11 Outsourcing Articles
11 Outsourcing Articles
Date: Monday, May 26, 2003 12:18 PM
JOB DESTRUCTION NEWSLETTER
www.ZaZona.com
Memorial Day is a time to remember the soldiers that fought for our
country. Let's also use this day to ponder the anti-American behavior
of the international corporations that hide behind the veil of
patriotism while plundering the families who sacrificed so dearly for
our country.
Article 1:
http://www.tcpalm.com/tcp/pj_edt_columnists/article/0,1651,TCP_1127_1964494,00.html
Vincent Safuto: Lost jobs chilling Florida
Article 2:
http://www.advanceforhim.com/common/Editorial/editorial.aspx?CC=14744
Offshore Outsourcing: Shattering the Myths
Article 3:
http://www.azstarnet.com/star/today/30514CALLINDIA.html
Tucson call centers take jobs to India
Article 4:
http://www.theinquirer.net/?article=9554
HP tries new money saving tactic. Fear
Article 5:
http://money.guardian.co.uk/feature/story/0,11579,957646,00.html
On the line to Dell hell
Article 6:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/05/23/BU308784.DTL
Real risks in Kaiser's contracts
Article 7:
http://news.com.com/2100-1011_3-1009684.html
Outsourcing guides see green offshore
Article 8:
http://www.hindustantimes.com/news/181_262500,0005.htm
US states considering banning outsourcing of data contracts
Article 9:
http://infotech.indiatimes.com/cms.dll/html/uncomp/articleshow?msid=44254021
Bangalore to host Intel's first Asian cell tech centre
Article 10:
http://www.silicon.com/news/500029/1/3869.html
Indian outsourcing goes from strength to strength
Article 11:
http://www.csc.com/newsandevents/news/2045.shtml
CSC AND MOTOROLA SIGN $1.6 BILLION 10-YEAR OUTSOURCING AGREEMENT
http://www.tcpalm.com/tcp/pj_edt_columnists/article/0,1651,TCP_1127_1964494,00.html
Vincent Safuto: Lost jobs chilling Florida
By Vincent Safuto staff writer
May 16, 2003
They're closin' down the textile mill
'Cross the railroad tracks.
Foreman said "These jobs are goin', boys,
And they ain't comin' back."
"My Hometown"
Bruce Springsteen
We've patted ourselves on the back here in Florida of late, but we've
had our share of economic pain.
The textile mills of New England, the Carolinas and even our state's
Panhandle have shut down, and their work has gone overseas, where the
minimum wage and pensions are the random rantings of socialists and
trade-union types.
We benefit by being able to buy cheap undershorts and socks, and the
loss of manufacturing and its well-paid jobs may seem very remote. It
all happened somewhere else, we say, so we can go on living in the
sunshine and watching the pelicans float by.
News that another factory or call center has up and gone to Mexico,
China, India or the Philippines sounds like good news. Who could be
against paying less for a washing machine, power tools or a car?
The tech industry, where all the jobs were supposed to be, is looking
with longing at low-wage frontiers, where tech-support people and
programmers can be hired by the dozen for what it costs to employ one
American.
Microsoft is leading the charge in the outsourcing realm, I've read,
and is pushing its subcontractors, which provide tech support for its
products and services, to head for India.
We're told this is a good thing, one that will lower prices and create
scads of American jobs. But there's a catch.
Those formerly productive, wage-earning American workers, having lost
their well-paying jobs, health benefits and vacation time, won't be
coming to Florida with their children to visit Mickey, see the other
tourist attractions, eat, sleep and pay sales taxes on mouse ears.
Multiply that by the millions of jobs lost and to be lost if the trend
continues and you have a hefty hole in our state's sales-tax dependent
budget.
And when those good people stop coming to our state, Floridians in the
tourism industry suffer. Those losses ripple through the economy, as
unemployed workers still need schools, police, fire and other
taxpayer-provided services, plus help with training and finding new
jobs.
With our state budget in the hole, such services are being reduced,
leaving Florida in a downward economic spiral.
Those without health insurance, and their children, insist on getting
sick. They turn up at the emergency room or at the charity hospitals.
The medical community needs to be paid, so if the financially bereft
can't pay for services, the cost is passed on to the rest of us.
Someday, we who are now working and have health insurance may join
those unfortunate Americans in the ranks of the unemployed, bankrupt
and uninsured.
And we'll have those wonderful CEOs and other top executives and their
toadies in Congress to thank for our fate.
Vincent F. Safuto is a copy editor for the Press Journal. Reach him at
(Vincent.Safuto@scripps.com.)
MORE SAFUTO COLUMNS ;
Copyright 2003, TCPalm. All Rights Reserved.
http://www.advanceforhim.com/common/Editorial/editorial.aspx?CC=14744
Issue Date: 5/12/2003
Offshore Outsourcing: Shattering the Myths
Technology is fueling a revolution in high quality, low-cost MT
services. With its proven quality, educated labor force and robust IT
infrastructure, it is clear that India is here to stay as an MT
outsourcing partner.
By Ann L. Eckert
As technology obliterates distance in the marketplace, the latest wave
reshaping the global economy springs not from the boardrooms on Wall
Street, but from the offices and developing infrastructures in India
and other developing countries.
Over the last 10 years, the potential of remote IT-enabled service
(ITES) industries has begun to generate significant interest and
deployment among established and start-up businesses, governments and
development organizations. India has emerged as the outsourcing
destination of choice. Its large, highly educated, English-speaking
workforce, government commitment to building and maintaining a robust
IT infrastructure, and low overhead costs helped fuel a 65 percent ITES
growth rate in 2000.
