn, manufactur-
ers face the challenge to contain
costs. Often, the response is to reduce
workforce and outsource non-core
operations.
“However, when the next growth
cycle starts, it is not always possible
to ramp up the workforce quickly,
particularly where skilled labour is
involved.”
Tarafdar added: “Manufacturers
need to think long-term and be stra-
tegic about cost-cutting measures in
order to survive this economic crisis.
Effective use of IT can in fact help
reduce costs, and improve agility and
decision-making capability.
“This creates a platform for the
existing workforce to be more produc-
tive. It also enables collaboration
across the value chain, and connects
outsourced facilities seamlessly with
internal operations.”

SMBs discovering virtualisation

Despite first gaining traction in the corporate datacenter, virtualisation is
now becoming as popular with small- and midsized businesses (SMBs) as it is
with larger enterprises – perhaps even more so.
That’s according to the results of a recent survey from Forrester Research,
which said in a new report that about 36% of the x86 server operating system
instances at participating SMBs are virtualised, as opposed to 31% of OS
instances at enterprises.
“I was surprised by the interest in cloud computing and virtual servers
was so high,” said Frank Gillett, a Forrester analyst and the report’s author.
Gillette said it shows that companies are listening to the hype and would like to
implement the technology.
He also said that over the years, the use of virtualisation by SMBs has
trended only a few percentage points behind its use in enterprises.

March – April 2009 | Outsourcing | 33

Outsourcing | survey

In its annual Top 10 Predictions of the IT On solid ground

services market for Malaysia, IDC predicts ... However, local
that innovative and cost-saving services will players must adapt
keep the services market afloat in troubled quickly to meet the
economic times. IT services vendors that changing demands of
can adapt quickly to meet the changing customers.
demands of customers will be in a stronger
position to exploit the niche opportunities
that still exist.
The following are the top 10 key predic-
tions that IDC believes will shape the IT
services industry in Malaysia this year:
1. Services market to grow
The IT services market in Malaysia is
expected to increase from US$1.2 billion
in 2007 to US$2 billion in 2012 with a
compound annual growth rate (CAGR) of
11.1%. IDC predicts that spending on IT
services in 2009 will grow between 11% and
12% over the previous year. The business
services market is also expected to increase
from US$1.32 billion in 2007 to US$2.68
billion in 2012 with a CAGR of 14.1%. IDC
forecasts that spending for business services
will grow between 17% to 18% in 2009.
2. Shift from manufacturing to
services
Malaysia is becoming a strong competitor in
the global outsourcing market, as organisa-
tions not only seek affordable locations,
but also better value and skills. Malaysia,
traditionally strong in the contract-manu-
facturing arena, will see a shift to more
service-based outsourcing engagements.

M’sian services
The availability of affordable skilled
labour is expected to support this shift.
3. Cost savings to drive service-
oriented architecture

market to survive
Although companies are expected to tighten
their budgets in an economic downturn,
they will also look for services and solutions
that help to save costs. One such solution is

