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BlackBerry outsourcing smartphone design in strategic shift

t was supposed to be the phone that saved BlackBerry – but the firm said IN July that it would stop making its Classic smartphone, less than two years after launching it with much fanfare.

Ralph Pini, the company’s chief operating officer and general manager for devices, said the Classic has long surpassed the average lifespan for a smartphone in today’s market.

‘We are ready for change so we can give our customers something better,’ said Pini in a company blog post.

The BlackBerry Classic hit the market in December 2014.

It offered customers a 3.5-inch (88.9-millimeter) screen, which was 60 percent larger than the previous BlackBerry Bold 9900.

It also had longer battery life and a standard keyboard and touch screen

Handsets with the BlackBerry name will be produced under license by PT Tiphone Mobile Indonesia Tbk, allowing the Canadian firm to concentrate on software and services, a statement by the firms said.

BlackBerry will take a royalty on devices sold by the Indonesian firm.

‘We are reaching an inflection point with our strategy. Our financial foundation is strong, and our pivot to software is taking hold,’ said chief executive John Chen, pointing to a doubling of software revenue over the last financial year, reports AFP.

‘The company plans to end all internal hardware development and will outsource that function to partners. This allows us to reduce capital requirements and enhance return on invested capital,’ said Mr Chen.

BlackBerry, which a decade ago was among the largest smartphone makers, has seen its global market share slip to less than one percent amid domination by Apple and Android devices.

As the market shifted, BlackBerry has shifted its focus to software, including security applications, and the latest announcement takes the company out of the handset market entirely.

It had hoped its first Android-operating smartphone launched last year would help restore the company to its former glory but the handset wasn’t a big hit.

Earlier this year, BlackBerry announced that it was killing off its Classic smartphone with a physical keyboard – once the workhorse of the smartphone market – in order to modernise its lineup.

The oddly shaped BlackBerry Passport, which launched in 2014, was met with a mixed response largely thanks to its odd dimensions

In 2013, the company unveiled its long-awaited BlackBerry 10 software alongside the Z10 handset, but the both were already way behind their iOS and Android rivals by the time they were ready to launch.

Ernest Doku, mobiles expert at, said: ‘In spite of a small yet loyal-to-the-death contingent of fans, BlackBerry simply couldn’t survive a market dominated by two mobile behemoths’

‘BlackBerry addicts will no doubt be gutted by the news, but this is one mobile maker that just made too many mistakes,’ he added.

While BlackBerry has already started outsourcing its smartphone manufacturing, it will back out entirely by the end of the year, Chief Executive Officer John Chen said on a call with analysts, reports Reuters.

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Mitie outsourcing group issues profit warning

Shares in outsourcing group Mitie have sunk by a quarter after it cut its profit outlook amid uncertainty over the UK’s decision to leave the EU and other “economic pressures”.

Mitie said its profits would be “materially below” its expectations as a result of challenges it faced.

These included lower UK growth rates, changes to labour laws and public sector spending cuts.

It also said “uncertainty both pre and post the EU referendum” was to blame.

Mitie is one the UK’s largest outsourcing groups, offering facilities management services to clients such as the NHS, London City Airport and Linkedin.

Its profit before tax increased by 0.7% to £114.1m in 2015, but in May this year it warned uncertainty around the EU referendum was causing clients to delay or cancel projects .

It also said that the introduction of the National Living Wage in April would add to its costs in 2016.

The company, which is led by chief executive Baroness Ruby McGregor-Smith, said it was taking “strong action” to counter the impact of these pressures including making cost savings across the group.

It also said a stronger forecast second half would lead to a slight growth in sales at the end of the year.

However, operating profits are expected to be significantly below expectations. According to Reuters, analysts Liberum have cut their full-year earnings per share guidance by 8%, warning that Mitie’s management is preparing for a 10-20% fall in core earnings.

The news could also negatively impact rival outsourcing groups Carillion and Interserve, Liberum said.

In early afternoon trading, Mitie shares were down more than 2% to 298.9p.

Analysis: Simon Jack, business editor

The city exacts a heavy price from companies whose profits don’t live up to expectations. Even by the city’s harsh standards, today’s plunge was spectacular.