Numerous industries are reaping the benefits of outsourcing. In the
mid-1990s, GE Capital became one of the first multinational firms to
outsource to India; it now runs an efficient $2 billion back office
enterprise in the country. British Airways and Swissair run their
frequent-flyer programs from India, American Express runs accounting
and data processing operations, and Bechtel runs its online support
centerstaffed largely with engineers. Some $800 million, including
$300 million in venture capital funding, was invested in the Indian
ITES market in 2002.
Service businesses typically require a trained and skilled work force.
Therefore, the decision to relocate remotely must balance the goal of
low wage rates with the availability of a qualified workforce. In the
case of medical transcription, labor force requirements include
English-speaking skills, a high level of education, comprehensive
training in transcription as well as medical practice and terminology,
and computer skills. In addition, given the dependence on
telecommunications technology to facilitate the transmission of the
data, the environment must also offer sufficient telecommunications and
computing infrastructure.
Indias labor force meets all these requirements. Furthermore, the
industry is receiving strong support from the government in providing
the necessary infrastructure to enable India to become a world leader
in remote IT-enabled services
Pressure on medical transcription providers to jump on the outsourcing
bandwagon is rising. Some medical transcription service organizations
(MTSOs) are already achieving 20 percent to 30 percent cost reductions
on the volume of work currently being sent to India. It is projected
that these firms will continue to increase the percentage of their
total work that they send to India.
For those MTSOs not yet outsourcing, the key will be to build a strong
relationship with a trusted outsourcing partner to remain competitive.
However, the myths around offshore outsourcing stop many medical
transcription companies from taking advantage of the obvious benefits.
MYTH: The quality of Indian work is inferior.
FACT: With the right partner, medical transcription performed in India
meets or exceeds U.S. standards (without the need for costly additional
QA overhead!).
The first wave of MT companies that came to India in the early 1990s
were plagued by reports of inconsistent quality, lack of well trained
transcriptionists, and poor management, resulting in a high mobility
rate among transcriptionists. The more recent second wave, led by
companies such as Spryance Inc., of Maynard, MA, took careful note of
the difficulties experienced by the early pioneers, and recruited a
world class management team to develop and implement the tools,
processes and procedures to support the operational objective of
achieving quality measurements that meet or exceed U.S. standards.
MYTH: Medical transcription performed in India wont comply with
HIPAA.
FACT: Offshore outsourcing partners add value by ensuring HIPAA
compliance.
Outsourcing partners can help MT providers achieve compliance with the
HIPAA regulations by meeting the requirements of each of the three
primary components outlined in the regulation. The three components
include: transmission, protection, and accountability of PHI.
Transmission of data is secured by fully encrypted voice and text
files, and can be accomplished through such tools as secure FTP and
secure HTTP.
Protection of PHI can be controlled by implementing clear protocols and
contracts detailing privacy requirements and sophisticated username /
password rule sets to limit access.
Accountability is ensured through employee and contractor training and
routine auditing.
By selecting an outsourcing partner that has state-of-the-art HIPAA
compliant platform and documented systems, procedures and protocols in
place to meet these requirements, U.S.-based MT providers can achieve
HIPAA compliance in India as successfully, or better, as they can in
their home offices.
MYTH: Indias workforce is largely uneducated.
FACT: Medical transcriptionists have a higher average education level
than their U.S. counterparts.
Because medical transcription is a well-paying field by Indian
standards, medical transcriptionists in India have significantly higher
average education levels, and, often, greater professional commitment
than their U.S. counterparts. Medical transcriptionists are likely to
be familiar with medical terminology, even before they go through the
four- to eight-month training sessions required for entry into the
field. The intensive medical transcription training programs that are
required in India include all of the components of the most advanced
training programs in the U.S. Medical transcription training typically
covers medical terminology, grammar, AAMT guidelines, and best
practices, ensuring that transcriptionists are empowered to work
effectively and efficiently within accepted industry standards.
MYTH: Indias technology infrastructure is unreliable.
FACT: Indian government and industry have invested heavily in a robust
IT network and state-of- the art technology platforms
A report by McKinsey & Co. states that India is emerging as the number
one destination in the world for IT-enabled services, due in part to
strong support from the Indian government and industry. The Indian
government has made a robust IT infrastructure one of its top
priorities. It has made significant investments in technology parks in
cities such as Hyderabad, Chennai and Bangalore three cities that form
a technology triangle in the southeastern part of the country. A
Ministry of Information Technology has been established to regulate IT
policies and streamline approval and implementation of IT projects
across the country, while individual state governments are vying with
each other to attract IT-enabled service businesses and investments.
The Indian government also has created an investment-friendly
regulatory environment, characterized by 10-year tax holidays and
liberal investment policies. All of these initiatives work to ensure
that Indian medical transcription providers will continue to have
access to advanced telecommunications systems, supported by strong laws
protecting the privacy and integrity of electronically transmitted
data.
MYTH: Outsourcing steals jobs from U.S. workers.
FACT: There arent enough MTs in the U.S. to meet the growing demand.
There is a critical shortage of qualified medical transcriptionists in
the U.S., and it is predicted that the seriousness of the shortage will
grow over the next several years as the demand for transcription
services continues to grow at double-digit rates.
The Medical Transcription Industry Alliance (MTIA) estimates that there
were approximately 270,000 U.S. medical transcriptionists in 1996, and
recently reported that the number of U.S. medical transcriptionists has
been declining at a rate of 4 percent to 9 percent per year over the
last several years. At the same time, the need for transcription
services continues to increase at 15 percent to 20 percent per year.
MYTH: Outsourcing MT services is a passing fad.