Service-Oriented Architecture (SOA), which
enables business process standardisation
across multiple clients at a lower price.
IDC predicts that 2009 is the year that
vendors will start to take notice of the vast
opportunities in the SOA market and step
in to educate customers about the long-term
benefits of SOA.
4. Increase in network consulting and
integration opportunities
Vendors will have ample opportunities
in 2009 to strengthen their position in
the network consulting and integration
services (NCIS) market. In addition to tax
deductions, the government has committed
to invest RM400 million (US$100 million)
to kick start the High-Speed Broadband
(HSBB) project, targeted to increase the
nationwide broadband penetration rate to
50% of households by 2010.
Service providers are also upgrading their
infrastructure to meet the growing demand
for larger bandwidth. Most SPs will continue
to invest in the next-generation network
(NGN) in addition to the HSBB project.
5. Virtualisation will gain momentum
The benefits of virtualisation cannot be
ignored in the era where time means money.
The adoption of virtualisation technologies
is expected to gain traction as companies
look for flexibility in their IT infrastructure
on top of the existing pressure to cut energy
cost and maintain high ROIs.
economic storm
6. Government to adopt Web 2.0
The government has always been an advo-
cate of growth in the IT services industry in
Malaysia. In a financial crisis, the role of the
government as a growth catalyst becomes
even more prominent. The government is
expected to be one of the largest spenders
of IT services in 2009. IDC sees Web 2.0
applications as a viable option for the
government to adopt in 2009.
7. SMBs to move back to traditional
ways
IDC predicts a trend in the smaller startups
(typically less than 20 personnel) to revert to
the traditional way of doing business by us-
ing equipment, infrastructure, and services
from a third-party outsourcing firm.
These small and medium-sized busi-
nesses (SMBs) do not operate from an office,
therefore requiring a PO Box address and
professionally manned phones for busi-
ness dealings. As business owners look to
downscale operations in a tight economy,
IDC sees this form of hosted business services
as an innovative solution that provides
attractive market opportunities for SPs.
8. Green IT to walk the walk
The past couple of years has seen the term
“Green IT” being promoted across Malaysia
to generate awareness of the concept and
the benefits that it can bring. IDC believes
that 2009 will finally be the year where
companies convert awareness into execu-
tion.
9. Advantage for vendors with
strong verticalisation strategy
Businesses have shown a marked preference
for vendors that understand their business
and can deliver solutions or services specific
to their business environments. CIOs prefer
industry-specific solutions so that they can
see the business benefits of investing in
specific technologies and services.
10. Software as a Service to provide
opportunities
The concept of offering alternative delivery
and deployment methods for software has
a long-standing history.
IDC predicts that Software as a Service
(SaaS) will make greater strides in Malay-
sia in 2009 due to the changing market
dynamics.
Trying times such as this will be a push
factor for organisations to adopt the SaaS
model because of its low upfront cost com-
pared with traditional licensing.

34 | Outsourcing | March – April 2009


From page 29
Make ITO a cost-saving tool
Without new revenue, it’s often difficult
to make government more cost effective.
Many public sector entities freeze their
technology in place the moment an
economic downturn hits and keep
systems in place until revenues start
to improve. This is a major mistake.
Consolidating and modernising an
IT infrastructure is often one of the
easiest ways for governments to achieve
large costs savings with a relatively
fast payback.
One of the most cost-effective
programmes governments can
implement is deploying Enterprise
Resourcing Planning (ERP) software
across multiple functions — human
resources, finance, and procurement,
to name a few — to drive efficien-
cies, better manage the function,
get access to integrated data and
eliminate the cost of maintaining
duplicative legacy applications.
Another approach that could
have an impact is to deploy Web-
enabled tools to provide citizens
easy and more effective access to
government services. This can help
a government improve its services
while actually reducing its “head-
count”.
Do governments have the means
to make these kinds of technology
investments? New line items are
hard to come by in this economy,
but managers that have a good
handle on their budgets should
be able to redeploy funds from
expensive projects that can be de-
layed —  such as replacing desktop
computers — with more strategic
investments.
In many cases, however, these
kinds of investments will be difficult.
Which brings us back to outsourcing.
Outsourcing IT projects is often the
most cost-effective way to modernise
and upgrade an IT infrastructure
— making the provider responsible
for both the upfront investment and
the upgrades.
It provides an opportunity for
governments to deploying new ap-
plications — and to make major
efficiency improvements without
adding to their staff.
Explore other options, too
If outsourcing is not an option,
there are others. Collaboration
with other governments and
agencies is another option. This
perspective | Outsourcing
Working together ...
governments and service
providers could find new
ways to deliver a higher
level of service for lower
costs.
can be done either by joining with
other jurisdictions in building
out common IT infrastructure
or by teaming up with another
jurisdiction that has already made
the upfront investments in creating
shared services centers to handle
non-mission critical functions
such as HR, payroll, financial
management and procurement/
contracting services.
Adopting a shared-services de-
livery model could reduce current
operating costs between 20 to 40%,
and free staff to focus on matters of
greater strategic significance.
It also helps provide a new source
of revenue for the government that
For countries that has already made the investment.
experimented The same approach could be tried
early with in partnership with private sector
government entities. Governments can look for
outsourcing, new ways to team with commercial
the demand firms in the building, owning and
for outsourced operating of critical public assets,
solutions including new transportation infra-
continues to be structure, technology infrastructure
strong and is and share in the proceeds of those
growing. investments.
These are trying times for the
public sector around the globe. The
depth of the economic crisis makes
it clear that governments cannot just
hunker down and wait for the crisis
to pass, they must transform the
way they deliver services. Whether
through outsourcing or other in-
novative approaches, the time for
experimentation is over, the time
for action is now. – Source: Global
Services
March – April 2009 | Outsourcing | 35
Outsourcing | management

