Thursday, April 9, 2009

Will the Obama's policy on US firm to pull back jobs have effect on India?

Sallie Mae, a US-based company which gives loans to students, Monday announced to move back as many as 2,000 overseas jobs, including those from India, even if it means an additional financial burden on the company because of higher labour expenses.

"It's the right thing to do," said Sallie Mae Chief Executive Albert Lord at a press conference which was attended by Democrat Congressman Paul Kanjorski and Senator Robert Casey in an apparent reference to the large scale job losses in the US in the last one year.

The value of a company's franchise is essentially measured in financial terms, but there are a lot of values in a company that relate to the long-term value of a franchise. It's a wise investment in the company's future, Lord said.

"The current economic environment has caused our communities to struggle with job losses. They need jobs, and we will put 2,000 of them into US facilities as soon as we possibly can," he added.

In the next 18 months, some 2,000 overseas jobs would be moved back to the US. These jobs are primarily in India, Mexico and the Philippines and are basically call centres, information technology and operations support positions.

The move would cost the company $350,000 per annum as the workers in the US would have to be paid a much higher wage than those in countries such as India.

Sallie Mae is the largest US-based student loan provider. It employs more than 8,000 people in the US. For quite some time, it has been struggling during the credit crunch to finance loans to students.

In the fourth quarter the company had reported a net loss of $216 million, in which it made $4.8 billion in student loans. Through its subsidiaries, the company manages $180 billion in education loans and serves 10 million student and parent customers.


Is Open Source Really Open?

Open source software in the traditional sense means software whose source code is freely available and modifiable. (Yes, we know there are versions of software that are only pseudo open source where the source is available, but not for free. Or the source code is available, but not modifiable, etc). In our opinion, most businesses should not, and will not, care if a software is open source. Even if they have control over the source code, they might not have the technical capability to solve a particular problem or implement a particular feature.

So, there will be certain software that will work 'out of the box' with the features you would want, while others like ERP, CRM or BI systems need to be highly customised as per the nature of business. However, you can hire talent to modify an open source software as per your requirements. For example, if you are using a popular PHP application, the source code is available and can be freely modified by in-house talent at a reasonable cost. This would entirely depend on the type of application and the expertise available including its price.

Understand your business requirements

The very first step that any business needs to figure out is what they plan to achieve by implementing a particular open-source solution. Ask yourself, "How will I make my work cheaper/faster/easier using this tool? What business objective will this tool facilitate?" For, every IT solution entails direct and indirect costs. For example, before you deploy any ERP, CRM or BI solution or migrate your existing solution, you should have clear and quantifiable objectives that should be met. Will this CRM software help me better understand and, in turn, serve my customers? Will this ERP solution help me reduce inventories? Will it facilitate better warehouse management? Will the BI solution help me gain more insights about my products and services that I don't already know? Is it worth the time, effort and price?

How do I facilitate the implementation?

If you have identified a unified communication solution or a ERP, CRM or a BI solution, you should know what features you would require the most. Do you require features like collaboration? How much control is required? What is the level of security that you would expect? You should evaluate all offerings (open source or not/paid or free) based on the above set of requirements. Next you must hunt for all possible offerings so that you can compare multiple solutions and their pros and cons.

Open source DOES NOT always mean free

It is a common misconception that open source software is free. While many software follow that norm, it is not a rule. You might have to spend on certain open source software. Also, there are training and support costs associated with open source software as well.

While it might not be very difficult to learn a shiny new open source browser, you cannot say the same about a content management or a ERP/CRM system. For example, for a particular open source software that is not popular, the availability of support will be lower and support costs will be higher as a general rule. Also, open-source projects such as Firefox, Thunderbird, Apache, etc are well-established. Using a well-established software ensures long-term support for the software in terms of features, bugs and security patches. There are a lot of open source software that started with a bang and lost steam over a period of time. Also, commercial and non-open source software may be good in terms of providing better support as those companies are legally required to do so. Also, you can install a low cost/free open source solution and buy support from many commercial vendors.


Having considered the above-mentioned points, perform an in-depth research before deciding on which solution to adopt.


Wednesday, April 8, 2009

Has Wipro axed 33 employees across centres?

IT companies HR teams too have not been left untouched by pink slips. According to a web report, Wipro has given marching orders to a as many as 33 of its employees who formed the part of the company's candidate relationship management team.

The team was specifically responsible for talent acquisition. However, with a hiring freeze across centres, these recruiters had little to do.

The report quotes an employee who on the condition of anonymity said that they were told on March 17 that they have only thirteen days left in the organisation. By March 30, all the team members were relieved from service and the team was dissolved. According to him, none of them were given notice.

Earlier in February, the company said it would honour the job offers it made to 8,000 freshers, though there is a possibility of this spilling over to next year.


