In a huge relief to the IT industry, software companies have been allowed to enjoy benefits of the software technology parks of India (STPI) scheme for another year.

The government has extended the tax concessions under Section 10A of the Income-Tax Act to March 2010.

The scheme was to expire in March 2009 under the sunset clause provided in the scheme. On an average, IT companies would have a revenue benefit of at least 5-7 per cent (on the effective tax rate) because of this extension.

Normally, companies have about 50 per cent business located in the technology parks, export revenue from which is exempt from any kind of tax.

Shilpa Goel is going through a rite of passage. The 20-year-old engineering student at Indira Gandhi Institute of Technology is facing a barrage of recruiters from Indian outsourcing companies. Today, she has an interview with Tata Consultancy Services (TCS). She is eager to please and tells the three panelists that she would move anywhere in the world - even Pakistan.But despite her nervous demean-our, Ms. Goel knows her high marks and strong English will bring offers. She and her classmates go so far as to tick off the qualities they are seeking in an employer: good job security, good working environment, good growth rate.

Cheap brain power has driven the outsourcing wave in India. But as the number of companies and the range of services grow, so too is the demand for top graduates from the best schools. More than 400,000 students graduate each year in engineering alone, although fewer than half of them are considered “employable.” An even smaller fraction are suitable for the top-tier firms.   read more

First you should understand, How to choose perfect partner for better output in your Projects. The first Process was chiefly to do with the cost. This Business Process covers payroll system and transaction processing Services comes in back office Services operating process. Companies have grasped the understanding that they could reduce back office operating costs by turning to service providers who could arrange their own infrastructure.

In today’s competitive world, Outsource Process has become a boon for Every Person and every Country and simply for the majority of companies, offshore Services have turned out to be a very attractive option due to its cost effectiveness. Moreover, outsourcing provides the freedom of dumping all of their non-core activities, which is also an important aspect of their Projects and gives them freedom to focus on their core activities. On the whole, it is a practice of handing over the work to an individual or group of individuals who can give cost-effective fair dealing to the development of your Projects.

Software Development outsourcing really is delivering results. There is less of a variation between what’s happening in these companies and the claims they make on their conference calls.
Modern society is built around specialization more tasks are outsourced today then ever before. Most of Companies are interesting in outsource SEO and Web Development services, Transcription Services and Data entry Projects. In general, Outsource things that have one or more of three characteristics: they are complex, important, or distasteful. In business.

Large companies in sunrise sectors such as IT/ITeS and retail have shown the way in investing in training and academic interventions to feed their huge manpower requirement. Now, much smaller and niche players are not hesitating to replicate the model as industry-ready talent is getting scarce. Minnows are investing in creating third-party training facilities to feed their own requirements and also convert their idle assets (machines and manpower) into a revenue stream.

Behind this trend is not just an economy growing at 8-9 % a year, but also the structural shifts that demand new sets of skills the current education system is not geared to meet. It is this skill void that is compelling even rank start-ups to put on the coach’s hat, industry observers say. The start-up world is full of such examples such as The Writers’ Block, Teleradiology Solutions, Comat and TutorVista. And these could just be tip of the iceberg.

Rajesh Shukla, the founder of The Writers Block, a Bangalore-based documentation outsourcing company, prefers to call the choice of a technical writer’s job a “happy accident”. This is because not many are aware of the field and those who do are not adequately trained. So, this start-up today has a parallel training school that has so far trained over 500 technical writers who have joined the likes of Infosys and Wipro apart from TWB itself. There would be a need for 50,000 technical writers in the country over the next five years, he says.
A similar story is at play at Teleradiology Solutions, which reads MRI and CT scans of patients in the US at 30% lower cost. The Bangalore-based company, which dishes out medical reports in half an hour to manpower-strapped hospitals in the US and Singapore, is training radiologists and doctors in the art of reading these images. Again, the driver is captive need, which has been spun off into a revenue stream.

Says founder Dr Sunita Maheshwari: “There are only 10,000 radiologists in India while the number in the US is 25,000 for a population of 250 million.” The company’s recently launched training school, Rad Gurukul, is targeted at medical personnel and healthcare technologists.

The BPO deal space for acquisitions is looking hot again after a lull for over the last six months. The US slowdown is pushing more third-party outsourcing firms and captive operations to sell out, according to industry players and investment bankers.

Compared to the last quarter when both potential targets and buyers were in a wait-and-watch mode, large third-party BPO firms and integrated IT and BPO players are now keen on using their cash reserves to gain scale and new service lines, while potential targets that were holding out hoping for a recovery in their valuations are now interested in exiting before further value erosion happens

Many of the smaller players which are unable to scale up are now looking to sell out. Some of the investors in these companies were planning to exit through IPOs but given the market conditions they cannot go IPO now. Many multinationals with captive back office operations of less than 5,000 people are also in the market,” said one large IT and BPO player.

Cost-based approach won’t work, says Gartner official

We still see businesses making the mistake of buying BPO services using procurement managers who used to buy office furniture.

Adith Charlie

Mumbai, April 14 Mr Andy Kyte is Vice-President & Gartner Fellow at research and advisory firm Gartner Inc. In an exclusive chat with Business Line, Mr Kyte puts forth his view on happenings in the Indian BPO space.

Is it true that a lot of small to medium size BPOs are concentrating only on the top line growth by undercutting prices?