FACT: Outsourcing to India is becoming the standard, not the exception.
When the concept of outsourcing MT services to India first emerged in
the 1990s, the industry went through a rapid growth phase. This was
followed by an industry correction aimed at improving quality,
turnaround times and cost containment. The number of medical
transcription companies was whittled from a high of 400 to the current
200. The industry is now comprised largely of firms with highly
qualified, highly motivated transcriptionists who have the skills and
resources to meet the growing demand for services for many years to
come. In fact, ITES exports are projected to grow from 14 percent of
all Indian exports in 1999-2000 to 24 percent in 2003.
SUMMARY FACT: Offshore Outsourcing is a Reality
With its proven quality, educated labor force and robust IT
infrastructure, it is clear that India is here to stay as an MT
outsourcing partner. The decision, then, is not whether to outsource to
India, but how to pick a company that can guarantee high quality,
service and turnaround times at lower cost than is possible in the
United States. As you begin to consider various offshore outsourcing
partners, evaluate their capabilities and qualifications by answering
the following questions:
How long have they been in the transcription business, and who are
their customers?
What daily / monthly volume do they service?
What processes do they have in place to ensure meeting U.S. quality
standards?
Is their customer service staff professional, knowledgeable and
available during U.S. business hours?
Do they have a robust, scalable technology platform that is HIPAA
compliant?
What is their plan for continuity of business in light of the
geo-political turmoil in the Middle East and other parts of the world
economy
With the right partner, outsourcing is the surest way to continue to
deliver high quality, reasonably priced transcription services today
and in the coming years.
Ann L. Eckert is senior vice president of sales and marketing with
Spryance Inc., Maynard, MA.
http://www.azstarnet.com/star/today/30514CALLINDIA.html
3 call centers take jobs to India
By Tim Steller
ARIZONA DAILY STAR
Wednesday, 14 May 2003
India's booming call-center industry has some local workers worried
their telephone headsets will soon rest at cubicles halfway around the
world.
The parent companies of Tucson's three largest call centers -
Convergys, Intuit and America Online - have moved jobs to India, mostly
to take advantage of lower labor costs.
If the trend continues, some fear, it could threaten many local
call-center jobs, which number about 16,000 and make up 4 percent to 5
percent of Tucson's work force.
"There is no way to sugar-coat the reality of outsourcing," said Mark
Kobayashi-Hillary, a British consultant and author of the forthcoming
book, "Outsourcing to India." "It means that some jobs will go."
Some jobs already have left town:
* Convergys is moving about 100 jobs providing technical support to
Microsoft Windows users from Tucson to India and elsewhere, a Microsoft
spokeswoman said.
* America Online has moved to India around 100 positions on its
community action team, which deals with users who break AOL rules,
according to current and former employees.
The numbers so far are small, accounting for less than 10 percent of
each company's local work force. But the trend is clear. The first
sectors to move call-center jobs to India have been in the financial
services and information technology sectors, but others are starting to
follow, Kobayashi-Hillary said.
Forrester Research of Cambridge, Mass., estimated about 3.3 million
U.S. jobs in call centers, software development, accounting and product
development will move to India and other countries over the next 15
years.
A recently departed Convergys employee said he doubts the kind of work
he did - offering technical support to users of Microsoft Windows - has
a future in this country.
"As an overall trend, it seems the technical (work) is leaving here for
India," Mike Stover said.
Already, customers are noticing, call-center workers say.
Fred Mendoza, who worked in customer retention for AOL until March,
said about half his callers, tired of dealing with foreign accents,
asked if he was in the United States.
Then Mendoza, a self-described rabble rouser, was fired over a disputed
absence and got a taste of his customers' angst.
He called AOL to cancel his account, he said, and the woman who
answered "had a very thick Indian accent. I asked where she was, and
she said Bangalore" - India's call-center capital.
Part of a broader shift
The movement of call-center jobs to India is part of a broader shift of
white-collar work overseas. Those jobs follow the migration patterns
blue-collar jobs established over recent decades.
Some companies, such as America Online, are building their own call
centers and answering their own calls in India. AOL wouldn't specify
how many people work at its Bangalore call center other than to say
it's in the hundreds; an industry Web site, www.BPOIndia.org, pegs the
number at 1,200 workers.
Other companies, such as Convergys, set up call centers in various
countries to be able to offer clients a variety of prices and skills.
Convergys, which has about 1,600 employees in two Tucson call centers,
already has more than 3,000 employees at a call center near Delhi. The
company is building another call center, big enough for 3,000 more
workers, in Bangalore.
Intuit, which has about 1,300 employees at its Tucson call center,
contracts with Indian companies to provide services there. On weekends
and after-hours, calls that would be answered in Tucson are answered in
India, said Kathy Whitehurst, communications coordinator for Intuit in
Tucson.
The main motive for most of the firms is simple: lower labor costs.
Call centers in India can pay annual salaries of $2,400 to $4,000 per
year, compared to an average of $16,000 to $20,000 in the United
States, Leo Fernandez, vice president of human resources outsourcing
firm India Life Hewitt, told an industry conference in Bangalore last
year.
The cost of connecting via telephone or Internet to India adds some
costs, according to an Indian trade group, the National Association of
Software and Service Companies. But companies that move call centers to
India can expect an average cost savings of 40 percent to 60 percent,
the association said.
Educated labor pool
Companies that migrate to India often get benefits beyond lower labor
costs, said Nosa Eke, publisher of Call Center Times, an online
newsletter. The labor force is highly educated and speaks excellent
English, he said. It isn't uncommon to find Indian college graduates in
jobs that, in the United States, are filled by people with high school
diplomas, he said.
