Motif announces Employee Stock Option Plan

In an analysis of new outsourcing contract signings and related market trends, Everest Research Institute found that as the market for outsourcing services continues to grow and mature, buyers are shifting away from large, broad-based, IT-oriented single-vendor contracts in favor of more specialized contracts, focused on discrete business functions such as human resources, finance & accounting and procurement, that are designed to deliver more tangible results and benefits.

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Wages for IT outsourcing and Business Process Outsourcing (BPO) services providers in key offshore markets, including India, China and Poland, are increasing on average by 8 to 11 percent per year, which is nearly half of what has been commonly reported, according to new findings by Everest Research Institute. The lower figures reflect in part the efforts that offshore outsourcing suppliers have been making to control rising labor costs, including the expansion of their operations into second-tier, lower-cost cities and countries, as well as exchange rate movements and other factors.

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One key conclusion from the study is that there is a direct correlation between the investment organizations make in Outsourcing Management and Governance (OM/G), and outsourcing engagement satisfaction. EquaTerra defines OM/G investment as the personnel, processes, software and tools, and external services (e.g., advisors, lawyers and auditors) required for outsourcing success. EquaTerra typically advises clients that optimum investment levels range from four to seven percent of total annual contract value on OM/G to achieve the greatest level of satisfaction from their outsourcing deals, and satisfaction levels in the study support that suggested spend-level.

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Most people would not quibble with the statement that one cannot outsource responsibility for the quality of HR services. The task of providing and advising on fire protection or payroll can be outsourced, but the responsibility for providing a safe work environment or for paying employees cannot.

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… we are seeing the emergence of collaborative business models that were simply unimaginable a decade ago. Today, there are so many more tools, so many more ideas, so many more people able to put these ideas and tools together to discover new things, and so much better communications to disseminate these new ideas across the globe.

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The next wave in outsourcing: Mid size companies

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The outsourcing industry has gained tremendous growth in the last few years. The early adaptors – the Fortune 500 companies have tasted success and gained strategic and economic benefits from outsourcing. They are now increasing either their own presence with offshore delivery centers or building strong vendor relationships with large third party service providers around the world. There is an increased pressure on mid size companies to offer competitive solutions to its clients. As a result, mid size companies are starting their outsourcing and offshoring initiatives.

Large organizations utilize the services of global BPO/management consultants to prepare an outsourcing plan and identify the right vendors to perform these outsourcing requirements. However, it may not be an economical solution for mid size companies to follow the same path due to restricted budgets, resources and time. So, how do they find the right partner to gain these benefits?

Once the management has decided on the outsourcing objectives and identified the transactions that are non-core but repetitive and rules based in nature, it is important to find an offshore vendor partner with specialization in these processes. A gradual approach by starting to outsource distinct processes first and then moving on to complicated processes will help manage start-up costs, transition process and performance evaluation.

From the supply side, large service providers blend technology solutions and end to end solutions with ITO development and BPO offerings. But, the drawback is that high cost of sales, marketing, consulting and multi shore establishments compels the large service providers to focus on larger deals with multi year contracts.

On the other side, specialized BPO companies offer process expertise, low start up costs and flexibility in using client systems. Due to the above reasons, mid size companies get a better attention from specialized service providers.

According to a recent survey, large service providers will struggle in the mid market where the specialized players will make considerable inroads due to process expertise in discrete BPO.

So how does a mid size company find the right specialized BPO service provider? Here are some suggestions:

• Discuss with peers in the industry for similar engagements and success stories
• Visit industry specific events to learn about outsourcing trends. It is likely that you will meet some specialized BPO service providers in these events
• Research leading IT/BPO trade associations to find specialized BPO service providers
• Meet the vendors and evaluate
  • Process expertise and industry knowledge
  • Value addition provided to other clients
  • Financial stability and management commitment
  • Cultural fit and track record
  • Visit their offshore centers to conduct due diligence
• Last but not the least, ask for reference able clients