By Dr ArLyne
Diamond

Leadership
Extraordinaire
We make distinctions between leading and
managing and often say leaders can manage
and managers should also learn how to be
leaders. But, what do we really mean by those
words? What is great leadership?
In my courses on Leadership and Or-
ganisational Behaviour, my MBA students
struggle with these terms, often describ-
ing leaders as “visionaries” and manag-
ers as “making sure the tasks get done.”
I recently read a definition of workplace
leadership as “the ability to build a team that
achieves sustained, long-term performance”.
(WJM Associates, Inc. – from their website)
I like this definition because it reminds me
of the incredibly effective and cooperative
team one of my CEOs built. Let me describe
it for you.
Coming from India, working together
in the same company, the more risk-taking
and visionary of the group decided to form a
company and he invited some of his friends
and colleagues to join him and become his
executive team. They did. Together they
formed a boutique high-tech company here in
Silicon Valley. Since I didn’t obtain permission
to write about them, I am going to disguise
some information and the names of the
executives.
Having consulted in many other compa-
nies, I am always interested in observing how
executive staff meetings are conducted. Most
of the time I find that the executives have had
their staff create sexy power-point presenta-
tions and that they talk at each other, rather
than with each other during those meetings.
Typically they don’t interfere with each other’s
Ready for offence “sandboxes” or “silos” – except if they are
… Leaders backstabbing, of course.
Extraordinaire Not so at this little boutique company
encourage the – which I will name Milpitas Tech just for this
disagreement article. When I attended the first staff meeting
– don’t allow – and many others after that I observed six men
attack – and bring (no women, I’m embarrassed to report) come
out the best from into the room as equals with a common goal of
all their team doing what was best for the entire company.
members. Under the leadership of their warm, person-
able and friendly CEO, who I am naming Joe
for convenience, this group actually talked with
each other, problem solved together, helped
each other make departmental decisions, and
although they were careful not to step on each
other’s toes, they never hesitated to make sug-
gestions for improvement. Indeed, one of my
tasks with them was to collaborate with some
of their executives to improve processes.

36 | Outsourcing | March – April 2009


Reagan … Great leaders know they must
listen to their other executives, but
ultimately make their own decisions.
As they grew they looked for an
infusion of money. The venture
capital community made offers
– but these offers included wanting
to replace some of the executives,
especially Joe, the CEO with “profes-
sional management”. Because of
how powerfully positive the team
was under Joe’s leadership, I advised
him to hold out and not leave the
team. He agreed.
Some time later they received an
offer they couldn’t refuse – money
was great, integration with another
company had marvelous potential
and best of all the team was respected
as a team and left in place.
I really believe that great leader-
ship includes the ability to create
trust and safety among those you
lead so that they can talk freely
with each other without posturing
and showing off. The executive
team members should not be in
competition – or conflict – with each
other, although disagreement due to
different needs and points of view
should be encouraged.
Leaders Extraordinaire encour-
age the disagreement – don’t allow
attack – and bring out the best from
all their team members. They lead,
management | Outsourcing
they learn, they synthesise. Great
leaders know they must listen to
“Great leadership their other executives, but ultimately
make their own decisions. Ronald
includes the ability to Reagan was this sort of leader and
create trust and safety Harry Truman gave us the phrase,
among those you lead “The buck stops here.”
When I work with CEOs, Ex-
so that they can talk ecutive Directors of Boards and
freely with each other Associations, and managers at
all levels, I stress the importance
without posturing and of developing a relationship that
showing off.” encourages mutual support, respect,
honesty and cooperation. Hiring
well, developing teams that really
respect each other and don’t get
defensive or on the attack, and lead-
ing those teams through example
are significant contributors to the
companies reputation, value and
of course, bottom line.
Leaders Extraordinaire are men
and women who deeply care about
other people as well as their visions
and desire for success within their
companies. Are you one?
Dr ArLyne Diamond is an Organi-
sational Development and Human
Resource Consultant with over 30
years. She can be contacted at www.
diamondassociates.net
March – April 2009 | Outsourcing | 37
Outsourcing | happeningS