The value of Mitie fell by a quarter because the reasons it gave were not flash-in-the-pan problems, but significant economic pressures which highlight trends of interest to a wider group than the outsourcing company’s shareholders.

Mitie said profits will be hit by a triple whammy of a higher minimum wage, declining local authority budgets and Brexit concerns.

The national living wage saw minimum rates of pay rise from £6.50 to £7.20 an hour in April. Previously, the company said this would have minimal impact on its profits, so today marked a change of tune.

Back in May the company warned that many big customers were holding budgets back ahead of the 23 June referendum. Today, Mitie said that the continuing uncertainty surrounding the kind of Brexit the UK negotiates meant that still held true.

Mitie also provides social care and housing maintenance services to local councils, and the company said it was feeling the effects of cuts to their budgets.

Mitie is in many ways a microcosm of some of the big issues facing UK businesses – and as the city reminded it today, not in a good way.


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Brexit could mean more offshore deals for outsourcing

If all British sectors were as buoyant as outsourcing, our new chancellor would be swinging from the chandeliers of Number 11. Contracts worth £3.91 billion were signed in the first half of the year, a rise of 19 per cent year on year, according to the arvato Outsourcing Index. Local government spending on outsourcing almost doubled in the same period. Plus there are wonderful new technologies to talk about, such as robotic process automation, which is a new field in the sector.

All blue skies and sunshine? Not quite. The vote on June 23 for Britain to leave the EU triggered a mass of questions for the industry. Few sectors straddle borders like outsourcing. Industry veterans can navigate the back streets of Bangalore and Bratislava with their eyes shut. Brexit may mean Brexit, but what is the industry facing?

First up, outsourcing seems to have carried on with business as usual. No hysterics. That is borne out by transaction numbers and investor confidence.

Alex John, partner at international mergers and acquisitions consultants Livingstone, which works heavily in outsourcing deals, says: “We are not seeing any drop in investor confidence. In fact, we are seeing good levels of investor interest, from both UK and overseas investors. The present view on Brexit seems to be that the UK economy is weathering the storm extremely well and therefore remains a good market for investment.”

When Brexit actually occurs we may see a few changes. Trade with the EU will depend on the deal struck. We have no idea what that deal will be.

We do know that the UK will lose a large number of trade agreements with the rest of the world, currently enjoyed under the EU umbrella. Reverting to World Trade Organization rules, with no additional deals, is an option in many cases. The downside is that tariffs may be higher. And there might be areas of conflict and lack of legal clarity.

The UK will also need to decide whether to participate in the Transatlantic Trade and Investment Partnership, which covers law enforcement and equal treatment of overseas parties.

Prioritising India

Since the UK will be trying to replace 53 preferential trading agreements currently held by the EU with the rest of the world, it may need to prioritise certain markets. India is a prime jurisdiction. The UK is the largest G20 investor in India and India invests more in the UK than in rest of the EU combined.

A fortnight after the Brexit vote, then-business minister Sajid Javid flew to Delhi to meet the Indian commerce minister and finance minister, both of whom confirmed India would be keen to start work on a deal as soon as possible. The Indian private sector echoed this.

Confederation of Indian Industry director general Chandrajit Banerjee spoke enthusiastically of an Anglo-Indian free trade deal: “With Britain’s departure from the EU, India will have to negotiate a free trade agreement with the UK which may be easier to accomplish at a bilateral level… This could well be the best era for our industries to collaborate.”

The new department for Brexit will need to resolve some tricky issues. For example, the physical location of data is a hot question in outsourcing.

Mark Turner, vice president of IT delivery at T-Systems, the corporate customer arm of Deutsche Telekom, explains: “Location is now a key question for UK CIOs [chief information officers]. Brexit will have pushed the accelerator, but the direction of travel was already set by the worries surrounding the reach of US jurisdictions.

“UK companies that only operate in the UK are looking for data centres located in the UK, whereas companies that operate in Europe and need to adhere to European data security rules want to locate their data in Europe. Three years ago, CIOs didn’t care where their data was as long as it was safe; now location is central to decision-making.”