Enterprise mobility solutions for Indian market

Sybase, a leading provider of enterprise infrastructure and mobile software, on Wednesday announced the release of its broad portfolio of industry-leading enterprise mobility offerings in the country.

The company also announced a new version of iAnywhere Mobile Office with expanded iPhone support and availability on the iPhone App Store.

"There is an increasing demand from customers and partners in India for a complete, tightly integrated platform that provides true enterprise value by mobilising business processes and applications. Our offerings are designed to help them unleash the power of information from the data center right to the mobile edge anywhere, at any time," Sybase India and sub-continent's Managing Director, Sunil Jose, told reporters here.

The new release will strengthen the companys existing enterprise mobility portfolio in field-force automation, email and application mobilization, the company said in a statement.

Enterprise mobility is expected to find dramatic levels of adoption in 2009, following companies focusing on it significantly in 2008 as a tool to optimise operational cost and efficiency in the context of the economic downturn, the statement said.


Tuesday, April 7, 2009

Has IBM pulled out of $7b offer for Sun Microsystems?

IBM withdrew its $7 billion bid for Sun Microsystems on Sunday, a day after Sun’s board balked at a reduced offer, according to three people close to the talks.

The deal’s collapse after weeks of negotiations raises questions about Sun’s next step, since the IBM offer was far above the value of the Silicon Valley company’s shares when news of the IBM offer first surfaced last month. Sun, an innovative pioneer in computer workstations, servers and Internetera software, has struggled in recent years and spent months trying to secure a suitor. With IBM and others shying away from a deal, a bruised Sun could be forced to continue pursuing a solo business model whose prospects have been questioned by many analysts.

After the legal review, IBM shaved its offer on Saturday from $9.55 a share, the proposal on the table late last week, to $9.40 a share, said one person familiar with the talks. The offer was presented to Sun’s board on Saturday, and the board balked. The Sun board did not reject the offer outright, but wanted certain guarantees that the IBM side considered “onerous,” according to that person. Sun then said it would no longer abide by its exclusive negotiating agreement with IBM, a second person familiar with the discussions said. On Sunday, IBM’s board decided to withdraw the offer.

The breakdown in the talks, said the second person close to the negotiations, came over the shifting balance of price and conditions for the deal.

For example, IBM scrutinized the “change of control” contracts with Sun executives, senior engineers and managers. IBM felt that the payments to senior employees were higher and extended more broadly across the company than it had anticipated. IBM pointed to the change of control contracts as one reason it was reducing its offer price.

The breakup of the deal, analysts say, is a blow to Sun’s prospects. “For IBM, given its size, this was never a transformational deal,” said A M Sacconaghi, an analyst for the investment research firm Sanford C Bernstein.

“But in Sun’s case, it’s an extremely material event.” “This leaves Sun in a tough situation,” Sacconaghi added. “Sun was on a path to selling itself, and this will inevitably raise questions in customers’ minds, no matter what Sun says, about its commitment to a go-it-alone strategy.”

Sun was most concerned about securing tighter provisions to restrict IBM’s ability to walk away from the deal.

Whether the IBM decision amounts to a negotiating tactic to get agreement on the final sticking points is unclear. Though the offer is off the table for now, the two sides could resume bargaining if Sun’s share price drops from its $8.49 close on Friday and major investors pressure the company to come to an agreement. “There’s lots of testosterone going back and forth,” said a third person familiar with the discussions. All three people who discussed the deal would speak only on condition of anonymity because details of the merger talks are confidential.


Monday, April 6, 2009

Vishal Info likely to buy firms in Europe

Mid-sized IT-enabled services and solutions providing company Vishal Information Technologies (VITL) is close to buying out two companies. Chennai-based VITL, a Rs 400-crore company, is looking at the inorganic route to expand its presence in international markets.

The company is in talks with two companies — one of them is a player in data digitisation and conversion/e-publishing company, while the other is a fund accounting/financial KPO company. This seems to be in synergy with own businesses. In order to fund these acquisitions, the company has recently issued global depository receipts (GDR) worth $30 million. This has been listed on the Luxembourg Stock Exchange. Six new equity shares will be issued on the conversion of each GDR.

Dilip Parekh, executive director, VITL, told ET that the company has identified a couple of companies in the UK and Sweden for possible buyouts. According to him, VITL was at an advanced stage of closing the deal. “We will be looking at two acquisitions with one having a size of $20-25 million and another will be $10-15 million.”

While this will be partly funded by the money raised through GDR, the balance will be through a share swap ratio. “The company will issue fresh shares to the target company, apart from the funds raised through GDR for the acquisition,” he said.

