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Economic Slowdown Driving HR Work Offshore

November 19, 2008 on 6:07 am | In Uncategorized | Comments Off

DALLAS, November 13, 2008

In an increasingly slowing economy, offshore providers of human resources services are well positioned to take market share from US-based suppliers as buyer companies are now more focused on early cost savings that can be gained from labor arbitrage, according to a new study by the Everest Research Institute.

Other high-level insights from the in-depth analysis include:

- Market size and growth: The multi-process HRO market slowed in 2008, and is estimated to reach US$2.9 billion by the end of the year (in terms of annual contract value). Compared to 47 new deals signed in 2007, Everest estimates only 28-32 deals to be signed in 2008. However, multiple factors will ensure market growth in the future

- Changing dynamics: In a slowing economy, buyers prefer a componentized model over a wide-scope transformation model. Further, an “offshore-led” lift-and-shift (of employees and functions) model is coming into play for buyers looking for earlier cost savings

- Buyer adoption trends: Buyer adoption varies across geography, industry and employee segments. Demand from continental Europe and the United Kingdom continues to rise. Manufacturing, high-tech and telecom, and financial services are leading HRO adopters. In terms of number of deals, the mid-market is growing at a faster rate than the large market

- Potential and penetration: The multi-process HRO market has low penetration, especially in the mid-market. Both the mid-market and large market have comparable revenue potential

Outsourcing for European Start-ups

November 11, 2008 on 4:12 am | In Uncategorized | Comments Off

European Outsourcing has been lagging behind the US market for many many years. But now when Europe holds one of the most expensive currencies, more European companies are turning for outsourcing possibilities. Especially, start-up companies.

Established market players will, of course, choose the big outsourcing names which provide security and scalability of 2000 to 25 000 FTEs. However, there is a niche of SMEs or even Start-ups which could use Outsourcing to make gigantic leap forward in business growth. Outsourcing from established providers can be a great financial benefit as well as time management improvement and experience.

Most start-up companies are either overwhelmed or insufficiently organized. The reality of having an outsourcing contract for the start-up are:

- Better organization through contractual relationship management;
- Outsourcing provider experience spill-over to start-up;
- Cost savings vs. locale employee hiring;
- Better efficiency and free consulting service with outsourcing contract.

With the current regular taxation and financial structures, EU countries sometimes offer special conditions for start-up companies for the duration of 1-2 years only. Hence, it is especially beneficial for a start-up to use outsourcing and save costs while improving chances of a full-blown success.

Based on the latest statistics, 40 to 50% of Start ups fail during their first year of life, however, 60 to 70% of those start ups could have prolonged and may be turned out to be successful if their funding was enough for 2 and not 1 year. Outsourcing can make this dream a reality for an EU-based start-ups, either in new technlogies or old brick-and-mortar business, fully supporting IT, Customer Service, Finances, and Sales.

Please contact Verana Obschots with BPO Ukraine, if you are an EU-based start-up.

E-mail: verena.obschots@bpoukraine.info

ACS Joins Others in Sending ‘More Complex’ Jobs Offshore

November 10, 2008 on 9:12 am | In Uncategorized | No Comments

Earlier this year, a CareerBuilder.com Wharton School study showed that 28 percent of U.S. companies said they were offshoring an increasing number of high-wage, high-skills jobs. ACS, one of the “Big Six” North American outsourcing specialists, is among those ranks. During a call discussing its most recent financial results, ACS said it planned this year to increase the number of employees working offshore by 4,200. That includes “more complex, higher paying jobs,” said CEO Lynn Blodgett during the call. Offshoring these positions will yield cost savings that ACS plans to invest in key areas such as sales and new product development, said the company’s COO, who called the move “the right thing to do and the right time to do it.”

Waking Giant: The Mid-Market and FAO

November 7, 2008 on 6:24 am | In Uncategorized | Comments Off

07.11.2008

Over 40% of the global organizations belong to the Mid-Market segment, it offers significant revenue growth potential for FAO suppliers. It is time that Financial Outsourcing providers concentrate on the mid-market segment.

Perot Systems Reports Third Quarter 2008 Financial Results

November 6, 2008 on 2:53 am | In Uncategorized | Comments Off

PRNewswire-FirstCall
PLANO, Texas
(NYSE:PER)

PLANO, Texas, Nov. 4 /PRNewswire-FirstCall/ — Perot Systems Corporation (NYSE: PER) today announced third quarter 2008 financial results:

– Revenue was $711 million, an increase of 9% year-to-year over third quarter 2007 revenue of $655 million.

– Earnings per share (diluted) was $.25, an increase of 25% over third quarter 2007 earnings per share (diluted) of $.20.

– Operating profit margin expanded year-to-year by 40 basis points to 6.8% for the third quarter of 2008.

– New contract signings totaled $184 million for the third quarter of 2008, bringing the total value of new contracts signed during the past twelve months to $1.4 billion. Total bookings, which include contract renewals, totaled $473 million for the third quarter of 2008, bringing the total value of bookings during the past twelve months to $3.0 billion.

– Operating Cash Flow and Capital Expenditures for the third quarter of 2008 totaled $58 million and $11 million, respectively. Trailing twelve month Operating Cash Flow and Capital Expenditures were $221 million and $47 million, respectively.

– As of September 30, 2008, Cash totaled $246 million, and Debt totaled $185 million.

“We are pleased with our third quarter financial results and the progress we made building our business,” said Peter Altabef, president and CEO for Perot Systems. “We expanded revenue, profit margins, and earnings in the quarter. The sound business model and market position we have developed has continued to serve us well.”

Business Outlook

In October, Perot Systems signed a new seven-year contract extension with Catholic Healthcare West, extending the services relationship it originally signed in 2001. With this new contract, Perot Systems has signed contract extensions with two of its largest five clients during 2008.

As part of the new contract extension with CHW, Perot Systems will transition the third party contract management function back to the client. The pass-through revenue associated with this operation has grown significantly since the beginning of the original contract, producing $60 million of revenue during the first nine months of 2008. While this change will reduce revenue going forward, it will provide a profit margin benefit because the revenue was predominately pass-through expenses. From the third quarter of 2008 to the fourth quarter of 2008, this will result in a reduction to revenue of approximately $16 million, but will have an insignificant reduction to gross profit.

Other recent contract extension activity includes several successful Federal Government contract extensions. On one of these re-competed contracts, Perot Systems retained its core services, but moved from a prime contractor role to a subcontractor role to meet the agency’s requirements. This will result in a $5 million quarterly reduction in previous subcontractor revenue going from the third quarter of 2008 to the fourth quarter of 2008, but essentially no profit impact.

For the fourth quarter of 2008, Perot Systems expects normal seasonality to pressure revenue and earnings per share (diluted) by up to $4 million and $.02 per share, respectively. Including this effect, Perot Systems expects earnings per share (diluted) to range from $.23 to $.25.

Perot Systems expects revenue for the fourth quarter of 2008 to range from $680 million to $695 million, which includes the $25 million reduction to revenue associated with recent contract extensions and the effect of seasonality, as noted above.

Economic Slowdown Driving HR Work Offshore

Outsourcing for European Start-ups

ACS Joins Others in Sending ‘More Complex’ Jobs Offshore

Waking Giant: The Mid-Market and FAO

Perot Systems Reports Third Quarter 2008 Financial Results

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