Malaysia’s mobile telecom-

munications operator Maxis
Communications Berhad and IBM
announced that Maxis Mobile Sdn
Bhd and IBM Malaysia Sdn Bhd
have entered into a five-year IT
services relationship.
The tie-up will enable Maxis
to fast-track the transformation
of the company’s IT services and
solutions to deliver multifaceted,
innovative and enriching experi-
ences to its subscriber base of over
11 million in Malaysia.
“This is an exciting moment
for us at Maxis. We are happy to
enter into this historic and strate-
gic relationship with IBM,” said
Sandip Das, Maxis’ Chief Execu-
tive Officer. “Our two companies
share a common commitment to
delivering innovation and bring-
ing contemporary services to our
customers.
“Besides enhancing our com-
petitiveness and strengthening
our leadership, this partnership is

Maxis rings
a vital part of our efforts to propel
Maxis to the next threshold of pro-
viding future-ready and reliable
services that will bring tangible
benefits to our subscribers.”

up IBM
Under the agreement, IBM will
support Maxis’ transformation
of key business processes over All smiles
the next five years, including – Ou Shian
customer relationship manage- Waei, IBM

for 5-year
ment, service delivery platform Malaysia’s
to support value-added and data Managing
services, business intelligence and Director
dealer management. (left) and
In addition, Maxis and IBM Sandip

IT deal
will also jointly engage in in- Das after
novation projects with a focus sealing the
on extending existing business deal.
capabilities to address new market
opportunities and drive business
process innovation to achieve new
benchmarks in service quality.

PMI Asia Pacific EON Bank Group

Congress
Nearly 400 people gathered in Kuala Lumpur last February for
the opening session of PMI Global Congress 2009  – Asia Pacific.
PMI congresses are gatherings for project professionals to gain
knowledge and new ideas, and this event was no exception.
Fredrik Haren, the founder of interesting.org and the author of
The Idea Book, kicked-off the congress.
Following the keynote address and opening session, attendees
moved on to the heart of the congress, the educational sessions,
which spanned 12 categories that ranged from new trends to
advanced skills. PMI credential holders earned Professional
Development Units (PDUs) to maintain their credentials, and
all attendees sharpened their skills to compete in a challenging
economy.
The next opportunity to attend a PMI Global Congress occurs
from 18–20 May in Amsterdam. For more information, visit
http://congresses.pmi.org/EMEA2009
turns to Big Blue
EON Bank Group has implemented the IBM Power 550
Express server to accelerate the bank’s transaction process
and improve its back-end system, allowing faster data access
with applications running 24 by 7.
The RM20 million (US$5.5 million) investment was
done to upgrade the group’s core banking applications and
disaster recovery site, which is expected to further improve
the banking group’s commitment, delivery and efficiency to
its customers.
Speaking at a press conference with IBM Malaysia and
Silverlake Group to announce the implementation, EON
Bank Group Chief Executive Officer Albert Lau Yiong said,
“We are proud to be the first financial institution in Malaysia
to acquire this new system, which will improve business
responsiveness and customer service efficiency.”

38 | Outsourcing | March – April 2009

 happeningS | Outsourcing

Sealing
the deal ...
From left:
Lin, Loo,
Badlisham
and Ng.
Hike
in SAP
software
revenue in
Malaysia
SAP Asia Pacific Japan
(SAP APJ) announced it
had outperformed the
business market across
the region last year.The
company remains SAP
AG’s fastest-growing
region with a 23%

Sun Microsystems,
software revenue
growth to 594 million
euros.
While software
revenue in South East

MDeC to develop
Asia grew by 20% last
year, Malaysia’s revenue
increased by 24%.
“The steady growth
shown by SAP across

talent pool
the region and in
Malaysia demonstrates
the pull of our
products, especially
in the current trying
economic conditions,”
SUN Microsystems Malaysia Sdn Bhd (Sun) recently of open source software adoption in the country. said SAP Malaysia
signed a memorandum of understanding (MoU) “Under this MoU, students will gain relevant managing director
with the Multimedia Development Corporation IT skills and improve their employability, whilst Krish Datta in a
(MDeC) to train university graduates in Sun Learn- the global IT industry will have access to a pool statement.
ing and Certification solutions. of trained manpower on emerging technologies,” At the same time,
The alliance will see Sun providing course said MDeC chief operating officer Datuk Badlisham software and software-
materials for Java EE, Java SE, Java ME, MySQL and Ghazali. related services
OpenSolaris, with the relevant certification frame- “Sun is committed to helping the next generation revenue grew at 24%
work as well as training sessions for graduates. of entrepreneurs spur innovation through the to 1.192 billion euros.
Successful candidates will also have the op- transformative power of open source technologies,” In South East Asia,
portunity to do a three-month apprenticeship at said Sun Malaysia’s managing director, CP Loo. it grew by 19% while
MSC Malaysia Status companies. Also present at the signing ceremony were MDeC the revenue in Malaysia
This collaboration is in support of the govern- vice-president (Capacity Development Division) Ng increased by 18%
ment’s initiative to develop a pool of talented and Wan Peng and Sun Microsystems vice-president in the financial year
skilled engineers to meet the increasing proliferation (Global Communities) Lin Lee. ended 2008.