Founded in 2000, VITL is a subsidiary of Tutis Technologies, which specialises in biometric products, software development and consulting. VITL is a service provider to government and semi-government organisations, large and medium-sized companies, NGOs, universities, publishing houses and legal entities.

It focuses in the areas of providing solutions for the print production industry with services like e-publishing, e-book, print on demand, data and document management, data conversion, digital library management among others. It also has a subsidiary, Basiz, which is a fund accounting service KPO primarily focusing on servicing hedge funds, mutual funds, private equity firms among others.


Alcatel-Lucent to outsource IT operations

French telecoms equipment maker Alcatel-Lucent is considering outsourcing its information technology globally, Les Echos newspaper reported without naming its sources.

The contract could be worth several hundred million euros annually and last seven years, the paper said.

The group has made a request for information from potential candidates for the work, and a firm decision could be made soon, the paper reported.

Alcatel-Lucent is also looking at the possibility of outsourcing some of the research and development work for its most mature equipment, the newspaper added.

Alcatel-Lucent said in a statement emailed to the media on Monday that it wanted to develop co-sourcing partnerships, as announced in December, but that no deals had been reached at this stage.

Sunday, April 5, 2009

Suspected money laundering made record in 2008:Swiss govt

Switzerland, on the 'grey list' of tax havens, saw a surge in suspected activities related to money laundering in 2008, with assets worth Switzerland an all-time high $ 1.65 billion involved in them.

After the world's top 20 economies resolved to crack down on tax havens worldwide at a meeting here last week, the Organisation for Economic Cooperation and Development (OECD) named Switzerland among countries not having substantially implemented international tax standards.

This classification put Switzerland on the 'grey list' of tax havens, but Switzerland reacted sharply to such descriptions and said it was not actually a 'tax haven'.

However, the Swiss Federal Department of Justice and Police (FDJP) has said in a report that the number of Suspicious Activity Reports (SARs) in connection with money laundering jumped from 795 in 2007 to 851 last year.

This included nine related to suspected terror financing and involved assets worth over one million Swiss francs ($ 884,600).

"The increase was due mainly to the greater volume of reports from the banking sector, which reached a new record high. The total value of assets involved doubled to reach an all-time high of CHF 1.87 billion Swiss francs ($ 1.65 bn)," the FDJP said in a statement.

In 2008, the Money Laundering Reporting Office Switzerland (MROS) received 851 SARs, with nearly 67 per cent of them coming from the banking sector. Among them, most were related to investment fraud.

The statement noted that third on the list of offences was bribery related to individual corruption, which, due to their complexity involving numerous businesses, generated several SARs.

"Although the acts of corruption took place abroad, the suspected bribe money was deposited in Switzerland," it added.

Interestingly, Opposition parties in India have said that assets worth about $ 1.5 trillion are stashed away in Swiss banks by Indian citizens.

The FDJP said that in the CHF 1.87 billion, three SARs totalling CHF 700 million ($ 620.5 million) are involved. Among them, two cases involved fraud while the other one was related to corruption.

This included a single report involving an asset value of 942,000 Swiss francs ($ 834,999) and the case was forwarded to the appropriate prosecuting authority, which subsequently dismissed the case.

"None of the incoming SARs relating to terrorist financing was based on the State Secretariat for Economic Affair's so-called Taliban Regulations.

"All but one SAR with an unclear economic background were based on information received from third parties (press reports, information from third persons or prosecuting authorities) indicating possible terrorist involvement.

"After careful scrutiny, MROS forwarded seven of the nine SARs to the Office of the Attorney General of Switzerland, which has in the meantime dismissed or suspended three of the cases. Four cases are pending," the statement noted.


Air Deccan Gopinath proposes low-cost campaign in polls

To reach his electorate as well as keep costs within the stipulated budget of Rs 25 lakh for election campaigning, Air Deccan founder G. R. Gopinath is resorting to viral marketing, SMS messages, and e-mail.

Gopinath, who is standing as an Independent candidate from Bangalore South constituency, India's IT capital, has also launched a dedicated website with provision for suggestions, advice and feedbacks.

"We are using viral marketing techniques to keep our costs within the sum allotted by the Election Commission," said Gopinath. Viral marketing is a low-cost marketing technique that uses pre-existing social networks to increase brand awareness. It can be word-of-mouth delivered or enhanced by the network effects of the Internet, or any form of video clips, images, or even text messages.

As per Gopinath, the email blasters were done with database received from volunteers instead of buying the database. The SMSs are being sent free by service providers who are his well-wishers. Even the social networking sites like Facebook and Twitter are free sites.

Gopinath said he opted to contest these elections with the backing of Infosys Technologies' Nandan Nilekani and Mohandas Pai, Pradeep Kar of Microland; Kiran Mazumdar-Shaw of Biocon and brand guru Harish Bijoor.


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