The cost savings are especially important to information technology
companies, which are struggling to defend thin profit margins, said
Brian Boyer, an analyst for First Analysis in Chicago. Companies such
as Convergys that specialize in performing outsourced duties for other
firms face formidable pressure to minimize their prices, Boyer said.
Among the leading outsourcing companies are Convergys, Teletech and
APAC, all of which have call centers in Tucson. All of them also
operate call centers offshore in countries such as India and the
Phillipines.
Although Mendoza, the former AOL customer-retention agent, heard
complaints about foreign accents, the companies take such concerns into
account. Many have Indian agents take on American-sounding first names,
changing Dipak, for example, to Derek.
Many train agents in American pronunciation and usage.
"It comes down to the ability to articulate clearly," Eke said. "When
you call into a call center, be that call center in the U.S. or India,
if the person taking the call is not competent, it really wouldn't
matter what the accent is."
Expansion to India doesn't necessarily mean job losses here, since a
growing company will add workers. AOL spokes-man Nicholas Graham said
his company may add employees in Tucson and in Bangalore.
"Our work force, both here and internationally, will ebb and flow
according to the needs of our members and also according to our
business strategy," he said.
* Contact reporter Tim Steller at 434-4086 or by e-mail at
steller@azstarnet.com.
http://www.theinquirer.net/?article=9554
HP tries new money saving tactic. Fear
Web site prompts instant removal
By Charlie Demerjian: Monday 19 May 2003, 11:58
OVER THE LAST few weeks, HP Australia has started to gut its phone tech
support operations, and move the jobs to India. It was so proud of its
new corporate savings plan that it didn't announce it, and got very
cross with the entire department when news leaked to us.
The furore over the plan seems to have died down, and the Australian
government, a major consumer of the services offered by the soon to be
unemployed technicians does not seem to mind one bit. You would think
they might object to spending tax dollars on outsourcing, especially at
the cost of domestic jobs. Oh well, that's life in the globalized
economy.
Even with the layoffs, most of the workers there have told us they are
happy with their jobs, and are quite fond of their co-workers. So fond,
one had the temerity to start up a web site so he could keep in contact
with his ex-fellow employees when the axe finally fell.
The site is basically a contact database, job hunt help site, and
support for the people. It also has a poll. The poll last week,
entitled "worst manager", was a bit much for the happy ax wielders at
HP, so they took revenge, escorting the site owner, Raymond Frangie,
out of the building in a most unfriendly fashion.
People who witnessed the event were left with the impression that the
way he was paraded past the other workers with a phalanx of security
guards was meant more to strike fear in the hearts of the remaining
than to prevent misdeeds by the departee. One only wonders what HP
would do if people were to actually express dislike for being fired.
5
http://money.guardian.co.uk/feature/story/0,11579,957646,00.html
On the line to Dell hell
Increasingly, call centres are moving to India to take advantage of
cheap labour. But is customer service suffering? Phillip Inman thinks
so after his problems over a computer
Phillip Inman
Saturday May 17, 2003
The Guardian
Six weeks after my first phone call and Dell was still stonewalling. I
was asking when my replacement computer would arrive and what kind of
machine I would get.
"Can I speak to a supervisor?", I asked. "It's not possible" came the
reply. "Another department is dealing with it." Even the worst call
centres let you talk to a supervisor. They might tell you some nonsense
about customer complaints - "We hardly ever have any" - and the quality
of their service - "It's second to none" - but at least you can sound
off at someone senior.
Not at Dell, at least not when I phoned and phoned. In all there were
more than 25 calls and when it came to the moment when I asked to speak
to the supervisor he was always away.
Dell is widely regarded as one of the better suppliers of computers. It
may not be the very cheapest, but Dylan Armbrust, editor of monthly
magazine Personal Computer World, says it is ranks well on price and
its all round service is highly regarded.
He says: "We do get complaints [from Dell customers] caught in a poor
service vortex, but we tend to get more in percentage terms from middle
ranking PC suppliers. In our November 2002 issue, based on reader
votes, Dell won the after sales service award."
It may not win this year, judging from my personal experience. Over the
past few months Dell has been switching calls from customers with
technical queries to a call centre based in India's techno city of
Bangalore. The company says it has moved operations for all English
speaking countries to the Indian sub-continent for the technical
support offered by its highly qualified population of computer
engineers. It is the technical know-how, says the company, and not
comparatively cheap rates of pay for call centre staff that led them to
make the switch.
Until last year technical queries were handled by staff in Ireland, not
far from the factories that make Dell machines for the UK market. But
like so many banks and insurance companies, Dell has decided that the
lure of the Indian sub-continent is overwhelming.
However, in the many calls I made to the Dell centre, the staff I spoke
to stuck strictly to a pre-prepared script. In fact, most of my
attempts to re-phrase questions in order to elicit an answer would be
rewarded with a robotic response.
The problem is that the transition has proved tricky and as the firm
admits, technical queries that turn into complaints have been
mishandled. In my case I bought a warranty to give next day, on-site
support at a cost of #180, but six weeks after I first complained
about a technical fault, I still had a broken notebook machine on my
desk and no way of knowing what was going to happen next.
Roger Wilson, Dell's communications director says the company's
problems stem from the systems it had in place for handling complaints.
"We are guilty, like lots of big companies, of measuring things that
are important to us and not the customer."
He says recent months have proved to be a difficult period. "Your
complaint came at a time when we were making changes in technical
support. We had used an outsourcing company for our operations in the
UK and Ireland and made the decision to bring those jobs in-house and
to do that in India. It has been a massive start-up for the company,
with 4,000 people starting work in Bangalore and most of the emphasis
has been on training," he says.