Onshore versus offshore

The onshoring-versus-offshoring debate will be renewed by Brexit. Trends may be counter-intuitive. For example, a lack of free movement might result in more offshoring.

This will more than likely lead to an increase in offshore outsourcing in order to compensate for less freedom of movement of skilled workers into the UK

Robert Barbus, operations director for the Slovakia-originated Soitron Group, says: “Brexit may make it difficult for skilled Polish and other EU-CEE [central and eastern European] IT workers from gaining work permits in the UK. Equally for onshoring businesses, which depend on staff from within the EU, it’s most likely the CEE region, including Slovakia, Czech Republic and Bulgaria, will find it hard to gain visas, and the cost of gaining work visas may not make this form of outsourcing viable.

“This will more than likely lead to an increase in offshore outsourcing in order to compensate for less freedom of movement of skilled workers into the UK.”

Obviously no one can say what Brexit will look like. As a result, we’ll see a more cautious approach to outsourcing – not fewer deals, but simply higher risk management. There are signs this is already happening.

Simon Scarrott, business development director of Timico Technology Services, says: “As uncertainty in the business and IT market remains post-EU referendum, we are seeing more companies turning to fixed-priced outsourcing contracts as they look to control their budgets and derisk the purchasing process.”

The outsourcing industry has a proud history of flourishing in the face of perverse trade deals, legal bureaucracy and political uncertainty. Brexit may throw up challenges, but so far there is no reason to think the industry won’t simply march on regardless.

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Prudential workers to strike over outsourcing jobs to India …

Prudential workers are to strike in a dispute over jobs being moved to Mumbai

Workers at insurance giant Prudential are to stage two 24-hour strikes in a dispute over the outsourcing of jobs to India.

Members of Unite based in Reading will walk out on September 16 and 23 in protest at annuity work being switched to Mumbai.

Unite regional officer Ian Methven said: “The Prudential has got itself tied up in knots over this unnecessary offshoring exercise.

“The management is unclear about how many jobs are at risk and how much money will allegedly be saved.

“This confusion smacks of rank incompetence. As a result, our members will be staging two 24-hour strikes as a major shot across the company’s bows. Customer services for annuities will be severely affected on the strike days.

“We want the management to reconsider its decision which risks losing over 500 years of collective knowledge and experience in Reading.”

The union said 82 jobs are at risk.

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Dr Simon Ashby: Outsourcing comes with its own problems, but don’t rule it out entirely

When I was a student studying industrial economics at the University of Nottingham two questions fascinated me: why do we need large firms to produce goods and services (instead of relying on smaller enterprises and markets)? And if we do need large firms, why do they not keep in house every aspect of their supply chain and associated production process?

I admit that, during my first and second years of study I needed to get out more, though deciding to make up lost time and party hard in my final year probably wasn’t the best idea. Nevertheless I still spent many happy hours reading dusty tomes on the optimal size and structure of firms.

Of course the reasons why large firms keep certain processes in-house, while outsourcing for others, are to save costs and increase operational efficiency. In the case of outsourcing, a service provider may be able to conduct a particular activity or process at a lower cost, due to economies of scale or cheap labour. In terms of efficiency an outsource service provider may have the specialist skills and experience needed to conduct certain activities/processes more quickly and reliably, increasing output and customer satisfaction.

Dr Simon Ashby: Outsourcing comes with its own problems, but don’t rule it out entirely

Doing outsourcing projects differently

United Kingdom Outsourcing and offshoring Retail


The Issue

Typically, Outsourcing Projects take a long time to procure and deliver. This can be bad news for both customer and supplier

Often, there is mismatch between what a customer thought that it was buying and what is ultimately delivered.

Often, it takes longer.

Often, it costs more.

Often, there is dissatisfaction.

In a fast moving environment, this can be disastrous.

Understanding the phases of an outsourcing

All outsourcings involve:

the transition of the responsibility for providing a service from the customer or an incumbent supplier to a new supplier; and the provision of the transitioned service from the service commencement date for the term of the contract.

