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Welcome to the June 2005 issue of Offshore Insights! We are tracking the
offshore outsourcing space to give you updated news, views and trends to add
value to your offshore outsourcing decisions.
The phenomenon of offshore service delivery is not new but it is currently
enjoying a renewed level of interest. This renewed interest is partly due to
the current economic conditions that encourage exploration of low-cost options
and is partly due to the increasing maturity of the offshore locations and
suppliers that are active today.
The current trend by customers to increase offshore activities is considered a
permanent trend. There is an increased attempt from emerging offshore
destinations such as China, etc to lure business into their territories - we
see that various governments play an increasingly supportive role through trade
agreements, investments in infrastructure and education, and through tax
incentives, etc.
China is being perceived as an outsourcing destination of the future, however
in reality is it such a good option as of now? This month neoIT brings to you
‘The China Reality Check’ which contains first hand impressions about the
maturity of China offshoring today and predictions for the future too, in
addressing offshore services demand from the western world.
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| Offshore Sourcing Articles
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The China Reality Check - Impressions from a Recent Market Visit  |
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By neoIT
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End April 2006, neoIT conducted a China Knowledge tour and
visited 16 leading offshore IT services suppliers spanning the markets of
Shanghai, Beijing and Dalian. At Dalian, the Software Park executives were met
up with. The trip was extremely informative as it allowed better appreciation
of the facilities and capabilities of the Chinese IT service’s companies. The
visit also facilitated an evaluation of the state of infrastructure in various
parts of China and approximations of the demand and market trends for IT
offshore services from the western world.
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| Industry Research and Case Studies |
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Offshore & Nearshore ITO Salary Report 2004 |
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By neoIT
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The bulk of this report is an investigation of wages across
experience levels in specific offshore and nearshore locations and the
particular characteristics of each country that affect its ability to offer
global sourcing services. A look at how IT wages in each country have changed
and are expected to change is also included.
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Operating in Developing Economies: Outsourcing, Trade, and Political Risk
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By Frank Crystal & Company
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Foreign Risk is largely a product of local conviction, local
social constructs, and local trends. As a result, foreign operational risk is
fundamentally different than domestic operational risk: whereas liability for
negligence is often one the leading operational risks in the United States, it
tends to be a more nominal risk in economically developing nations. This
publication focuses on the methods of transfer available for political and
supply chain risks, which tend to be particularly acute in economically
developing nations. With a thorough approach to risk management, an American or
European company can move or outsource its service or manufacturing operations
to an economically developing nation without assuming increased operational
risk
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Best Practices in Communicating Global Outsourcing Initiatives |
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By neoIT
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The success of the communication plan depends on the development
of customized communication streams that have the end objective of addressing
key challenges, managing resistance to change and achieving stakeholder
“buy-in”. Effective communication strategies comprise of both internal and
external elements and are treated as a separate function with its own set of
objectives, guidelines and tactics. This issue goes on to discuss the factors
that an organization should consider when developing an effective communication
strategy
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| Special Events |
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Baker &
McKenzie-neoIT Global Outsourcing Webinar Series
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July 21, 2005- 'Global Outsourcing: Destination The Philippines'
August 31, 2005- 'Global Outsourcing: Destination China'
September 29, 2005- 'Global Outsourcing: Destination Eastern Europe'
October 27, 2005 Global- 'Outsourcing: Destination Malaysia'
November 30, 2005 Global- 'Outsourcing: Destination Latin America'
neoIT’s
Eugene Kublanov
& noted offshoring legal and tax experts
Baker & Mckenzie
will host a series of Free Global Outsourcing Seminars
Download the Brochure
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Brazil
Outsourcing 2005
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July 7 - 8, 2005
Rio di Janiero, Brazil
Eugene Kublanov, neoIT Vice-President
(Corporate Development), will present on The Globalization of Services: 2005 and
Beyond, on July 8, between 9.30 am and 10.30 am.
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Excite Media Group LLC and Greenberg Traurig LLP Panel on Outsourcing
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July 12, 2005
New York, NY
Tarun Mehta, neoIT Managing Director, will
participate in the panel "Global Sourcing and Services: The India - China
Discussion".
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The CIO Decisions Conference
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July 26 - 28, 2005
Pebble Beach, CA
Atul Vashistha, neoIT CEO and
Stephen Nordahl
of Milbank, Tweed, Hadley & McCoy LLC, will co-present on the topic of Managing
the Outsourcing Lifecycle.
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| Offshore Knowledge Center |
Visit the
Offshore Knowledge Center to learn more about global and offshore
outsourcing. Examine best practices on the full lifecycle of off shoring from
assessment and due diligence to transition, on-going management and analysis.
You will find reports written by respected industry analysts, articles from
around the Web, and other important resources, such as newsletters and
presentations.
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What’s new in the OKC |
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neoIT in the News |
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Outsourcing and the End of Emerging Markets
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Information week,
June 2005
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A study released last week by outsourcing consultancy neoIT says
entry-level programmers and help-desk workers in Vietnam earn an average,
annual salary of about $3,000 per year.
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Indian Call Centers to Work with U.K. on Data Theft
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Bloomberg.com,
June 2005
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"It can happen anywhere, wherever people have access to the
data," Pradeep Mukherjee, managing director of neoIT's Indian unit, said in an
interview in Bangalore. NeoIT advises U.S. companies about setting up
technology facilities in India.
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Latin America: Outsourcing's New Hot Spot
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E-Commerce News,
June 2005
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Eugene Kublanov, vice president of corporate development at
neoIT, a consulting firm based in San Ramon, Calif., that specializes in
providing advice on offshoring, said he is seeing two trends...
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India is a Role Model Supplier in Zone BPO
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The Economic Times,
June 2005
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A study by the Silicon Valley-based outsourcing consultancy,
neoIT, puts the country as the second lowest cost provider of outsourced
services in the APAC region, next only to Vietnam and a shade ahead of China.
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India's Home Advantage
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The Financial Express,
June 2005
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According to neoIT’s latest global report on ‘Offshore and
Nearshore IT salary report’, of the total cost, wages constitute 35-45% of the
total expenditure of any offshore IT company. If the same work had been done in
a nearshore location, wages would take up over 55% of the total expenditure.
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Opinion Poll |
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Is offshore satisfaction declining?
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Resources |
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ISRAEL:
Israeli Association of Software Houses (IASH)
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Founded in 1982, the Israeli Association of Software Houses
(IASH) is the umbrella organization for Israeli software and IT companies,
representing the common interests of its member companies. The more than 100
members of IASH are a mixture of mature and leading companies as well as young
and innovative ones.
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Your Space
(Readers write-in) |
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neoIT derives knowledge from market intelligence. Your opinions and views
matter to us. If you feel you have something interesting or important to tell
us, please
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write to
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Note: Articles will be edited for content and length.
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