One fundamental issue, he adds, centres on the way the company monitors
complaints. Like most telephone-based retailers it tapes conversations
between staff and customers. But it only measures how well the call has
been handled. Each of the 25 or more calls I put in were dealt with
politely and the company's procedures were always followed, as far as I
could tell. But no one was monitoring how well my case was progressing
and that, says Mr Wilson, is where the system fell down.
I would be told on each occasion that a diagnostic test must be
followed before staff could discuss further remedies.
These tests tie your machine up for about three hours. Once is enough
to determine that there is a big problem. Yet each technician wanted me
to do the same thing again and would only relent after a lengthy
dispute and conversations with their call centre colleagues (though
never a supervisor).
On one occasion they sent a new modem and talked me through fitting it
myself. Then a new hard disk arrived, this time with a technician to
fit it, but still no success. Each time the call centre staff could
credit themselves with trying something. However, I was no nearer
finding out why my notebook failed to connect to the internet, when the
ancient desktop sitting alongside happily performed the same function.
"We are now putting in place a monitoring system that addresses this
fault-line in our operations," Mr Wilson says.
He denies that taking the firm's call centre to a non-English speaking
country is also a recipe for disaster. Mr Wilson says: "It is a balance
between the language skills and technical skills. And all our studies
show that improving language skills is not an insurmountable problem."
Even if this turns out to be true, the language problem is likely to
persist unless the Bangalore call centre can overcome the persistent
high rates of staff turnover that afflict call centres in Britain.
In the end I called Dell's press office and was told my complaint was
on a fast track. Within a week I had a new machine, and a week later I
received compensation of #250 and a printer/scanner/copier worth
#100. But I know that as an ordinary customer my case was going
nowhere.
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/05/23/BU308784.DTL
Real risks in Kaiser's contracts
David Lazarus
Friday, May 23, 2003
)2003 San Francisco Chronicle | Feedback
Kaiser Permanente wasn't happy about my column detailing the Oakland
health care giant's outsourcing of tech support to companies in India.
I wrote that overseas contractors have access to Kaiser patients'
medical data, including lab results and drugs taken; members' personal
information, including financial records and home addresses; and
payroll files for 135,000 Kaiser employees and 11,000 physicians,
including salaries and Social Security numbers.
I also wrote that the depth of members' and employees' information
available to techies abroad will increase in coming years as Kaiser
proceeds with its ambitious plans to move much of its systems
maintenance to Indian firms.
In a letter to The Chronicle this week, Bernard Tyson, Kaiser's senior
vice president for communications, and Matthew Schiffgens, senior
issues management consultant, responded that "protecting our members'
privacy is a primary mission for every Kaiser Permanente employee and
physician."
They stressed that all of Kaiser's offshore work complies with the
Health Insurance Portability and Accountability Act, or HIPAA, which is
intended in part to protect the privacy of members of U.S. health care
organizations.
HIPAA compliance also figured prominently in internal talking points
issued by management to Kaiser employees after my first column on this
subject.
Well, let's take a closer look.
I've heard from dozens of past and present Kaiser workers in recent
days, and they say that HIPAA in no way serves as a guarantee that
patients' and employees' private information will remain private.
Judith Toledano used to work for Kaiser and now handles the info-tech
needs of a state health agency in Sacramento that she'd rather not name
("I don't want to get into trouble," she told me.) Among other things,
Toledano oversees HIPAA compliance for her department.
"I'm not comfortable having my records go overseas," she said. "It's
one thing for Dell to service my computer from India. It's another
thing to have someone access my medical records."
HIPAA requires that a health care provider like Kaiser ask outsourcing
firms to agree in writing that they'll protect members' privacy. The
outsourcing firms in turn are contractually obligated never to exploit
or misuse information from the provider's computer network.
"But how do you enforce that?" Toledano asked. "How can you possibly
enforce something like that when you're thousands of miles away?"
Indeed, this is one of the flaws in the HIPAA system. While violations
by a domestic contractor could lead to hefty fines, an overseas
outsourcing firm is not subject to U.S. laws and regulations.
The only thing keeping it honest, in effect, is a piece of paper
promising that its workers will be good.
"It's a bit of the honor system," acknowledged Ann Geyer, a health care
industry consultant specializing in HIPAA issues. "Patients do have
reason for concern that overseas outsourcers have access to huge
amounts of information."
HIPAA does not require organizations like Kaiser to actively monitor
the activities of "business associates" such as Indian outsourcing
firms, she said.
Rather, action would be called for only if Kaiser should learn of
inappropriate behavior.
By then, of course, it's already too late.
"HIPAA is not about patients," Geyer said. "It's about the duties of
health care organizations."
Kaiser may be fully HIPAA-compliant, in other words, but that doesn't
ensure the privacy of its 8.3 million members.
I spoke with a worker at one Kaiser computer center who helps oversee
the organization's HIPAA compliance. He noted that any time a third
party -- a police investigator, say -- requests members' medical data,
Kaiser is obliged under HIPAA to keep detailed records of who accessed
the files.
But if a techie in New Delhi opens the same files, no records are
required.
"The thinking is that the information is still technically within the
company," the Kaiser worker said. "But that's not true. It's now
obviously outside."
Gerry Hinkley, a San Francisco lawyer specializing in health care
regulatory matters, confirmed that outsourcing firms do not qualify
under HIPAA as third parties.
As such, he said, there's no requirement for them to keep records about
any information they may have seen or even copied.
"The burden is on the covered entity (such as Kaiser) to have
appropriate safeguards," Hinkley said.