Yes, this is absolutely true. What we are seeing is a very natural state of market dynamics. If you are in a market where you have to compete for every piece of work, you really cannot focus on margins.

Any time when there are too many players in the market, the survival strategy is to win business at all costs. Doing so might not be very profitable, but it keeps you going. If by focusing on margins, you quote a higher price, you won’t be able to sell.

Unfortunately, the level of maturity among buyers of BPO services is pretty low. So, we still see businesses making the mistake of buying BPO services using procurement managers who used to buy office furniture.

Many clients just look at price-based negotiations all the time. Anybody who is involved in the industry knows that you need to have a much more complex set of evaluation criteria and that you need to understand how to pay the right price for the right service.

So it is natural; if the buyers want to buy on price, the sellers have to sell on price.

What will be the impact of such a cost-based strategy in the long run?

Eventually clients that want to leverage offshoring for the pure cost cutting logic will see a lot of deals going bad. At that point most buyers will realise that they need to buy quality and not just cheapness; the best prepared BPO vendors will develop branding strategies and delivery strategies to say that they can deliver quality and hence charge an optimum price.

Apart from the dollar appreciation, which are the other significant pain points for the Indian BPO industry?

The BPO industry has got a problem with the degree of fragmentation that exists in the industry and the difficulty of creating the true economies of scale that these vendors are looking for.

On the demand side, we are clearly not in a situation where in BPO players have more work than they can handle.

Since BPO has grown rapidly, it has attracted a lot of new players in the marketplace; the demand has not grown as much as the capacity has grown.

So it is quite a competitive environment at the moment. Moreover, all BPO vendors want to be able to achieve better price points, courtesy the rupee appreciation.

However, not all of the competitors are capable competitors and so they tend to depress prices. The reality is that this reduces margins even available for vendors offering high quality services.

Source : The Hindu

Monday, April 07, 2008:  NASSCOM has appointed Dr Ganesh Natarajan, deputy chairman and managing director, Zensar as the chairman of NASSCOM for the year 2008-09. Pramod Bhasin, president and CEO, Genpact has been elected as the vice chairman of NASSCOM for the current year.

Announcing the chairman and vice chairman for 2008-09, Som Mittal, president, NASSCOM, said, “We are pleased to have Dr Ganesh Natarajan onboard as chairman of NASSCOM. He has been associated with NASSCOM for a number of years and has helped in setting up a several initiatives focussed on innovation, as well as for the small and medium enterprises. An industry veteran, he is immensely respected and regarded by peers and colleagues not only for his adept leadership but also for his keen knowledge and focus on innovation.” 

The internet could soon be made obsolete by “the grid”. The lightning-fast replacement will be capable of downloading entire feature films within seconds.

At speeds about 10,000 times faster than a typical broadband connection, the grid will be able to send the entire Rolling Stones back catalogue from Britain to Japan in less than two seconds.

The latest spinoff from Cern, the particle physics centre that created the web, could also provide the kind of power needed to transmit holographic images; allow instant online gaming with hundreds of thousands of players, and offer high-definition video telephony for the price of a local call.

David Britton, professor of physics at Glasgow University and a leading figure in the grid project, believes grid technologies “could revolutionize society” . “With this kind of computing power , future generations can collaborate and communicate in ways older people like me cannot even imagine,” he said.

The power of the grid will become apparent this summer after what scientists at Cern have termed their “red button” day — the switching on of the Large Hadron Collider , the new particle accelerator built to probe the origin of the universe. The grid will be activated at the same time to capture the data it generates.

Cern, based near Geneva, started the grid computing project seven years ago when researchers realized LHC would generate annual data equivalent to 56m CDs — enough to make a stack 50 miles high. Ironically this meant that scientists at Cern — where Tim Berners-Lee invented the internet in 1989 — would no longer be able to use his creation for fear of causing a global collapse.

This is because the internet has evolved by linking together a hotchpotch of cables and routing equipment, much of which was originally designed for telephone calls and which lacks the capacity for high-speed data transmission.

By contrast, the grid has been built with dedicated fibre optic cables and modern routing centres, meaning there are no outdated components to slow the deluge of data. The 55,000 servers already installed are expected to rise to 200,000 in two years.

THE GRID
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While the web is a service for sharing information over the internet, the new system, Grid, is a service for sharing computer power and data storage capacity over the internet.

It will allow online gaming with hundreds of thousands of players, and offer highdefinition video telephony for the price of a local call

In search of new drugs against malaria, it analysed 140m compounds — a task that would have taken an internet-linked PC 420 years.

Source: ET

New Delhi, Apr 3 Despite the Budget remaining quiet on the extension of the Software Technology Parks of India (STPI) scheme, there may still be some hope for the industry. on Thursday said he is hopeful that the finance ministry will agree to extend the scheme by another 10 years.

“I have once again discussed the proposal with finance minister P Chidambaram and am confident he will look at extending it, although he does have some reservations,” Raja said. He added that he has also apprised Prime Minister Manmohan Singh about continuing the scheme who has interacted with the FM over the issue.

If the scheme now has to be extended, it will have to be done during the course of the fiscal year, as by the next Budget, it will lapse.

The STPI scheme, which provides a number of tax benefits including a 10-year tax holiday to units registered under it, is set to get over in March 2009. Any announcements on the extension of the schemes had to be made in this Budget to ensure continuation of the scheme. Source: Financial Express