Financial Insights fetes services firms

Research and advisory firm Financial
Insights, an IDC company, announced that
ANZ Bank; Alliance Bank Malaysia Berhad;
HSBC (Bangladesh); HSBC Direct, Taiwan;
Kotak Mahindra Bank; Maybank Berhad;
Overseas-Chinese Banking Corporation;
Standard Chartered Bank; Taishin Bank;
and, Siam Commercial Bank PCL are the
ten winners of the 2009 Financial Insights
Innovation Awards (FIIA).
Held in conjunction with the Asian
Financial Services (AFS) Congress, the
FIIA 2009 – in its fourth consecutive year
– paid tribute to the most innovative use of
information technology in day-to-day busi-
ness operations by Asia/Pacific financial
institutions.
The winners showed that applying tech-
nology innovation in business strategies,
product development, and IT investment,
can bring about not only benefits such as
operational efficiency and infrastructure
optimisation, but it is also key to increas-
ing market share, securing fresh revenue
streams, and building overall competitive
differentiation in a crisis environment.
“The Financial Insights Innovation
Awards showcased the achievements of fi-
nancial institutions in applying innovation
and best practices to realise business goals,”
notes Cyrus Daruwala, Managing Director
of Financial Insights Asia/Pacific.
“It also showed that the financial services
industry in Asia/Pacific is at the forefront of
leveraging technology as a true business
enabler.”

March – April 2009 | Outsourcing | 39

Outsourcing | last word

Kiwi agents
stage hunger
strike
Up to 20 agents at a market
research companyís contact
centre in Auckland went
on a 24-hour hunger strike
in protest over wages and
conditions.
Around 110 workers
are based at the site where
wages are said to be as
low as US$12.50 per hour,
compared with US$21.72 an
hour made by their Australian
counterparts.Trade union
Unite is demanding pay of
US$17 per hour for full timers
and US$15 an hour for part
time staff.
It is also asking for its
members to be paid for shifts
cancelled at short notice, five
minutes break for each hour
worked, and guaranteed hours
for long-serving staff.

Brisbane CC
staff reveal
strange calls Some more un
o
usual calls includ
w w ha t de pa
• “I doI’vn’etfoknund an ant in my house.”
think
ed:
rtment to call bu
tI

Brisbane City Council’s contact fully to pump it out and wanted the  
centre staff have revealed some of the council to try.
say she wante d the air
to
more unusual calls fielded among Another caller made a complaint
that swooping birds had made her
• A itlaydyin her street tested, as the ees were
w ho ra ng tr
the 1.6 million phone enquiries qual ade of green.
they receive each year, Australia’s cat a nervous wreck. “I’ve had to not the right sh
Courier-Mail reported. take time off work to be with my cat  
One distressed caller rang for the to protect her. I have a lawyer and I
plained about the noisy
m
council to help find his lost clothes want to sue!” she said. • A cas he feared could damage hearing.
ller w ho co his
peg. He said he always hung wash- Brisbane mayor Campbell cicada
ing with matching pegs and losing Newman said the council’s contact  
about the tree
up to complaiinng leaves. He
the red one meant he no longer had centre staff won awards for prompt
a colour-matched set. handling of serious issues, and prob- • A mdeanhiras ng
property drri opp
Another woman lost A$200 ably deserved awards for keeping a outsi
at it w as litte ng and someone
stuffed in her bra down the toilet. straight face on the not-so-serious advised th
.
Her husband had tried unsuccess- issues as well.  should be fined

40 | Outsourcing | March – April 2009

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 4HEPERFECTINGREDIENTS
FORTHEBESTRESULTS
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