Kaiser says its outsourcing firms "must abide by our strict security
and confidentiality procedures, as well as all federal guidelines
regarding patient privacy."
But one Kaiser tech worker I spoke with said there's virtually nothing
to stop an errant techie abroad from copying down confidential
information from Kaiser's files and exploiting it for personal gain.
"He could send it on the Internet to a friend in this country to get a
birth certificate," the worker said, citing a worst-case scenario.
"This data's important to people," the worker added. "I'm a Kaiser
member and I don't want anyone knowing I have a certain condition or
take a certain drug. I don't want anyone knowing my Social Security
number."
I can appreciate that Kaiser takes members' and employees' privacy
seriously. But I'm not wrong when I say there's a danger that
confidential information could leak out.
And if HIPAA is the best defense Kaiser can muster, then members have
every reason to wonder if these guys are really placing privacy
foremost among their concerns as they save a few bucks shipping jobs
overseas.
Physician, heal thyself.
http://news.com.com/2100-1011_3-1009684.html
Outsourcing guides see green offshore
By Ed Frauenheim
Staff Writer, CNET News.com
May 26, 2003, 4:00 AM PT
http://news.com.com/2100-1011-1009684.html
More about overseas outsourcing
The economy remains in a slump, and that's exactly why Atul Vashistha
is smiling.
As CEO of NeoIT, a consulting firm that helps companies outsource some
operations overseas, Vashistha has little trouble these days pitching
the value of his company's services. Last year, San Ramon, Calif.-based
NeoIT played a part in the signing of offshore outsourcing contracts
worth more than $250 million--of which it received a cut. In the first
three months of this year, it worked on deals totaling more than $300
million.
"We believe every company can (outsource) offshore," said Vashistha.
"The question is, how much should you do?"
American businesses have long outsourced some operations to cut costs,
most obviously in manufacturing, and the technology industry also has
increasingly outsourced tasks such as applications development. More
recently, many businesses have been engaged in process outsourcing,
such as moving call center operations offshore.
Low-wage workers are the key draw. The cost of an entry-level
programmer in China, for example, is 30 percent to 50 percent less than
for one in Tokyo, London or Chicago, according to market analysis firm
Forrester Research.
Forrester has estimated that the number of computer jobs moving
overseas will grow from 27,171 in 2000 to a cumulative total of 472,632
by 2015. Forrester analysts predict that other services--including call
center services and back-office accounting--will follow information
technology operations abroad.
But navigating the outsourcing waters abroad can be treacherous. How do
you know whether you're getting a good price? Is the foreign company
reputable? Will quality slip?
That's where companies such as NeoIT and The Woodlands, Texas-based
TPI, which focuses on outsourcing arrangements for clients such as J.P.
Morgan Chase, Procter & Gamble and General Motors, come in.
According to TPI chief executive Dennis McGuire, about 30 percent of
the time that he works with companies, he advises them not to bother
with an outsourcing deal in the first place. "We give an objective
answer on whether or not they should outsource," he said.
McGuire's firm traditionally has worked on deals in which companies
hooked up with a domestic-services provider. But in recent months, TPI
has seen a dramatic shift toward clients looking to include an offshore
component in their outsourcing deals.
The percentage of TPI's projects that involve some type of offshore
arrangement climbed from 44 percent in March to 52 percent in April,
McGuire said. TPI, which has a partnership with NeoIT in order to help
it provide advice about offshore deals, saw its revenue jump about 38
percent last year to $58 million. TPI's sales are on pace to climb
another 15 percent to 20 percent this year, McGuire said.
Offshore on the money
Other companies are jumping on the bandwagon as well. Law firm Shaw
Pittman has brought on business consultants to help it advise companies
on outsourcing decisions. Armed with their expertise, the technology
division of the law firm has seen its revenue rise from roughly $35
million three years ago to about $45 million last year, said Shaw
Pittman attorney Robert Zahler.
"We've done this dozens of times," Zahler said. "We can help them do it
more efficiently and know what the issues are."
Those issues include intellectual property protection and
geopolitical-stability questions such as, for example, an outsourcer's
backup plans in the event of war between India and Pakistan.
Another challenge for companies looking to ship IT-related work abroad
is separating legitimate providers from rookie outfits. Mike Atwood,
president of Dallas-based outsourcing consulting firm Everest Group,
said companies may pitch themselves as offering a "complete" financial
services offering--when they're currently prepared to handle
accounts-payable services only.
"We do a lot of research into, 'Who are the players, what are their
offerings, what's real and what's not real?'," Atwood said.
Atwood, whose staff has grown by 30 percent this year amid a surge in
offshore deals, said an Everest official has already taken three trips
to India in 2003 to check out the legions of outsourcing companies
there.
NeoIT's vice president for business development, Eugene Kublanov,
recalls a case where a Chinese company described as a high-tech leader
turned out to lack a Web site in English.
Still, although business is brisk, outsourcing consultants do face
hurdles. One involves the difficulty of picking winners as
consolidation shrinks the ranks of offshore providers.
Events that disrupt international travel, such as the spread of severe
acute respiratory syndrome(SARS) that has curtailed visits to and from
Asia, are another wild card.
"The moment a customer cancels a trip, you can automatically assume
there's going to be a delay of four to eight weeks in the deal,"
NeoIT's Vashistha said.
A third obstacle is domestic in nature: the growing backlash by
American workers to offshore outsourcing. WashTech, a Seattle-based
tech-worker advocacy group, has issued a call for Congress to study the
trend of moving jobs offshore. The New Jersey Senate has approved a
bill that permits only citizens or legal residents of the United States
to work on certain state contracts.