In addition, most outsourcing projects involve a transformation phase pursuant to which the supplier will implement changes to the way in which the services are delivered so as to meet the requirements of the customer and/or the recommendations of the supplier for doing things differently.

Typically, both the transition and transformation elements are contracted for on the basis of fixed requirements and/or a fixed solution which, from the customer’s perspective is delivered against fixed milestones for a fixed cost. This should still Doing outsourcing projects differently

Process robotics: The economics of digital labor shakes up …

The economics of process robotics promises to shake up the outsourcing sector, creating a new dialog among vendors, business executives and CIOs.

Process robotics, also known as robotic process automation (RPA), aims to take over the manual effort involved in carrying out a range of IT and business process activities. With this technology, software robots can be configured to handle tasks traditionally assigned to humans. Repetitive, rules-based business processes, such as payroll processing, fall into this category. On the IT side, RPA can automate help desk requests, such as password resets. RPA’s envisioned reach extends beyond high-volume, transactional activities to judgment-based processes that have previously demanded human discernment. So-called cognitive RPA systems, built upon artificial intelligence, seek to take on the latter process type.

RPA’s potential to replace human labor has put the technology on a collision course with offshore outsourcing, a practice based on labor arbitrage. While the actual labor savings stemming from RPA depends on the nature of a given process, the technology is thought to deliver greater cost reduction than outsourcing.

“For the majority of processes, especially transactional ITO/BPO [IT outsourcing/business process outsourcing] processes, it is significantly less expensive,” said Dave Kuder, principal, business model transformation Process robotics: The economics of digital labor shakes up …

Are brainy people lazy? "Need For Cognition" correlates with less physical activity

According to Hollywood stereotypes, there are the clever, nerdy young people who spend most of their time sitting around thinking and reading, and then there are the jocks – the sporty, athletic lot who prefer to do as little thinking and studying as possible. This seems like a gross over-simplification and yet a new study in the Journal of Health Psychology suggests there may be a kernel of truth to it.

The researchers, led by Todd McElroy at Florida Gulf Coast University, gave an online test of “Need For Cognition” to lots of students, to find 30 who expressed a particularly strong desire to think a lot and 30 others with a strong preference to avoid anything too mentally taxing. This test has been around for over three decades and it involves people rating how strongly they agree with items like “I really enjoy a task that involves coming up with new solutions to problems” and “I only think as hard as I have to”. The 30 thinkers and 30 non-thinkers then wore an accelerometer on their wrist for 7 days, to provide a constant measure of how physically active they were during that time.

The thinkers Are brainy people lazy? "Need For Cognition" correlates with less physical activity

Carlyle Bets on Outsourcing in China With VXI Global Deal – WSJ

U.S. private-equity company Carlyle Group LP is making a big bet that the future of the outsourcing industry, long associated with India, will be in China.

Carlyle has reached a deal to buy 70% of China-focused outsourcing business VXI Global Solutions LLC in a deal that values the company around $1 billion, according to people familiar with the…

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Outsourcing is passe, it’s time to build a smart bot empire

By Milan Sheth Today robots pick-pack boxes in warehouses; assemble varied objects as small and delicate as smartphones and as large and complex as aircraft engines. Automation is making rapid inroads into IT and business processes, transforming human to system and system to system interactions. This raises a pertinent question for customers-why outsource when you can automate to get the cost advantage?

Intelligent automation presents itself as the best-suited solution for majority of rules-driven processes being outsourced today (infrastructure management or IM, business process management or BPM and application management and testing) – redefining the offshoring versus on-shoring debate.

While there is a scope to bring down the headcount by over 50% and reduce costs up to 70% in an optimally automated IM contract, automation also poses a dilemma for enterprises–adopt a cost-effective automation fix to solve technology problems or choose an end-to-end automation solution which may require a higher upfront investment?

Robotic process automation and artificial intelligence (AI) are poised to redefine IT-BPM industry. Robotics has played a pivotal role in transforming the shop floor and assembly lines in the manufacturing sector. Now, software robotics is gaining traction across healthcare, insurance, banking and Outsourcing is passe, it’s time to build a smart bot empire