TPI's McGuire himself wonders what sorts of jobs will remain in the
United States as the offshore outsourcing trend continues. He expects
the controversy over domestic job losses to grow in the next six to 12
months.
Companies will need to formulate answers for employees and the public
about their plans, McGuire said, which suggests that the domestic
threat to companies like his may actually create more work--in helping
employers develop those answers. "If you don't have a strategy," he
said, "you're in deep trouble."
http://www.hindustantimes.com/news/181_262500,0005.htm
US states considering banning outsourcing of data contracts
Press Trust of India
London, May 25
Four American states are considering legislation to ban outsourcing of
state data processing contracts to developing nations even as dozens of
household names, spanning insurance, banking, technology and telecom,
are transferring part of their white collar administrative and
customer-service work to Asia, particularly to India to cut costs.
The US States considering the measure to curb flight of jobs are New
Jersey, Maryland, Connecticut and Washington, The Sunday Telegraph
reported on Sunday.
The report also expressed concern about the future of UK call centres,
a major industry employing about 500,000 people across 6,000 sites.
According to it, Mitial Research, a specialist consultancy, has
predicted that one third of Britain's larger call centres could shut
down by 2005 with the loss of 90,000 jobs.
General Electric, the giant US conglomerate, which initiated the bold
decision to shift thousands of back office jobs to India a decade ago
is still in the van, with 11,000 Indian processing staff, the report
said.
"If China is becoming the workshop of the world, India is the world's
back office," says Chris Gentle, a director at Deloitte Consulting,
part of Deloitte and Touche, the big five accountancy firm.
Deloitte estimates that 2 million jobs in financial services alone are
likely to move from developed economies to emerging nations in the next
five years. Across all industries, the exodus of services jobs could be
4 million.
By 2008, financial services firms, are expected to have transferred 356
billion dollars, or an average of 1.4 billion dollars for each of the
world's top 100 financial services companies. For leaders such as
Citigroup and HSBC, there could be savings of two or three times that
level.
India's rise has been remarkable. Some 100,000 people are thought to be
employed in call centres, while India's computer services and software
industry is now worth 10 billion dollars. It is expected to grow by 25
to 30 per cent this year, according to Nasscom.
Call centres in India handle the processing of student loans, queries
about utility bills for Powergen and flight bookings for British
Airways. A series of other British companies, including BT, HSBC,
Prudential and Aviva, are shifting their call centres to the world's
biggest democracy.
Cost is just one issue. "Companies go for the costs and stay for the
quality," says Mike Harding, the managing director of Mercer O liver
Wyman. India may be a poor country but it has a well-educated,
English-speaking workforce.
According to the report JP Morgan, the investment bank, has said it
would set up a team of 40 junior research analysts in India. The plan
is to provide greater analytical coverage at a fraction of the cost in
the West.
The trend has even caught the eye of the entertainment industry.
Sanjeev Bhaskar, the star of the spoof BBC chat show The Kumars at No
42, is to script The Call Centre, a film billed as a comic love story
set in India and the UK.
http://infotech.indiatimes.com/cms.dll/html/uncomp/articleshow?msid=44254021
Infotech Online
Printed from infotech.indiatimes.com >News
Bangalore to host Intel's first Asian cell tech centre
TIMES NEWS NETWORK[ WEDNESDAY, APRIL 23, 2003 12:51:45 PM ]
BANGALORE: Leading chip maker Intel has set up its first Asian design
team for its Centrino mobile computing platform in Bangalore. The
firms R&D centre in the city already employs around 1,000 people.
This development group will work with other facilities in the US and
Israel on software development and chip design, according to Dadi
Perlmutter, vice president and general manager of Intels mobile
product group.
He told reporters in Bangalore on the sidelines of Intel Developer
Forum Spring 2003 (IDFS) that the firms development centre in Israel
worked on silicon and CPU-related work, the California facility working
on chipsets and graphics and teams in Oregon and Santa Clara dedicated
to platform-related activities. While refusing to be drawn into
specifics on the size of the team, Mr Perlmutter said it would have
several dozen engineers.
Intel executives see this centre as a reaffirmation of Indias
potential as a development destination. We are continuing are
investment here. We are going to start new teams, in line with our
product and capability needs, Mr Avtar Saini, director, South Asia, at
Intel said.
Intel Centrino mobile technology is designed specifically for mobile
computing, with integrated wireless local area network (WLAN)
capability. This is Intels first integrated computing technology
designed specifically for wireless notebook PCs.
Intel executives said wireless connectivity is expected to increase
productivity by 20%. The number of hotspots or areas of wireless
internet access is also in the rise. A few hospitality chains have
taken the lead in providing wireless access to guests.
Earlier, delivering the keynote address at the opening day of the IDFS,
Mr Perlmutter said the world was being increasingly digitised. While
several new technologies were surfacing, it was essential to build
applications to support them, he added.
Mr Perlmutter noted that the global tech industry had large scope for
growth. Despite growing to over $1 trillion globally, the IT industry
accounted for barely 1% of the worlds GDP. Growth in this sector has
to be nurtured. It always comes from innovation, especially in hard
times, he said.
Asia Pacific and India are seen as the growth drivers, according to Mr
Gary Greeve, Intel Asia Pacific vice president and general manager.
Intel has grown its revenues from Asia Pacific by 7% to 39% this
fiscal, he noted.
Intel continues to look for ways to innovate. Several labs around the
world have been working on cutting-edge technologies. Intel researchers
are working on shrinking the size of the chip from 120 nanometres to 90
nanometres and eventually hope to reach 30 nanometres by the end of the
decade.
http://www.silicon.com/news/500029/1/3869.html
Wed 23 April 2003 03:22PM BST
Indian outsourcing goes from strength to strength
3,000 jobs created in a thrice...
Call centre outsourcing giant Convergys has announced it is to open its
second Indian integrated contact centre in Bangalore.
Staff will start to man the phones at the new centre in the next month
and once it is up to capacity, sometime within the next 14 months, it
is expected to employ around 3,000 people.
Located in Bangalore, India's 'Silicon Plateau', the contact centre
will provide both general support and advanced technical help desk
services to a variety of Convergys clients, many of whom operate in the
high tech sector.
Jack Freker, president of Convergys Customer Management Group, said:
"The 3,000 employees in our first India contact centre in New Delhi
have validated our strong belief that India offers a motivated
workforce of highly-dedicated, well-educated, English-speaking
professionals and the infrastructure needed to deliver world-class
customer care.
"We will continue to utilise this pool of talented individuals to
deliver consistent, responsive, and cost-effective customer care across
multiple channels for many clients."
Freker added: "We will be hiring not only contact centre agents in
Bangalore, but also many highly-trained, high-tech employees who will
be handling technical help desk inquiries by both telephone and
internet involving the most advanced technology."
Increasingly more and more companies have been looking at outsourcing
call centre operations to India, primarily because of the potential
cost savings.
The demand for high-tech staff in India to meet the outsourcing boom
has become so great that the country faces the very real danger of
having too few people for the wealth of positions available.
Conversely the move to the subcontinent has resulted in a severe cull
of positions in the UK call centre sector, with ten of thousands of
staff facing lay-offs.
Convergys currently employs more than 44,000 people in 45 call centres
worldwide.
Will Sturgeon
http://www.csc.com/newsandevents/news/2045.shtml
News Release -- March 27, 2003
CSC AND MOTOROLA SIGN $1.6 BILLION 10-YEAR OUTSOURCING AGREEMENT
CSC to Deliver Motorolas Global IT
Infrastructure Services
EL SEGUNDO, Calif. and SCHAUMBURG, Ill. -- March 27, 2003 Computer
Sciences Corporation (NYSE: CSC), one of the worlds leading
information technology (IT) services companies, and Motorola, Inc.
(NYSE: MOT), a global leader in integrated communications solutions and
embedded electronic solutions, today announced that they have signed a
global information technology infrastructure outsourcing agreement. The
10-year contract is valued at approximately $1.6 billion.
Under the agreement, which becomes effective May 1, CSC will manage
Motorolas midrange, desktop and distributed computing infrastructure
worldwide, as well as Motorolas global help-desk and network
infrastructure functions. As part of the agreement, CSC will acquire
certain Motorola IT infrastructure and network assets.
CSC is pleased to have been selected by Motorola to implement this
important agreement, said CSC Chairman and Chief Executive Officer Van
B. Honeycutt. Our extensive experience and broad expertise give us
great confidence in our ability to help Motorola achieve significant
operational and business results.
Motorolas agreement with CSC is business-driven, said Motorola
Senior Vice President and Chief Information Officer Sam Desai. The
agreement reinforces Motorolas continuing commitment to drive
efficiency and improve financial performance. At the same time, we
expect to gain improved overall service levels as well as improved
productivity and quality of services, systems and transactions.
Motorola and its employees will benefit by this agreement.
CSC will provide significant value by delivering standardized
processes, enhanced security, lower costs and an integrated IT
infrastructure architecture worldwide, according to Jeff Andrew, a vice
president in CSCs Technology Management Group and global account
executive for the Motorola engagement. Motorola will gain not only an
improved cost structure but also the flexibility to access
state-of-the-art tools and industry best practices across the spectrum
of information technology, he said.
Mike Manley, corporate vice president and director, global
infrastructure solutions for Motorola, said, A benefit of this
agreement is that affected Motorola IT infrastructure employees will be
offered employment by CSC. Information technology is CSCs core
business. As a result, increased training and advancement opportunities
for transitioning Motorola employees will enhance those individuals
career prospects.
Approximately 1,300 Motorola employees are expected to join CSC as part
of the agreement. Over half of these employees are based in the U.S.
The rest are located in the Europe, Middle East, Africa and
Asia-Pacific regions, with a small number from Canada and Latin
America.
About Motorola
Motorola, Inc. is a global leader in providing integrated
communications and embedded electronic solutions. Sales in 2002 were
$26.7 billion. For more information, please visit the companys Web
site at: www.motorola.com.
About CSC
Founded in 1959, Computer Sciences Corporation is one of the worlds
leading information technology (IT) services companies. CSCs mission
is to provide customers in industry and government with solutions
crafted to meet their specific challenges and enable them to profit
from the advanced use of technology.
With approximately 90,000 employees, including more than 26,000 from
the companys March 7, 2003 acquisition of DynCorp, CSC provides
innovative solutions for customers around the world by applying leading
technologies and CSCs own advanced capabilities. These include
systems design and integration; IT and business process outsourcing;
applications software development; Web and application hosting; and
management consulting. Headquartered in El Segundo, Calif., CSC
reported revenue of $11.3 billion for the 12 months ended Dec. 27,
2002. For more information, visit the companys Web site at
www.csc.com.
http://in.country.csc.com/en/
In India CSC has developed domain expertise in insurance, banking,
healthcare and chemicals and operates out of its state-of-the-art
facilities at NOIDA, a suburb of Delhi and Indore, in Central India.
The company employs a pool of highly educated, skilled and talented
software professionals and believes that customer satisfaction, quality
in all things and employee development are key to its success.
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